Budget and Budgetary Regulations; Local Authorities

Whilst cameralistic accounting focuses on revenue and expenditure during the financial year – and thus on a liquidity-based approach – double-entry accounting aims primarily to present the use of resources (expenses, income, depreciation), to allocate liabilities on an accrual basis (e.g. the creation of provisions) and to present the local authority’s financial position, taking into account its affiliated legally and economically independent entities.

The content, annexes and components of the budget are determined by the accounting system. They are intended to provide an overview of the current status and development of the local authority’s budgetary management and to enable the local authority to manage its administration.

The budget is the binding basis for the financial management of the relevant local authority; it must be balanced. The budget sets out all expenditure anticipated during the financial year for the performance of the authority’s duties

• income received, payments received, expenses incurred and payments to be made (in the case of budgetary management in accordance with the principles of double-entry municipal accounting),
• expected revenue and expenditure to be incurred (in the case of budgetary management in accordance with the principles of cameralistic accounting),
• the commitment appropriations required.

Under a budgetary system based on the principles of double-entry municipal accounting, the budget comprises:

• the overall budget, which in turn consists of
  • the performance-based budget
  • the budget
  • an overview of the revenue and expenditure of the sub-budgets of the operating budget, and of the receipts, payments and commitment appropriations of the sub-budgets of the financial budget, presented as a cross-section of the budget,
  • an overview for assessing long-term performance,
• the sub-budgets and
• the staffing plan;

and, in the case of a budget system based on the principles of cameralistic accounting, consists of:

• the overall plan,
• the individual sections of the administrative budget and the capital budget,
• the collection records and
• the establishment plan for civil servants and employees.

Where the budget is managed in accordance with the principles of double-entry municipal accounting, the following must be attached to the budget:

1. the preliminary report,
2. the medium-term financial plan (Article 70 of the Rules of Procedure, Article 64 of the County Council Regulations) together with the investment programme on which it is based; if, during the preparation of the budget, significant changes arise for the following years, a corresponding supplementary budget must be attached,
3. an overview of the payments expected to be due from commitment appropriations in each year; where payments are due in years not yet covered by the financial plan, it must be demonstrated that this does not jeopardise future budgetary balance,
4. an overview of the estimated balance of liabilities arising from bonds, loans and legal transactions that are economically equivalent to loans, as well as provisions and reserves at the start of the financial year,
5. the latest consolidated annual accounts,
6. an overview of the budgetary appropriations carried over from previous years,
7. the business plans and most recent annual accounts of the special funds for which separate accounts are kept; the same applies to companies in which a stake of more than 50 per cent is held; the business plans and latest annual accounts may be replaced by an overview of the economic situation and the expected development of the companies and institutions,
8. an overview of the budgets

Where the budget is managed in accordance with the principles of cameralistic accounting, the following must be attached to the budget:

1. the preliminary report,
2. an overview of the expenditure expected to be incurred in each year from commitment appropriations; where expenditure is due in years not yet covered by the financial plan, the anticipated funding of the expenditure requirements for those years must be set out separately,
3. an overview of the estimated level of debt (excluding overdrafts) and reserves at the start of the financial year,
4. the business plans and most recent annual accounts of the special funds for which separate accounts are kept; the same applies to companies in which the state holds a stake of more than 50 per cent; the annual accounts and business plans may be replaced by a concise overview of the economic situation and the expected development of the enterprises,
5. the medium-term financial plan (Article 70 of the Rules of Procedure, Article 64 of the County Council Regulations) together with the investment programme on which it is based,
6. an overview of the budgets, listing the sections and subsections allocated to each budget

The budget, setting out

• the total amount of revenue and expenditure for the financial year, as well as the resulting balance of the operating budget; the total amount of receipts and payments arising from day-to-day administrative activities, from investing activities and from financing activities for the financial year, as well as the resulting balance of the cash-based budget, where the budget is managed in accordance with the principles of double-entry municipal accounting or
• of the total amount of revenue and expenditure in budgetary management in accordance with the principles of cameralistic accounting

and

• the total amount of the commitment appropriations provided for,
• the total amount of borrowing envisaged for investment and investment promotion measures (borrowing authorisations) and, furthermore,
• the maximum amount of overdraft facilities, and
• the rates of levy, which are to be set anew for each financial year,

In both double-entry accounting and cameralistic accounting, these are laid down in the budgetary regulations.