State Budgetary Changes and Public Spending Regulations

Budgetary Changes and Modifications

Modifications are changes to the budget amount, the purpose, or the timing of appropriations approved initially by the State Budget Law.

Authorities for Budget Amendments

The General Budget Law establishes the authority to approve budget amendments which corresponds, according to their nature, to the following bodies:

• Council of Ministers.
• Minister of Economy and Finance.
• Holders of a ministerial department.

Classes of Budgetary Changes

Modification of the Quantitative Limitation

These are changes in the amounts allocated to loans, i.e., intended to fund expenses that were not anticipated in the Budget Act and cannot be delayed until the following year (e.g., a lack of money to pay the unemployed).

In all cases, we must justify the need and urgency of spending, while specifying the means or resources that should fund the proposed increase.

The most important modifications of quantitative restrictions are:

• Outstanding credits and supplements.
• Extensions of credit.

Qualitative Limitation Changes

Changes are motivated by the needs of the total or partial transfer of a loan to a different budgeted item. These do not represent an increase in budgeted expenditures (e.g., credit transfers; missing money in one area moved to a grant in another).

Amendments to the Limit

These are applied to a certain amount of expenditure which is undertaken in the year in which the execution started, but covers a wide period (e.g., multi-year works expenditure for roads and commitments).

Public Spending and the Treasury

Public spending is the financial outlay of the State in order to meet the needs of people within the limitations set by the State Budget.

Functions of the Public Treasury

The services of the public are secured by the Public Treasury, which the General Budget Law commissions with the following functions:

• Pay and raise rights and obligations of the State.
• Serve as a centralized treasury unit for the centralization of funds and the values generated by budget and extrabudgetary operations.
• Maintain a State bank account in Spain via the Bank of Spain. The Treasury may also open foreign currency accounts in euros or with other credit institutions other than the Bank of Spain.

Public Spending as a Legal Relationship

Public spending is defined as the obligational link between the administration and another subject of law on the occasion of a disbursement from the public coffers.

Three Elements of Public Spending

1. The individual asset: The contract making the expenditure incurred.
2. The taxable subject: The State administration, the regional administration, or the local administration that performs the spending.
3. The cause: The social need being met with the realization of that public spending.