Public Budget represents the basis of every country’s financial system, expressing the specific type of financial relations

budgetary relations that are implied in the processes of formation, distribution and use of budgetary funds necessary for the national (central) and local state bodies.
Lecture 4 Budget and budgetary system Slide 1

Public Budget represent the economic relations that manifest themselves in the process of formation and utilization of the main centralized cash fund of the state and of the administrativeterritorial units’ funds, with the purpose of financing the activities focused on improving the quality of life, the economic development of the country, scientific research, improving and widening the infrastructure, creating state reserves, national defense, and public and law order
Lecture 4 Budget and budgetary system Slide 2

Public Budget represents the main document, viewed as a law, which establishes the nature and the size of income that is mobilized by the state on one side, and on another side the type and the amount of budget allocations that the state will forward to fund various activities during the year.
Lecture 4 Budget and budgetary system Slide 3

There are three categories of financial (budget) laws: A.The annual law of finance or the law of initial budget which stipulates and authorizes the set of state resources and expenses for each financial year and it is known as the State Budget Law;

Lecture 4 Budget and budgetary system Slide 4

There are three categories of financial (budget) laws: B. Lecture 4 Budget and budgetary system Slide 5 .The adopted laws of the state budget (adopted for the current year) focus on the rectification (correction) of the provisions of the initial budget law (the number of the provisions is not fixed and can vary from year to year).

through which is established the real execution of budget and approved differences between recorded results and forecasts of annual law of finance. After expiration of the budget year ( usually after one year). This law can be considered in a narrow acceptance.There are three categories of financial (budget) laws: C. Law of finance regulation (Law of execution of the Budget). Lecture 4 Budget and budgetary system Slide 6 . fulfilled by adjusting laws.

It can be seen under four main approaches: Lecture 4 Budget and budgetary system Slide 7 .Adopted by the Parliament. the budget is the main document from public life. because it is the financial expression of action plan of the state for the period of one year.

budget is a financial document with the power of law which includes certain norms and normatives for organization of a clear and explicit financial administration.a)From the juridical point of view. these norms are for organization of a transparent administration of state finances and determination of Governmental authorities in the budget field. Lecture 4 Budget and budgetary system Slide 8 .

Lecture 4 Budget and budgetary system Slide 9 . Here. from the technical point of view we are interested especially in processes of elaboration and execution of budget as methods of forecasting and evaluation of different categories of revenues and expenses of the Budget.b) From the accounting point of view the budget represents the set of accounts that administrate financial resources of the state.

These funds represent the considerable weight of GDP taken through taxes and expenses made by the state. Lecture 4 Budget and budgetary system Slide 10 .c)From the economic point of view can be mentioned the specific funds that pass through budgetary account.

Lecture 4 Budget and budgetary system Slide 11 .). educative. military etc. cultural. past influence. inertial phenomena etc. social.d)From the political point of view the budget is considered as the expression of Governmental options in the set of fields (economical politics. these options are reflected through accumulation and distribution of revenues and expenditures and are determined by multiple factors related to doctrines of political parties.

Lecture 4 Budget and budgetary system Slide 12 . 3.Budget must execute three functions: 1.Efficient use of financial resources and staff for managing and realizing the supposed activities. 2.Planning of state activities by which are established objectives and are formulated different alternative programs being evaluated by financing possibilities.Control over expenditures by which is supervised budget execution by public authorities.

The budget of federation. Lecture 4 Budget and budgetary system Slide 13 .Budgetary System of Federal Type states is formed from three parts: 1. 3. 2.The budget of territorial units (components of federation).Local budget.

Lecture 4 Budget and budgetary system Slide 14 . 2.Local budget of territorial-administrative units.Budget of state central administration.Budgetary System of Unitary Type is composed from two components: 1.

