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Budget management

Bilancio di previsione

The State budget becomes operational at the beginning of the financial year - in our system this coincides with the calendar year. The resources allocated in the expenditure budget forecasts are used according to a process consisting of four successive stages: commitment, liquidation, ordering and payment). Similarly, the sums provided in the revenue budget forecast are verified, collected and, finally, paid.

The allocation of financial resources provided by the budget forecasts has some margins of flexibility, which provide for combining the management and executive function to the authorising nature of the budget law. These margins are established by Law number 196 of December 31, 2009 and by other related sources of regulation.
In addition to any new expenditure laws or rules establishing new withdrawals, which can be approved by Parliament during the financial year, the forecasts provided by budget law can be modified with other regulatory or administrative instruments.

Public accounting and finance law stipulates that the balancing law is the main legal instrument for budget intervention during the financial year. It is submitted to Parliament by June 30, it combines all changes in the initial forecast budget required during the financial year in a single measure - also in view of the consistency of the residuals of the previous financial year verified ex post - not previously carried out with specific interventions. The balancing law has the same structure as the forecast budget: it is divided into budget forecasts (one for revenue and as many for expenditure as there are ministries), which are in turn divided into missions and programmes. Balancing specifies the values of the variations - compensatory, between programmes of the same mission - on an accrual and cash basis, which can only change the forecast for the current financial year. The balancing law is accompanied by a cost budget review (economic budget).

On the other hand, the administrative budget management acts include the variation decrees. Depending on the type of variation applied, they are provided by the Minister of the Economy and Finance, the competent Minister or the executive in charge, as required by current legislation in this area. 
Specifically, the Minister of the Economy and Finance is authorised to provide for the required budget variations for the application of legislative provisions published after the presentation of the forecast budget. Within the limits imposed by the law and in full respect of the invariance of the public finance balances, it can adopt compensatory variations between the financial allocations within each programme. Since this aggregate coincides with the parliamentary voting unit, these variations do not modify the allocative choices of the legislator.

Budget Balancing

Budget balancing is the legal-accounting instrument for updating the annual forecast budget according to the actual economic and financial situation and the new situations arising after its approval. Like the budget, it is a merely formal and mandatory law, which the Minister of the Economy and Finance is required to present to Parliament before the month of June each year.

Revised budget

With the balancing law, the cost centres also update the initial forecasts of the costs to be covered during the financial year (Budget Forecast according to Budget Law) as a function of the objectives effectively pursued to carry out the tasks assigned to them and to ensure the activities for their operation. Analytical accounting by cost centre is then made consistent with the changes to the financial budget implemented by balancing.

Variation Decrees

These acts establish compensatory variations - leaving the balances unchanged - within the same programme (parliamentary voting unit) or lower level expenditure aggregates. They are provided, with specific constraints, by the Minister of the Economy and Finance, by the competent Ministers or by the general executive in charge, based on the provisions of the budget flexibility regulations.