An important grouping of budget expenditures is a functional classification, which reflects the direction of spending budget funds for the state to perform its main functions.

Until 2005, in accordance with the functional classification, all expenditures of the federal budget of the Russian Federation included expenditures on:

• 1) state administration and local self-government;
• 2) the judiciary;
• 3) international activities;
• 4) national defense;
• 5) law enforcement and state security;
• 6) fundamental research and promotion of scientific and technological progress;
• 7) industry, energy and construction;
• 8) agriculture and fisheries;
• 9) protection of the natural environment and natural resources, hydrometeorology, cartography and geodesy;
• 10) transport, road facilities, communications, informatics;
• 11) development of market infrastructure;
• 12) prevention and elimination of consequences of emergency situations and natural disasters;
• 13) education;
• 14) culture, art and cinematography;
• 15) mass media;
• 16) health care and physical culture;
• 17) social policy;
• 18) servicing state and municipal debt;
• 19) replenishment of state stocks and reserves;
• 20) financial assistance to budgets of other levels;
• 21) disposal and elimination of weapons, including the implementation of international treaties;
• 22) mobilization preparation of the economy;
• 23) exploration and use of outer space;
• 24) military reform;
• 25) road facilities;
• 26) other expenses;
• 27) target budget funds.

Table 1 shows the ratio of various types of expenses in the areas of functional classification. 2.

Since 2005, the functional classification has undergone significant changes. Instead of 27 sections from 2005 to 2010. functional classification included 11 sections. The ratio of various types of federal budget expenditures during this period is presented in Table. 3.

Structure of federal budget expenditures in 1998-2004, %

table 2

Table 3

Distribution of federal budget expenditures by sections of the functional classification of RF budget expenditures for 2005-2010, %"

Calculated according to the federal laws on the federal budget for 2005, 2006, 2007, 2008, 2009 and 2010.

In 2010, changes were made to the functional classification. The federal budget of the Russian Federation for 2011 and for the planned period up to 2012 and 2013 was compiled in accordance with the new functional classification of expenses, which included 14 sections:

• 01 - General government issues.
• 02 - National Defense.
• 03 - Homeland security and law enforcement.
• 04 - National economy.
• 05 - Housing and communal services.
• 06 - Environmental protection.
• 07 - Education.
• 08 - Culture and cinematography.
• 09 - Healthcare.
• 10 - Social policy.
• 11 - Physical culture and sports.
• 12 - Media.
• 13 - Servicing the state and municipal debt.
• 14 - Interbudgetary transfers to the budgets of subjects of the Russian Federation and municipalities of a general nature.

The section "National issues" reflects the expenses for the functioning of the head of state - the President of the Russian Federation, the highest official of the constituent entity of the Russian Federation and the local government, legislative (representative) bodies of state power and local government, the Government of the Russian Federation, the highest executive authorities of the constituent entities of the Russian Federation, local administrations, judicial system, financial, tax and customs authorities and supervisory authorities in these areas, holding elections and referendums, international relations and international cooperation, international economic and humanitarian assistance, maintenance and replenishment of the state material reserve, fundamental research, reserve funds, applied scientific research in areas of national affairs and other general government expenditures.

The section "National Defense" reflects the costs of maintaining and supporting the activities of the Armed Forces of the Russian Federation in the field of ground, sea, air, anti-missile and space defense. This also includes expenses for mobilization and non-military training, mobilization training

economics, the preparation and participation of the Russian Federation in ensuring collective security and peacekeeping, the implementation of measures related to ensuring national defense of the nuclear weapons complex, applied scientific research, as well as other issues in this area.

The section "National Security and Law Enforcement Activities" includes expenses for the maintenance and operation of the internal affairs bodies, the prosecutor's office, justice, security, the border service, the authorities for controlling the circulation of narcotic drugs and psychotropic substances, as well as the internal troops, the penitentiary system. This section also reflects expenses for the prevention and elimination of emergencies and natural disasters, civil defense, migration policy, applied research in the field of national security and law enforcement.

The “National Economy” section reflects the costs of maintaining and ensuring the activities of ministries, services, agencies that manage and manage the national economy, including: industry and energy, compliance with competition laws in commodity markets and the financial services market, technical regulation and metrology, regulation of natural monopolies, regulation in the field of nature management, environmental protection and environmental safety, environmental, technological and nuclear supervision.

This section reflects the costs of developing building standards and monitoring their compliance, as well as costs associated with technical regulation and metrology. It also takes into account the costs of maintaining and supporting the activities of the Federal Service for Labor and Employment, the implementation of state policy in the field of employment. The costs of supporting individual industries are also taken into account - the fuel and energy complex, agriculture, forestry, water resources, transport, communications and informatics (subsidizing interest rates, supporting industries, etc.).

The section “Housing and Communal Services” includes the costs of maintaining and supporting the activities of institutions that manage and manage housing and communal services and urban planning, as well as the costs of managing services in this area, and applied scientific research. It reflects expenditures for the construction and reconstruction of residential buildings, the provision of subsidies to citizens for the purchase of housing and subsidies to promote the expansion, improvement or maintenance of the housing stock. This section also reflects the costs associated with issues of communal development and the provision of communal services: such as maintaining and restoring the proper technical and sanitary and hygienic condition of buildings, structures, equipment, communications (development, reconstruction and replacement of engineering networks) and housing and communal services destination (street lighting, sanitary cleaning facilities, green spaces, etc.).

The “Environmental Protection” section reflects expenses for wastewater treatment, collection and disposal of waste, protection of plant and animal species and their habitats, and air purification.

It also reflects the costs of carrying out environmental control measures and ensuring the activities of institutions that carry out functions in the field of environmental control.

The section "Education" includes directions of expenses for the purposeful process of education and training. This reflects: the cost of preschool education for young children and the maintenance of preschool educational institutions; expenses for primary general, basic general, secondary (complete) general education; expenses for initial vocational training in secondary specialized educational institutions, special vocational schools, interschool educational complexes, training and production workshops; expenses for education in educational institutions of secondary vocational education; expenses for higher professional education; expenses for professional retraining and advanced training, as well as for youth policy and the organization of a health campaign for children.

The section “Culture and cinematography” reflects the costs of providing services in this area, the maintenance of cultural institutions, the management of facilities intended for cultural purposes, the organization, holding or support of cultural events, state support and subsidies for the production of films, as well as the provision of grants, subsidies for support for individual artists, writers, artists, composers or organizations engaged in cultural activities.

Under this section, the allocation and financing of cultural objects of particular importance for the state, such as, for example, the Russian State Library; State Hermitage; State Russian Museum; State Museum of Fine Arts named after A.S. Pushkin; Museum of Science and Industry; Novgorod State United Museum-Reserve; State Academic Bolshoi Theater of Russia; State Academic Mariinsky Theatre; State Film Fund of the Russian Federation; State Kremlin Palace and others.

“Health and Sports” expenses include state expenses for the maintenance and operation of institutions that manage and manage the healthcare sector, the current maintenance of healthcare institutions, including the provision of medical services by them, the costs of providing services to individuals, centralized purchases of medicines and medical equipment, implementation of measures related to the organization of treatment of citizens of the Russian Federation abroad, the current maintenance of institutions that provide state sanitary and epidemiological supervision, measures in the field of sanitary and epidemiological supervision, as well as the costs of the budgets of the constituent entities of the Russian Federation for compulsory medical insurance of the non-working population.

