583

ACT
on the date 23th September 2004
of Budgetary Rules of the Regional Self-Administration
and of Change and Amendment of Particular Acts

The National Council of the Slovak Republic ordered on this act:

Art. I

PART ONE
INTRODUCTORY ESTABLISHMENTS

§ 1
Subject of the Regulation

(1)	This act regulates
a)	budgets of regional self-administration which are municipalities and the budget of higher regional units,
b)	the budgetary procedure, rules of budgetary management, drafting and approval of closing account of municipalities and closing account of higher regional units,
c)	financial relationships between the state budget and the budget of the municipalities and between the state budget and the budgets of higher regional units, financial relationships between the budgets of municipalities and budgets of higher regional units mutually, as well as financial relationships of the budgets of municipalities and budgets of higher regional units with other legal entities and natural persons.

(2)	Establishments of this act relate to city parts which are legal entites, in the same extent as to municipalities; by the definition of budget incomes and expenditures of the city parts according to this act, are considered conditions determined by statute according to a particular regulation.
(3)	To municipalities and higher regional units and to the budgetary organizations and contributory organizations as the part of the public service section managed by them is related a particular regulation with departures stated in this act.

§ 2
Definition of the Concepts

For the purpose of this act are understood
a)	reimbursable sources of financing the means of the municipality budget or the budget of the higher regional units from accepted credits, loans, reimbursable financial aids and drafts and from public obligations issued by the municipalities or the higher regional units,
b)	as surplus of the budget of the municipality or the budget of the higher regional unit the positive difference between budget incomes of the municipality or higher regional unit and budget expenditure of the municipality or higher regional unit,
c)	as deficit of the budget of the municipality or the budget of the higher regional unit the negative difference between the budget incomes of the municipality or the higher regional unit and budget expenditures of the municipality or higher regional unit.

§ 3
Financial Relationships of the State to the Budgets of the Municipalities
and to the Budgets of the Higher Regional Units

(1)	Financial relationships of the state to the budgets of the municipalities and to the budgets of the higher regional units are
a)	shares on taxes in state management,
b)	dotations for repayment of cost of transferred performance of the civil service,
c)	further dotations in accordance with the act of state budget for the corresponding budget year.

(2)	Financial relationships according to the paragraph 1 letter a) are established by a particular regulation and are secured through the medium of tax offices. Financial relationships according to the paragraph 1 letter b) are secured through the medium of the administrator of the state budget section, into whose subject matter competence belong the performance of civil service, which was transferred to the municipality or the higher regional unit. Financial relationships according to the paragraph 1 letter c) are secured through the medium of the Ministry of Finance of the Slovak Republic (hereinafter called „Ministry of Finance”) or the administrator of the state budget section, into whose subject matter competence belong the activity which it has to finance.
(3)	Dotations according to the paragraph 1 letter b) are rendered on the basis of particular regulations. For repayment of cost, for which dotations are rendered  according to the paragraph 1 letter b), advance may be rendered.
(4)	If the performance of the civil service is transferred by law to the municipality or higher regional unit, the costs of such transferred performance of the civil service are repaid from the state budget to the municipality or the higher regional unit in extent defined by the act of state budget for the corresponding budget year.
(5)	Proposal of financial relationships between the state budget and the budget of municipalities and between the state budget and the budget of the higher regional units discussed by the Ministry of Finance with the republic councils of the municipalities and with the representatives of the higher regional units before presenting the budget proposal initials of the civil service and before presenting the budget proposal of civil service for discussion to the government of the Slovak Republic according to a particular regulation.4
(6)	If municipalities administrate a common municipal office or association of municipalities according to a particular regulation, the competent ministry or a subject established by a particular regulation may also render a dotation in the name of these municipalities to a municipality, in which is the residence of the common municipal office or the residence of the association of municipalities, after the preceding consent of all the municipalities, which administrate a common municipal office or association of municipalities.

PART TWO
BUDGETS OF REGIONAL SELF-GOVERNMENT

§ 4
Position and Content of the Budget of the Municipality
and the Budget of the Higher Regional Unit

