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    1. Budgeting – the Case of SloveniaBudgeting – the Case of SloveniaMojca Voljč, Ministry of Finance SloveniaLjubljana, June 2013Study tour for officials from National Institute of Financial Management
    2. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia221. Introduction of Ministry of Finance and BudgetDirectorate2. Major public finance reforms in Slovenia3. Budget system in Slovenia1. Legislation2. Budget Classifications3. Budget Structure4. Organization and Responsibilities5. Information system4. Budget Preparation Procedures in Slovenia5. Role of the Parliament6. Main points about Budget ExecutionAgendaAgenda
    3. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia331.1. Introduction of Ministry of Finance and Budget DirectorateIntroduction of Ministry of Finance and Budget Directorate
    4. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia441.1. Introduction of Ministry of Finance and Budget DirectorateIntroduction of Ministry of Finance and Budget Directorate preparation and coordination of budget and public financepolicy, public finance legislation and other documentsconcerning public spending interpreting budget solutions and advising budget users aboutbudget preparation and execution preparation of budget manual (budget and annual report) final preparation of budget documents (for Government andParliament) indirect control of budget preparation and execution (i.e.through budget user managers) preparation of different analysis of budget measures andbudget executionBUDGET DIRECTORATE:
    5. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia55 Public Finance Act (Organic Budget Law, 1999) Economic Classification (= accounting classification,GFS, 1999) COFOG (2000) Program Classification (2000) Institutional Classification (2000) “Source of Funds Classification” “Two Year Budget” (2001) Changed budget preparation procedures from “bottomup” to “top down” (2002) Development programs plan (2003)2. Major public finance reforms in Slovenia2. Major public finance reforms in Slovenia
    6. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia66““Technical” consequences of public finance reformsTechnical” consequences of public finance reformsNEED FOR INFORMATION SYSTEM Improvement of information Transparent Budget (Who?, How?, What for?) OVERLOAD OF INFORMATION COMPLEXITY OF THE BUDGET2. Major public finance reforms in Slovenia2. Major public finance reforms in Slovenia
    7. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia773.1.3.1. Budget system in SloveniaBudget system in Slovenia –– LegislationLegislationLEGISLATION• Public Finance Act• Decree on Strategic Development Documentsand on the Bases and Procedures forPreparation of a Proposed National Budget• Rules of Procedure of the Parliament
    8. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia88Public Finance Act01.January31.DecemberBudget preparationDecree on Strategic Development Documentsand on the Bases and Procedures forPreparation of a Proposed National Budget01.OctoberPreparation of budget proposalRules of Procedure ofthe ParliamentAdoption of the Budget33.1. Budget system in Slovenia – Legislation.1. Budget system in Slovenia – Legislation
    9. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia993.1.3.1. Budget system in SloveniaBudget system in Slovenia –– LegislationLegislationPublic Finance Act regulate: Composition of the budget and financial plans Two budgets for next two years Documentations that Government should submit to theParliament The date for submission to the Parliament Instruction for preparing the Budget The structure of the proposed financial plans explanation Adjustment of proposals Adoption of the Budget and restrictions in adopting the Budget
    10. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia10103.1.3.1. Budget system in SloveniaBudget system in Slovenia –– LegislationLegislationDecree regulates: The preparation of the strategic development documents of thestate The formulation and determination of national developmentpriorities The preparation of the budget memorandum and determinationof fiscal rule (the frame of public finance expenditures) The procedures and documents for the preparation of aproposed national budget, proposed amendments to thenational budget, a proposed revised national budget and otherdocuments connected with these acts
    11. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia11113.1.3.1. Budget system in SloveniaBudget system in Slovenia –– LegislationLegislationDecree determine budget preparation procedures asfollows: The preparation and composition of the budget memorandum First budget session of the Government (before 15. of May) Harmonization of budget expenditures in government workinggroups Second budget session of the Government (before end of June) Instructions for the preparation of the budget Submission of proposed financial plans (before 15. of August) Submission of the budget memorandum and the proposed budgetby the MoF to the Government (before 20. of September)
    12. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia1212 INSTITUTIONAL CLASSIFICATIONWHO spend public money ECONOMIC CLASSIFICATIONHOW we spend public moneyFOR WHICH economic purposes PROGRAM CLASSIFICATIONWHAT FOR we spend public moneyON WHICH program areas FUNCTIONAL CLASSIFICATION - COFOGWHAT FOR we spend public moneyFOR WHICH function SOURCE OF FUNDS CLASSIFICATIONFROM WHICH FUNDS33.2. Budget system in Slovenia – Classifications.2. Budget system in Slovenia – Classifications
    13. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia131333.2. Budget system in Slovenia – Classifications.2. Budget system in Slovenia – ClassificationsINSTITUTIONAL CLASSIFICATIONGENERALGOVERNMENTCENTRALGOVERNMENTLOCALGOVERNMENTSOCIAL SECURITYFUNDSDirect budgetusersState fundsOther units of the statelevel (indirect users)Line Ministries- 34 -Direct budget users-169 –NongovernmentalGovernmentalJustice (Courts, Prosecutions,..)
