Act No.218/2000 on Budgetary Rules and on amendments of some related acts (budgetary rules)

The Parliament has adopted the following Czech Republic Act:

This Act shall regulate

1.  

2. Unless stated otherwise by a special act², the Government shall finance the activities providing for the state functions only from the state budget and the National Fund.

    

3. The budgetary year shall equal a calendar year.

    

4. Unless stated otherwise by a special legal regulation, there shall be no legal entitlement to the state budget's finances .

    

5. Stipulated in a decree by the Ministry of Finance ('the Ministry'), an uniform classification of revenues and expenditures (the 'budgetary composition') shall apply to all budgets of state organizational units, for the monitoring of the state budget's performance, for disbursements from state organizational units' reserve funds, in the budgets of state funds and for movements in the accounts of state financial assets and financing units pursuant to (3) i).

For the purposes of this act

1.  

2. a subsidy shall refer to financial means of the state budget, state's financial assets or the National Fund provided to body corporate or natural persons for a specified purpose,

    

3. refundable financial assistance shall refer to financial means of the state budget, state's financial assets of the National Fund provided interest-free to body corporate or natural persons for a specified purpose, which the recipient is obliged to refund to the state budget, state's financial assets or the National Fund

    

4. other state financial means shall refer to financial means of the state's financial assets, of contributory organizations, state funds and state organizational units' funds,

    

5. financial settlement of a subsidy or refundable financial assistance shall refer to a statement of disbursement and use of funds and return of unused funds,

    

6. unauthorized use of financial means of the state budget, state's financial assets, contributory organizations, state organizational units' funds, funds provided from the state budget or the National Fund shall refer to the expenditure of the above, through whose execution an obligation stipulated by a legal regulation, contract or a decision or agreement concerning the provision of a subsidy or refundable financial assistance has been breached,

    

7. withholding of financial means of the state budget, state financial assets, or the National Fund shall refer to the breach of one's obligation to refund the funds provided from the state budget, state financial assets, or the National Fund by a specified deadline,

    

8. state budget chapter administrators (the 'chapter administrators') shall refer to central state administrative bodies and other state organizational units if a special act stipulates these state organizational units possess either a separate chapter within the state budget or that their standing is that of a central administrative body or that for budget purposes their standing is that of a central state administrative body,

    

9. financial means of the state treasury shall refer to an aggregate of financial means from the state budget, other state financial means, and those financial means in the financial authorities' accounts where tax revenues of the territorial self-governing units³ are administered as deposited in the accounts with the Czech National Bank or in the accounts with banks and the branches of foreign banks⁴ (the 'bank'),

    

10. financing items shall refer to financial operations related to the liquidity management of the state budget, in particular the revenues from the sale of state public bonds, to the credits taken for the purpose of overcoming the cash deficit of the state budget, short-term and long-term credits taken, redemption of the principal of the state debt and the purchase of bonds or term deposits for the purpose of liquidity management.

1.  

2. A medium-term budgetary outlook shall include expected revenues to the state budget and estimated expenditures from the state budget in the separate years which the budget outlook is compiled for, namely in the following minimum breakdown:

   1. total income,
   2. total expenditures,
   3. expenditures per selected asset replacement programs, for the financing of which the amount of state budget participation has been approved by the government,
   4. a survey of credits guaranteed by the state.

    

3. A part of the medium-term outlook shall be the analysis of the state's payables to be incurred by the state.

    

4. If the medium-term outlook expects a state budget deficit, it shall include the anticipated method of financing it.

    

5. A medium-term outlook shall be compiled for a period of two years that follow the year for which the state budget is being submitted for; it shall include indicators under subsection (1) for the year the state budget is being submitted for. Regarding asset replacement programs under (1) c), the period of the medium-term outlook shall coincide with the period of their financing. Concerning state-guaranteed credits the period of the medium-term outlook shall coincide with the period of their repayment.

    

6. The ministry shall draft the medium-term outlook in cooperation with the chapter administrators, territorial self-governing units and state funds, and shall submit it to the government together with a draft state budget. In a decree the ministry shall stipulate a deadline for the handing over of source materials for drafting of the medium-term outlook, their scope and structure.

    

7. The government shall discuss a draft medium-term outlook together with a draft state budget. An approved medium-term outlook shall be submitted separately by the government to the House of Representatives to be noted by it, together with a draft state budget act.

1.  

2. The state budget represents the financial relationships, which secure the financing of certain state functions during a budget year. For this purpose the state budget shall concentrate budgetary revenues as delineated by this or a special act.

    

3. The state budget includes expected revenues and expenditures of the state budget during a budget year and financing items.

    

4. The state budget as an aggregate of financial documents shall include a state budget act, a breakdown of state budget indicators, detailed budgets of state organizational units and modifications of these documents.

    

5. The revenues and expenditures of the state budget shall be articulated into state budget chapters (a 'chapter').

    

6. The state budget shall issue from the medium-term outlook.

    

7. The state budget shall contain also subsidy relationships to the budgets of territorial self-governing units and state funds.

    

8. The binding state budget indicators shall be stipulated by the relevant year's state budget act.

Unless stated otherwise by a special act, the state budget revenues shall comprise of:

1.  

2. tax revenue, including accessories,⁵

    

3. social security premiums and contributions to state policy of employment, including penalties,

    

4. revenues from customs, including penalties and defrayal of executory costs in customs proceedings,

    

5. income from activities of the state organizational units and contribution from contributory organizations,

    

6. contribution of remaining profit of the Czech National Bank⁶,

    

7. penalties for breaches of budget discipline,

    

8. administrative and court fees,

    

9. defrayal associated with realization of state guarantees,

    

10. income from sale and rental of the Czech Republic assets managed by state organizational units, and income from sale and rental of the Czech Republic real estate managed by contributory organizations; this shall not apply to income from sale of the Czech Republic real estate acquired through gifts and inheritance,

     

11. repayment of refundable financial assistance provided from the state budget,

     

12. financial gifts to state organizational units used in the current budget year,

     

13. income from the state's ownership stakes,

     

14. incomes from securities, whose purchase was realized from state budget means,

     

15. penalties for the National Fund means used in an unauthorized way or withheld,

     

16. means obtained from the National Fund for means issued from the state budget pursuant to Section 38,

     

17. penalties,

     

18. other revenues stipulated by a special legal regulation.

    1.  

    2. For the purpose of this act the contributions and subsidies provided to state organizational units from abroad ('means provided from abroad') used in current budgetary year shall refer to state budget revenues.

1.  

2. The following shall be defrayed from the state budget:

   1. expenditures for activities of state organizational units and for contributions to the operation of and the subsidy for financing the programs and actions (sections 12 and 13) of contributory organizations in their spheres of activity,
   2. expenditures for retirement benefits, health insurance benefits, state welfare benefits, social care benefits, , other social benefits, expenditures for material support to job seekers and for active employment policy,

       

   3. subsidies and refundable financial assistance to territorial self-governing units for activities other than business activities,
   4. subsidies and refundable financial assistance to bodies corporate and natural persons for their business activities⁷
   5. subsidies to civil associations⁸,and contributions to political parties⁹
   6. subsidies to bodies corporate established or set up for the purpose of the provision of health, cultural, educational and social services and the provision of social and legal protection of children¹⁰ and to physical persons who provide such services or social and legal protection of children exclusively for the purposes mentioned,
   7. subsidies to state funds,
   8. subsidies to physical persons who do not perform any business activity and who are engaged in bee-keeping, keeping of breeders for the purpose of insuring of natural breeding of livestock¹¹ or are the owners or renters of woods,
   9. state's financial stakes in the joint-stock companies¹,
   10. purchase of securities,
   11. financial gifts to recipients abroad
   12. deposits and contributions to international organizations
   13. defrayal of payables from state guarantees,
   14. expenditures related to fulfillment of obligations to the European Communities,
   15. contributions to natural persons pursuant to a special act,
   16. expenditures related to debt servicing,
   17. other expenditures specified by a special act.

    

3. The expenditures under (1)i) through l) shall take place only with previous consent of the government.

1.  

2. A draft state budget act shall be prepared by the ministry in cooperation with chapter administrators, territorial self-governing units and state funds.

    

3. The ministry shall direct work to prepare a draft state budget act. Chapter administrators, state funds, territorial self-governing units and other bodies corporate l or natural persons requesting funds from the state budget or a state guarantee shall be obliged to submit to the ministry information necessary to prepare a draft state budget act by the deadline, in the extent and structure specified by the ministry's decree. It shall not apply to the chapters House of Representatives, Senate, Constitutional Court, Supreme Audit Office and the Office of Ombudsman. Municipalities shall submit information through county authorities to the regions, which shall forward it to the ministry. The City of Prague shall submit these source materials directly to the ministry. Source materials for the compilation of draft state budget expenditures to finance asset replacement programs ('the program') shall be submitted by municipalities directly to the relevant chapter administrator.

    

4. The draft chapters for the Office of the House of Representatives, the Office of the Senate, the Constitutional Court, the Supreme Audit and the Office of Ombudsman shall be compiled by the chapters administrators following the negotiation with the ministry which shall include them into the draft act on the state budget.

    

5. If the government rejects the submitted draft chapters for the Office of the House of Representatives, the Office of the Senate, the Constitutional Court, the Supreme Audit Office or the Office of Ombudsman, it is the House of Representatives Budget Committee that shall determine the figures by 15 September upon the government's request.

    

6. A draft state budget act shall be submitted by the ministry for the government's approval.

1.  

2. If the House of Representatives fails to give its approval to the state budget act for the relevant budget year prior to the first day of that budget year, the budget management in the period from the budget year's first day up to the state budget act's becoming effective for that budget year ('the period of stop-gap budget') shall be governed by the volume of revenues and expenditures of the state budget approved for the previous budget year. By the decision of the ministry each month of the period of the stop-gap budget the expenditures of the state budget shall be released by individual chapters of the state budget up to the amount of one twelfth of the total annual amount. With respect to expenditures stipulated by some other act (mandatory expenditures) the volume of expenditures may be exceeded provided it shall be directly related to the financing stipulated by law.

