THE GOVERNMENT OF THE REPUBLIC OF CROATIA
Pursuant to Article 39(2) of the Budget Act (as published in the Official Gazette of the Republic of Croatia, No. 92/94), the Government of the Republic of Croatia has, at its session held on 23 November 1995, adopted the following
DECREE
ON THE TREASURY BOOK SYSTEM AND THE METHODS OF KEEPING THE TREASURY GENERAL ACCOUNT
I. GENERAL PROVISIONS
Article 1
(1) The Decree on the Treasury Book System and the Methods of Keeping the Treasury General Account (hereinafter: the "Decree") shall regulate the treasury book system, the accumulation and collection of public monies, public expenditure control and management, the functioning of the Treasury General Account and official documents, and shall also contain penalty provisions and transitional and final provisions.
(2) This Decree shall provide a basis for the implementation of systems and IT solutions for treasury functions, in particular the management of public monies and public debt, as well as all such tasks as may be related to the preparation and execution of the Central Budget and sub-systems for treasury functions.
(3) This Decree shall also provide for all procedures to be followed by responsible persons while paying any central budget revenues and receipts to the Treasury General Account.
(4) This Decree shall specify the circumstances under which the Minister of Finance shall, pursuant to law, regulations, decrees, instructions or any such other regulation, define in more detail the contents of any provision of this Decree, in accordance with the Budget Act.
Article 2
(1) For the purposes of this Decree, the terms used herein shall have the following meanings:
a) The treasury shall, pursuant to the Budget Act, mean the organisational unit of the Ministry of Finance, where, in accordance with law, this Decree and any such other regulation, all activities related to the Central Budget shall be performed. Such activities shall, in particular, include central budget preparation and execution, central budget supervision, cash management, and government accounting;
b) The Treasury Book system shall be a systematic record of all transactions and business events related to revenues, receipts, expenditure and any such other payments, as well as the status of assets, liabilities and ownership sources*** that were, in connection with the Central Budget, generated, incurred or created*** during the fiscal year, i.e. before a specific date, and shall provide information on transactions and business events at both functional and economic classification levels, in accordance with the prescribed chart of accounts. This system shall be comprised of two separate parts: Book I, which shall include only those transactions and business events which are related to revenues and expenditures, and Book II, which shall include the information on the status of and changes in assets, liabilities and ownership sources. The Treasury Book, together with the Treasury General Account, shall provide a basis of the public expenditure management system;
c) The Treasury General Account shall mean one or more bank accounts used for receiving, keeping, paying and transferring all revenues, receipts, expenditures and other central budget payments. The Minister of Finance shall, in accordance with law, open such account(s) with the Croatian National Bank. The Treasury General Account shall also include a foreign currency account of the treasury, i.e. Central Budget. The Treasury General Account may have several sub-accounts;
d) Functional classification shall mean the classification of revenues and expenditures as well as assets and liabilities by their purpose, i.e. according to activities defined for the purposes of the central budget, that is, the classification of revenues and expenditures at the level of competent ministries and agencies;
e) Economic classification shall mean the classification of revenues and expenditures as well as assets and liabilities by type of transactions and business events, in accordance with the prescribed budget chart of accounts;
f) Public monies shall mean revenues, receipts, loans or any such other monies receivable by the Central Budget and payable to the Treasury General Account. The responsibility for the collection of public monies to the Treasury General Account shall rest with persons responsible for the accumulation and collection of public monies;
g) The person responsible for the accumulation and collection of public monies shall be any such person as may be nominated by the Minister of Finance to accumulate and collect monies receivable by the Central Budget for the account of the treasury. Such nomination of a person responsible for the accumulation and collection of public monies shall mean that the Minister of Finance confers a part of his rights and responsibilities onto a person within a competent ministry that is connected with the accumulation and collection of public monies;
h) The person responsible for the submission of public expenditure requests shall be a responsible official of the competent ministry or a person onto whom the authorisation for the submission of such requests has been conferred under the conditions stipulated herein;
i) The disbursement controller shall be any such person responsible for the control of disbursement requests as may be nominated by the Minister of Finance, at the proposal of the competent ministry’s responsible official, to approve on his behalf any disbursement proposal or request, provided that such disbursement complies with the budget and/or financial plan and the procedures laid down herein. The nomination of such person responsible for disbursement control shall means that the Minister of Finance confers a part of his rights and responsibilities onto a person within a competent ministry that is connected with public expenditure;
j) The disbursement verifier shall be any such person responsible for verification of public expenditure requests as may be nominated by the Minister of Finance, at the proposal of the competent ministry’s responsible, to verify on his behalf any public expenditure for the purposes determined by the Central Budget, law or regulation, in an efficient and effective manner. The nomination of such person responsible for disbursement verification shall mean that the Minister of Finance confers a part of his rights and responsibilities onto a person within a competent ministry that is connected with public expenditure;
k) The responsible official of the competent ministry shall mean the person leading the competent ministry or a person to whom such powers have been conferred under the conditions envisaged by law or this Decree;
l) The persons responsible for accounting control shall be the persons stated under items h), i) and j) of this Decree or other persons to whom the Minister of Finance confers a right which has been bestowed on him by law and this Decree;
m) The competent ministry shall be any government administration body or any other government authority, which has, for the purposes of functional classification of revenues and expenditure, been designated as a "section" in the Central Budget;
n) The agency shall be any entity which has, for the purposes of functional classification of revenues and expenditure, been designated as a "heading" in the Central and shall constitute the sum of all corresponding amounts of central budget beneficiaries belonging to that agency;
o) The budget beneficiary shall be any unit for which, in accordance with the Regulations on Budget Accounting and Chart of Accounts (Official Gazette of the Republic of Croatia 98/94), salaries and/or other items of expenditure have been earmarked and stated in the Central Budget as part of an agency of a competent ministry. If, for the purpose of functional classification, a competent ministry or another State government body has no agencies, then such body shall also have the role of a budget beneficiary.
