2. Background for the Kosovo General Budget

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2 2. Background for the Kosovo General Budget This guidance is preliminary and may change based on work now underway on policy priorities. Changes may occur in the timetable for the following reasons: Discussions are ongoing with international organizations, including the International Monetary Fund (IMF), the World Bank, and the European Union, regarding economic forecasts, including revenue and expenditure projections. Based on these discussions, the Government may choose to modify its revenue estimates and expenditure targets for 2008 and subsequent years. The Government is in the process of discussing its policy priorities for , building on the Kosovo Development Strategic Plan (KDSP). The outcome of these discussions will further inform development of the 2008 budget and will be communicated to budget organizations as more information about priorities becomes available. Because the timing of a change in Kosovo s legal status is uncertain, alterations may be made to the process and timetable described in this circular. If questions are raised regarding the guidance in this circular, Municipalities should feel free to consult with their analysts in the Department of Municipal Policies and Budget within Ministry of Finance and Economy s (MFE). 3. The Context for Preparation of the 2008 Kosovo General Budget The development of the 2008 Budget for Kosovo will be especially challenging and will therefore require close cooperation of everyone. The following provides the context for this year s budget development: Government Policy Priorities The Government is currently discussing its priorities for public expenditure, with the understanding that these will guide 2008 budget development and decisions. The process of setting priorities builds on the work done in 2007 on the Kosovo Development Strategic Plan (KDSP) and the contributions of the KDSP technical working groups representing various economic sectors. At the Prime Minister s request, the MFE is leading and providing technical support for the priority setting process. The focus of these priorities is to create Rapid Sustainable Economic Growth for the Benefit of all Citizens of Kosova. These priorities include: Governance and the Rule of Law, Energy, Education, Transportation, Facilitating Private Sector Development, and More Effective Delivery of Public Services. All of these priorities must be pursued in a way that is consistent with Kosova s long-term desire to enter the EU. However, these priorities are considered to be key clusters of issues that must be addressed in order to generate more rapid economic growth, and do not automatically indicate areas of spending growth. 2

3 Medium Term Expenditure Framework The MFE is also preparing a Medium Term Expenditure Framework (MTEF) that will give more specific numerical guidance to Budget ceilings for the years , within the context of the Macroeconomic Projection. The MTEF is the bridge from the KDSP to the 2008 budget. It is expected that fiscal discipline within the MTEF will be reinforced by a Letter of Intent that will be recommended by the IMF. In addition to providing Government-wide budget expenditure targets for the three-year period, it will place spending in the context of Government priorities, including detailed analyses of seven key spending sectors: 1 Energy 2 Transportation 3 Education 4 Agriculture 5 Health 6 Private Sector Development 7 Social Cohesion Budget organizations with responsibilities in these functional areas should assist MFE staff in drafting of sectoral analyses upon request. It is anticipated that the MTEF will be prepared by the end of April, when it will be made available in draft to budget organizations as an additional guide to their budget development. The MTEF will be updated annually. There has been the suggestion that donors could make some, possibly significant, contributions to the KCB. The MTEF will seek to incorporate these possibilities in a responsible way that is in accordance with the priorities indicated in the KDSP. 4. Continuation of Municipal Budget Process Reforms The 2008 municipal budget process will build on the last year reform program. Municipalities should refer to general instructions provided in the last year first budget circular and training materials for detailed overview of reforms. In particular, Municipalities should respect the principles of medium term budget framework, program budgeting (budget planning by directorates/programs in accordance with internal budget instructions), using forward estimates, and PIP during the 2008 budget preparation. In order to enhance budget certainty for Municipalities, the level of intergovernmental transfers for municipalities will be determined by the Grants Commission early in the budget process, including grants for the planned budget year and grants forecasts for following two years. This will enable Municipalities to plan their budget based on a more certain stream of funding. It is envisaged that the Grants Commission in April determines and approves the aggregate amount of intergovernmental transfers and initial 3

