The Economic Nature and Classification of Financial Flows of Budgetary Institutions

Abstract

The purpose of this article is to provide a theoretical substantiation of the economic nature of financial flows of budgetary institutions and to develop their generalized classification model based on the analysis of existing scientific approaches to the classification of revenues and expenditures of public sector institutions, as well as the study of current budget legislation that determines the procedure for their formation and use.

The article examines the economic nature of financial flows of budgetary institutions, which are formed and used exclusively within the framework of budget legislation and the approved budget estimate, and reflect the process of transformation of financial resources of the state and territorial communities into socially useful services that ensure the performance of public sector functions. It is established that existing approaches to the classification of revenues and expenditures are fragmented and do not provide a holistic understanding of the structure and purpose of financial resources of budgetary institutions. Based on the systematization of scientific views and the analysis of current budget legislation, a generalized classification model of financial flows of budgetary institutions has been developed, and each of the proposed classification criteria has been characterized.

It is determined that the financial flows of budgetary institutions represent an integral system of movement of budgetary resources that ensures the fulfillment of socially significant functions assigned to the state and local self-government bodies. Their economic nature is conditioned by the targeted and regulated nature of revenues and expenditures, which are formed and used exclusively within the framework of budget legislation and the approved budget estimate. It is proposed to analyze the financial flows of budgetary institutions according to the criteria presented in the generalized classification model, namely: by sources of formation / coverage, by budget classification, by reflection in financial reporting and accounting forms, by the possibility of planning, by the possibility of forecasting, by the nature of receipts, by the period of occurrence, by sources of receipts, by principles of recognition, and by the nature of use. This approach will allow for a comprehensive assessment of the structure, dynamics, and balance of revenues and expenditures, as well as improve the validity of managerial decisions regarding the formation and use of financial resources. Prospects for further research are seen in the development of methodological approaches to evaluating the efficiency of formation and use of financial flows of budgetary institutions based on the proposed classification model.