(1)	The budget of the municipality and the budget of the higher regional unit is the basic instrument of the financial management in the corresponding budget year, by which the financing of the tasks and functions of municipalities and higher regional units are managed in the corresponding budget year. The budget of the municipality and the budget of the higher regional unit is a part of the public service section’s budget.
(2)	The budget year is identical with the calendar year.
(3)	The budget of the municipality and the budget of a higher regional unit expresses independence of the management of the municipality and the higher regional unit. It contains incomes and expenditures in which are expressed financial relationships to legal entities and natural persons – enterpreneurs acting in the territory of the muncipality or higher regional unit, as well as to the inhabitants living in this territory resulting for them from laws and other generally obligational legal regulations, from generally obligational ordinances of the higher regional unit, as well as from contracts. The budget of the municipality and the budget of the higher regional unit comprises also financial relationships according to the § 3 par. 1.
(4)	The budget of the municipality and the budget of the higher regional unit contains financial relationships to budgetary organizations and contributory organizations established by the municipality or higher regional unit according to a particular regulation4 and to other legal entities which were founded by them. The management of the budgetary organizations and the contributory organizations is related to a particular regulation.4
(5)	The budget of the municipality may contain financial relationships to budgets of other municipalities, as well as financial relationships to the budgets of higher regional units, to whose territory the municipality belongs, if they fulfill common tasks. The budget of higher regional units may contain financial relationships to the budgets of other higher regional units, as well as tinancial relationships to budgets of the municipalities in its territory.
(6)	In the budget of the municipality and in the budget of the higher regional unit is applied a budgetary classification in accordance with a particular regulation.

§ 5
Incomes of the budget of the municipality

(1)	The incomes of the municipality are:
a)	returns of local taxes and fees according to a particular regulation,
b)	non-tax incomes from possession and from possession transferring of the municipality’s property and from activities of the municipality and its budgetary organizations according to this or a particular act.
c)	returns from financial means of the municipality,
d)	sanctions for breach a financial discipline stated by the municipality,
e)	gifts and profits from voluntary collections on behalf of the municipality,
f)	shares on taxes in state administration according to a particular regulation,5
g)	dotations from the state budget for repayment of costs of the transferred performance of civil service in accordance with the act of state budget for the corresponding budget year and dotations from state funds,
h)	further dotations from the state budget in accordance with the act of state budget for the corresponding budget year,
i)	objective dotations from the budget of a higher regional unit or from the budget of other municipality for the realization of contracts according to a particular regulation,
j)	means of the European Union and other means from abroad rendered for a particular purpose,
k)	other incomes established by particular regulations.

(2)	The municipality may use for the fulfilment of its task also
a)	means of extra-budgetary financial funds (hereinafter called „financial funds”),
b)	profit from enterpreneurial activity,
c)	reimbursable sources of financing,
d)	joint means.

(3)	As own incomes of the budget of the municipality are understood incomes of the budget of the municipality according to the paragraph 1 letter a) to f). As own incomes are also understood incomes according to the paragraph 1 letter k), if it is established by a particular regulation. About the usage of own incomes of the budget of the municipality decides the municipality independently. This is not so in the case of gifts, if the giver determines the purpose, for which the given means has to be used. Incomes of the budget of municipality according to the paragraph 1 letter g) to j) may the municipality use only in accordance with the purpose, for which the means were rendered.

§ 6
Incomes of Higher Regional Units

(1)	Incomes of higher regional units are:
a)	returns of local taxes according to a particular regulation,11
b)	non-tax incomes from possession and from possession transferring of the property of higher regional unit and from activities of the higher regional unit and its budgetary organizations according to this or a particular act.
c)	incomes from financial means of higher regional unit,
d)	sanctions for breach of financial discipline stated by the higher regional unit,
e)	gifts and incomes of voluntary collections on behalf of the higher regional unit,
f)	shares on other taxes in state administration according to a particular regulation,5
g)	dotations from the state budget for repayment of costs of the transferred performance of civil service in accordance with the act of state budget for the corresponding budget year and dotations from state funds,
h)	further dotations from the state budget in accordance with the act of state budget for the corresponding budget year,
i)	objective dotations from the budget of the municipality or from the budget of the higher regional unit for realization of contracts according to particular regulations,
j)	means of the European Union and other means from abroad rendered for a particular purpose,
k)	other incomes established by particular regulations.

(2)	The higher regional unit may also use for the fulfilment its tasks
a)	means of financial funds,
b)	income of enterpreneurial activity,
c)	reimbursable sources of financing,
d)	joint means.

(3)	As own incomes of the budget of the higher regional unit are understood incomes of the budget of the higher regional unit according to the paragraph 1 letter a) to f). As own incomes are also understood incomes according to the paragraph 1 letter k), if a particular regulation establishes so. About the usage of own incomes of the budget of the higher regional unit decides the higher regional unit independently. This is not so in case of gifts, if the giver determines the purpose for which the gifted means has to be used. The incomes of the budget of the higher regional unit according to the paragraph 1 letter g) to j) may the higher regional unit use only in accordance with the purpose for which the means were given.