    

3. If the House of Representatives gives its approval to the state budget act for the relevant budget year prior to the first day of that budget year but the act does not become effective by that day at the latest, the budget management from the budget year's first day up to the state budget act's becoming effective shall be governed by the state budget act approved by the House of Representatives.

    

4. If the government fails to submit a draft state budget act to the House of Representatives by the budget year's first day, it shall be proceeded pursuant to (1).

    

5. Budget revenue and expenditures realized in a stop-gap budget period shall become state budget revenue and expenditures upon the state budget act's becoming effective for the relevant year.

1.  

2. State budget revenue and expenditures shall be articulated into chapters which connote the sphere of activity and responsibility of central state administrative bodies¹² and other state organizational units, provided that a special act has stipulated these state organizational units either posses a separate state budget chapter or their standing is that of a central state administrative body, or their standing is that of a central state administrative body for budget purposes.

    

3. A chapter's budget shall contain budget revenue and expenditures of the chapter administrator, revenue and expenditures of the state administrative units within its sphere of activities, asset replacement contributions and subsidies for contributory organizations and taxes by the contributory organizations within its sphere of activities. A chapter's budget shall also include subsidies and refundable financial assistance from the state budget to natural and other bodies corporate for those tasks and activities which are within the sphere of activities of the chapter administrator. Within the scope of binding indicators stipulated by the state budget act, chapter administrators may create specification reserves.

    

4. State budget revenue and expenditures of general nature that do not fall within the sphere of activities of a specific chapter administrator, or state budget expenditures whose amounts for the individual chapter is not known at the time of adopting a state budget act for the relevant budget year, shall constitute a General Treasury Administration chapter. The inclusion of additional expenditures into the General Treasury Administration chapter shall be ruled upon by the government when a draft state budget act is being prepared, or by the House of Representatives when a draft state budget act is in the process of adoption. The government's budgetary reserve comprises a part of the General Treasury Administration chapter. The ministry shall be the General Treasury Administration chapter's administrator.

    

5. State budget expenditures associated with state debt servicing and redeeming shall constitute a State Debt chapter. The ministry shall be the chapter's administrator.

    

6. Revenue and expenditures of all county authorities, revenue and expenditures of state organizational units established by county authorities, and contributions, program financing subsidies and taxes from contributory organizations established by county authorities shall constitute a County Authorities chapter divided pursuant to the individual county authorities The Ministry of Finance shall be the County Authorities chapter's administrator.

    

7. Financial operations in the accounts of state financial assets save the operations associated with the state debt servicing and redeeming shall constitute the Operations of state financial assets chapter the administrator of which is the ministry.

Financing of programs (sections 12 and 13) and the provision of subsidies and refundable financial assistance pursuant to this act or special legal regulations must be in compliance with act on state aid¹³.

1.  

2. A program shall refer to a set of material, temporal and financial conditions for the acquisition or technical appreciation of tangible and intangible long-term and short-term assets¹⁴, their maintenance and repairs, and possibly also for additional activities necessary to achieve defined objectives.

    

3. Documentation of a program shall include:
   1. the program's identification data, its possible breakdown into sub-program and a preparations-cum-implementation schedule,
   2. a balance of the needs and resources for the financing of the program and its separate sub-programs,
   3. a specification of the objectives of the program and its sub-programs together with their technical/economic justification and an evaluation of efficiency of allocated financial means.

    

4. The material, temporal and financial indicators of specific undertakings of construction, technical appreciation and repairs of buildings and structures, acquisition of real estate, technical appreciation and repairs of machines, equipment and intangible assets, real estate transfers for consideration, and additional activities aimed at the achievement of the program's objectives ('undertakings') shall be kept track of in the Asset Replacement Financing Information System ('the information system').

    

5. The information system shall be administered by the ministry, which shall specify its structure and contents, shall oversee its updating as conducted by the chapter administrators, and shall provide for data output required for the preparation of draft state budgets, the closing state account and the medium-term outlook.

    

6. The registration in the information system of an undertaking shall be effected by the chapter administrator on the basis of an investment intent that includes material, temporal and financial designation of the undertaking, its technical/economic justification and an expression of efficiency of allocated means, together with a specification of requirement to secure the operations of the resource under construction or redevelopment.

    

7. The registration under subsection 5, financed by purpose-earmarked state budget means under Section 12 (3) a) or c), its application and any modifications of the binding specific parameters can be effected only with the ministry's consent.

1.  

2. State budget participation in program financing shall refer to

   1. expenditures to finance programs listed under subsection 3,
   2. provision of state guarantee for credits accepted by bodies corporate or natural persons.

    

3. The amount of state budget participation in program financing shall be determined on the basis of program documentation assessment
   1. by the government, if state budget participation is not less than CZK 5bn,
   2. by the ministry, if state budget participation is under CZK 5bn.

    

4. Program financing expenditures are purpose-earmarked state budget means and they shall be broken down into
   1. case-by-case evaluated expenditures of a state organizational unit purpose-earmarked to finance a specific undertaking as a rule exceeding CZK 100m,
   2. systemically earmarked expenditures of state organizational units to finance a restricted number of financial needs under whose framework the chapter administrator shall determine the expenditures for specific undertakings,
   3. individual subsidies to bodies corporate and natural persons purpose-earmarked to finance a specific undertaking as a rule exceeding CZK 100m,
   4. systemic subsidies earmarked to finance a restricted number of financial needs, under whose framework the chapter administrator shall provide a subsidy to bodies corporate or natural persons for specific undertakings,
   5. refundable financial assistance provided to bodies corporate or natural persons to finance specific undertakings or a restricted number of financial needs.

    

5. The rules of procedure concerning the ministry, chapter administrators and investors regarding preparations, approval and implementation of programs and undertakings appearing on record in the information system and for the final evaluation shall be stipulated by the ministry in accord with the Ministry of Local Development in a decree.

1.  

2. Unless a special legal regulation has stipulated otherwise, there shall be no legal entitlement to a subsidy or a refundable financial assistance.

    

3. A subsidy or refundable financial assistance from the state budget shall be provided only by a central state administrative body, the Czech Republic Academy of Science, the Czech Republic Grant Agency or the party so designated by a special act (the 'provider').

    

4. A subsidy or a refundable financial assistance shall be provided on the basis of a request. The decision on the provision of a subsidy or a refundable financial assistance shall contain the designation of the recipient of a subsidy or a refundable financial assistance, the purpose which a subsidy or a refundable financial assistance shall be provided for and the conditions of their use. This decision shall not be regulated by the general administration proceedings regulations.¹⁵

    

5. A subsidy recipient shall be obliged to financially settle it by specified deadlines with the provider.

    

6. In respect of the provision of refundable financial assistance, providers shall be obliged to keep records pursuant to a special legal regulation¹⁶ concerning receivables incurred through the provision of refundable financial assistance, further to schedule and keep track of the repayment installments.

1.  

2. Proceedings on the withdrawal of a subsidy or a refundable financial assistance shall be commenced provided that following the issue of the decision on the provision or a subsidy or a refundable financial assistance

   1. the state budget means have been bound,
   2. it has been found that the date on the basis of which a subsidy or a refundable financial assistance has been provided were incomplete or false, or
   3. it has been found that the decision on the provision of a subsidy or a refundable financial assistance has been issued contrary to law.

    

3. The proceedings under subsection (1) shall be regulated by general administration proceedings regulations.¹⁵

    

4. If it has been decided on the withdrawal of a subsidy or a refundable financial assistance for the reasons mentioned in subsection (1) a) and c) it shall not be possible to impose the refund of a subsidy or a refundable financial assistance or a part thereof or a premature refund of a refundable financial assistance or a part thereof which has already been provided to the recipient.

1.  

2. Subsidies and refundable financial assistance shall be provided by transfer from a chapter administrator's account to the recipient's bank account or by enabling disbursement up to the specified limit from a budgetary expenditure account.

    

3. State budget expenditures earmarked to finance programs which are
   1. purpose-earmarked for replacement of assets not owned by the Czech Republic,
   2. which constitute a condition for disbursement of state guarantee credits,
   3. which constitute a condition for disbursement of means from the funds of the European Community,
   shall be provided in the form of advance expenditures from the individual chapter administrators, transferred to selected banks on the basis of agreements concluded by the ministry with such banks.

    

4. The procedure of the ministry and chapter administrators regarding the conclusion and realization of agreements under subsection 2 in respect of provision of banking services consisting of effecting defrayal for work and deliveries and the manner and deadlines of settling such advances with the state budget by year-end shall be stipulated in a decree by the ministry following an agreement with the Czech National Bank.

Subsidies or refundable financial assistance may be provided on the basis of agreements concluded between the provider and the applicant ('the agreement'), if so stipulated by a special act. The special act shall always set out all particulars of such agreements.

Section 18

The confidentiality clause pursuant to a special legal regulation¹⁷ shall not apply to the provision of information supplied to the ministry in respect of subsidies and refundable financial assistance.

1.  

2. The criteria for the calculation of the amount of a subsidy provided from the state budget into the region's budget shall be stipulated annually by the state budget act, unless specified otherwise by this act or a special act.

    

3. Subsidies from the state budget to the municipal budgets shall be provided through the chapter county authority, unless specified otherwise by this act or a special act.

1.  

2. The government shall be accountable to the House of Representatives for the performance of the state budget. After the lapse of each calendar half-year, the government shall submit to the House of Representatives a report which evaluates the progress of the economy and the performance of the state budget; the report shall also include an evaluation of the performance of the budgets of territorial self-governing units and developments in state financial assets, the status of state guarantees and developments in the state debt, their detailed analysis, perspective of the performance by the end of the year and in case of a deviation from the approved state budget the information on the steps providing for the budget management stability.

    

3. Further to this, the ministry shall evaluate on an ongoing basis the performance of the state budget and shall submit a report to this effect to the government, always after the lapse of the first and third quarter in such a manner that the government may forward it to the House of Representatives Budget Committee till the end of the month following the lapse of the calendar quarter.

