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The BudgetSteps in the budgeting process

The following describes the budgeting process, from estimating revenues to the passage of annual budget legislation.

In April, functionaries of government institutions, external experts, government authorities and members of Congress begin their analyses to develop the budget for the following year. At the same time, the Finance Ministry evaluates the results of programs included in the prior year’s budget and analyzes the performance of the public institutions involved. This information is used to define an initial budgetary framework that includes expenses that are required by law or by contract, and the continued financing of programs that have been evaluated as successful.

Once priorities have been determined, the different public institutions design and submit their plans to expand successful programs or to create new programs to the Finance Ministry. The proposals must compete for financing from a common biddable fund. After the ministry and Mideplan have conducted a comprehensive process of technical analysis and discussion, the president of the republic reviews and defines the proposed budget legislation for each public institution.

On September 30, at the latest, the Finance Ministry concludes preparation of the budget proposal, which is then signed by the president of the republic and sent to Congress.

In early October, after the finance minister’s address on the state of fiscal budget, Congress begins to analyze the budget proposals of the executive for the different public institutions. To accomplish this, a special mixed budget commission made up of 13 Senators and 13 Congressmen is formed. The commission is divided into 5 sub-committees, each of which analyzes the budget proposals of a different ministry.

Any difference between bills passed in the Senate and the lower house is resolved by a joint committee.

During passage of the legislation, Congress may effect modifications to the original bill through amendments or votes. However, Congress only has the power to decrease expenditures for the items proposed by the executive in the budget bill.

Congress has until Nov. 30 to pass the bill. After that, the president of the republic signs the budget into law.

On January 1 of the following year the budget law goes into effect, and activities related to carrying out the approved budget projects begins.