Electronic Issue "Scientific Research"

ISSN: 1312-7535
Title The reform of the budget process in Bulgaria – problems and ways of development
Authors Valentina Alexandrova

Abstract

European law does not specify for a particular model of organization and operation on the public finances of the EU members it is necessary for our country to take the proper steps in order to ensure the efficient control of the EU budget as well as its own resources. Since 1998 Bulgaria conducts a reform in the budget, targeting improvement in the planning, administering and controlling of the budget resources. In this way Bulgaria makes an effort to synchronize its own budgetary procedures and practices with the best achievements in this field of the EU members. Changes were made in the process of the budget reform, regarding: 1. Preparation of a three-year budget prognosis. The target point of the budgetary procedure, in accordance to the Organization of the State Budget Law, is the preparation of a three-year budget prognosis, which is based on an actualized three-year macro-economic framework. This framework should clearly reflect on the macro-economic program, the fiscal strategy, the objectives of the fiscal policy and the instruments needed for their achievement. 2. Type of budgeting The preparation of budget prognosis and budget planning are targeting toward a productive budget programming. The point is to achieve an effective allocation of the resources and efficiency in the state services expenditures. The current budget preparation is resource-oriented. 3. Budgetary documentation As toward the current situation the budget is represented by a unified budget classification of the incomes and expenditures. Considerable improvements have been made in the budget documentation. 4. The approval of the State Budget Law of the Republic of Bulgaria for the corresponding year The appropriation bill for the state budget, approved by the Council of the Ministers, is proposed for review and approval by the National Assembly no later than two months before the end of the year. Suggestions on additions or changes to the project for the annual law of the state budget can be made by the National Assembly after the first reading. During the second reading the appropriation bill and the suggestions are discussed upon and approved by the National Assembly. After being published in "State Journal", the Ministry Council approves a special regulation for the budgetary proceedings. 5.Introduction to the state treasure system. Bulgarian government initiated a preparation for the introduction of the state treasure system. Its primary functions are to assist for the execution of contemporary methods for budgetary planning, implementation, report and control. 6. Establishment of a new information system for financial management (ISFM). A principal role in the realization of a budgetary reform and the introduction of the system for state treasure is played by the establishment of a new information system for financial management. The system allows for integration and a high level of computerization of all accounting operations, which facilitates the analysis, prognosis and management of the budget funds 7. Establishment of a new accounting framework in the budget sector. The new accounting plan allows for a consolidated report on the base deficit, the preparation of reliable reports and on the reinforcing of the control on the budget realization. 8.Harmonizing Bulgarian and EU laws in the sphere of budget policy. The Bulgarian Constitution and the Law of State Budget Management form the legal framework of the budget process in Bulgaria. According to the Constitution the annual law for the state budget as well as all international contracts, containing financial obligations are approved and ratified by the National Assembly. The Law of State Budget Management, since 1997, defines the role of the different national institutions in the budgetary process. 9. Medial-period fiscal framework The Republic of Bulgaria uses a Medial-period fiscal framework (MFF) as a technical instrument for prognosis and simulation of the budget trends, based on macro-economic indicators. The used model is based on financial programming. 10.Budget discipline and fiscal stability During the last several years, in the context of the budgetary discussions, on a national, as well as on EU level, the concept of the "quality of the public finances" is getting a greater importance. The achievement of a budget discipline and fiscal stability are key priorities of the budgetary policies. The contribution of the fiscal framework of the growth can be illustrated in three general dimensions of budgeting: a) steadiness; b) stability; c) effective allocation of the resources. Problems, which are to be resolved until the end of the budget reform, can be distinguished: The necessary legal norms are to be implemented in the financial legislation of the Republic of Bulgaria, as well as indicators and criteria, It is necessary to be formulated and approved obligatory legal criteria for the control of the credibility of the proposed budget projects, as well as the presence of legal organs, which to enforce the control. In the budgetary legislation The Parliament should provide for not only administrative, but penal sanctions in cases of corruption and improper management of the state resources by the state employees and the political cabinets. Criteria for verification of the legal and effective actions of the organs of the state power should be established and used. The solution to the above problems will, in our opinion, provide for a higher effectiveness in realizing the budget reform and in the budget process


References

Преговорна позиция на Република България по глава 29 "Финансови и бюджетни въпроси". Преговорна позиция на правителството на Република България по глава 28 "Финансов контрол". Bulgaria: Report on the Observance of Standards and Codes-Fiscal Transparancy Module. August 2005, International Monetary Fund, Washington, D.C.


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