Банкеръ Weekly

Briefs

Cabinet Bans Corrections in Budget by Mid-Year

Ministry of Finance decided to put strict order in the execution of the state budget for 2013. Upon its request on January 9 the Council of Ministers decided by mid-year to prohibit any changes in planned expenditure budget of individual departments. So, if the Ministry of the Interior, for example, wants to increase payroll costs at the expense of the additional revenue collected or due to a reduction in capital expenditures, it will not be able to do so. The restriction is part of the various regulations that the government adopts each year to ensure smooth execution of the state budget.


Numerous adjustments to different types of costs that government agencies often wanted and the Cabinet often approved of during the past several financial years led to sharp criticism of the Supreme Audit Office. Generally speaking, such adjustments during the year are a pure violation of the will of the National Assembly, which it has expressed in the adoption of the state budget act. That is so, since, besides income and expenditure of the state as a whole, the Parliament votes also the revenue-expenditure plans of various primary spending authorities of public funds - ministries, government agencies and other supposedly independent institutions, which, however, without the money from the state budget cannot support themselves. And in order to comply with the recommendations of the Supreme Audit Office, the Government has now banned first-instance spenders to make internal reallocation of funds, something that mayors were found to be allowing.


Agencies which reported an over-performance in revenue collection would have to transfer it into the unified account of the Central Bank. And from this moment on, the Treasury will decide whether this money is to fill temporary shortages of funds at institutions whose plan has not been executed or not. According to officials of the ministry led by Mr. Dyankov at least until the middle of the year there will be no filling of holes arising from the excesses in the planned expenditure. Each public institution will have to spend under its preliminary plan. Although not officially recognized, this restriction was introduced because of the upcoming elections in the summer. As already mentioned, the Finance Minister Simeon Dyankov is determined to do everything necessary to prevent possible violations of the state budget act, non-execution or underperformance to become the subject of negative comments from the opposition.


The BANKER

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