Annual Financial Report

Transcription

1 Republika e Kosovës Republika Kosova Republic of Kosovo Qeveria - Vlada - Government Ministria e Ekonomisë dhe Financave / Ministarstvo Privrede i Finansija / Ministry of Economy and Finance Thesari/Trezor/Treasury Annual Financial Report Kosovo Consolidated Budget For the Year Ended 31 December 2009 Address: New Government Building, Floor 10, Mother Theresa Str Prishtina-Kosovo Telefon/Faks: /

2 Table of Contents Table of Contents...2 Definitions...5 FINANCIAL STATEMENTS OF THE GOVERNMENT OF KOSOVO...6 Consolidated Statement of Comparison of Budget and Actual Amounts for the Government of Kosovo For the Year Ended 31 December, Consolidated Statement of Cash Assets and Fund Balances for the Government of Kosovo...9 Notes to Financial Statements Note 1 Summary of Significant Accounting Policies Basis of Preparation Accounting Policy Reporting Entity Payments by Third Parties Cash Refunds of Previous Year Expenditures (payments) Reporting Currency Reporting Amounts Authorization Date Note 2 Customs Presumptive Tax Profit Tax Corporate Tax Personal Income Tax Value Added Tax Domestic VAT Note 4 Municipal Own Source Revenues Note 5 Central Budget Organization Own Source Revenues Note 6 Designated Donor Grants Note 7 Deposit Fund Note 8 Fines and Fees Note 8.1 Administrative Fees Note 8.2 Fines Note 8.3 License Revenues Note 8.4 Revenues from Sale of Services Note 9 Interest Note 10 PTK Dividend Note 11 Other Receipts Note 11.1 Revenues from Previous Year Note 11.2 Interdepartmental Revenues Note 12 Wages and Salaries Note 13 Goods and Services Note 14 Utilities Note 15 Subsidies and Transfers Note 16 Capital Outlays Note 17 Debt Servicing Page 2 of 78

3 Note 18 Loans to Public Enterprises Note 19 Payments for Membership to IFIs Note 20 Deposit Refunds Note 21 Cash Note 22 Budgetary Comparisons Note 23 Funds with the Central Bank of Kosovo Note 24 Deposits in Commercial Banks PTK Dividend Note 25 Cash in Transit Note 26 Embassy Accounts Note 27 Cash on Hand (Cashbox) Note 28 Designated Donor Fund Note 29 Own Source Revenues Note 30 Other Funds Note 30.1 Lottery Games Deposits Note 30.2 DJA Deposits Note 30.3 Minority Trust Salaries Note 30.4 Prisoners Deposits Note 30.5 Kosovo Property Agency Deposits Note 31 KTA/PAK Fund REPORT OF THE KOSOVO CONSOLIDATED BUDGET Receipts Payments ANNEX 2. Expenditures by budget organizations ANNEX 3. Designated Donors Grant Report ANNEX 4 Revenues to be Carried Forward ANNEX 5. Loan Report ANNEX 6 Budget Organizations Non-Financial Assets Report ANNEX 7 Outstanding Invoices Report by Budget Organizations ANNEX 8 Unjustified Advances by Budget Organizations ANNEX 9 Cash in Transit ANNEX 10 Data on Transfers of Reserves ANNEX 11. Employment data Page 3 of 78

4 Page 4 of 78

5 Definitions The following abbreviations and acronyms used in the present Financial Statements shall have the following meanings: AGL AI B.A. BEP BKP BKT BO BpB BRK CBK CEC CMZB CUCK DC DJA GFS IFI IMF IPSAS KCB KCF KFMIS KPA KPS KSB KTA KTA/PAK LPFMA MEF Note OPM PCB PPRC PR RBKO SRSG TAK TRA VAT 0 Amounts <500 Euros Accounts General Ledger KFMIS Administrative Instruction Bank Accounts Banka Ekonomike e Prishtinës Banka Kreditore e Prishtinës Banka Kombëtare Tregtare Budget Organization Banka Private e Biznesit Banka e Re e Kosovës Central Bank of Kosova Central Election Commission CommerzBank Clinical University Center of Kosovo District Department of Judicial Administration Government Finance Statistics International Financial Institutions International Monetary Fund International Public Sector Accounting Standards Kosovo Consolidated Budget Kosovo Consolidated Fund Kosovo Financial Management and Information System Kosovo Property Agency Kosovo Police Service Kasabank Kosovo Trust Agency Kosovo Trust Agency/Privatization Agency of Kosovo Law on Public Financial Management and Accountability Ministry of Economy and Finance Line item explanation Office of the Prime Minister ProCredit Bank Public Procurement Regulatory Commission Prishtina Raiffeisen Bank Kosovo Special Representative of the Secretary General Tax Administration of Kosovo Telecom Regulatory Authority Value Added Tax Page 5 of 78

6 FINANCIAL STATEMENTS OF THE GOVERNMENT OF KOSOVO IN ACCORDANCE WITH THE CASH BASIS INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS Page 6 of 78

