Budgeting practice of local government units in Serbia

Brnjas, Zvonko and Dedeić, Predrag (2013) Budgeting practice of local government units in Serbia. In: Post crisis recovery. Belgrade Banking Academy, Belgrade, pp. 470-486. ISBN 978-86-7852-034-1

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Abstract

Budget and finance management is one of the key functions of Local Governments (LGs), through which they perform their competencies: their own, as well as those which are delegated by higher levels of the Government. LGs use a number of management tools in conducting the budgeting process (planning, executing and controlling), among which specific budget models and formats are very important and particularly effective instruments. This article elaborates the most widespread budget models in LG practice such as Line-Item Budgeting, as well as specific ones such as Zero-Based Budgeting, Performance Based Budgeting, and finally the most advanced, such as Program Budgeting. The major features (advantages as well as disadvantages) of each of those budgeting models are briefly presented and discussed. In the following sections current budgeting practices in Serbian local government units are analyzed and evaluated in respect to the LG reform process which has been initiated during the 2000s. The general goals of the reform process which refer to improvement of the efficiency and transparency of the budget process and accountability of the main players in planning, executing and controlling public finance at the local governmental level - could be significantly affected by the selected and implemented budgeting models. In respect to this the prospective of improving the current LG budgeting practice through introduction of more advance budgeting models such as the performance-based and program budgeting are elaborated and discussed in more detail.

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