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BUDGET ORGANIZATION AND BUDGET PROCESS

UNIT 2

PUBLIC FINANCE

A. TEXT

FINANCE AND FINANCIAL SYSTEM

Finance is the provision of money at the time when it is needed. It is a system of monetary relations leading to formation, distribution and use of money in the process of its turnover between economic entities.

The financial system is the network of institutions through which firms, households and units of government get the funds they need and put surplus funds to work.

Savers and borrowers are connected by financial intermediaries including banks, thrift institutions, insurance companies, pension funds, mutual funds, and finance companies.

Finance in an economic system comprises two parts: public finance and finance of economic entities.

Public finance is the provision of money (by the community through taxes) to be spent by national and local government authorities on projects of national and local benefit. It is a collective term for the financial flows and also the financial institutions of the public sector.

Public finance has the following four functions: a) the provision of essential services; b) the encouragement or control of particular sectors of the economy; c) the implementation of social policy in respect of social services, and d) the encouragement of the growth of economy as a whole.

The major instrument of any financial system is the budget. In a market-oriented economy, the budget is the most important tool for achieving national priorities and goals through the allocation and distribution of resources, and the maintenance of a stable macroeconomic environment.

The budget is an estimate of national revenue and expenditure for the ensuing fiscal year. When expenditure exceeds the revenue the budget has a deficit.

Revenue and expenditure forecasting is the most fundamental step in the process of budget preparation. Adequate planning of recurrent and capital expenditure depends critically on an accurate forecast of revenue availability. The determination of the expected overall deficit in the public sector and therefore the macroeconomic impact of fiscal policy requires accurate forecast of tax collection and expenditures.

In Ukraine, public finance is a sum of budgets of all levels of subjects, extra budgetary and reserve funds.

An accurate revenue forecast is most critical at the state level but it is also important for all subnational governments because over the last several years they have worked with increasingly autonomous budgets.

Budget preparation at the state level involves a number of institutions. The Ministry of Finance (MoF) is the central coordinating institution in charge of compiling and presenting the budget. It has major inputs from ministries in various sectors of the economy and the state tax bodies.

B. DIALOGUE

VOCABULARY LIST

A.

АНГЛІЙСЬКИЙ ВАРІАНТ РОССІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
public finance(s)   provision   monetary relations formation   distribution turnover (of money/capital) economic entity network of institutions   household unit of government   funds   surplus saver borrower intermediary thrift institution   insurance company pension fund mutual fund finance company comprise   community     tax government authorities   benefit financial flows encouragement     particular   implementation   social policy budget goal maintenance of a stable macroeconomic environment estimate revenue(s) ensuing fiscal year expenditure deficit   forecasting fundamental step budget preparation adequate planning planning of recurrent and capital expenditure critically accurate forecast availability determination of the overall deficit macroeconomic impact   tax collection   subjects of Federation extrabudgetary and reserve funds subnational governments   increasingly   autonomous budget to compile and present the budget государственные финансы снабжение, обеспечение   денежные отношения образование, формирование распределение оборот, оборачиваемость (денег/капитала) экономический субъект сеть учреждений (организаций) семейное хозяйство государственная организация фонды, средства, деньги, капитал излишек, избыток вкладчик заемщик посредник сберегательное учреждение страховая компания пенсионный фонд взаимный фонд финансовая компания включать, охватывать, содержать, вмещать сообщество, группа лиц, объединенных какими-либо признаками налог правительство, органы государственной вла­сти выгода, польза, благо финансовые потоки поддержка, стимулирование, поощрение особый, специфический, особенный выполнение, осуществление социальная политика бюджет цель, задача поддержание стабильной макроэкономической ситуации оценка, смета государственные доходы последующий финансовый год расходы, затраты дефицит, недостаток, нехватка прогнозирование основной шаг подготовка бюджета разумное планирование планирова­ние текущих и капитальных расходов решающим образом точный прогноз наличие определение, расчет общего дефи­цита макроэкономическое воздействие сбор, взимание, собираемость налогов субъекты Федерации внебюджетные и резервные фонды органы власти субъектов Федерации все более, все в большей степени автономный бюджет составить и представить бюджет державні фінанси   постачання, забезпечення грошові відносини утворення, формування   розподіл оберт, оборотність (грошей/капіталу)   економічний суб'єкт мережа установ   сімейне господарство державна організація   фонди, кошти, гроші, капітал надлишок вкладник позичальник посередник ощадна установа   страхова компанія пенсійний фонд взаємний фонд фінансова компанія включати, охоплювати, містити, уміщати співтовариство, група осіб, об'єднаних будь – якими ознаками податок уряд, органи державної влади пожиток, користь, благо фінансові потоки підтримка, стимулювання, заохочення особливий, специфічний   виконання, здійснення   соціальна політика бюджет мета, завдання підтримка стабільної макроекономічної ситуації оцінка, кошторис державні доходи наступний фінансовий рік витрати дефіцит, недолік, недостача прогнозування основний крок підготовка бюджету розумне планування планування поточних капітальних витрат вирішальним образом точний прогноз наявність визначення, розрахунок загального дефіциту макроекономічний вплив   збір, стягнення, збирання податків суб'єкти Федерації позабюджетні й резервні фонди органи влади суб'єктів Федерації усе більше, все більшою мірою автономний бюджет скласти й представити бюджет

 

В.