The “Social Policy” section reflects the costs of pensions related to the payment of old-age pensions, pensions for military personnel, state and municipal employees, judges, life allowance for judges, including an allowance of 50% of the monthly life allowance. This section also reflects the costs associated with the organization of social services for the population, the functioning of institutions and organizations of social services (boarding houses for the disabled, medical and sanitary expert commissions, etc.), the provision of social support measures in the form of benefits in cash and in the form of benefits for dependents in case of loss of a breadwinner, as well as social support measures related to the provision of disabled people with technical means of rehabilitation, including the manufacture and repair of prosthetic and orthopedic products.

This section also reflects the costs associated with social insurance of the population, including all types of benefits and insurance payments made by the Federal Social Insurance Fund, the provision of social protection in the form of: benefits in cash to persons who are able to work, ready to work, but cannot find a suitable job; child benefits for citizens with children; benefits to citizens in the event of post-vaccination complications; compensation for auto insurance for the disabled and others. It also takes into account the costs of combating homelessness, guardianship and guardianship.

The section "Physical culture and sports" reflects the costs of ensuring the activities of institutions in the field of physical culture and sports, the maintenance of national teams and participation in international, all-Russian and other sports events, as well as state support for the development of sports in the constituent entities of the Russian Federation and municipalities. It also reflects the costs of maintaining and ensuring the activities of institutions that manage and manage in the field of sports, the provision of services for the organization of sports and physical culture, and the management of facilities intended for active sports.

The “Mass Media” section reflects the costs of state support for radio and television broadcasting, electronic media, as well as support for publishing houses and periodicals, including periodicals established by state authorities and local governments. It also reflects the costs of ensuring the activities of the executive authorities of the Russian Federation, constituent entities of the Russian Federation and local governments, institutions that manage and manage the media, as well as the development of a general policy, plans and budgets in this area.

The “Servicing the state and municipal debt” section includes expenses associated with the payment of interest payments on state and municipal debt obligations, the payment of a discount upon repayment (repurchase) of state and municipal debt obligations, except for expenses related to the payment of remuneration (commission) to agents for rendering agency services in the field of servicing, accommodation, redemption, exchange and repayment of state and municipal obligations. In addition, expenses related to the repayment of overdue interest in the framework of the exchange of debt obligations of the Russian Federation on terms comparable to the terms of the exchange of debt to creditors of the London Club are subject to reflection under this section.

The section "Interbudgetary transfers" reflects the costs of paying transfers, other forms of financial assistance, grants, subventions and subsidies to government bodies of various levels. This section reflects the costs associated with the formation in the federal budget of the Federal Fund for Financial Support of the Subjects of the Russian Federation, the Compensation Fund, the Fund for Co-financing Social Expenditures, the Regional Development Fund, as well as other forms of support for budgets of other levels, including targeted, current ones. It also reflects expenses incurred at the expense of the federal budget by transferring funds to the Social Insurance Fund of the Russian Federation and the Pension Fund of the Russian Federation for the payment of benefits and cash payments, as well as to the Federal Compulsory Medical Insurance Fund for the implementation of social support measures for certain categories of citizens for the provision of medicines and for compulsory health insurance for the non-working population, including children.

Analysis of the ratio of sections of the functional classification is of great importance for determining the intentions and preferences of the government for the next financial year.

So, from Table. Figure 3 shows that a significant part of the federal budget spending today is directed to finance national issues, national defense and law enforcement. In total, these expenditures in 2010 amounted to 31.8% of federal budget expenditures.

The largest expenditure item of the federal budget is intergovernmental transfers. In 2010, in absolute terms, they amounted to 2 trillion 721 billion rubles, or 38.5% of federal budget expenditures. This is largely due to the fact that a cooperative model of budgetary federalism is being implemented in Russia, which involves the concentration of a significant part of budgetary funds in the federal budget with their subsequent distribution among other levels of the budgetary system.

Expenditures for national needs in 2010 ranked second - about 964 billion rubles, or 13.6% of the total federal budget expenditures. A significant amount of expenses under this section is largely due to the fact that during 2005-2010. The structure of expenditures for national needs included the costs of servicing the public debt. These costs amounted to approximately 30% of the total costs for this section.

I would like to note that the cost of servicing the public debt over the past years has occupied a significant place in the structure of federal budget expenditures (Table 2). Thus, the cost of servicing the public debt in 2001 amounted to 20.1% of the federal budget of the Russian Federation. In 2002 they were 14.6%. In 2005, the share of federal budget expenditures was 8.3%. In 2011, public debt service expenditures amounted to 3.6% of federal budget expenditures. Although the share of spending on public debt service is declining, however, its share in federal budget expenditures still remains significant, especially if we compare the level of these expenditures with expenditures on education, healthcare, and science.

A significant share of federal budget expenditures falls on national defense. In 2010, these expenses amounted to about 597 billion rubles. Of course, this is much less than our state spent on military needs in the USSR. At that time, spending on armaments ranged from 25 to 30% of GDP. However, if we compare this article with others - education, health care, etc., then it significantly surpasses them.

Stable, but relatively low, are the state's expenditures to support certain sectors of the national economy - industry, construction, agriculture, transport, etc. In 2010, these expenditures amounted to 529 billion rubles.

The cost of education is also low. Over the past years, they account for no more than 4-5% of federal budget expenditures. Health care costs are significantly lower - no more than 2-3%.

The share of expenditures on fundamental research is also small - only 1.5% of federal budget expenditures. This is a very small figure, and it is constantly falling. Thus, if in 1991 the state's expenditures on fundamental research amounted to 1.03% of GDP, which was 3.87% of federal budget expenditures, then in 1993 it was already 0.69% of GDP. In 2001, the share of spending on science in GDP was only 0.2%, which is many times lower than the critical level estimated at 3% of GDP. It is believed that at the level of state spending on science in the amount of less than 3% of GDP, the scientific and technical potential is destroyed. Such spending on science actually does not allow for deep fundamental research, which could in the very near future bring the country to the forefront of scientific and technological progress.

True, it should be noted that in 2002 expenditures under the "Social policy" item increased significantly. Whereas in 2001 expenditures under this item accounted for only 9% of federal budget expenditures, in 2002 they accounted for 22% (see Table 1). Currently, the share of spending on social policy is about 5%. A rather high share of expenditures on social policy is due to the fact that this section takes into account the expenditures of state social non-budgetary funds - the Pension Fund of the Russian Federation, the Social Insurance Fund, etc.

Determining priority areas for spending budget funds is a very important and responsible activity of the state. Unfortunately, in Russia there are still a number of negative aspects in the field of spending budget funds. This is the low efficiency of the use of budgetary funds; widespread practice of misappropriation of budget funds; insufficient amount of funds allocated for the solution of social issues; a low share of public investment in the national economy, which reduces the possibility of rapid stabilization of the financial situation in the country.

The main tasks in the field of improving the process of spending budget funds in Russia are:

• 1) ensuring priority financing of social expenditures;
• 2) ensuring obligations in the field of education, healthcare and social services for the population with an increase in the targeting of the provision of social assistance;
• 3) expansion of state financing of investments in priority areas of the economy;
• 4) reduction of expenses for certain target items of expenditure and target programs;
• 5) reduction of subsidies to cover the losses of individual industries;
• 6) concentration of budget expenditures on the most efficient costs;
• 7) reducing the cost of maintaining the state apparatus and servicing the public debt;
• 8) ensuring the maintenance and development of transport infrastructure, including motor roads;
• 9) increasing the efficiency of the use of budgetary funds for national defense on the basis of the gradual implementation of the military reform;
• 10) strengthening control over the use of budgetary funds.

