The budget reform launched by the Ministry of Finance has been going on for more than a decade.
Almost all segments involved in the budget process both at the federal, regional and local levels are subject to “perestroika”.
One of the most significant innovations for all this time was the introduction of a new classification of both income and expenses, which allows to unify budgets at all levels.
Classification of budget expenditures
The principles of classifying budget expenditures are approved directly by the Ministry of Finance of the Russian Federation and tend to almost change annually. It includes:
- Codes of the main managers of budgetary funds. Approved by order of the Ministry of Finance of the Russian Federation. No abbreviated name. Group expenses by departments.
- Codes of sections and subsections. Approved by order of the Ministry of Finance of the Russian Federation. The abbreviated name is KFSR. Group expenses by industry: education, culture, healthcare, and so on.
- Codes of types of expenses. Approved by order of the Ministry of Finance of the Russian Federation. The abbreviated name is CWR. In the transcript of the concept, it is noted that the types of expenditures indicate the direction of expenditure of funds that are required to comply with the authorities and state institutions.
- Codes of target items of expenditure. Approved by order of the financial authority. The abbreviated name is KSSR. Group the costs of implementing various targeted programs.
- Codes of operations of the general government sector. Approved by order of the Ministry of Finance of the Russian Federation. The abbreviated name is KOSGU. Indicate the direct items of expenditure, which provide estimates of public institutions and authorities. Subject to strict coordination with CWR. Decryption and verification of linkage is usually carried out during audits and allows us to draw conclusions about the targeted or inappropriate spending of budget funds.
Thus, all budget expenses are encoded with a 20-digit set of digits.
Codes of types of expenses - CWR. Deciphering the concept
Since, as with any control and audit activities, as well as during preliminary financial control, the main attention is paid to observing the targeted and targeted nature of spending, it is the classification of the types of expenses that can be called the most difficult and important in the implementation of the budget process procedure. It is she who most accurately reflects the structure of budget expenditures. The guidelines on the application of the budget classification, approved by Order of the Ministry of Finance No. 87-N, stipulate the basic requirements for the structure of expenses:
- Mandatory allocation of items of expenses provided for payments upon dismissal related to the reduction and liquidation of institutions.
- Allocation of cost items for the payment of contributions of employing institutions to the Pension Fund, social insurance and the compulsory health insurance fund.
- The division of payments to citizens in cash or in kind.
- Differentiation of payments depending on the categories of recipients.
- Reflection of appropriations for payments to citizens in situations where the absence of concluded labor or similar contracts is allowed.
- Allocation of appropriations related to business trips.
- Detailed budget capital expenditures.
- Separate reflection of the appropriations relating to the administration of the fulfillment by the authorities of public obligations (payment for the delivery or forwarding of payments of a social nature).
- Reflection of appropriations for tax payments.
Common types of expenses are divided into groups, subgroups and elements of types of expenses. Possession of the decoding skills of the CWR usually allows citizens to more fully and objectively assess the direction of spending budget funds of the territory where they live.
The acquisition of goods, works and services to meet the needs of the public sector
This includes most of the costs of performing the functions of the state, which almost all citizens face: buying textbooks at schools, food for children, providing medicines for hospitals, etc.
In order to roughly imagine how much money is provided for such goals and activities, you need to find KVR 244 in the budget, the transcript of which tells us that, for example, it includes funds for:
- purchase of goods, payment for work, services related to various information technologies (for example, payment for the Internet);
- delivery of secret mail through special channels;
- postal services (including envelopes and stamps);
- installation and maintenance of fire, burglar alarms;
- purchase of complex medical diagnostic equipment (tomographs, ultrasound machines);
- purchase of consumables for office equipment;
- incentive payments for business inventions;
- payments of overhaul fees for the municipal housing fund.
The transcript of KVR 244, in conjunction with the codes of operations of the general government sector, usually constitutes a rather serious section in the explanatory notes to the estimates of state institutions.
Payment of taxes, fees and other obligatory payments in the public sector
All public sector institutions pay mandatory taxes and fees in a general manner. In the laws on the budget you can find this item of expenditure provided for state institutions. In addition to the traditional land tax and corporate property tax, for example, the payment of transport tax, which is present in the decoding of CWR 852, can be made.
Home Borrowing Service
Budgets of different levels to cover the deficit often practice attracting either bank or budget loans within the country. Any loan is provided on a paid basis, that is, at a certain interest rate. Interest payment is attributed to CWR 853. Deciphering the information on this type of expense allows you to receive, in addition to information about the payment of interest on loans, information and other mandatory payments, with the exception of taxes and fees, which are not reflected in other types of expenses. For example, in the comparative table of the Ministry of Finance that relates the types of expenses and types of operations of the general government sector, when studying KVR 853, the transcript of KSGU indicates that the expenses for increasing the value of shares acquired in state ownership may also be contained here.
Information and communication technology
In the context of economic modernization processes, budgets at all levels provide for CWR 242. Deciphering and attributing these expenses is carried out in accordance with regulatory documents adopted by each level of government.
Support for the activities of budgetary institutions
Financial support for the existence of all budgetary institutions of education, culture, social protection, health care is carried out by forming a state or municipal task on the part of their founder and providing a subsidy for its implementation. These expenses, both in the budget and in the list of the main manager of budget funds, are attributed to CWR 611. Decisions by institutions are made directly in the above list.
Conclusion
The population still somehow faces income codes of budget classification in everyday life, paying a parental fee for children attending kindergartens, property taxes, land, transport, fines, if out of luck. The expendable components of the classification codes relate mainly to narrow specialists who are somehow related to budget execution or budget accounting. Studying the basics of financial literacy, examples of which are given above, will allow you to more consciously familiarize yourself with materials on the budget that are periodically published in the media.