Local Government Financing Directorate

Jeni Nacheva

Contact details:
102 “G. S. Rakovski” Str.
1040 Sofia, Bulgaria
telephone: (+359) 2/9859 2260
e-mail: Embedded Image

Directorate's main task:

Assisting the Minister of Finance in preparing and implementing the state budget in its part referring to municipalities as well as in their financing with funds from the central budget.

The Directorate interacts with the 265 municipalities on the territory of the Republic of Bulgaria, the sectoral Ministries, the National Association of Municipalities in the Republic of Bulgaria and non-governmental organizations.

Functional structure:

The Local Government Financing Directorate comprises 22 employees organized in three divisions:

  • State Mandated Activities Division;
  • Consolidated Budget Forecasts and Relations between Municipalities and the Central Budget Division;
  • Financial Recovery of Municipalities Division.

Within these divisions the Directorate implements its main functional priorities laid down in the Structural Regulations of the Ministry of Finance.

Municipal budget forecasts

The Directorate elaborates the medium-term budget forecast and the draft State Budget of the Republic of Bulgaria Act in their part referring to municipalities; takes part in the coordination and consultations with the National Association of Municipalities in the Republic of Bulgaria as regards the total amount of the relations between the municipal budgets and the central budget, as well as on other proposals on the draft state budget for the relevant year in its part referring to municipalities, including on the mechanisms to allocate subsidies/transfers by municipalities; forecasts and analyses the proceeds from municipal tax and non-tax revenues; takes part in the development of mechanisms to determine the amount of the general subsidy for state mandated activities, the equalizing subsidy and the target subsidy for capital expenditures from the central budget to the municipalities.

Performance of municipal budgets and local government financing

The Local Government Financing Directorate prepares an initial and maintains an updated, defined more precisely annual plan of the relations between the central budget and the municipalities' budgets and sets limits on municipalities' subsidies and transfers in accordance with the legal provisions. It prepares and proposes the required adjustments to the budget relations between municipalities and the central budget. The Directorate monitors, analyses and maintains the information provided by municipalities pursuant to Article 5a of the Local Taxes and Fees Act. It monitors and analyses the performance of the main indicators under the municipalities' budgets, their accounts for EU funds, the capital expenditures. It prepares short-term forecasts for the expected performance of municipalities’ budgets and accounts for EU funds by months.

The Local Government Financing Directorate elaborates guidelines to municipalities for the preparation of municipal budgets as regards the accounts for EU funds; coordinates the instructions on their performance and closure; and provides methodological support to municipalities.

Central Municipal Debt Register

The Local Government Financing Directorate maintains the Central Municipal Debt Register; monitors, analyses and provides information from the register in accordance with the requirements of the Municipal Debt Act and the Public Finance Act.

Financial Recovery of Municipalities

The Local Government Financing Directorate takes part in and monitors the procedure of municipalities’ financial recovery in execution of the commitments of the Ministry of Finance ensuing from Chapter Eight “A” – “Municipalities in Financial Difficulties”, of the Public Finance Act, as well as publishes information from the reporting data of municipalities on their financial situation.

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