BUDGET SYSTEM LAW("Official Herald of the Republic of Serbia", No. 9/2002, 87/2002, 61/2005 - other law, 66/2005, 101/2005 - other law, 62/2006 – other law, 63/2006 correction of other law, 85/2006 and 86/2006 - correction) |
Article 1
This Law shall regulate the planning, preparation and enacting of the budget of the Republic of Serbia (hereinafter: the Republic), and the budgets of the territorial autonomies and local self-government (hereinafter: local authorities).
This Law, through establishment of the Treasury of the Republic, i.e., local authority, shall also regulate budget execution, borrowing, issuing of guarantees, debt management, budget accounting and reporting.
This Law establishes the Treasury Office as an administrative body within the Ministry of Finance (hereinafter: the Ministry), it defines its jurisdiction and organization, and it sets the local authorities duty to establish their own Treasuries.
This Law shall also regulate control and audit of the Republic and local authorities budget, and control and audit of public institutions and other indirect budget spending units, public institutions and legal entities founded by public enterprises, i.e., legal entities in which the Republic or local authority exercises direct or indirect control in excess of 50% of the capital or more than 50% of votes in the management board.
This Law shall also regulate preparation and adoption of financial plans, borrowing, accounting, reporting, control and audit of financial plans of the Republic Health Insurance Institute, Republic Pension and Disability Insurance Funds and Republic Labor Market Office (hereinafter: mandatory social security organizations).
The Minister responsible for finance (hereinafter: the Minister) shall pass acts to enforce this Law, in accordance with law.
Article 2
For the purposes of this Law, the terms used shall have the following meanings:
1) The Budget Law is the law whereby the National Assembly of Republic of Serbia (hereinafter: National Assembly) approves for each year expenditure and other outflows, revenues and receipts, borrowing and other financial transactions of the Republic, and funds for the realization of the National Investment Plan are presented for one or more years;
2) Budget decision is the act whereby the autonomous province assembly and/or municipal assembly, assemblies of cities or the city of Belgrade (hereinafter: local assembly), approve for each year the expenditure and other outflows, revenues and other receipts, borrowing and other financial transactions of local authorities;
3) The supplemental budget is a Republic law and/or a decision of a local assembly whereby the budget is amended;
4) A financial plan is an act of a direct and/or indirect budget beneficiary, as well as an act of mandatory social security organizations, containing an estimate of the volume of revenues and expenditures (including revenues and expenditures from its own receipts) in a gross amount for the budget year;
5) A medium term financial plan is a financial plan specified in point 4 of this Article for the budget year and two subsequent fiscal years;
6) The direct budget beneficiaries are the bodies and organizations of the Republic and/or local authority;
7) The indirect budget beneficiaries are judicial bodies, local communities, public companies, directories and funds established by local authorities financed from public revenues and with their purpose defined by a separate law, institutions founded by the Republic and/or local authority over which the founder, through direct budget beneficiaries, exercises statutory powers in respect of management and financing, and budgetary funds;
8) An appropriation is the authority granted by the National Assembly, and/or by the local assembly, through the Law on the Budget of the Republic, i.e. through the decision on the budget made by local authorities, to the Government of the Republic of Serbia (hereinafter: the Government), and/or to the competent executive local authority body, to spend public funds up to a certain amount and for specified purposes during the budget year, i.e. to spend the amount of funds defined by the financial plan of the mandatory social security organization for specified purposes; permanent appropriation is an appropriation in the budget which compulsorily defines funds for debt repayments and issued guarantees; appropriations for indirect budget beneficiaries are not classified by name for each indirect budget beneficiary, but collectively in accordance with indirect budget beneficiaries types and funds purposes within the allocation of a direct budget beneficiary, which is, in terms of the budget, responsible for those indirect budget beneficiaries;
9) Borrowing is the contracting of loans or issuing state securities, in accordance to the special law;
10) Liquidity borrowing is the contracting of short-term loans, i.e. issuing short-term state securities for financing temporary shortfalls in the budget liquidity resulting from unbalanced developments of revenues and expenditures during the execution of the budget;
11) A commitment is engagement of funds by a budget beneficiary, on the basis of its own legal act, that at the moment of engagement, is expected to result in the cash outlay, immediately or in the future;
12) Payments are all financial transactions that result in the reduction of bank account balances;
13) Public funds are the funds under the control of and at the disposal of the Republic, local authorities or mandatory social security organizations;
14) The Consolidated Treasury Account is a unified fund account of the Republic budget beneficiaries and of mandatory social security organizations beneficiaries, opened for the Republic and registered within the Treasury Office;
15) The General Treasury Ledger is the main double entry bookkeeping ledger where all changes on the accounts are recorded;
16) Tax expenditures are benefits or exemptions from a usual tax structure that reduce revenue collection;
17) The Budget Memorandum is a middle-term macroeconomic and fiscal frame used as a base for enacting budgets and financial plans of mandatory social security organizations;
18) The General Balance is a constitutive part of the Budget Memorandum for the budget year in which all revenues and expenditures of the Republic, local authorities and mandatory social security organizations are being balanced; general balance for the city level is an act of the citys executive body in which all revenues and expenditures of the city budget and budgets of city municipalities are being stated;
19) The Mandatory Social Security Organizations Funds Beneficiaries are mandatory social security organizations and beneficiaries of the Republic Health Insurance Institute funds (health care and pharmaceutical institutes founded by the Republic or by the local authority);
20) The Transfer Funds are funds from the Republic budget, and/or local authority budget, which are being transferred to the beneficiaries on the other level of government and to mandatory social security organizations;
21) The donation is restricted revenue based on the contract between the donor and recipient;
22) The State Aid is an aid granted from the Republic budget and from the local authority budget aimed at stimulating the work of certain companies or production of certain goods, on the basis of the selectivity principle and defined by the special law;
23) The System of Consolidated Treasury Accounts is a unified fund account of consolidated accounts of the Republic Treasury and of local authorities treasuries, used for making payments between the budget fund beneficiaries and mandatory social security organizations funds beneficiaries, on one side, and subjects not covered with the system of consolidated treasury accounts, on the other side, and for calculating payments between banks;
24) The Consolidated Local Authority Treasury Account is a unified fund account of local authoritys belonging budget beneficiaries, opened for the local authorities and registered within the Treasury Office;
25) The Sub-account is an account of budget fund beneficiaries and of mandatory social security organizations fund beneficiaries used for keeping records, opened within the appropriate consolidated treasury account and registered within the Treasury Office;
26) The Law on the Republics Budget Final Account is the National Assemblys act enacted for every budget year defining the total amount of collected revenues and the Republic budget fund beneficiaries incomes on their own, the budgets expenditures, the Republic budget fund beneficiaries expenditures of their own incomes and the Republic budgets financial result;
27) The Decision on the Local Authoritys Budget Final Account is the local assemblys act enacted for every budget year defining the total amount of collected revenues and the local authority budget fund beneficiaries incomes on their own, the budgets expenditures, the local authority budget fund beneficiaries expenditures of their own incomes and the local authority budgets financial result;
28) The Decision on the Mandatory Social Security Organizations Final Account is the mandatory social security organizations act enacted for every budget year defining the mandatory social security organizations total amount of collected revenues and expenditures, its own revenues and expenditures of its own incomes, as well as the mandatory social security organizations financial result;
29) The Citys Consolidated Report is the consolidated report of the citys and its belonging municipalities budget final accounts, prepared by a body in charge of citys finances and submitted to the Treasury Office;
30) The Republics Consolidated Report is the consolidated report of the Republics budget final account, of mandatory social security organizations final accounts, of the Republic Health Insurance Institutes consolidated report, of territorial autonomy units final accounts, of municipalities final accounts and of cities consolidated reports, which Government delivers to the National Assembly as an act of notification;
31) Program part of the budget is part of the budget consisting of budget fund beneficiaries’ tasks and activities which are conducted in order to have the efficient management of funds based on proposed programs, and these programs are contributing to accomplishing strategic goals in line with country’s economic policy;
32) Strategic Fields are fields named as such by the National Assembly and Government, in which budget fund beneficiary acts, i.e. provides services, with funds allocated in its financial plan;
33) Main Program is general program which is part of a Strategic Field and is prepared and operated through one or more programs, which are under competence of one or more budget fund beneficiaries;
34) Program is part of a Main Program and is under competence of just one budget fund beneficiary; program has clearly defined specific goals and indicators of achievements and effectiveness, which are contributing to accomplishing Main Program’s general goals;
35) Project is set of mutually connected activities organized to lead towards accomplishing goals and results of a project, i.e. program;
36) Activities consist of tasks the budget fund beneficiaries perform, i.e. provide services within the program, i.e. project, with precisely planned expenditures and outflows, and they end up with achieving one or more results which are contributing to accomplishing goals and results of a program, i.e. project whose constitutive part they are;
37) National Investment Plan is a fund plan where funds earned during the privatization procedure, from international financial institutions’ loans and from other sources defined by law, are allocated for investments that are urging employment, modernizing infrastructure, additionally speeding the economy development, evening regional development and contributing to raising people’s standards, and for other purposes defined by that plan;
38) National Assembly of the Republic of Serbia Finance Committee shall quarterly examine information on realization of the National Investment Plan and notify the National Assembly about it.
Article 3
The budget system shall comprise the budget of the Republic, the budgets of the local authorities and the financial plans of the mandatory social security organizations.
The integrity of the budget system shall be ensured by a uniform legal basis, single budget classification, use of single budget documentation for drafting budgets and financial plans, single system of budget accounting, single criteria for budget control and audit, the transfer of statistical reporting and information from one budget level to another, and the principles set for the budget process, in accordance with this Law.
Article 4
The budgetary objective in preparing and executing the budget shall be macro-economic stability, sustainable and stable economic development and the minimisation of financial risk of the Republic.
The budget appropriations shall be used also to finance the functioning of Republic and local authorities, discharging of their duties and for other purposes under the Constitution, laws or local authority regulations.
In preparing and executing the budget, the principles of efficiency and economy, completeness, accuracy and single budgetary classification must be adhered to.
Article 5
Budget receipts belonging to the Republic or local authority shall be allocated and stated by source in the budget.
Budget expenditures of the Republic or local authorities shall be determined by individual purpose in the budget.
Receipts shall be stated in total collected amounts, and all outflows in total executed amount.
Exceptionally, in case higher authority allocates funds to the lower authority as compensation for damages caused by natural disasters, the local authority in charge of finances shall open adequate appropriations for executing outflows on that ground.
The budget must be balanced in respect of receipts and outflows.
During a current year, the Republic and/or appropriate executive body of local authority may have at their disposal those receipts that have been contributed to their budgets by the end of the current year.
The direct budget beneficiaries may enter into commitments and use budget appropriations up to the levels determined by individual purpose in the budget, i.e. up to the levels of appropriations determined within the program.