4 financing for each Municipality using formula based methodology. The initial amount of financing for each Municipality will be communicated through the second Budget Circular and will represent preliminary assessment, which could be subject to further changes if macro-fiscal outlook for the next three years changes. In addition to that, in their budget submissions, each Municipality will include the projection of property tax revenues separately from municipal own source revenues. Property tax revenues forecasts for 2008 and projections for consequent years will not be lower than the collections in previous years, and will be in accordance with the revenue objectives for Property Tax Incentive grant. All Municipal Assemblies no later than September, 2007 will approve the Property Tax Regulations for 2008, setting out tax zones and rates, while one copy of the regulations will be attached to the municipal budget submissions. Approved regulations for property tax will determine tax rates and property values in accordance with property tax revenue projections, while taking into account current collection rates/percentages Municipal Medium Term Budget Framework The Municipal Budget process will build on the Municipal Medium Term Budget Framework (Municipal MTBF) developed last year. Immediately after receiving from the Ministry of Finance and Economy information on the initial level of intergovernmental transfer Municipal authorities (i.e., Chief Financial Officer) shall review and update the last year MTBF and shall submit completed Municipal KAB through the Board of Directors and the CEO, to the Policy and Finance Committee (PFC), a complete draft Municipal MTBF by no later than May 20, The Board of Directors shall recommend the Municipal MTBF to the PFC. The Municipal MTBF should set forth the following for the next three fiscal years: (a) Economic and budgetary forecasts and assumptions (b) Municipal development strategy (c) Aggregate estimates of revenues from all sources, including intergovernmental transfers consistent with amounts advised by the Minister of Finance and Economy, and municipal own source revenues including citizens participations, consistent with own economic and budgetary assumptions contained in the Municipal MTBF (d) Aggregate targets for expenditures on directorates by economic categories of expenditure (e) Estimates of expected donor support, including individuals, international donor and international government agencies. In developing the draft Municipal MTBF, the CFO shall consult with the community and key stakeholders. Consultation shall include public meetings to discuss priorities and strategies. The Policy and Finance Committee (PFC) shall also hold one or more properly warned public meetings to discuss priorities and strategies after receipt of the draft 4

5 Municipal MTBF. The PFC shall approve a Municipal MTBF document, which shall be published by 15 June, 2007 and a copy submitted to the MFE. We recommend those Municipalities who do not have municipal development strategy to start immediately its development and preparation, in order to have more time for the budget development following the issuance of Budget Circular 2008/ Directorate and Program Budgeting The 2007 Municipal Budget process initiated the first mandatory stages of program budgeting. The 2008 municipal budget process will enforce utilization of program budgeting at the level of Directorate. Emphasis will be placed on objectives, strategies, and outputs and outcomes sought through the budget process. In many cases Municipalities have already made progress in defining programs and objectives. The Municipal Budget submissions will be prepared according to five economic categories for budgeted expenditures consistent with following definitions issued by the Treasury: Wages & Salaries, Goods & Services, Municipal Utilities, Subsidies & Transfers, and Capital Expenditures Using Forward Estimates Municipalities will be required to use three year rolling forward estimates prepared at a Directorate level. This concept means that the estimated costs (or baseline estimates) of ongoing Municipal programs will be published for the Budget and following two years (these two years are referred to as forward estimates). While a three year budget will be published, only the Budget year funding will be appropriated on a cash basis. As part of the budget process, these estimates will, subject to resource constraints and approval by relevant authority, be updated for approved parameters that determine the changes in the costs of these programs. When a budget year concludes, the estimate of the costs of these ongoing programs in the second year (forward estimate 1 or FE1) will become the base for the new budget year. This will significantly reduce workload, as resourcing needs for ongoing programs are agreed (and updated for agreed parameters) and only requests for funding for new programs and options for program savings need to be considered in detail during the budget development process. Further explanation of rolling forward estimates is set out below and in Attachment A. Recurrent Spending Municipalities should recognize in their budget planning that recurrent budget expenditures will decrease compared with The reasons for the projected decrease include the following: The Government s commitment to reduce civil service staffing by 2008, compared with 2005 levels, largely through attrition. 5

