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UNITED NATIONS NATIONS UNIES United Nations Interim Administration Mission in Kosovo Mission d’Administration Intérimaire des Nations Unies au Koso...
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UNITED NATIONS

NATIONS UNIES

United Nations Interim Administration Mission in Kosovo

Mission d’Administration Intérimaire des Nations Unies au Kosovo

UNMIK

UNMIK/REG/2002/23 31 December 2002 _____________________________________________________________________ REGULATION NO. 2002/23 ON THE APPROVAL OF THE KOSOVO CONSOLIDATED BUDGET AND AUTHORIZING EXPENDITURES FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2003

The Special Representative of the Secretary-General, Pursuant to the authority given to him under United Nations Security Council resolution 1244 (1999) of 10 June 1999, Taking into account United Nations Interim Administration Mission in Kosovo (UNMIK) Regulation No. 1999/1, of 25 July 1999, as amended, on the Authority of the Interim Administration in Kosovo, Taking into account UNMIK Regulation No. 1999/16 of 6 November 1999, as amended, on the Establishment of the Central Fiscal Authority of Kosovo and Other Related Matters and in particular section 4 thereof, Having regard to the responsibilities of the Provisional Institutions of SelfGovernment under sections 5.1 (a) and (b) and section 5.2 (c) of UNMIK Regulation No. 2001/9 of 15 May 2001, as amended, on a Constitutional Framework for Provisional Self-Government in Kosovo in the fields of economic and financial policy, fiscal and budgetary issues and assisting municipalities to develop their own budgets and financial management systems, Taking into account the final authority of the Special Representative of the SecretaryGeneral under section 8.1 (c.) of UNMIK Regulation No. 2001/9 of 15 May 2001, as amended, on a Constitutional Framework for Provisional Self-Government in Kosovo to approve the Kosovo Consolidated Budget, Having considered the advice of the Economic and Fiscal Council, and

For the purpose of approving the Kosovo Consolidated Budget and other related matters, Hereby promulgates the following:

Section 1 Definitions For the purposes of the present Regulation: “Assembly” means the Assembly of Kosovo established pursuant to Chapter 9 of UNMIK Regulation No. 2001/9 of 15 May 2001 “On a Constitutional Framework for Provisional Self-Government in Kosovo.” “Appropriation” means the legally authorized amount that may be made available for expenditure from the Kosovo Consolidated Fund for either an expenditure category within a specific programme or purpose or, where a specific purpose is not identified, for an expenditure category for a Budget Organization, as set out in Schedule 1 of the present Regulation.

“Balances” means the amounts of unexpended commitments, unallocated appropriations, uncommitted allocations and any revenues in excess of the sum of expenditures and unexpended commitments carried forward from Fiscal Year 2002. “Budget Organization” means any organization to which an appropriation is made under the Kosovo Consolidated Fund as set out in Schedule 1 attached to the present Regulation. “Commitments” means contemplated expenditures, for which a Commitment Payment Order has been submitted to the Treasury and recorded in the Treasury Accounting Record, whether or not subject to a legal obligation. “EFC” means the Economic and Fiscal Council established by UNMIK Regulation No. 2002/10. “Expenditure categories” means Salaries and Wages, Other Goods and Services, Subsidies and Transfers, Capital Outlays and Reserve. “Expenditures” means payments of money from, or transfers out of, the Kosovo Consolidated Fund. “Fiscal Year” means the period during which all financial transactions authorized under the annual budget must be completed or committed to. For 2003, the Fiscal Year shall be the period beginning immediately after midnight on 31 December 2002 and ending at midnight on 31 December 2003.

