II - Changes to the Budgetary Process

Budgetary process       
Describe the main characteristics of the budgetary process (cycle, actors, instruments, etc.) in Slovenia.

The basic provisions for the budgetary process are determined in the Constitution of the Republic of Slovenia, more precisely in Article 148 and Article 149. Article 148 determines that “All revenues and expenditures of the state and local communities for the financing of public spending must be included in their budgets. If a budget has not been adopted by the first day it is due to come into force, the beneficiaries financed by the budget are temporarily financed in accordance with the previous budget.” Article 149 provides that “State borrowings and guarantees by the state for loans are only permitted on the basis of law.”

The Public Finance Act is the law that prescribes more precisely the rules on the budgetary process. The Public Finance Act determines the composition, preparation and execution of the state budget and the budgets of the local communities, asset management, borrowing, guarantees, debt management, accounting and budgetary control. The act determines that the Government is accountable to the National Assembly for the execution of the budget, whereas majors are accountable to their local councils. Both need to report to the National Assembly.

The Public Finance act provides that the government submit to the National Assembly, a proposed budget for two consecutive years (Article 13 and 13a). However, the government can suggest changes to the budget for the second year until October 1, if such changes are required because of the changes in the economic development, or fiscal policy. As explained in the OECD report, “It is . . . not the case that Slovenia makes a biannual budget every two years. Rather it makes two annual budgets every year”.[1]

The Decree on the documents of development planning bases and procedures for the preparation of the central and local government budgets determines that,[2] in adopting the budget, the government should consider the macroeconomic forecasts of the Institute of Macroeconomic Analysis and Development (UMAR) and other independent institutions. The use of the forecasts provided by UMAR has been criticized, given that UMAR is one of the users of the Slovenian budget. However, the forecasts provided by UMAR have been generally considered reliable.

The budget that is approved by the National Assembly is then publicly announced. As explained, it is possible to adopted changes in the budget for the coming year. The Government shall propose such changes if the assumptions of macroeconomic development, economic policy, and fiscal policy have changed, or in the event that the assessment of the execution of the current budget significantly deviates from the approved budget. The changes have to be finally adopted by the National Assembly. It is also possible to adopt changes to the budget of the current year (i.e. rebalans proračuna). The Government should propose such amendments if new obligations have arisen, the revised economic trends show an increase in spending or reduced revenues, or there is a need to implement measures to balance the budget.[3]

In July of each year, the minister responsible for finance and/or the mayors shall report to the Government and/or the local councils on the implementation of the budget in the first half of the year. The Government shall report to the National Assembly. At the end of the budgetary year, the users must prepare a report of their spending and submit it to the Ministry of Finance. The government must then report to the National Assembly.

The Fiscal council is a consultative body for the independent evaluation of fiscal policy. Its members are appointed by the Government on a proposal of the Minister of Finance. The Fiscal Council performs inter alia the following tasks: (i) ex-post evaluation of the sustainability and stability of fiscal policy; (ii) assessment of the medium-term fiscal targets of the fiscal framework; (iii) assessment of the effectiveness of public spending (iv) provision of an estimate of the trends of individual categories of revenue and expenditure of public finances in terms of impact on the sustainability of public finances; (v) assessment of government compliance of fiscal policy with long-term sustainability of public finances of aging. The fiscal council is financed by the government.

The Court of Audit of the Republic of Slovenia[4] is the highest body for supervising state accounts, the state budget and all public spending in Slovenia. The Constitution of Slovenia provides that the Court of Audit is independent in the performance of its duties and bound by the Constitution and law (Article X).

In addition to the Budget Implementation Act, there are several lower acts that determine the budgetary process. The fiscal rule was for instance determined in a decree, which could be amended by the Government to adapt the rule to the current economic and political situation. The fiscal rule was not accompanied by any automatic corrective mechanisms, which would prevent deviation from the rule and predetermined sanctions if the fiscal rule would not be respected. There was no body responsible for monitoring compliance with the fiscal rule and thus no determination of supervisory and potential executive powers of such authority.[5] The fiscal rule was revised through a constitutional amendment adopted in 2013 (see on this under VII.5 below).