§ 7
Expenditures of the Budget of the Municipality

(1)	From the budget of the municipality are repaid
a)	obligations of the municipality related to the fulfilment of duties established by particular regulations,
b)	expenditures for the performance of self-governmental competence of the municipality according to particular regulations and for activities of budgetary organizations and contributory organizations established by the municipality,
c)	expenditures for repayment of costs of transferred performance of civil service according to particular regulations,
d)	expenditures connected to management, maintenance and evaluation of the municipality’s property and the property of other subjects, which the municipality uses for the fulfilment of tasks according to particular regulations,
e)	obligations arisen from cooperation with other municipality or with higher regional unit, eventually with other persons for the securement of the tasks related to the competence of the municipality including obligations arisen from common activities,
f)	expenditures related to the international cooperation of the municipality,
g)	interests from accepted credits, loans and reimbursable financial aids,
h)	expenditures related to the emission of bankable papers issued by the municipality and for expenditures for repayment of their profits,
i)	other expenditures estabished by particular regulations.

(2)	From the budget of the municipality may be repaid dotations to legal entities, whose founder is the municipality, namely for particular tasks and actions in public interests or on behalf of the development of the municipality’s territory.
(3)	To the acceptance of means from the state budget for repayment of costs of transferred performance of civil service the municipality may use its own incomes for repayment of these costs. After accepting means from the state budget for repayment of costs of transferred performance of civil service, the means of the state budget will be accounted by the municipality on behalf of its own budget.
(4)	To legal entities not described in the paragraph 2 and natural persons – enterpreneurs, who have their residence or permanent place of abode in the territory of the municipality, may the municipality render dotations under conditions established by generally obligational ordinance of the municipality only for support of generally beneficial services, generally beneficial or public beneficial purposes, for support of enterpreneurship and employment. City parts of Bratislava and Košice may render dotations in the whole territory of the city.
(5)	If the municipality cooperates on the basis of a contract about establishment of an association of municipalities8 or founds a legal entity according to a particular regulation, or acquires property shares in enterpreneurship of a legal entity founded according to a particular regulation,16 it may use budgetary means for repayment of member fees, for founding of a legal entity according to a particular regulation16 or acquisition of property shares in enterpreneurship of such legal entity.
(6)	In the budget of the municipality for the corresponding budget year the means according to the paragraphs 2 to 4 are budgeted for particular action, task or purpose of usage of the means. They are subject to annual settling with the municipality’s budget and by their rendering the whole debt of the municipality can not be raised.

§ 8
Expenditures of the Budget of Higher Regional Units

(1)	From the budget of the higher regional units are repaid:
a)	obligations of the higher regional unit realated to the fulfilment of duties established by particular regulations,
b)	expenditures for performance of self-governmental competence of the higher regional units according to particular regulations and for activities of budgetary organizations and contributory organizations established by the higher regional unit,
c)	expenditures for repayment of costs of transferred performance of civil service according to particular regulations,
d)	expenditures connected with management, maintenance and evaluation of property of the higher regional unit and the property of other persons, which the higher regional unit uses for fulfilment of tasks according to particular regulations,
e)	obligations arisen from cooperations with other higher regional unit or with a municipality, eventually with other persons for the securement of tasks related to the competence of the higher regional unit including obligations arisen from common activity,
f)	expenditures related to international cooperation or to membership in an international association,
g)	interests from accepted credits, loans and reimbursable financial aids,
h)	expenditures connected to the emission of bankable papers issued by the higher regional unit and expenditures for the repayment of their profits,
i)	other expenditures established by particular regulations.

(2)	From the budget of the higher regional unit may be rendered dotations to legal entities, whose founder is the higher regional unit, namely for particular tasks and actions of public interest or on behalf of the development of the territory of the higher regional unit.
(3)	To the acceptance of means from the state budget by the higher regional unit for repayment of costs of transferred performance of civil service may the higher regional unit use its own incomes for repayment of these costs. After accepting means from the state budget for repayment of costs of transferred performance of civil service, the means of the state budget will be accounted by the higher regional unit on behalf of its own budget.
(4)	The higher regional unit may render dotations to municipalities in its own territory as a part of the financing of common tasks on behalf of the development of the higher regional unit’s territory.
(5)	To legal entities not described in the article 2 and natural persons – enterpreneurs, who have their residence or permanent place of abode in the territory of the higher regional unit, may the higher regional unit render dotations under conditions established by generally obligational ordinance of the municipality only for support of generally beneficial services,14 generally beneficial or public beneficial purposes,15 for support of enterpreneurship and employment. 
(6)	If the higher regional unit founds a legal entity according to a particular regulation16 or acquires property shares in enterpreneurship of a legal entity according to a particular regulation, 16 the higher regional unit may use for this purpose budgetary means; budgetary means may be used also for repayment of member fees.17
(7)	In the budget of a higher regional unit for the corresponding budget year the means according to the paragraphs 2 to 5 are budgeted for particular actions, tasks or purpose of the use of means. They are subject to annual settling with the budget of the higher regional unit and by their rendering the whole debt of the higher regional unit can not be raised.