7 Statement of Cash Receipts and Payments for the Government of Kosovo For the Year Ended 31 December, Managed by Government of Kosovo Payments by Third Parties Managed by Government of Kosovo Payments by Third Parties Managed by Government of Kosovo Payments by Third Parties Note '000 '000 '000 '000 '000 '000 RECEIPTS Tax Customs 2 634, , ,591 - Tax Administration 3 181, , , , , ,133 - Own Source Revenues Municipalities 4 48,293-42,784-29,237 - Central Budget Organizations 5 29,657-29,066-25,724-77,950-71,850-54,961 - Grants and Assistance Designated Donor Grants 6 13,880 5,012 12,832 4,854 11,643 3,242 Budget Support Grants ,880 12,845 4,854 11,643 3,242 Other Receipts Deposit Fund ,009-5,045 - Fines and Fees 8 43,209 42, ,622 - Bank Interest 9 5,432 17,268-11,332 - PTK Dividend ,000 30, ,637 93, ,998 Other 11 3,425 5,823-7,147 - Total Receipts 1,160,697 5, ,126 4, ,882 3,242 PAYMENTS Operations Wages and Salaries , , ,923 Goods and Services ,739 5, ,583 4, ,877 3,242 Utilities 14 19,234 18,489 17, , , ,703 Transfers Subsidies and Transfers , , ,552 Capital Expenditures 16 Property, Plant and Equipment 406, , ,208 Other Payments Debt Servicing 17 43, Loans to Public Enterprises 18 78,829 8,711 - Membership to IFI 19 17, Refunds from Deposit Funds 20 5,627 1,885 2,624 Other Total Payments 1,252,348 5, ,384 4, ,086 3,242 Increase/(Decrease) in Cash (91,652) - 25, ,796 Cash at Year Beginning , , ,966 Cash at Year End , , ,762 Page 7 of 78

8 Consolidated Statement of Comparison of Budget and Actual Amounts for the Government of Kosovo For the Year Ended 31 December, 2009 Approved Budget on a Cash Basis (Classification of Payments by Economic Classification) Original Budget Final Budget Actual Variance Actual Actual A B C D=C-B C Note '000 '000 '000 '000 '000 '000 CASH INFLOWS Tax 840, , ,805 (5,195) 805, ,133 Own Source Revenues 57,200 85,500 77,950 (7,550) 71,850 54,961 One -off Revenue - PTK Dividend - 200, , Other 58,500 50,000 53,062 3,062 65, ,904 Total Inflows 956,500 1,156,500 1,146,817 (9,683) 942, ,998 CASH OUTFLOWS Wages and Salaries 258, , ,396 (15,326) 227, ,513 Goods and Services 163, , ,763 (26,734) 139, ,018 Utilities 21,215 22,573 19,225 (3,348) 18,481 17,893 Subsidies and Transfers 223, , ,901 (6,227) 209, ,018 Capital Expenditures 408, , ,380 (98,109) 347, ,767 Reserves 64,682 9,520 - (9,520) - Other 80, , ,674 (32,326) 8,711 - Total Outflows 23 1,219,799 1,423,929 1,232,339 (191,590) 950, ,208 (85,523) (8,001) 241,790

9 Consolidated Statement of Cash Assets and Fund Balances for the Government of Kosovo For the Year Ended 31 December, Cash Assets Managed by the Governmen t of Kosovo Managed by the Government of Kosovo Managed by the Government of Kosovo Note '000 '000 '000 Central Bank of Kosovo 23 88, , ,126 Government Securities - 266,477 - Commerzbank AG - Frankfurt Term Deposits in CBK ,000 Term Deposits in Commercial Banks ,922 Accounts in Commercial Banks Cash in Transit 25 5,793 5,812 4,151 Embassy Accounts Cash on Hand Total Cash Assets 383, , ,763 Funds Balances Special Purpose Designated Donor Grants 28 8,561 12,798 11,267 Own Source Revenues 29 25,128 35,690 28,725 Other 30 8,233 12,956 12,626 41, ,133 52,618 Undistributed 341, , ,144 Total Balance of Funds , , ,762

10 Notes to Financial Statements Note 1 Summary of Significant Accounting Policies 1.1 Basis of Preparation The Financial Statements have been prepared in accordance with the LPFMA (03/L-048) and Cash Basis IPSAS - Financial Reporting Under the Cash Basis of Accounting. The notes to the Financial Statements form an integral part to understanding the statements and shall be read in conjunction with the statements. 1.2 Accounting Policy The basis of accounting and reporting in the Government of Kosovo in accordance with the LPFMA is the Cash Basis. Under the cash basis, information presented in these Financial Statements represent cash receipts and cash payments and movements of cash balances Cash management is organized through a Treasury Single Account system. The Treasury Single Account is a system of bank accounts used for collection of revenues and execution of payments controlled by a single institution the Treasury Department. Receipts are recognized when they are received in the Treasury Single Account, in commercial banks and in the form of cash in budget organization offices. Payments are recognized when cash flows out of the main account of the TSA, except for cash advances which are recognized as expenditures when justified with invoices. LPFMA envisages additional requirements for presentation of nonfinancial assets and liabilities in the explanatory notes to Financial Statements, in accordance with Part 2 of the Cash Basis IPSAS. Assets presented under Annex 6 are based on information from KFMIS, and include assets at a value of over 1,000 Euro and minimum life expectancy of 12 months in accordance with Administrative Instruction 2005/11. Despite the fact that depreciation is not recognized as expenditure in accordance with the cash basis of reporting, the list of financial assets has been presented at a net value, after deduction of accumulated depreciation as per the rates under AI 2009/21. Liabilities presented are based on information declared in the budget organizations financial statements. Expenditures are categorized by economic classification that reflects the IMF's Government Finance Statistics (GFS), being a modified version of the cash based GFS 1986 that includes elements of GFS In year 2009 a change of accounting policy was applied with regard to the KTA/PAK fund. On basis of the definition of public money in the LPFMA, privatization funds were not presented in the primary financial statements and comparative information of previous years were adjusted to reflect this change. You may find information on the KTA/PAK fund, including expenditures and revenues, under Explanatory Note No 31. The accounting policies have been applied consistently throughout the period. Page 10 of 78