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
budget organization budget process system of governance autonomy   expenditure responsibilities to hand down from ...to consolidated budget   subject (to)   approval calculation   unified budget system/classification principles of integrality, independence and balance of all budgets   contradictory contradict legal base submission of data manifest   grant revenue-raising sources   at smb's discretion/at the discretion of formulation consideration execution to be involved   elsewhere executive branch   execution of the budget legislative   Accounts Chamber Federal Assembly Federal Treasury System   elaborate revenue-sharing arrangements in accordance with, according non-tax revenues fixed, or assigned, regulating and additional revenue sources proportion     transfer appropriate   VAT (Value-Added Tax)   ensure   balance   to levy taxes additional sufficient at the expense of subsidy subvention financial assistance   to grant assistance due to   demographic situation   geographical position   equalization interbudgetary relations   per capita budget revenues     average   budget federalism бюджетное устройство бюджетный процесс система управления автономия, самостоятельность обязанности по расходам передавать от... к консолидированный бюджет подлежащий, подверженный (чему-л.) одобрение расчет, подсчет, калькуляция единая бюджетная систе­ма/классификация принципы единства, независимости и сбалан- сированности всех бюджетов противоречивый противоречить юридическая база представление данных обнаруживать(ся), проявлять(ся) предоставлять источники получения доходов по чьему-л. усмотрению   формирование рассмотрение исполнение участвовать; быть вовлеченным в других местах; везде исполнительная ветвь (власти) исполнение бюджета законодательная ветвь (власти) Счетная палата Федеральное собрание система федерального казначейства разрабатывать порядок распределения государ­ственных доходов в соответствии с; согласно неналоговые доходы источники закрепленных, регулирующих и дополнительных доходов пропорция, количественное соотношение переводить (деньги) соответствующий, подходящий налог на добавленную стоимость обеспечивать, гарантировать баланс, сбалансированность облагать налогом дополнительный достаточный за счет субсидия субвенция финансовая помощь (поддержка) предоставлять помощь вследствие, из-за, по причине демографическая ситуация географическое положение выравнивание межбюджетные отношения доходы бюджета в расчете на душу населения средняя величина, средний показатель бюджетный федерализм бюджетний устрій бюджетний процес система керування автономія, самостійність   обов'язки по витратах передавати від... до консолідований бюджет   підлягаючий, підданий (будь – чому) схвалення розрахунок, підрахунок, калькуляція єдина бюджетна систе-ма/класифікація принципи єдності, незалежності й сбалан-сованості всіх бюджетів суперечливий суперечити юридична база надання даних виявляти, проявляти   надавати джерела одержання доходів по чиємусь розсуду   формування розгляд виконання брати участь; бути залученим в інших місцях; скрізь виконавча галузь (влади)   виконання бюджету законодавча галузь (влади) Рахункова палата Федеральні збори система федерального казначейства розробляти порядок розподілу державних доходів відповідно до; згідно   неподаткові доходи джерела закріплених, регулюючих і додаткових доходів пропорція, кількісне співвідношення   переводити (гроші) відповідний, підходящий   податок на додану вартість забезпечувати, гарантувати баланс, збалансованість   обкладати податком додатковий достатній за рахунок субсидія субвенція фінансова допомога (підтримка) надавати допомогу внаслідок, через   демографічна ситуація   географічне положення   вирівнювання міжбюджетні відносини   доходи бюджету розраховуючи на душу населення середня величина, середній показник бюджетний федералізм

 

 

EXERCISES

l. Answer these questions:

A. 1. What is finance and financial system?

2.What parts does finance comprise?

3. What functions does public finance perform?

4.What is a country's budget?

5. What does the process of budget preparation include?

 

В. 1. What is the budget organization of the Ukraine?