    

4. The chapter administrators, state organizational units, contributory organizations, territorial self-governing units, state funds and other recipients of state budget means shall be obliged to furnish data requisite for interim evaluation of the performance of the state budget. The obligation to furnish data requisite for interim evaluation of the performance of the state budget shall apply also to those bodies corporate or natural persons on behalf of which the state guarantees securing repayment of credits was extended. The territorial self-governing units and state funds shall be obliged to furnish data requisite for interim evaluation of the performance of their budgets. The municipalities shall furnish data through county authorities to the regions. The regions and the City of Prague shall furnish the data to the ministry. The data on the financing of asset replacement programs shall be submitted by municipalities directly to an appropriate chapter administrator.

    

5. Failure to meet the obligation to furnish data shall constitute a reason to suspend any further provision of budget means, until such a time when the requisite obligation has been satisfied. This shall not affect accountability under a special legal regulation.¹⁶

    

6. The method of, deadlines for the provision of the data and the extent thereof shall be stipulated by the ministry in a decree.

Unless stated otherwise by this act, the means of the state budget can be used exclusively within the respective budget year for purposes they have been earmarked for by the state budget act.

1.  

2. If there arises, during the year, to any state organizational unit the need to make a remittance not provided for by the budget, this need shall be provided for by thriftier execution of other tasks, postponement or restriction of another task which is less pressing or by resorting to off-budget resources of the state organizational unit (Section 45 (3)). Prior to making such a remittance, a budgetary measure shall be in place.

    

3. If there arises, during the year, to any contributory organization the need to make a remittance not provided for by the budget, this need shall be provided for by the restricted execution of some tasks, in the given budget period following the negotiations with the founder in the scope of the specified costs, by higher income, by utilization of the contributory organization's funds, or by increasing the operations contribution from the founder's budget.

    

4. Means from the government's budgetary reserve (Section 27) can be used to defray the needs, which have not been provided for by the budget.

A budgetary measure shall refer to

1. transfer of state budget funds within the scope of and between the binding indicators specified by the state budget act, or within the scope of and between the binding indicators specified by the chapter administrator; the binding indicators specified by the chapter administrator shall be revenue and expenditures specified by the administrator and broken down in a more detailed manner within the framework of the binding indicators specified by the state budget act,
2. correlated increase of revenue and expenditures which effects a modification in the binding indicators,
3. permitted excess of the budget of expenditures which does not effect a modification of a binding indicator,
4. a tie-up of state budget means within the budget which does not effect a modification of a binding indicator.

1.  

2. The government or the Minister of Finance as authorized by the government may permit

   1. realization of necessary expenditures not provided for by the state budget, if the defrayal is to be provided for by savings in other state budget expenditures up to the amount not exceeding in the given year 5 % of the total amount of the approved budget of chapter's expenditure with respect to which the modification is being performed and not exceeding 10 % of the total amount of the binding indicator with respect to the chapter in which the modification is being performed.
   2. reduction of certain revenue budgeted as income from activity on the premise that the balance of the budgeted revenue and expenditures of the chapter shall not be affected.

    

3. Provisions of subsection 1 shall not apply to the use of government budget reserve in the General treasury administration chapter, Operations of state financial assets chapter and the State debt chapter.

    

4. The House of Representatives Budgetary Committee may approve a transfer between the State Budget binding indicators in the framework of the chapter above 10 % of each indicator.

    

5. A written application to conduct a budgetary measure under subsection 1 shall be filed with the ministry no later than 30 November of the current budget year. The ministry shall process the application to conduct a budgetary measure within a 30 calendar days' time limit, not later than 15 December of the current budget year. Upon the receipt of a notification on the settlement of the application, the applicant shall convey the limit of expenditures to the Czech National Bank no later than 20 December of the current budget year.

    

6. A written application to conduct a budgetary measure under subsection 1, which modifies the binding indicators of expenditures to finance programs shall be filed by the deadlines as announced in a decree by the ministry, not later than 30 November of the current budget year.

    

7. The government shall inform the House of Representatives of the budgetary measures under subsection 1 in its reports on the performance of the state budget or if the House of Representatives so requests.

    

8. Budgetary measures under subsection 1 and under section 25 (1)e) that are connected with the House of Representatives chapter, the Senate chapter, the Constitutional Court chapter, the Supreme Audit Office and the Office of Ombudsman chapter may be effected only with the consent of the House of Representatives or a body appointed thereby.

1.  

2. The state organizational units

   1. shall be entitled to transfer state budget means within the scope of individual binding indicators specified by the state budget act or by the chapter administrator,
   2. shall be entitled to exceed the binding indicators of expenditures by the amount of used off-budget resources (Section 45 (3)) and by reimbursement for insurance events; any changes in the binding indicators of expenditures in other cases may be approved for the organizational unit by the chapter administrator within the scope of the chapter's budget,
   3. shall be obliged to tie up the state budget means which have been purpose-earmarked by the binding indicators of the state budget act in the event that the tasks shall fail to be executed in their entirety or partially,
   4. shall be obliged to tie up state budget means, if they fail to fulfil the budget revenues with the exception of revenue from taxes, customs, social security premiums, contributions to state policy of employment; if a state organizational unit cannot offset the reduction of income by tying up a corresponding portion of current expenditures, it shall advise its founder of this fact and the organizer shall decide on the manner of providing for the budgeted balancing of the chapter,
   5. shall be obliged to tie up state budget means, if the government so resolves.

    

3. Provisions of subsection 1 c) and d) shall not apply to the State debt chapter and Operation of state financial assets chapter.

    

4. If a state organizational unit cannot provide for defrayal of a necessary expenditure because its budget has counted on a lower amount for the defrayal thereof or the amount has not been budgeted, the unit shall be obliged to secure state budget means to defray this expenditure by a preferential transfer of funds within its own budget.

    

5. All expenditures effected prior to the implementation of a budgetary measure above the amount specified by the binding indicator shall constitute unauthorized use of the state budget means. All expenditures effected prior to the implementation of a budgetary measure above the amount specified by by sections and items of the budgetary composition shall constitute unauthorized use of the state budget means.

    

6. If the modifications in the binding indicators shall be about to happen due to change in subordination or transfer of tasks between state organizational units, the state organizational units concerned shall provide its organizer with mutually agreed protocols containing proposals about mutual transfers of the state budget means. If chapter administrators are not authorized to modify the binding indicators, the chapter administrator shall submit them to the ministry. The ministry shall carry out these requested budgetary measures if no discrepancies in the proposal for their implementation are noted.

    

7. A state organizational unit shall tie up expenditures, which have been purpose-earmarked by the binding indicators of the state budget act only with the ministry's consent.

    

8. A state organizational unit must not use budgetary means that have been tied up in the budget, for transfers or realization of budget expenditures without the consent of the body, which has ordered or approved the tying up.

    

9. A state organizational unit shall conduct transfers of state budget means within its own competence in such a manner so that these expenditures could be effected no later than 31 December of the current budget year.

    

10. A state organizational unit shall be obliged to keep chronological records of all its budgetary measures put in place during the year and listed in subsection 1 and Section 24. Budgetary measures report concerning revenue and expenditures shall be drafted to encompass the entire scope of the budgetary composition.

     

11. Chapter administrator shall file with the ministry, by deadlines appointed by the ministry in a decree, an outline of budgetary measures under subsection 9. Failure to observe this obligation can be the reason for suspension of the processing of the chapter administrator's applications to institute budgetary measures.

The following constitute particulars of an application for budgetary measures:

1. the kind of budgetary measure under Section 23 a) and b),
2. the amount which is the subject of the budgetary measure,
3. detailed justification of the proposed budgetary measure,
4. if an increase of expenditures is requested, a proposal on how to provide for the expenditures, and evidence for the possibility or impossibility to provide for them within the scope of the budget of the chapter on the basis of the actual disbursements from the budget ,
5. if a reduction of expenditures is applied for, the designation of a state organizational unit whose budget could be enhanced by these means,
6. if a correlated increase of revenue and expenditures is applied for, a document evidencing the amount of revenues attained above its approved budget,
7. if a reduction of budgeted revenue is applied for, a proposal to reduce expenditures by the same amount,
8. names of the binding indicators concerning the proposed budgetary measure, including the budgetary composition's item and section,
9. updated information system data pursuant to Section 12(4).

1.  

2. In order to provide for the budget management, a budgetary reserve of the government shall be created in the state budget to cover necessary and unforeseeable expenditures. The government's budgetary reserve shall be made up of at least 0.3 % of the state budget's expenditures for the relevant budgetary year.

    

3. The use of the government's budgetary reserve shall be decided on by the government and the Minister of Finance to the extent appointed by the government.

    

4. The government shall inform about the use of the government's budgetary reserve in its reports to the House of Representatives concerning the performance of the state budget.

1.  

2. In order to financially provide for specifically assigned tasks and the management of means earmarked for these, state funds shall be set up as body corporate. Each state fund shall be established by an act.

    

3. Each act establishing a state fund shall designate a body into whose competence this state fund belongs; further it shall designate the state fund's financial resources and the manner of their use; it shall designate the manner of financing the state fund's administrative expenditures which include expenses associated with the activities of the state fund's employees and defrayal of emoluments specified by law to the state fund's statutory bodies.

    

4. If the state fund's administrative expenditures are financed from subsidies from the state budget, the use of these means shall be subject to the legal regulations applicable to the management of state organizational units.

    

5. The state fund's balance of means shall be rolled forward into the next budget year.

    

6. The name of each state fund shall include the designation of "state fund".

    

7. The provision of subsidies and refundable financial assistance from a state fund, including the method of the provision, shall be treated by a special legal regulation.

1.  

2. The closing state account shall include data regarding the results of the budget management from the previous year.

    

3. A component of the closing state account shall comprise the closing accounts of the chapters processed and submitted to the House of Representatives separately by their administrators.

    

4. An annex to the closing state account shall include summary information on the results of the management by the territorial self-governing units, the state funds' closing accounts, an outline of state financial assets and liabilities, an outline of state guarantees, an outline of the status of the state organizational units' funds.

1.  

2. A draft closing state account shall be prepared by the ministry in cooperation with the chapter administrators, territorial self-governing units, state funds, and shall be submitted to the government by the ministry. At the same time the ministry shall submit a plan for utilization of any budget surplus or defrayal of any deficit.