847 from 24. comprising: a) state budget b) budget of social insurance of state c) budgets of territorial-administrative units Lecture 4 Budget and budgetary system Slide 15 .05.The budgetary system of the Republic of Moldova has the unitary type. Nr. which constitute the national public budget.96 “ Budgetary system is a unitary system of budgets and funds. According to the Law of the Republic of Moldova “ Regarding budgetary system and budgetary process”.

respectively financial resources mobilized in State disposal. Lecture 4 Budget and budgetary system Slide 16 .State budget reflects financial relations expressed by expenditures corresponding to realization of objectives and actions of national interest.

The TAU budgets ensure with financial resources’ realization for satisfaction of socio-economic and cultural needs of population as for development of the territory in subordination. (state or region). Lecture 4 Budget and budgetary system Slide 17 .Budgets of territorial-administrative units (TAU) are the financial relations corresponding to the expenditures of certain actions for local collectivities.

according to Fiscal Code and are spread directly to the respective budgets. formed from local duties and taxes. Lecture 4 Budget and budgetary system Slide 18 .Own revenues. TAU elaborates and approves its own annual budgets in limits of available financial resources which are formed from: 1.According to the legal framework. for each separate territory.

Special means. in the form of donations. . Lecture 4 Budget and budgetary system Slide 19 .2.are revenues of public institutions. sponsorships and other cash means incorporated legally in the possession of public institution.

Lecture 4 Budget and budgetary system Slide 20 . according to normative percentage established through annually budgetary law.3.Transfers from general revenues of the state.

according to the legal provisions.4.Transfers from the state budget. financing activity fields which correspond to the competence of local public authorities. with a definitive title and in an absolute amount. or from district budgets to the local budgets for leveling financial possibilities of administrative-territorial units.are the allocated financial means. in order to ensure execution of certain public functions. from state budget to the district budgets. Lecture 4 Budget and budgetary system Slide 21 . .

etc. These are related to the fields like education.4. 5. culture and art. .Annual expenditures of TAU budgets are coming under responsibility of representative authorities and are approved just in limits of available financial resources. healthcare.represent cash means for sustaining some programs of local interest. Lecture 4 Budget and budgetary system Slide 22 . in accordance with legal disposals. sports and activities for teenagers.Special funds.

respectively through revenues characteristic for this domain. assistance and compensations. reflected through pension payments. social protection. first of all contributions for social insurance.The budget of state social insurance (BSSI) comprise the financial relations expressed through expenditures specific for this field. Lecture 4 Budget and budgetary system Slide 23 .

warranted by the state and protects the population’s interests in the field of health protection. These funds cover expenditures of treatment in situations conditioned by happening of ensured events. Lecture 4 Budget and budgetary system Slide 24 .Insurance of obligatory medical assistance represent the system.

its aprovement. which takes place annually comprising elaboration of budget project. Lecture 4 Budget and budgetary system Slide 25 . budget execution and bugetary control.Budgetary process can be defined as the set of activities and operations.

which consists from ordination of priorities and allocation of necessary financial resources for concerned objectives. with public utility.BP has the decisive type. under the level of public necessities of the period. Decision that should be taken is one of the most complicated. in all situations. Lecture 4 Budget and budgetary system Slide 26 . as mobilized resources are limited and are situated.

Lecture 4 Budget and budgetary system Slide 27 .BP is a political predominant. they are just based on the objectives of the governing program. as decisions related to allocation of mobilized budgetary resources are not based on criteria or information on the market. established by the party which has the majority in the Parliament.

needs and possibilities. Lecture 4 Budget and budgetary system Slide 28 . because it is realized through participation of a big number of subjects of different nature with own interests.BP has a complex character.

BP is cyclic. according to the requirements of annual principles and budgetary publicity. being realized successively under a rigid (strict) calendar. BP is strictly regulated by the legislation and methodological norms elaborated by the Ministry of Finance. Lecture 4 Budget and budgetary system Slide 29 .

) 2) main officers of the budget (ministers and leaders of other specialized bodies of central public administration ) 3) Ministry of Finance 4) Government 5) Legislative body (Parliament) 6) Groups of interest and citizens. Lecture 4 Budget and budgetary system Slide 30 . administrative-territorial units etc.The main participants in the budgetary process are: 1) entities financed from the budget (institutions.