6 The projected drop in prices in 2008, compared with 2007, meaning that each euro will buy more in 2008 than it does in This means that the decrease in the target for recurrent spending is not as severe as it appears. Capital Spending Planned municipal capital expenditures should be evaluated in the context of the following: Municipal Development Strategy in order to address local development and investment needs. Consistency with Government policy priorities and (when available) the Medium Term Expenditure Framework. Municipal budget organizations should aim at developing capital proposals that will contribute to the achievement of the the Government s priority goals for Public Investment Program (PIP) Based on the last year experience and practice Municipalities will be required to prepare PIP analyses for all public investment projects (almost entirely capital expenditure projects). Proposals that lack a PIP analysis will not be considered for funding. PIP proposals will include both those proposed for KCB funding consideration and for donor funding, too. They should include projects that would be initiated in 2008, 2009 and 2010 not just projects that would be initiated in Municipalities will receive additional information on the PIP process, as well as PIP training, in the near future. We encourage all Municipalities to start preparing their capital project requests as soon as possible. This should avoid subsequent delays. Project proposals that were submitted to the PIP process last year, but were not funded, can be resubmitted some updates may be required to reflect changed circumstances. The forms that were used in along with other instructions can be obtained from the MFE website: or contact the MEF Budget Analyst Budget Data Management System Municipalities have already been notified that the Budget Data Management System (BDMS) is installed and available for use by budget organizations. Training on the system will be available to ensure that all Municipalities understand how to use the system. After this training, all Municipalities will be obliged to insert data in BDMS independently. In cases in which budget organizations fail to use BDMS, they will face problems accessing their budgeted funds. 1 Note that updated forms, supported by new systems, are planned for investment proposals submissions during However, the forms will be similar to those used in 2005 and information entered into last year s MSWord-based forms can be copied to the new systems using copy-paste functions. The new systems are planned to be implemented by June 2006 for submission of PIP proposals. It is intended that proposals submitted last year will be loaded into the new system. 6

7 If your staff has questions or problems pertaining to the use of BDMS, they are encouraged to contact their budget analysts within the Department of Municipal Policies and Budgets or with Arjeta Rukovci, the Budget System Administrator at tel 038/ The Municipal Budget Process Stages The following section sets out the Municipal Budget timetable and summarizes the steps and action requirements of the Municipal Budget process. Step 1: Establishing Municipal Medium Term Budget Framework The first step in the development of the Municipal Budget will be to review economic and fiscal environment (including information on the level of available financing from the intergovernmental transfer), to agree the Municipal Medium Term Budget Framework (Municipal MTBF), and to announce Municipal development priorities and strategy for the following three years. Municipalities should use the last year MTBF document in order to introduce necessary revisions and updates. The Municipal MTBF should include a set of aggregate fiscal outcomes that are to be sought over the medium term. These aggregates should include total revenue and expenditure targets, as well targets for how expenditure should be divided between key economic categories. The Municipal MTBF and the fiscal targets included should be set at a high level and not seek to focus on the finer details, such as spending for particular programs or agencies. Projected revenues planned to be collected from property tax must be forecasted based on the current number of issued invoices, their valuation and current percentage of the collection. The Municipal MTBF should also set out the policy priorities that the Municipality is seeking to achieve through the development of the Budget consistent with the overall Municipal Development Strategy. These would be expected to be 3 to 4 key priorities focused on important economic and/or social outcomes that are being sought by the authorities. These might include for example job creation and/or improving education. Action required: 1. The MFE communicates information on the initial level of intergovernmental transfer foreseen for the Municipality for the next three years as recommended by the Grants Commission by April 30, The CFO develops and submits through the Board of Directors to the Policy and Finance Committee the draft Municipal MTBF by May 20, Consultations shall take place with the community and key stakeholders, including public meetings to discuss Municipal priorities and strategies. The CFO 7

8 consultations shall take place until May 15, the PFC consultations between May 20 and June The PCF approval, publication of the Municipal MTBF and submission to the MFE by June 15, Transition Step: Preparation of the 2008 Forward Estimates (Prepared by the CFO with the assistance of Directorates) In order to introduce rolling forward estimates, it is a prerequisite to have accurate costing of ongoing approved Municipal programs and to identify the parameters to be used to update them. This transition step will require the CFO, in cooperation with municipal budget programs and directorates, to prepare such estimates by program in accordance with the approved budget ceilings. Step 2: Municipal Directorates Priority Review This step will require Directorates to conduct a review of policy issues and priorities in their area of responsibility. Existing programs should be assessed in the context of the Municipality s overall policy objectives and any sectoral strategies that have been developed. In accordance with Municipality s wide priorities (where available), each Directorate should also provide a summary listing of high priority new policy proposals to be proposed for the Municipal Budget process (i.e., expected to commence in each year), together with potential savings options of low priority and poor performing programs. Initial indicative estimates of costs should be included together with proposed performance targets. Proposals for new capital spending should be supported by analysis of the benefits and costs of the project (where available) and consistency with Municipal priorities. A new policy proposal is defined as a request for funds for (a) a new program (including a new capital project and including new legislation that has a fiscal impact); (b) extensions of an existing program whose authority is due to expire; or (c) an expansion of an existing program. A savings option can be (a) a proposed reduced in expenditure in a program because of proposed efficiencies or reductions in the level of service or (b) the proposed abolition of a program that is no longer needed; under performing or of low priority. The priority reviews will give Directorates an opportunity to compete in the priority setting process at an early stage of budget development and before decisions are made on hard budget ceilings. If a proposal or option is approved (in principle) by the Policy and Finance Committee of the Municipal Assembly during this initial process of priority review, the Directorate will provide a more detailed request as part of its budget submission later in the budget process. The process is also intended to expedite priority setting by enabling the Policy and Finance Committee to tick and flick proposals in accordance with the Municipality s social and economic goals. 8