    

3. The chapter administrators, territorial self-governing units, and state funds shall be obliged to furnish to the ministry all information requisite for the preparation of a draft closing state account. Municipalities shall submit information through county authorities to the regions. The regions and the City of Prague shall forward the information to the ministry. The data regarding the financing of programs (Section 12) shall be submitted by the municipalities directly to the relevant chapter administrator. The structure, deadlines and scope of the data to be furnished as required for the preparation of a draft closing state account shall be specified by the ministry in a decree.

    

4. The ministry shall direct work on preparing a draft final state account and the final accounts of the chapters, territorial self-governing units and state funds.

    

5. Using the results of the budget management in the previous year, the chapter administrators compile a draft closing state account of their chapter, in the scope and by the deadlines as specified by the ministry in a decree, and in the identical breakdown used for the compilation of the state budget. Each chapter administrator shall discuss it in appropriate House of Representatives committees prior to the draft closing state account discussions in the House of Representatives.

    

6. A draft closing state account shall be submitted by the government to the House of Representatives no later than 30 April of the year that follows the budget year being evaluated.

    

7. If the balance of the state budget differs from that specified by the state budget act, it is the House of Representatives that shall decide on the utilization of any surplus or defrayal of any deficit as proposed by the government. If the House of Representatives decide when discussing a draft closing state account that any surplus or a portion thereof shall be used to finance state budget expenditures of the current budget year, these funds will be rolled forward to revenues of the state budget of the current budget year.

1.  

2. Upon the declaration of state emergency¹⁸ the ministry shall prepare a draft extraordinary closing state account and a draft emergency state budget for the remainder of the year. When compiling a draft extraordinary closing state account it shall proceed along the provisions of Sections 29 and 30, while in compiling a draft emergency state budget it shall proceed along the provisions of Section 8, taking into consideration any potential danger due to procrastination.

    

3. A draft extraordinary closing state account for the period up to such time when the emergency state budget becomes effective shall be prepared by the ministry in cooperation with the chapter administrators and shall be submitted to the government.

    

4. A draft emergency state budget shall be prepared by the ministry in cooperation with the chapter administrators and shall be submitted to the government within 15 days of the declaration of state emergency.

1.  

2. Upon the declaration of the state of war¹⁹ the ministry shall prepare a draft extraordinary final state account and a draft wartime state budget for the rest of the year.

    

3. When compiling a draft extraordinary final state account and a draft wartime state budget the ministry shall proceed similarly along Section 31.

1.  

2. For the administration of the state treasury's financial means the Czech National Bank shall keep for the ministry a summary account of the state treasury's current management efforts ('the summary account'). The account shall keep track of all revenue and expenditures of the state budget, income from the sale of short-term bonds and from accepted credits earmarked to overcome a treasury deficit of the state budget, other state financial means and income of the territorial self-governing units3 administered by the financial authorities.

    

3. The financial means of the state treasury shall be monitored separately in:
   1. revenue and expenditure accounts of the state budget,
   2. state financial assets accounts,
   3. aggregate balances on accounts of financial authorities where tax revenues are administered which are subsequently earmarked to other public budgets
   4. the account of liquidity management of the state treasury,
   5. accounts of off-budget means of the state organizational units,
   6. accounts of state bodies corporate,
   7. accounts of the state funds,
   8. accounts of other funds, if so stipulated by a special act ('accounts subordinated to the state treasury'). Accounts subordinated to the state treasury shall be opened by entities having a financial relationship with the state treasury.

    

4. The accounts under subsection 2 a) through h) shall be kept with the Czech National Bank. The grand total of non-term deposits in these accounts may not be negative.

    

5. The accounts under subsection 2 e) through h) shall be kept with the Czech National Bank, unless otherwise specified below. Balances of these individual accounts may not be negative.

    

6. The content and scope of the activities pertaining to the maintenance of the summary account and accounts subordinated to the state treasury shall be delineated by an agreement between the ministry and the Czech National Bank.

    

7. Should the maintenance of accounts subordinated to the state treasury be prevented by reasons on the part of the Czech National Bank, the ministry shall determine, on the basis of public competition, the maintenance of these accounts with another bank.

    

8. The balances of the accounts subordinated to the state treasury shall comprise part of the government's financial statistics and the records of these shall be provided by the ministry.

    

9. Those state organizational units and bodies corporate which have a financial relationship with the state treasury shall be obliged to furnish to the ministry information for ongoing monitoring of the developments in financial means and for the control of their use, pursuant to the ministry-appointed rules. Further, these state organizational units and bodies corporate shall be obliged to give their consent to the Czech National Bank and the banks maintaining their accounts which are subordinated to the state treasury in respect of the provision of information to the ministry about the balances of and movements in these accounts.

    

10. The state treasury's financial means must not be placed outside of the accounts subordinated to the state treasury. The ministry shall be authorized to check whether any state organizational units and bodies corporate with a financial relationship with the state treasury do not deposit their financial means outside of the accounts subordinated to the state treasury.

1.  

2. The ministry shall implement measures necessary to overcome a treasury discrepancy between revenue and expenditures of the state budget up to 6% of the total expenditures as approved by the state budget act, or a stop-gap budget, by accepting credits or by selling state treasury bills. The authorization to defeat a treasury discrepancy between revenue and expenditures of the state budget shall be increased, if a state budget deficit is approved by the act , by the amount of the deficit.

    

3. The ministry is authorized to cover the state budget deficit of the previous year by issuing state treasury bills until the final decision of the House of Representatives concerning the solution of this deficit.

    

4. In order to make up for inadequate funds in the summary account, the ministry may opt to utilize other financial means of the state pursuant to Section 33 (2) g) and h) in a form of temporary financial assistance. This assistance must not jeopardize defrayal of payables from these accounts and shall have to be repaid by 31 December of the same year during which it has been resorted to. The ministry shall pay interest on such temporary financial assistance.

    

5. Any surplus in the accounts subordinated to the state treasury listed in Section 33 (2) a) through d) can be invested on the financial market by the ministry in liquid short-term state treasury bills or Czech National Bank bills. These transactions shall have to be settled by 31 December of the current budget year. Such transactions must not jeopardize the activities of financial authorities arising from special legal regulations.

1.  

2. In managing liquidity of the state debt the ministry shall be authorized to acquire and alienate and legally encumber the state bonds and acquire and alienate the bonds issued by the Czech National Bank. For this purpose the ministry shall directly conduct transactions on the secondary market by purchasing and selling state bonds or bonds issued by the Czech National Bank, unless it shall agree on their effecting with the Czech National Bank or other entity; in doing so the ministry shall proceed in accordance with a special legal regulation.²⁰

    

3. In financing the state debt the ministry shall create a reserve of financial means from the yield of state bond issues being the ministry's source for elimination of interest-related risks and the risks associated with non-placement of primary issues of state bonds. These financial means and transaction with them are subject to being kept track of in the state financial assets.

1.  

2. The ministry shall exercise administration over state financial assets and liabilities.

    

3. The state financial assets shall comprise
   1. financial means rolled forward from the results of the budget management from the previous years on the basis of a House of Representatives decision, and other financial means which have been so earmarked by the government or the House of Representatives or the financial means earmarked by a special act,²¹
   2. the state's ownership stakes in commercial companies and state-owned securities the management of which has been authorized for none of the chapter administrators,
   3. state receivables from extended credits, returnable financial assistance provided from the General Treasury Administration chapter or from state financial assets, as well as receivables from realized state guarantees.

    

4. "Special Retirement Insurance Account" constitutes part of the state financial assets; the account holds financial means transferred in the amount of a positive difference between the revenue from retirement insurance premiums and the expenditures to retirement insurance benefits including expenditures associated with the collection of retirement insurance premiums pursuant to the balance as of 31 December of the current budget year. The means in this account shall be used solely for increased retirement insurance benefits and for defrayal of a negative balance of retirement insurance premiums including expenditures associated with the collection of retirement insurance premiums.

    

5. State financial assets created from the budget management of the previous years shall be utilized only with the consent of the House of Representatives. The utilization of other state financial assets shall be decided by the government or the Minister of Finance if so authorized by the government. This shall hold also for any provision from the state financial assets of subsidies or refundable financial assistance. Section 14 (1) and (3) through (5) and Section 15 shall apply to the provision from the state financial assets of subsidies or refundable financial assistance and their withdrawal.

    

6. Financial operations of state financial assets are deemed to be the state budget operations.

    

7. State financial liabilities shall comprise
   1. state payables originating in the state's acceptance of out-of-state loans, bank credits and from the issued state bonds,
   2. other state liabilities.

    

8. The sum of state financial liabilities shall constitute a state debt.

    

9. Simultaneously with a draft state budget act, the government shall submit to the House of Representatives a report on projected developments in the state financial assets and liabilities.

1.  

2. The National Fund is an aggregate of financial means which the European Community has entrusted to the Czech Republic for the implementation of joint programs in the Czech Republic, and financial means which other out-of-state sources have undertaken to provide for the implementation of those programs, the state budget, the budgets of the territorial self-governing units and other public sources and private sources, unless proven that the use of those financial sources has been earmarked for a specified purpose.

    

3. Through the National Fund the ministry shall coordinate the management of financial flows and the adherence to procedures regulating implementation of joint programs of the Czech Republic and the European Union,

    

4. The financial means concentrated in the National Fund shall be decided on by the ministry in accord with the liabilities related to the acceptance of the mentioned financial means.

    

5. The financial means concentrated through the National Fund shall be used in line with the budget outlook principles and with the liabilities incurred by the Czech Republic under an international treaty.

    

6. The management and control of financial means concentrated through the National Fund shall be governed by the provisions of this act dealing with the budget management and control, unless stated otherwise by this act or an international treaty binding the Czech Republic.

    

7. The accounts of the National Fund's financial means shall be kept for the ministry by the Czech National Bank, unless the ministry decides otherwise.

    

8. Interest earned on the deposits of the financial means in the accounts shall constitute revenue of the National Fund.

    

9. The balances of the financial means in the National Fund's accounts shall be rolled over for the next year.

1.  

2. Section 44 shall apply when dealing with discipline breaches when managing the National Fund's financial means, unless stated otherwise by this act.

    

3. The amounts of National fund means used in an unauthorized manner or withheld shall be refunded to the National Fund by the party, which used them in an unauthorized manner or withheld. Penalties from the National Fund's means, which have been used in an unauthorized manner or withheld, shall constitute revenue of the state budget.