2. How is the system of governance in the state changing?

3. What principles underlie the unified budget system of the state?

4. How are revenues classified?

5. What taxes are mentioned in the dialogue?

6. What measures can be taken if subjects have deficit budgets?

7. Why do different regions of the country have unequal possibilities for raising revenue?

8. What mechanism of budget revenue "equalization" is used in Ukraine?

9. What bodies control the execution of the budget?

 

 

Ex. 2. Give derivatives of the following nouns:

provision distribution finance benefit
encouragement growth budget estimate
determination funds spending governance
practice classification independence transfer

 

Ex.6.

a) Supply the articles where necessary.

b) Write down 3-5 questions about the text.

Ex. 7.

a) Supply the prepositions where necessary,

b) Write down six questions about the text.

Budgetary Policy

The transformation of the economic and political systems in Russia has been accompanied ... substantial reforms in the budget process, including budget preparation and classification, a new treasury system for budget execution and expenditure control, considerable autonomy of subnational governments in the formulation of their budgets.

On the whole, the budgetary policy in Russia is aimed ... attaining the efficient allocation of national resources, the desirable redistribution of income ... the poorer groups in society, and the maintenance of a macroeconomic environment with stable prices, full employment and equilibrium in the balance of payments.

Accurate budget evaluation is more necessary now than ever before. The economic transition has led ... drastic retrenching in public resources so there is a need to increase the efficiency with which public resources are used. Proper budget evaluation will provide critical information and feedback to policy makers ... how well budget objectives are being attained ... the implementation of the budget.

The transition ... the market economy has significantly increased the complexity of interactions of the government with the private sector thus increasing the opportunities ... misuses of funds and ... corruption. For these reasons it is important that an effective and I independent ex-post audit be carried ... by the Accounts Chamber at . all levels of government.

Words you may need:

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
accompany treasury system formulation of the budget attain equilibrium retrench   feedback objective misuses of funds   ex-post audit   сопровождать система казначейства подготовка бюджета достигать, добиваться равновесие сокращать, урезывать (расходы) обратная связь цель нарушения в использовании средств аудит (ревизия) использования средств супроводжувати система казначейства підготовка бюджету досягати, домагатися рівновага скорочувати, урізувати (витрати) зворотний зв'язок ціль, мета порушення у використанні коштів аудит (ревізія) використання коштів

 

Ex. 8. Open the brackets putting the verbs in the correct active and passive form:

History of Russian Money

The first Russian coins (to mint) when Russia was converted to Christianity. The gold and silver coins of Kievan Rus were first made under Grand Duke Vladimir Sviatoslavich in the late 10th - early 11th century. After a long "coinless" period, minting (to resume) in the 1380s, under Grand Duke Dmitry Donskoy of Muskovy.

The Russian monetary system, which laid the foundations of national accounting and even the present-day rouble, (to take) shape in the early 16th century. Then, the chief currency unit was the silver kopeck with a depiction of a horseman with a lance (kopye in Russian), which was Russia's emblem and the symbol of grand-ducal power. The kopeck's emergence (to connect) with the 1535-1538 reform of Yelena Glinskaya, who managed to create a single monetary system for the centralized Russian state, with the rouble containing 100 kopecks.

But by the 17th century, the Russian monetary system, based on just one type of coin, the one-kopeck piece, (to become) something of an anachronizm, lagging behind the more convenient European arrangement. Peter the Great (to bring) into circulation coins of various denominations: one-rouble, fifty-kopeck, ten-kopeck, and other coins. The drastic change also (to involve) the minting metal, with gold and copper coins being produced in addition to the traditional silver pieces, and machine-minted coins taking the places of the hand-made ones.

The reform of finance minister Count Kankrin (1839-1843) was the first step towards turning paper banknotes into money backed by precious metal reserves. The silver rouble (to recognize) as the principal monetary unit.

During finance minister Sergei Witte's tenure in office, paper banknotes (to back) by gold reserves worth 1.5 billion roubles, and a new monetary economy was set up on the basis of scientifically computed paper money emission rates. Thanks to Witte's reform, Russia finally (to manage) to close the age-old gap between itself and Europe and to integrate into the global financial system. The rouble (to become) convertible.

In the post-1917 period the first paper banknotes of Soviet Russia (to issue). The monstrous hyperinflation of the first years of Soviet power went down once the New Economic Policy was in place and the gold reserves in the country rebuilt. The chervonets, as the new unit equivalent to 10 pre-revolutionary roubles was known, (to help) reviv the Russian monetary system founded by Witte. It stayed i; circulation until 1928. With the first 5-year plan in operation, when the Government resumed its practice of high emission rates, inflation (to return) and the Soviet rouble became an exclusively domestic legal tender. Now the Russian rouble (to become) an international currency.

