Budget principles (budget principles)

Budget principles are the basis for drawing up and implementing the budget and are intended to make the public budget controllable and transparent.

The budget principles were developed in a long parliamentary tradition and are regulated by law in the Basic Law and also in the Act on the Principles of Budget Law of the Federation and the States (HGrG), in the Federal Budget Code (BHO), in the respective State Budget Code (LHO) of the federal states and in the Social Code (SGB).

The budgetary principles include the following individual principles:

1. Annuality: A budget is drawn up for one budget year (calendar year) or 2 budget years (double budget) by the federal, state and local governments.

2. Previous: The budget must be drawn up before the start of the budget period to which it relates.

3. Prohibition of earmarking public revenues (total coverage, non-affectation principle): All income should be used to cover all expenses. Exceptions to this budgetary principle are only possible if the earmarking of certain revenues is provided for by law or by a note in the budget.

4. Unity and completeness: All revenues, expenditures and commitment appropriations to be expected in the budget year (expenditures that are only due in later budget years) are to be listed in full in the budget.

5. Accuracy and budgetary clarity: All income and expenditure to be expected in the financial year are calculated / estimated as precisely as possible, and the source of the funds and the purpose of use are systematically structured and clearly set out in the budget. This is to avoid obfuscation or manipulation of budget funds

6. Gross principle / offsetting prohibition: The expected income and expenditure must be budgeted in full and separately from each other. Income and expenses may not be offset against each other.

7. Specialty: The income is to be booked in the budget according to the reason for it. The expenses may only be estimated for the stated purpose (qualitative specialty), in the estimated amount (quantitative specialty) and in the intended period (temporary specialty).

8. The budgeted income and expenses are to be balanced.

9. Economic efficiency, thrift, necessity: The most favorable relationship between the purpose and the means used must be observed, either according to the minimum principle (the result should be achieved with the least possible means) or according to the maximum principle (the best possible result should be achieved with a certain use of means).

10. Public: The budget must be available to the public.

There are a few exceptions that are strictly regulated by law (transferability, emergency budget law, earmarking, special assets and federal operations, coverage).

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