II TREASURY BOOK SYSTEM
Article 3
(1) The Treasury Book System shall be based on cash-basis accounting.
(2) The Treasury Book System shall ensure the recording of transactions and business events, that is revenue and expenditure as well as of the status of and changes in assets, liabilities and ownership sources, at both functional and economic classification levels.
(3) The Ministry of Finance shall manage the Treasury Book System and the Payment Operations Institute (hereinafter ZAP) shall provide IT support and operate it.
(4) The rights, obligations and responsibilities of the ZAP as referred to in paragraph 3 of this Article shall be governed by a contract concluded between the Ministry of Finance and the ZAP.
Article 4
(1) Each competent ministry shall be obliged to keep a general ledger for all transactions and events that pertain to such competent ministry.
(2) Transactions and events in the general ledger of the competent ministry shall comply with the content and amount of transactions and events in the Treasury Book System.
(3) If, pursuant to the Regulations referred to in Article 54(2) in connection with Article 9(2) of the Central Budget Act, a competent ministry is permitted to generate budget beneficiary revenues, the amounts of transactions and events as recorded in its general ledger under Paragraph (1) of this Article may differ from those recorded under Paragraph (2) of this Article.
(4) The competent ministry and any other budget beneficiary referred to in Paragraph (3) of this Article shall include in its financial statements data from both records and account for any such difference.
Article 5
(1) Each budget beneficiary shall keep a general ledger for all transactions and business events and assets and liabilities that relate to it.
(2) Transactions and business events in the general ledger of a budget beneficiary shall comply with the content and amount of transactions and events in the Treasury Book System, except for those transactions and events that are not connected with the Central budget.
(3) In the event a central budget beneficiary is financed solely out of the Central budget and if the data on all transactions and business events relating to it can be obtained from the general ledger of its competent ministry, such beneficiary shall not be obliged to keep its own general ledger.
Article 6
(1) If using the possibility referred to in Article 5(3) hereof, such budget beneficiary shall obtain from the head of the competent ministry a prior written consent clearly indicating that all necessary information can be obtained from the general ledger system of the competent ministry.
(2) In the case referred to in Paragraph 1 of this Article, such budget beneficiary shall submit the decision along with the written consent to the Ministry of Finance.
Article 7
(1) The Treasury Book System ensures the posting of transactions and business events that relate to revenues and expenditure in accordance with budget accounting regulations.
(2) Transactions and business events that relate to the status of changes in assets, liabilities and ownership sources shall be regulated by a separate decree.
(3) The transactions and business events referred to in Paragraph 1 of this Article shall be recorded in Book I and the transactions and events referred to in Paragraph 2 of this Article shall be recorded in Book II.
(4) This Decree shall govern the Book I System.
III ACCUMULATION AND COLLECTION OF PUBLIC MONIES
Article 8
(1) All of the accumulated and collected public monies receivable by the Central Budget shall be paid to the Treasury General Account.
(2) The public monies referred to in Paragraph 1 of this Article shall be accumulated and collected pursuant to the provisions of law, this Decree and other applicable regulations.
Article 9
(1) Persons responsible for the accumulation and collection of public monies shall be obliged to transfer such public monies to the Treasury General Account.
(2) The Minister of Finance shall, pursuant to his authority referred to in Article 54(2) of the Central Budget Act, designate all such persons responsible for an efficient and effective accumulation and collection of public monies and their transfer to the Treasury General Account and define other details relating thereto.
IV PUBLIC EXPENDITURE CONTROL AND MANAGEMENT
Article 10
(1) Any public expenditure provided for by the Central Budget shall be subject to financial control, accounting control and audit to be performed pursuant to law and this Decree.
(2) The financial control referred to in Paragraph 1 of this Article shall be a special control and approval procedure imposed on all public expenditure proposals and requests before any obligation is assumed or settled.