4. 3.The stages of the budget process are the following: 1. 2. Lecture 4 Budget and budgetary system Slide 31 .elaboration of the budget project.execution of budget.adoption of the budget project.budget control.

Stage elaboration of the budget project The Ministry of Finance presents the main economic data.1. necessary for the elaboration of state budget project. in terms fixed by the Government and it includes: Lecture 4 Budget and budgetary system Slide 32 .

determined. elaborated and presented by the Ministry of Economics.a) Forecast of macroeconomic and social indicators for the next budgetary year. which is determined. of external obligations and of other indicators that characterize the credit monetary policy of the state. of credits. elaborated and presented by the Ministry of Labor. b) Forecast of indexes and demands of the state social insurance budget. which is determined. Social and Family Protection. Lecture 4 Budget and budgetary system Slide 33 . c) Forecast of the balance of payments. elaborated and presented by the National Bank of Moldova.

Lecture 4 Budget and budgetary system Slide 34 . the Government presents to the Parliament: a) The project of budget law for the next budget year and the explanatory note. the Government approves the project for the next budget year.After the amendments have been included. if they existed. b) The list of modifications in the legislation resulted from project of annual budget law. Until the October 1-st of each year.

Stage The examination and adoption of the annual budget law The Government presents to the Parliament until October 1-st of each year the project of annual budget law. Additionally to the project of annual budget law. the Ministry of Finance presents calculations of budget incomes and expenditures. Lecture 4 Budget and budgetary system Slide 35 .2.

as well as plans of the their subordinated institutions. In term of 10 days after the adoption of the annual budget law. b) Prepares the breakdown of monthly distribution of incomes stipulated by the annual budget law and by other legislative documents.Stage 3 The execution of state budget The Government has the responsibility for the execution of state budget. the Ministry of Finance: a) Requests form central public authorities their financial plans. Lecture 4 Budget and budgetary system Slide 36 .

All incomes uncollected until December 31 are cashed in the budget account for the next year. Lecture 4 Budget and budgetary system Slide 37 . the Ministry of Finance issues the report regarding the execution of the state budget. in order to make the annual report. Ministry of Finance makes the final balance of all accounts opened during the current budget year. which is presented to the Government and Parliament until May 1-st of the next year after the current one.Stage 4 The report regarding the execution of annual budget law and its approval On December 31-st of each year. At the end of each budget year.

In this context. Lecture 4 Budget and budgetary system Slide 38 . the necessity of control over the budget derives from political and financial interests.the control over execution of the state budget represents a stage from the budget process that is based on the restrictions.The budget control . taking into account that budgetary resources have limited character.

Lecture 4 Budget and budgetary system Slide 39 .Juridical control is performed by the specialized organs of the state for the purpose of establishing of the juridical responsibility of the subjects implicated in the budget execution process in case of defective administration of political funds. For this purpose. the Court of Accounts activates as a basic control organ from annual budget law state.

etc) as well as the realized control inside of each institution under the form of control made by the main ordinates of budget credits over the way of how these credits are consumed by subordinates. Treasury. Lecture 4 Budget and budgetary system Slide 40 .Administrative control includes the performed control by specialized organs of Ministry of Finance (IFPS.

the budgetary control may be: ▪ Preventive ▪ Concomitant. ▪ Post-operative.Depending on the time of its accomplishment. Lecture 4 Budget and budgetary system Slide 41 .

because it can stop running illegal operations or those judged to be inappropriate and inefficient.Preventive control is the most effective. Lecture 4 Budget and budgetary system Slide 42 .

but should not be underestimated. because by determining the legality or illegality of the operation. there is prevented the initiation of similar actions in future. Lecture 4 Budget and budgetary system Slide 43 .Concomitant control has limited effectiveness.

but by identifying deviations from the law and determining those responsible. it may establish measures for the recovery of damages to the state.Post-operative control can not fix what was done. Lecture 4 Budget and budgetary system Slide 44 .