public budget

The public budget is the summary of public finance and meets the purposes cameral accounting in accordance with principles in accounting offices, federal government, states, municipalities, associations and institutions of public law and public bodies. This is also the case internationally, although a departure from cameral principles of double-entry bookkeeping, especially in government subdivisions, is recognizable. The future budget will be kept in the budget.

General

Household Leading Make pursue as legal persons governed by public law as the acquiring company economic principle of profit maximization, but the output coverage. The so-called need for recovery principle dominates in particular public budgets. Therefore, not productivity and efficiency considerations are important, which is why the comparison of income and expenditure and a sufficient any revenue surplus is not called profit, but there is a surplus. Public authorities are not also in the competition, but practice a sovereign government monopoly. For these purposes, a budget is sufficient. Since 2003, however, there are also efforts in Germany, under the new municipal financial management gradually double-entry based on the HGB introduce, in particular because even local law apply economic efficiency and economy principles. International particular financial statements governmental subdivisions are created doppisch ( Switzerland, USA, Canada).

Tasks

The budget complies with - depending on the state subdivision level - different tasks. While the state budget overall expenditure pattern has (about national defense, development aid, interest rates on government bonds), the budgets of state subdivisions by community relevance expenditure ( municipal investment, social transfers) are marked. The main task of such households is the operation of an infrastructure that is available to all members of society as a state power in the context of general interest are available. These would include education, the judiciary, the security being or health care. The economic aspects of public finances are the subject of an independent scientific discipline, the financial science. The budget is one of the most important planning instruments of public entities. It is set up on a regular basis ( eg § 78 para 1 GemO NRW) and based on a specified future period of one calendar year ( § 78 para 3 GemO ). He is systematically into detailed positions (" Chapter ", " title " ) shall be broken, which is uniformly binding determined in the municipality of Financial Regulation. He unfolded binding effect both internally and externally. Compared with the citizens he has normative character by the tax rates for the financial year are set. To manage the budget so far is binding, can be performed as tasks and measures only to the agreements made in the budget determinations; particular jobs, investment and other expenditure may be issued only within the available budget and if they are provided in the budget ( § 85 para 1 GemO ). The decision on the budget is one of the most important tasks of the municipal council ( § 41 para 1 h GemO ).

Balanced budget

Goal of budgeting is balancing the budget. This postulate is responsible for budget management is of central importance. The budget is not to be understood in purely formal, your bookkeeping sense. Formally, each budget is balanced. Rather, a material budgetary compensation is required, which is satisfied only if the household leading place in addition to their current expenditure also can deny the interest and principal payments on loans from their current income. At the federal level of government balance budgetary terms, the difference between revenue and expenditure, the credit market transactions in reserves, settlements funds excessive surpluses and deficits and Münzeinnahmen be taken out of the income and expenditure ( § 13 para 4 BHO).

A material balance the budget is difficult, because the income tax is based on estimates, while the majority of expenditure is already determined by law. Coverage problems thus arise when implementing the budget, if the revenues were lower than expected. The municipal budget is balanced out when the supply from the office staff to the capital budget at least equal to the scheduled principal payments equal. Extraordinary repayments are not considered. If the feed amount of the capital budget is higher, has budgetary management authority for a " free tip ", he will be less, has the budget to a budget deficit. In practice, it is not enough merely to compare the supply to the capital budget and the ordinary repayment; because usually the duty of feeding is estimated in the budget. A shortfall is then the fact that the proposed expenditure of the administrative budget for that exceed the existing revenue in total. Frequently, balancing the budget is possible mathematically, except that funds from the financial budget as the feed flow in the operating budget. In fact, it involves the use of assets ( mostly from the sale of land or municipal investments ) to finance current expenditure. Can not be reached at local equilibrium, a household fuse concept is required ( § 76 para 1 GemO ).

"Free tip " is budget law, the positive balance of the administrative budget, net of scheduled principal payments on debt, which is paid to the capital budget. So the balance is the normalized result expressed in budget deficit or surplus ( " free tip "). This result represents the balance of the operating budget under the condition of preserving substance dar. However, a free tip is not a good indicator of budgetary stability. It can also result from the pawns of substitute cover means from reserve resolutions, asset disposals. According to § 106 HessGemO a reserve to offset revenue fluctuations and to secure the payment ability is to be applied. Decreases it is wealth that has been built in recent years, been used in the current budget. Unless a fortune at the same time purchase is made, there is a substance consumption. Warning limit is reached, the minimum amount ( 2% of the average expenditure of the administrative budget of the last three years according to § 20 paragraph 2 GemHVO ). As low repayments to a low minimum supply lead to the capital budget, an operating budget presented more favorable the long-term are the repayment terms. A debt spiral arises when the interest burden forces to renewed borrowing and induces in turn increasing interest expense.

Economical and sound financial management

In the regional municipality orders the principle of economic and efficient financial management is anchored ( eg § 110 para 2 NKomVG ). Sound financial management implies economical action, taking into account the impact on the performance of work. Has been made to the account shall be taken when using either a least possible use of resources, a certain success ( minimum principle ), or with a specific allocation of resources the best possible result ( maximum principle). Legal transactions that violate the public budget law and grossly contradict the principle of economic and efficient financial management, are unconscionable and therefore void unless the violation is subjective attributable both sides. Economy in this sense is the collection of the optimal input-output relationship. However, the simple Kameralistik not enough to make efficiency aspects completely transparent. It is only money consumption, but not also considered the use of resources. It was therefore decided in Germany in 2003, successively to the extended Kameralistik (federal ) or even double-entry switch.