11 1.3 Reporting Entity The Financial Statements encompass the reporting entity as specified in the Law on Public Financial Management and Accountability (03/L-048) and are comprised of the following: (i) All budget organizations (ministries, reserve powers, municipalities), and (ii) Kosovo Trust Agency/Privatization Agency of Kosovo 1.4 Payments by Third Parties The Government also benefits from goods and services purchased as a result of cash payments made by third parties during the reporting period. The payments made by the third parties do not constitute cash receipts or payments but do benefit the Government. They are disclosed in the Payments by 3rd Parties column in the Consolidated Statement of Cash Receipts and Payments. 1.5 Cash Cash means funds mainly kept in the Central Bank of Kosovo, Commercial Banks and cash in cashboxes of BOs, and cash equivalents. 1.6 Refunds of Previous Year Expenditures (payments) Expenditures refunded to the KCB from previous years are recorded as receipts in the current year. 1.7 Reporting Currency The reporting currency is Euro ( ). 1.8 Reporting Amounts The reporting amounts are in `000 (thousand) Euros ( ), whereas in the Annexes the amounts are in Euro units ( ). 1.0 Authorization Date The Financial Statements were authorized on 31 March, Note 2 Customs Receipts from Customs have been collected in accordance with legislation in force. The 2009 Customs receipts amount to 635,214,000, whereas the tax refunds amount to

12 Description '000 '000 '000 External Border Excise 150, , ,395 Import Customs Tax, cigarette, etc 56, ,817 61,988 Import Customs Tax 98, ,350 81,208 Border VAT 327, , ,039 Various Customs Tax ,513 Penalties Revenues Goods Sale , Other Customs Tax Administrative Fees - - Damage compens. from insurance comp Banderolls External Customs Control ,555 Fast-Customs Revenues 635, , ,755 VAT Refund (373.95) (362) (279) Excise Refund (337.23) (114) (272) Customs Refund (263.28) (233) (208) Various Customs Tax Refund (93.37) -75-1,405 Refunds -1, ,164 Net revenues 634, , ,591 Page 12 of 78

13 Note 3 Tax Administration The receipts from the Tax Administration have been collected based on the legislation on power. The 2009 TAK receipts amount to 206,469,000, whereas tax refunds amount to 24,810, Description Note '000 '000 '000 Presumptive Tax 3.1 2, , Profit Tax 3.2 8, ,425 3,441 Corporate Tax , ,982 53,728 Personal Income Tax , ,524 33,968 Value Added Tax , ,023 58,783 Individual Business Tax , ,752 16,034 Interest, Dividents, Rent, Lottery Games Tax 2, ,793 1,966 Extra Profit Tax ,474 16,612 Unspecified Tax 1,388 1,855 6,317 Receipts 206, , ,845 Value Added Tax Refunds (24,810.09) (21,324) (9,303) Refunds (24,810) -21,324-9,303 Net Receipts 181, , , Presumptive Tax This type of tax is gradually being removed following the entry into force of the corporate profit tax as of 1 April, 2002 (see Note below), except for insurance companies, which still pay the presumptive tax at a rate of 7% in gross receipts. The presumptive tax collected during 2009 amounts to 2,793, Profit Tax TAK has collected profit tax in accordance with the legislation on power. The receipts from profit tax collected in the year that ends on 31, December, 2009 amount to 8,407, Corporate Tax TAK has collected the corporate tax in accordance with the legislation on power. The amount of corporate tax collected in 2009 is 55,355,230. Page 13 of 78

14 3.4 Personal Income Tax TAK has collected the personal income tax in accordance with the legislation on power. The amount of personal income tax collected in 2009 is 39,227, Value Added Tax Domestic VAT The 2008 domestic tax receipts amount to 75,825,280. This amount is of domestic VAT because the import VAT is included within customs taxes (see note 2) Page 14 of 78

15 Note 4 Municipal Own Source Revenues The municipal revenues comprise all own source revenues collected through activities performed by the municipalities. The revenues noted below do include revenues from fines, as they are registered as nontax revenues of the central level and are later allocated to municipalities Description '000 '000 '000 Drenas Fushë Kosovë 1, Lipjan 1, , Obiliq Podujevë 1, Prishtinë 18, ,116 10,485 Shtime Dragash Prizren 4, ,014 2,992 Rahovec Suharekë 1, , Malishevë Mamushë Deçan Gjakovë 2, ,446 1,108 Istog Klinë 1, Pejë 2, ,240 1,344 Junik Leposaviq Mitrovicë 1, ,354 1,138 Skenderaj Vushtrri Zubin Potok Zveçan Gjilan 2, ,344 1,365 Kaqanik Kamenicë Novo Berdo Shterpc Ferizaj 2, ,232 1,813 Viti Hani i Elezit Total 48,293 42,784 29,237 Page 15 of 78

16 Note 5 Central Budget Organization Own Source Revenues This category includes receipts collected in accordance with the Budget Law and Memorandums of Understanding. The total amount of these receipts collected in 2009 is 29,657, Description '000 '000 '000 Administrative Fees Revenues 5,385 3, Fines - Penalties Revenues 1,822 1,101 3,745 Licence Revenues 3,922 6,266 4,111 Services/Assets Revenues 2,494 2,205 2,124 Participation Revenues 11,303 10,704 10,869 Inspection Revenues 4,711 4,853 4,659 Bank Interest Revenues Public Premises Rent Revenues Total 29,657 29,066 25,724 Note 6 Designated Donor Grants These are grants received from various donors who specifically indicate the purpose for which the funds are to be used. The following table presents details of the 2009 receipts by donors. Page 16 of 78

