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measures to the extent determined by the municipal council in accordance with § 102 para. 2 point. a). If the range is not specified, the council may approve budgetary measures. Each council must responsibly consider whether and to what extent the council will accept budgetary measures. It is a question of transparency – meetings of the municipal council are in fact private. Legal obligations regarding publishing: The draft municipal budget must be (see § 11, para. 3 of the Act no. 250/2000 Coll.) published at least 15 days prior to its consideration in council in an appropriate manner and in appropriate scale (and) on the official message board, and (b) in electronic form in a manner enabling remote access. Comments on the draft budget by municipality citizens may lawfully be registered either (a) in writing within the period specified in the publication or (b) orally at a meeting of the council at which the budget proposal is discussed. Budget breakdown: This phase also includes a budget breakdown. This is done immediately after the budget has been approved by the municipal council. It includes binding budget indicators for those officials who are obliged to follow them. The municipal council discusses and approves the budget broken down by budgetary structure so that the approved budget expresses the binding indicators, which are compulsory to follow: • Executive bodies of a municipality (such as an government office) during management according to the budget, • Legal entities established or founded by the scope of the municipality in its management, • Other persons who are to be the beneficiaries of grants or contributions from the budget.

7.3.3 Management according to budget amendments, breaching budgetary discipline – Phase 3 The third phase of the budgetary process includes: (1) implementation of the budget (pumping, management according to the budget), (2) ongoing monitoring (financial control defined by the Act on Financial Control) and (3) potential changes (budgetary measures). Management according to Budget and Control Each municipality carries out its operations according to the approved budget, which is reserved to the municipal council (§ 102, paragraph 2,

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letter a)). Each municipality or county shall exercise control of its management according to law no. 320/2001. (Financial Control Act) throughout the financial year – risks and financial control are discussed in Chapter 7. In particular, the implementation of the preliminary, interim and subsequent checks under the system of financial controls are very important. In addition, the municipality exercises control established by management (such as governmental organizations) or formed (for example, Ltd.) legal entities. Implementation of the budget only includes (a) such revenues which were actually received, and such financial transactions which were made in a calendar year; (B) expenditures, i.e., the drawing of funds, which took place in the calendar year. For the classification of revenue or expenditure regarding the implementation of the budget for the calendar year, there is a concrete date for either crediting or debiting bank accounts. Budget amendments Amendments to the budget are approved by the assembly. The council makes changes to the budget only to the extent set out by the assembly. Amendments in the budget are conducted due to (1) organizational changes, (2) changes in legislation affecting the amount of budgeted revenue and expenditures (in terms of methodological changes), (3) changes regarding objective factors affecting the implementation of the budget revenues and expenditures (in terms of substantive changes) . Amendments can be made by budgetary measures. These are recorded by time sequence, for budgetary measures: Transfer of appropriation: Individual income or expenditures with other changes, but without changing their overall volume or approved by the difference between the total revenues and expenditures. (2) new revenues and new spending: This is the use of new, unforeseen budget revenues to pay for a new, unsecured budget expenditure – this will increase the overall size of the budget. (3) Binding of budgetary expenditure: Binding of spending is done when their coverage is threatened by the non-fulfillment of budget revenues; this measure reduces the size of the budget. Budgetary measures are implemented mandatorily (1) in the case of changes in financial relationships to another budget; (2) in case of changes in the binding indicators against other people; (3) should there be a risk of a budget deficit. When implementing the budget may lead to undesirable phenomenon – a breach of budgetary discipline. A breach of budgetary discipline can be the manifestation of symptoms of corruption risks.

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Breach of budgetary discipline Each of the following is considered to be a breach of budgetary discipline; (1) The unauthorized use or (2) retention of funds provided from the municipal budget. The unauthorized use of funds is (1) where there has been a violation based on official usage restrictions set out by law, contract, or decision to grant these funds, or (2) where a violation occurred based on the conditions under which the relevant funds are provided, (3) furthermore this also holds true when it cannot be demonstrated exactly how the funds were used. Withholding funds is a violation of the obligation to repay funds provided by the set deadline. The municipality, which breached budgetary discipline is required to pay a reimbursement for breaching budgetary discipline in the budget from which funds had been provided. The reimbursement payment for the breach of budgetary discipline is equivalent to the amount withheld or to the misappropriated funds.

7.3.4 Billing, economic review, the final account – the last stage of the budgetary process Phase 4 includes feedback control, billing, review of management (the audit) and, the preparation and approval of the final account. The final account is approved by the assembly in the second quarter (often in June). In terms of the budgetary process, the preparation, discussion and approval of the final accounts of the municipality is the final phase which takes place after the end of the calendar year. The final account is the collectively processed data regarding the annual management of the municipality. It is a document that is crucial in terms of closing the budget for the previous year. It is also a source of important information for citizens, the voluntary sector and other interested parties on how the community is operating. The quality and extent to which the final account is sufficiently compiled is a testament to the openness and transparency of the municipality or county. Sometimes, an annual report of the municipality or authority (unlike the final account, this is a voluntary document) is published along with the final account. The final account includes (a) data on the implementation of the budget, revenues and expenditures fully broken down according to the budgetary composition, (b) data on property management and (c) information about financial transactions, including the form and use of funds (statement of financial relations to the state budget , regional budgets, municipal budgets, state funds and other budgets, and management of

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Detecting and reducing corruption risk and fraud in the public sector (Ukázka, strana 99)  
Detecting and reducing corruption risk and fraud in the public sector (Ukázka, strana 99)