Words you may need:

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
mint to convert to Christianity   grand duke depiction to lag (behind) tenure in office convertible revive legal tender   чеканить обращать в христианство   великий князь изображение отставать пребывание в должности конвертируемый возрождать законное платежное средство чеканити, карбувати звертати(спрямовувати) у християнство великий князь зображення відставати перебування на посаді конвертований відроджувати законні платіжні кошти

 

 

Ex.9.

a)Fill each gap with a suitable word from the box.

b)Sum up the text in 5-7 sentences and present your summary in class.

Coin forms used called known small objects assets invented using money handle big instruments

What Is Money?

Money is an asset that serves as a means of payment, a store of value, and a unit of account. Money was____a long time ago.

Gold and silver coins are the best __form of money. They have the longest history and have been more widely accepted as payment than any other form of commodity money.

The popularity and universal acceptability of ____ money is easy to understand. Coins are solid, attractive, hard-wearing and easy to ____. In addition to the qualities mentioned above, coins can be produced in___ and _____ denominations.

Societies__ gold and silver have used other____ as money, including shells, beads and pelts. Anything can serve as ____ that is easily recognized, widely accepted, and not easily copied. Gold, shells, and pelts are no longer used as money in the majority of countries.

Today two kinds of financial ____serve as money: currency (coins and bills) and checking deposits at banks and thrift institutions.

Currency plus checking deposits at banks and thrifts is often ____ M1. The money that includes balances in money market funds, savings deposits in banks and thrifts and certain other liquid _____ is called M2.

Along with coins, paper currency, and checking deposits, "plastic money" is widely ____ today. "Plastic money" comes in two ____ - credit cards and debit cards.

Words you may need:

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
asset means of payment store of value unit of account commodity money     solid hard-wearing denomination shell bead pelt checking deposit   Ml М2 «plastic money» инструмент средство платежа средство сбережения расчетная единица товар-посредник в роли денег (например, соль, мех) прочный неизнашивающийся достоинство (денег) раковина бусина шкура вклад на текущем счете   денежный агрегат Ml денежный агрегат М2 «пластиковые деньги» інструмент кошти платежу кошти заощадження розрахункова одиниця товар-посередник у ролі грошей (наприклад, сіль, хутро) міцний що не зношується вартість (грошей) раковина бусина шкіра внесок на поточному рахунку грошовий агрегат Ml грошовий агрегат М2 «пластикові гроші»

 

 

DISCUSSION

Ex. 10. a) Read and discuss the texts.

b)Single out the main facts of each text. Present them in a short review.

c)Compare the budget of New York with the budget of Moscow or Kiev. Name the major budget expenditure items.

a) The Budget Message of the Mayor

(the City of New York)

April 27, 1995

To Members of the City Council:

The budget for fiscal year 1996 has been prepared in the context of the directions for the City of New York set forth in the budget for 1995, which is being executed rather successfully.

In this connection I would like to stress that as the city authorities promised the crime is down dramatically, the quality of life has improved, the imbalances between the public and private sectors have been reduced and private sector employment is growing.

It is worth mentioning here that at the beginning of the year we carried out a reduction of 15,000 positions in the City's workforce to cut the costs and get some additional savings.

The reduction was accomplished without layoffs with the help of the municipal unions. In the course of productive negotiations with the unions the City was provided with employee redeployment rights, a valuable management tool which enabled us to transfer employees between government agencies where, in the past, layoffs may have been required.

Besides, the readjustments we made earlier this year stabilized the private sector and helped to provide the first significant growth in private sector jobs. The private sector has grown by 35,000 jobs.

However, we have to recognize that not everything is being done to execute the budget for 1995 fully. For example, the revenues are less than had been projected. To offset some of the difference, the City has proposed that the State restore funding for reimbursement for pre­school for handicapped children as well as revenue-sharing payments. As we work we learn important lessons and gain experience which helps us to assess the situation more correctly, which, we hope, the 1996 budget will reflect.

The 1996 budget of the City of New York is $ 31.1 billion. This is the sixteenth successive budget which is balanced under generally accepted accounting principles. The budget is balanced without relying on unreasonable State and Federal aid, taxes being the largest source of revenue. We understand, however, that for the economic well-being of our City, we must reduce the burden on our taxpayers.

Hence, the budget for 1996 reflects our plans to expand the tax reduction program and to boost local economic activity by providing tax reliefs. Reductions in the hotel tax, the commercial rent tax and the unincorporated business tax introduced earlier, have already had an effect.

Besides, we shall be stimulating non-tax revenue initiatives. The budget assumes the attainment of $ 600 million in labour savings and productivity in fiscal year 1996.

In recognition of the need to reduce the costs of the government we are planning to continue to improve, restructure and streamline government workforce through agency reductions, consolidation of agency functions, agency mergers, and managerial pay freeze.

