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What is the budget? How is it planned, executed and controlled?

The Budget

It is the basic financial and legal act which determines all income and expenses of the City for the financial year (from 1 Jan. to 31 Dec.).
The mayor as the executive body proposes the budget which is approved by the City Council as the representative body by a majority of the votes of all the Council members.

The Budget is adopted towards the end of the current year for the next financial year.

Budget structure

  • General part
    –  Profit and Loss Account – contains a scheme of all income and expenses of the City of Rijeka for the financial year stated by economic classification and  sources of financing
    – Financing Account – contains all receipts from financial assets and borrowings and all expenses relating to financial assets and loan repayment for the financial year.
  • Special part – contains a plan of  expenses and costs of the City departments and of budget users distributed by programmes and activities, current and capital projects.
  • Development programme plan – contains expenses planned for investments, capital assistance and donations for the next three years.

Budget expenses – what is financed from the Budget?

In accordance with the Law on Local and Regional Self-government and the Statute of the City of Rijeka.

  • physical planning of residential area and housing,
  • spatial and urban planning,
  • utility management,
  • child care,
  • social welfare,
  • primary healthcare,
  • education,
  • culture,
  • sport and technical culture,
  • consumer protection,
  • protection and improvement of environment,
  • fire-fighting and civil protection,
  • traffic in its territory,
  • maintenance of public roads,
  • issue of building permits and site development permits, other acts tied to construction and implementation of spatial planning documents, and,
  • other activities in accordance with special laws.

Budgeting

Budgeting is based on the Budget Act, the Guidelines of the Government of the Republic of Croatia and the macroeconomic and fiscal policies for a three-year period, the Budgeting Instructions of the Ministry of Finance for drawing up the state budget and budgets of local and regional self-government units for a three-year period, the Guidelines for drawing up the budget of the City of Rijeka for a three-year period and on the evaluation of the realisation of its own income and expenses.

Budget formation and adoption

  • the methodology for drawing up the Budget and financial plans of budget users has been laid down by the Budget Act and the Instructions issued by the Ministry of Finance,
  • the Department of Finance draws up a draft budget on the basis of the financial projections of the city departments and submits it to the mayor of the City of Rijeka (legal deadline for submission is 15 October of the current year),
  • the mayor discusses the draft budget during a public meeting and determines amendments to the proposed budget and the final draft budget is submitted to the City Council (legal deadline 15 November of the current year),
  • working bodies (committees) of the City Council discuss the draft Budget before holding a public meeting of the City Council,
  • the City Council discusses the draft budget during the public meeting, it analyses programmes and the budget policy proposed by the mayor and adopts the Budget.
  • The budget is publicly published in the “Official Gazette of the Primorje – Gorski Kotar County”.

Borrowings

  • by taking out loans, lending facilities, and issuing securities,
  • for investments financed from the Budget, which are confirmed by the City Council,
  • borrowings require previous consent of the Government of the Republic of Croatia,
  • the annual borrowing rate may amount up to a maxim of 20% of the income realised in the previous year.

Borrowings of legal entities owned by the City of Rijeka

  • only with the consent of the City of Rijeka,
  • up to the amount and for the purpose determined by a decision adopted by the City Council,
  • The City may issue a guarantee for the fulfilment of obligations of the companies and public institutions founded and owned by it.

Budget execution

  • is regulated by the Decision on the execution of the City of Rijeka Budget,
  • all income and expenses are effected through the unique Budget Account,
  • the City Departments collect and reimburse budget income from their scope of activity and are responsible for entire and timely collection,
  • the City Departments execute budget expenses and are responsible for their execution in accordance with intentions and scopes specified in a particular part of the Budget – distribution,
  • the Department of Finance submits to the mayor the semi-annual report (legal deadline is by 5 September) and the annual report on Budget execution (legal deadline is by 1 May),
  • The City Council considers and adopts the semi-annual report (legal deadline is by 15 September) and the annual report on Budget execution (legal deadline is by 1 June),
  • the Annual Report on Budget execution is submitted to the Ministry of Finance and the State Audit Office.

Audit

In accordance with the Audit Act, the State Audit Office has an obligation to carry out an annual audit of budget expenses of the City of Rijeka, financial reports and financial transactions of the budget.

Budget Supervision

In accordance with the Budget Act, the Ministry of Finance carries out budget supervision and supervision of purposeful use of the budget funds that are assigned from the State Budget.

 

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