17 Description '000 '000 '000 Internal Grants 2,413 2,544 3,131 Insurance Company for MEM Insurance Company Dukagjini for MEM ProCredit Bank Banka e re e Kosoves for MEM Swiss Caritas United Arab Emirates Salbatring international 20 Red Cross 4 World Bank 1,732 1,193 1,299 Austrian Government British Government Save the Children 4-2 Danish Government 1, Dutch Government 147 European Union 2,553 1, German Government Irish Government Italian Government Italian Caritas Norway Government Japan Government Swiss Government Swedish Government Turkish Government International Civil Office - ICO 36 UNDP 2, ,694 UNICEF USA GTZ EAR ,396 OSCE USAID DFID SIDA IOM ILO Care internatinal UNMIK Global Fund 929 1, CIDA Canadian Greece Liechtenstein Belgium Government WHO 3-59 Council of Europe State Foreign Secretary Slovenia Government Tempus French KFOR Danish KFOR WORLD VISION Other Receipts Total 13,880 12,731 11,496 Page 17 of 78

18 Note 7 Deposit Fund These are receipts kept in trust on behalf of third parties and are to be kept in trust until a decision in made. These funds are kept in Kosovo Consolidated Fund Accounts Description '000 '000 '000 Lottery Games Deposits 150 2,154 - Regulative Committee Deposits 8 17 Political Entities Deposits Deposits - Procurement review body 10 DJA Deposits Special Chamber Deposits Wrong Payments Deposits Pensions Trust Fund - - Prisoners Deposits Public auctions deposits 0 Swiss Office Deposits 380 Minorities Trust Salaries - 4,020 Kosovo Property Agency KPA Deposits KPA -Inventory Rent Trust Account Prishtina Municipality Trust Account Prishtina Municipality Total 996 3,009 5,045 Note 8 Fines and Fees These receipts are collected by central level Budget Organizations. The total amount of such receipts in 2009 is 43,209,000.

19 Description Note '000 '000 '000 Revenue from Administrative Fees ,123 29,652 27,375 Revenue from Fines and Penalties ,141 4,224 Revenue from Licenses 8.3 5,706 6,035 78,583 Revenue from Services/Assets 8.4 1, Revenue from Copayments (*) Revenue from Inspection Revenue from Civil Aviation Revenue from Bank Interest Revenue from Rent of Public Buildings Revenue from Insurance Policies Revenue from Rent Other Non-Tax Revenues Revenue from Previous Years Reconciliation Account Interdepartmental Revenues Total 43,209 42, ,622 Note 8.1 Administrative Fees The Administrative Fees collected during 2009 amount to 36,123,000, presented in the table below Description Note '000 '000 '000 Vehicle Registration Fee 6,433 6,670 5,859 Road Fee 10,248 10,052 9,126 Travel Document Fee 12,202 8,043 5,501 ID Fee 1, Driving License Fee 4,175 3,219 2,676 Authentification of Various Documents Administrative Fee on Requests Tender Participation Court Fees ,079 Citizenship Fee 214 Marriage Certificates - - Other Certificates - Court fees Refund - - Total 36,123 29,651 27,376 Note 8.2 Fines The receipts of this category collected during 2009 amount to 159,000. The table below shows details by fine types. Page 19 of 78

20 Description '000 '000 '000 Traffic Fines - 3,505 2,624 Court Fines - 2, Inspectorate Fines Other Fines Damage compens. from insurance comp. 90 Financial Institutions Fines Unspecified Court Revenues 3 25 Media Penalties - - Total 159 6,141 4,224 Page 20 of 78

21 Note 8.3 License Revenues During 2009, the receipts collected from licenses amount to 5,706,000, presented analytically in the table below Description '000 '000 '000 License for leisure and individual activities License for quarries and mines 4,261 4,446 1,884 License for business registration License for technical acceptance of premises License for professional services License for games License for using forests License for medical products - - License for big service shops - - Construction License Laboratory License - 3 Design License 3 12 Hotel License Travel Agency License License for Radio and TV 57 - Other business license (*) - 75,002 License for petroleum and fuel import Petroleum and fuel retail license Petroleum and fuel wholesale license LPG Gas sale license Oil services license Deposit licenses Mazout import license - 10 Licence for importing solar - 8 Industrial oil import license - 10 LPG import license - 4 Oil import license - 29 Unidentified licenses - - License for auditor - - Work permit license - - Total 5,706 6,035 78,583 Note: (*) In Year 2007 an amount of 75,000,000 Euro was received for licensing the second mobile telephony operator. Page 21 of 78

22 Note 8.4 Revenues from Sale of Services This category is composed of revenues from sale of services of different budget organizations to third parties. These revenues are collected in the relevant account with economic codes, see table below Description '000 '000 '000 Sale of services Sale of forms for standard reimburs 3 Various police services - - Goods sale Official Gazette - OPM Property Usage Education - Health Participations Rent from public facilities 3 Assembly Canteen Revenues Revenues - scrap sale 4 Concession revenues 736 Rent revenues from housing objects 3 Accreditation Fee 5 3 Total 1, Note 9 Interest Interest receipts comprise interest earned from CBK accounts and from the investment of public money. The public money investment started in June Interests from bank accounts and investments are presented in below table Description '000 '000 '000 Revenue from KCF Interest 5,432 17,268 11,332 Note 10 PTK Dividend In accordance with Decision no 03/74 of the Government of Kosovo, PTK has declared a dividend of 200,000,000 Euro and paid to its sole shareholder, the Government of Kosovo. PTK dividend at the amount of 200,000,000 Euro has been received in 2009 and is presented as a special item of receipts. Note 11 Other Receipts These are receipts received in the Treasury Main Account. These receipts amount to 3,425,000