The collection of revenues shall not be limited by revenue estimates stated in the budget.
Responsibility for Passing of the Budget and Financial Plan of Mandatory Social Security Organizations
Article 6
The National Assembly shall pass the Law on Republic Budget.
The Local Assembly shall enact the decision on local authority budget.
The financial plans of the mandatory social security organizations shall be passed by the competent body of the organization, in accordance with law and other regulations.
Unless otherwise stipulated by law, bodies responsible for preparing budgets and financial plans referred to in paragraphs 1-3 of this Article, shall autonomously allocate total receipts and outflows, in accordance with law.
Responsibility for Execution of the Budget and Financial Plan of Mandatory Social Security Organizations
Article 7
The Minister shall be responsible for execution of the budget. The Government shall be accountable to the National Assembly for execution of the budget.
The relevant executive body of local authority shall be accountable to the local assembly in respect of execution of the budget of the local authority.
The relevant body of a mandatory social security organization shall be accountable to the Government for execution of the organizations financial plan.
If the execution of the budget endangers the implementation of the Republics affairs defined by the Constitution and specific laws, then the Minister may temporarily reduce, and/or suspend transfer of funds to other levels of government and immediately notifies the Government about it.
Reports on the execution of the budget to the National Assembly and/or local assembly shall be submitted in the manner stipulated by this Law.
The Minister, and/or the local administrative authority responsible for finance shall monitor regularly the execution of the budget and shall inform the Government and/or the relevant local authority body accordingly at least twice a year.
The ministers responsible shall monitor regularly the execution of financial plans of mandatory social security organizations and shall semi-annually inform the Government and the Minister.
Article 8
The Minister and/or administrative body of local authority responsible for finance shall establish a Consolidated Treasury Account.
The Consolidated Treasury Account of the Republic and the consolidated treasury accounts of the local authorities shall make the system of the Consolidated Treasury Account of the Treasury which is kept at the National Bank of Serbia.
The Minister and/or the body of local authority responsible for finance, and/or a person authorized by it, shall open the sub-accounts of direct and indirect beneficiaries of the budget resources of the Republic and/or of local authorities and mandatory social security organizations.
The following shall be recorded separately within the scope of the sub-account specified in paragraph 3 of this Article:
1) Funds set apart in the budget and/or financial plan of the budget beneficiary and/or of the mandatory social security;
2) Own proceeds that are realized by the budget beneficiary and/or mandatory social security organization, in accordance with law.
The Treasury Office shall keep sub-accounts of direct and indirect beneficiaries of the Budget of the Republic, and/or local authority and mandatory social security organizations.
Monetary assets of the Budget of the Republic, direct and indirect beneficiaries of assets of that Budget, and mandatory social security organizations shall be held and deposited on the Consolidated Treasury Account of the Republic.
Monetary funds of the budget of the local authority and direct and indirect beneficiaries of that budget shall be held and deposited on the consolidated treasury account of the local authority.
The Minister and/or the person authorized by him may invest on domestic or foreign financial money and capital market, and in the mode specified in Article 53, paragraph 7 of this Law, monetary funds deposited on the Consolidated Treasury Account, except for own revenues specified in paragraph 4, sub-paragraph 2 of this Article, as well as those for which the special law and/or an international treaty have determined the purpose limiting the use of such assets.
The local administrative agency responsible for finance, and/or the person authorized by it may invest on domestic financial money market, in the mode provided in Article 53, paragraph 7 of this Law, the monetary funds deposited on the consolidated treasury account of the local authority, except for its own revenue, as specified in paragraph 4, sub-paragraph 2 of this Article, as well as those for which the special law and/or local regulations or an international treaty have determined the purpose limiting the use of these assets.
The local administrative agency responsible for finance is required to notify the Treasury Office about executed investments of funds mentioned in paragraph 9 of this Article.
The beneficiary of the Republic budgetary funds and/or the mandatory social insurance organization may enter into contract with the minister relating to investment of own revenues specified in paragraph 4, sub-paragraph 2 of this Article.
Direct and indirect beneficiaries of the budget funds of the local authority may enter into contract with a local authority agency relating to investment of own revenues specified in paragraph 4, sub-paragraph 2 of this Article.
Upon investing funds mentioned in paragraph 9 and 12 of this Law, direct and indirect beneficiaries of the budget funds of the local authority are required to notify the appropriate local authority treasury about it, and the local authority treasury shall notify the Treasury Office.
The local administrative agency responsible for finance may enter into contract with the minister relating to investment of monetary assets deposited on the consolidated treasury account of the local authority.
Revenues derived from investments specified in paragraphs 8 to 14 of this Article shall be paid in the corresponding consolidated treasury account and/or own revenues sub-account specified in paragraph 4, sub-paragraph 2 of this Article.
The minister and/or the local administrative agency responsible for finance shall regulate in detail the mode of use of funds deposited on the sub-accounts and/or other accounts specified in this Article.
Article 8a
The Ministry and/or the local administrative agency responsible for finance shall keep the General Treasury Ledger.
Transactions and turnover changes, including revenues and receipts, expenditures and outflows as well as equity account and relevant changes, liabilities and sources of financing, are recorded in the General Treasury Ledger in accordance with the chart of accounts and at the levels of budgetary classification as prescribed in Article 11 of this Law.
Separate records shall be kept in the General Treasury Ledger of the Republic and/or local authority, for each and every direct and indirect beneficiary of budgetary funds.
Separate records shall be kept in the General Treasury Ledger for mandatory social security organizations.
Transactions and turnover changes recorded in the general ledger of a direct and indirect beneficiary of budgetary funds have to be filed promptly and in accordance with the transactions recorded in the General Treasury Ledger.
Transactions and turnover changes recorded in the auxiliary ledgers of direct and indirect beneficiaries of budgetary funds have to be in accordance with the transactions and turnover changes filed in the General Treasury Ledger.
Transactions and turnover changes recorded in auxiliary ledgers of mandatory social security organizations have to be in accordance with the transactions and turnover changes in the General Treasury Ledger.
The General Treasury Ledger shall include records relating to special purpose revenues that are used by direct and indirect beneficiaries of budgetary funds, and which may not be used for other purposes.
The minister shall regulate in detail the mode of recording and contents of the general and auxiliary treasury ledgers of the Republic and/or local authority.
Financial Service of a Direct Budget Beneficiary
Article 9
Direct budget beneficiary shall set up services to prepare and execute the budget and perform other tasks related to the management of state assets under responsibility of a direct budget beneficiary (hereinafter: financial services).
As an exception to the provision specified in par. 1 of this Article, the financial service of a direct budget beneficiary may also perform tasks for other direct budget beneficiaries.
The Minister shall prescribe common principles, criteria and tasks for operation of financial services, which may be specified by direct budget beneficiaries.
Direct budget beneficiaries of local authority budgets shall set up financial services to prepare and execute the budget, and perform other tasks related to management of local authority assets under responsibility of direct budget beneficiaries, in accordance with provisions of paragraphs 2 and 4 of this Article.
II PREPARATION AND PASSING OF THE BUDGET AND FINANCIAL PLANS
Preparation of the Budget and Financial Plans of Direct Budget Beneficiaries and Mandatory Social Security Organizations
Article 10
The budget shall comprise a general part, special part and program part.
The general part of the budget shall comprise:
1) A summary of current revenues and current expenses;
2) A summary of anticipated receipts from foreign and domestic borrowing and repayment of principal and interest in Republic debt and activated guarantees;
3) A proposal for the use of the surplus and, in the event of a deficit, sources for its financing;
4) An estimate of total amount of new borrowing of the Republic and/or repayment of its debt during the budget year;
5) An estimate of the total amount of new guarantees proposed to be issued by the Government during the budget year;
6) A summary and structure of total outstanding debt and guarantees, with an assessment of the risk of expenditures that may arise from the outstanding guarantees, as well as the Government plan for financing activated guarantees;
7) An assessment of other contingent liabilities and their potential impact on the budget;
8) Description and estimate of tax expenditures;
9) Current and permanent budgetary reserve.
The special part of the budget shall comprise financial plans of the direct budget beneficiaries, pursuant to principle of separation of power between the legislative, executive and judicial.
The financial plans shall include outflows of each direct budget beneficiary presented in accordance with program, economic and functional classification and accounting fund classifications stipulated in Article 11 of this Law.
The general and special part of the budget shall disclose:
1) Estimated revenues and receipts and expenditures and outflows for the current fiscal year;
2) Planned revenues and receipts and expenses and outflows for the budget year;
3) Estimated revenues and receipts and expenses and outflows for the subsequent two fiscal years;
The program part of the budget shall disclose:
1) strategic fields;
2) main programs;
3) programs;
4) projects;
5) tasks and activities.
Elements of the budget program plan mentioned in paragraph 6 of this Law shall be identified in line with program classification.
The financial plan of the mandatory social security organization shall comprise a general part and a special part, determined in the manner prescribed by the Minister.
Article 11
The Budget shall be prepared and executed on the basis of the single budget classification system.
The budget classification shall include the program classification, economic classification of revenues and receipts, economic classification of expenditures and outflows, organizational classification, functional classification, and accounting fund classification as follows:
1) The program classification identifies classification of strategic fields and main programs of budget beneficiaries;
2) The economic classification of revenues and receipts identifies revenues and receipts on basis of legislation or agreement that determine the sources of the revenue and/or receipts;
3) The economic classification of expenditures and outflows identifies the specific goods and services and transfer payment made;
4) Organizational classification identifies outflows by direct budget beneficiaries, with the distribution of appropriations between beneficiaries;
5) Functional classification identifies outflows according to the functional purposes for a particular field and shall be independent of the organization implementing such function;
6) Accounting fund classification identifies receipts and outflows pursuant to requirements for carrying out specific activities or for attaining certain objectives, in accordance with special regulations (separate identification of funds obtained from international agreements, funds from additional postal stamps for particular humanitarian purposes, etc).
Foreign and domestic sources of financing as well as the repayment of foreign and domestic debt shall comprise elements of the classification referred to in para. 2 of this Article.
The Minister shall specify the budget classification that shall be applied by the Republic and local authority, direct and indirect budget beneficiaries, and mandatory social security organizations in preparing their financial plans.
Article 12
The following shall comprise budget receipts:
1) Current revenues, such as:
(1) Tax;
(2) Contributions for mandatory social insurance;
(3) Donations and transfers;
(4) Other revenues (fees, compensations for use of goods of common interest, fines, penalties and confiscated material gain, receipts from sale of goods and services, etc.);
2) Proceeds from domestic and foreign borrowing;
3) Proceeds from the sale of fixed assets, and
4) Proceeds from the sale of financial assets and repayment of given loans.