An important grouping of budget expenditures is a functional classification, which reflects the direction of spending budget funds for the state to perform its main functions.
Until 2005, in accordance with the functional classification, all expenditures of the federal budget of the Russian Federation included expenditures on:
1) state administration and local self-government;
2) the judiciary;
3) international activities;
4) national defense;
5) law enforcement and state security;
6) fundamental research and promotion of scientific and technical progress;
7) industry, energy and construction;
8) agriculture and fisheries;
9) protection of the natural environment and natural resources, hydrometeorology, cartography and geodesy;
10) transport, road facilities, communications, informatics;
11) development of market infrastructure;
12) prevention and elimination of consequences of emergency situations and natural disasters;
13) education;
14) culture, art and cinematography;
15) mass media;
16) health care and physical culture;
17) social policy;
18) servicing state and municipal debt;
19) replenishment of state stocks and reserves;
20) financial assistance to budgets of other levels;
21) disposal and elimination of weapons, including the implementation of international treaties;
22) mobilization preparation of the economy;
23) exploration and use of outer space;
24) military reform;
25) road facilities;
26) other expenses;
27) target budget funds.
Table 1 shows the ratio of various types of expenses in the areas of functional classification. 2.
Since 2005, the functional classification has undergone significant changes. Instead of twenty-seven sections, today the functional classification includes only 11. These are the following sections;
1. National issues.
2. National defense.
3. National security and law enforcement activities.
4. National economy.
5. Housing and communal services.
6. Environmental protection.
7. Education.
S. Culture, cinematography and media;! mass media.
9. Health care and sports.
10. Social policy.
11. Intergovernmental transfers.
The section "National issues" reflects the expenses for the functioning of the head of state - the President of the Russian Federation, the current official of the subject of the Russian Federation and the local self-government body, legislative (representative) bodies of state power and local self-government. Government of the Russian Federation, the highest executive authorities of the constituent entities of the Russian Federation, local administrations, the judiciary, financial, tax and customs authorities and supervisory authorities in these areas, holding elections and referendums, international relations and international cooperation, international economic and humanitarian assistance, maintenance and replenishment of the state material reserve, fundamental research, servicing the state and municipal debt, reserve funds, applied scientific research in the field of national issues and other national expenses.
The section "National Defense" reflects the costs of maintaining and supporting the activities of the Armed Forces of the Russian Federation in
land, sea, air force, anti-missile and space defense. This also includes expenses for mobilization and non-military training, mobilization training of the economy, training and participation of the Russian Federation in ensuring collective security and peacekeeping activities, the implementation of nuclear weapons complex measures related to ensuring national defense, applied scientific research, as well as other issues in this area.
The section "National Security and Law Enforcement Activities" includes expenses for the maintenance and activities of the internal affairs bodies, the prosecutor's office, justice, security, the border service, the authorities for controlling the circulation of narcotic drugs and psychotropic substances, as well as the internal troops, the enforcement system punishments. This section also reflects expenses for the prevention and elimination of emergencies and natural disasters, civil defense, migration policy, applied scientific research in the field of national security and law enforcement.
The “National Economy” section reflects the costs of maintaining and ensuring the activities of ministries, services, agencies that manage and manage the national economy, including: industry and energy, compliance with competition laws in commodity markets and in the financial market. services, technical regulation and metrology, regulation of natural monopolies, regulation in the field of nature management, environmental protection and environmental safety, environmental, technological and nuclear supervision.
This section reflects the costs of developing building standards and monitoring their compliance, as well as costs associated with technical regulation and metrology. It also takes into account the costs of maintaining and supporting the activities of the Federal Service for Labor and Employment, the implementation of state policy in the field of employment. The costs of supporting individual industries are also taken into account - the fuel and energy complex, agriculture, forestry, water resources, transport, communications and informatics (subsidizing interest rates, supporting industries, etc.).
The section "Housing and communal services" includes the costs of maintaining and ensuring the activities of institutions that carry out
related to the management and management in the field of housing and communal services and urban planning, as well as the costs of managing services in this area, applied research. It reflects expenditures on the construction and reconstruction of residential buildings, the provision of subsidies to citizens for the purchase of housing and subsidies to promote the expansion, improvement or maintenance of the housing stock. This section also reflects the costs associated with issues of communal development and the provision of communal services: such as maintaining and restoring the proper technical and sanitary and hygienic condition of buildings, structures, equipment, communications (development, reconstruction and replacement of engineering networks) and housing and communal facilities (street lighting, sanitary cleaning facilities, green spaces, etc.).
The section "Environmental protection" reflects the costs of wastewater treatment, collection and disposal of waste, protection of plant and animal species and their habitats, purification of atmospheric air.
The section "Education" reflects the direction of expenses for the purposeful process of education and training. This reflects: the cost of preschool education for young children and the maintenance of preschool educational institutions; expenses for primary general, basic general, secondary (complete) general education; expenses for initial vocational training in secondary specialized educational institutions, special vocational schools, interschool educational complexes, training and production workshops; expenses for education in educational institutions of secondary vocational education; expenses for higher professional education; expenses for professional retraining and advanced training, as well as for youth policy and the organization of a health campaign for children.
The section "Culture, cinematography, mass media" reflects the costs of providing services in this area, maintaining cultural institutions, managing objects intended for cultural purposes, organizing, holding or supporting cultural events, state support and subsidizing the production of films , radio and television broadcasting, publishing, as well as the provision of grants, subsidies to support individual artists, writers
lei, artists, composers or organizations involved in cultural activities.
Under this section, the allocation and financing of cultural objects of particular importance for the state, such as, for example, the Russian State Library; State Hermitage; State Russian Museum; State Museum of Fine Arts named after A.S. Pushkin; Museum of Science and Industry; Novgorod State United Museum-Reserve; State Academic Bolshoi Theater of Russia; State Academic Mariinsky Theatre; State Film Fund of the Russian Federation; State Kremlin Palace and others.
Expenses for "Health care and sports" provide for state expenses for the maintenance and provision of activities of institutions that manage and manage the healthcare sector, the current maintenance of healthcare institutions, including the provision of medical services by them, the costs of providing services to individuals, centralized procurement of medicines and medical equipment, implementation of measures related to the organization of treatment of citizens of the Russian Federation abroad, the current maintenance of institutions that provide state sanitary and epidemiological surveillance, measures in the field of sanitary and epidemiological surveillance, as well as expenditures of the budgets of the constituent entities of the Russian Federation for compulsory medical insurance for the unemployed.
This section also reflects the costs of maintaining and ensuring the activities of institutions engaged in leadership and management in the field of sports, the provision of services for the organization of sports and physical culture, the management of facilities intended for active sports or sports events, participation in Russian and international sporting events, as well as the cost of providing subsidies to support teams or individual competitors.
The “Social Policy” section reflects the costs of pension provision related to the payment of old-age pensions, pensions for military personnel, state and municipal employees, judges, life allowance for judges, including an allowance of 50% of the monthly life allowance. This section also reflects the costs associated with the organization of social services for the population, the
establishment of social service institutions and organizations (boarding schools for the disabled, medical and sanitary expert commissions, etc.), provision of social support measures in the form of cash benefits and in the form of benefits to dependents in the event of loss of a breadwinner, as well as social support measures related to with the provision of disabled people with technical means of rehabilitation, including the manufacture and repair of prosthetic and orthopedic products.
This section also reflects the costs associated with social insurance of the population, including all types of benefits and insurance payments made by the Federal Social Insurance Fund, the provision of social protection in the form of: cash benefits to persons who are able to work, ready to work but cannot find a suitable job; child benefits for citizens with children; benefits to citizens in the event of post-vaccination complications; compensation for auto insurance for the disabled and others. It also takes into account the costs of combating homelessness, guardianship and guardianship.
The section "Interbudgetary transfers" reflects the costs of paying transfers, other forms of financial assistance, grants, subventions and subsidies to government bodies of various levels. This section reflects the costs associated with the formation in the federal budget of the Federal Fund for Financial Support of the Subjects of the Russian Federation, the Compensation Fund, the Fund for Co-financing Social Expenditures, the Regional Development Fund, as well as other forms of support for budgets of other levels, including targeted, current character. It also reflects expenses incurred at the expense of the federal budget by transferring funds to the Social Insurance Fund of the Russian Federation and the Pension Fund of the Russian Federation for the payment of benefits and cash payments, as well as to the Federal Compulsory Medical Insurance Fund for the implementation of measures of social support for certain categories of citizens to ensure medicines and for compulsory health insurance of the non-working population, including children.
Federal budgets for 2005 and 2006 drawn up already in accordance with the new sections of the functional classification of budget expenditures.
Analysis of the ratio of sections of the functional classification is of great importance for determining the intentions and preferences of the government for the next financial year.
The main part of the federal budget spending today is directed to finance national issues, national defense and law enforcement. In total, these expenditures for 2006 will amount to 43.5% of the RF federal budget expenditures.
The largest expenditure item of the federal budget is intergovernmental transfers. In 2006, they will amount to almost 1,500 billion rubles in absolute terms. This is largely due to the fact that currently most of the revenues are concentrated in the federal budget, which are then redistributed between the levels of the budget system.
Defense spending is the second largest item in the federal budget. In 2006, these expenses will amount to almost 670 billion rubles. Of course, this is much less than our state spent on military needs in the conditions of the USSR. At that time, spending on armaments ranged from 25 to 30% of GDP. However, if we compare this article with others - support for individual sectors of the economy, including social sectors, then it significantly exceeds them.
The third place is occupied by spending on national issues - about 650 billion rubles in 2006. A significant amount
expenditures under this section is largely due to the fact that in the new budget classification, expenditures for general government needs include expenditures on servicing the public debt - approximately 1/3 of the total expenditures under this section.
I would like to note that the cost of servicing the public debt over the past years has occupied a significant place in the structure of federal budget expenditures (Table 2). Thus, the cost of servicing the public debt in 2001 amounted to 20.1% of the federal budget of the Russian Federation. In 2002 they were 14.6%. In 2005, the share of federal budget expenditures was 8.3%. Although the share of spending on public debt service is declining, its share in the federal budget expenditures still remains significant, especially if we compare the level of these expenditures with expenditures on education, healthcare, and science.
Stable, but relatively low, are the state's expenditures to support certain sectors of the national economy - industry, construction, agriculture, transport, etc. In 2006, these expenditures will amount to only 340 billion rubles.
The cost of education is also low. Over the past years, they account for no more than 4-5% of federal budget expenditures. Health care costs are significantly lower - no more than 2-3%.
The share of expenditures on fundamental research is also small - only 1.5% of federal budget expenditures. This is a very small figure, and it is constantly falling. Thus, if in 1991 the state's expenditures on fundamental research amounted to 1.03% of GDP, which was 3.87% of federal budget expenditures, then in 1993 it was already 0.69% of GDP. In 2001, the share of spending on science in GDP was only 0.2%, which is many times lower than the critical level estimated at 3% of GDP. It is believed that at the level of state spending on science in the amount of less than 3% of GDP, the scientific and technical potential is destroyed. Such spending on science actually does not allow for deep fundamental research, which could in the very near future bring the country to the forefront of scientific and technological progress.
True, it should be noted that in 2002 expenditures under the "Social policy" item increased significantly. Whereas in 2001 expenditures under this item accounted for only 9% of federal budget expenditures, in 2002 they accounted for 22% (see Table 1). Currently, the share of spending on social policy is about 5%. A rather high share of expenditures on social policy is due to the fact that this section takes into account the expenditures of state social non-budgetary funds - the Pension Fund of the Russian Federation, the Social Insurance Fund, etc.
Determining priority areas for spending budget funds is a very important and responsible activity of the state. Unfortunately, in Russia there are still a number of negative aspects in the field of spending budget funds. This is the low efficiency of the use of budgetary funds; widespread practice of misappropriation of budget funds; insufficient amount of funds allocated for the solution of social issues; a low share of public investment in the national economy, which reduces the possibility of rapid stabilization of the financial situation in the country.
The main tasks in the field of improving the process of spending budget funds in Russia are:
1) ensuring priority financing of social expenditures;
2) expansion of state financing of investments in priority areas of the economy;
3) reduction of expenses for certain target items of expenditure and target programs;
4) reduction of subsidies to cover the losses of individual industries;
5) concentration of budget expenditures on the most efficient costs;
6) reducing the cost of maintaining the state apparatus and servicing the public debt;
7) increasing the efficiency of the use of budgetary funds for national defense on the basis of the gradual implementation of the military reform;
8) strengthening control over the use of budgetary funds.