(3) The accounting control referred to in Paragraph 1 of this Article shall include the verification of disbursement requests.
(4) Audit shall constitute a special control procedure to be carried out after a disbursement is made pursuant to the law governing the operations of the Auditor General’s Office.
FINANCIAL CONTROL
Article 11
(1) The financial control procedure shall include the control of both current and future liabilities.
(2) Current liabilities shall be such Central budget liabilities that are effected, that is disbursed out of the approved amounts of the Central budget during the current fiscal year.
(3) Future liabilities shall be such liabilities that are to be determined in the Central Budget in the next fiscal year or subsequent fiscal years.
(4) The future liabilities as defined in Paragraph 3 of this Article shall relate only to capital expenditure.
(5) The future liabilities referred to in Paragraph 3 of this Article shall be determined in the Central Budget of the current fiscal year, which also contains information for the two subsequent fiscal years.
Article 12
(1) During financial control of current liabilities, the authorised person shall confirm disbursement subject to the following conditions:
a) the public expenditure procedure or request has been initiated or submitted by the responsible official of a competent ministry or a person authorised to spend public monies, if it goes for capital expenditure stated in the preceding fiscal year’s Central Budget as a future liability;
b) the expenditure or any other disbursementcomplies with the purpose stated in the Central Budget;
c) funds have been earmarked for that purpose in the Central Budget;
d) sufficient undisbursed funds have remained for that purpose within the quarterly planned Central Budget;
e) the approved or requested amount is not in excess of the planned quarterly amount or the annual amount of the Central Budget.
Article 13
(1) The future liabilities referred to in Article 11(3) hereof may be determined, contracted or otherwise assumed only on the basis of an approval of the Croatian National Parliament (hereinafter: "Parliament"), a decision of the Government of the Republic of Croatia (hereinafter: the "Government") or a written consent of the Minister of Finance, if the latter has obtained such authority from Parliament or the Government and in accordance with the procedure laid down hereby.
(2) The Minister of Finance may, under the conditions referred to in Paragraph 1 of this Article and in accordance with the opinion of the Government, determine restrictions with regard to the assumption of any future liability referred to in Article 11(3) hereof.
Article 14
(1) The future liabilities referred to in Article 11(3) hereof shall be subject to the procedure of submission of public expenditure requests hereunder and such requests shall be submitted to the Minister of Finance.
(2) The request referred to in Paragraph 1 of this Article shall contain: a) the position in the capital budget or chart of accounts that is proposed for such future capital expenditure;
b) a detailed description of the purpose of expenditure;
c) an approval granted by Parliament or the Government, if the decision to assume such liability has already been adopted; and
d) the budget years and the amounts of capital expenditure to be budgeted for each such year.
(3) Persons entitled to submit requests for the purposes of Paragraph 1 of this Article shall be responsible officials of competent ministries for all items falling, in accordance with functional classification, within their authority, including all agencies and budget beneficiaries.
Article 15
(1) Any future liability assumed by Parliament or the Government prior to the entry into force of this Decree shall not be subject to the procedure referred to in Article 14 hereof.
(2) The responsible official of a competent ministry whose competence includes any future liability referred to in Paragraph 1 of this Article shall be responsible for the inclusion of all future liabilities in the procedure whereby the Central Budget is adopted.
(3) The responsible person of a competent ministry or the person on whom such authorisation has been conferred, shall keep a separate record of future liabilities.
(4) The Ministry of Finance shall organise a consolidated register of capital expenditure and future liabilities.
(5) The Minister of Finance shall determine the method and procedures for keeping such consolidated register of future liabilities and capital expenditure, pursuant to his authority referred to in Article 54(2) of the Central Budget Act.
2. SUBMISSION OF PUBLIC EXPENDITURE REQUESTS
Article 16
(1) The responsible official of each competent ministry shall be entitled and obliged to submit requests for public expenditure constituting future liabilities as defined in Article 11(3) of this Decree.
(2) If any individual request for a future liability as referred to in Paragraph 1 of this Article is not in excess of HRK 100,000, the responsible official of the competent ministry may confer the right referred to in Paragraph 1 of this Article onto the person responsible for the submission of public expenditure requests. Such request shall subsequently be subject to the approval of the responsible official of the competent ministry.
Article 17
(1) When submitting a public expenditure request, the responsible official of the competent ministry or the person responsible for the submission of public expenditure requests referred to in Article 16(2) hereof may, if necessary, attach to such public expenditure request a written explanation to the Ministry of Finance confirming that:
a) the request complies with the Central budget, law or any such other applicable regulation; and
b) capital expenditures envisaged for the next or subsequent central budgets will contribute to the overall economic growth or development.
(2) Apart from the basic conditions referred to in Paragraph 1 of this Article, the Minister of Finance may also prescribe additional conditions.