Outflows shall comprise:
1) Current expenditures for employees, goods and services, interest payments, subsidies, budgetary transfers to other levels of government, social transfers, and other expenditure;
2) Outflows for purchase of fixed assets;
3) Outflows for obtaining of financial assets, for extended loans or purchased securities;
4) Repayment of principal on borrowing.
Article 13
The budget surplus, i.e. the budget deficit is the difference between the total amount of current revenues and incomes realized by selling non financial property and the total amount of current outflows and expenditures for non financial property procurement.
The primary surplus, i.e. the primary deficit is the budget surplus, i.e. the budget deficit corrected for the amount of net interest (the difference between the total amount of collected interests and the total amount of paid interests).
The total fiscal result (according to the Government Finance Statistics) is the budget surplus, i.e. the budget deficit corrected for the net difference between revenues based on payments of given loans and sale of financial property and expenditures based on given loans and procurement of financial property.
The consolidated surplus, i.e. the consolidated deficit is the difference between the consolidated public revenues and incomes based on sale of non financial property and the consolidated public expenditures and expenses for non financial procurement. The consolidation is being exercised between different levels of government (the Republic, the local authorities and the mandatory social security organizations), excluding mutual transfers between different levels of government and including contributions for social insurance collected from the economy section.
Article 13a
The Law on the Republic Budget, i.e. the local authoritys decision on the budget shall define the amount of the budget surplus and the model of its distribution.
The Law on the Republic Budget, i.e. the local authoritys decision on the budget shall define the amount of the budget deficit and the model of its financing.
The Republics Consolidated Report shall define the consolidated surplus, i.e. the consolidated deficit, and it shall be the constitutive part of the Budget Memorandum.
Article 14
The process of preparation and adoption of the budget is done according to the budget calendar, as follows:
1) The calendar of the Republic budget:
April 30 - the Minister, in co-operation with the bodies responsible for economic development, shall prepare the Budget Memorandum, detailing the economic and fiscal policies and outlook for the budget year and two subsequent years;
May 15 - the Government shall adopt the Budget Memorandum;
June 1 - the Minister shall issue instructions for preparing the draft Republic Budget;
June 1 - the Minister shall provide the adopted Budget Memorandum to local authorities and the mandatory social security organizations;
August 1 - Direct budget beneficiaries and mandatory social security organizations shall submit their proposed financial plans to the Ministry;
October 1 - upon proposal coming from the Minister, the Government shall revise the Budget Memorandum taking into consideration any updating of macro-economic framework that has occurred since April 30;
October 15 - the Minister shall submit the draft Republic Budget and financial plans of mandatory social security organizations to the Government;
November 1 - the Government shall adopt the proposed Republic Budget and submit it with the Budget Memorandum and financial plans of mandatory social security organizations to the National Assembly;
December 15 - the National Assembly shall pass the Republic Budget.
2) The calendar of local authority budget:
June 15 - the body of local authority responsible for finance shall issue instructions for preparing the local authority draft budget;
July 15 - direct beneficiaries of local budget funds shall submit financial plans to the body of local authority responsible for finance;
October 15 - local authority body responsible for finance shall submit the draft budget to the relevant executive body of the local authority;
November 1 - the relevant executive body of the local authority shall submit the budget proposal to the local assembly and to the Ministry;
December 20 - the local assembly shall pass the local budget;
December 25 - the relevant executive body of the local authority responsible for finance shall submit the local authority budget to Minister.
The dates in the paragraph 1 of this Article represent the deadlines in the budget calendar.
Proposed Republic and Local Authority Budgets
Article 15
The Government shall submit to the National Assembly:
1) Budget Memorandum;
2) Proposed Republic Budget;
3) Planned sales of the Republics non financial assets and fixed assets during the budget year;
4) Proposed financial plans for the budget year with regard to mandatory social security organizations; and
5) Proposed law for executing of the Republic budget.
The relevant executive body of local authority shall submit to local assemblies:
1) Proposed local authority budgets;
2) Planned sales of the local authoritys non financial and fixed assets during the budget year;
3) Proposed decisions required for executing of local budgets.
Article 16
The Minister shall prepare a Budget Memorandum on the economic and fiscal policies for the budget year and the subsequent two fiscal years, revised within deadlines given in the Article 14 of this Law, taking into consideration the macroeconomic frame updated after April 30 th.
The budget memorandum shall contain:
1) A medium macroeconomic and fiscal framework setting out the assumptions and forecasts against which the budget is being prepared;
2) A review of government economic and fiscal policies and their budgetary implications;
3) Recommendations regarding budget strategies and choices;
4) Proposed resource allocations according to functional classification referred to in Article 11, paragraph 2, point 4 of this Law for the budget year and subsequent two fiscal years and in accordance with the medium term fiscal framework;
5) The General Balance of the Republic of Serbia;
6) The Consolidated Republics General Balance, made by excluding mutual transfers between different levels of government (the Republic, the local authorities and the mandatory social security organizations) and including contributions for social insurance collected from the economy section;
7) The Consolidated Republics Report.
The revised Budget Memorandum includes the review of non-purposeful and purposeful transfers from the Republic budget to every local authority.
Instructions for Preparing the Republic Budget
Article 17
After the Budget Memorandum has been adopted, the Minister shall deliver to the direct budget beneficiaries the instruction for preparing the proposed Republic Budget.
The instructions specified in para. 1 of this Article shall include:
1) Principal economic assumptions and guidelines for preparing the Republic Budget;
2) Estimate of receipts and outflows of the Republic Budget for the budget year and the subsequent two fiscal years;
3) Proposed scope of funds in financial plans of the direct budget beneficiary for the budget year and the subsequent two fiscal years;
4) Procedures and time schedules for the preparation of the Republic Budget and financial plans of direct budget beneficiaries.
Recommendation to Local Authority, Mandatory Social Security Organizations and Indirect Budget Beneficiaries
Article 18
The Ministry shall deliver the Budget Memorandum to local authorities and mandatory social security organizations.
The relevant ministries shall inform indirect budget beneficiaries of the Republic Budget on essential economic assumptions and guidelines for preparation of the Republic Budget.
The body of local authority responsible for finance shall advise local direct budget beneficiaries, on the essential economic assumptions and guidelines for preparing the local authority budget, whilst the relevant local authority body shall advise local indirect budget beneficiaries.
Proposed Financial Plan of a Direct Budget Beneficiary
Article 19
On the basis of the instruction for preparing the proposed Republic budget, the direct budget beneficiaries shall draw up their proposed financial plan.
The proposed financial plan referred to in paragraph 1 of this Article shall comprise of four parts:
1) The request for current outflows, providing details on existing activities and services of a direct budget beneficiary;
2) The request for additional funds, for current activities which cannot be facilitated through the limitations of funds for current outflows, with proposal of priorities to be considered in the budget approval process;
3) The fixed assets request enabling the direct budget beneficiary to request the funds for purchase of the equipment, additional funds for capital projects initiated in previous budget years, as well as funds for new capital projects, as priorities that should be considered in the process of approving the budget.
4) The request for allocation of funds from the National Investment Plan identified by programs, i.e. projects for one or more years.
Parts referred to in para. 2 of this Article shall comprise a written elaboration and financial request.
The written explanation of the request specified in para. 2, point 1 of this Article shall provide information on the existing organizational structure of a direct budget beneficiary, activities and services, an overview of funds and employees necessary to facilitate the beneficiarys activities and services within their current outflow.
The written explanation of the request specified in para. 2 point 2 of this Article shall contain a description and justification of activity for which the additional funds and job position are requested.
The written explanation of the request specified in para. 2 point 3 of this Article shall provide for each individual request, a justification, description, completion plan and estimate of future costs associated with use and maintenance of a fixed asset, once it is completed.
The written explanation of the request specified in para. point 4 of this Article shall contain, for each individual request, the name of the budget beneficiary which is carrying out the program, i.e. project, the program, and/or the project code, the title and description of the program, and/or project with organizational mark, the legal grounds for a specific strategy, the program long-term objectives and their connections with objectives from strategic documents and main programs, the main annual program objectives, the funds necessary to carry out the program, and/or project, the realization plan, the results estimation, and risks in accomplishing program, and/or projects.
Drafting and Submitting the Financial Plans of Mandatory Social Security Organizations and Indirect Republic Budget Beneficiaries
Article 20
The mandatory social security organizations and indirect republic budget beneficiaries shall draft the proposed financial plans on the basis of the guidelines for the Republic budget.
The ministries responsible shall, in accordance with the directives and within the deadlines prescribed by the Minister, request the mandatory social security organizations and indirect budget beneficiaries of the Republic budget to submit the data necessary for the drafting of the financial plans of ministries.
The Minister may request of the mandatory social security organizations and indirect republic budget beneficiaries to submit directly the data relating to their financing, necessary for the preparation of the proposed Republic budget.
The ministry responsible shall submit the proposed financial plans of the mandatory social security organizations to the Minister who shall submit such plan, together with the proposed Republic budget, to the Government.
The Government shall submit the financial plan specified in para. 4 of this Article to the National Assembly, together with the proposed Republic budget.
The financial plan of the mandatory social security organizations shall be approved in accordance with Article 6, para. 3 of this Article.
The responsible body of indirect budget beneficiaries of the Republic budget shall approve the financial plan in accordance with law, other regulation or statute of an indirect budget beneficiary.
Article 21
The Ministry shall examine the requests of the budget beneficiaries, taking into consideration:
1) Revenue and expenditure targets;
2) The information and justifications required under Article 19 of this Law.
Prior to finalising the proposed budget, the Minister shall inform the direct budget beneficiaries of proposed amounts of receipts and expenditures.
Direct budget beneficiaries shall submit remarks to the Minister in respect of the amount of funds specified in para. 2 of this Article.
The Government shall decide in final instance in the event that no agreement specified in para. 3 of this Article is reached.
Preparation of a Proposed Local Authority Budget
Article 22
After the Budget Memorandum has been received, local authority bodies responsible for finance shall submit to the direct budget beneficiaries instructions for preparing the proposed local authority budget.
The instructions referred to in para. 1 of this Article shall comprise the following:
1) Principal economic assumptions and guidelines for preparing the draft local authority budget;
2) A description of the local governments planned policies;
3) An estimate of receipts and outflow of the local authority budget for the budget year and the subsequent two fiscal years;
4) Proposed amount of volume of funds in financial plans of direct beneficiaries of local budgets for the budget year and two subsequent fiscal years;
5) Procedures and time schedules involved in the preparation of the local authority budget and proposed financial plans of direct beneficiaries of local budgets.
On the basis of the instruction for preparing the proposed local authority budget, direct budget beneficiaries shall draft their proposed financial plans and shall submit them to the local authority body responsible for finance.
Drafting and Submitting the Financial Plans of Indirect Beneficiaries of Local Authority Budgets
Article 23
The indirect budget beneficiaries of local authority budgets shall be obliged to draft the proposed financial plans on the basis of the guidelines applied to local authority budgets.