The object of public spending is the income mobilized at the disposal of the state and its enterprises. The construction of the public spending system is based on certain principles established by the state and enshrined in regulations. Among the most important of them are:

Target allocation of funds (for example, Art. 70 of the RF BC);

Compliance with the savings regime (Articles 71-73 of the RF BC).1

The government spends the accumulated funds in various forms:

1. budget financing used to support general government spending, such as the defense industry, law enforcement, administration, health care, science, art, education, etc.

2. self-financing. According to paragraph 4 of Art. 41 of the RF BC, incomes of budgetary institutions received as a result of entrepreneurial activity remain in the use of a budgetary institution, but at the same time, they are simultaneously taken into account as incomes of the corresponding budget. This form is used to cover the costs of state-owned enterprises from their own resources;

3. lending, is used when the Russian Federation provides state credits (loans) to foreign states, as well as foreign and Russian legal entities (budget and tax credits) for which the borrower has financial obligations to the Russian Federation (subject of the Russian Federation or municipality) as a creditor.

Any state carries out expenses in three main areas - public administration, social sphere and support of the economic sphere.

In Russia, respectively, first group expenses include expenses for:

activities of financial and tax authorities;

the national defense

holding elections, referendums;

· mass media;

· social protection of employees of the state apparatus and special units (this is the most stable group of expenses that tends to grow).

second group make up the costs of public education, training of professional personnel, culture and art, science, health care, physical culture and sports, social programs.

To the third group includes expenses for:

· state investments on a gratuitous basis in the system of state infrastructure (housing, social sphere);

· foreign economic activity;

Servicing the public debt

other economic expenses.