    14. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia141433.2. Budget system in Slovenia – Classifications.2. Budget system in Slovenia – ClassificationsINSTITUTIONAL CLASSIFICATION
    15. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia151533.2. Budget system in Slovenia – Classifications.2. Budget system in Slovenia – ClassificationsECONOMIC CLASSIFICATIONACCOUNTS OFREVENUES ANDEXPENDITURESTHE FINANCIAL ASSETSAND LIABILITIESACCOUNTFINANCING ACCOUNT40 Current expenditure41 Current transfers42 Capital expenditure43 Capital transfers45 Payments to the EUbudget44 Lending andacquisition of equity55 Amortization of debt70 Tax revenues71 Non - tax revenues72 Capital revenues73 Grants74 Transferred revenues78 Receipts from the EUbudget75 Repayments of loansand sales of equities50 Borrowing
    16. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia1616 Budget expenditure (tip 1) Pre-accession funds – Slovenian participation - BLC A (tip 20) Accession funds– Slovenian participation (tip 29) Donations – Slovenian participation (tip 31) Norwegian 3 financial mechanism and EEA financial mechanism – Slovenianparticipation (tip 33) EU 04-06 – Structural funds – Slovenian participation (tip 51) EU 07-13 – Structural funds – Slovenian participation (tip 71) EU 04-06 – Cohesion fund – Slovenian participation (tip 53) EU 07-13 – Cohesion fund – Slovenian participation (tip 73) EU 04-06 – Rural development – Slovenian participation (tip 55) EU 07-13 – Rural development – Slovenian participation (tip 75) EU 04-06 – Other measures in agriculture sector – Slovenian participation (tip 63) EU 07-13 – Other measures in agriculture and fisheries sector – Slovenian participation(tip 83) EU 04-06 – Environmental measures – Slovenian participation (tip 65) EU 07-13 – Environmental measures – Slovenian participation (tip 85) EU 04-07 – Internal policies – Slovenian participation (tip 67) EU 07-13 – Internal policies – Slovenian participation (tip 81) EU 07-13 – European fisheries fund – Slovenian participation (tip 87) EU 07-13 – Territorial co-operation – Slovenian participation (tip 89) ……..165133.2. Budget system in Slovenia – Classifications.2. Budget system in Slovenia – ClassificationsSOURCE OF FUNDS CLASSIFICATION
    17. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia171733.2. Budget system in Slovenia – Classifications.2. Budget system in Slovenia – ClassificationsFUNCTIONAL CLASSIFICATIONThree levels of classification:• Divisions - 10• Groups - 69• Classis - 11101 GENERAL PUBLIC SERVICES02 DEFENCE03 PUBLIC ORDER AND SAFETY04 ECONOMIC AFFAIRS05 ENVIRONMENT PROTECTION06 HOUSING AND COMMUNITY AMENITIES07 HEALTH08 RECREATION, CULTURE AND RELIGION09 EDUCATION10 SOCIAL PROTECTION
    18. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia18183.2.3.2. Budget system in Slovenia – ClassificationsBudget system in Slovenia – ClassificationsPROGRAM CLASSIFICATION• FOR WHICH programs we spend public money• The base for result oriented budgeting• Three levels:• Policy – 24• Program – 112• Subprogram – 300
    19. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia1919BUDGET STRUCTURE1. GENERALPART2. SPECIALPART3. DEVELOPMENTPROGRAMS PLAN33.3. Budget system in Slovenia – Budget structure.3. Budget system in Slovenia – Budget structureREVENUES ANDEXPENDITURESECONOMICCLASSIFICATION SURPLAS/DEFICIT• INSTITUTIONAL•PROGRAMCLASSIFICATIONSEXPENDITURES•PROGRAMCLASSIFICATIONSEXPENDITURES –PROJECTS /ACTIVITIES
    20. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia20203.3.3.3. Budget system in Slovenia – Budget structureBudget system in Slovenia – Budget structureGENERAL PARTECONOMICCLASSIFICATIONshall comprise:A: the joint accounts ofrevenues andexpenditures,B: the financial assetsand liabilities accountandC: the financing account
    21. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia21213.3.3.3. Budget system in Slovenia – Budget structureBudget system in Slovenia – Budget structureSPECIAL PARTPROGRAMCLASSIFICATIONINSTITUTIONALCLASSIFICATIONof the budget shall comprisefinancial plans of the directspending units
    22. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia22223.3.3.3. Budget system in Slovenia – Budget structureBudget system in Slovenia – Budget structureDEVELOPMENT PROGRAMS PLANPROGRAMCLASSIFICATIONPROJECTSACTIVITIESshall disclose projects for investments, EU funds and state aidand activities of direct spending unitsin the subsequent four years, which shall be broken down by:– Individual program of direct spending units– Year in which the outgoings for the programs will burden the budget– Source of financing for full completion of programs.
