UNMIK PROVISIONAL INSTITUTIONS OF SELF-GOVERNMENT INSTITUCIONET E PËRKOHSHME TE VETËQEVERISJES PRIVREMENE INSTITUCIJE SAMOUPRAVLJANJA

MINISTRY OF ECONOMY AND FINANCE MINISTRIA PËR EKONOMI DHE FINANCA MINISTARSTVO ZA PRIVREDU I FINANSIJE

SECTION 41 FINAL BUDGET REPORT

2003

Fiscal Reporting Unit Ministry of Finance and Economy Corner of Boulevard and Mother Teresa Street, ,

Telephone: +381 (0)38 540 564 x244 Facsimile: +381 (0)38 540 788 FINAL BUDGET RECONCILIATION REPORT 2003

Reporting Requirement

The Law on Public Financial Management and Accountability requires that the Minister of Finance and Economy shall prepare a Budget Reconciliation Report covering the previous fiscal year.

Readers Guide

This report is designed to provide the information required of a Final Budget Report under the Law for the 2003 financial year. The column titled “Reporting Requirement” in following table outlines the information sought in each relevant section of the Law.

The “Status” column in the table below either contains the information requested or will direct you to the relevant sections of the information provided in the attachments. Consistent with the Law, where information is not currently available this is specified.

Section Reporting Requirement Status 41.3 (a) An overview of important actual receipts and Total Expenditures in 2003 were € 570.14 million. expenditures. Total revenues were € 589.65 million. In addition, Designated Donor Grants of € 25.15 million were received during 2003. These receipts and expenditures are set out in Attachment 1, 2 and 3. 41.3 (b) Details of how a budget deficit was financed In 2003 there was a cashflow surplus of €19.5 million. or how a surplus was invested. These surplus funds were invested in the Banking and Payments Authority of Kosovo. 41.3 (c) Other information considered necessary by In addition to the reporting requirements set out in the the Minister of Finance and Economy or Law, this report also includes a detailed cashflow th e SRSG. statement for 2003. This is included as Attachment 1. 41.4 (a) The actual receipts, identified by type, of Attachment 2 details the actual receipts of budget budget organizations compared with the organizations on an aggregate basis. relevant projections contained in the budget. 41.4 (b) Actual dedicated revenue received, identified The principle item of dedicated revenue is municipal by ty pe , dur in g t he f isc a l ye ar . own-source revenue. During 2003 €23.6 million euro of own source revenue was spent by municipalities. The collected € 5.0 million euro of dedicated revenue during the year, in the form of student fees. The Ministry of Health collected € 1.2 million in of dedicated revenue in the form of co- payments in hospitals. 41.4 (c) Actual expenditures, by classification, from Of the € 21.5 million of municipality own source appropriations of dedicated revenue. revenue spent in 2003, € 21.3 million was for goods and services and € 0.2 million for capital.

All expenditure of student fee revenue by the University of Pristina was classified as being for goods and services.

All expenditure of co-payment revenue by the Ministry of Health was classified as being for goods and services. 41.4 (d) Actual number of permanent and temporary Data for the number of employees by budget organization is included in Attachment 5. Currently employees of budget organizations paid the data available from the Ministry of Public Services from appropriations in the fiscal year. does not distinguish between temporary and permanent employees. 41.4 (e) Actual payments of interest or amounts in the There is currently no debt held by the Government nature of interest on debt described in and therefore no payments of interest or principal. Section 46 and for repayment of debt principal. 41.4 (f) Actual expenditures in respect of each In 2003 appropriations are categorized by Goods & app rop riat io n category comp ared wit h (i) the Services, Wages & Salaries, Subsidies & Transfers budget appropriation for that category; and and Reserves. Attachment 2 contains information on (ii) the actual expenditure for that category in spending in these categories against the 2003 th e prev ious fiscal year. appropriation and expenditure under these categories in 2002 (total actual and YTD). 41.4 (g) Details of all recipients of public grants made Public grants are record ed by Treasury as subsidies in the fiscal year and the amount they and trans fers, refl ecting the structure of appropriation Received. schedules.