23 Description '000 '000 '000 Revenues from previous year ,348 5,622 6,492 Return of advances from previous year Suspense Account 0 Other Unidentified Revenues Reconciliation Account Payments returned from KEK Interdepartmental Revenues Refunds from CEC Total 3,425 5,823 7,147 Note 11.1 Revenues from Previous Year Pursuant to the Law on Public Financial Management and Accountability, the previous years expenditures refunded into the KCB shall be recorded as current year receipts and not as reduction of expenditures. These revenues amount to 3,348,000. Note 11.2 Interdepartmental Revenues Interdepartmental revenues include receipts of budget organizations from other budget organizations. Such interdepartmental transactions have not been consolidated in order to maintain consistency with financial statements of budget organizations which report such revenues. Page 23 of 78

24 Note 12 Wages and Salaries The wages and salaries paid during 2009 amount to 268,925,000. This includes 264,396,000 from the General Fund, and 4,529,000 from the Designated Donor Grants. The following table shows payments by economic categories Description '000 '000 '000 Payments from KCB Net salaries 221, , ,677 Personal Incomes Tax 8,967 9,581 8,173 Employee pensions contribution 12,548 10,799 9,910 Total Gross Salaries 243, , ,760 Employer pensions contribution 12,732 10,807 9,909 UITUK Unions Payment -0.10% to 0.50% Over time payments (*) 4,903 8,881 7,477 Per diems of parliament members and committees 2,453 1, Contract Salaries , , , ,513 Payments from Grants Net salaries 1, Personal Incomes Tax Employee pensions contribution Employer pensions contribution Over time payments Contract payment(not from payroll) 2,639 Per diems of parliament members and committees 4 - Contract Salaries , Total 268, , ,923 Note (*) The overtime payment category comprises: secondary wages, on-call duty, committee payments, overtime payment, employee incentives. Page 24 of 78

25 Note 13 Goods and Services The goods and services paid during 2009 amount to 154,739,000. This includes 1from the General Fund, and 2,976,000 from the Designated Donor Fund. The direct payments of the World Bank are not included in this disclosure Description '000 '000 '000 Payments from KCB Travel Expenses 4,998 4,124 4,417 Telecommunication Expenses 3,445 2,814 3,735 Contracted Services (*) 30,880 19,161 22,424 Furniture and Equipment 7,034 8,861 7,716 Other Expenditures (**) 45,455 44,393 35,955 Fuel 17,822 23,127 19,312 Advances Financial Services Registration and Insurance 3,089 3,464 3,013 Maintenance and Repairs (***) 24,815 22,868 20,440 Rent 5,526 4,881 4,654 Marketing 5,467 3,357 3,323 Representation 2,328 1,663 1,554 Court Decisions 14 Deficit in Cashbox - 1 Other unauthorized expenses , , ,018 Expenditure from Grants Travel Expenses Telecommunication Expenses Contracted Services 1,050 1,163 3,101 Furniture and Equipment Other Goods and Services 421 Other Expenses Fuel Advances 671 2, Financial Services Registration and Insurance Maintenance and Repairs Rent Marketing Representation ,976 4,951 5,859 Total 154, , ,877 Note: (*) The contractual expenditures category includes the following: education and training services, representation and lawyer services, health services, advisory services, printing services, software maintenance, court order compensation, etc. (**) The other expenditure category includes: medical supply expenditures, cleaning supplies, accommodation, ammunition and fire arms supply, food and drinks supply, office supply, status related expenditures, purchase of seals, banderols, etc. (***) The maintenance and repair category includes: vehicle maintenance and repair, building maintenance, road infrastructure maintenance, IT maintenance, furniture and equipment maintenance etc. Page 25 of 78

26 Note 14 Utilities Utilities paid during 2009 amount to 19,234,000. This includes 19,225,000 from the General Fund, and 9,000 from the Designated Donor Grants Description '000 '000 '000 Payments from KCB Electricity 8,374 7,774 7,196 Water 3,351 3,253 2,989 Waste 2,493 2,033 2,027 District Heating 2,165 2,307 1,851 Telephone 2,509 3,106 3,832 Other ,225 18,481 17,893 Payments from Grants Electricity Water Telephone Other Total 19,234 18,489 17,903 Page 26 of 78

27 Note 15 Subsidies and Transfers Subsidies and transfers paid during 2009 amount to 257,767,000, including 256,901,000 from the General Fund and 866,000 from the Designated Donor Grants, as presented in the table below Description '000 '000 '000 Payments from KCB Subsidies 82, Subsidies to POEs - 60,090 30,016 External Support Sub. to Cultural Public Entities 3,429 2,537 1,771 Subsidies to non-public entities 14,835 8,662 4,278 Transfers to other Governments UNOPS - Admin. Project KPA Payments to individual beneficiaries 7,739 3,371 2,380 Basic Pension 86,140 77,589 64,119 Disabled Pension 11,554 10,110 10,217 Social Assistance 28,219 26,050 27,933 KPC pensions 444 War invalids payments 19,363 17,850 8,596 Payments for civil individuals 1 0 Payments to families of war victims Trepça employees pensions 2,585 2,785 2,839 Court Orders , , ,018 Payments from Grants Subsidies Subsidies to POEs Sub. to Cultural Public Entities Subsidies to public entities 359 Subsidies to non-public entities Transfers for other Governments - 0 UNOPS - Admin. Project KPA Payments to individual beneficiaries ,535 Total 257, , ,552 Page 27 of 78

