Budget classification of the Russian Federation

The budget classification of the Russian Federation is a division of income and expenditure by separate groups depending on specific characteristics. The purpose of such a separation is to facilitate the system of financial control and maintain the order of involving and using funds. Indeed, the presence of a clear classification allows analysts not only to track the targeted use of financial resources, but also to reveal the moments of inexpedient investment of funds or to find ways to increase revenues.

The budget classification of the RF is based on certain requirements and principles. First of all, the grouping must comply with the principles of clarity and transparency, so that each person, having taken a legislative act or other state document, understood and oriented in this division. Also, the system of reflecting the indicators of expenses and incomes requires a detailed reflection of indicators, which greatly facilitates the procedure for verifying the quality of the implementation of the budget plan.

The current budget classification of the Russian Federation is organized in such a way as to ensure comparability of data at the international level. This, in turn, is a huge step towards strengthening relations with representatives of foreign companies. All national firms and organizations that comply with tax legislation should adhere to the grouping of incomes and expenditures created by state bodies. So, the budget classification of the Russian Federation includes:

1) The division into groups of all revenues coming to the treasury of the state.

2) Then the following classification of the expenditure part is distinguished:

A) organizational;

B) functional;

C) economic;

D) sources of internal and external financing of the budget deficit;

E) types of state internal and external debt.

The income part is differentiated by source of funds. And detailing manifests itself in the formation of individual groups, subgroups, articles and sub-items.

The expenditure part reflects the use of the funds received. In this connection, the functional classification presupposes the reflection of the goals for which financial resources are allocated within the framework of this division. Most of the funds go to ensure the smooth execution of the main functions of state bodies, to implement social programs that are of paramount importance. Within the framework of functional differentiation, one can note the presence of levels. The first reflects sections of specific government functions. Under the second level, it is common to understand a set of concreting subsections. At the third level, the articles of target spending are concentrated. That is, the amounts go directly to the managers and are intended to finance certain needs. And the fourth level is the detailing of articles by types of expenses. In general, this division is inherent in each classification of the expenditure side.

The organizational budget classification of the Russian Federation is intended for the allocation of financial resources to recipients or distributors within the republican and local budgets, as well as the budgets of federations. Accordingly, the classification of the economic expresses the cost of economic needs. The next group reveals the financing of the budget deficit and debt, both internal and external.

The RF budget classification is aimed at facilitating the achievement of the main objectives of the policy pursued by the state, as well as simplifying the financial monitoring system, designed to facilitate control over the appropriateness of spending in a particular sphere. In addition, it allows the government to identify additional sources of income.