State spending policy encompasses the process of redistribution among and on the various levels of management in order to implement government priorities and achieve higher levels of an effective and efficient use of budget resources. The main philosophy behind the national spending policy lies in the flexible expenditure management which is directed towards strategic aspects in the medium term and oriented towards achieving end results.

The national spending policy is carried out in three basic directions:

• Funding of government priorities implemented through state bodies' budgets and funding of the independent and autonomous budgets. Evaluation of the effectiveness and efficiency of the budget proposals by state bodies and independent and autonomous budgets. Coordination of the proposals and alternatives concerning state expenditure by evaluating the effect of their possible funding.
• Drawing up, implementation and reporting of the state budget in its part related to municipalities, based on division of activities funded through municipal budgets into local and state mandates in organizing and providing public services. Thus, the state provides equal access of the population to a minimum level of public services for all municipalities.
• Effective management of financial resources during the implementation of public support measures in accordance with the state aid rules and regime.

• Report monitoring the reform towards fiscal decentralization in 2005

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• Indicators of the fiscal decentralization monitoring and assessment system

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