“Funds allocation” means the maximum amount of expenditures and commitments able to be made against a specified appropriation, as advised to a Budget Organization in an allocated funds notice issued by the Ministry of Finance and Economy. “Government” means the Prime Minister and Ministers of Kosovo. “Kosovo Consolidated Budget” means the overall budget of Kosovo comprising the sectors of government activity covered by the Kosovo General Budget and the public enterprise sector, that have been consolidated in accordance with internationally accepted government finance standards. “Kosovo General Budget” means the budget comprising the unconsolidated budgets for all Kosovo Budget Organizations in the sectors of government activity represented by the Provisional Institutions of Self-Government (including Municipalities) and the Reserved Powers, the appropriations for which are set out in Schedule 1 to the present Regulation. “Kosovo Consolidated Fund” means the fund that was first established pursuant to UNMIK Regulation 1999/16, as amended, or the account or the consolidated group of accounts defined in the Treasury Accounting Record for the purposes of receiving deposits and making payments of public money. “Reserved Power Budget Organizations” means the Budget Organizations receiving an appropriation under Table B of Schedule 1 attached to the present Regulation. “Schedules” means the schedules attached to the present Regulation. “Treasury Accounting Record” means the accounting record established within the Treasury of the Ministry of Finance and Economy.

Section 2 Kosovo General Budget Appropriations Appropriations from the Kosovo Consolidated Fund for the Fiscal Year 2003, as set out in Schedule 1 attached to the present Regulation and the expenditures itemized under the Kosovo General Budget for the General Government purposes indicated and the amounts shown in Schedule 1 are authorized. The expenditure estimates indicated in Schedule 2 for Fiscal Year 2004 and Fiscal Year 2005 are projections only and are not authorized.

Section 3 Municipal Budget Appropriations 3.1 Notwithstanding section 2, appropriations in Schedule 1, Table C that are based on the “Municipal Own Source Revenues” are only authorized to the extent such revenues are deposited in the Kosovo Consolidated Fund and properly recorded in the Treasury Accounting Record. 3.2 Each Municipality specified in Schedule 3, shall allocate to non-majority communities of that Municipality, from their Own Source Revenues and General, Education and Health Grant received from the Kosovo General Budget, at least the proportion indicated in Schedule 3, which Schedule may be revised periodically to reflect the effects of movements by Internally Displaced Persons or Returnees. 3.3 Within 15 days from the end of each quarter of the Fiscal Year 2003 each Municipality shall prepare and submit a report to the Office of Community Affairs on their fair share financing and other relevant standards and benchmarks. 3.4 In the event that a Municipality does not meet the set proportion of fair share financing, or does not comply with other relevant standards and benchmarks, the DSRSG Pillar II may recommend to the Special Representative of the SecretaryGeneral (hereinafter “SRSG”) the implementation of measures which may include, but are not limited to: (a) Holding back of future allocations from the Kosovo General Budget or Own Source Revenues, until such time as the shortfall has been addressed; (b)

Designation of criteria for Municipalities on expenditure of available

(c)

Diversion of funds directly to non-majority communities; and

(d)

De-certification of the Municipality in question.

funds;

3.5 The DSRSG Pillar II, consulting as necessary, shall issue Administrative Instructions in relation to the administration of fair share financing by Municipalities.

Section 4 Appropriation and Re-Appropriation of Balances and Surplus Carried Forward Funds 4.1 No later than thirty (30) days after the closure of Fiscal Year 2002, the Minister of Finance and Economy shall submit to the SRSG for approval: (a) A schedule of any unexpended commitments against the Kosovo Consolidated Fund and properly recorded in the Treasury accounting Record; and

(b)

A proposal for the re-appropriation of such unexpended commitments.

4.2 No later than forty-five (45) days after the close of Fiscal Year 2002, the Minister of Finance and Economy shall submit to the SRSG through the EFC for the approval of the SRSG: (a) A schedule of all unallocated appropriations and uncommitted allocations for 2002 recorded in the Treasury Accounting Record; and (b)

A proposal for the appropriation of such balances in Fiscal Year 2003.