PART THREE
BUDGETARY PROCEDURE

§ 9
Multiannual budget

(1)	Multiannual budget is a medium-term economical instrument of the financial policy of the municipality or the higher regional unit, in which in the framework of their competence are expressed the intendments of the territory’s development and needs of inhabitants for at least three budget years.
Multiannual budget consists of
a)	budget of the municipality or budget of the higher regional unit for the corresponding budget year,
b)	budget of the municipality or budget of the higher regional unit for the year following the corresponding budget year,
c)	budget of the municipality or budget of the higher regional unit for the year following the year, for which the budget is drawn up according to the letter b).

(2)	Multiannual budget is drawn up in the same classification as the budget of a municipality or the budget of a higher regional units drawn up (§ 10 par. 3).
(3)	Incomes and expenditures of the budget described in the article 1 letter b) and c) are not obligational.

§ 10
Drawing Up and Classification the Budget of the Municipality
and the Budget of the Higher Regional Unit

(1)	Drawing up the budget of a municipality and the budget of a higher regional unit results first of all from the multiannual budget, from determined share of tax returns in the administration of the state established by a particular regulation5 and from approved financial relationships of the state budget to the budget of regional self-administrations.
(2)	The municipalities  and the higher regional units are obliged at drawing up the budget to secure the covering of all obligations, which results for them from the fulfilment of obligations established by particular regulations.
(3)	The budget of the municipality and the budget of the higher regional unit is internally divided into:
a)	current incomes and current expenditures (hereinafter called „current budget”),
b)	capital incomes and capital expenditures (hereinafter called „capital budget”),
c)	financial operations.

(4)	Current incomes of the budget of the municipality or the budget of the higher regional unit are incomes according to the § 5 par. 1 or according to the § 6 par. 1 divided according to the budgetary classification with the exception of the incomes, which are capital incomes according to the budgetary classification.
(5)	The subject matter definition of the current expenditures and capital expenditures of the budget of the municipality or the budget of the higher regional unit and their uniform classification is included in the budgetary classification.
(6)	Financial operations are also the part of the budget of the municipality and the higher regional unit, by which the transfers from financial funds of the municipality and form financial funds of the higher regional unit are performed and the reimbursable sources of financing and their repayment is realized. As financial operations are also understood rendered loans and reimbursable financial aids from the budget of the municipality or the budget of the higher regional unit and their instalments, drawn and accepted drafts, sale and purchase of property shares. Financial operations are not part of incomes and expenditures of the budget of the municipality and the budget of the higher regional unit. Detailed classification of financial operations is included in the budgetary classification. Munipalities or higher regional units may render reimbursable financial aids from their budget to a legal entity, which was founded by them, while for this purpose can not be used reimbursable sources of financing.
(7)	The budget of the municipality and the budget of the higher regional unit according to the paragraph 3 is drawn up as balanced or having surplus. Municipalities or higher regional units are obliged to draw up their current budget as balanced or having surplus. Capital budget is drawn up as balanced or having surplus; capital budget may be drawn up as having deficit, if this deficit may be covered by the balance of the financial means of the municipality of the higher regional unit from preceding years, by reimbursable sources of financing, or this deficit is covered by the surplus of current budget in the corresponding budget year. If the current budget or the capital budget is drawn up as having surplus, the surplus of the current budget may be used for the repayment of reimbursable sources of financing.
(8)	If during the budget year arises the need of repayment of current expenditures for removal of average state of the municipality’s property or the property of the higher regional unit, or for liquidation of damage caused by disasters of nature or by other extraordinary circumstances, which are not budgeted and covered by incomes of the current budget, the municipality or the higher regional unit may use the means of the reserve fund on the basis of decision of their council.
(9)	For balancing time inaccordance between the incomes and expenditures of the current budget, the incomes of the capital budget may be used, if they shall be returned to the term of their use for the budgetary purpose, at the latest however to the end of the budget year.

§ 11
Budgetary provision

(1)	If the budget of the municipality or the budget of the higher regional unit for the following budget year is not approved by the municipal council or the council of the higher regional unit by December 31st of the current year, the municipality or the higher regional unit manages according to the budget of the municipality or the budget of the higher regional unit of the preceding budget year, while the expenditures realized during the budgetary provision can not exceed per month the 1/12 of the entire expenditures of the budget of the municipality and the budget of the higher regional unit of the preceding budget year. Exceptions are expenditures realized during the budgetary provision, which are repaid in accordance with the terms of repayment agreed in the preceding budget year and expenditures realized during the budget provision for obligational repayment according to  particular regulations.
(2)	Budget incomes and expenditures realized during the budgetary provision are settled with the budget of the municipality and the budget of the higher regional unit after its being approved.

