Budget financing is the use of state money capital (on an irrevocable basis), the goals and procedures of which are different. But the bulk of the funds are used and distributed through financing. As a rule, its directions are state-owned facilities. This process is carried out using various sources, among which are budgetary and extra-budgetary funds, as well as the possibilities of business associations and enterprises.
Budget financing is in a special group, because its source is important and unique, because the budget plays its role.
As for the principles on which this process is based, the main ones are distinguished:
1. Irrevocability.
2. Intended use of capital. The thing is that each item of expenditure has a specific purpose: wages, scholarships, pensions, current expenses and so on.
3. Budget financing, which is carried out as work is performed or services are provided. The essence of the principle is that funds are allocated not according to the annual plan, but after the implementation of a certain amount of material, as well as according to quantitative and qualitative indicators. Its preliminary implementation is carried out using quarterly or monthly distribution of expenses.
4. Coordination of financial discipline accordingly.
Note that the economic costs in the system of this type of financing occupy a special position in view of the fact that the main social and production costs are ensured through the use of their own capabilities. If there is a need, loans taken from commercial banks are attracted to achieve these goals. They use budget financing only in case of special need, which is established by law.
As for the state budget sphere, it is also characterized by certain features. All budgetary organizations are aimed at solving problems of socio-social needs arising from members of society.
Investment activity is coordinated by the state and may have several directions, one of which is budget financing of investments. Its implementation is carried out using a tax investment or budget loan, as well as budget allocations. As for the budget form of credit, we note that it can be provided to a foreign state or legal entity. This is carried out either free of charge or on a refundable basis. This loan is provided only to entities that do not have debt.
One should also consider such a form as budget and budget financing. It is carried out on the basis of an individual financial act, which fixes the main target direction of the funds received, as well as their volume and quarterly distribution.
Thus, monetary support is provided for almost the entire non-production sector (budget). As for organizations that receive funding in this way, they are called budget.
Considering the concept of estimates, we note that it is carried out in the form of a financial plan drawn up by an organization or institution receiving funds for expenses that are designed to ensure their implementation. Its main components are articles that describe the type and purpose of costs. Financing of all types of institutions is carried out at three large costs: wages, current expenses, as well as capital investments.
As a rule, an estimate is limited to a fiscal year: it starts on January 1 and ends on December 31.