Budget system and budget process - Finance, money circulation and credit

Budget system and budgetary process

From the definition given in the US BC, it follows that the budgetary system is based on economic relations and the state structure of the United States, is governed by the rules of law and represents the aggregate of the federal budget, the budgets of US subjects, local budgets and budgets of state extra-budgetary funds.

Budget system acts as a system of relations that arise between different actors in the process:

- the formation of income and expenditure budgets of all levels of the system and budgets of state extra-budgetary funds, the implementation of state and municipal borrowing, the regulation of state and municipal debt;

- preparation and consideration of draft budgets, their approval and execution, as well as control over their execution.

The US budget system consists of budgets of three levels (Figure 2.1):

- the federal budget and budgets of state extra-budgetary funds;

- budgets of US entities and budgets of territorial state extra-budgetary funds;

- local budgets, which include budgets of municipal districts, city districts, city municipalities of federal cities of Moscow and St. Petersburg, and budgets of urban and rural settlements.

Federal ( state ) Budget is a form of accumulation and expenditure of funds intended for ensuring the tasks and functions assigned to the subjects of the United States.

The structure of the budgetary system of the United States

Fig. 2.1. The structure of the budgetary system of the United States

The budget of the subject of the United States ( regional budget ) is designed to provide tasks and functions related to the subject matter of the subject USA.

The local budget, or municipal budget, is a form of education and spending of funds intended for solving tasks and functions related to the subjects of local self-government. The use of other forms of education and spending of funds for the fulfillment of obligations of municipal entities is not allowed by local governments.

In local budgets, in accordance with the budget classification, funds are allocated for the execution of expenditure obligations of municipal entities arising in connection with the exercise by local self-government authorities of local issues and expenditure liabilities of municipalities executed at the expense of assistance from other budgets budgetary system of the USA for realization of separate state powers.

The federal budget and the budgets of the United States entities are developed and approved in the form of laws at the appropriate level, local budgets in the form of legal acts of representative bodies of local self-government.

Budgets operating in the respective territories are combined into consolidated budgets, which represent the budget of all levels of the budget system in the relevant territory. Thus, the federal budget and the consolidated budgets of the US entities constitute the consolidated budget of the United States.

Consolidated budgets are not approved in the form of laws, but are used to calculate the minimum social and financial norms and standards required for budget planning, as well as for analyzing the efficiency of distribution and use of budgetary funds. The indicators of consolidated budgets are also the basis for providing financial assistance from the federal budget.

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