§ 12
Classification of the budget and budgetary management

(1)	Municipalities and higher regional units perform after the approval of the budget its classification to budgetary organizations and contributory organizations in their establishing competence.
(2)	Municipalities and higher regional units manage with the budgetary means according to the approved budget and during the year they control the management with the budgetary means according to a particular regulation.
(3)	Municipalities and higher regional units keep under review during the budget year the development of management according to the budget and if it is necessary, they perform changes in their budgets with the aim of securing the balance of the current budget to the end of the budget year, while the deficit of the current budget of the municipality or the higher regional unit may arise only from the reason of the reserve funds’ usage according to the § 10 par. 8.
(4)	Municipalities and higher regional units are obliged to render necessary data about their management to the Ministry of Finance for the purpose of drawing up the proposal of the public service’s budget, proposal of state budget, proposal of closing account of the public service and proposal of the state closing account according to a particular regulation.4
(5)	If the municipality or the higher regional unit does not fulfill obligations resulting from this act, the Ministry of Finance may suspend the rendering of financial means from dotations of the state budget until they will be fulfilled.
(6)	Depreciation of corporeal and incorporeal property of the municipality and corporeal and incorporeal property of the higher regional unit is administrated by a particular regulation.

§ 13
Time and Purpose Usage of Budgetary Means

(1)	To the fulfilment of the budget of the municipality and the budget of the higher regional unit are involved only those incomes, expenditures and financial operations, which were realized in the corresponding budget year. For classifying the income or the expenditure into the fulfilment of the budget of the municipality or the budget of the higher regional unit in the budget year is decisive the day of assignment or depreciation of the means from the corresponding account of the municipality or the account of the higher regional unit.
(2)	Budgetary means may be used only for the purposes for which they were approved in the budget of the municipality or in the budget of the higher regional unit.
(3)	Municipalities or higher regional units may permit on the basis of a well-founded request an exception from the time usage of the budgetary means rendered by a municipality or a higher regional unit in the corresponding budget year in form of dotation with the exception of the budgetary means from dotation according to the § 3 par. 1, letter b) and c).

§ 14
Changes of the Budget and of Budgetary Measures

(1)	Changes of the budget is approved by the authority of the municipality or the higher regional unit competent according to particular regulations18 with the exception of  means rendered for a determined purpose from the state budget.
(2)	The competent authority of the municipality or authority of the higher regional unit performs changes of the budget in the course of the budget year by budgetary measures, which are:
a)	transfer of budgetary means in the framework of the approved budget, while the total incomes and total expenditures are not changed,
b)	permitted exceed of expenditures at achievement of higher incomes,
c)	tying of budgetary expenditures, if their covering is threathed by non-fulfilment of budgeted incomes or if violation of the balance of current budget is expected from other reasons as the usage of reserve funds according to the § 10 par. 8.

(3)	Municipalities and higher regional units lead an operational register about all budgetary measures performed in the course of the budget year.

§ 15
Financial Funds

(1)	Municipalities and higher regional units may create financial funds. The sources for financial funds may be mainly
a)	surplus of the budget for the passed budget year,
b)	profit of enterpreneurial activity after taxation,
c)	entire balance of these funds of preceding budget years.

(2)	Entire balance of financial funds do not forfeit at the end of the year. About usage of financial funds decides the municipal council or the council of the higher regional unit.
(3)	Means of financial funds are used by the municipality and the higher regional unit through the medium of their budget except for the transfers of means between individual financial funds mutually and except for the cases, when the means of financial funds are used only for balancing the time inaccordance between the incomes and expenditures of their budget in the course of the budget year.
(4)	Municipalities and higher regional units create a reserve fund in the amount determined by their councils, at least however in 10 per cents of the surplus of the budget according to the § 10 par. 3 letter a) and b).

