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Foreigner: Could you give me a general idea of budget organization and budget process in Someland?

Somelandian: Certainly. First of all, by the budget organization we mean the structure of our budget system and its major components.

F.: I suppose there is a close link between the budget organization and your state system, isn’t there?

S.: Yes, there is. We have the state budget, regional budgets and local budgets.

F.: I see. I know that in the past you used to have a single budget including the government and local budgets, didn’t you?

S.: Yes, that’s true. But now the situation has changed. Our system of governance is moving from a centralized one to a more decentralized. Our regional and local authorities have been given considerable budget autonomy now.

F.: Do you mean to say that some of expenditure responsibilities have been handed down from the central government to the subnational governments?

S.: Exactly. I would also like to stress that our consolidated budget is not subject to approval any longer. It is used only for analysis and calculation.

F.: If I got you right, now the budget system of Someland represents a sort of a compendium of the state, regional and local budgets.

S.: Correct, but it is a unified budget system based on the principles of integrality, independence and balance of all budgets.

F.: How do these contradictory principles work in practice? For instance, independence and integrality?

S.: Well, these principles do not contradict each other because each has its own sphere of influence on the budget system.

F. : Could you be more specific, please?

S.: Yes, the principle of integrality means the integrality of the legal base, use of the unified budget classification and budget documentation, submission of statistical data from one level to another for the preparation of the consolidated budget.

F.: In what way does budget independence manifest itself?

S.: Over the transition years a number of laws have been passed that grant local governments more autonomy in budgetary matters. Thus governments at different levels have their own revenue-raising sources now and use them at their discretion.

F.: I’m clear now. And how is the budget process arranged?

S.: The budget process includes all activities of government bodies on formulation, consideration, approval and execution of the budget.

F. What governing bodies are involved in this process?

S.: As elsewhere, different governing bodies are involved in the process. The executive branch is responsible for the preparation and execution of the budget; budget consideration and approval is the responsibility of the legislative branch.

F.: Are there any bodies controlling the execution of the budget?

S.: Of course. First of all, it’s the Chamber of Accounts, then Treasury System.

F.: It seems the Government has done a lot to create a new budget system and to elaborate a new budget policy and methods of budget planning.

S.: You are absolutely right.

F.: I’m also interested in how budget revenues are formed and distributed at different levels. What revenue sharing arrangements are practised?

S.: It is done in accordance with the tax law. Budget revenues include tax and non-tax revenues. To distribute revenue sources between budgets of different levels we divide revenues into assigned, regulating and additional.

F.: If I’m not mistaken you’ve worked out more uniform rules for revenue sharing and expenditure assignments for all subjects of the state.

S.: Yes, that’s right, but so far we haven’t eliminated the contradiction between the need for greater subnational autonomy and measures to increase central control.

F.: All federal countries face tax sharing problems. In my country the big defect is that local government hasn’t got enough resources.

S.: We also work to relieve subnational administrations of the burden of unfunded mandates.

F: As far as I know, there are 27 subjects in Someland. Public authorities at all levels need revenue to meet the cost of social and municipal services. What if the revenue is not sufficient?

S.: Deficits, if they arise, are covered at the expense of budget funds transferred from the budget of a higher level of authority. Besides, subsidies, subventions and other forms of financial assistance can be granted.

F.: I see. It’s obvious that different regions of Someland have unequal possibilities for raising revenue and different requirements for financial resources due to natural and climatic conditions, demographic situation, geographical position, social and economic development. How do you solve this problem?

S.: The “equalization” is done through transfers which are the key element of the new mechanism of the interbudgetary relations. Government assistance is granted to regions where the per capita budget revenues are lower than the average for Someland.

F.: Now I understand that you are really engaged in improving your budget process.



Ex. 1. Answer these questions:


1. What is finance and financial system?

2. What parts does finance comprise?

3. What functions does public finance perform?

4. What is a country’s budget?

5. What does the process of budget preparation include?


6. What is the budget organization of Someland? Is it similar to the budget organization in Ukraine?

7. How is the system of governance in Someland changing? Has it changed in our country?

8. What principles underlie the unified budget system of Someland (Ukraine)?

9. How are revenues classified?

10. What taxes are mentioned in the dialogue?

11. What measures can be taken if subjects of the state have deficit budgets?

12. Why do different regions of Someland have unequal possibilities for raising revenue? Is the same situation typical for Ukraine?

13. What mechanism of budget revenue “equalization” is used in Someland?

14. What bodies control the execution of the budget?


Ex. 2. Give derivatives of the following nouns:


Provision, distribution, finance, benefit, encouragement, growth, budget, estimate, determination, funds, governance, practice, classification, independence, transfer, equalization, consideration, execution, submission, contradiction, expenditure, implementation, maintenance, provision.


Ex.3. Find in the main text and dialogue English equivalents for the following

Ex. 4 Reread text A. Which of the following do you think is true or false?

1. Finance is a system of using of money in the process of its turnover between economic entities.

2. The financial system is the network of institutions through which large companies get the funds they need and put surplus funds to work.