28 Note 16 Capital Outlays Capital Outlays during 2009 amount to 406,382,000, including 400,380,000 from the General Fund and 6,002,000 from the Designated Donor Grants, as presented in the table below by economic categories Description '000 '000 '000 Payments from KCB Buildings 120,423 58,417 31,195 Other structures - 70,863 13,767 Road construction 159, ,944 32,001 Waste water system 8,842 2,596 2,362 Water supply system 6,496 3,254 1,634 Electricity, generation, and transmission supply 2, IT equipment 18,021 6,555 2,437 Transportation vehicles 7,913 8,487 7,144 Machinery 2,822 2,439 3,383 Other capital (*) 57,151 21,510 10,321 Investment Advance(**) - 20, Pasuritëe paprekshme 19 Land Capital transfers -Public Entities (***) 13,305 19,386 49,429 Capital transfers - non Public Entities (***) 195 Court Orders 2, , , ,767 Payments from Grants Buildings 1, Other structures Road construction 1,698 2,467 1,895 Waste water system Water supply system Electricity, generation, and transmission supply IT equipment 1, Transportation vehicles Investment Advance - 32 Land - 5 Machinery - - Other capital Capital Transfers -public entities 6 Capital Transfers - Non-public entities ,002 4,548 4,441 Totali 406, , ,208 Note: (*) The Other Capital Category includes: working tool expenses, building repair and renovation, mines equipment, afforestation expenses, PC purchase, software development, etc. (**) The Investment Advance category includes: road maintenance advance, bridge maintenance advance, school construction, square construction, etc. (***) The capital transfers to POEs relate to KEK, District Heating, KOSST, Railways, etc.. Page 28 of 78

29 Note 17 Debt Servicing In 2009 payments of government debt were made at the amount of 43,814,897. In addition to this amount paid from Kosovo Consolidated Budget, US Government and the European Commission have paid a part of the Kosovo government debt in the form of a grant. A table with details is presented below: Consolidated Debt Payments in 2009 Total Debt 381,208, Principal 43,077, Interest 737, Total paid from KCB 43,814, Principal, paid by US Government 84,118, Principal, paid by EC 5,000, Total paid by donors 89,118, Remaining Debt as of end ,275, Note 18 Loans to Public Enterprises In accordance with Loan Agreements between KEK and the Ministry of Finance, loan disbursements to KEK have been made in year 2009 at a total amount of 78,829, Note 19 Payments for Membership to IFIs Membership to International Financial Institutions Payments in 2009 International Monetary Fund 15,504, World Bank Group International Bank for Reconstruction and Development - IBRD 373, International Development Association - IDA 48, Multilateral Investment Guarantee Agency - MIGA 74, International Finance Corporation - IFC 1,049, Exchange Rate Difference -21, Total paid from KCB 17,030, Note 20 Deposit Refunds Below is a summary of those refunds in These payments are not considered in the yearly appropriation process as they are refunds of trust funds. The total of refunds is 5,627,000.

30 Description '000 '000 '000 Lottery Games Deposits Refund Wrong Payments Obligations Revenues Refund 31-2 Trust Deposits - Minorities Salaries 4, Political Entities Deposits KPA Deposits Donation Refund Total 5,627 1,885 2,624 Note 21 Cash Cash is comprised of funds mainly kept with the Central Bank of Kosovo, and commercial banks, cash held in cashboxes of BOs, and cash equivalents. The Consolidated Statement of Cash Assets and Fund Balances highlights the main categories of cash assets managed by the Government. Notes 24 through 31provide details of those balances. These funds include special purpose funds, including Designated Donor Funds, Own Source Revenues carried forward and trust funds. These cash balances are discussed in Notes 29, 20 and 31, with an overview in the table below Description '000 '000 '000 Total Funds 383, , ,762 Undistributed Funds (341,930) 414,061 (397,144) Designated Funds 41,922 61,444 52,618 Designated Funds Designated Donor Grants 8,561 12,798 11,267 Own Source Revenues carried forward 25,128 35,690 28,725 Other 8,233 12,956 12,626 41,922 61,444 52,618 Page 30 of 78

31 Note 22 Budgetary Comparisons During the year there have been different adjustments to the original appropriations. These adjustments are based on the legal authorizations given under the LPFMA. These adjustments are summarized in the Budget Report and Annexes 1 and 2. The Budget Report does not include receipts and payments from Designated Donor Grants. Note 23 Funds with the Central Bank of Kosovo The Government manages its funds by using the Treasury Single Account (TSA). The vast majority of accounts are kept with the Central Bank of Kosovo (CBK) (see tables below) Account number Account name `000 Euro `000 Euro `000 Euro Main Account- BK 83, , , Ministry of Agriculture Kosovo Police Independent Media Commission Ministry of Public Administration Ministry of Environment Regulative office of Civil Aviation Ministry of Economy and Finance Ministry of Trade and Industry Ministry of Health Ministry of Education Reserve Trust Fund for the Debt Servicing Office of Prime Minister Customs Services Ministry of Internal Affairs Ministry of KSF Fines against financial institutions Tax Administration of Kosovo Salaries of Civil Servants Kosovo Judicial Council Special Chamber of Supreme Court - Receipts Special Chamber of Supreme Court - Deposits Pensions and social schemes Ministry of Transport Central Election Commission I.C.U Portfolio Sale 3,013 2, Prucurement Review Body Commission for Mines and Minerals Ministry of Culture Youth and Sports R. Office for Water and Waste Ministry of Labor and Social Welfare Deposits of Games of Chance 3,816 1, Trust Funds - DC Dubrave Detention Center- Prizren Detention Center- Gjilan Detention Center- Lipjan Trust Funds - DC Lipjan Detention Center- Peje Detention Center- Mitrovice Detention Center- Prishtine Minority salaries Trust ,212 8, Grant for youth development

