State budget expenditures are classified according to 4 main directions.

• functional
• departmental
• economic
• programmatic

Analyzing functional expenditures

The functional classification of budget expenditures shows the expenses aimed at the implementation of various functions in individual sectors of the public sector.

The functional classification is used to evaluate the sectoral direction of the policy implemented by the government, sectoral priorities. In other words, if, for example, according to the functional classification, the share of the resources allocated to healthcare is large only in the budget expenditures, or the volume of allocations for the healthcare sector has increased by the largest volume compared to the previous year, then we can claim that the efforts of the government are aimed at the development of the healthcare sector, and that the healthcare sector is among the priorities of the government.

According to the functional classification, expenditures are grouped into classes, groups and departments. The first level of grouping is divisions, followed by groups, and then classes.

 For example, the “Health” division is represented in the functional structure by 5 groups:

• Medical products, devices and equipment,
• Outpatient services,
• Hospital services,
• Public health services,
• Healthcare (not included in other classes).

Each of the above groups is classified according to separate classes. Thus, the group “Hospital services” includes 3 classes.

• General hospital services,
• Specialized hospital services,
• Maternal and child health services.

Each of the classes, in turn, is divided according to the budget lines of distribution of financial resources, which coincide with the measures of the budget programs of the Program classification.

There are 11 sections of presentation with functional classification of budget expenditures.

• General public services
• Protection
• Public order, security and judicial activity
• Economic relations
• Environmental protection
• Housing construction and utility service
• Healthcare
• Leisure, culture and religion
• Education
• Social protection
• Contingency funds not classified into main sections