4.3 Upon approval by the SRSG, the proposed re-appropriation of the unexpended commitments referred to in section 4.1 and the proposed appropriation from the Kosovo Consolidated Fund of the balances referred to in section 4.2 shall be deemed authorized for Fiscal Year 2003. 4.4 No later than forty-five (45) days after the close of Fiscal Year 2002, the Minister of Finance and Economy shall determine and then submit to the SRSG through the EFC, a schedule indicating the total, sources and amounts of the elements of the funds carried forward as a cash surplus from Fiscal Year 2002. No later than sixty (60) days after the close of Fiscal Year 2002, the Minister of Finance and Economy shall submit to the SRSG through the EFC for the approval of the SRSG a proposal for the use, release and appropriation of the funds carried forward as a cash surplus from Fiscal Year 2002. The SRSG may approve the amounts, proposed use, release and appropriation of the cash surplus as an adjustment to the 2003 Kosovo General Budget. Approved appropriations shall be deemed authorized for the period 1 January to 31 December 2003 from the Kosovo Consolidated Fund. 4.5 No later than thirty (30) days after the close of Fiscal Year 2002, the Minister of Finance and Economy shall submit to the SRSG for approval: (a) A schedule of any unexpended commitments of Municipal General, Education, Health and Local Community Organization Grants recorded in the Treasury Accounting Record; and (b)

A proposal for the re-appropriation of such unexpended commitments.

4.6 No later than forty-five (45) days after the close of Fiscal Year 2002, the Minister of Finance and Economy shall submit to the SRSG through the EFC for approval: (a) A schedule showing all unallocated appropriations and uncommitted allocations of Municipal General, Education, Health and Local Community Organization Grants appropriated in Fiscal Year 2002 and recorded in the Treasury Accounting Record; and

(b)

A proposal for the appropriation of such unexpended balances.

4.7 Upon approval by the SRSG, the proposed re-appropriation of the unexpended commitments referred to in section 4.5 and the proposed appropriation of the unexpended balances referred to in section 4.6 shall be deemed authorized for Fiscal Year 2003 from the Kosovo Consolidated Fund. 4.8 Unexpended balances of “Municipal Own Source Revenues” from Fiscal Years 2000, 2001 and 2002, to the extent they have been deposited in the Kosovo Consolidated Fund and recorded in the Treasury Accounting Record as appropriations, are appropriated and authorized for Fiscal Year 2003. 4.9 Unexpended balances of designated donor grants, which grants were actually received and recorded in the Treasury Accounting Record in 1999, 2000, 2001 and 2002 are appropriated and authorized for Fiscal Year 2003.

Section 5 Limits on Commitments and Expenditures 5.1 An expenditure from, or a commitment against, the Kosovo Consolidated Fund shall only be made: (a)

From an amount that has been appropriated therefore; and

(b)

In accordance with the other requirements of the present Regulation.

5.2 The SRSG may, after consultation with the Minister of Finance and Economy and the EFC, impose limits or other constraints on the manner in which and the rate at which expenditures or commitments are to be made and discharged. 5.3 The SRSG may, after consultation with the Minister for Finance and Economy and the EFC, approve the issue of guidelines and instructions setting out procedures for accepting, accounting for and implementation of, donor gifts, loans or grants. Unless otherwise approved by the SRSG, donor gifts, loans or grants shall be deposited into, and appropriately accounted for as part of, the Kosovo Consolidated Fund. Upon completion of the approved procedures for acceptance and after being deposited into the Kosovo Consolidated Fund or as otherwise approved by the SRSG, such gifts, loans or grants shall be deemed to have been appropriated for the specified purpose or purposes, and may be allocated and expended for such purpose or purposes. 5.4 Revenue from co-payments or fees from health care activities collected by the Ministry of Health in Fiscal Year 2003 shall be appropriated for health care purposes only. In the event such revenue exceeds the amount appropriated for such purposes