Providing budget loans as a form of financial assistance, provided for by Article 133 of the RF BC from the federal budget to the budgets of the constituent entities of the Russian Federation is not regulated by budgetary legislation. At the same time, Art. 137 of the RF BC is devoted to the provision of budget loans to the constituent entities of the Russian Federation only to finance cash gaps.

According to Art. 6 of the RF BC, a budget loan is understood as “budgetary funds provided to another budget on a returnable, gratuitous or reimbursable basis for a period of not more than six months within a financial year”. Being an integral part of the mechanism of intrabudgetary borrowings, this form of ensuring budget revenues is based on the redistribution of funds between budgets.

§ 3. LEGAL REGULATION OF STATE EXTRA-BUDGETARY FUNDS

Independent elements of the Russian budget system are budgets state off-budget funds and territorial state off-budget funds.

At the same time, the state extra-budgetary fund is understood only as funds of funds formed outside the federal budget and the budgets of the constituent entities of the Russian Federation and intended for the implementation of the constitutional rights of citizens to pensions, social insurance, health care and medical care (Article 13 of the RF BC).

From these funds it is necessary to distinguish extra-budgetary funds created and used for additional financing of territorial needs (current, capital nature), at the regional and local levels. For example, according to Article 2 of the federal law of September 25, 1997 “On the financial foundations of local government in the Russian Federation”, local finances include local budget funds, state and municipal securities owned by local governments, and other financial resources.

Regional and local non-budgetary funds are often used in the interests of individual political forces, since according to the principle of completeness of budgets, budgets must reflect all possible income and expenses in full. Therefore, the creation of separate funds of funds financing some regional and local needs is not advisable.

Extra-budgetary funds are created by the decision of the representative or executive authorities at the federal level, by the decision of the legislative (representative) authorities of the constituent entities of the Russian Federation - at the regional level and by the decision of local governments at the municipal level.

Extra-budgetary funds specified in the Budget Code have a strictly designated purpose and are managed autonomously. These include the Pension Fund of the Russian Federation, the Social Insurance Fund, the Federal and Territorial Compulsory Medical Insurance Funds and the State Employment Fund.1 The funds of these extra-budgetary funds are not subject to withdrawal and are spent in accordance with the intended purpose determined by the regulation (charter) on the fund approved by the representative authority .

Social off-budget funds are part of the system of state social insurance - a special area of ​​insurance activity, which is a function of the state. With the help of social insurance, the state implements its social policy. Thus, the Federal Law of July 16, 1999 “On the Fundamentals of Compulsory Social Insurance”2, in Article 1 defines compulsory social insurance as part of the state system of social protection of the population, the specifics of which is insurance of working citizens against possible changes in material and (or) social status, including due to circumstances beyond their control.

State social insurance is characterized by a number of features:

1. There is no principle of voluntariness. Insurance occurs automatically (neither the form nor the amount of insurance is determined - all this is established by the state).

2. Insurance premiums are set at a certain percentage of the wage fund, and no additional circumstances, such as the age of the insured, his state of health, are not taken into account.

3. Within the framework of social insurance, only certain risks are covered that are closely related to a person's ability to work, such as illness, accident at work, disability, unemployment.

Payments from the social insurance system are aimed primarily at restoring the labor force.

The legal status of the Pension Fund of the Russian Federation (hereinafter referred to as PFR) is such that it was created for the purpose of state management of pensions for citizens. Its activities are based on the Regulation “On the Pension Fund of the Russian Federation”, approved by the Decree of the Supreme Council of the Russian Federation of December 27, 19911

The PFR is an independent financial and credit institution operating in accordance with the legislation of the Russian Federation and these Regulations. The state bears subsidiary liability for the obligations of the Pension Fund of the Russian Federation to the insured persons, in accordance with the Federal Law of December 15, 2001 No. “On Compulsory Pension Insurance in the Russian Federation”2

Traditional: financing of organizations of direct jurisdiction.

Target:

Allocation of funds for the implementation of budget programs and holding cultural events;

Support for cultural figures (state, gubernatorial, etc. scholarships, awards);

2-1 Actual spending on culture, arts and cinematography from the federal budget in 1993-1998 were lower than planned.

Support for creative projects in the field of culture and art

^residential, gubernatorial, etc. grants) 25 .

9 7.5. Forms of financial interaction between cultural management bodies at various levels.

Abroad.

Challenge subsidies- a higher body develops a program that affects the interests of a number of territories, and partially assumes its financing, so that the rest is reimbursed by interested participants.

reimbursement subsidies- the program developed by the lower body is partially financed from the budget of the higher level.

Counter subsidies- centralized funds are allocated only in response to subsidies from the local budget or sponsorship funds.

In Russian federation.

Equity financing- in relation to those projects that correspond to the established priorities and are justified by a detailed financial calculation.

seed funding- in relation to those projects that correspond to the established priorities, but have an increased risk during implementation, or cannot be substantiated by detailed financial calculations, and subsequent financing of which is possible based on the results of the completed stages of work.

Custodian Funding- in relation to those projects that are innovative and require special support.

9.2. Financing of cultural organizations. 9.2.1. Stages of changing the financing system.

Until the end of the 1980s In the field of culture, three types of organizations were distinguished by the method of financing:

fully financed from the budget(libraries, television) were financed according to the estimate in accordance with the budget classifier of cost items;

25 Since 1997, in accordance with the decree of the President of the Russian Federation "On measures to strengthen state support for culture and art in the Russian Federation", 100 grants from the President of the Russian Federation have been allocated to support creative projects of national importance in the field of culture and art. In addition, special forfeits are provided to “support certain types of art. projects of leading professional groups of folk music and choreography Since 2006, 11 grants in the field of theatrical art have been established to support the most famous, oldest drama theaters (6) and theater educational institutions (5).

- self-sustaining(circuses) - reimbursed their expenses and formed a profit;

- subsidized(all other cultural organizations) - received a subsidy to cover the difference between income and expenses.

Since the late 80s of the XX century during the transition of cultural organizations to new economic conditions, the foundations are laid multi-channel financing system. Organizations have the right to attract extrabudgetary funds through the provision of paid services and the receipt of voluntary contributions from enterprises and individuals. Budget funds are allocated in a single amount and are treated as a special type of income of cultural organizations, due to the social usefulness of the results of their activities. Funds from other sources are not grounds for reducing the size of budget allocations. Funds not used by the organization cannot be withdrawn or set off in the amount of funding for the next year. Organizations are self-sufficient in spending financial resources within the framework of a voluntarily chosen model of income distribution.

Attempts to improve the ways and mechanisms of financing budgetary cultural institutions through the introduction "performance budgeting (RBB)". The PB concept is based on the principle of financing not the existing costs of budgetary institutions, but state or municipal social order (tasks), determined by the priorities of the relevant cultural policy.

PB as an alternative to estimated (costly) financing. The use of RBB in many countries of the world as a tool to rationalize and improve the efficiency of the use of budget expenditures.

9.2.2. Channels and sources of financing of state and municipal institutions in Russia 26 .Funding channels:

Direct budget financing;

Indirect budget financing;

extrabudgetary funds.