The direct budget beneficiaries of local authority budgets shall be obliged, in accordance with guidelines and within the deadlines prescribed by the local authority, to request the indirect budget beneficiaries under their responsibility to submit the data necessary for the drafting of the financial plans of the direct budget beneficiaries.
Local authority body responsible for finance may request directly from the indirect budget beneficiaries to submit the data relating to the financing of beneficiaries that are necessary for the preparation of the proposed local authority budgets.
The competent body designated in the local authority regulations, in accordance with such regulations shall approve the financial plans of indirect budget beneficiaries of local authority budgets.
Making and Submission of Proposed Budget to the National Assembly and/or Local Assembly
Article 24
The Minister shall submit the proposed Republic Budget to the Government.
The Government may request that the Minister present additional information or explanations regarding the Annual Budget Proposal.
The Government decides on any amendments to the Proposed Budget, determines the proposed Republic Budget and submits it together with the Budget Memorandum to the National Assembly.
The local authority body responsible for finance shall submit the proposed local authority budget to the executive body of local authority.
The executive body of local authority may request of the local authority body responsible for finance present additional information or explanations regarding the local authoritys draft budget.
The executive body of local authority decides on the proposed local authority budget, within the period of time defined by the budget calendar.
If executive body of local authority does not submit the proposed budget to the local assembly within a deadline given by the budget calendar, the local assembly still may adopt the budget.
Adoption of the Budget and Issuing of Approval on Financial Plans of Mandatory Social Security Organizations
Article 25
The National Assembly and/or local assemblies shall adopt the budget of the Republic, i.e., the local authority budget.
The National Assembly shall approve the financial plans of the mandatory social security organizations.
Restrictions on Adopting the Budget
Article 26
Amendment of the proposed budget made by the National Assembly and/or local council shall be in compliance with the deficit ceiling set in the Governments budget proposal and/or executive body of local authority.
The surplus defined in the proposed budget made by the Government and/or executive body of local authority shall not be used for increasing the outflows proposed by the budget.
Any proposal to increase an outflow shall also state measures to increase receipts or reduce other outflows by the same amount.
Article 27
The Republic Budget, the revised Budget Memorandum and the mandatory social security organizations financial plans shall be published in the "Official Herald of the Republic of Serbia".
The local authority budgets shall be published in the local authorities official heralds.
Fiscal Year and Temporary Financing
Article 28
A budget shall be adopted for one fiscal year and shall be valid during the year for which it is passed, and funds for the realization of the National Investment Plan shall be planned for one or more years.
The fiscal year shall be a period of twelve months, from 1 January to 31 December of each calendar year.
In the event that the National Assembly and/or local assembly fail to pass a budget before the commencement of the fiscal year, temporary financing shall be instituted for a maximum period of the first three months of the fiscal year.
Temporary financing for the purpose of para. 3 of this Article shall be executed in proportion to funds utilised in the same period in the preceding years budget, up to a maximum of one-fourth of the total revenues allocated in the preceding fiscal years budget.
The Government and/or relevant body of local authority shall pass the decision on such temporary financing.
Amending a Budget and Financial Plans of Mandatory Social Security Organizations
Article 29
If during the fiscal year a law or regulations are adopted having an effect of decreasing the planned revenues and receipts or increasing the planned expenses and outflows, a decision shall be passed determining additional revenues and receipts, or reducing expenditure and outflow, required to balance the budget.
If during the fiscal year an increase in expenses or outflows or a decrease in revenues or receipts occurs, the budget shall be balanced by either reducing the planned expenses or outflows or by introducing new revenues or receipts.
Budget balancing shall be done through supplementary budget passed in compliance with the budgetary procedure.
No law or other regulations may be passed or action taken envisaging spending of public funds outside of the budget.
Provisions of paras. 1 - 4 of this Article shall be accordingly applied to financial plans of mandatory social security organizations.
Financial Effects of Laws and Other Regulations
Article 30
An explanation pertaining to a law or other regulations submitted to the Government, and /or the executive body of local authority for determining the proposal, i.e., adoption, shall contain an estimate of financial effects that such law or regulation shall have on the budget.
The estimate referred to in para. 1 of this Article shall contain information on whether the proposed law, i.e. other regulation, increases or reduces budget receipts or outflows.
The estimate referred to in paras. 1 and 2 of this Articles shall include as mandatory:
1) Anticipated changes in receipts and outflows for the budget year and the subsequent two fiscal years;
2) Proposals to ensure funds to cover the increased outflows;
3) Proposals to provide sources of financing for reduced revenues;
4) The opinion of the Ministry and/or local authority body responsible for finance.
Article 31
Receipts of the Republic Budget and local authority budget shall be collected and paid in accordance with law and other regulations, regardless of the amounts determined in the budget for individual types of receipts.
Direct and indirect budget beneficiaries shall be required to deposit in full and on time, on due date, on the prescribed account of the relevant consolidated treasury account, of budgetary receipts from their jurisdiction, for their allocation into the budget, in accordance with the law.
The provisions of paras. 1 and 2 of this Article shall also apply in the periods of temporary financing.
Article 32
Within 15 days starting from the day this Law, and/or budget decision, comes into force, the direct budget fund beneficiaries who are, in terms of the budget, responsible for indirect budget fund beneficiaries shall allocate funds to indirect budget beneficiaries within the scope of their approved appropriations, and they shall inform every indirect budget beneficiary about it, after getting an approval from the Treasury Office, i.e. local authority’s Treasury.
The direct budget fund beneficiary who does not respect the procedure mentioned in para. of this Article shall not be allocated the budget funds, including salary funds.
Article 33
The Ministry and/or the local authority body responsible for finance shall plan the budget liquidity by forecasting the budget cash flow on the basis of receipts and outflows, within the framework plans of budget execution drafted by the direct budget beneficiaries, in accordance with the methodology and within the deadlines set by the Minister, and/or local authority body responsible for finance.
The plan of budget execution shall mean an overview of the planned receipts of direct budget beneficiary pursuant to source of financing, and an overview of the planned outflows.
Article 33a
The budget fund beneficiary which, besides budget revenues, makes revenues from other sources in order to cover specific expenditures and outflows shall firstly settle those expenditures and outflows with revenues from other sources.
Once funds from other sources are spent, the transfer of budget funds for settling expenditures and outflows shall be made.
Determining the Volume of Expenditures of Direct Budget Beneficiaries within a Set Period of Time
Article 34
Direct and indirect budget beneficiaries may only make payments up to the volume of outflows determined for a quarter or other period by the Minister and/or the body local authority responsible for finance (hereinafter: quota).
In determining the quota for direct budget beneficiaries, the Minister and/or the local authority body responsible for finance shall take into consideration the funds planned within the budget for the direct budget beneficiary, its commitments and the liquidity possibility of the budget.
The Ministry and/or the local authority body responsible for finance shall inform the direct budget beneficiaries of their quota no later than fifteen days prior to commencement of the period to which it relates.
The Minister shall stipulate the procedure and conditions for determining the quotas referred to in the paras. 1 and 2 of this Article, as well as the measures in the event of non-compliance with the quotas.
Commitment and Expenditure Responsibilities
Article 35
Commitments undertaken by the direct, i.e. the indirect budget beneficiary shall comply with the appropriation approved for that purpose to that beneficiary and for that budget year.
Article 35a
The beneficiaries of the Republic Budget, and of the mandatory social security organizations funds and of the local authorities budget funds may have a foreign currency account open only within the National Bank of Serbia, unless otherwise regulated by a special law or by the international treaty.
As an exemption from this, the Minister may allow the beneficiary from Paragraph 1 of this Article to open a foreign currency account within the authorized bank for payments that cannot be made through the National Bank of Serbia, if this beneficiarys specific business requires so.
The law dealing with foreign exchange transactions shall apply to all purchases and sales of foreign currency payments, to all payments, collections of payments and transfers of foreign currency payments in which beneficiaries from Paragraph 1 of this Article participate.
The National Bank of Serbia shall provide data on beneficiarys foreign currency account situation.
The National Bank of Serbia shall deliver data from Paragraph 3 of this Article to the Treasury Office on monthly basis, and/or upon request from the beneficiary or from the Treasury Office.
Article 36
In entering into commitments, direct and indirect budget beneficiaries must follow guidelines on terms and conditions of payment as may be determined by the Minister and/or local authority body responsible for finance.
Budget beneficiaries shall enter into commitments on the basis of a written agreement or other legal act, unless otherwise provided by law.
Commitments incurred in excess of authority granted in the Budget or incurred in contravention of this Law or other regulations, may not be executed on the burden of Treasury Consolidated Account of the Republic and/or local government.
The compulsory collection against the budget fund beneficiary, providing the base for the compulsory collection refers to the budget fund account, may be executed only up to 50% of the total amount of funds allocated to that budget beneficiary, at the beneficiarys appropriation expense, with successive execution in harmony with the dynamics of the budget execution (monthly quotas).
Article 37
A contract for supplies, services or construction works concluded by direct and indirect budget beneficiaries and mandatory social security organizations may only be made pursuant to the law regarding public procurement.
Article 38
Each outflow from the budget must be based on bookkeeping documents.
The legal basis and the amount of the commitment arising from the said authentic bookkeeping documents must be confirmed in writing prior to the actual payment.
The Minister shall specify the methods of entering into commitments, reporting on the commitments entered into and the methods of payments to be made from the Republic and/or local authority budgets.
The provisions of the paras. 1 through 3 of this Article shall be applied to commitments of the mandatory social security organizations.
Article 39
If no legal grounds existed for an individual payment, a direct budget beneficiary shall immediately require a repayment to the budget.
Should the payment be returned in the same fiscal year it was made, the debit side of the financial plan of the budget beneficiary shall be proportionally reduced.
The provisions of the paras. 1 and 2 of this Article shall be applied to the repayment of funds of mandatory social security organizations.
Repayment of Overpaid or Erroneously Paid Public Revenues to the Taxpayer
Article 40
Should a greater amount of public revenues referred to in Article 12, para. 1, point 1. sub point (1) of this Law be collected from a taxpayer, and/or if the basis for collection was erroneous, a return of funds shall be made in accordance with the law regulating the collection of public revenues.
The repayment of revenues referred to in paras. 1 and 2 of this Article shall be made against the current revenue payment account.
Should the payment account of the current revenue referred to in paragraph 1 of this Article have insufficient funds for repayment, and if the said current revenue in entirety belongs to the Republic budget or local authority budget, i.e. if it is shared between Republic and local budgets, the Treasury Office shall transfer the amount of funds to be repaid to the taxpayer to the corresponding public revenues payment account, in proportion to the beneficiarys prescribed participation in allocation of such public revenue.
