Process of municipal budget planning

Municipal budget planning includes a host of institutions such as the Kosovo Assembly, the Government and the Ministry of Finance and local government institutions as the mayor and the municipal assembly. However, citizens themselves have a great impact on this process.

1. By 30 April, the Kosovo Government shall submit to the Assembly of Kosovo the Medium Term Expenditure Framework.
2. By 15 May, the Ministry of Finance issues the 1^st Budget Circular, containing the budget process instructions, budgetary limits, budget calendar.
3. By June 30, the municipality should submit to the Ministry of Finance the Medium Term Budget Framework (MTBF) approved by the Municipal Assembly.
4. Planning continues with the submission by the chief finance officer to each municipal department of the first internal municipal budget circular where preparation of budget proposals is required and their submission to the CFO. Subsequently, the CFO shall submit the 2^nd the internal Municipal Budget Circular containing information and guidance on spending limits to the departments, and the 3rd Internal Municipal Budget Circular containing the schedule for organizing of budget hearings.
5. The Ministry of Finance shall, until August 15^th, issue the 2^nd Budget Circular which provides final budget guidelines and final grant levels.
6. The Mayor shall, by September 1^st, submit to the municipal assembly a draft budget proposal for the following year. The municipal assembly has to approve and submit to the Ministry of Finance the municipal budget by September 30^th for the following year.
7. The Government, after adopting the Kosovo Consolidated Budget proposal and the Budget Appropriations Proposal, shall submit it to the Assembly of Kosovo by October 31^st. The Assembly of Kosovo approves the budget for next year until December 31^st.

In addition to all these procedures and timeframes, if inadequate planning takes place, a budget review process may take place. The decision to undertake such action and the timeline for its implementation shall be made as per seperate instructions of the Ministry of Finance.

Budget and members of the municipal assembly

Members of the municipal assembly should have detailed information on each step of planning process for the municipal budget as the deadline of 30 September is not sufficient for members of the municipal assembly to ensure that the budget proposal is received by the mayor in compliance with requirements of the citizens of the municipality. In this context, the municipal assembly shall invite the chief financial officer within the deadlines concerned to give information to members of the municipal assembly on budget circulars. At the same time, members of the municipal assembly may find this information also in the Ministry of Finance and budget and finance directorate of their municipality.

Roles of municipal institutions in budget planning and budget implementation  

The Mayor shall submit to the Municipal Assembly the draft annual budget for approval.

The Policy and Finance Committee in particular and the Municipal Assembly in general, have a great responsibility as far as planning and oversight of municipal finances are concerned. At the planning stage, the Policy and Finance Committee reviews important documents such as the municipal budget, medium-term municipal budget frame, procurement plan, and provides recommendations for action by the municipal assembly.

The Municipal Assembly shall, taking into account the recommendations of the Policy and Finance Committee, review, and, in case of agreement, approve key municipal documents relating to managementof municipal finances.

Roles of municipal institutions in drafting a municipal budget

Central institutions

The Department of Municipal Budget is a department within the Ministry of Finance dealing with municipal finances. This department is involved in planning and implementing municipal finances, as:

• Prepares the budget proposal for municipalities
• Prepares the part of the Medium Term Municipal Expenditure Framework (MTMEF)
• Assist municipalities in implementation of the budget;
• Examines and evaluates requirements for amending budget appropriations;
• Analyzes and provides recommendations on transfers, reallocations and other submissions related to budget appropriations;
• Electronic Data System Management (EDSM), Public Investment Program (PIP) or other systems for municipalities; etc.

Municipal budget analysts, cooperate with municipal offices on all municipal financial management issues. For example, they accept requests from municipalities and submit them for processing; inform and advise municipalities in order to respect the legal framework and decisions taken at ministerial level; inform and advise municipalities in case there is a deficit of means in economic categories; etc.

The Grants Commission is an inter-governmental institution and it consists of nine members: Prime Minister, Minister of Finance, Minister of Local Government Administration, another Minister (selected on an annual basis), and four mayors (to be selected on a random annual basis, but provided that one of them comes from the municipalities of national minorities). The main responsibilities of this Commission are the following:

• Review the grant allocation formula every third year;
• On an annual basis, determine the formula of open system grants (healthcare and education);
• Review municipal complaints about the financing formulas and their proposals for capital expenditures;
• Recommend the amount of additional funding to municipalities that have been given enhanced competencies; etc.

Budget planning should adhere to several principles: Be targeted so that it takes into account specific needs of certain and marginalized groups of society.

Be inclusive because we cannot talk about targeted budgeting without inclusive budgeting - how can we understand needs of different groups of society without involving them in the budget planning process.

Being transparent means allowing access to the public at all stages of budgeting, including the planning stage and the execution of the municipal budget. Transparence means that the budget is not only easily accessible, but it has to be drafted in easily simplified formats easily understandable by everyone.

Acting under the Law on Gender Equality No. 05/L-020 (2015), Kosovo institutions are responsible for “inclusion of gender budgeting in all areas, as a necessary tool to guarantee that the principle of gender equality is respected in collecting, distribution and allocation of resources” (Article 5.1.5).

For this reason, budget organizations should make visible the effects of public expenditure on gender equality in the 2018 annual budget. This would also contribute to increasing the effectiveness and transparency of public finance management. You should consider these guidelines in issuing an internal municipal budget circular as a basic document for planning your municipal budget for the period 2018-2020. If there is uncertainty in this regard, budget organizations may consult relevant analysts within the Department of Budget at the Ministry of Finance.