under the Kosovo General Budget, a formal adjustment to such appropriated amount may be made by the SRSG, after consulting the Minister of Finance and Economy and the EFC. Every such an adjustment shall be recorded in the Treasury Accounting Record. 5.5 In the event that revenue from co-payments, fees, charges or taxes collected by a municipality exceeds the revenue amounts appropriated in Table C of Schedule 1 for such municipality, a concomitant adjustment in the amounts appropriated in the budget for such municipality shall be made. Such excess revenue may not be allocated or expended until such an adjustment is made to the budget of such municipality by the Municipal Assembly in accordance with the relevant procedures. The SRSG may, after consultation with the Minster of Finance and Economy and the EFC, authorize the issue of guidelines and instructions establishing the procedure governing the making of such adjustments. Every such adjustment shall be recorded in the Treasury Accounting Record. Revenue from education fees and/or charges shall be separately recorded, and such revenue may only be appropriated and used by the municipality for education purposes. Revenue from primary health care co-payments shall be separately recorded, and such revenue may only be appropriated and used by the municipality for primary health care purposes. 5.6 The SRSG may, after consultation with the Minister of Finance and Economy and the EFC, make an appropriation to a Budget Organization, for a specified purpose, of an amount equal to fees or other charges deposited into the Kosovo Consolidated Fund. 5.7 Each Budget Organization is required to ensure that the number of its staff does not at any time during Fiscal Year 2003 exceed the number specified in Schedule 1 attached to the present Regulation. 5.8 (a) The SRSG may authorize an increase or decrease in the number of staff of a Budget Organization specified in Schedule 1; (b) If the affected Budget Organization is not a Reserved Power Budget Organization, the SRSG shall consult with the Minister of Finance and Economy and the EFC before authorizing such increase or decrease; and (c) If the amount of the increase or decrease is equal to or greater than 40% of the number of the staff specified for such Budget Organization in Schedule 2 the SRSG shall consult with the Government before authorizing such increase or decrease. 5.9 The SRSG may issue an Administrative Direction amending a Schedule attached to the present Regulation. Provided, however, that, if the amendment affects a Budget Organization that is not a Reserved Power Budget Organization, the SRSG may issue such an Administrative Direction after consultation with the Minister of

Finance and Economy and the EFC, or where required under the present Regulation, the Government. Section 6 Contingent Expenditures 6.1

Funds for contingent expenditures are appropriated as:

(a) An “Advance to the Minister of Finance and Economy” in Table A of Schedule 1; and (b) An “Advance to the Special Representative of the Secretary-General” in Table B of Schedule 1. The amounts authorized for contingent expenditures may be used only for urgent and unforeseen requirements. 6.2 Amounts may be transferred from the contingent expenditure appropriations in accordance with the following criteria: (a) Transfers of amounts less than or equal to and 250,000 Euros from the “Advance to the Minister of Finance and Economy” shall be authorized, on receipt of proper justification, by the Minister of Finance and Economy; (b) Transfers of amounts greater than 250,000 Euros from the “Advance to the Minister of Finance and Economy” shall be authorized, on receipt of proper justification, by the Minister of Finance and Economy after receiving the approval of the Government; and (c) Transfers of amounts from the “Advance to the Special Representative of the Secretary-General” shall be authorized by the SRSG.

Section 7 Transfers of Amounts Appropriated 7.1 (a) The SRSG may, after consultation with the EFC, authorize a transfer of appropriated amounts between the tables of Schedule1; (b) If the negatively affected Budget Organization is not a Reserved Power Budget Organization, and the amount to be transferred exceeds 20% but is less than 40% of the negatively affected appropriation, the SRSG may authorize such a transfer after consultation with the Minister of Finance and Economy and the EFC; and (c) If the amount to be transferred is equal to or greater than 40% of the negatively affected appropriation, the SRSG shall consult with the Government before authorizing such transfer.

7.2 (a) The SRSG may authorize a transfer of appropriated amounts between Budget Organizations or specific purposes appearing on the same table of Schedule 1; (b) If the concerned transfer involves Budget Organizations or specific purposes that are not Reserved Power Budget Organizations and the amount to be transferred exceeds 20% but is less than 40% of the negatively affected appropriation, the SRSG may authorize such a transfer after consultation the Minister of Finance and Economy and the EFC; and (c) If the amount to be transferred is equal to or greater than 40% of the negatively affected appropriation the SRSG shall consult with the Government before authorizing such transfer. 7.3 The SRSG may, if provided with a valid justification by the Head of a Reserved Power Budget Organization, authorize a transfer of part of one appropriation for the Budget Organization or specific purpose, as set out in Schedule 1, to another appropriation for the same Budget Organization or specific purpose. 7.4 The Minister of Finance and Economy may, if provided with a valid justification by the head of a Budget Organization that in not a Reserved Power Budget Organization, authorize a transfer of part of one appropriation for that Budget Organization or specific purpose, as set out in Schedule 1, to another appropriation of the same Budget Organization or specific purpose; provided, however, that the part so transferred shall not exceed 20% of the negatively affected appropriation. If the amount to be transferred exceeds 20% of the negatively affected appropriation, the Minister of Finance and Economy may authorize such transfer only after obtaining the advice of the EFC by submitting a proposal thereon to the EFC that has been approved by: (a) The Government if the amount to be transferred exceeds 20%, but is less than 40%, of the negatively affected appropriation; or (b) The Assembly if the amount to be transferred is equal to or greater than 40% of the negatively affected appropriation. 7.6 The Minister of Finance and Economy shall be notified promptly in writing of all transfers covered by this section 7 and shall ensure that such transfers are duly recorded in the Treasury Accounting Record.