    

4. If the Commission of the European Communities asks that funds of the European Union which have been used in an unauthorized manner or withheld be refunded, these means shall be transferred from the National Fund to the budget of the European Communities. Should there be inadequate funds in the National Fund, the amount shall be taken from the state budget; upon refunding any means used in an unauthorized manner or withheld these shall be conscripted from the National Fund to the state budget.

    

5. Interest imposed by the Commission of the European Communities for failure to observe obligations under subsection 3 shall be defrayed from the state budget.

    

6. If the obligation under subsection 3 has been met and there are financial means left after the contribution into the National Fund under subsection 2, they shall be transferred from the National Fund to other joint funding sources in the identical joint funding ratio.

1.  

2. For the purpose of this act, financial control shall refer to an aggregate of activities to verify

   1. the facts decisive for the granting of state budget funds or other state financial means from a state fund or the National Fund,
   2. eligibility for, efficiency and economizing of the handling of state budget means, other state financial means or with means provided from the state budget, a state fund, state financial assets, or the National Fund,
   3. facts decisive for the granting of a state guarantee.

    

3. The ministry or regional financial authorities shall conduct financial control
   1. of state organizational units, state funds and contributory organizations,
   2. of the recipients of means provided from the state budget, state funds, state financial assets or the National Fund, or of the applicants requesting such means,
   3. of bodies corporate or natural persons who have been granted state guarantees.

    

4. The ministry or regional financial authorities can conduct financial control under subsection 1 prior to any decisions to provide these means or state guarantees, in the course of utilization of these or after they have been used, by examining accounting records.

    

5. The ministry shall provide methodological guidance and shall coordinate the financial control system of the chapter administrators.

1.  

2. The chapter administrator shall be responsible for the management of state budget means and other state financial means within its chapter. For this end, it shall be required to put in place a financial control system to provide for financial control of its own management and of the management exercised by state organizational units and contributory organization in its sphere of competence.

    

3. The provider shall conduct financial control of the applicant for, or recipient of, subsidies or refundable financial assistance covering the entire scope of their management by examining accounting records.

The county authorities shall conduct within their respective areas financial control of municipalities and organizations set up by the municipalities.

The conduct of financial control under Sections 39, 40 (2) and 41 shall be subject to a special legal regulation.²²

If these funds from abroad have been provided through the state budget, control procedures under Section 39 through 42 shall apply similarly.

1.  

2. Breaches of budgetary discipline shall refer to

   1. unauthorized use of financial means of the state budget and other state financial means,
   2. the recipient's unauthorized use or withholding of financial means provided from the state budget, the National Fund or state financial assets,
   3. a contributory organization's failure to pay taxes pursuant to Section 53 (6),
   4. an organizer's failure to assess taxes pursuant to Section 54 (3),
   5. failure to pay taxes as assessed by the organizer to a contributory organization pursuant to Section 54 (3),
   6. violation of the provisions of Section 45 (2) by a state organizational unit,
   7. failure to pay taxes pursuant to section 45 (8) and 52 (4).

    

3. Natural persons, bodies corporate or state organizational units which have breached budget discipline shall be obliged to refund to the state budget, or a state fund or state financial assets or the National Fund a contribution for the violation of budgetary discipline in the same amount by which budgetary discipline has been breached. At the same time they shall be obliged to pay to the state budget, or a state fund or state financial assets a penalty of 0.1% per day of the amount concerned in the violation of budgetary discipline, at the most, however, totaling the amount concerned. The penalty shall be computed from the date when the budgetary discipline violation occurred to the date when the funds were remitted. This shall not affect accountability under a special legal regulation.²³

    

4. The contribution for a budgetary discipline violation and the penalty shall be ordered in proceedings under a special legal regulation²⁴ by the financial authority in whose district jurisdiction the natural person, bodies corporate or state organization unit concerned has its registered office or his/her domicile. The contribution for a budgetary discipline violation and a penalty can be levied no later than ten years from 1 January of the year, which follows that year when the budget discipline violation took place.

    

5. Penalties under CZK 3,000 per individual instances shall not be levied.

    

6. The financial directorate can in justified cases waive in full or partially the obligation of contribution for a budgetary discipline violation or penalties whose amount per individual case does not exceed CZK 5m. The ministry can in justified cases waive in full or partially the obligation of contribution for a budgetary discipline violation or penalties whose amount per individual case exceeds CZK 5m. In respect of unauthorized use or withholding of state financial assets, the obligation of contribution and of penalties can be waived in full or partially only by the ministry.

    

7. Only natural persons, bodies corporate or state organizational units which have violated budgetary discipline can apply under a special legal regulation²² upon the exhaustion of regular remedies, for a waiver or a partial waiver of the penalty and contribution for this budgetary discipline violation. The application shall be filed with the ministry through that regional financial authority which has ordered the contribution and the penalty.

1.  

2. A state organizational unit manages state budget means allocated to it by the chapter administrator within the chapter's budget minimally in the scope of the breakdown by the binding indicators specified by the state budget act, unless stipulated otherwise by a special legal regulation. Its revenues shall constitute revenue to the state budget and its expenditures shall constitute expenditures from the state budget, unless stipulated otherwise by this act. The budget of a state organizational unit can include only revenues and expenditures related to the activities specified in the charter, or stipulated for it by the act that has established it.

    

3. A state organizational unit shall be obliged to exert due care to achieve income set by the budget and perform its specified tasks in the most economical way. The means at its disposal can be used to cover its necessary needs and for measures based on the legal regulations. Its means may be disbursed only up to the amount of the biding indicators specified for it by the state budget act, or by the chapter administrator within the chapter's budget and in line with its material performance, unless specified otherwise by this act (Sections 24, 25 and 47).

    

4. Further to this, a state organizational unit shall manage off-budget resources, which happen to be the means of the state organizational unit's funds, profit from a business activity performed on the basis of special act, financial gifts and means provided from abroad, in accordance with the stipulations based on a legal act through which they have been provided. Off-budget resources shall be utilized through its budget. The means of the cultural and social need fund shall be used directly, save for those means earmarked to finance replacement of long-term tangible assets.

    

5. A state organizational unit shall compile a budget of revenues and expenditures broken down in accordance with the budgetary composition. All budgetary revenues achieved within the framework of its management shall be concentrated in an appropriate budgetary revenue account and all budgetary expenditures shall be defrayed from appropriate expenditure budgetary accounts.

    

6. Further to this, state organizational units shall set up accounts for the funds created pursuant to this act, a liabilities account, a joint means account, accounts for its internal organizational sections about which the head of the state organizational unit has decided that they shall manage with advance payments, and accounts which have to be set up under a special legal regulation, and also accounts for such revenues and expenditures from whose nature, given by a legal regulation, it follows they do not comprise part of state budget revenues or income.²⁵

    

7. The accounts under subsection 5 shall be opened in the same bank where the state budget's revenue and expenditure accounts are maintained. These accounts balances as of the end of the year shall not forfeit. Interest earned from these accounts shall constitute state budget revenue and charges for bank services shall constitute state budget expenditures.

    

8. A liabilities account shall be opened for separate deposit of outside capital, primarily for funds credited in error, for salaries of the state organizational unit's employees and related expenditures for December but paid out the following January, the means concentrated by chapter administrators as part of financial settlement from recipients of funds provided from the state budget, conference fees paid in the current budget year for conferences to be held early in the following year, financial means of patients and inmates of medical and other facilities, and the means of cultural funds of retirement/social care homes.

    

9. Concentration of revenues in different account and defrayal of expenditures from different account shall be permissible for a state organizational unit only in cases stipulated by this act or with the ministry's consent. The state organizational unit shall be obliged to deliver to the state budget the revenue of the state budget concentrated in other than revenue budgetary accounts within 3 days following the day when the amount has been put to its account, unless stipulated otherwise by this act.

1.  

2. A state organizational unit can defray from the current year's budget only such expenditures, which economically belong to that year and which shall be executed by the Czech National Bank no later than by 31 December. The expenditures not executed by the Czech National Bank by that date at the latest shall be debited to the organizational unit's budget for next year, although they economically belong to the current year.

    

3. A state organizational unit shall transfer by 31 December of the current year
   1. the means to pay salaries for December including all related expenditures and travel allowances that are paid together with salaries to the liabilities fund. The expenditures related to salaries shall include social security premiums, contributions to state policy of employment, health insurance premiums and contributions to the cultural and social needs fund. Any unused means shall be transferred by the state organizational unit from the liabilities account to its revenue account on the date of December payday,
   2. any savings of budget means under Section 47.

A state organizational unit may transfer up to 2% of the volume of the budgeted expenditures, after the budgetary measures under Section 23 a) and b) have been executed, reduced by the tied up state budget means under Section 23 d), such means that have remained unused for the performance of tasks in the current budgetary year to its reserve fund and use them in the next years. Unused funds earmarked for salaries, other remuneration for work, wage compensation and related expenditures shall not be transferred. Unused means budgeted for systemically earmarked expenditures to finance a restricted number of financial needs shall be transferred up 5% of the respective binding indicator. Unused means budgeted for case-by-case evaluated expenditures to finance specific undertakings and for individual subsidies shall be transferred in the amount of the respective binding indicator throughout the period of financing a specific undertaking.

1.  

2. A state organizational unit shall create the following financial funds:

   1. a reserve fund,
   2. a cultural and social needs fund.

    

3. The source of the reserve fund is unused budgeted means transferred under Section 47, accepted financial gifts, means provided from abroad if not used by the state organizational unit during the current budgetary year, income from sale of real estate given to the state organizational unit or acquired through transmission by the state organizational unit.

    

4. Reserve fund means can be used only for
   1. defrayal of operating needs not provided for by the budget,
   2. replacement of assets in the amount transferred under Section 47 and income from sale of real estate which a state organizational unit has acquired as a gift. The means which have been budgeted for systemically earmarked expenditures and systemic subsidies earmarked to finance a restricted number of financial needs and for case-by-case evaluated expenditures to finance specific undertakings and individual subsidies, can be used only in the structure of the indicators in accordance with which they have been transferred,
   3. other expenditures to be approved by the Czech Republic government in extraordinary cases.

