Understanding Public Expenditure: Principles and Stages

Posted on Feb 17, 2025 in Law

Understanding Public Expenditure

Public expenditure refers to the financial outlay of the State with the aim of satisfying public needs, within the limitations established in the General State Budget.

Legal Ratio

The legal relationship involves the legal act of hiring a work or service, creating tributary relations with the following elements:

  • An active subject: The contract giving rise to the completion of expense.
  • A taxable person: The State Administration (autonomous, local, etc.).
  • The object: Primarily the financial obligation, which is the amount in euros.
  • The cause: The social need for the implementation of public spending.

Functional Financial Aspects

Public spending needs an administrative procedure for implementation through its various phases:

  • Authorization of expenditure
  • Settlement of expense
  • Payment order or warrant: This is available whereby the competent office goes to the State Treasury.
  • Payment: The physical act of outflow of funds.

Enforcement of Expenditure

Enforcement is deeply influenced by the restrictive nature and binding of claims and coverage for implementation, as reflected in the General State Budget. This limitation reaches three aspects:

  • Temporal limitation: The budget appropriations must be used to cover actual costs in the year of the budget which contain.
  • Qualitative limitation: Provision for expenses to be used only for specific purpose.
  • Maximum quantities: There shall be acquired by spending commitments exceed the total amount of appropriations in the statements of expenditure.

Spending Stages

This stage is aimed directly to the recognition of the financial obligation and makes the managing of expenditure:

  • Okay: It is the act whereby the ministry or authority agrees to carry out a cost.
  • Arrangement or commitment: It is the act whereby the contract is agreed the implementation of work, service or purchase of goods.
  • Recognition of the obligations: It is the act by which the Administration assumes the obligation to charge the amount, once the implementation is justified by the particular corresponding provision.
  • Payment proposal: It is the act by which the representative of the center manager, direct requests of General Treasury as general computer pagos.

Payment Stage

It aims at the fulfillment of the obligation previously incurred by the national and manager of payment:

  • Formal Order payment: Agreed by the Ministry of Finance.
  • Pay Order material: Consisting of an embodiment of the check or EFT payment against the Treasury’s current account at the Bank of Spain.

General Principles of Public Expenditure

  • The principle of legality: Public Administrations may only contract financial liabilities and incur expenditures in accordance with the laws.
  • Principles of control: Parliamentary scrutiny, both before and after. Prior examination by the adoption by the General Courts of the State General Budget. Subsequent control attributed to the Court of Auditors, organus Parlamento.El dependent internal control by the General Comptroller of the State Administration.
  • Principle of unity of the budget: Requires that all resources and expenditures of public finance are included in one budget.
  • Accounting principle box unit: Income and expenses are included not just one budget, but it is addressed or departing from a single box.