Section 8 Funds Allocation Limited to Revenues 8.1 (a) The Minister of Finance and Economy, in coordination with and with the approval of the SRSG, shall have the authority to allocate funds to Budget

Organizations and to make variations to the allocation of such funds, within the limits of their respective appropriations; (b) In accordance with the allocations approved under this section, the Minister of Finance and Economy shall prepare and issue allocated funds notices; and (c) All such allocations or variations to such allocations shall be promptly recorded in the Treasury Accounting Record. 8.2 The Minister of Finance and Economy, in allocating funds for expenditure, shall allocate funds only to the extent that revenue or other financing sources are: (a)

Actually available in the Kosovo Consolidated Fund; and/or

(b) Reasonably expected to be deposited in the Kosovo Consolidated Fund over a future period of time provided that such future period of time shall fall entirely within the Fiscal Year and shall not exceed ninety (90) days. 8.3 The Minister of Finance and Economy shall monitor the progress of commitments and expenditures against the available funds in the Kosovo Consolidated Fund to ensure that the total does not exceed the funds actually available.

Section 9 Public Enterprise Expenditures and Revenues Expenditures of public enterprises forming part of the Kosovo Consolidated Budget are authorized only to the extent of revenues realised by each enterprise, including revenues in the form of a transfer or subsidy set out in Schedule 1. Public enterprises shall submit financial reporting of revenues, expenditures and cash flows, as may be required by the SRSG under an Administrative Direction.

Section 10 Reporting 10.1 Within thirty (30) days from the end of each quarter of Fiscal Year 2003, the Minister of Finance and Economy shall prepare and submit to the EFC interim reports covering Fiscal Year 2003 through the close of the concerned quarter. 10.2 Interim reports required under section 10.1 shall include, to the extent possible, detailed information regarding revenues, appropriations, funds allocations, commitments and expenditures of Budget Organizations.

10.3 Within three months from the close of Fiscal Year 2002, the Minister of Finance and Economy shall prepare and submit to the EFC a final budget reconciliation report for Fiscal Year 2002, which shall include: (a) A report on revenues, appropriations, funds allocations, commitments and expenditures; and (b) A report on the use of the funds for contingent expenditures and any remaining balances of those funds. Within four months from the close of the Fiscal Year 2002, the Minister of Finance and Economy shall forward the final budget reconciliation report, together with any additional information considered necessary, to the Chairperson of the Budget Committee of the Assembly and to the SRSG through the EFC.

Section 11 Lapsing of Appropriations and Allocations

Other than in those cases where the present regulation provides for re-appropriation, appropriations and funds allocations made in Fiscal Year 2002 shall automatically lapse at midnight of 31 December 2002.

Section 12 Entry into Force The present Regulation shall enter into force on 31 December 2002.

Michael Steiner Special Representative of the Secretary-General

Schedule 1 Kosovo General Budget

Table A: For Provisional Government Budget Organizations

(As attached)

Schedule 1 Kosovo General Budget

Table B: For Reserved Power Budget Organizations

(As attached)

Schedule 1 Kosovo General Budget

Table C: For Budget Organizations that are Municipalities (As attached)

Schedule 2 Kosovo General Budget - Functional Classification

(As attached)

Schedule 3 Proportions to be used by the Specified Municipality for the Purpose of Allocating Funds under the Fair Share Financing Principles

(As attached)