    

5. Purpose-earmarked gifts and means provided from abroad shall be used in compliance with their allocation.

    

6. The means transferred in the structure of the indicators but unused within these indicators shall be subject to financial settlement with the state budget for that budgetary year when a particular program was completed.

    

7. The cultural and social needs fund shall be created by an essential contribution from the state organizational unit's budget from the annual volume of costs expensed as salaries, salary compensation or wages, wage compensation, remuneration for work emergencies, recompense and other consideration for work performed as part of professional training in productive activities paid to students at vocational facilities, fellowships to internal postgraduate researchers, and employees' study trips. The cultural and social needs fund is replenished on an advance basis from the annual planned amount in line with its approved budget. Reconciliation of the actual essential contribution shall be conducted as part of the annual financial statements. The fund shall serve to provide for cultural, social and other needs of the employees employed by the employer, servicemen in a service relationship, judges, students at secondary vocational facilities and vocational facilities, internal postgraduate researchers, retirees who at the time of their first old-age retirement or full-disability retirement worked for the employer, also family members of the employees and other natural persons and bodies corporate. Additional revenues, the amount of additions to and management of the cultural and social needs fund shall be specified by the ministry in a decree.

1.  

2. Unless specified otherwise by this act, a state organizational unit shall not be authorized to accept or provide credits, accept loans, issue or accept bills of exchange. It can provide loans solely from the cultural and social needs fund or on the basis of a special legal regulation.²⁶

    

3. A state organizational unit may extend advance to contractors for a period of one quarter at most, when linked to material performance consisting of deliveries of products and services. These advances have to be reconciled by the end of each current budgetary year, and if the amount of advances exceed the amount of monthly performance, they have to be refunded to the budget. No reconciliation statement shall have to be submitted for advances on the deliveries of power, gas, water, heat, advances on fuels provided through debit or credit cards, and on newspaper and magazine subscriptions. When program needs are financed, the respective chapter administrator shall determine the amount of advances.

    

4. From the current year's budget of the Ministry of Labor and Social Affairs chapter an advance can be made to the Czech Republic Post Office to distribute retirement benefits in early January of the following year.

    

5. A state organizational unit shall defray a contribution for breach of budgetary discipline and related penalties from its budget, or if the rules of managing its cultural and social needs fund have been violated, from that fund.

    

6. A state organizational unit shall provide financial gifts solely from its cultural and social needs fund, unless stipulated otherwise by this act.

    

7. A state organizational unit can spend financial means on financial and in-kind awards only if a legal regulation so stipulates.

    

8. A state organizational unit can offset expenditures by received revenues only if these are
   1. means provided from the budget and refunded to the budget the very same budgetary year,
   2. a subsequent compensation of earlier expenditures in the same budgetary year through which the state organizational unit has received a refund of expenditures the state organizational unit has paid due to operating/technical reasons primarily for phone charges, power, water and sewage,
   3. compensation of salaries , for work performed by the state organizational unit's employees for another organizational unit or another entity.

    

9. It shall be allowed to offset only a specific expenditure that can be precisely identified through application of the budgetary composition and whose defrayal arises from contractual relationships.

    

10. No compensation shall be allowed for expenditures, which a state organizational unit has incurred while providing services, which constitute the subject of activities the state organizational unit has been set up for, unless stipulated otherwise by a special legal regulation.

1.  

2. A state organizational unit shall finance asset replacement from its budget within the specified binding program-financing indicators.

    

3. A state organizational unit can, in order to reinforce its means under subsection 1, use the means of its cultural and social needs fund, its reserve fund, and means accepted from bodies corporate and natural persons if these means have been provided for asset replacement. These means shall be transferred by the state organizational unit into a special revenue account set up for the chapter administrator; the chapter administrator shall increase by the amount of the means transferred the state organizational unit's limit of expenditures to finance asset replacement. The chapter administrator shall return the unused balance of the means transferred in this fashion no later than 31 December of the current budgetary year to the account from which these means were originally transferred.

1.  

2. Only those payments received at the Czech National Bank no later than 31 December of the current budget year shall be accounted in favor of the state budget for the current budget year.

    

3. A state organizational unit shall deposit at the bank revenues received in cash in such a way so that they could be credited to its revenue budgetary account no later than 31 December of the current budgetary year.

    

4. Any arrears from the preceding year and earlier years received after 1 January of the current budgetary year shall constitute revenues of the current budgetary year. The same shall apply even when it concerns a compensation of a budgetary expenditure from the previous year.

1.  

2. The head of a state organizational unit shall be authorized to designate internal organizational sections of the state organizational unit, which are to receive advances to finance their operations from the budget. These advances shall be provided for the period of one month in cash, or credited to current accounts with the banks.

    

3. The internal organizational sections shall be obliged to reconcile these advances after the lapse of the period the advance was provided for, but no later than at 31 December. By this date they shall return to the state organizational unit all unused advances provided under subsection 1.

    

4. The head, who has designated internal organizational sections that manage the advances, shall have to appoint employees responsible for the management, cash register and accounting and to conclude with these employees written agreements concerning material accountability pursuant to a special legal regulation.²⁷

    

5. An internal organizational section, which shall collect state budget revenues others than incomes from taxes, customs, social security premiums and contributions to state policy of employment shall be obliged to transfer them to the revenue account set up for a state organizational unit no later than by the end of each month. The head of the state organizational unit may order the transfer even in shorter terms by stipulating the deadline or the amount, if reached, the revenues shall have to be transferred.

    

6. If an internal organizational unit shall be authorized to collect the revenues of the state budget, it must not reimburse the expenses therefrom.

1.  

2. A contributory organization manages financial means obtained through its own activities and the financial means received from the state budget only within the framework of financial links as specified by its organizer. Further, a contributory organization manages the means in its funds, the means acquired through the additional activity, financial gifts from natural persons and bodies corporate and financial means provided from abroad. The main activity is the activity stipulated by organizers of a contributory organization in a special act²⁸ and performed by a contributory organization. In the case of a contributory organization set up by a special act the main activity is the activity stipulated by a special act.

    

3. The management of a contributory organization shall be based on its budget which, upon the inclusion of a contribution from the state budget, or the determination of a contribution into the state budget, must be compiled as a balanced one. The budget of a contributory organization can include only costs and income related solely to the services provided by it, which constitute the subject of its principal activity.

    

4. When compiling a budget of costs and income, the use of reserve fund means under Section 57 (3) and of financial means provided from abroad during the year shall always be budgeted.

    

5. A contributory organization shall be obliged to exercise due care to perform its assigned tasks in the most economical way and to uphold the prescribed financial links to the state budget. It can use the financial means at its disposal only for such purposes they have been earmarked for, namely to cover necessary needs, for measures based on the legal regulations and to cover such measures as to secure the organization's smooth functioning. All defrayals a contributory organization shall undertake to effect in the current year must not exceed its budget for that year.

    

6. If the actual amount of costs and income in the course of the budget year does not correspond to the budgeted figures and there is a likelihood the budgeted economic result could be worse, the contributory organization shall be obliged to take such measures to ensure balancing of the budget.

    

7. Within three working days from the day when the amount has been credited to its account, a contributory organization shall be obliged to deliver to the state budget its income from the sale and rental of the Czech Republic-owned real estate it manages, save for income from sale of real estate the contributory organization acquired as a gift or through transmission.

1.  

2. The financial links specified by the founder shall include

   1. a contribution for the operations from the state budget or a contribution from the operations to the state budget,
   2. individual and systemic subsidies to finance programs and actions,
   3. refundable financial assistance,
   4. a contribution from depreciation.

    

3. A contribution for the operations shall be determined when the budgeted costs without the state budget contribution exceed budgeted income. The contribution from the operations shall be determined by a founder of a contributory organization when its budgeted incomes exceed budgeted costs. The amount of the contribution for the operation or the amount of contribution from the activity shall be determined as the difference between the volume of budgeted costs and income for the main subject of activity. The amount of the contribution for the operations and its disbursement during the year can be linked by the founder to certain indicators specified in advance, as a rule to a measurable unit of outputs performed by the contributory organization. If the contribution is not tied to a measurable unit of outputs, the organization shall be entitled to draw the operations contribution up to the amount, which has been set in a biding manner by the founder.

    

4. Should there be a significant change in the circumstances under which the financial link to the state budget has been determined, the founder shall reduce the specified contribution to the contributory organization or will order an unbudgeted contribution from the operations or it can increase the specified contribution. Such a change in the circumstances shall be reported by the contributory organization to the founder without delay. If an unbudgeted contribution from the operations is levied, the founder shall specify its due date.

    

5. Refundable financial assistance may be provided if the founder decides on defrayal of a worsened economic result under Section 55(2) c). Such refundable financial assistance, provided when the founder has decided on defrayal of a worsened economic result under Section 55(2) c), must be repaid by the end of the budgetary year during which the worsened economic result was to be defrayed.

    

6. A contribution of depreciation can be specified by the founder
   1. if it does not count of further advancement of activity by the contributory organization and gradually cuts down its activity,
   2. if it is contemplating its dissolution,
   3. if the volume of depreciation considerably exceeds realistic needs of the contributory organization in the area of replacement of long-term assets; in this case the total contribution of depreciation must not exceed the volume of real estate depreciation.

    

7. Contribution of depreciation shall be ordered always in the current year only up to the amount of resources created in that year.

1.  

2. The economic result of a contributory organization is an aggregate of the management of its principal activity and of after-tax profit in the additional activity.

    

3. If a contributory organization's economic result for the current year is loss-making after the contribution has been included (a 'worsened economic result'), the founder shall be obliged to discuss with the contributory organization ways of providing for its defrayal by the end of the next budgetary year. Defrayal of a worsened economic result shall be provided for
   1. from the contributory organization's reserve fund,
   2. from the chapter's budget, if there are insufficient means in the contributory organization's reserve fund,
   3. from profit after inclusion of the operations contribution or contribution from operations (an 'improved economic result') of the contributory organization in the next budgetary year if there are insufficient means in the chapter's budget as well.