§ 16
Closing Account of the Municipality,
Closing Account of the Higher Regional Unit

(1)	After the passing of the budget year municipalities and higher regional units process the data of budgetary management compoundly into the closing account of the municipality or the higher regional unit.
(2)	Municipalities and higher regional units settle their management financially including financial relationships to established or founded legal entities and natural persons – enterpreneurs and legal entites, for whom they rendered means from their budget; furthermore they settle financial relationships to the state budget, state funds, budgets of other municipalities and to the budgets of higher regional units.
(3)	Municipalities and higher regional units are obliged to have attested their account balance according to a particular regulation.19 At attesting the account balance the auditor attests also the managment according to their budgets in accordance with this act, management with other financial means, state and development of debt and abiding the rules of usage of the reimbursable sources of financing.
(4)	If the auditor at the attesting according to the paragraph 3 ascertains breach of obligations resulting from this act, he is obliged to announce these facts in writing to the Ministry of Finance; the Ministry of Finance or the administration of financial control charged by them is entitled to verify these facts, while processing adequately according to a particular regulation.
(5)	Closing account of the municipality and closing account of the higher regional unit contains mainly
a)	data about fulfilment of the budget in classification according to the § 10 par. 3 in accordance with the budgetary classification,
b)	balance of assets and liabilities,
c)	summary about the state and development of debt,
d)	data about the management of contributory organizations in their competence,
e)	summary about rendered guarantees according to individual acceptors,
f)	data about the costs and profits of enterpreneurial activity.

(6)	Surplus of the budget of the municipality and of the budget of higher regional unit according to the § 10 par. 3 letter a) and b) do not forfeit after the ending of the year and are source for creation of reserve fund, eventually further financial funds. The eventual deficit of the budget according to the § 10 par. 3 letter a) and b) is repaid by the municipality and higher regional unit first of all from the reserve fund, from further financial funds or from reimbursable sources of financing. About the usage of the budget surplus according to the § 10 par. 3 letter a) and b) or about the way of repayment of the budget deficit according to the § 10 par. 3 letter a) and b) decides the municipal council or the council of the higher regional unit at discussing the closing account.
(7)	Before the approval of the proposal of the closing account of the municipality and the proposal of the closing account of the higher regional unit it is presented for public discussion according to a particular regulation.18
(8)	Discussion of the closing account of the municipality and the closing account of the higher regional unit is concluded by one of these sentences:
a)	the year-round management is approved without reserve,
b)	the year-round management is approved with reserves.

(9)	If the closing account is approved with reserves, the municipal council or the council of the higher regional unit is obliged to take measures for the amendment of shortcomings.
(10)	Proposal of the closing account of the municipality or the higher regional unit is discussed at the latest in six months after the passing of the budget year.

PART FOUR
RULES OF BUDGETARY MANAGEMENT

§ 17
Rules of Usage of Reimbursable Sources of Financing

(1)	Municipalities and higher regional units are obliged to keep the rules described in the paragraphs 2 to 7 at using of reimbursable sources of financing.
(2)	Municipalities and higher regional units may use reimbursable sources of financing only for the repayment of capital expenditures. For balancing the time inaccordance between the incomes and the expenditures of the current budget in the course of the budget year these sources of financing may be used exceptionally under conditions that they will be repaid to the end of the budget year from the incomes of the current budget.
(3)	To emission of public obligations a particular regulation is related.
(4)	Municipalities and higher regional units may enter only into such obligations resulting from reimbursable sources of financing, whose repayment does not disturb in long-term the balance of the current budget in the following years.
(5)	Municipalities and higher regional units may not accept guarantee for a credit, loan or other debt of a natural person or of a legal entity with the exception of the guarantee accepted by the municipality for rendering reimbursable financial aid from the state budget.
(6)	Municipalities and higher regional units may accept for the fulfilment of their tasks reimbursable sources of financing, only if
a)	the total sum of the debt of the municipality or higher regional unit does not exceed 60 per cents of real current incomes of the preceding budget year and
b)	the sum of the annual instalments of the reimbursable sources of financing including the repayment of profit does not exceed 25 per cents of real current incomes of the preceding budget year.

(7)	As the total sum of the debt of the municipality or of the higher regional unit for the purpose of this act is understood the sum of the obligations resulting from repayment of principal of reimbursable sources of financing to the end of the budget year and sum of guarantor obligations of the municipality or of the higher regional unit.
(8)	Into the total sum of the municipality’s debt according to the paragraph 7 are not counted the obligations from credits rendered by former state funds and from credit rendered from the State Fund of Housing Development for the building of municipal tenement houses in the amount of the credit instalments, whose repayment is included in the price of the annual rent of the municipal tenement houses. Into the sum of the annual instalments of the reimbursable sources of financing according to the paragraph 6 letter b) the municipality and the higher regional unit do not count the sum of their lump-sum interim payment.
(9)	Keeping the conditions of acceptance of reimbursable sources of financing according to the paragraph 6 is verified before their acceptance by the chief auditor of the municipality or the chief auditor of the higher regional unit.
(10)	The chief auditor of the municipality or the chief auditor of the higher regional unit is obliged to announce the breach of conditions for the acceptance of reimbursable sources of financing by the municipality or by the higher regional unit according to the paragraph 6 without delay to the Ministry of Finance.