General change   
How has the budgetary process changed since the beginning of the financial/Eurozone crisis?

Several changes were implemented since the beginning of the crisis.

(i)                In 2013, the Government has introduced a fiscal rule in its Constitution, amending Article 148. (see also question IX.4)

(ii)    There were also amendments to the Public Finance Act. In 2010, the Act Amending the Public Finance Act was adopted,[6] which did however not address the issues related to the harmonization of the national provisions with the EU provision. Further, in 2011, the government adopted the Additional 2012 Intervention Measures Act.”[7]

(iii)  In 2009, the Government established the Fiscal Council intended to act as a consultative body for the independent evaluation of fiscal policy. According to the Court of Audit, however, several factors impair the independence of the Fiscal Council. The Court of Audit maintained that the Government “did not enable independent financial operations of the Fiscal Council, failed to provide adequate expert support to the Fiscal Council in carrying out its tasks, while the Fiscal Council evaluates the work of the authority that appointed it and within which it operates.” Further, the Court of Audit stated that Government failed to ensure adequate consideration and reflection of the Fiscal Council evaluations in the planning of the fiscal policy and preparation of the budget.[8] (see also question VII.5)

(iv)             After the year 2011, the government adopted several acts that affect the rules of the budgetary process. It adopted the Rules on the completion of the implementation of the central and local government budgets for 2012,[9] Rules on the common bases for work procedures of financial services of direct spending units of the budget of the Republic of Slovenia,[10] and the Rules on the transmission of information about debt level and changes in debt level of legal entities of the public sector and communities.[11]

Institutional change 
What institutional changes are brought about by the changes in the budgetary process, e.g. relating to competences of parliament, government, the judiciary and independent advisory bodies?

No major changes were adopted so far. Perhaps, there will be changes in the role of the Fiscal Council (see also question VII.5).

Change of time-line     
How has the time-line of the budgetary cycle changed as a result of the implementation of Euro-crisis law?

The budgetary memorandum 2011-2012 explicitly states the intention to harmonize the budgetary cycle in Slovenia with the European semester.[12] I am however not aware of any change in the budgetary cycle.

What other information is relevant with regard to Slovenia and changes to the budgetary process?

No other relevant information.

[1] Dirk-Jan Kraan and Joachim Wehner, budgeting in Slovenia, 4 OECD Journal on Budgeting, ¶ 60 (2005), available at

[2] Uredba o dokumentih razvojnega načrtovanja in postopkih za pripravo predloga državnega proračuna in proračunov samoupravnih lokalnih skupnosti, Ur.l. RS, št. 44/2007.


[4] Računsko sodišče Republike Slovenije

[5] Court of Audit, Summary of the audit report Efficiency of the Preparation of Budgets of the Republic of Slovenia for the years 2011 and 2012, August 2013. See attachment: IVf Court of Audit Summary of the audit report, at 87.

[6] Zakon o spremembah in dopolnitvah Zakona o javnih financah, Ur.l. RS, št. 107/2010

[7] Zakon o dodatnih interventnih ukrepih za leto 2012, Ur.l. RS, št. 110/2011.

[8] Court of Audit, Summary of the audit report Efficiency of the Preparation of Budgets of the Republic of Slovenia for the years 2011 and 2012, augst 2013. See attachment: IVf Court of Audit Summary of the audit report, at 87

[9] Pravilnik o zaključku izvrševanja državnega in občinskih proračunov za leto 2012 Ur.l. RS, št. 71/2012.

[10] Pravilnik o skupnih osnovah za postopke dela finančnih služb neposrednih uporabnikov proračuna Republike Slovenije, Ur.l. RS, št. 84/2012.

[11] Pravilnik o pošiljanju podatkov o stanju in spremembah zadolžitve pravnih oseb javnega sektorja in občin, Ur.l. RS, št. 3/2013.