    

4. If a worsened economic result is not defrayed even from the contributory organization's improved economic result under subsection 2 c), the founder shall dissolve the contributory organization by the end of the year which follows the year from whose economic result the worsened economic result was to be offset, unless the founder defrays it from the chapter's budget. If it is necessary, the activity hitherto provided by the contributory organization shall be performed by a state organizational unit. The ministry's consent shall not be required for that.¹

    

5. If the management by the contributory organization posts an improved economic result, it shall be given a priority in offsetting the organization's worsened economic result under subsection 2 c), and further to defrayal of a worsened economic result which occurred prior to thus act becoming effective.

    

6. The provisions of subsections 2 and 3 shall not apply to those contributory organizations financed from public health insurance and such contributory organizations which provide specialized sanitation and anti-epidemic services and constitute the base for exercise of state control in the protection of public health.

1.  

2. A contributory organization shall create the following financial funds:

   1. a reserve fund,
   2. an asset replacement fund,
   3. a recompense fund,
   4. a cultural and social needs fund.

    

3. If any worsened economic result from the previous year or years has been offset, the contributory organization shall divide its improved economic result into its funds as follows:
   1. the recompense fund: up to 20% of the improved economic result of the contributory organization, but at the most up to 20% of the limit of the means earmarked for salaries or of the permissible volume of the means earmarked for salaries,
   2. the asset replacement fund: up to 25% of the improved economic result of the contributory organization,
   3. the reserve fund: no restrictions.

    

4. Additions to the individual funds under subsection 2 shall be effected by a contributory organization on the basis of an approval by the founder of the approved economic result in the year that follows the year when the approved economic result was achieved.

    

5. Fund balances as of 31 December shall be rolled forward into the next budget year.

1.  

2. The reserve fund shall be created from an improved economic result under Section 56 (2) c), from accepted gifts and financial means provided from abroad, unless stated otherwise by this act.

    

3. The reserve fund's means can be used
   1. to offset a worsened economic result,
   2. to defray penalties,
   3. to replenish a current assets fund which is the source of covering the contributory organization's current assets, especially if there is a need to enhance current assets as a consequence of operating an additional activity,
   4. to offset worsened economic results that originated prior to this act's becoming effective under Section 55 (4),
   5. to replenish the asset replacement fund with the founder's consent,
   6. to temporarily bridge over the difference between income and costs.

    

4. During the year the reserve fund can be used to defray needs not secured by the contributory organization's income or by the founder's operations contribution only if the use has been budgeted. In this case the use shall be accounted into the contributory organization's income. Any unused portion budgeted to cover needs and transferred into the contributory organization's income shall be returned to the reserve fund prior to the compilation of the annual financial statements.

    

5. Purpose-earmarked financial gifts and means provided from abroad shall be used in line with their purpose.

1.  

2. The asset replacement fund shall be created

   1. from depreciation of tangible and intangible long-term assets,¹⁶
   2. of a contribution from an improved economic result,
   3. of income from the sale of long-term tangible and intangible moveable assets,
   4. from gifts and income from permitted public collections aimed at acquisition and technical appreciation of long-term tangible and intangible assets,
   5. of income from sale of real estate assets the contributory organization acquired as gift on behalf of the state, or by a transmission
   6. of means provided from abroad, purpose-earmarked for acquisition and technical appreciation of tangible and intangible long-term assets.

    

3. The asset replacement fund's means shall be used
   1. to finance acquisition and technical appreciation of tangible and intangible long-term assets,
   2. as an auxiliary source to finance repairs and maintenance of tangible and intangible long-term and short-term assets and to acquire tangible and intangible short-term assets,
   3. to defray credits accepted under Section 62 (3).

    

4. The asset replacement fund's means used to finance repairs and maintenance of assets under subsection 2 b) shall be accounted into the contributory organization's income.

    

5. When effecting a free-of-charge transfer of real estate assets to a state organizational unit or a contributory organization, the contributory organization concerned may simultaneously transfer from the asset replacement fund such means, which equal accumulated depreciation pertaining to these assets.

1.  

2. The recompense fund shall be created of contributions from an improved economic result.

    

3. The recompense fund shall be used to make up for a potential deficit in salaries; the amount of the deficit shall be ascertained pursuant to a special legal regulation.²⁹

The cultural and social needs fund shall be created by an essential contribution from the state organizational unit's budget from the annual volume of costs expensed as salaries, salary compensation or wages, wage compensation, remuneration for work emergencies, recompense and other consideration for work performed as part of professional training in productive activities paid to students at vocational facilities, fellowships to internal postgraduate researchers, and employees' study trips. The cultural and social needs fund is replenished on an advance basis from the annual planned amount in line with its approved budget. Reconciliation of the actual essential contribution shall be conducted as part of the annual financial statements. The fund shall serve to provide for cultural, social and other needs of the employees employed by the employer, servicemen in a service relationship, judges, students at secondary vocational facilities and vocational facilities, internal postgraduate researchers, retirees who at the time of their first old-age retirement or full-disability retirement worked for the employer, also family members of the employees and other bodies corporate and natural persons. Additional revenues, the amount of additions to and management of the cultural and social needs fund shall be specified by the ministry in a decree.

Contributory organizations shall defray contributions for violations of budget discipline and penalties

1. from their reserve fund; if there are inadequate means in the reserve fund, the contribution and penalties can be debited to cost of the principal activity,
2. from the fund concerned, if fund management rules have been breached; if there are inadequate means in the fund, the contribution and penalties can be debited to cost of the principal activity.

1.  

2. Financial gifts can be extended by a contributory organization only from the cultural and social needs fund.

    

3. A contributory organization can spend financial means on financial and in-kind awards only if so stipulated by a special legal regulation.

    

4. Contributory organizations shall be prohibited from accepting or granting loans and credits and to issue bills of exchange. The exception are contractor credits to finance programs, which can be accepted only with the ministry's consent, and, in respect of health care facilities, credits may be accepted to bridge over a temporary lack of financial means, provided that the lack has been caused by health insurance companies' belated payments for health care services.

1.  

2. Additional activities must be accounted separately from the principal activity. If the contributory organizations performs an additional activity, the subject and scope thereof must be added into the establishing charter before this activity starts.

    

3. If an additional activity is loss-making at 30 September, the statutory body of the contributory organization must make sure that the loss be offset by the end of the budgetary year or take measures to terminate the additional activity so that this activity could not continue after the lapse of the budgetary year.

1.  

2. If a state organizational unit or contributory organization is established by law and this act does not state who has the function of the founder vis-a-vis this state organizational unit or contributory organization, the function shall belong to the chapter administrator to whose chapter this state organizational unit or contributory organization is connected via financial links.

    

3. If the founder's consent is required for a remittance by a state organizational unit, and the need of such a remittance is incumbent precisely on the founder, the respective chapter administrator shall be authorized to give its consent, or the ministry, if the founder happens to be the chapter founder.

1.  

2. A budgetary limit shall refer to the amount of expenditures set in the course of a budgetary year, up to which amount it shall be possible to draw financial means from the state budget's expenditure accounts after having notified the bank about the limit. The limit notification shall be executed on a bank-approved form and signed and stamped by the chapter administrator and the pertinent state organizational unit, or a body corporate authorized to draw such funds. The bank's condition shall apply to the handling of such a form. Limit modifications shall be executed in the same fashion.

    

3. Every chapter administrator sets budgetary limits for its own budget management, for state organizational units and contributory organizations in its sphere of competencies, and further, chapter administrators set separate limits for disbursement of expenditures to finance programs under Section 13 (3) c), d) and e), and separate limits for disbursement of other subsidies and refundable financial assistance from the state budget for other body corporate . A chapter administrator shall be entitled to delegate its authorization consisting of setting budgetary limits for state organizational units and contributory organizations to a state organizational unit, which in an economic manner provides for another state organizational unit or contributory organization.

    

4. Limits for the drawing of means by a state organizational unit shall apply to
   1. current expenditures apart from those with limits under b), c) and d),
   2. employee salaries, other payments for work rendered, and insurance premiums,
   3. case-by-case evaluated expenditures pursuant to Section 13 (3) a) earmarked to finance specific undertakings,
   4. systemically-earmarked expenditures pursuant to Section 13 (3) b) intended to finance a specific program.

    

5. Limits shall be set for a contributory organization for
   1. disbursement of the founder's contribution for the organization's operations,
   2. disbursement of individual subsidies pursuant to Section 13 (3) c) provided for specific undertakings,
   3. disbursement of systemic subsidies pursuant to Section 13 (3) d) provided for specific undertakings,
   4. disbursement of refundable financial assistance pursuant to Section 13 (3) e) provided for specific undertakings.

    

6. No limits shall be required for disbursement of social security benefits and for disbursement of expenditures from the General Treasury Administration chapter.

    

7. The ministry can set expenditure limits under subsections 2 through 4 if it is necessary to provide for a treasury balance of the state budget or if breaches of the legal regulations have been noted in the sphere of competencies of a chapter administrator.

    

8. Budgetary limits shall be set as a rule for the period of one quarter at the most. A contributory organization shall transfer the contribution for activity to its account up to the limit set by its founder. Subsidies provided to finance asset replacement shall be drawn by contributory organizations by direct defrayal of a action's need financed by an individual subsidy, and its needs financed as part of systemic subsidies from a respective budgetary expenditure account.

    

9. Modifications of expenditure limits shall be executed even for permitted overdrafts of the budgeted expenditures and for tie-ups of state budget means.

    

10. The limits shall expire as of 31 December of the current budgetary year.

1.  

2. No financial payments shall be arranged for performance of their subject of activities between state organizational units within the sphere of competencies of a single chapter administrator. The same applies to a state organizational unit and a contributory organization established by the former.

    

3. State organizational units render no compensation for the use of real estate managed by another state organizational unit or contributory organization.

1.  

2. In justified cases, state organizational units and contributory organizations shall arrange to their employees for petty and pressing expenditures spent in the interest of the state organizational unit or contributory organization cash advances for the statement

   1. in the expected amount of the expenditures as one-time advances for which a statement shall be prepared no later than 10 days after the fulfillment of the purpose they were made for, or
   2. in the amount of projected one-month consumption as standing advances for which a statement shall be prepared no later than 10 days after the end of the calendar month.

