Creating and adopting a stable budget for the state is like building a foundation for a house – every detail must be carefully designed to ensure a solid and lasting structure that will support the growth and prosperity of all its inhabitants.
How to behave in a situation when the adoption of the budget is delayed from December 31, 2023, and there is still no decision on temporary financing that must be adopted if the budget is not adopted for a maximum of three months of the current year.
We take the example of the FBiH Budget Law which is analogously applied not only to all budgets at all levels but also to all budget users and extra-budgetary funds, directorates, institutions, agencies and others. Article 35 of the FBiH Budget Law states that the budget must be adopted by the end of the year for the following year, and if it is not adopted, a Temporary Financing Decision must be made and adopted for a maximum of three months of the current year, and after the expiration of those three months, nothing may or can be executed from obligations until the budget or financial plan is adopted.
The law prescribed that there must be a basis for executing basic financial obligations but did not provide a transitional solution if one of these two documents is not adopted.
The consequences of not adopting the budget are numerous and can be very serious and have a wide spectrum of impact on the state, its institutions and citizens. Some of them are:
- financial uncertainty regarding the planning and execution of the state’s financial obligations,
- limitations regarding the functioning of the state in performing its basic functions and providing services to citizens, then
- loss of public confidence in the Government’s ability to efficiently manage public funds and implement planned programs and projects, and perhaps most important of all are
- citizens and numerous social programs on which many of them depend.
It is evident that in cases when these two documents are not adopted, the legislative body does not fulfill the obligations prescribed by law and there is no document on the basis of which the incurred obligations could be executed. What is the only thing that can be paid in such a situation?
The country’s credit rating is very important, so in this regard the legislator prescribed that obligations based on loans, to domestic or foreign creditors must be executed!
The exception, apart from loan repayments, are programs that are specially financed from donations of special earmarked sources and part of long-term projects. These are the only recognized category of expenditures after the temporary financing decision expires if the budget is not adopted on time, everything else is NOT executed.
The budget is a key document that must primarily be adopted by December 31, with a focus on encouraging lower levels of government to make efforts in its adoption, and the temporary financing decision is conceived as a “transitional account” until it is adopted.
It is important to note that the BiH budget has still not been adopted.
It is visible that the reason for not adopting the budget and the decision is not of a financial nature but exclusively of a political nature. Politics has an important role in budget adoption, but it should be ensured that political interests are subordinated to essential and financial needs.
The absence of a budget or temporary financing decision threatens the basic functions of institutions and negatively affects the quality of life of citizens. Therefore, as a response, it is necessary for the legislative body to find a compromise and solution for adopting both documents.
