The Budget Code of Ukraine
Date of Entry into Force:
July 24, 2001
The Budget Code of Ukraine (hereinafter referred to as “the Code”) determines the fundamentals of budget system of Ukraine, its structure, principles and legal grounds for functioning, principles of budget process and inter-budget relations and responsibility for violation of budget legislation.
The Code defines terms that are used in the budget legislation, envisages delimitation of functions in the budget sphere between executive bodies of state power and executive bodies of local self-government.
The Code consists of General Part, Special Part and Final Provisions.
General Part of the Code is devoted to the principles common for budgets of all levels and grounds for organization of budget process and budget procedures.
Special Part determines particular course of budget process regarding drafting, adoption and fulfillment of the State Budget of Ukraine, local budgets of all levels and regulation of inter-budget relations.
Final provisions determine the procedure for entry into force by the Code, as well as the peculiarities of application of its separate provisions during 2002-2006.
Pursuant to the Code the budget system of Ukraine consists of state and local budgets. To budgets of local self-government refer budgets of village, settlement city territorial communities, as well as their associations. Local budgets are budget of the Autonomous Republic of Crimea, oblast, district budgets, and budgets of districts in cities and budgets of local self-government.
Budget may consist of general and special funds.
The general budget fund includes:
1) all budget incomes, except for those which are intended for allocation to the special fund;
2) all budget expenditures at the expense of allocations to the general budget fund;
3) financing of the general budget fund.
The special budget fund includes:
1) budget allocations for expenditures from particular special sources;
2) grants or gifts (in monetary value) obtained by managers of budget funds for particular purpose;
3) difference between profits and expenditures of the special budget fund.
Division of the budget into general and special funds is determined by the Law of Ukraine on the State Budget of Ukraine. The sources of forming special fund are determined exclusively by the laws of Ukraine.
Pursuant to the Code budget period for all budgets, which make budget system, shall be one calendar year. The year shall start on January 1 and end on December 31 of the same year.
Not later than June 1 or the first day of the plenary session of the Verkhovna Rada following it the Parliament holds hearings on budget policy issues for the next budget period. The Cabinet of Ministers of Ukraine shall submit to the Verkhovna Rada of Ukraine the draft of Basic directions of budget policy for the next budget period. The draft shall be submitted not later than four days prior to the hearings.
Grounding on the Basic directions of budget policy the Cabinet of Ministers of Ukraine shall develop draft of the State Budget of Ukraine for the next year, which shall be brought for consideration of Verkhovna Rada until September 15 of the year preceding the planned one.
The Code determines in details the procedure for consideration and adoption of the State and local budgets of Ukraine, as well as introduction of amendments to them.
Adoption of the State Budget of Ukraine or local budgets for the respective budget period with deficits shall be allowed in case of grounded sources of respective budget deficit financing. Profit of the budget may be approved exclusively with the purpose of settlement of basic debt amount and ensuring of saving of circulating cash balance amount.
The State Treasury of Ukraine keeps accounting of all allocations which belong to the State and local budgets of Ukraine and upon submission of the prosecution bodies returns the funds which were allocated to the budgets by mistake or above the limit.
The Code prohibits creation of off-budget funds by the bodies of state power, bodies of power of Autonomous Republic Crimea, bodies of local self-government and other budget institutions.
Control over adherence to budget legislation at each stage of budget process shall be conducted by the Verkhovna Rada of Ukraine, the Accounting Chamber of Ukraine, the Ministry of Finance of Ukraine, the State Treasury of Ukraine, the State Control and Revision Service of Ukraine, bodies of local self-government and local state administrations.
Non-observance by a participant of the process of making, consideration, approval, introduction of amendments, fulfillment of budget or report on fulfillment of budget shall be interpreted as budget violation.
In case of budget violation reveal the Ministry of Finance of Ukraine, the State Treasury of Ukraine, the State Control and Revision Service of Ukraine, local financial bodies, heads of executive committees of cities and town, village and settlement councils, as well as chief managers of budget funds within the limit of their authorities may commit the following actions as regards to the managers of budget funds and recipients which obtained respective budget allocations:
1) impose administrative penalties on the persons guilty of budget violations in compliance with the law;
2) stop transactions with budget funds.
The persons guilty of budget legislation violation shall bear civil, disciplinary, administrative or criminal responsibility pursuant to the laws of Ukraine.