    

3. Employees who received one-time or standing advances shall have to file their statements so that any expenditures made from these advances could be included in costs of that year in which the advances were extended; employees of state organizational units must file their statements so that unused means are not debited to the budget of the year in which the advances were made.

    

4. If the expenditure for which a one-time advance was made cannot be realized, the employee shall have to return the advance no later than the next working day of having noted this fact. It shall be possible to make a one-time advance for the same purpose to an employee only after the previous advance's statement has been filed. Subsequent augmentation of a one-time advance shall not be considered a new advance.

    

5. The advances under subsection 1 shall be extended only to those employees with whom the employer has concluded a written agreement on material accountability pursuant to a special legal regulation.²⁷

    

6. Subsection 1 through 4 shall not apply to advances provided for reimbursement of travel costs under a special legal regulation.³⁰

1.  

2. In their own facilities that provide education and accommodation, state organizational units or contributory organizations pay for

   1. acquisition and technical appreciation of assets,
   2. expenditures or costs associated with the operation of such facilities, maintenance and repair included.

    

3. If their own facilities under subsection 1 are exploited also for recreational or sports purposes, prorated payments for expenditures or costs under subsection 1 b) shall be remitted on such activity from the cultural and social needs fund.

    

4. In respect of facilities that provide accommodation, remittances for accommodation shall correspond to expenditures and a prorated portion of depreciation, or costs associated with the service provided under b).

    

5. State organizational units or contributory organizations can contribute up to 50% for its own employee, unless specified otherwise by a special act.

Meals in company cafeterias shall be provided by a state organizational unit or contributory organization in its own facilities housing a company cafeteria or through another state organizational unit, body corporate or natural person for its own employees, students of secondary vocational facilities or special vocational facilities, vocational facilities, if their meals are not catered under special legal regulations, for pupils, students and postgraduate researchers during the period of their activities at the state organizational unit or contributory organization if their meals are not catered under special legal regulations. A state organizational unit or contributory organization can, in line with its collective agreement, provide company meals at the cafeteria facility where it provides meals for its own employees, also to retired persons who worked for that state organizational unit or contributory organization at the time of their retirement, as well as to employees evolving activities on the basis of agreements concerning jobs conducted outside of employment relationship for the state organizational unit or contributory organization. A state organizational unit or contributory organization can also provide company meals to those citizens on whose behalf it has entered into an agreement on company meals with another state organizational unit, body corporate or natural person , and to such employees of different employers who happen to be on a business trip at that state organizational unit or contributory organization or evolve other activities for it. Company meal costs and defrayal of these shall be regulated by the ministry in a decree.

1.  

2. A state organizational unit can insure only the Czech Republic assets upon its founder's consent.

    

3. A contributory organization can insure only the Czech Republic assets under its management.

    

4. Income from insurance events can be used by the state organizational unit solely to rectify damages caused by that insurance event. The unused balance of indemnification shall be transferred by year-end to its reserve fund and used for same purposes in the same manner in the following years.

    

5. Insurance premiums that are different from those under subsections 1 and 2 can be paid by state organizational units and contributory organizations only if so stipulated by a special act.³¹

1.  

2. State organizational units and contributory organizations shall defray expenditures associated with the participation of their employees at professional conferences and other professional events (the 'conferences'), provided that the program of such events is related to the activity of those state organizational units and contributory organizations.

    

3. A conference held by a state organizational unit or contributory organization must be approved by the founder and included in the approved budget of the state organizational unit or contributory organization. The conference's budget must be balanced out with fees paid by the attendees. Section 66 shall not apply to the defrayal of attendance fees.

    

4. If the conference is of international character and organized pursuant to bylaws of an international organization whose membership includes the Czech Republic, the amount totaling the specified share of the participation in the conference by that state organizational unit or contributory organization must be stated as a binding indicator in a chapter for the relevant budgetary year. If the need arises to remit for a portion of the participation by the state organizational unit or contributory organization, which could not be budgeted, it is the government that shall approve the budgetary measure securing the requisite financial means.

1.  

2. Association agreements pursuant to a special legal regulation³² shall be concluded by a state organizational unit or contributory organization only for the purpose of underwriting operating activities for which the state organizational unit or contributory organization has been authorized and for which it has necessary resources earmarked in its budget.

    

3. An association agreement shall make sure that the relevant state organizational unit or contributory organization make good use of its facilities, outputs or other benefits commensurate with its share of the pooled means.

    

4. The state organizational unit keeps received pooled means up to the period of their utilization in a special account, whose unused balance at year-end shall be rolled forward into the following years. Earned interest on this account shall constitute income for thus account and bank charges shall constitute this account's expenditures.

The Czech Republic shall be entitled to provide state guarantees only if stipulated by a special act.

The state guarantees the liabilities of contributory organizations arising in connection with the main activity performance.

A state organizational unit, a contributory organization and the subsidies recipients shall financially settle the relationships with the state budget in deadlines and in line with the principles which shall be stipulated by the ministry in a decree.

The government shall decide on the use of balances of the reserve and development funds held by county authorities posted at the effective date of this act.

1.  

2. The legal regulations in force until now shall apply to state budget means provided prior to this act's effectiveness and to state guarantees provided prior to this act's effectiveness.

    

3. Should the total volume of state guarantees provided prior to this act's effectiveness exceed 40% of total expenditures of the state budget as approved by the state budget act for the relevant year, new state guarantees shall be provided only after the volume of guarantees has been reduced below that mark.

Budgetary discipline violations, which occurred prior to this act's effectiveness, but noted while this act is effective, shall be evaluated pursuant to the legal regulations in force until now. Penalties not exceeding in separate cases CZK 3,000 shall not be levied.

Repayment installments on governmental credits granted prior to this act's effectiveness and being repaid while this act is effective shall constitute state budget revenues.

State funds established pursuant to the valid legal regulations shall be obliged to amend their legal relations in line with this act within two years after this act's effectiveness.

The following shall be repealed:

1.  

2. Act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules),

    

3. Act No.166/1992 Coll., which amends and supplements Czech National Council act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules), as amended by Czech National Council act No.579/1991 Coll.,

    

4. Act No.57/1995 Coll., which amends Czech National Council act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules), as amended,

    

5. Act No.154/1995 Coll., which amends Czech National Council act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules), as amended,

    

6. Act No.160/1997 Coll., which amends Czech National Council act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules), as amended.

In Section 1(1) of Act No.337/1992 Coll., on administration of taxes and fees, as amended by Act No.35/1993 Coll. and Act No.255/1994 Coll. the words "of amounts used in an unauthorized manner or budgetary means withheld" shall be superseded by the words "of contributions for budget discipline breaches1)" and the footnote No.1 shall have the following wording:

"¹⁾ Section 44 of act No…../2000 Coll., on budgetary rules and on amendments of certain relating acts (budgetary rules)."

Amendment to Act No.531/1990 Coll., on territorial financial authorities, as amended

Section 83

In section 1(1)b) of Act No.531/1990 Coll., on territorial financial authorities as amended by Act No.311/1999 Coll., the words 'budgetary means used or withheld in an unauthorized manner" shall be superseded by the words "of contributions for budget discipline breaches" and the footnote No.1a shall have the following wording:

"^1a) Section 44 of act No…../2000 Coll., on budgetary rules and on amendments of certain relating acts (budgetary rules)."

Amendment to Act No.579/1991 Coll., on the state budget of the Czech Republic for the year 1992 and on amendments and supplements to Czech National Council act No.576/1999 Coll., on management rules concerning budgetary rules of the Czech Republic and municipalities in the Czech Republic, as amended by Act No.516/1992 Coll.

Section 84

In Act No.579/1991 Coll., on the state budget of the Czech Republic for 1992 and on amendments and supplements to Czech National Council act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules), as amended by Act No.516/1992 Coll., Part Two shall be repealed.

Amendment to Act No.321/1992 Coll., which amends and supplements Czech National Council act No.425/1990 Coll., on county authorities, regulation of their competencies and on some other related measures, as amended

Section 85

In Act No.321/1992 Coll. which amends and supplements Czech National Council act No.425/1990 Coll., on county authorities, regulation of their competencies and on some other related measures, as amended by Czech National Council act No.266/1991 Coll., and Czech National Council act No.542/1991 Coll., Article III shall be repealed.

Amendment to Act No.10/1993 Coll., on the state budget of the Czech Republic for 1993, on amendments and supplements to certain Czech National Council acts and certain other regulations as amended

Section 86

In Act No.10/1993 Coll., on the state budget of the Czech Republic for 1993, on amendments and supplements to certain Czech National Council acts and certain other regulations, as amended by Act No.166/1993 Coll., Act No.172/1993 Coll., Act No.331/1993 Coll., Act No.85/1994 Coll., Act No.117/1995 Coll., Act No.236/1995 Coll., and Act No.48/1997 Coll., Part Four shall be repealed.

Amendment to Act No.189/1993 Coll., which amends and supplements Czech National Council act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules), as amended

Section 87

In Act No.189/1993 Coll., which amends and supplements Czech National Council act No.576/1990 Coll., on management rules concerning budgetary means of the Czech Republic and municipalities in the Czech Republic (The Republic's budget rules), as amended by Czech National Council act No.579/1991 Coll., Czech National Council act No.166/1992 Coll., Czech National Council act No.516/1992 Coll. and Czech National Council act No.10/1993 Coll., and supplements Act No.424/1991 Coll., on association in political parties and in political movements, as amended by Act No.468/1991 Coll., and Act No.68/1993 Coll., Article I shall be repealed.

Amendment to Act No.160/1995 Coll., which amends and supplements certain acts in relation with the adoption of the retirement insurance act, as amended

Section 88

In Act No.160/1995 Coll., which amends and supplements certain acts in relation with the adoption of the retirement insurance act, as amended by Act No.48/1997 Coll., Act No.134/1997 Coll., Act No.225/1999 Coll. and Act No.360/1999 Coll., Article XV shall be repealed.

Amendment to Act No.360/1999 Coll., which amends and supplements certain acts in relation with the adoption of act on social and legal protection of children

Section 89

In Act No.360/1999 Coll., which amends and supplements certain acts in relation with the adoption of act on social and legal protection of children, Article VII shall be repealed.

Effectiveness

Section 90

This act shall become effective on 1 January 2001.