32 Account number Account name `000 Euro `000 Euro `000 Euro Energy regulatory office KPA Kosovo Property Agency KPA Deposits KPA Inventory Rents University of Prishtina Reg. Authority of telecom KTA SOE BATLLAVA NORVEGIAN AID KTA POE PTK DIVIDEND 31, Municipality of Decani Municipality of Dramatist Municipality of Ferizaji Municipality of Fushe Kosoves Municipality of Gjakoves Municipality of Gjilanit Municipality of Gllogocit Municipality of Hanit te Elezit Municipality of Istogut Municipality of Junikut Municipality of Kamenices Municipality of Kaqanikut Municipality of Klines Municipality of Leposaviqit (0) Municipality of Lipjanit Municipality of Malisheves Municipality of Mamushes Municipality of Mitrovices Municipality of Novo Berdes Municipality of Obiliqit Municipality of Pejes Municipality of Podujeves Municipality of Prishtines 1, Municipality of Prizrenit Municipality of Rahovecit Municipality of Shterpces Municipality of Shtimes Municipality of Skenderajit Municipality of Suharekes Municipality of Vitise Municipality of Vushtrrise Municipality of Zubin Potokut (0) Municipality of Zveqanit KCF Municipality of Prishtina KCF Municipality of Prishtina Trust General Payment Pensions account War invalids account KCF MF Custom Mitrovica Euro TRAVEL DOC. reven Direc. Of Rural affar.reven MPS DAL SCS revenues UN Trust fund Forigen special account MSLW Disability Pensions DoJ - Receipts - 1, Road Toll Kosovo Agency for Medicinal Products Receipts of med students in Tetovo University MTI Licenses WB Escrow Kosovo Social Prot.Prog. - Total of accrual account 88, , , Government Valuable papers 0 266, Account of termed deposits 125, Total of KCB fund 213, , ,126 Page 32 of 78

33 Note 24 Deposits in Commercial Banks PTK Dividend As of December 31, 2009, the balance of term deposits in commercial banks from PTK dividend fund was 163,922,000 Euro, and is broken down by commercial banks as follows Bank Name '000 Raiffeisen Bank Kosovë 48,050 Banka Private e Biznesit 13,300 Pro Kredit Bank Kosovë 34,906 TEB 19,015 Banka Ekonomike 11,400 NLB Prishtina 21,251 Banka Kombëtare Tregtare 16,000 Total 163,922 Note 25 Cash in Transit This relates to cash received through commercial banks as 2009 receipts but which were not swept to the Treasury account with CBK as of The amount of cash in transit kept with commercial banks is summarized below Bank Name '000 '000 '000 Raiffeisen Bank ,217 Banka Private e Biznesit NLB Prishtina 2,769 3, Banka Kombëtare Tregtare ProCredit Bank ,690 Banka Ekonomike KEP-i - Vllesa TEB-i Total 5,793 5,812 4,151 Note 26 Embassy Accounts These accounts are opened in commercial banks in the countries where republic of Kosovo Government has opened its embassies, in accordance with administrative instruction for embassies accounts, with the purpose to provide bank services for embassies and consulates in these countries. Fund balance is shown in table below.

34 2009 Description '000 Embassy in Albania 0 Embassy in the United Kingdom 29 Embassy in Germany 399 Embassy in Switzerland 13 Embassy in France 15 Embassy in Austria 8 Embassy in Italy 15 Embassy in Turkey 12 Embassy in the United States 21 Embassy in Belgium 35 Consolidated Embassy Account (RBKO) 10 Total 557 Note 27 Cash on Hand (Cashbox) This amount represents petty cash held by budget organizations, which were not spent nor deposited into the main account with CBK as of Name '000 '000 '000 Cash Total The following table represents the budget organizations that have kept those funds. Page 34 of 78

35 Description '000 '000 '000 Ministry of Economy and Finances Ministry of Health Ministry of Culture Youth and Sports Ministry of Education Science and Tech Ministry of Labor and Social Welfare Ministry of Returns and Communities Ministry of Internal Affairs Ministry of Justice Reconstruction Fund Central Election Commission sity KPC Office of Coordinator Kosovo Police Kosovo Property Agency Prishtina Peja Klinë 1 Prizreni 0 Mamushë 0 Hani i Elezit Ministry of Foreign Affairs Total Note 28 Designated Donor Fund The Designated Donor Grants can only be spent in accordance with the terms and conditions of the grant agreement. Please refer to Annex 3 for a detailed analysis of donor fund balances. Code Description '000 '000 '000 1 Carried Forward Grants Balan 12,676 11,274 12,949 2 Grants Received 13,880 12,731 11,496 3 Interest from Grants EU Portfolio Sale Direct Payments 5,012 4,854 3,242 6=( ) Total Grants Received 18,899 17,685 14,885 7=(6+1) Total 31,575 28,959 27,834 8 KCB transfer (3,020) Grants Expenditures (19,395) -15,826-15, Grants Refund (600) ,070 11=( Unspent Grants 8,561 12,798 11,267 Page 35 of 78