§ 18
Particularities of the Management of the Municipalities
and Higher Regional Units

(1)	Municipalities or higher regional units may determine that their subjects, which do not have legal personality, will manage individually only with entrusted advance. At the same time, they determine the amount of the advance and the term, for which it is rendered. Municipalities or higher regional units are obliged to settle incomes and expenditures of these subjects at the latest by the end of the budget year.
(2)	If the municipality or the higher regional unit performs enterpreneurial activity, incomes and expenditures of this activity are not budgeted and are monitored on an individual extra-budgetary account. Expenditures of this activity has to be covered by its incomes. Profit of the enterpreneurial activity after taxation stays in full extent at the municipality of the higher regional unit as suplementary source of financing.
(3)	Municipalities or higher regional units may congregate means according to a particular regulation. Congregated means are led on an individual account.
(4)	Municipalities or higher regional units realize payments according to a concluded contract about the congregation of sources, which they are entitled to use for an activity described in the subject of this contract.
(5)	Municipalities or higher regional units arranges the property, which they gained by the performance of activities financed by congregated means according to the paragraph 3, according to a particular regulation.24

§ 19
Healing regime and forced administration of the municipality

(1)	Healing regime precedes the forced administration with the exception according to the paragraph 9 letter a). The municipality is obliged to introduce healing regime, if the total amount of its obligations after the term of repayability overlaps 15 per cents of real current incomes of the municipality of the preceding budget year and if it did not repay some allowable obligation in 60 days from its repayability.
(2)	If facts according to par. 1 took place, the municipality is obliged to announce it in three days from their discovery to the Ministry of Finance and the mayor of the municipality (hereinafter called „mayor”) is obliged to work out a proposal in 15 days for the introduction of the healing regime, which creates a part of a healing budget and the proposal of measures for the stabilization of budgetary management. The municipality is not obliged to classify the healing budget to current budget and capital budget.
(3)	The mayor is obliged to present the proposal for introduction of the healing regime to the municipal council in term of 15 days from the day, when the facts according to paragraph 1 took place. The municipal council has to discuss the proposal for the introduction of the healing regime at the latest in 15 days after its presentation.
(4)	During the healing regime the municipality may use its financial means only in accordance with approved healing budget, while every usage of the financial means of the municipality has to be approved aforehead in writing by the chief auditor of the municipality.
(5)	The chief auditor of the municipality is obliged to present a written report to the proposal of healing regime to the municipal council, to the proposal of healing budget and to every report about the fulfilment of healing regime including fulfilment of healing budget.
(6)	The mayor is obliged to present a report of fulfilment of healing regime including fulfilment of healing budget to the municipal council regulary in every month.
(7)	After the introduction of the healing regime the municipality is obliged to present the order of introduction of healing regime to the Ministry of Finance in three days after its approval by the municipal council.
(8)	In term of seven days after passing 90 days of introduction of the healing regime, the municipality is obliged to announce the Ministry of Finance the results of its fulfilment including the fulfilment of the healing budget and the state of obligations together with the standpoint of the municipality’s chief auditor. If the municipality proves that by the fulfilment of healing regime achieved improvement of the result of management and reducement of total obligations described in the par. 1, the Ministry of Finance may give consent to the extension of management in healing regime with determination of its term on the basis of the municipality’s request, which shall not exceed 90 days.
(9)	The Ministry of Finance is entitled to decide about the introduction of forced administration, if
a)	facts according to the paragraph 1 took place and the municipality did not introduce healing regime,
b)	after the end of management in healing regime the facts according to the paragraph 1 last, namely according to recognition of the Ministry of Finance are on the basis of an announcement of
1.	the mayor,
2.	the chief auditor of the municipality,
3.	an auditor,
4.	a creditor of the municipality or
5.	a state authority.

(10)	The mayor or the chief auditor of the municipality is obliged to discuss the announcement according to the paragraph 9 letter b) with the municipal council and send it to the Ministry of Finance in 15 days after the ending of the management in healing regime.
(11)	Before the introduction of forced administration the Ministry of Finance or the administration of financial control appointed by it verifies the facts described in the announcement according to the paragraph 9 letter b) and the causes of non-repayment of the obligation according to the paragraph 1. The municipality is obliged to render unavoidable necessary cooperation for the above mentioned purposes including rendering accounting documents and other documents necessary for this purpose.
(12)	The forced administrator is appointed and recalled by the Ministry of Finance. The Ministry of Finance concludes a contract with the forced administrator about the performance of activities of forced administrator, which determines in detail his rights and duties. The amount of earnings of the forced administrator is determined by the Ministry of Finance. Costs connected with the performance of forced administration including the earnings of the forced administrator are repaid by the municipality, in which the forced administration was introduced.
(13)	Forced administrator may be a natural person, who
a)	has completed a university degree and has specialized experiences in the field of finances at least five years,
b)	is not the mayor, member of other authority of the municipality or an employee of the municipality,
c)	is not a person familiar to the mayor, member of other authority of the municipality or to an employee of the municipality, in which the forced administration is introduced.