The provisions of paragraphs 1 through 3 of this Article shall be accordingly applied to the prescribed account of record of the body in charge of customs affairs for payment of excise and import tax.
Provisions of paragraphs 1 through 3 of this Article shall also be appropriately applied to the case of repayment of social security contributions.
Changes in Appropriations during the Year
Article 41
Should the extent of business activities or authority of a direct budget beneficiary change during the year, the volume of appropriations set aside for its activities shall be increased or reduced accordingly.
Should the scope of activities or authorities of the direct budget beneficiaries referred to in para. 1 of this Article be increased, the funds shall be provided from the current budget reserve.
Should a new budget beneficiary be formed during the year, the funds required for the activities or authorities for such budget beneficiary shall be provided from the current budget reserve.
Should the direct budget beneficiary cease to exist, and should its tasks not be transferred to another budget beneficiary, the unused funds shall be carried over to the current budget reserve.
Should, during the year, several direct budget beneficiaries be formed from one direct budget beneficiary, the unused funds allocated to the original beneficiary shall be carried over to the current budget reserve and further allocated to the newly formed direct budget beneficiaries.
The decision on changes in appropriations referred to in paras. 1 through 5, and the use of funds of current budget reserve shall be taken by the Government and/or competent executive body of local authority.
The direct budget beneficiary, with the approval from the Minister or local authority body responsible for finance may, apart from appropriations of funds for the realization of the National Investment Plan, redirect appropriations approved for certain expenditures up to the 5 % of the appropriation for the expenditure being reduced.
Appropriations may not be transferred between judicial, executive and legislative branches of power.
Temporary Suspension of Implementation of the Budget
Article 42
If during the fiscal year outflows are increased or receipts are reduced, the Government, on the proposal of the Minister, and/or the executive body of local authority on the proposal of the local authority bodies responsible for finance, may suspend the implementation of individual outflows (hereinafter: temporary suspension of implementation) for a period not to exceed 45 days.
The temporary suspension of implementation may:
1) Halt the entering into commitments;
2) Propose the extension of contractual terms of payment;
3) Halt the issuing of approvals to contracts; and
4) Halt the allocation of quotas.
The Ministry and/or the local authority body responsible for finance shall draft the proposed volume and measures relating to the temporary suspension of implementation in co-operation with the direct budget beneficiaries.
The measures relating to the temporary suspension of implementation may apply to all the direct budget beneficiaries.
The decision referred to in the para. 1 of this Article shall be reported by the Government to the National Assembly and by the executive body of local authority to the local assemblies.
Article 43
Should it be impossible to balance the budget during enforcement of measures relating to temporary suspension of implementation, the Government and/or the executive body of local authority shall, no later than 15 days prior to the expiration of the period in which the temporary suspension of implementation is being carried out, propose a supplementary budget.
By means of the supplementary budget to be adopted by the National Assembly and/or the local assembly on the proposal of the Government and/or the executive body of local government, the receipts and the outflows of the budget shall be re-balanced.
During the period of adopting the supplementary budget the Government, on the proposal of the Minister, and/or the executive body of local authority may continue with temporary suspension of implementation of individual outflows.
Article 44
A budgetary fund shall be an account of record opened by the Government and/or executive body of local authority as part of the General Treasury Ledger in order to separately keep certain budget receipts and outflows with the purpose of achieving the goal stipulated in a special Republic law, and/or local authority regulation or international agreement.
The regulation, that is, agreement referred to in the para. 1 of the this Article shall stipulate:
1) The purpose of the budgetary fund;
2) The period of time for which the budgetary fund is established;
3) The Ministry and/or the local authority body responsible for managing the budgetary fund; and
4) The sources of financing of the budgetary fund.
Financing the Budgetary Fund and the Commitments Arising from the Budgetary Fund
Article 45
The budgetary fund shall be financed from:
1) Appropriations provided within the budget for the current year;
2) Earmarked receipts of the budget which are defined as earmarked receipts of the budgetary fund; and
3) Receipts arising from the management of liquid assets of the budgetary fund.
Budgetary fund commitments are met by the assets of the fund.
Article 46
The responsible ministry, and/or the responsible local authority body shall manage the budgetary fund.
Upon liquidation of the budgetary fund, the rights and obligations of the budget fund shall be taken over by the Ministry and/or the local body referred to in para. 1 of this Article.
Special Conditions on the Use of Budgetary Fund Resources
Article 47
Payments against the budgetary fund may only be made up to the level of available assets in the budgetary fund and commitments may be entered into within the framework of realistically planned receipts of the budgetary fund.
At the end of the current year, any unused resources of the budgetary fund account shall be carried over to the subsequent year.
Article 48
Within the budget, a part of the planned receipts shall not be allocated in advance but shall be retained as the current budget reserve.
The funds of the current budget reserve shall be used for either unplanned purpose for which no appropriations have been made, or when it becomes evident during the year that insufficient appropriations have been allocated for a particular purpose.
The Government and/or executive body of local authority shall adopt, following the proposal of the Minister and/or local authority body responsible for finance, decisions regarding the use of the current budget reserve.
The funds of the current budget reserve shall be allocated to the direct budget beneficiaries.
Exceptionally from paragraphs 1 through 4 of this Article and due to the decreased volume of revenues of the local authoritys budget, the funds of the current Republic budget reserve may be used for executing the local authoritys budget.
Article 49
The budget shall plan funds for the permanent budget reserve, and these funds shall be stated as a special appropriation.
The permanent budget reserve shall be used for financing Republics, and/or local authoritys expenditures in removing consequences resulting from emergency circumstances such as flood, drought, earthquake, fire, ecologic catastrophe and other natural catastrophes, i.e. other extraordinary events that may endanger peoples lives and integrities and that may cause high proportion damages.
The permanent budget reserve cannot exceed 1.5% of total revenues for the budget year.
The decision on using the permanent budget reserve funds shall be adopted by the Government, upon proposal from the Minister, i.e. by the local authoritys competent executive organ, upon proposal from the local authoritys body responsible for finance.
The report on using the permanent budget reserve funds shall be delivered to the National Assembly, i.e. to the local parliament, along with the budget final account.
Responsibility of the Head of a Direct Budget Beneficiary
Article 50
The head of a direct, and/or indirect budget beneficiary shall be responsible for entering into commitments, verifying commitments, issuing orders for payments to be covered by the budget of the body headed by him/her, and issuing orders for the collection of funds to be credited to the budget.
The head of a direct, and/or indirect budget beneficiary shall assume responsibility for legal, correct, economical, and effective use of budget appropriations.
The head of a direct, and/or indirect budget beneficiary may delegate individual powers referred to in para. 1 of this Article to other persons in the direct, and/or indirect budget beneficiary.
Allocation of Responsibilities between Order-issuing Authority, Accountants and Internal Controllers
Article 51
The functions of order-issuing authority, accountants and internal controllers shall not overlap.
Articles 52 and 53*
(Cease to be in effect)
Article 54
(Deleted)
Limitations of Debt and Guarantees
Article 55
The Republic budget shall include a limitation on the total amount of debt that may be incurred during the Budget year, with the exception of short-term liquidity borrowing that must be repaid by December 31 of the current fiscal year, as well as limitations on the overall volume of guarantees.
In proceeding with the limitation on debt, the Ministry shall consider any relevant factors relating to:
1) Refinancing requests of the domestic debt;
2) Financing requests of the budget deficit;
3) Estimates of the following macro-economic indicators:
(1) The ratio of total State debt to the Gross National Product;
(2) The ratio of the annual interest payments on debt to the Gross National Product;
(3) The amount of borrowing from the banks, including from the National Bank of Serbia under the guarantee of securities;
(4) The proportion of total short term internal debt in the overall state debt;
(5) The proportion of total external debt in the overall state debt;
(6) The ratio of debt and guarantees to revenues; and
(7) The ratio of total debt service expenditures to exports.
Articles 56 to 60*
(Cease to be in effect)
V BUDGETARY ACCOUNTING AND REPORTING
Budgetary Accounting Responsibilities
Article 61
Direct budget beneficiaries shall be responsible for the accounting of their own transactions, and within their powers, also for transactions of the indirect budget beneficiaries falling within their jurisdiction (hereinafter: budgetary accounting).
The indirect budget beneficiary and the mandatory social security organizations beneficiary shall be responsible for the accounting of its own transactions.
Budgetary accounting is the accounting of revenues, commitments and expenditures of direct and indirect budget beneficiaries and mandatory social security organizations beneficiaries.
The Minister and/or the local administrative body responsible for finance shall, on behalf of the Government and/or or the executive body of local authority, be responsible for accounting of received loans and debt transactions.
Authority to Pass Budgetary Accounting Regulations
Article 62
The Government shall specify the accounting system, the General Treasury Ledger system and the method of keeping the Treasury Consolidated Account.
The Minister shall prescribe the method of budget accounting and the content and mode of financial reporting for all direct and indirect budget beneficiaries, mandatory social security organizations and budgetary funds of the Republic and local authorities and may issue special instructions on financial reporting to certain state administration bodies.
The Minister shall prescribe the mode of reporting on total revenues and total outflows for local authorities’ Treasuries.
The Minister shall prescribe the manner of preparation, compiling and submission of final accounts of direct and indirect budget beneficiaries, mandatory social security organizations and budgetary funds of the Republic and local authorities.
Proposed Final Account Statement
Article 63
The proposed final account statement shall be drafted by the Government and/or the executive body of local authority.
The Government and/or executive body of local authority shall submit the proposed final account statement to the National Assembly and/or local assembly.
Calendar for Submission of Final Accounts Statements
Article 64
The process of preparation, compiling and submission of final accounts statements of the budget funds beneficiaries and mandatory social security organizations beneficiaries and final accounts statements of the Republics budget and local authorities budgets shall take place according to the prescribed calendar, as follows:
February 28 - indirect budget beneficiaries shall prepare their final accounts statements for the preceding year and submit them to the competent direct budget beneficiary;
February 28 - the Republic Health Insurance Institutes funds beneficiaries shall prepare their final accounts statements for the preceding budget year and submit them to the Republic Health Insurance Institute;
March 31 - direct budget beneficiaries shall prepare their annual statements and submit them to the Treasury Office and/or to the local authority body responsible for finance, and those direct budget beneficiaries who have indirect budget beneficiaries under their competence shall control and reconcile data from indirect budget beneficiaries annual statements, and shall produce a consolidated annual statement which is to be submitted to the Treasury Office and/or to the local authority body responsible for finance;
March 31 - mandatory social security organizations shall prepare decisions on final accounts statements of mandatory social security organizations financial plans and submit them to the Treasury Office, and the Republic Health Insurance Institute shall control and reconcile data from final accounts statements of those funds beneficiaries who are under its competence, it shall consolidate data from those final accounts statements and shall produce a consolidated annual statement which is to be submitted to the Treasury Office;
May 15 - the local authority body responsible for finance shall prepare the draft decision on the local authority’s budget final account statement and submit it to the local authority’s competent executive body;
June 1 - the local authority’s competent executive body shall submit the draft decision on the local authority’s budget final account statement to the local assembly;
June 15 - the Ministry shall prepare the draft Law on the Republic’s budget final account statement and submit it to the Government, along with decisions on final accounts statements of mandatory social security organizations’ financial plans;
June 15 - the local authority body responsible for finance shall submit to the Treasury Office the decision on the local authoritys budget final account adopted by the local assembly, except for those local authority bodies responsible for finance belonging to the city municipalities who submit their decisions on budget final accounts to the city;
July 1 - the local authority body responsible for city finances shall produce a consolidated city statement and submit it to the Treasury Office;
July 15 - the Government shall submit the draft Law on the Republics budget final account statement and decisions on final accounts statements of mandatory social security organizations financial plans to the National Assembly;
September 1 - the Ministry shall produce the Republics Consolidated Statement and submit it to the Government;
September 30 - the Government shall submit the Republics Consolidated Statement to the National Assembly, as a notification.