36 Note 29 Own Source Revenues The carried forward Own Source Revenues are collected revenues that were not spent by municipalities and central BOs by the See Annex 4 for details on own source revenues to be carried forward to Note 30 Other Funds Other funds represent trust funds. The following table represents details of the fund s composition Description Note '000 '000 '000 Student Fees - - Debt Service Reserve Trust Fund Tetovo Students Deposits Lottery Games Deposits ,822 3,816 1,579 Public Procurement Regulatory Committee Independent Media Commisionrt DJA Deposits ,841 Deposits of Special Chamber CEC - Political Entities Deposits Trust Minorities Salaries ,258 7,212 8,355 Prisoners Deposits Kosovo Property Agency Deposits Trust Account - Prishtina Municipality Deposits of Swiss Office Total 8,233 12,956 12,626 Note 30.1 Lottery Games Deposits These are deposits paid in accordance with the legislation on lottery games. Note 30.2 DJA Deposits The DJA deposits are funds paid by third parties for realizing their rights, deposited by. Note 30.3 Minority Trust Salaries The Government of Kosovo took a decision to establish the Minorities Salary Trust Fund composed of salaries refused by minority civil servants. In 2009, these fund amounts to 2,258,000.

37 Note 30.4 Prisoners Deposits These deposits represent money deposited for the prisoners into relevant bank accounts of prisons located in Kosovo regions. These deposits are later refunded to prisoners when freed. These deposits amount to 188,000. See table below with details by regions: Description '000 '000 '000 Trust Account - Dubrava Detention Centre Peja Detention Centre Dubravë Detention Centre Prizren Detention Centre Prishtine Trust Account Lipjan Detention Centre Gjilan Detention Centre Mitrovice Trust Account - Lipjan 10 Detention Centre - Lipjan 13 7 Total Note 30.5 Kosovo Property Agency Deposits These are deposits paid by third parties to the KPA for the rent and safety of the properties they use until a decision is undertaken by the KPA. These deposits amount to 405, Description '000 '000 '000 Rent - Kosovo Property Agency Deposits - Kosovo Property Agency Inventory Rent - Kosovo Property Agency Note 31 KTA/PAK Fund Until June 2008, the Privatization Fund was administered by the Kosovo Trust Agency (KTA). Pursuant to Article 65(1) of the Constitution of the Republic of Kosovo, the Assembly of the Republic of Kosovo adopted the Law on the Privatization Agency of Kosovo (03/L-067), established as the successor of the Kosovo Trust Agency regulated by UNMIK Regulation 2002/12, as amended, and all assets and liabilities of the latter shall be assets and liabilities of PAK, except the Publicly Owned Enterprises. The Agency is authorized to administer, authorize for sale, transfer and/or liquidate enterprises and assets as defined in the Law on the Privatization Agency of Kosovo (03L-067).

38 KTA fund has not been treated as public money because in accordance with the Law on Public Financial Management and Accountability, article 2.8, cash and financial assets held in trust by the KTA/PAK under the authority of a Law or UNMIK Regulation shall not be public money. Opening Payments Balance as of Balance 2009 Receipts Description million million million million Central Bank of Kosovo 403, ,437 (76,709) 451,041 ProCredit Bank (167) 123 RBKO 0 0 (0) 0 Total 403, ,495 (76,877) 451,164 Note: Data from PAK Financial Statements for year 2009 submitted to Treasury. Page 38 of 78

39 REPORT OF THE KOSOVO CONSOLIDATED BUDGET 2009 Budget Law 03/L-105 sets forth the original appropriations for This Law also includes the changes to those appropriations during the course of the year, including: Carried forward appropriation of municipal own-source revenues not spent during 2008; Appropriation of some types of own-source revenues collected by Central Budget Organizations; Appropriation of municipal own-source revenues collected during 2009; Transfer of appropriations from SRSG and Minister of Economy and Finances Reserves to specific Budget Organizations. Transfer of appropriations among budgetary lines, within the limits and approvals provided for in the regulation. Annex 1 displays the original budget appropriations, the mid-year review appropriations, and the final appropriations in the Treasury Financial Management System for each budget organization and for each economic category. Appropriations: A (Law 03/L-105) B (Law 03/L-167) C (KFMIS) A B C Description '000 '000 '000 Central Government Budget ,799 1,111,000 1,109,104 General Grant for Municipalities , , ,115 Municipal Own Source Revenues ,000 49,900 48,757 Municipal Own Source Revenues Carried Forward from ,943 Central Own Source Revenues ,326 Central Own Source Revenues Carried Forward from ,112 Total Appropriations ,219,799 1,365,000 1,422,356 Page 39 of 78

40 Receipts The revenues collected during 2009, not including the Designated Donor Grants, amount to 1,146,817,000, and represent 99.2 percent of the total annual planned revenues. This indicates an increase of 22% percent of the annual revenues compared to last year. Please see the table below for more details: Budget Plan Revenues Compared Progress to previous Receipts Receipts against plan year '000 '000 në,% në,% '000 '000 Receipts A B C=(A/B) D=(B/E) E Customs 644, ,146 98% 5.0% 604, ,591 Tax Administration 176, , % -9.5% 200, ,542 Municipality Own Source Revenues 49,900 48,293 97% 12.9% 42,784 29,237 Central Own Source Revenues 35,600 29,657 83% 2.0% 29,066 25,724 Central Non-Tax Revenues 50,000 53, % -19.2% 65,645 58,904 One time revenues - PTK Dividend 200, , % 0.0% 0.0% - Total Receipts 1,156,500 1,146, % 22% 942, ,998 Annual Revenues 2009 Budget Plan 2009 Revenues Customs Tax Administ Munic Own source revenues Own sour revenuescentral level Non tax reven-centr level One time revenues- PTK divid Page 40 of 78