9 Action required: 1. The CFO shall issue Internal Municipal Budget Circular #1 providing instructions on the completion of the Directorates priority review by June 15, Directorates shall be required to prepare their Priority Review submissions by no later than June 30, The Policy and Finance Committee of the Municipal Assembly shall approve the Priority Reviews by July 5, The Policy and Finance Committee shall hold consultation meetings with each Directorate of its Municipality. The purpose of these meetings will be to reach agreement on the rationale for new program/policy initiatives and indicative costing. (As noted, at this stage program proposals should be simply identified as one-line proposals to enable decision makers to quickly review emerging needs and priorities and to determine which projects should be further developed during the next steps.) Step 3: Initial Department-Specific Ceilings Following the decision of the Policy and Finance Committee on the Priorities Review the CFO of the Municipality shall, by July 10, develop and submit to the Policy and Finance Committee a document establishing directorate-specific expenditure ceilings for each of the next three (3) fiscal years (Municipal Internal Expenditure Ceilings). Such Municipal Internal Expenditure Ceilings shall be consistent with the Municipal MTBF and the Budget Circular issued by the MFE. The Municipal Policy and Finance Committee shall immediately review and approve (or disapprove or change) such Municipal Internal Expenditure Ceilings. During its review, Policy and Finance Committee may modify the Municipal Internal Expenditure Ceilings proposed by the municipality s CFO provided, however, that any modifications will be consistent with the Budget Circular. The CFO shall immediately issue to the Directors of municipal functional units/directorates/programs Internal Municipal Budget Circular #2 providing information and instructions on the expenditure ceilings applicable for the next three (3) fiscal years and the methodology and formats to be used in preparing proposed budget requests. Such budget circular shall include: (a) (b) (c) (d) the procedures to be used by the functional units/directorates/programs in preparing their proposed budgets and appropriation requests the information that must be set forth in such proposed budgets requests details on the format in which such proposed budgets requests must be prepared; and the date by which the functional units/directorates/programs must complete and submit to the CFO such proposed budgets requests 9

10 In order to maintain budget discipline, municipal directorates/programs will be required to strictly adhere to the budget ceilings. Action required: 1. Directorates/programs-specific initial budget ceilings shall be determined by July 10, Internal Municipal Budget Circular #2 shall be immediately issued to all directorates providing information on approved directorates/programs-specific ceilings and instructions for the preparation of budget submissions. Step 4: Budget Submissions The Budget Submissions are the means by which Directorates present their budget estimates and detailed new policy proposals and savings options in the context of a medium term fiscal strategy (and in accordance with the initial budget ceilings). The Budget Submission shall be designed to simplify information gathering and streamline the work of the Policy and Finance Committees. By using the rolling forward estimates approach, and recognizing that most Municipal programs continue from year to year, the focus of budget decision making will be on proposals for new and/or additional spending programs and those subject to possible savings in the context of the current fiscal position. Municipal Offices for Property Tax will provide their recommendations on valuation zones and tax rates in order to achieve forecasted property tax budget revenues. Action required: 1. Budget directorates will forward their Budget Submissions to the CFO by the date specified in Internal Municipal Budget Circular #2. Step 5: Budget Hearings Once the time limit specified in the Internal Municipal Budget Circular #2 expires, the CFO will (i) review the proposed budgets received from each functional units/ directorates/programs, and (ii) conduct hearings for the purpose of reviewing and understanding proposed budgets and attempting to resolve issues and concerns regarding such proposed budgets, especially as regards their consistency with the initial department-specific budget ceilings. Action required: 1. The CFO shall issue the Internal Municipal Budget Circular #3 to provide the timetable and requirements for Budget Hearings. 2. Budget hearings shall be conducted in August, Budget Hearings shall be properly warned and conducted as public hearings. 10