The time limits referred to in para. 1 of this Article represent the due dates in the calendar for submission of final accounts statements and other acts.
Content of Final Accounts Statements
Article 65
The final account statement shall include:
1) balance sheet;
2) balance of revenues and expenses;
3) statement of capital expenditures and financing;
4) cash flow statement;
5) statement of the execution of the budget, presented in such away as to clearly identify the difference between the approved budget and execution;
6) explanation regarding large discrepancies between the approved funds and execution;
7) report on grants and loans received, both domestic and foreign, and debt repayments made;
8) report on the outflows from the current and permanent budgetary reserves;
9) report on guarantees issued during the fiscal yea;
10) external audit report on financial reports referred to in points 1 through 9 of this paragraph.
VI CENTRAL UNIT FOR HARMONIZATION, BUDGETARY CONTROL AND AUDIT
Central Unit for Harmonization
Article 66
The central unit for harmonization of financial control, for financial management and control and for internal audit shall be formed within the Ministry.
The central unit specified in para. 1 of this Article shall perform the following tasks:
1) it shall conduct the central harmonization and coordination of methodologies of control and audit in public sector;
2) it shall define control standards in line with internationally recognized standards;
3) it shall define joint criteria for organization and procedure of internal audit in public sector;
4) it shall define methodological guide-books and manuals for financial management;
5) it shall take care of advanced training, certificating and monitoring of internal auditors’ work;
6) it shall conduct the training of managers and employees at public sector regarding financial management and control, in line with internationally accepted standards;
7) it shall conduct internal audit of budget fund beneficiaries, organizations, undertakings, i.e. legal entities mentioned in the Article 68 paragraphs 1 and 3 of this Law, according to the Minister’s plan;
8) it shall conduct internal audit of budget fund beneficiaries for project co-financed by the European Union.
Minister shall prescribe acts defining standards, organization criteria and methodological guide-books, i.e. defining tasks mentioned in para. 2 of this Article.
Article 66a
Direct and indirect budget beneficiaries, mandatory social security organizations and public companies established by the Republic, i.e. local authority, legal entities established by those public companies, and/or legal entities the Republic, i.e. local authority has direct or indirect control over more than 50% of capital or more than 50% of votes in the management board, as well as other legal entities where more than 50% of total revenues are public funds, shall establish internal control systems for all transactions relating to the accounts of revenues and expenses, the financial assets and liabilities account and the financing account, as well as the management of state assets.
The internal control system comprises a network forming an organization, whose aim is to ensure:
1) application of laws, regulations, policies and procedures;
2) effectiveness of operations;
3) economical, efficient and purposeful use of resources;
4) safeguarding of assets and interests from losses of all kinds, including those arising from fraud, irregularity or corruption; and
5) the integrity and reliability of information, accounts and data.
Internal control shall be organized as a system of procedures and responsibilities of all persons involved in the financial and operational processes of direct and indirect budget beneficiaries and mandatory social security organizations.
The head of direct and indirect budget beneficiary, the head of mandatory social security organization, the head of public company, i.e. legal entity the Republic, and/or local authority has direct or indirect control over more than 50% of capital or more than 50% of votes in the management board, as well as head of other legal entity where more than 50% of total revenues are public funds, and/or person he/she authorizes as such, shall be liable for establishing safe and efficient internal controls of all decisions related to financial management and control.
Article 67
Internal audit shall be established for direct budget fund beneficiaries and mandatory social security organizations which form complex entity in organizational and financial terms.
Minister shall define direct budget beneficiaries specified in para. 1 of this Article and prescribe joint criteria for organization and procedure of internal audit, on which basis direct budget beneficiaries and mandatory social security organizations may define closer organization and procedure of conducting internal audit.
Direct budget beneficiaries shall establish appropriate forms of internal audit for indirect budget beneficiaries falling under their competence.
Local authority direct budget beneficiaries shall establish appropriate forms of internal audit.
Internal audit shall also be conducted in public companies established by the Republic, i.e. local authority, legal entities established by those public companies, and/or legal entities the Republic, i.e. local authority has direct or indirect control over more than 50% of capital or more than 50% of votes in the management board, as well as in other legal entities where more than 50% of total revenues are public funds.
Internal auditors shall be directly responsible to heads of direct budget beneficiaries, heads of mandatory social security organizations, and/or to heads of public companies and legal entities specified in para. 5 of this Article.
Functions of internal audit shall be:
1) to inspect the application of law and observation of internal audit rules;
2) to evaluate the internal audit systems in terms of their adequacy, efficiency and complexity;
3) to advise when new systems, procedures or tasks are being introduced;
4) to revise the work (performance) mode which is the evaluation of business operations and processes, including non-financial operations, for the purpose of evaluating rationality, efficiency and effectiveness;
5) to establish cooperation with external audit;
6) to perform other tasks necessary for accomplishing safety in terms of having the internal audit system functioning.
Internal audit shall deliver annual work reports to the Central Unit for Harmonization not later than January 31 of the current year for the previous year.
Article 68
Budget inspection shall be carried out by the Ministry, for the purpose of inspecting:
1) Direct and indirect budget beneficiaries;
2) Mandatory social security organizations;
3) Public enterprises founded by the Government, legal entities founded by such enterprises and/or legal entities in which the Republic has direct or indirect control exceeding 50% of the capital or 50% of votes in the management board, as well as legal entities where public funds comprise more than 50% of the total revenue.
The competent executive body of local authority shall establish a Local Inspection.
The Local Inspection shall be responsible for carrying out inspection over:
1) Direct and indirect beneficiaries of local budgets;
2) Public enterprises founded by local government, legal entities founded by such public enterprises an/or legal entities where the local authority exercise direct or indirect control over more than 50% of the capital or more than 50% of votes in the management board, as well as over legal entities in which the funds from local budgets comprise more than 50% of total revenue.
The function of the budget inspection is to control the application of law in the field of financial operations and purposeful and legal work of budget fund beneficiaries, organizations, enterprises, and/or legal entities specified in paras. 1 and 3 of this Article.
Article 68a
If during inspection procedure irregularities are found, the budget inspection shall order measures for their removal and it shall initiate other procedures defined by law.
Article 68b
If budget fund beneficiaries, mandatory social security organizations and public enterprises specified in the Article 68 paragraph 1 of this Law do not obey the budget inspection’s order, the minister in charge of finance may issue an order to suspend the allocation of budget funds, apart from salaries, up to the amount of irregularly spent funds, which they must return as stipulated in the budget inspection’s order.
Article 68c
If territorial autonomy unit does not obey the budget inspection’s order, the minister in charge of finance may temporarily suspend the affiliated portion of salary taxes and company profit taxes to the territorial autonomy unit.
If local authority unit does not obey the budget inspection’s order reached during the control procedure specified in the Article 68 paragraph 3 of this Law, the minister in charge of finance may temporarily suspend the allocation of funds from the Republic budget, until defined irregularities are removed.
If local authority body exceeds the debit level specified in the Articles 35 and 36 of the Public Debt Law (“Official Herald of the Republic of Serbia”, No.61/05) and does not act in accordance with the Article 37 paragraph 3 of that Law, the Minister may temporarily suspend the allocation of funds from the Republic budget, until the moment the conditions defined by the mentioned regulations are met.
Article 69
The Budget Inspection shall be operationally independent. Its work, powers, markings etc, shall be defined by a separate act of the Government, following the proposal of the Minister. This act shall regulate the right of appeal in administrative procedure against inspector’s order.
The Minister shall determine the work program of the Inspection.
The provisions specified in paras. 1 and 2 of this Article shall be applied to the inspection on the local authority level.
The Minister shall define the methodology and shall specify the work practice of the Inspection and Audit Service.
The standards relating to the methodologies and details of work practices referred to in para. 4 of this Article shall be applied to the inspection at the local authority level.
The Budget Inspection shall have a quality assurance role over the work of the Inspection referred to in para. 5 of this Article to ensure that inspection approaches are applied consistently throughout the Republic.
Local Inspection shall, on request, provide documents and reports to the Head of the Inspection for the purpose set forth in the para. 6 of this Article.
The Budget Inspection and local equivalents shall have access to all data, documents, reports and information they require to carry out their functions in bodies they inspect - budget beneficiaries, organizations, enterprises and/or legal entities referred to in Article 67, paras. 1 and 3 of this Law.
The Budget Inspection and local equivalents shall be adequately supplied with resources (staff, premises and equipment) in order to carry out their functions.
In performing their tasks, the Inspection staff and local equivalents shall have due regard to official and business confidentiality.
Article 70
The Budget Inspection shall report to the Minister on inspections conducted, its findings and measures.
The Budget Inspection shall also provide copies of its record to budget beneficiaries, organizations, enterprises and/or legal entities referred to in Article 67, paras. 1 and 3 of this Law it has inspected.
The Budget Inspection, i.e. its local equivalent shall also provide copies of its record on conducted inspection of beneficiaries referred to in Article 68 paragraph 3 of this Law to the local authority assembly, for the purpose of informing the local assembly and initiating adequate measures from local assembly’s competence.
The Minister shall deliver reports referred to in para. 1 of this Article to the Government which shall submit them to the National Assembly.
The provisions of paras. 1 and 2 of this Article shall accordingly apply to the Local Inspection.
Article 71
The annual account statement of the Budget of the Republic, the budget of the local authority and financial plans of mandatory social security organizations shall be subject to external audit.