A) Direct budget financing:

- capital investments(investments) - funds for new construction, reconstruction of buildings, technical re-equipment;

- budget (current) appropriations- budgetary funds allocated according to the estimate for the maintenance of budgetary institutions and maintaining

"" Ignatieva E. L. Financing of cultural institutions in modern economic conditions // Handbook of the head of a cultural institution. 2002. No. 0. P. 8-15 (see Appendix I).

staff activities in accordance with the approved budget IMI yu In the absence of standards for financial costs, the principles for determining the amount of budgetary appropriations are getting tired. naV, corresponding limits of budgetary obligations are brought. No funds are used exclusively through personal accounts of financial institutions, which are maintained by the relevant authorities

treasury;

- special-purpose financing- budgetary funds provided -
1e on a competitive basis for the implementation of cultural projects for additional

crimes concluded with state authorities and local self-government bodies. The main form of target budget financing is financing under programs and projects.

B) Indirect budget financing.

tax incentives.

Benefits granted to cultural institutions for the payment of taxes at the federal level.

The rights of public authorities of the constituent entities of the Federation and local governments to provide cultural institutions with additional tax benefits:

Exemption from payment of federal taxes to the extent that
goes to regional and local budgets;

Exemption from payment of regional and local taxes.
State course to reduce tax benefits.
Other financial benefits:

Securing property on the right of operational management, in
in some cases - transfer for gratuitous use or
reductions in rental rates;

Discounted utility rates.
C) Extrabudgetary funds:

Income received from the conduct of activities: the provision of paid services, the use of property, etc.;

Loans (see clause 9.2.4.);

Charitable donations, sponsorship contributions, grants from charitable foundations, etc. (See clause 9.3.)

Inconsistency of the norms of the current legislation regarding the income received from the conduct of activities. In Article 47 of the Fundamentals, the income of cultural organizations was divided into income from the main (.paid) types of cultural activity and income from entrepreneurial activity. Since 2004, this wording has been removed. For the purposes of taxation in the Tax Code of the Russian Federation, all income received by state and municipal institutions from conducting activities is treated as income from entrepreneurial activity. And, nako-

nec, in the RF BC, these incomes are considered as non-tax incomes d 0 . moves of the respective budgets.

9.2.3. The main sources of income generation for private non-profit and commercial cultural organizations.

To the main sources of income generation private non-profit organizations relate:

Regular and one-time receipts from the founders (participants, members);

Voluntary property contributions and donations;

Proceeds from the sale of goods, works, services and property rights;

Dividends (income, interest) received on shares, bonds, other securities and deposits;

Income received from the property of organizations;

Target financing from budgets of different levels;

Other receipts not prohibited by law.

Narrower range of possible funding sources commercial cultural organizations. A high share of operating income in the total income of commercial organizations.

Sources of funding for cultural projects do not differ from similar sources of funding for cultural organizations.

9.2.4. Credits: forms, area and prospects of use.

According to the form of submission can be distinguished:

Bank loan - issuance of a loan at a certain percentage
for a specified period;

Material credit (leasing) - leasing of expensive equipment for a long or medium term;

Supplier credit - the transfer of goods (works, services) before the actual transfer of funds and (or) other forms of payment on the basis of concluded agreements;

- "uncivilized credit" - untimely payment by cultural organizations for communal and other services, goods and works.

The predominance at the present stage of "uncivilized credit with the almost complete absence of bank and material credit.

A budgetary institution is not entitled to receive credits (loans) from credit institutions, other legal entities, individuals, from the budgets of the budgetary system of the Russian Federation (Article 161 of the RF BC).

Prospects for the development of leasing in the sphere of culture.

expenses are recognized as justified and documented

fixed costs (in some cases, losses) incurred by the Reported) organization.

Justified costs should be understood as socially and (or) economically justified costs.

Documented expenses are understood as expenses confirmed by documents drawn up in accordance with the legislation of the Russian Federation (Article 252 of the Tax Code of the Russian Federation).

Expenses, depending on their nature, as well as the conditions for implementation and areas of activity of organizations, are divided into expenses associated with production and sale, and non-operating

In the Russian Federation, a special mechanism for spending budgetary funds is provided for budgetary institutions. In accordance with Art. 70 of the RF BC, they spend budgetary funds exclusively on:

Remuneration in accordance with the concluded employment contracts and legal acts regulating the wages of the relevant categories of employees;

Transfer of insurance premiums to state off-budget funds;

Transfers to the population paid in accordance with federal laws, laws of the subjects of the Russian Federation and legal acts of local governments;

Travel and other compensation payments to employees in accordance with the legislation of the Russian Federation;

Payment for goods, works and services under concluded state or municipal contracts;

Payment for goods, works and services in accordance with approved estimates without the conclusion of state or municipal contracts.

Spending of budgetary funds by budgetary institutions for other purposes is not allowed.

The distribution of expenditures according to the relevant items and items is carried out in accordance with the budget classification of the Russian Federation and the Instructions on the procedure for its application, approved by the Ministry of Finance of the Russian Federation.

Modern technologies for financing organizations

(pg> R Imen e organizations culture of technology fundraising ■ attraction of financial resources).

Broad and narrow interpretation of fundraising. Fundraising in the narrow sense of the word is the attraction of financial resources from extrabudgetary sources. Fundraising in the broad sense of the word is raising funds from all possible channels and sources of financing. The broad interpretation of fundraising is due to the specifics of non-profit cultural organizations in our country, integrated into the state (municipal) sector 2? .

Fundraising as a financial support for social partnership in the implementation of cultural projects.

The role of business plans in attracting additional financial resources to cultural organizations.

9.3. Charity, patronage and sponsorship in culture. 9.3.1. Sponsorship.

Sponsorship- implementation by a legal or natural person (sponsor) of a contribution (in the form of providing property, results of intellectual activity, rendering services, carrying out works) to the activities of another legal or natural person (sponsored) on the terms of distribution by the sponsored advertising about the sponsor, his goods.Sponsorship is recognized as payment for advertising, and the sponsor And sponsored accordingly by the advertiser And advertising distributor 2 .

Charity.

Charity- activities for disinterested (gratuitous or on preferential terms) transfer of property to citizens or legal entities, including funds, disinterested performance of work, provision of services, provision of

other support.

The main features of charitable activities:

voluntariness;

Selflessness (moreover, selflessness is understood as support not only on a gratuitous basis, but also on a preferential basis);

27 Ignatieva E. Fundraising in Russia: Status and Prospects // AL-manager-
2002. No. 2. pp. 7-11. Currently, there are two transcriptions of the word "Gashk1ga151P#
The author adheres to the European pronunciation "fundraising", which was reflected
zhenie on the pages of this tutorial. Using the transcription "fand"
raising" in this article reflects the position of the editors of the magazine "Agt-manager".

29 of the Federal Law of the Russian Federation "On charitable activities and charitable organizations.
Art. 1.2.

Focus on social priority goals.

The use of labor of volunteers (volunteers) as a form of charity in culture.

Volunteer (volunteer)- a person working on his own initiative without an appropriate monetary reward, that is, free of charge.

The expediency of developing a special program for recruitment

(recruitment) and work with volunteers.

patronage as a kind of charitable activity in the sphere of culture, science, education.

Legislative acts of the Russian Federation do not contain the concepts of "philanthropist", "philanthropic activity", although in practice the term "philanthropy" is used. At present, the Ministry of Culture of Russia has prepared the concept of a draft federal law, which proposes to specifically distinguish "philanthropy" as a cultural category and enshrine in the law "On charitable activities and charitable organizations."

It is necessary to distinguish the economic understanding of the budget from the legal understanding. We are primarily interested in the first of them.