11 4. The Policy and Finance Committee shall approve Final Budget Ceilings after taking into consideration the results of the Budget Hearings. Step 6: Final Budget Ceilings and Budget Documentation After receiving the PFC s approvals and after the budget hearings, the CFO will prepare and deliver to the Board of Directors and CEO a proposed Municipal Budget for each of the next three (3) fiscal years in a format consistent with the Budget Circular issued by the MFE and consistent with the decisions of the PFC. The CFO shall simultaneously distribute to the functional units/departments/directorates the proposed budget for the next fiscal year. The proposed budget shall be consistent with the Municipal MTBF. Upon receiving the proposed Municipal Budget the Board of Directors shall, within the next seven calendar days, hold a special meeting for the purpose of reviewing, modifying and approving this document; provided, however, that any such modifications shall not cause this document to become inconsistent with the Municipal MTBF. Step 7: Review of Municipal Budget Once the Board of Directors has approved a proposed Municipal Budget for the next three fiscal years, including supporting documents as required by the MFE, the CFO will submit the proposed Municipal Budget documents to the Municipal Assembly. Budget Summary documents for publication, distribution, and the use of the Municipal Assembly and the public shall also be submitted with the detailed budget documentation. In this summary budget documentation has to be included municipal regulation that sets out valuation areas and tax rates, which prior to that submission, will be debated and approved by municipal assemblies. The list of mandatory budget documents is included in Attachment B. The Assembly shall consider them at its next regularly scheduled meeting or at an earlier special meeting called for the purpose of reviewing such documents. It is recommended that the Municipal Assembly hold a properly warned special meeting for soliciting public input to the budget and its consideration and approval. This meeting should include media coverage and public budget address from the CEO and Municipal Assembly President, and it is recommended that it be a Town Hall Meeting in conformance with UNMIK Regulation 2000/45. Action required: 1. The Municipal Budget and supporting information will be submitted for the approval to the Municipal Assembly by no later than September 15, The Municipal Assembly must hold one or more properly warned public meetings to secure public input on the budget, consider the budget, and approve it. Step 8: Municipal Budget Approval by the Assembly and Transmission to the MFE 11

12 Once approved by the Municipal Assembly, Municipal Budget and its supporting documentation, including regulation on property tax, shall be submitted to the MFE. Consistent with the aim of fiscal transparency and accountability, budget documents shall be made available to the public. Action required: 1. Municipal Budget approved by the Municipal Assembly will be submitted to the MFE by September 30, 2007 in hard copy, with adequate signatures and official protocol addressing, and in electronic copy, in three languages. 5. Training and Further Information The Ministry of Finance and Economy will be providing training to Municipalities that relate to the Budget development. Initial training seminars will provide an overview of the revised processes for both budget officers and program managers. Follow up training will include more specific training modules on each of the key stages of the budget. The timetable and agenda for respective trainings will be provided to Municipalities by a separate communication. 6. Transparent Distribution of the Budget Circular in the municipal level Municipal authorities are required to distribute this Budget Circular to all municipal officials engaged in the budget development process, respectively members of PFC and Directors of programs. All Municipal authorities are responsible for scheduling their involvement and activities in accordance with budget development timetable in order to fully support budget preparation, compliance with budget instructions, and timely finalization and approval of municipal budget. 7. Additional Information For your information and benefit, please find attached the 2008 Kosovo General Budget Timetable (Attachment C). Municipalities shall respect the Municipal Budget development timetable as described in Steps 1-8 above. Haki Shatri Minister of Finance and Economy Attachments: ATTACHMENT A GUIDANCE ON THE FORWARD ESTIMATES ATTACHMENT B LIST OF BUDGET SUBMISSION DOCUMENTATION ATTACHMENT C 2008 BUDGET SCHEDULE KOSOVO GENERAL BUDGET ATTACHMENT A 12