    23. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia232333.4. Budget system in Slovenia – Organization and responsibilities.4. Budget system in Slovenia – Organization and responsibilitiesPARLIAMENTCABINET OF MINISTERLINE MINISTRIESDIRECT BUDGETUSERSMinistry of FinanceBudget departmentMinistry ofJusticeMinistry ofDefenceMinistry ofEducation …CoreMinistryOffice forYouthInspectoratefor Education …LocalcommunitiesHealthFundPensionFundTransfersfrom the statebudgetINDIRECT BUDGETUSERS ≈ 3000 …PrimarySchoolSecondarySchool …Transfers from the state budgetORGANIZATION ANDRESPONSIBILITIES
    24. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia2424System MFERAC• Execution• AccountingSystem APPrABudget preparation process• Scenarios – First phase• Budget preparation – Secondphase• Reporting systemExecution and accountingdata- Automatic procedures- Every nightAdoptedbudget3.5. Budget system in Slovenia – Information system3.5. Budget system in Slovenia – Information system
    25. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia25251. Scenarios2. Reporting system – internal (budget department)3. Budget preparation – web collection of data4. Reporting system – web5. Final accounts – web collection of data6. Applications for local communities7. Application administrationAPPrASystem / application for information support inbudget preparation procedures and data analysesrelated to the budget3.5. Budget system in Slovenia – Information system3.5. Budget system in Slovenia – Information system
    26. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia26263.5. Budget system in Slovenia – Information system3.5. Budget system in Slovenia – Information system
    27. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia27274.4. Budget Preparation Procedures in SloveniaBudget Preparation Procedures in SloveniaTimetable for budget implementationExpenditures by programsLegislature scrutinises and approves budgetBudget submitted to legislatureDraft budget prepared by MoFBudget requests reviewed by MoF -negotiationsLine ministries submit budget requestsBudget circularCabinet approves strategy and ceilingsRevenues and expenditures projectionsPreparation of macro-economic frameworkOSAJJMAMFJ
    28. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia2828Government budget sessionFirst phaseCeilings- determination of priorities- revenue and expenditure estimations- nominal expenditure frame- deficit / surplus as a goalExpenditures by policies, programs,subprograms and line ministriesHarmonisation of budget expendituresBudget adopted by the GovernmentSecond phaseBudget send to the Parliament- each line minister – financeminister- preparation of financial plansaccording priorities and instructionsMoF prepare budget proposal+ other documentationsHarmonisation of proposals -Final negotiations4.4. Budget Preparation Procedures in SloveniaBudget Preparation Procedures in Slovenia
    29. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia2929INPUT DATA• Base data• Macro-economicindicators• Index• Absolute valueRULESMathematical functionsBD*MEI1*(Ind1+Ind2) +/- AVRESULTRevenues /expenditures for theobserved periodo Wizard for defining ruleso General and specific ruleso At least 1 rule per data point per yearo Result on detailed levelFirst Phase – Information systemAPPrA – module Scenarios4.4. Budget Preparation Procedures in SloveniaBudget Preparation Procedures in Slovenia
    30. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia3030Government budget sessionFirst phaseCeilings- determination of priorities- revenue and expenditure estimations- nominal expenditure frame- deficit / surplus as a goalExpenditures by policies, programs,subprograms and line ministriesHarmonisation of budget expendituresBudget adopted by the GovernmentSecond phaseBudget send to the Parliament- each line minister – financeminister- preparation of financial plansaccording priorities and instructionsMoF prepare budget proposal+ other documentationsHarmonisation of proposals -Final negotiations4.4. Budget Preparation Procedures in SloveniaBudget Preparation Procedures in Slovenia
    31. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia3131 Instructions for the preparation of the budget shallcontain• the resolutions of the first and second budget sessions of theGovernment• the basic economic starting points and assumptions for thepreparation of budget proposals• the distribution of rights to expenditure determined by theGovernment• instructions for preparation of explanations of financial plans• deadlines• other technical and substantive instructions for the preparation ofthe proposed budget Submission of proposed financial plansby 15 August of the current year or by a day determined by theGovernmentSecond Phase4.4. Budget Preparation Procedures in SloveniaBudget Preparation Procedures in Slovenia
    32. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia3232WEB applicationData base on MoFControls of data onenteringDifferent Role:MoF, BU, LMCentral administration andupgrade of applicationSecond Phase – Information system4.4. Budget Preparation Procedures in SloveniaBudget Preparation Procedures in Slovenia