(14)	The decision about introduction of forced administration also contains the first name and the surname of the forced administrator, address of his permanent place of abode, number of his identification card and birth number. Appeal from this decision does not have suspensory effect. Decision about introduction of forced administration is also delivered to the locally competent tax office.
(15)	From the introduction of forced administration earnings may not be paid out to the mayor, to members of the municipal council, to the chief auditor, nor other employees of the municipality.
(16)	The municipality is obliged to establish a particular account of forced administration in a branch of a foreign bank in seven days from the delivery of the decision about introduction of the forced administration and to transfer to this account all balances of financial means led on actual accounts except for the financial means which the municipality is obliged to lead on individual acconts according to this or a particular act.
(17)	During the forced administration all incomes of the municipality come into the particular account except for the incomes, which the municipality is obliged to lead on individual accounts according to this or a particular act. Financial means led on the particular account of the forced administration are not subject to execution of decision according to a particular regulations by write-off the bank account. Financial means on all accounts may be used by the municipality during the forced administration only with written consent of the forced administrator.
(18)	After the introduction of forced administration the forced administrator is obliged to ascertain the state of municipality management, while the municipality is obliged to make him possible to revise all the accountary and other documents necessary for the purpose of ascertaining the state of the municipality management. On the basis of recognised facts the forced administrator is entitled to claim from the municipality authorities the adoption of a program for consolidation of the municipality management including organisatory and personal measures.
(19)	The forced administrator is entitled to participate with advisory vote in the meetings of the municipal council and its competent comitees, in which is negotiated about the municipality budget, management and municipality property. Reports submitted in the meeting of the municipal council, which relate to the budget of the municipality, management and municipality property have to be enclosed by the standpoint of the forced administration.
(20)	In seven days from the delivery of the decision about the introduction of forced adminstration, the municipality is obliged to published this decision in a manner usual in the municipality. In the same term the municipality is obliged to announce the introduction of the forced administration to all banks, branches of foreign banks, in which the municipality’s accounts are led, and to all its creditors.
(21)	In 30 days from the delivery of the decision about the introduction of forced administration, the municipality is obliged to draw up and approve a crisis budget for the term to the end of the budget year, in which the forced administration is introduced. In the crisis budget are obligationally budgeted all expenditures according to the § 7 par. 1 letter a) to c). If the forced administration does not ends in the corresponding budget year, the municipality is obliged to draw up and approve by December 31st of the current year a crisis budget also for the following budget year. The municipality is not obliged to divide the crisis budget into current budget and capital budget.
(22)	If the municipality does not approve the crisis budget in the terms according to the par. 20, it manages according to the crisis budget drawn up by the forced administrator.
(23)	Ministry of Finance may decide about the abolition of the forced administration on the basis of proposal of the forced administrator, of the municipality’s request, or if it is stated, that the reasons of its duration are gone.
(24)	Incomes and expenditures realized during the forced administration the municipality settles with approved municipality budget after the abolition of the forced administration.

PART FIVE
COMMON AND TRANSITIONAL ESTABLISHMENTS

§ 21
Transitional Establishments

(1)	The proposal of municipality budget and the budget of a higher regional unit for the year 2005 is drawn up with consideration to the valid establishment of this act about the drawing up of the municipality budget and the budget of the higher regional unit.
(2)	If the budgetary classification is adjusted for the following budget year, the proposal of the municipality budget and the budget of the higher regional unit for the following budget year is drawn up in accordance with the budgetary classification valid for the following budget year.
(3)	Multiannual budget of the municipality and of the higher regional unit is drawn up for the first in the year 2006 for the following budget years, beginning with the year 2007.
(4)	For the drawing up of the municipality’s closing account and of the closing account of the higher regional unit for the year 2004 is related the actual regulation.
(5)	Healing regime and forced administration introduced in the municipality according to the actual regulations end with the day of force of this act.

Art. IV.

This act entries into force on the day of its promulgation with the exception of art. I. § 1 to 20, § 21 par. 3 to 5, which entry into force on January 1st 2005.

Ivan Gašparovič
Pavol Hrušovský
Mikuláš Dzurinda