Budget Ppw. (Conspecte - MD)

Public Budget represents the basis of every countrys financial system, expressing the specific type of financial relations
budgetary relations that are implied in the processes of formation, distribution and use of budgetary funds necessary for the national (central) and local state bodies.
Lecture 4 Budget and budgetary system Slide 1
Public Budget represent the economic relations that manifest themselves in the process of formation and utilization of the main centralized cash fund of the state and of the administrativeterritorial units funds, with the purpose of financing the activities focused on improving the quality of life, the economic development of the country, scientific research, improving and widening the infrastructure, creating state reserves, national defense, and public and law order
Public Budget represents the main document, viewed as a law, which establishes the nature and the size of income that is mobilized by the state on one side, and on another side the type and the amount of budget allocations that the state will forward to fund various activities during the year.
There are three categories of financial (budget) laws: A.The annual law of finance or the law of initial budget which stipulates and authorizes the set of state resources and expenses for each financial year and it is known as the State Budget Law;
There are three categories of financial (budget) laws: B.The adopted laws of the state budget (adopted for the current year) focus on the rectification (correction) of the provisions of the initial budget law (the number of the provisions is not fixed and can vary from year to year);
There are three categories of financial (budget) laws: C. Law of finance regulation (Law of execution of the Budget). After expiration of the budget year ( usually after one year), through which is established the real execution of budget and approved differences between recorded results and forecasts of annual law of finance, fulfilled by adjusting laws. This law can be considered in a narrow acceptance.
Adopted by the Parliament, the budget is the main document from public life, because it is the financial expression of action plan of the state for the period of one year. It can be seen under four main approaches:
a)From the juridical point of view, budget is a financial document with the power of law which includes certain norms and normatives for organization of a clear and explicit financial administration; these norms are for organization of a transparent administration of state finances and determination of Governmental authorities in the budget field.
b) From the accounting point of view the budget represents the set of accounts that administrate financial resources of the state. Here, from the technical point of view we are interested especially in processes of elaboration and execution of budget as methods of forecasting and evaluation of different categories of revenues and expenses of the Budget.
c)From the economic point of view can be mentioned the specific funds that pass through budgetary account. These funds represent the considerable weight of GDP taken through taxes and expenses made by the state.
d)From the political point of view the budget is considered as the expression of Governmental options in the set of fields (economical politics, social, educative, cultural, military etc.); these options are reflected through accumulation and distribution of revenues and expenditures and are determined by multiple factors related to doctrines of political parties, past influence, inertial phenomena etc.
Budget must execute three functions: 1.Control over expenditures by which is supervised budget execution by public authorities. 2.Efficient use of financial resources and staff for managing and realizing the supposed activities. 3.Planning of state activities by which are established objectives and are formulated different alternative programs being evaluated by financing possibilities.
Budgetary System of Federal Type states is formed from three parts: 1.The budget of federation; 2.The budget of territorial units (components of federation); 3.Local budget.
Budgetary System of Unitary Type is composed from two components: 1.Budget of state central administration; 2.Local budget of territorial-administrative units.
The budgetary system of the Republic of Moldova has the unitary type. According to the Law of the Republic of Moldova Regarding budgetary system and budgetary process, Nr.847 from 24.05.96 Budgetary system is a unitary system of budgets and funds, which constitute the national public budget, comprising:
a) state budget b) budget of social insurance of state c) budgets of territorial-administrative units

State budget reflects financial relations expressed by expenditures corresponding to realization of objectives and actions of national interest, respectively financial resources mobilized in State disposal.
Budgets of territorial-administrative units (TAU) are the financial relations corresponding to the expenditures of certain actions for local collectivities, (state or region). The TAU budgets ensure with financial resources realization for satisfaction of socio-economic and cultural needs of population as for development of the territory in subordination.
According to the legal framework, TAU elaborates and approves its own annual budgets in limits of available financial resources which are formed from: 1.Own revenues, formed from local duties and taxes, for each separate territory, according to Fiscal Code and are spread directly to the respective budgets.
2.Special means; - are revenues of public institutions, in the form of donations, sponsorships and other cash means incorporated legally in the possession of public institution.
3.Transfers from general revenues of the state, according to normative percentage established through annually budgetary law.
4.Transfers from the state budget; - are the allocated financial means, according to the legal provisions, with a definitive title and in an absolute amount, from state budget to the district budgets, or from district budgets to the local budgets for leveling financial possibilities of administrative-territorial units, in order to ensure execution of certain public functions, financing activity fields which correspond to the competence of local public authorities.
4.Special funds; - represent cash means for sustaining some programs of local interest, in accordance with legal disposals. 5.Annual expenditures of TAU budgets are coming under responsibility of representative authorities and are approved just in limits of available financial resources. These are related to the fields like education, healthcare, culture and art, sports and activities for teenagers, etc.
The budget of state social insurance (BSSI) comprise the financial relations expressed through expenditures specific for this field, reflected through pension payments, assistance and compensations, social protection, respectively through revenues characteristic for this domain, first of all contributions for social insurance.
Insurance of obligatory medical assistance represent the system, warranted by the state and protects the populations interests in the field of health protection. These funds cover expenditures of treatment in situations conditioned by happening of ensured events.
Budgetary process can be defined as the set of activities and operations, which takes place annually comprising elaboration of budget project; its aprovement; budget execution and bugetary control.
BP has the decisive type, which consists from ordination of priorities and allocation of necessary financial resources for concerned objectives, with public utility. Decision that should be taken is one of the most complicated, as mobilized resources are limited and are situated, in all situations, under the level of public necessities of the period.
BP is a political predominant, as decisions related to allocation of mobilized budgetary resources are not based on criteria or information on the market, they are just based on the objectives of the governing program, established by the party which has the majority in the Parliament.
BP has a complex character, because it is realized through participation of a big number of subjects of different nature with own interests, needs and possibilities.
BP is cyclic, being realized successively under a rigid (strict) calendar, according to the requirements of annual principles and budgetary publicity. BP is strictly regulated by the legislation and methodological norms elaborated by the Ministry of Finance.
The main participants in the budgetary process are: 1) entities financed from the budget (institutions, administrative-territorial units etc.) 2) main officers of the budget (ministers and leaders of other specialized bodies of central public administration ) 3) Ministry of Finance 4) Government 5) Legislative body (Parliament)
6) Groups of interest and citizens.