Article 72
(Deleted)
Duties and Responsibilities of the Treasury Sector
Article 73
The Treasury Office shall perform the following functions:
1) In preparing the budget:
(1) Coordinating the procedure for preparing the budget;
(2) Elaborating directives for preparing the budget;
(3) Analyzing requests to finance budget beneficiaries and proposing appropriation amounts which are entered into draft budget;
(4) Analyzing mandatory social security organizations financial plans and local authorities’ budgets and proposing transfer amounts which are entered into draft budget;
(5) Participating in preparing mandatory social security organizations financial plans and local authorities’ budgets;
(6) Following the execution of the budget with respect to budget beneficiaries plans, giving proposals for corrections and forwarding the corrected plan for budget execution and for managing cash base;
(7) Following budget revenues and expenditures, mandatory social security organizations revenues and expenditures and local authorities budget revenues and expenditures;
(8) Providing recommendations to budget beneficiaries, local authorities and mandatory social security organizations in respect with budget and budget system issues;
2) Financial planning, which involves:
(1) Projecting and monitoring inflows into the Treasury Consolidated Account and the Republic’s Treasury Account, as well as dealing with requirements for the execution of expenditures;
(2) Defining quarterly and monthly quotas on commitments and payments.
3) Management of the Republic’s cash assets, which involves:
(1) Management of the Consolidated Treasury Accounts into which all receipts are credited and from which all government payments are made, including;
- Opening and controlling all bank accounts and sub-accounts, and
- Managing all banking relations;
(2) Liquidity management;
(3) Develop procedures for collection of all receipts through the banking system; and
(4) Management of financial assets.
4) Expenditure control, which involves initiating procedures of commitment authorization, verification of receipts of goods and services, and approval of outflows of budget funds.
5) Budget accounting and reporting, which involves:
(1) Accounting operation for:
- Processing of payments and recording receipts,
- Maintenance of the journal, general ledger and selected subsidiary ledger for all receipts and outflows,
- Accounting for international grants and other assistance.
(2) Financial reporting; and
(3) Accounting methodology, including:
- Maintaining the classification systems,
- Prescribing budget accounting rules and regulation, and
- Prescribing internal and external reporting requirements.
6) Establishing the financial information system including both direct and indirect budget beneficiaries, as well as establishing the system of public revenues and public expenditures (permanent information system), and managing this system.
7) Affairs regarding public payments that involve keeping files and performing functions within the system of the Treasury Consolidated Account, as follows:
(1) Keeping files on direct and indirect Republic’s and local authorities’ budgets beneficiaries, as well as mandatory social security organizations’ funds beneficiaries, and other files stipulated by special regulations;
(2) Opening public revenues payment accounts and keeping files on them;
(3) Assigning paid public revenues to appropriate sub-accounts of different levels of government, in accordance with law;
(4) Keeping files on sub-accounts of direct and indirect Republic’s and local authorities’ budgets beneficiaries, as well as mandatory social security organizations’ funds beneficiaries, that are included in the system of the Treasury Consolidated Account;
(5) Keeping files on other accounts, in accordance with law and other regulations;
(6) Receiving, controlling and processing payment orders coming from direct and indirect Republic’s and local authorities’ budgets beneficiaries, as well as from mandatory social security organizations’ funds beneficiaries, that are included in the system of the Treasury Consolidated Account;
(7) Issuing payment orders at the expense of direct and indirect Republic’s and local authorities’ budgets beneficiaries, as well as of mandatory social security organizations’ funds beneficiaries that are included in the system of the Treasury Consolidated Account, based on law and powers vested with it, based on court and other execution orders, based on error corrections and service payments;
(8) Effecting cash payments of direct and indirect Republic’s and local authorities’ budgets beneficiaries, as well as of mandatory social security organizations’ funds beneficiaries, that are included in the system of the Treasury Consolidated Account;
(9) Receiving cash payments from individuals for settling their public revenues liabilities;
(10) Receiving, controlling and processing annual statements of funds beneficiaries, in accordance with law and other regulations;
(11) Running fiscal statistics, in accordance with regulations enacted by the Minister;
(12) Keeping track on liquidity of direct and indirect Republic’s and local authorities’ budgets beneficiaries, as well as of mandatory social security organizations’ funds beneficiaries, that are included in the system of the Treasury Consolidated Account, and providing data about it, in accordance with current regulations
8) Processing employees’ personal earnings, as follows:
(1) Processing salaries, remunerations and employees’ other personal earnings;
(2) Maintaining and keeping data on employees and employees’ personal earnings;
9) Monitoring and controlling public companies’ activities, as follows:
(1) Monitoring the processes of restructuring public companies, in accordance with agreements signed with international financial institutions;
(2) Participating in preparing guidelines for drafting the strategic plan;
(3) Issuing guidelines for drafting the business plan;
(4) Issuing analysis on quarterly statements;
(5) Monitoring the movements of earnings;
(6) Producing statements needed by the commission competent for restructure;
10) Recording and monitoring the state aid;
11) Managing the National Fund’s assets provided by the European Union.
Article 73a
Organizational units shall be instituted for the affairs within the jurisdiction of the Treasury Office.
The mode of instituting, the number, the structure, the network and scope of responsibility of the organizational units specified in paragraph 1 of the present Article shall be regulated, at the proposal of the director of the Treasury Office, by an act of the minister.
Article 73b***
The director shall manage the Treasury Office.
The Government, at the proposal of the minister, shall appoint the director of the Treasury Office.
The director of the Treasury Office may have a deputy.
Article 73c
(Deleted)
Article 73d
The Minister shall prescribe conditions and mode for opening and canceling sub-accounts of the Consolidated Treasury Account, the schedule of these sub-accounts, the mode and procedure of effecting payment operations within the framework of the Consolidated Treasury Account, as well as the mode and procedure of effecting internal control of performance of the payment operations within the framework of the Consolidate Treasury Account, as well as other issues significant for the Treasury operations.
Article 73e
Payment orders that are not covered by assets shall be recorded and shall be executed in accordance with the time of their receipt, unless otherwise determined by law.
The Minister shall closely arrange the procedure for executing payment orders from paragraph 1 of this Article.
Failure to Execute a Payment Order
Article 73f
The Treasury Office shall not effect a payment order that is not in conformity with the regulations, and at the request of the applicant shall provide, in written, an assignment of reasons for refusing the order, within a three day time limit from the day of submitting the order.
List of Direct and Indirect Beneficiaries of Budgetary Funds
Article 73g
The Minister shall determine a list of direct and indirect beneficiaries of budgetary funds of the Republic and/or local authority and mandatory social security organizations, that are included in the Consolidated Treasury Account system.
The List specified in paragraph 1 of this Article shall be published in the "Official Herald of the Republic of Serbia".
Providing Other Financial Services
Article 73h
The Treasury Office shall charge fees for public payment services and it may provide other financial services and perform other jobs in accordance with a contract, on the ground of which it shall effect revenue.
The amount of recompense to be charged for performing services specified in paragraph 1 of this Article shall be determined by the Government, at Ministers proposal.
Article 73i
(Deleted)
Article 73j
The instruments of labor for the Treasury Office work may also be acquired from the budget of the Republic.
The Treasury Office is entitled to the portion of the remaining sources of revenues, as specified by the financial plan of the Office, for the purpose of professional education, vocational training and advanced training, designing, construction and maintenance of the information system, acquiring of work equipment, building and purchasing business premises and incentives remuneration of the employees.
The organizational unit of the Treasury Office may enter into commitments within the limits of funds determined by the financial plan.
Article 73k
The local authority treasury performs the following tasks:
1) Financial planning, including the following:
(1) Projecting and monitoring the revenues inflow on the Consolidated Local Authority Treasury Account, as well as dealing with requests for execution of expenditures;
(2) Defining quarterly and monthly quotas of commitments and payments;
2) Managing funds from the Consolidated Local Authority Treasury Account which receives receipts and which executes payments from the budget, including the following:
(1) Managing the liquidity;
(2) Managing the financial assets;
3) Managing the debt, including the following:
(1) Managing negotiations on the borrowing;
(2) Keeping files on the debt;
(3) Managing receipts from the borrowing;
4) The budget accounting and reporting, including the following:
(1) Processing payments and recording receipts;
(2) Running business books;
(3) Financial reporting;
(4) Preparing and producing all statements and producing the local authoritys budget final account, as well as producing the consolidated report of the citys budget final account;
5) Controlling the expenditures, including management of the processes of approving commitments, checking the receipts of goods and services and granting payments at budget funds expenses;
6) Monitoring the movements of earnings within public companies at the level of that treasury and reporting it to the Ministry.
Temporary Suspension of Assets Allocation
Article 73l
If local authoritys competent body doesnt submit to the Ministry statements and acts in accordance with this Law, the Minister may temporarily suspend the allocation of funds from the Republics budget, until the moment the requested statements and acts are submitted.
Article 74**
A fine of 5,000 to 50,000 dinars shall be pronounced to the responsible official of any budget beneficiary, the responsible person in mandatory social security organizations or any other responsible person, for committing the following offences:
1) If such person enters into a commitment or pays out of a budget account any expenditure that has not been foreseen in the budget;
2) If such person fails to comply with the provisions of Articles 13a, 19, 20, 22, 23, Article 24 paragraph 6 and Article 32 of this Law in the preparation and passage of the budget;
3) If the budget proposal and annual accounts that are submitted to the National Assembly and/or local assembly fail to contain the sections stipulated by Article 10 and 65 of this Law;
4) If such person fails to comply with the provisions of Articles 31 through 41, 50 and 51 of this Law in the execution of the budget;
5) (deleted)
6) If such person defers due payment or approves installment repayment without obtaining prior approval from the Government and /or executive body of local government;
7) If such person fails to comply with Article 8 paragraphs 10 and 13 and provisions of Articles 61 through 65 of this Law;
8) If such person fails to remedy problems identified in written internal control reports, and/or in findings of the Budget Inspection and Audit or fails to do so in a timely fashion (Articles 66 and 79);
9) If such person fails to comply with the provisions of Article 73l of this Law.
Article 74a
A fine of 30.000 dinars to 300.000 dinars or prison sentence up to one year shall be pronounced for a crime to the responsible person of the budget beneficiary, responsible person of the mandatory social security organization or other responsible person of the budget beneficiary or mandatory social security organization, who creates commitments or approves at budget’s expense payments of expenditures and outflows of the amount exceeding 1.000.000 dinars the amount defined by the budget or financial plan, i.e. exceeding the loan amount granted by the Government’s act.
Article 75
The motion to initiate misdemeanour proceedings referred to in Article 74 of this Law shall be filed by internal controllers, Budget Inspection and Audit Service, local inspection and audit service and other persons authorized to supervise implementation of this Law.
Misdemeanour proceedings specified in Article 74 of this Law shall not be conducted if three years have passed since the day the misdemeanour took place.
Misdemeanour proceedings specified in para. 1 of this Article shall be conducted in accordance with provisions of the law regulating misdemeanours.
X TRANSITIONAL AND CONCLUDING PROVISIONS
Article 76
On the day this Law comes in effect, the provisions of other laws shall cease to be in effect if contrary to the provisions of this Law.