It should be pointed out specifically that the budget for 1996 provides a meaningful program for developing a long-term capital investment strategy to improve and expand projects in environmental protection, housing, transportation, education and medical aid. S350 mil. will be earmarked for investing in emergency medical services. The budget proposes the sale of the water and sewer system. The sale will be funded by issuance of bonds.

The budget is based on the commitment of the City's authorities to provide an equitable distribution of the city's resources, to correct the imbalances, and to mitigate the impact of the cuts on those whose incomes have not kept pace with inflation.

As we enter the budget adoption process I welcome a rational discussion of our city's priorities, which, I am confident, will give the city its best opportunity to participate in the national recovery.

Words you may need:

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
crime unbalance   it is worth mentioning ... savings   layoff   employee redeployment right     offset   reimbursement   handicapped children   assess successive   generally accepted accounting principles burden tax relief assume attainment streamline   merger pay freeze   It should be pointed out... earmark issuance of bonds mitigate to keep pace (with) преступность несоответствие, диспропорция Следует упомянуть ... сбережения, накопления   увольнение (из-за отсутствия работы) право на перевод служащих в другую государствен­ную организацию возмещать, компенсировать возмещение, компенсация дети, страдающие какими-либо физическими недостатками оценивать следующий, один за другим общепризнанные принципы учета бремя налоговая льгота предполагать достижение рационализировать, совершенствовать слияние замораживание заработной платы Следует подчеркнуть ... выделять выпуск облигаций смягчать идти в ногу (с) злочинність невідповідність, диспропорція Варто згадати ... заощадження, нагромадження звільнення (через відсутність роботи) право на переказ службовців в іншу державну організацію   відшкодовувати, компенсувати відшкодування, компенсація діти, що страждають будь – якими фізичними вадами   оцінювати наступний, один за іншим загальновизнані принципи обліку тягар податкова пільга припускати досягнення раціоналізувати, удосконалювати злиття заморожування заробітної плати Варто підкреслити ... виділяти випуск облігацій пом'якшувати іти в ногу (з)

 

d) Read the text (b) and say what you know about the budget process:

b) In market economies the budget is the proposed and later the authorized statement of revenues and expenditures for a period, normally a fiscal year. The government budget may show the planned or authorized expenditure of central government alone, or may incorporate also expenditures and revenues of regional and local governments.

The budget is the key instrument for expression and execution of the government's economic policy.

Government budgets have a wide implication for the national economy. There are various practical approaches to budgeting, including the administrative budget, which emphasizes the expenditures of ongoing government operations; the capital budget, which gives separate treatment to public works projects and their special financing requirements; the cash budget, which simplifies budgetary procedures, etc.

In the United States the federal budget deals mainly with expenditure programmes, and revenues are covered only briefly. The size of the budget deficit or surplus is regarded as very important. An important aspect of the budgetary process is a great influence of the Congress. The US budget is submitted in January for the fiscal year coming in July. It is then considered by several sub-committees of the House of Representatives and the Senate.

In Great Britain the preparation of the budget is the function of the Treasury, which is headed by the Chancellor of the Exchequer. The emphasis of the British Budget is on taxation and the state of the economy.

The Budget is the Government's main economic statement of the year. It is announced by the Chancellor of the Exchequer who reviews the nation's economic performance and describes the Government's economic objectives and the policies it intends to follow in order to achieve them.

Words you may need:

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
authorized   incorporate implication budgeting administrative budget   capital budget   cash budget   Chancellor of the Exchequer разрешенный, официально принятый включать значение составление бюджета административная финансовая смета бюджет капиталовложений бюджет наличных средств министр финансов дозволений, офіційно прийнятий включати значення складання бюджету адміністративний фінансовий кошторис бюджет капіталовкладень бюджет наявних коштів   міністр фінансів

 

READING PRACTICE

Ex. 15. Read the text and name the facts from the text which are new to you:

Treasury

Despite the many changes and reforms in Russia over the past few years, budget execution still presents significant problems. There is a lack of efficient control of expenditure, of information on extra-budgetary funds, of a well-defined procedure for the allocation of funds between different levels of government. In addition, there are problems with the budget classification, the obsolete system of public accounts, weak debt and cash management practices.

In 1993, Russia began its work on setting up the Federal Treasury, It consists of the Main Department of the Federal Treasury of the Ministry of Finance of the Russian Federation and its territorial bodies in republics, areas, and regions. The tasks of the Treasury are the following: to organize and exercise control over the execution of the federal budget; to regulate relations between the federal budget and federal off-budget funds; to exercise control over the receipt and use of the funds; to regulate relations between the federal budget and budgets of subjects of the Federation; to make short-term projections of financial resources and to manage them; to collect and compile information about the position of federal finances, to manage and service the state internal and external debt jointly with the Central Bank.

