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Money and credit - Ivanov VM

25.6. Cash budget

Until 1 July 1993 in Ukraine operated the cash execution of the budget procedure, developed in the former Soviet Union. It included two schemes of financing costs:

• implementation of local (village, town, district, municipal and provincial) budget is carried out within the actual income received;

• execution of the state budget of Ukraine based on the principle of advances on credit costs.

The new procedure excluded automatism budget crediting. Funding began in within the actual income received, and received bank loans. State Budget of Ukraine started to be carried out by a scheme similar to the local budgets.

Establishment of commercial banks at the location of the relevant district and city financial departments open state budget revenue account. Payers of taxes and duties transfer funds directly to the state or local budgets. Means of income subject to the division between the state and local budgets (VAT, income, excise duty, income tax from the citizens) shall be credited to a separate account from which no later than the day following the day the respective share of funds transferred to the income from the state budget. Every day, early in the day the rest of the income is transferred to a commercial bank account by wire to regional management of the NBU. NBU management for the purpose of operational control is state budget revenue accounts in the context of branches of commercial banks, which are open-yielding accounts. Through the system of electronic payments received from commercial banks by means of budget revenues are transferred daily operational management of the NBU in Kiev.

Based on this statement of account management of Ukraine Ministry of Finance cash execution of the budget is the Operations Department of the National Bank of payment orders for the transfer of funds to the current passive accounts of ministries and departments (the main managers of appropriations). With these accounts on the basis of orders of the ministries and departments are transferred to the current budget accounts of institutions, enterprises and organizations financed from the state budget. Transfer of budget funds on their accounts is not allowed. Budget appropriations allocated for the financing of capital investments shall be credited to individual accounts.

With regard to payments to pensioners of the Ministry of Defense, Ministry of Interior, Security Service of Ukraine remained the order of the subsequent reimbursement of Treasury Savings Bank funds allocated for pensions.

This scheme involves a permanent counter-movement of income and expenses "Vertical", which dramatically reduces the effectiveness of the state budget execution systems: a significant amount of funds (as of November 1, 1993, for example, more than 8% of the budget expenditures) are "on the go" . To overcome this deficiency allows the transition to a system of "horizontal" financing of the state budget, the implementation of which is intended to provide the Treasury created the Ministry of Finance of Ukraine.

In January 1997 began the transition to the treasury system of the state budget execution. Funds manager, as before, are the heads of ministries, departments and agencies, which open registration accounts in the State Treasury bodies (CCU). In NBU introduced a single treasury account, which allows you to get detailed information about the state of the daily movement of funds on the revenues and expenditures of the state budget. Thus, today, the National Bank of Ukraine and authorized banks carry out settlement and cash services agencies CCU by following these steps:

• opening, closing and re-registration of bank accounts of the Civil Code and other budgetary institutions and organizations;

• operations done within the boundaries of actual cash on behalf of the Civil Code or the budget institutions;

• Providing timely and complete transfer of funds to the accounts of the Civil Code and other institutions;

• conducting cash transactions CCU for receiving and issuing of cash;

• carry out transactions for the purchase of T-bills in the primary auction with obligatory further their placement.