    33. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia3333Government shall submit to theParliament:• Budget memorandum• Proposed central government budget withexplanation• Proposed planned sales of the central government’sfinancial and physical assets for budgetary purposes• Proposed financial plans for the subsequent yearwith regard to the Health Insurance Institute andRetirement and Disability Pension InsuranceInstitute, both in the area of compulsory insurance,public funds and agencies founded by the centralgovernment, together with explanations• Proposed laws required to implement the proposedcentral government budget• Proposed Job Allocation Schedules and ProposedPlan of Capital Purchases4.4. Budget Preparation Procedures in SloveniaBudget Preparation Procedures in Slovenia
    34. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia343455. Role of the Parliament. Role of the ParliamentRules of Procedure of the Parliament determine theadoption of the budget: The session at which the budget memorandum and the draftstate budget will be presented (in 10 days after submission) Amendments are proposed to the individual subprogram ofdefined budget user in the special part of the draft state budget Amendments to the draft state budget may be tabled bydeputies, deputy groups, the working bodies concerned, and theworking body responsible (no later than 10 days following thepresentation) All proposers of amendments must take into consideration therule on the balance between budget revenues and expenditures. An amendment tabled should not burden the budget reserves orgeneral budgetary commitments, nor should it entail the burdenof additional borrowing
    35. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia353555. Role of the Parliament. Role of the ParliamentRules of Procedure of the Parliament determine theadoption of the budget: The Government takes a position on all tabled amendments On the basis of the latest analyses of economic trends and theimplementation of the state budget for the current year,government prepares a supplemented draft state budget andsubmits it to the Parliament (within 30 days following thepresentation) Amendments to the supplemented draft state budget may betabled by the working body responsible, a deputy group, or atleast one quarter of the deputies Committee on Finance and Monetary Policy - working bodyresponsible
    36. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia363655. Role of the Parliament. Role of the ParliamentRules of Procedure of the Parliament determine theadoption of the budget: The session of the Parliament at which the discussion on thesupplemented draft state budget will be held is convened within15 days following the submission of the supplemented draftstate budget the representative of the Government may first explain thesupplemented draft state budget the reporter of the working body responsible may presenta report the representatives of the deputy groups may presenttheir positions on such At the session of the Parliament they debated and voted onindividual parts of the supplemented draft state budget
    37. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia373755. Role of the Parliament. Role of the ParliamentRules of Procedure of the Parliament determine theadoption of the budget: The Parliament decides on the amendments to the supplementeddraft state budget at the end of the debate on the individual partof the special part of the supplemented draft state budget towhich the amendment was tabled When the voting on parts of the supplemented draft state budgetis completed, the chairperson establishes whether the draft statebudget is balanced in terms of revenue and expenditure, andindividual parts If the draft state budget is balanced, the Parliament votes on it inits entirety
    38. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia383855. Role of the Parliament. Role of the ParliamentRules of Procedure of the Parliament determine theadoption of the budget:The budget implementation act must be harmonised with the adopted state budget if not, the Government must propose a harmonisingamendment to the draft budget implementation act the discussion and adoption of the draft budgetimplementation act by the urgent procedure
    39. Budgeting – the Case of SloveniaBudgeting – the Case of Slovenia393966. Main points about Budget Execution. Main points about Budget ExecutionBUDGET EXECUTION Budget executed on budget line: budget item and 4-digiteconomic classification Reallocation of Appropriations are allowed in according toPublic Finance Act and annual Act on the implementation ofthe budget Carry overs are not allowed Restricted Entering into Commitments Burdening theBudgets for Subsequent Years
    40. Budgeting – the Case of SloveniaBudgeting – the Case of SloveniaThank you!Mojca.voljc@mf-rs.si

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