The new Treasury is expected to require that all spending units should report their operations at the commitment, verification and payment stages. The plan is that after verification of budget allocation and compliance with existing authorization the Treasury will issue the actual payment orders against a unified Treasury account with the Central Bank. This will imply a far-reaching change of budgeting practices in Russia. The new mechanism will allow the government to exercise effective spending controls in order to have updated information on government expenditure and for debt and cash management purposes. The new Treasury is also expected to help remedy other deficiencies in the process of budget execution. Effective implementation of the new Treasury system will lead to changes outside the budget execution, such as budget classification and accounting standards.

Words you may need:

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
despite lack obsolete public account   debt and cash management   to exercise control receipt internal and external debt   jointly (with) spending unit commitment verification authorization to issue payment orders   updated   to remedy deficiencies accounting standards несмотря на недостаток устаревший счет государственного учреждения управление долгом и наличными средствами осуществлять контроль получение, поступление внутренний и внешний долг совместно (с) бюджетная единица поручение проверка, контроль разрешение выдавать платежные поручения обновленный, скорректированный исправлять недостатки стандарты бухучета незважаючи на недолік застарілий рахунок державної установи керування боргом і наявними коштами здійснювати контроль одержання, надходження внутрішній і зовнішній борг спільно (з) бюджетна одиниця доручення перевірка, контроль дозвіл видавати платіжні доручення оновлений, скоректований виправляти недоліки стандарти бухобліку

 

Ex. 16 a) Read the article below quickly to find out the main facts about the reform of the financial system in Indonesia:

UNIT 2

PUBLIC FINANCE

A. TEXT

FINANCE AND FINANCIAL SYSTEM

Finance is the provision of money at the time when it is needed. It is a system of monetary relations leading to formation, distribution and use of money in the process of its turnover between economic entities.

The financial system is the network of institutions through which firms, households and units of government get the funds they need and put surplus funds to work.

Savers and borrowers are connected by financial intermediaries including banks, thrift institutions, insurance companies, pension funds, mutual funds, and finance companies.

Finance in an economic system comprises two parts: public finance and finance of economic entities.

Public finance is the provision of money (by the community through taxes) to be spent by national and local government authorities on projects of national and local benefit. It is a collective term for the financial flows and also the financial institutions of the public sector.

Public finance has the following four functions: a) the provision of essential services; b) the encouragement or control of particular sectors of the economy; c) the implementation of social policy in respect of social services, and d) the encouragement of the growth of economy as a whole.

The major instrument of any financial system is the budget. In a market-oriented economy, the budget is the most important tool for achieving national priorities and goals through the allocation and distribution of resources, and the maintenance of a stable macroeconomic environment.

The budget is an estimate of national revenue and expenditure for the ensuing fiscal year. When expenditure exceeds the revenue the budget has a deficit.

Revenue and expenditure forecasting is the most fundamental step in the process of budget preparation. Adequate planning of recurrent and capital expenditure depends critically on an accurate forecast of revenue availability. The determination of the expected overall deficit in the public sector and therefore the macroeconomic impact of fiscal policy requires accurate forecast of tax collection and expenditures.

In Ukraine, public finance is a sum of budgets of all levels of subjects, extra budgetary and reserve funds.

An accurate revenue forecast is most critical at the state level but it is also important for all subnational governments because over the last several years they have worked with increasingly autonomous budgets.

Budget preparation at the state level involves a number of institutions. The Ministry of Finance (MoF) is the central coordinating institution in charge of compiling and presenting the budget. It has major inputs from ministries in various sectors of the economy and the state tax bodies.

B. DIALOGUE

BUDGET ORGANIZATION AND BUDGET PROCESS

Foreigner: Could you give me a general idea of budget organization and budget process in Ukraine?

Ukrainian: Certainly. First of all, by the budget organization we mean the structure of our budget system and its major components.

F.: I suppose there is a close link between the budget organizations and your state system isn't there?

U.: Yes, there is. Being a state we have the budget, regional budgets, and local budgets.

F.: I see. I know that in the past you used to have a single budget including the state budget didn't you?

U.: Yes, that's true. But now the situation has changed. Our system of governance is moving from a centralized one to a more decentralized. Our regional and local authorities have been given considerable budget autonomy now.

F.: Do you mean to say that some of expenditure responsibilities have been handed down from the federal government to the subnational governments?

U.: Exactly. I would also like to stress that our consolidated budget is not subject to approval any longer. It is used only for analysis and calculation.

F.: If I got you right, now the budget system represents a sort of a compendium of the regional and local budgets.

U.: Correct, but it is a unified budget system based on the principles of integrality, independence and balance of all budgets.