The principal recipients of grants under the Kosovo Consolidated Budget in 2003 were Designated Entities (through the Kosovo Trust Agency) and cultural institutions (through the Ministry of Culture). Data is not currently held centrally regarding the amount received by each of these recipients. 41.4 (h) Details of expenditures for the contingent Expenditure under the Advance for the Minister for exp en dit ure app rop riat ions described in Finance and Economy, the Advance to the SRSG and Section 26. other Reserves are set out in Attachment 4. 41.4 (i) Details of all adjustments to appropriations No adjustments were made to appropriations on the made pursuant to Section 27 and basis of changes in responsibilities. Section 28. 41.4 (j) Actual user fee receipts for the fiscal year. T otal fees and charg es data is included in Attachment 2 under the category of non-tax revenue. 41.5 (a) Details of investments of public money made All surplus funds in 2003 were held as deposits at the during the fiscal year. Banking and Payments Authority of Kosovo. Interest received relates to deposit accounts held at Banking and payments Authority of Kosovo and Commerzbank. 41.5 (b) Details of any obligations described in The Government had no borrowings during the period. Section 46. 41.5 (c) A full accounting of assets held by budget Financial assets of the Kosovo Consolidated Budget at organizations at the end of the fiscal year. the end of 2003 totaled 336 million euro on a cash basis. Data relating to non-financial assets was not collected. The FreeBalance project team within the Treasury Department are currently planning for the introduction of an assets module which will enable the centralized collection of additional data on non- financial assets. 41.5 (d) Other information considered necessary by In addition to the reporting requirements set out in the & the Minister of Finance and Economy or Law, this report also includes a detailed cashflow 41.4 (k) th e SRSG. statement for 2003. This is included as Attachment 1.

Ali Sadriu Minister for Finance and Economy

2 ATTACHMENT 1 – CASH FLOW DATA 2003 2003 Actual (Unaudited) Total Total Jan Feb March April May June July Aug Sept Oct Nov Dec appropriations and DDGs actual Actual (€ million euro)

Total Revenues 584.40 589.65 41.17 34.88 48.51 51.59 45.65 45.69 56.89 51.53 65.21 58.35 38.17 52.00

Tax revenues 512.20 520.76 34.71 30.77 43.08 46.83 40.15 40.31 50.92 46.71 59.02 52.90 32.45 42.91 Border taxes 420.50 428.28 24.65 24.50 35.28 29.82 35.31 36.78 39.03 41.18 55.03 39.29 31.73 35.68 Domestic taxes 101.70 108.15 10.40 6.80 8.30 17.50 6.79 5.31 14.23 5.66 6.92 13.96 3.92 8.34 Domestic VAT refund -1.00 -2.25 -0.18 -0.21 -0.13 -0.22 -0.09 -0.02 -0.68 -0.03 -0.26 -0.16 -0.07 -0.20 Border taxes refund -9.00 -13.43 -0.16 -0.33 -0.37 -0.28 -1.86 -1.76 -1.66 -0.09 -2.68 -0.20 -3.13 -0.92

Non tax revenues 44.40 41.59 4.74 3.01 2.79 2.74 3.36 3.06 3.91 2.63 3.50 3.25 2.86 5.73

Municipal own revenues 27.80 27.31 1.72 1.10 2.64 2.03 2.14 2.31 2.05 2.19 2.69 2.21 2.87 3.36

Total Expenditures 862.43 570.14 32.43 36.39 41.50 43.17 48.54 46.62 49.52 38.15 43.00 46.55 58.91 85.37 Central government 624.94 406.41 16.51 26.92 29.06 32.46 36.40 33.92 34.83 26.55 30.65 29.01 43.60 63.84 Local governments 185.57 138.65 8.70 8.71 10.10 9.56 11.20 10.69 11.78 10.81 11.42 13.36 13.44 18.88 Designated Donor Grants 51.92 25.08 4.57 0.75 2.33 1.16 0.93 2.01 2.92 0.79 0.93 4.18 1.86 2.65 Adjustment 3 2.65 2.65

Overall Budget Balance -278.03 19.51 8.74 -1.51 7.02 8.42 -2.89 -0.93 7.36 13.38 22.21 11.81 -20.74 -33.37

Financing 278.03 -19.51 -8.74 1.51 -7.02 -8.42 2.89 0.93 -7.36 -13.38 -22.21 -11.81 20.74 33.37

Donor transfers 34.15 29.15 2.53 6.17 4.49 3.67 0.67 0.71 5.05 1.51 0.92 0.22 1.27 1.94 Budget Support Grants 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Designated Donor Grants new 29.15 29.15 2.53 6.17 4.49 3.67 0.67 0.71 5.05 1.51 0.92 0.22 1.27 1.94 Change in bank balances 243.88 -48.66 -11.27 -4.66 -11.51 -12.09 2.22 0.22 -12.42 -14.89 -23.13 -12.03 19.47 31.42

