BUDGETARY FUNDS AS AN INSTRUMENT FOR THE IMPLEMENTATION OF PUBLIC FUNCTIONS OF THE STATE

Abstract

The article provides a comprehensive examination of budgetary funds as a fundamental instrument for the implementation of the state's public functions. The study analyses the legal and financial nature of budgetary resources, their role in fulfilling constitutionally defined public obligations, and their significance for socio-economic development. This text focuses on several key areas, including but not limited to: the conceptual foundations of budgetary funds; the structure of the state's public functions; the financial and legal mechanisms governing budget formation and utilisation; the principles underlying the budgetary system; the contemporary trends and challenges of financing public needs in Ukraine. The study shows that budgetary funds are essential for state activity, as they enable the provision of social services, security and defence functions, and economic development. It emphasises the growing importance of efficiency, transparency and financial sustainability in conditions of fiscal constraint and heightened social and security demands. Methodology. The study is based on an integrated methodological approach that combines legal, institutional, comparative and economic analyses. The legal component is grounded in the norms of Ukrainian budgetary legislation, particularly the Budget Code of Ukraine, the annual State Budget laws, and the subordinate regulations of the Cabinet of Ministers and the Ministry of Finance. The institutional approach is employed to evaluate the roles and responsibilities of stakeholders in the budget process, as well as the organisation of public finance governance. The economic component examines budget expenditure structures and long-term trends in social and security financing, using empirical data from national public finance reports. Results. The findings demonstrate that budgetary funds perform a dual role: they act as both a legal category, determining the scope of public authority in managing public resources, and an economic instrument for redistributing part of the gross domestic product in order to meet collective needs. The analysis confirms the predominance of social and humanitarian expenditure in Ukraine’s budget, revealing persistent underfunding of education and healthcare. This undermines the quality of public services and long-term development. The study emphasises the pivotal function of legal and procedural mechanisms, such as programme-based budgeting, the principle of subsidiarity, treasury control and multi-level financial oversight, in guaranteeing the legality, transparency and targeted allocation of public funds. The results also demonstrate a significant increase in defence and security spending following an escalation in military threats, reflecting the adaptability of the budget in response to changes in national priorities. Practical implications. The study provides several practical recommendations for improving the efficiency and sustainability of public finance management. These include the reinforcement of medium-term and strategic budgetary planning; the augmentation of the utilisation of performance-based budgeting instruments; the enhancement of transparency in public expenditure through digital platforms and open data initiatives; and the improvement of tax administration to broaden the state's revenue base. The findings are of particular relevance to policymakers, state authorities, financial institutions, and local government bodies seeking to enhance fiscal discipline, optimise expenditure structures, and ensure the long-term stability of budgetary financing. Furthermore, the article identifies opportunities for the adoption of selected EU and OECD practices with a view to strengthening Ukraine's budgetary governance and increasing the resilience of public finance in crisis and post-crisis conditions. Value/Originality. The present study contributes to the scholarly discourse on public finance and administrative law by offering a comprehensive and interdisciplinary analysis of budgetary funds as both a financial and legal category. The present study proposes an integrated conceptual framework to facilitate comprehension of the manner in which budgetary resources empower the state to fulfil its public functions in circumstances of constrained resources and augmented demands. The paper's originality lies in its synthesis of legal, institutional and economic perspectives, its detailed examination of Ukraine's expenditure structure and budgetary challenges, and its substantiated proposals for enhancing the efficiency of public finance management. The study also emphasises the importance of transparency, fiscal decentralisation, and long-term investment in human capital and infrastructure as central determinants of sustainable development.