An exception to the provision of the para.1 of this Article are Articles 18 through 91 of the Law on Public Revenues and Public Expenditure ("Official Herald of the Republic of Serbia" Nos: 76/91, 41/92, 18/93, 22/93, 37/93, 67/93, 45/94, 42/98, 54/99 and 22/01), relating to local authorities, that shall remain effective until expiration of the time limit specified in Article 78, para. 4 of this Law.
Deadline for Issuing Regulations
Article 77
The regulations based on the authorisations of this Law shall be enacted within 12 months from the day this Law comes into effect.
Until the regulations referred to in para. 1 of this Article are enacted, the regulations effective prior to the effectiveness of this Law shall be in use, in accordance with the authority set forth in this Law.
Transitional Period Prior to Establishment of the Treasury Consolidated Account
Article 78
The Minister closes the accounts of the Republic direct and indirect budget beneficiaries and mandatory social security organizations opened with the organization authorized for conducting payment operations, on 31 December 2002.
The funds remaining on the direct and indirect budget beneficiaries and mandatory social security organizations accounts on the day the accounts are closed, shall be transferred to the Consolidated Treasury Account, and shall be made available to the budget beneficiaries and/or organizations.
The funds collected in accordance with special regulations or from other sources, upon closing of the direct and indirect budget beneficiaries and mandatory social security organizations accounts, shall be transferred to the CTA and made available to these beneficiaries and/or organizations, while the total amounts of such funds shall be separately shown in the final accounts statement of the Republic and /or financial plan of the mandatory social security organizations.
Local authority body responsible for finance closes the accounts of the direct and indirect beneficiaries of the local budget, opened with the organization authorized for conducting payment operations, on 31 December 2002. The provisions of articles 18 through 91 of the Law on Public Revenues and Public Expenditures specified in Article 76, paragraph 2 of this Law relating to local authorities shall apply until 31 December 2003.
Provisions of paragraphs 2 and 3 of this Article shall accordingly apply also to the direct and indirect budget beneficiaries of the local authority.
Transitional Period for Depositing the Funds
Article 78a
Monetary funds of the direct and indirect beneficiaries of the budgetary funds of the Republic and mandatory social security organizations that, on the day of coming into force of this Law, have been deposited in the business banks as sight deposits, shall remain in these banks deposited as the portion of the Consolidated Treasury Account, after which the decision on depositing shall be made by the Minister until 1 July 2003, at the latest.
Monetary funds of the beneficiaries and organizations specified in paragraph 1 of this Article which on the day of entering into force of this Law are deposited in the business banks as fixed-term deposits, shall be deposited by the Minister on the Consolidated Treasury Account after the expiration of the fixed-term deposit period, and until 31 December 2003, at the latest.
Beginning with the day of entering into force of this Law, monetary funds of the beneficiaries and organizations specified in paragraph 1 of this Article may not be deposited in business banks as fixed-term deposits.
Monetary funds of the direct and indirect beneficiaries of budgetary funds of local authorities, as the portion of the Consolidated Treasury Account of the local authorities, shall be deposited until 31 December 2003 in business banks as sight deposits, after which the decision on depositing shall be made by the local administration agency responsible for finance.
Monetary funds of the direct and indirect beneficiaries of budgetary funds of the local authority which on the day of entering into force of this Law are deposited in the business banks as fixed-term deposits, shall be deposited by the local administration agency on the Consolidated Treasury Account after the expiration of the fixed-term period, and until 31 December 2003, at the latest.
Monetary funds of the direct and indirect beneficiaries of budgetary funds of the local authority which in 2003 are deposited as fixed-term deposits in the business banks as the portion of the Consolidated Treasury Account of the local authority, the local administration agency responsible for finance shall deposit in the Consolidated Treasury Account after the expiration of the fixed-term period, and until 31 December 2003, at the latest.
To the monetary funds of direct and indirect beneficiaries of budgetary funds of the local authority, which are deposited in the business banks as fixed-term deposits between the day of entering into force of this Law and 31 December 2002, the procedure specified in paragraph 6 of this Article shall accordingly apply.
Transitional Period for Implementing Measures Resulting from Findings of the Budget Inspection and Audit Service
Article 79
Until such time the system of internal control specified in Article 66 of this Law is established in direct and indirect budget beneficiaries and mandatory social security organizations, and if during inspection and audit procedure illegalities are determined, the Budget Inspection and Audit Service shall by decision order measures for their elimination and shall undertake other measures stipulated by law.
The decision of the Budget Inspection and Audit Service is final in administrative proceedings.
Provisions of paras. 1 and 2 of this Article shall be accordingly applied to the local inspection and budget service.
Provisions of paras. 1 through 3 of this Article shall be applied until stipulations referred to in para. 1 of this Article are met, but not subsequent to December 31, 2003.
Temporary Appointment of External Auditors
Article 80
Until the High External Audit Authority is established, the National Assembly shall decide on engaging suitably qualified auditors for conducting external audit of annual accounts of the Republic budget and mandatory social security organizations.
Until the High External Audit Authority is established, the local assembly shall decide on engaging suitably qualified auditors for conducting external audit of annual accounts of the local authority budget.
Article 81
This Law comes into effect on the eighth day upon being published in the "Official Herald of the Republic of Serbia".
Independent Articles of the Law on Amending the Budget System Law
("Official Herald of the RS", No. 87/2002)
Article 11
On the day of the beginning of implementation of this Law, the Ministry shall take over the employees, immovables, equipment, instruments of labour, information systems (informatics equipment and network), the portion of monetary and non-business means, files and archives used by the National Bank of Yugoslavia - the Accounting and Payments Institution, and which are necessary for the performance of the functions which are taken over.
The taking over of employed personnel, files, documentation and archives as well as the corresponding equipment and means, specified in paragraph 1 of this Article, shall be effected on the ground of the act of the Government.
Article 12
The present Law shall enter in force on the eighth day upon being published in the "Official Herald of the Republic of Serbia", and shall apply from 1 January 2003.
Independent Articles of the Law on Amending the Budget System Law
("Official Herald of the RS", No.66/2005)
Article 41
The Minister responsible for finance shall adopt an act defining the deadline until when the payments from budget beneficiaries and mandatory social security organizations present sub-accounts may be done.
Article 42
The Treasury Office shall start its work on August 01, 2005.
The provisions of this Law abrogating the provisions of the Budget System Law ("Official Herald of the RS" No.9/02 and 87/02 hereinafter: the Law) which apply to establishment and sphere of activities of the Public Payments Authority and the Ministry of Finance Treasury Department, shall be applied as of the day when the Treasury Office commence its work.
Until the Treasury Office commences its work, the Public Payments Authority and the Ministry of Finance Treasury Department, both within their sphere of activities, shall continue to perform duties defined by the Law and other regulations which are in effect on the day when this Law enters in force, providing that duties at stake are those that should be performed by the Treasury Office according to this Law.
Until the Treasury Office commences its work, the Public Payments Authority and the Ministry of Finance Treasury Department shall also perform those duties which this Law places under the competence of the Treasury Office.
Article 43
On the day when the Treasury Office commences its work the Public Payments Authority shall stop working.
Until the Treasury Office commences its work, the Minister responsible for finance will harmonize this Law with the Rule Book on Internal Organization and Systematization of Jobs within the Ministry of Finance.
Article 44
On the day when it commences its work, the Treasury Office will take over the employees and continue to use equipment and other labor instruments used previously by the Public Payments Authority and the Ministry of Finance - Treasury Department.
Article 45
Articles 12 and 13 and paragraphs 1 and 2 of Article 15 of this Law shall be applied after establishing a permanent information system of the Treasury Office from Article 25 of this Law.
Article 46
This Law shall enter in force the day after being published in the "Official Herald of the Republic of Serbia".
Independent Articles of the Law on Amending the Budget System Law
("Official Herald of the RS", No.85/2006)
Article 29
Exceptionally, preparing and proposing the budget of the Republic of Serbia for 2007 shall be done in accordance with the following calendar:
November 01 – upon a proposal coming from the Minister, the Government shall adopt the Budget Memorandum, taking into account the macroeconomic frame updated after April 30;
November 15 – the Minister shall deliver the draft of the budget of the Republic and financial plans of mandatory social security organizations to the Government;
December 01 – the Government shall adopt the budget of the Republic and deliver it to the National Assembly, along with revised Budget Memorandum and financial plans of mandatory social security organizations.
Article 30
The provisions of this Law, in a part related to the program part of the budget, shall be applied in the procedure of preparing and adopting the Law on the Budget of the Republic of Serbia for 2007, particularly by its gradual introduction for specific budget fund beneficiaries.
The provisions of this Law, in a part related to the program part of the budget, local authorities shall apply in the procedure of preparing and adopting a decision on the budget for 2009.
Article 31
This Law shall come into force the day after its publication in the “Official Herald of the Republic of Serbia”.
PUBLISHER’S NOTE
* On the day when the Law on Public Debt ("Official Gazette of the RS", No.61/2005) entered in force, i.e. on July 26, 2005, Articles 52, 53, 56, 57, 58, 59 and 60 and Article 73 paragraph 1 point 4) of this law cease to be in effect.
** Amendment of offence fines described by the Article 18 of the Law on Amendments of the Law Defining Fines for Business Offences and Offences ("Official Gazette of the RS", No.101/2005) saying: In the Budget System Law ("Official Gazette of the RS", No.9/02 and 87/02) in the Article 74 paragraph 1 the words:"of 2.000 to 20.000 dinars" shall be replaced with the words:"of 5.000 to 50.000 dinars", has already been executed by means of the Article 39 of the Law on Amendments and Additions to the Budget System Law ("Official Gazette of the RS", No.66/2005) dated July 27, 2005.
*** Article 73b, paragraph 4, Item 2) of the Budget System Law (“Official Herald of the Republic of Serbia”, No. 9/2002, 87/2002, 61/2005 – other law, 66/2005 and 101/2005 – other law) was supposed to cease to be valid on January 1, 2007, on the grounds of the Article 58, paragraph 2, Item 3) of the Law on Wages of State Officials and Public Servants (“Official Herald of the Republic of Serbia”, No. 62/2006). However, since the provision of the Article 24 of the Law on Amending the Budget System Law (“Official Herald of the Republic of Serbia”, No. 85/2006) has deleted the Article 73 b, paragraphs 4 and 5 of the Budget System Law (“Official Herald of the Republic of Serbia”, No. 9/2002, 87/2002, 61/2005 – other law, 66/2005, 101/2005 – other law, 62/2006 – other law and 63/2006 – correction of other law), than the whole Article 73 b, paragraphs 4 and 5 ceased to exist on the day the Law on Amending the Budget System Law came into force, i.e. on October 04, 2006.