local government finance u.s. systems and serbian finance reforms serbia local government reform...

Local Government FinanceLocal Government Finance

U.S. Systems and Serbian Finance ReformsU.S. Systems and Serbian Finance Reforms

Serbia Local Government Reform ProgramSerbia Local Government Reform Program

Financial Management TeamFinancial Management Team

Belgrade OfficeBelgrade Office

November 2000November 2000

Forms of BudgetingForms of Budgeting

United StatesUnited States

Line Item BasedLine Item Based Zero BasedZero Based Program BasedProgram Based Performance BasedPerformance Based Program and Program and

Performance BasedPerformance Based

Republic of SerbiaRepublic of Serbia

Line Item BasedLine Item Based

Chart of AccountsChart of Accounts


FlexibilityFlexibility Recommended by Recommended by

State GovernmentState Government Local DecisionLocal Decision Not IMF BasedNot IMF Based


No FlexibilityNo Flexibility Defined by Budget Defined by Budget

System LawSystem Law Prescribed by ROS Prescribed by ROS

Book of RulesBook of Rules IMF Based SystemIMF Based System 3,600 Line Items3,600 Line Items

Consolidated TreasuryConsolidated Treasury


Required Function Required Function by State Lawby State Law

Separate Function Separate Function or Combinedor Combined


Legal Requirement Legal Requirement Budget System LawBudget System Law

Structure Needs Structure Needs ClarificationClarification

Internal AuditInternal Audit


Optional FunctionOptional Function Formal StructureFormal Structure Informal ProcessInformal Process


Legal Requirement Legal Requirement Budget System Budget System LawLaw

Local Inspection Local Inspection and Audit Service and Audit Service (LIAS)(LIAS)

External AuditExternal Audit


Legal RequirementLegal Requirement Performed Performed

AnnuallyAnnually Private FirmsPrivate Firms


Legal RequirementLegal Requirement ROS Function - ROS Function -

Budget Inspection Budget Inspection and Service (BIAS)and Service (BIAS)

Short Term DebtShort Term Debt


Allowed by State LawsAllowed by State Laws Local DecisionLocal Decision Private Lending Private Lending

InstitutionsInstitutions Repayment allowed Repayment allowed

beyond current fiscal beyond current fiscal yearyear


Allowed by ROS Law, Allowed by ROS Law, Article 58Article 58

Republic Budget Republic Budget Lending OnlyLending Only

Repayment by Repayment by November 30 of November 30 of current fiscal yearcurrent fiscal year

20% Combined Cap20% Combined Cap

Long Term DebtLong Term Debt


Allowed by State LawAllowed by State Law Local DecisionLocal Decision Private Financial Private Financial

InstitutionsInstitutions Bond MarketsBond Markets Annual Cap Based on Annual Cap Based on

Percentage of EAVPercentage of EAV


Allowed by ROS Law,Allowed by ROS Law,

Article 58Article 58 Requires meeting ROS Requires meeting ROS

Criteria – not definedCriteria – not defined Requires ROS Requires ROS

ApprovalApproval

Public Budget HearingsPublic Budget Hearings


Required by State Required by State LawLaw

Annual ProcessAnnual Process


Not Required by Not Required by LawLaw

Encouraged by Encouraged by USAID – SLGRPUSAID – SLGRP

MOU RequirementMOU Requirement

Finance Department StructureFinance Department Structure


Based on Internal Based on Internal Control SystemsControl Systems

Examined by AuditExamined by Audit


Requires Requires RestructuringRestructuring

Internal AuditInternal Audit Consolidated Consolidated

TreasuryTreasury Public PurchasingPublic Purchasing

local government finance u.s. systems and serbian finance reforms serbia local government reform...

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