Director of the Directorate
Mrs. Valentina Grozdanova
Contact details:
102 “G. S. Rakovski” Str.
1040 Sofia, Bulgaria
telephone: (+359) 2/9859 2550
e-mail: localfin@minfin.bg
The Local Government Financing Directorate is in charge of the preparation, implementation and balancing-off of the consolidated fiscal program in its part referring to municipalities. It interacts with the 264 municipalities on the territory of the Republic of Bulgaria in the preparation and implementation of local budgets.
Bulgaria has embarked on fiscal decentralization of municipalities since January 2003. The budgetary relations between municipalities and the Central budget are being determined under a mechanism, which includes 3 components: general grant for the state mandated activities, general equalizing grant and target grant for capital expenditures. This mechanism reflects the segregated expenditure responsibilities at central and local levels of government and establishes a single approach with regard to determining the expenditures for the mandated activities for municipalities on the basis of standards for their financing adopted by a decision of the Council of Ministers for the relevant year.
The amount of subsidies for municipalities is determined under a mechanism voted by the National Assembly of the Republic of Bulgaria as an integral part of the budget for the relevant year. The mechanism has been developed jointly with representatives of the National Association of Municipalities in the Republic of Bulgaria.
The current expenditures for the state mandated activities are financed from general grant for the state mandated activities, and for the local mandated activities - from property and other taxes, non-tax revenues, general equalizing grant and other transfers for local mandated activities. Municipalities also receive target grant to finance capital expenditures.
The Local Government Financing Directorate analyzes monthly the cash implementation of the budget of each municipality, the amount of arrears and cash in bank.
Within the annual budget procedure the Directorate plans the target grants for capital expenditures by municipalities and elaborates estimate limits for financing of capital expenditures from the Central budget, incl. for repairs and construction of local municipal roads. It coordinates the estimates for financing of capital expenditures of municipalities and monitors compliance with the procedure for allocation of resources to municipalities for co-financing of municipal projects under international and national programs (the programs of the Social Investment Fund, the Beautiful Bulgaria Project, PHARE, etc.).
The Local Government Financing Directorate manages and maintains the Central Municipal Debt Register in accordance with the Municipal Debt Law.
It participates in the activities concerning the realization of the Decentralization Strategy and the Program for its implementation, and monitors and analyzes the current implementation of the municipalities' budgets through a system of monitoring and evaluation indicators.
While monitoring the budgetary relations between municipalities and the Central budget and creating conditions necessary for the consistent implementation of fiscal decentralization, the Local Government Financing Directorate is guided by the Program of the Government of European integration, economic growth and social responsibility and the Three-year program for effective cooperation between the Ministry of Finance and the National Association of Municipalities in the Republic of Bulgaria. The Directorate participates in the generation of conditions necessary for fiscal decentralization consistent implementation, improvement of municipal independence and strengthening civil control thereon.