F.: How do these contradictory principles work in practice? For instance, independence and integrality?

U: Well, these principles do not contradict each other because each has its own sphere of influence on the budget system.

F.: Could you be more specific, please?

U: Yes, the principle of integrality means the integrality of the legal base, use of the unified budget classification and budget documentation, submission of statistical data from one level another for the preparation of the consolidated budget.

F.: In what way does budget independence manifest itself?

U.: Over the transition years a number of laws have been passed that grant local governments more autonomy in budgetary matters. Thus governments at different levels have their own revenue-raising sources now and use them at their discretion.

F.: I'm clear now. And how is the budget process arranged?

U.: The budget process includes all activities of government bodies on formulation, consideration, approval and execution of the budget.

F.: What governing bodies are involved in this process?

U.: As elsewhere, different governing bodies are involved in the process. The executive branch is responsible for the preparation and execution of the budget; budget consideration and approval is the responsibility of the legislative branch.

F.: Are there any bodies controlling the execution of the budget?

U.: Of course. First of all, it's the Accounts Chamber, then the State Treasury System.

F.: It seems the Government has done a lot to create a new budget system and to elaborate a new budget policy and methods of budget planning,

U.: You are absolutely right.

* * *

F.: I'm also interested in how budget revenues are formed and distributed at different levels. What revenue-sharing ar­rangements are practiced?

U.: It is done in accordance with the tax law. Budget revenues include tax and non-tax revenues. To distribute revenue sources between budgets of different levels we divide revenues into fixed, or assigned regulating and additional.

F.: Still, I'm not quite clear about this classification and the role of different kinds of revenue.

U.: Let's start with fixed revenues. They are fully, or according to fixed proportion, transferred to the appropriate budget. For example, let's take VAT. 75% of VAT is transferred to the state budget and 25% goes to the local budgets.

F: Thus, the regulating revenues ensure the budgets' balance,

U.: Yes. In addition, local authorities have the right to levy local taxes independently. They are called "additional taxes".

F.: As far as I know public authorities at all levels need revenue to meet the cost of social and municipal services. What if the revenue is not sufficient?

U.: Deficits, if they arise, are covered at the expense of budget funds transferred from the budget of a higher level of authority. Besides, subsidies, subventions and other forms of financial assistance can be granted.

F.: I see. It's obvious that different regions have unequal possibilities for raising revenue and different requirements for financial resources due to natural and climatic conditions, de­mographic situation, geographical position, social and econo­mic development. How do you solve this problem?

U.: The "equalization" is done through transfers which are the key element of the new mechanism of the interbudgetary relations. State assistance is granted to regions where the per capita budget revenues are lower than the average for Ukraine.

F: Now I understand that you are really engaged in improving your budget process.

VOCABULARY LIST

A.

АНГЛІЙСЬКИЙ ВАРІАНТ РОССІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
public finance(s)   provision   monetary relations formation   distribution turnover (of money/capital) economic entity network of institutions   household unit of government   funds   surplus saver borrower intermediary thrift institution   insurance company pension fund mutual fund finance company comprise   community     tax government authorities   benefit financial flows encouragement     particular   implementation   social policy budget goal maintenance of a stable macroeconomic environment estimate revenue(s) ensuing fiscal year expenditure deficit   forecasting fundamental step budget preparation adequate planning planning of recurrent and capital expenditure critically accurate forecast availability determination of the overall deficit macroeconomic impact   tax collection   subjects of Federation extrabudgetary and reserve funds subnational governments   increasingly   autonomous budget to compile and present the budget государственные финансы снабжение, обеспечение   денежные отношения образование, формирование распределение оборот, оборачиваемость (денег/капитала) экономический субъект сеть учреждений (организаций) семейное хозяйство государственная организация фонды, средства, деньги, капитал излишек, избыток вкладчик заемщик посредник сберегательное учреждение страховая компания пенсионный фонд взаимный фонд финансовая компания включать, охватывать, содержать, вмещать сообщество, группа лиц, объединенных какими-либо признаками налог правительство, органы государственной вла­сти выгода, польза, благо финансовые потоки поддержка, стимулирование, поощрение особый, специфический, особенный выполнение, осуществление социальная политика бюджет цель, задача поддержание стабильной макроэкономической ситуации оценка, смета государственные доходы последующий финансовый год расходы, затраты дефицит, недостаток, нехватка прогнозирование основной шаг подготовка бюджета разумное планирование планирова­ние текущих и капитальных расходов решающим образом точный прогноз наличие определение, расчет общего дефи­цита макроэкономическое воздействие сбор, взимание, собираемость налогов субъекты Федерации внебюджетные и резервные фонды органы власти субъектов Федерации все более, все в большей степени автономный бюджет составить и представить бюджет державні фінанси   постачання, забезпечення грошові відносини утворення, формування   розподіл оберт, оборотність (грошей/капіталу)   економічний суб'єкт мережа установ   сімейне господарство державна організація   фонди, кошти, гроші, капітал надлишок вкладник позичальник посередник ощадна установа   страхова компанія пенсійний фонд взаємний фонд фінансова компанія включати, охоплювати, містити, уміщати співтовариство, група осіб, об'єднаних будь – якими ознаками податок уряд, органи державної влади пожиток, користь, благо фінансові потоки підтримка, стимулювання, заохочення особливий, специфічний   виконання, здійснення   соціальна політика бюджет мета, завдання підтримка стабільної макроекономічної ситуації оцінка, кошторис державні доходи наступний фінансовий рік витрати дефіцит, недолік, недостача прогнозування основний крок підготовка бюджету розумне планування планування поточних капітальних витрат вирішальним образом точний прогноз наявність визначення, розрахунок загального дефіциту макроекономічний вплив   збір, стягнення, збирання податків суб'єкти Федерації позабюджетні й резервні фонди органи влади суб'єктів Федерації усе більше, все більшою мірою автономний бюджет скласти й представити бюджет