Memorandum items: Cumulative Budget Balance 324.77 300.30 304.96 316.47 328.56 326.34 326.12 338.54 353.43 376.56 388.58 369.11

ATTACHMENT 2 – AGGREGATE REVENUE DATA

2003 Budget Progress Plan YTD against annual actual plan

euro million % Total Revenues 584.40 589.65 100.9

Central Budget Revenues 556.60 562.35 101.0

Tax revenue 512.20 520.76 101.7

Taxes on income and profits 62.70 61.91 98.7 Wage tax 14.80 14.58 98.5 Profit tax 29.90 28.41 95.0 Presumptive tax 18.00 18.91 105.0 Hotels and restaurants tax 0.00 0.01

Taxes on goods and services 380.80 386.80 101.6 VAT 224.00 215.46 96.2 Domestic 36.30 34.86 96.0 Imports 187.70 180.60 96.2 Excises 156.80 171.34 109.3

Taxes on international trade 78.70 74.98 95.3 Customs 76.00 72.34 95.2 Other 2.70 2.64 -

Adjustments -10.00 -2.92 Border taxes 1.37 Domestic taxes 11.38 Tax refunds -15.67

Non tax revenue 44.40 41.59 93.7 Fees and charges 44.40 39.13 88.1 Interest Income n.a. 2.46

Transfers 54.15 29.15 53.8 Budget Support Grants 25.00 0.00 Designated Donor Grants New 29.15 29.15

Municipal own source revenues 27.80 27.31 98.2

Note: Donor grants received are treated as a financing item and are not included in total revenue. ATTACHMENT 3 – AGGREGATE EXPENDITURE DATA

2002 2003 Total Plan YTD against annual actual plan million euro % Total Expenditure 431.33 862.43 570.14 66.2

Central Government Operations 316 624.94 406.40 65.2

Current expenditure 251.32 430.52 314.45 73.2 Wages and Salaries 78.04 71.5 67.49 94.4 Goods and Services 85.79 185.8 118.61 63.8 Subsidies and Transfers 87.49 168.6 126.97 75.8 Reserve 0 2.5 1.38 54.8 Other 2.2

Capital expenditure 62.03 194.4 89.31 45.9 Adjustment -2.65 2.65

Local Governments Op e ratio ns 88.98 185.57 138.65 74.6

Current expenditure 88.98 156.54 134.23 85.6 Wages and Salaries 53.36 78.51 78.21 99.6 Goods and Services 35.62 75.7 55.04 72.4 Subsidies and Transfers 0 0 Reserve 0 2.3 0.97 42.0

Capital expenditure 0 29 4.42 15.3

Designated Donor Grants 52.92 25.08 48.5

Current expenditure 26.35 na 21.03 Wages and Salaries 0 Goods and Services 26.31 21.00 Subsidies and Transfers 0.04 0.03 Reserve 0 0 Capital expenditure 0 na 4.06

“Plan” consists of total appropriations for the year.

2 ATTACHMENT 4 - EXPENDITURE OF ADVANCES AND OTHER RESERVES

Other Reserves

Total Appropriations 12,768,116.00 SRSG’s Advance Department amount Total Appropriations 8,781,000.00 Mines and Minerals 225,000.00 Frequency Management Unit 660,000.00 Department amount Trepça Mine 900,000.00 Communities Office, Admin 90,000.00 Regulatory Committee 88,116.00 KTA Electricity 3,000,000.00 Independent Media 100,000.00 Civil Aviation 500,000.00 Independent Media 100,000.00 KTA Railroads - UNMIK 294,000.00 Independent Media 100,000.00 Justice – Special Chamber 168,881.00 Independent Media 24,651.00 Public Services Reg Committee 1,500,000.00 Airport 4,200,000.00 Auditor General 900,000.00 KTA Electricity KPS 700,000.00 EFC 170,000.00 Criminal Investigation 350,000.00 Public Security 1,800,000.00 Independent Media Committee 100,000.00 Project for North Mitrovica 1,181,000.00 Istog Municip. Administration 15,000.00 Prison Services 600,000.00 Obiliq Municip. Health 46,000.00 UNMIK Railroad 1,392,000.00 Central Administration Education 100,000.00 Total 12,440,767.00 Criminal Service 100,000.00 Balance 327,349.00 Communities Office Admin 290,000.00 Economic and Fiscal Council 10,000.00 Mitrovica Municipality 1,181,000.00 Minister’s Advance Total 8,444,881.00 Balance 336,119.00 Total Appropriations 9,964,122.00 Department amount Culture Support 530,000.00 Prime Minister’s Office 2,010,559.00