From the point of view of economic practice federal budget is the most important element. It ensures the accumulation of financial resources and their redistribution.

At the expense of the budget, a large part of effective demand is formed. This is achieved by the fact that significant amounts of wages are paid from the budget, goods and services are purchased, and capital investments are made.

Budget parameters directly affect the most important macroeconomic indicators - the volume of investment and production, the level of employment, .

Thus, in terms of its content, the federal budget is both an economic category and an instrument of policy.

In its form, the federal budget is the financial plan of the state, that is, a plan for the collection and use of financial resources in order to ensure state functions.

From a legal point of view, the federal budget is a normative act - a law. It is developed by the executive authorities and adopted by the legislative (or representative) authorities.

Revenues and expenditures of the federal budget

Income the federal budget is divided into tax And non-tax. The balance of funds at the end of the previous year shall be credited to federal budget revenues.

• established by tax legislation;
• customs duties, customs fees and other customs payments;

• income from the use of property;
• income from the sale of property;
• parts of the profit.

• profit of the Bank of Russia;
• income from foreign economic activity;
• income from the sale of state stocks and reserves.

Federal budget revenues may be transferred to the budgets of subjects of the Federation and local budgets in accordance with the standards established by the law on the federal budget for the next year.

• ensuring the activities of the President of the Russian Federation, the Federal Assembly of the Russian Federation, the Accounts Chamber of the Russian Federation, the Central Election Commission of the Russian Federation, federal executive bodies and their territorial bodies;
• the functioning of the federal judiciary;
• implementation of international activities;
• national defense and state security, the implementation of the conversion of defense industries;
• fundamental research and promotion of scientific and technological progress;
• state support for rail, air and sea transport;
• state support for nuclear energy;
• elimination of the consequences of emergency situations and natural disasters on a federal scale;
• exploration and use of outer space;
• formation of federal property;
• service and repayment of the public debt of the Russian Federation;
• compensation to state extra-budgetary funds for the payment of state pensions and benefits, other social payments to be financed in accordance with the legislation of the Russian Federation at the expense of the federal budget;
• federal investment program;
• official statistics.

When forming budgets of all levels, the creation of reserve funds is envisaged. The reserve fund in the federal budget cannot exceed 3% of approved federal budget expenditures.

The amount of reserve funds in the budgets of the constituent entities of the Russian Federation is established by the legislative authorities of the constituent entities of the Russian Federation upon their approval for the next financial year.

Reserve funds are used to finance unforeseen expenses, including for emergency recovery work to eliminate the consequences of natural disasters and other emergencies.

The order of spending from these funds is determined by the government. In addition, the federal budget for the next financial year provides for the creation of a reserve fund of the President of the Russian Federation in the amount of no more than 1% of the approved federal budget expenditures. The Budget Code of the Russian Federation establishes that the funds of the reserve fund of the President of the Russian Federation are spent on financing unforeseen expenses, as well as additional expenses provided for by decrees of the President of the Russian Federation.

It is not allowed to spend the resources of the reserve fund of the President of the Russian Federation on holding elections, referendums, and covering the activities of the President of the Russian Federation.

Data on revenues and expenditures of the federal budget for 1997-2003. are presented in table. 1. The federal budget had a significant deficit in 1997-2000. In 2001, an attempt was made to balance the budget. A federal budget surplus of 72.2 billion rubles is planned for 2003.

• public debt service (20% of all spending),
• national defense (19.0%),
• financial assistance to budgets of other levels (15.6%).

Drafting of the federal budget

Drawing up a draft federal budget is the exclusive prerogative of the Russian government. It starts no later than 10 months before the start of the next financial year.

• budget message of the President of the Russian Federation;
• forecast of socio-economic development for the next year;
• main directions of budgetary and tax policy for the next year;
• forecast of the consolidated financial balance for the next year throughout the territory of the Russian Federation;
• plan for the development of the public sector of the economy.

1. The budget message of the President of the Russian Federation shall be sent to the Federal Assembly of the Russian Federation no later than March of the year preceding the next financial year. The budget message of the President of the Russian Federation formulates the budget policy for the next year. It is determined on the basis of priority tasks for the development of the economy and the social sphere.

2. The forecast of socio-economic development is developed on the basis of statistical data for the last reporting period and trends in the development of the economy and the social sphere for the planned year.

The initial macroeconomic indicators for drawing up the draft budget are: the volume of gross domestic product for the next financial year and its growth rate; inflation rate.

Thus, the parameters of the federal budget for 2003 are based on forecast indicators: GDP - 13050.0 billion rubles, inflation rate - 10-12% per year.

When developing a forecast of socio-economic development, the following methods are used:

• method of economic analysis, which is based on the study of deviations of actual budget indicators from previously planned ones;
• extrapolation method, which consists in determining the prevailing trends in budget revenues and expenditures over a number of years and proposing that these trends remain unchanged for the future period.

3. The main directions of budget and tax policy for the next financial year are a document containing a plan for changes in budget and tax policy and, accordingly, in budget and tax legislation. In particular, this document may provide for changes in the rates of certain taxes and the distribution of taxes between budgets.

4. The forecast of the consolidated financial balance is a forecast of income and expenditure of all budgets in the territory of the Russian Federation. It is compiled on the basis of the balance sheet for the previous year and the forecast of socio-economic development for the future period. This balance reflects the total amount of financial resources available in the country and their distribution between the federal budget, the budgets of the subjects of the Federation and the budgets of local self-government. The consolidated financial balance allows you to make decisions about changes in the distribution of resources between budgets.

The plan for the development of the state economy includes:

• a consolidated plan for the financial and economic activities of federal state enterprises;
• program of privatization of state property;
• data on the staffing of civil servants by the main administrators of budgetary funds.

• forecast of the consolidated budget for the next financial year;
• perspective financial plan;
• targeted investment program for the next financial year;
• program of internal and external borrowings;
• a program for the provision of state guarantees for the next financial year.

Of the listed documents, a perspective financial plan should be noted. It is compiled on the basis of a medium-term forecast of the socio-economic development of the Russian Federation and contains data on the forecast possibilities of the budget for mobilizing revenues and financing basic expenses.

The long-term financial plan is not approved by law. It is developed in order to inform the legislature about the expected medium-term trends in the development of the economy and the social sphere. This plan is developed for three years, of which: the first year is the year for which the budget is drawn up; the next two years is the planning period.

The long-term financial plan is annually adjusted taking into account the indicators of the updated medium-term forecast of the socio-economic development of the Russian Federation. It is compiled according to consolidated indicators of the budget classification.

Let us now turn directly to the process of budgeting. The Budget Code of the Russian Federation distinguishes two stages of this process. For educational purposes, we will break them down into sub-steps.

• The Ministry of Economy is developing a plan-forecast of the country's development, containing the main macroeconomic indicators;
• the government of the Russian Federation considers and approves the forecast plan;
• The Ministry of Finance develops, on the basis of the forecast plan, the main characteristics of the draft federal budget. Moreover, already at this sub-stage, budget expenditures are distributed in accordance with sections of the functional classification;
• The government of the Russian Federation approves the main characteristics of the federal budget, and the Ministry of Finance sends budget projections to federal ministries and departments. The latter make on their basis a preliminary distribution of funds to specific recipients. In addition, the Ministry of Finance notifies the subjects of the Federation about the methodology for the formation of interbudgetary relations for the next financial year.