 

В.

АНГЛІЙСЬКИЙ ВАРІАНТ РОСІЙСЬКИЙ ВАРІАНТ УКРАЇНСЬКИЙ ВАРІАНТ
budget organization budget process system of governance autonomy   expenditure responsibilities to hand down from ...to consolidated budget   subject (to)   approval calculation   unified budget system/classification principles of integrality, independence and balance of all budgets   contradictory contradict legal base submission of data manifest   grant revenue-raising sources   at smb's discretion/at the discretion of formulation consideration execution to be involved   elsewhere executive branch   execution of the budget legislative   Accounts Chamber Federal Assembly Federal Treasury System   elaborate revenue-sharing arrangements in accordance with, according non-tax revenues fixed, or assigned, regulating and additional revenue sources proportion     transfer appropriate   VAT (Value-Added Tax)   ensure   balance   to levy taxes additional sufficient at the expense of subsidy subvention financial assistance   to grant assistance due to   demographic situation   geographical position   equalization interbudgetary relations   per capita budget revenues     average   budget federalism бюджетное устройство бюджетный процесс система управления автономия, самостоятельность обязанности по расходам передавать от... к консолидированный бюджет подлежащий, подверженный (чему-л.) одобрение расчет, подсчет, калькуляция единая бюджетная систе­ма/классификация принципы единства, независимости и сбалан- сированности всех бюджетов противоречивый противоречить юридическая база представление данных обнаруживать(ся), проявлять(ся) предоставлять источники получения доходов по чьему-л. усмотрению   формирование рассмотрение исполнение участвовать; быть вовлеченным в других местах; везде исполнительная ветвь (власти) исполнение бюджета законодательная ветвь (власти) Счетная палата Федеральное собрание система федерального казначейства разрабатывать порядок распределения государ­ственных доходов в соответствии с; согласно неналоговые доходы источники закрепленных, регулирующих и дополнительных доходов пропорция, количественное соотношение переводить (деньги) соответствующий, подходящий налог на добавленную стоимость обеспечивать, гарантировать баланс, сбалансированность облагать налогом дополнительный достаточный за счет субсидия субвенция финансовая помощь (поддержка) предоставлять помощь вследствие, из-за, по причине демографическая ситуация географическое положение выравнивание межбюджетные отношения доходы бюджета в расчете на душу населения средняя величина, средний показатель бюджетный федерализм бюджетний устрій бюджетний процес система керування автономія, самостійність   обов'язки по витратах передавати від... до консолідований бюджет   підлягаючий, підданий (будь – чому) схвалення розрахунок, підрахунок, калькуляція єдина бюджетна систе-ма/класифікація принципи єдності, незалежності й сбалан-сованості всіх бюджетів суперечливий суперечити юридична база надання даних виявляти, проявляти   надавати джерела одержання доходів по чиємусь розсуду   формування розгляд виконання брати участь; бути залученим в інших місцях; скрізь виконавча галузь (влади)   виконання бюджету законодавча галузь (влади) Рахункова палата Федеральні збори система федерального казначейства розробляти порядок розподілу державних доходів відповідно до; згідно   неподаткові доходи джерела закріплених, регулюючих і додаткових доходів пропорція, кількісне співвідношення   переводити (гроші) відповідний, підходящий   податок на додану вартість забезпечувати, гарантувати баланс, збалансованість   обкладати податком додатковий достатній за рахунок субсидія субвенція фінансова допомога (підтримка) надавати допомогу внаслідок, через   демо

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