Health - Ferizaj 150,000.00 Kosovo Veterinary Services 230,000.00 Municipality Admin Dragash 360,000.00 Social Assistance 150,000.00 Municipality Admin Prishtine 366,000.00 Municipality Admin Fushe Kosove 189,723.00 Education Kline 103,596.00 Health Gjilan 80,962.00 Administration Obiliq 250,000.00 Administration Shtime 120,000.00 Administration Suharek 130,000.00 Administration Shterpce 40,000.00 Administration Gjakove 100,000.00 Municipalities 2,487,282.00 Road Maintenance 2,666,000.00 Total 9,964,122.00 Balance 0.00

3 ATTACHM ENT 5 – EMPLOYM ENT DATA

Central Budget Organisations Budget Actual NATIONAL ASSEMBLY 237 248 OFFICE OF THE PRESIDENT 64 46 OFFICE OF THE PRIME MINISTER 95 106 MINISTRY OF FINANCE & ECONOMY 996 769 MINISTRY OF PUBLIC SERVICES 1,217 955 MIN.OF AGRICULT.FOREST &RURAL 501 471 MINISTRY OF TRADE AND INDUSTRY 106 100 MINISTRY OF TRANSPORT &COMMUN. 339 307 MINISTRY OF HEALTH 7,219 7,630 MINISTRY OF CULTURE, YOUTH &SP 476 392 MINISTRY OF EDUC.SCI ENCE &TECH 3,186 2,789 MINISTRY OF LABOR AND SOC. WEL 1,576 1,279 MINI. OF ENVIR.AND SPITAL PLAN 345 231 ECONOMIC AND FISCAL 483 493 DIRECTORATE OF ADMINI. AFFAIRS 379 293 OFFICE OF THE KPC COORDINATOR 5,162 3,114 POLIC E SER VICES 6,797 6.057 JUSTICE 2,058 1,871 PRISON SERVICES 1,618 1,489 DIRECTORATE OF RURAL AFFAIRS 136 127 KOVOVO TRUST AGENCY 16 7 PUBL. UTI.REGU.AUTH. OF KOSOVA - 9 MINES AND MINERALS - 18 RADIO AND TELEVISION OF KOSOVA - INDEPENDENT MEDIA COMMISSION - 10 BANKING AND PAYMENTS OF KOSOVA - OMBDUSPERSONI 55 48 LEG AL EXPERTS ON LEGIS.MATTERS 1 COMMUNITY AFFAIRS OFFICE 10 9 OFFICE OF GENDER AFFAIRS - FREQUENCY MANAGMENT UNIT - CIVIL AVIATION REGU LATORY OFFI - ADVANCE TO THE SRSG - OTHER RESERVES/ 2 - Total Central Government 33,072 28,868

4 ATT ACHMNET 5 – cont inued

Municipalities Budget Actual GLLOGOVC 1,402 1,324 FUSHE KOSOVE 739 659 LIPJAN 1633 1,572 OBILIQ 635 620 PODUJEVA 1,949 1,885 PRISHTINA 5,256 5,072 SHTIME 652 609 DRAGASH 651 726 PRIZREN 3,236 3,019 RAHOVEC 1,169 1,142 SHUAREKE 1,379 1,311 MALISHEVE 1,304 1,197 DECAN 938 922 GJAKOVE 2,088 2,167 ISTOG 973 941 KLINE 964 917 PEJE 2,448 2,266 LEPOSAVIQ 455 420 MITROVICE 2,851 2,351 SKENDERAJ 1,321 1,331 VUSHTRRI 1,572 1,638 ZUBIN POTOK 307 320 ZVECAN 230 233 GJILAN 2,483 2,567 KACANIK 879 924 KAMENICE 1,319 1,298 NOVO BERDO 177 167 SHTERPCE 419 479 FERIZAJ 2,273 2,131 VITI 1,189 1,185

Total Municipalities 42,891 41,393 TOTAL ALL BUDGET ORGANISATIONS 75,963 70,261

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