Budget classification is a unified system of codes that groups and systematizes budgetary indicators according to certain criteria.
Budgetary classification is important for policy formulation, identifying the allocation of resources between sectors and identifying Government activities. Classification is also needed to establish accountability for policy and performance and day-to-day budget management.
The best-known classification systems are the "Classification of Government Functions (COFOG)", developed by the United Nations, and the "Classification of Government Financial Statistics (GFS)", developed by the IMF.
The budget classification system applied in the Republic of Moldova, approved in 2015, is in line with the UN and IMF systems, and includes:
- Functional classification, for historical analysis and policy formulation;
- Organizational classification, for responsibility;
- Classification of the fund of sources, for the source of financing;
- Economic classification, for the control of the expenses of the line elements;
- Classification of programs, for policy formulation and performance accountability.
