The budget classification of the Russian Federation represents the separation of the revenue and expenditure parts of individual groups depending on specific characteristics. The purpose of this separation is to facilitate the financial control system and maintain the order of involvement and use of funds. Indeed, the presence of a clear classification allows analysts not only to trace the targeted use of financial resources, but also to identify moments of inappropriate investment or to find ways to increase revenue.
The budget classification of the Russian Federation is based on certain requirements and principles. First of all, the grouping must comply with the principles of clarity and transparency, so that everyone, taking a legislative act or other state document, understands and is guided in this division. Also, the requirement for detailed reflection of indicators is presented to the system for reflecting expenditure and income indicators, which greatly facilitates the process of checking the quality of the implementation of the budget plan.
The modern 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 laws must adhere to the revenue and expense groupings created by government agencies. So, the budget classification of the Russian Federation includes:
1) The division into groups of all revenues entering the treasury of the state.
2) Then distinguish the following classification of the expendable part:
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 revenue side is differentiated by the sources of funds. And detailing is manifested in the formation of individual groups, subgroups, articles and sub-articles.
The expense part reflects the directions of use of the received funds. In this regard, the functional classification involves the reflection of the goals for which financial resources are used within this division. Most of the funds are spent on ensuring the uninterrupted fulfillment of the main functions of state bodies, and on the implementation of social programs of paramount importance. Within the framework of functional differentiation, the presence of levels can be noted. The first reflects sections of specific government functions. The second level is understood as the totality of concretizing subsections. At the third level are concentrated articles of targeted spending. 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 type of expense. In general terms, such a division is inherent in each classification of the expendable part.
The organizational budget classification of the Russian Federation is intended for the distribution of financial resources among recipients or distributors within the framework of the republican and local budgets, as well as the budgets of federations. Accordingly, the economic classification expresses the costs of economic needs. The next group reveals the financing of the budget deficit and debt, both internal and external.
The budget classification of the Russian Federation is aimed at facilitating the achievement of the main goals of the policy pursued by the state, as well as at simplifying the financial monitoring system, designed to facilitate control over the appropriateness of expenditures in a particular area. In addition, it allows the government to identify additional sources of income.