• The Ministry of Finance forms budget expenditures in accordance with three classifications;
• The Ministry of Finance coordinates the planned expenditures with the ministries and departments. Uncoordinated issues on budget projections are subject to consideration by an interdepartmental government commission headed by the Minister of Finance. The development and approval of the draft budget for the next financial year is completed no later than July 15.

At the same time, the drafting of bills is being completed, the adoption of which should be taken into account in the draft budget. These include bills on minimum wages and minimum pensions;

• From July 15 to August 15 of each year, the government of the Russian Federation reviews the forecast of socio-economic development for the next year, the updated parameters of the forecast for the socio-economic development of the Russian Federation for the medium term and the draft federal budget. The government approves the draft law on the federal budget and submits it to the State Duma.

Consideration and approval of the federal budget

The draft federal budget drawn up by the Government of the Russian Federation is considered and approved by the State Duma.

The draft federal budget must be submitted to the State Duma no later than 24:00 on August 15 of the current year. At the same time, the draft budget is submitted to the President of the Russian Federation for review.

The draft budget is submitted to the State Duma along with the following documents and materials:

• preliminary results of the socio-economic development of the Russian Federation in the current year;
• forecast of socio-economic development of the Russian Federation for the next year;
• the main directions of budgetary and tax policy for the next year;
• plan for the development of the public sector of the economy;
• forecast of the Consolidated Financial Balance for the territory of the country for the next year;
• the forecast of the consolidated budget of the Russian Federation for the next year;
• a draft federal targeted investment program for the next financial year;
• a draft program for the privatization of state-owned enterprises for the next financial year;
• draft structure of the state external debt;
• draft structure of the state internal debt.

The State Duma considers the draft law on the federal budget for the next financial year in the first reading within 30 days from the date of its introduction.

First reading of the budget

When the State Duma considers the draft law on the federal budget in the first reading, its concept, the forecast of the country's socio-economic development, the main directions of budget and tax policy for the next financial year, and the draft program of state external borrowing are discussed. At the first reading, the main characteristics of the federal budget are approved:

• incomes of the federal budget by groups, subgroups and articles of the classification of incomes of the budgets of the Russian Federation;
• distribution of income from federal taxes and fees between the federal budget and the budgets of the constituent entities of the Federation;
• the federal budget deficit in absolute figures and as a percentage of the federal budget expenditures for the next year and the sources for covering this deficit;
• the total volume of federal budget expenditures for the next year (Fig. 5).

When approving in the first reading the main characteristics of the draft federal budget received from the government of the Russian Federation, the State Duma has no right to increase its revenues and deficit without the consent of the government of the Russian Federation.

If the draft law on the federal budget for the next year is rejected in the first reading, the State Duma has the authority to:

• submit the said draft law to a conciliation commission of representatives of the State Duma, the Federation Council and the Government of the Russian Federation for the development of an agreed version of the main characteristics of the federal budget;
• to return the specified bill to the government of the Russian Federation for revision;
• raise the question of confidence in the government of the Russian Federation.

Based on the results of consideration of the draft law on the federal budget, a resolution of the State Duma is adopted on the approval of the draft federal law on the federal budget for the next financial year in the first reading.

Second reading

When the State Duma considers a draft law on the federal budget in the second reading, federal budget expenditures are approved by sections of the functional classification of expenditures of the budgets of the Russian Federation within the total volume of federal budget expenditures approved in the first reading, as well as the total volume of the Federal Fund for Financial Support of the Subjects of the Russian Federation.

The Budget Committee develops and submits for consideration by the State Duma a draft resolution on the adoption of a draft law on the federal budget in the second reading

The State Duma considers the said bill in the second reading within 15 days from the date of its adoption in the first reading.

If the State Duma rejects in the second reading the draft law on the federal budget for the next year, it submits the said bill to the conciliation commission.

Third reading

When the State Duma considers the draft law on the federal budget in the third reading, expenditures are approved for subsections of the functional classification and the main managers of funds for all four levels of the functional classification, and the funds of the Federal Fund for Financial Support of the Subjects of the Russian Federation are distributed among the subjects of the Federation, the Federal Targeted Investment Program for the next year and the Program of State External Borrowings of the Russian Federation for the next year.

The State Duma considers in the third reading the draft law on the budget for the next year within 25 days from the date of adoption of this bill in the second reading.

The total amount of appropriations for each section of the functional classification, taking into account the adopted amendments, should not exceed the amount of expenditures for the corresponding section, approved in the second reading of the draft law on the federal budget for the next year.

fourth reading

The State Duma considers in the fourth reading the draft law on the federal budget within 15 days from the date of adoption of the said bill in the third reading.

When considered in the fourth reading, the bill on the federal budget is voted on as a whole. Amendments to it are not allowed.

The law on the federal budget for the next financial year adopted by the State Duma is submitted to the Federation Council for consideration within five days from the date of adoption. The Federation Council considers the law on the federal budget for the next year within 14 days from the date of submission by the State Duma. The Federation Council has the right to either adopt or reject the law on the federal budget. But he cannot make changes or additions to it.

If the law on the federal budget for the next financial year is rejected by the Federation Council, the said federal law is submitted to the conciliation commission.

If the State Duma does not agree with the decision of the Federation Council, the law on the federal budget for the next year is considered adopted if at least two-thirds of the total number of deputies of the State Duma voted for it during the repeat voting.

If the President of the Russian Federation rejects the federal law on the budget for the next year, this law is submitted to the conciliation commission. This commission includes a representative of the President of the Russian Federation.

If the law on the federal budget is not adopted within the prescribed period, then the government of the Russian Federation has the right to carry out expenditures in the next year, guided by the budget for the previous year, but in amounts not exceeding 1/12 of the previous appropriations per month.

• provide budget funds for investment purposes;
• provide budgetary funds on a returnable basis;
• provide subventions to non-state legal entities;
• carry out borrowings in the amount of more than 1/8 of the volume of borrowings of the previous financial year per quarter;
• form reserve funds and carry out expenses from these funds.

Amendments and additions to the federal budget

In economic life, circumstances may arise that lead to violations of previously made forecasts of socio-economic development and, accordingly, the parameters of the adopted budget. Such circumstances can be both negative events within the country and sharp fluctuations in the world market. But other situations are possible when the actual budget revenues significantly exceed the planned ones.

In the event of a decrease in expected revenues to the federal budget by more than 10% of annual appointments, the government of the Russian Federation is obliged to submit to the State Duma a draft law on amendments and additions to the law on the federal budget. At the same time, the following documents are submitted to the State Duma:

• report on the execution of the federal budget for the period of the current financial year;
• report of the federal executive authorities collecting federal budget revenues;
• report on the use of funds from the reserve fund of the government of the Russian Federation and the reserve fund of the president of the Russian Federation;
• analysis of the reasons that necessitated the introduction of amendments and additions to the law on the federal budget.

The State Duma is to consider this bill on an extraordinary basis within 15 days in three readings.

If the draft federal law on introducing amendments and additions to the law on the federal budget is not adopted within the established period, the government of the Russian Federation has the right to a proportional reduction in federal budget expenditures until a legislative decision is made on this issue.

The cuts in budget spending are called sequestration. This is a fairly rare procedure and it is used in exceptional cases.

In previous years, the concept of "protected budget items" was used. Expenses under such items should have been financed as a matter of priority. They were not subject to sequestration.