The stages of the budget process are the following: 1.elaboration of the budget project, 2.adoption of the budget project, 3.execution of budget, 4.budget control.
1.Stage elaboration of the budget project The Ministry of Finance presents the main economic data, necessary for the elaboration of state budget project, in terms fixed by the Government and it includes:
a) Forecast of macroeconomic and social indicators for the next budgetary year, which is determined, elaborated and presented by the Ministry of Economics. b) Forecast of indexes and demands of the state social insurance budget, which is determined, elaborated and presented by the Ministry of Labor, Social and Family Protection. c) Forecast of the balance of payments, of credits, of external obligations and of other indicators that characterize the credit monetary policy of the state, determined, elaborated and presented by the National
Bank of Moldova.
After the amendments have been included, if they existed, the Government approves the project for the next budget year. Until the October 1-st of each year, the Government presents to the Parliament: a) The project of budget law for the next budget year and the explanatory note; b) The list of modifications in the legislation resulted from project of annual budget law.
2. Stage The examination and adoption of the annual budget law The Government presents to the Parliament until October 1-st of each year the project of annual budget law. Additionally to the project of annual budget law, the Ministry of Finance presents calculations of budget incomes and expenditures.
Stage 3 The execution of state budget The Government has the responsibility for the execution of state budget. In term of 10 days after the adoption of the annual budget law, the Ministry of Finance: a) Requests form central public authorities their financial plans, as well as plans of the their subordinated institutions; b) Prepares the breakdown of monthly distribution of incomes stipulated by the annual budget law and by other legislative documents.
Stage 4 The report regarding the execution of annual budget law and its approval On December 31-st of each year, Ministry of Finance makes the final balance of all accounts opened during the current budget year, in order to make the annual report. All incomes uncollected until December 31 are cashed in the budget account for the next year. At the end of each budget year, the Ministry of Finance issues the report regarding the execution of the state budget, which is presented to the Government and Parliament until May 1-st of the next year after the
current one.
The budget control - the control over execution of the state budget represents a stage from the budget process that is based on the restrictions, taking into account that budgetary resources have limited character. In this context, the necessity of control over the budget derives from political and financial interests.
Juridical control is performed by the specialized organs of the state for the purpose of establishing of the juridical responsibility of the subjects implicated in the budget execution process in case of defective administration of political funds. For this purpose, the Court of Accounts activates as a basic control organ from annual budget law state.
Administrative control includes the performed control by specialized organs of Ministry of Finance (IFPS, Treasury, etc) as well as the realized control inside of each institution under the form of control made by the main ordinates of budget credits over the way of how these credits are consumed by subordinates.
Depending on the time of its accomplishment, the budgetary control may be: Preventive Concomitant; Post-operative.
Preventive control is the most effective, because it can stop running illegal operations or those judged to be inappropriate and inefficient.
Concomitant control has limited effectiveness, but should not be underestimated, because by determining the legality or illegality of the operation, there is prevented the initiation of similar actions in future.
Post-operative control can not fix what was done, but by identifying deviations from the law and determining those responsible, it may establish measures for the recovery of damages to the state.

Budget Ppw. (Conspecte - MD)

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Public Budget represents the basis of every countrys financial system, expressing the specific type of financial relations

Lecture 4 Budget and budgetary system Slide 4

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a) state budget b) budget of social insurance of state c) budgets of territorial-administrative units

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6) Groups of interest and citizens.

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