13 FORWARD ESTIMATES Forward estimates approach recognizes the fact that most of the programs do not change from year to year, i.e. primary and secondary education, health care etc and will continue to preserve earlier the approved levels of standards and quality. Budgets prepared using forward estimates reflects expenditures estimates for each of the budget organizations program for the current budget year, plus two subsequent years (FE1 + FE). When starting with the budget preparation, first year of forward estimates (FE1) of current budget is the baseline for the subsequent year. Therefore, there is no need to develop budget assessments from the zero bases. Potential adjustments for the increased costs, new approved policies or savings will be added on the top of FE1 in order to prepare new budget assessment for the subsequent budget year, i.e.: Budget assessment v1 = FE1y0 + parameters adjustment + New expenditures initiatives savings It is important that final budget and forward estimates are the only reflection of the approved policies and programs continual costs (i.e. they have to exclude possible or wishful proposals of policies, continuation or lapsing of programs or expansion of existing programs). Using of forward estimates contributes in the improvement of fiscal discipline since they limit the possibility to change the assessments from year to year. This ensures greater security for the following years financing for budget organizations, enabling them to improve their planning. This also reduces the workload of all involved parties in the budget development, leaving more space for the debate on budget allocations focusing on strategic policies and budget priorities (new policies and savings), rather than in technical issues related to the preparation of estimates from the baseline. 13

14 Forward estimates can be explained as following: 2007 Budget Estimates Program Name Budget year (2007) Forward Estimates 1 st year (2008) Budget and forward estimates (final allocation 2007) Program A (final budget allocation 2007) Budget and forward estimates 2008 Budget year (2008) Program A (baseline) Forward estimates 2 nd year (2009) Forward estimates 1 st year (2009) Budget adjustments Program A (final budget allocation 2008)) Budget and forward estimates 2009 Budget year (2009) Forward estimates 2 nd year (2010) Forward estimates 1 st year (2010) Program A (baseline) Budget adjustments Program A (final budget allocation 2009)) Arrows shows how estimates are being forwarded from year to year. Forward estimates 2 nd year (2011) 14

15 ATTACHMENT B List of Budget Submission Documents 1. Cover letter for the budget request submission (signed by CEO and CFO) 2. Municipal Assembly decision on Municipal Budget approval for Standard tables for Municipal Budget Planning: a. Grants and revenues total of expenditures and financing b. Municipal Budget distribution table c. Summary Table C 4. BDMS - PCF-s 5. List of approved capital projects PIP forms 7. Approved Property Tax Regulation Revenue Plan 2008 (OSR- 8) 9. Municipal MTBF Annual Plan of projects and expenditures for minorities for 2008 (see Administrative Instruction 2006/09 for FSF) 11. Complementary table for the education and health data s 15

16 ATTACHMENT C The Budget Schedule for the Preparation of the 2008 Kosovo General Budget The budget schedule for the next nine months is outlined below it is the current best estimate of the schedule and is subject to change. April 09. Issuance of Budget Circular 2008/01 and Status Cost.. This circular provides information to budget organizations on the commencement of budget planning process for , respectively on the budget calendar, fiscal message, government priorities, and the need for additional information on the post status cost related to the transfer of responsibilities April 20. Tentative date of Government meeting to discuss key budget priorities for April 23. Submission of post status costs related to the transfer or responsibilities May 04. Budget organizations submit their initial requests for continued programs (projects), any new programs, and other documentation as described in the respective Attachments. May 15. Issuance of Budget Circular 2008/02. This circular will include budget ceilings for each budget organization for recurrent spending based on the most recent data available. It will be prepared by MFE in cooperation with the OPM and the Fiscal Affairs Office (Pillar IV). It will provide additional guidance on the preparation of the 2008 Budget, including capital expenditure projects. June 15. Budget organization submissions. These submissions should be based on the budget ceilings for recurrent spending pursuant to Budget Circular 2008/02. Budget organizations should offset required increases for select programs with decreases elsewhere. This will be further explained in Circular 2008/02. July Budget hearings. Following receipt of budget organization submissions on June 15 and informal staff-to-staff budget discussions in June, budget hearings will be held. Hearing participants will include agency officials, MFE staff, officials from the Fiscal Affairs Office and the Office of the Prime Minister, and members of Kosova Assembly Budget Committee. If time permits, MFE staff will share with your budget organization a limited, advance set of questions for which answers will be sought at the hearing. The budget hearing schedule will be presented in Budget Circular 2008/02. If possible, agreement on your budget organization s 2008 recurrent budget totals will be sought at the hearing. August Consultations with EFC and Government and setting of final budget ceilings. 16

17 August 30 MFE issues third Budget Circular including budget ceilings. September 15. Submission of final requests by Budget Organizations. September Appeals of Budget Organizations. September Government Meetings to review Budget Organizations appeals. October Final decisions of EFC and Government October 30 th - Submission of the 2008 Budget to the Assembly and EFC by the date specified in the Law on Public Financial Management and Accountability. Your assistance during the 2008 budget process will be greatly appreciated. 17