3. Public finance is the study of the role of The Ministry of Finance in the economy.

4. Private markets will allocate goods and services among individuals efficiently in real life.

5. When private markets do not allocate goods or services efficiently, thre is a necessity for governmental provision of goods and services.

6. Government expenditures are specifically intended to transfer profit from some groups to others.

7. Public pension programs transfer wealth from the young to the old.

8. Macroeconomic stabilization is a category which describes the effects of monetary and fiscal policy on the economy.

9. Fiscal policy doesn’t relate to government spending, but relates to taxation and borrowing.

10. The budget is an estimate of national revenue and expenditure for the previous fiscal year.

11. Adequate planning of recurrent and capital expenditure depends critically on an accurate forecast of revenue availability.

12. The Treasury is the central coordinating institution in charge of compiling and presenting the budget.


Ex. 5. Say in a few words what the main text is about. Use the following opening phrases:

The text looks at the (the problem of)…;

The text deals with the issue of…;

It is clear from the text that…;

Among other things the text raises the issue of…;

The problem of…is of great importance;

One of the main points to be singled out is…;

In this connection, I’d like to say…;

I find the question of…very important because…;

I think that…should be mentioned here as a very important mechanism of…


Ex. 6. Sum up the content of the main dialogue. Use the following phrases:

The dialogue is about…;

According to the dialogue…;

The experts make it clear that…(stress the point that…, draw the readers’ attention to the fact that…);

Finally, the experts come to the conclusion that…


Ex. 7 Match the terms in left side column with their definitions

1. Public finance a) bringing inflation under control and lowering it over time
2. Tax b) part of the income which a person is allowed to earn and not pay tax on
3. Macroeconomic stabilization c) a tax on the estimated market value added to a product or material at each stage of its production
4. Tax allowance d) a legal document that is often passed by the legislature, and approved by a president, an estimate of national revenue and expenditure for the ensuing fiscal year
5. Tax relief e) a sum of budgets of all levels of subjects, extrabudgetary and reserve funds
6. Value-added tax f) a fee charged (levied) by a government on a product, income, or activity
7. A government budget g) refers to tax breaks that reduce the amount of tax due
8. Resource allocation h) the network of institutions through which firms, households and units of government get the funds they need and put surplus funds to work
9. The financial system i) the process of allocating resources among the various projects or business units
10. Capital Expenditures/Outlays j) proceeds from the sale of fixed or capital assets, such as land, building, machinery, stocks and intangibles, including receipts of unrequited transfers for capital purposes from non-governmental sources.
11. Capital revenue k) aggregate of revenues, borrowings and disbursements of the national government showing a cash deficit or surplus
12. Cash Budget l) shortfall/deficiency of revenues over expenditures of the government
13. Budget deficit m) expenditures for the acquisition of fixed assets and other goods and services the productive benefits of which extend beyond the fiscal year. These include investments in the capital stock of Government Owned or Controlled Corporations and their subsidiaries and investments in public utilities and loans outlays
14. Grants n) revenue collected from sources other than compulsory tax levies. Includes those collected in exchange for direct services rendered by government agencies to the public, or those arising from the government’s regulatory and investment activities.
15. Non-Tax Revenue o) all non-repayable transfers received from other levels of government or from private individuals, or institutions including reparations and gifts given for particular projects or programs, or for general budget support.


Int.: You’ve settled one of the basic budget issues. I’m sure your state budget will soon be approved.


Ex. 9. Match the verbs from (a) with the nouns from (b) below. Translate the expressions into Ukrainian and make the sentences with them.

à)to make to approve to provide to formulate to cut to cover to provide for to consider   b) funds provisions payments expenditure revenue deficit proposal budget  


Ex. 10. a) Supply the articles where necessary.b) Write down 3-5 questions about the text.


The World’s Major Financial Centre

The financial heart of England is the City. It is ... square mile in London on the bank of ... Thames. In the centre there is the Bank of England, and the head offices and foreign departments of other English banks.

It is ... home of commodity, financial, and insurance markets that are all concentrated in the narrow streets, which form the financial core of... City.

The position that the City holds is due in no small measure to the integrity of its members. The City is jealous of its honour, punctilious in fulfilling its obligations and, where deals of thousands of pounds are made merely by a word, is proud to make its word its bond.

The population of the City is almost entirely ... daytime one. Each morning about half a million people come in from north, south, east and west, and then as evening comes and business finishes they hurry home by ... train, bus, car or ... underground. Prior to 1914 this population was almost completely ... male one, with top hat, black tail coat, black and white striped trousers, stiff-fronted shirt and stiff white collar. Two wars have changed all that. There are probably as many women employed in the City as there are men these days.

From ... earliest times the City has been ruled by its own elected Lord Mayor and Aldermen, and to this day ... king or queen of England may not pass the bounds of the City until he or she has had permission of ... Lord Mayor, and then he or she comes only as ... guest.

Generally speaking, the City performs four financial functions:

a) the City gathers in ... country’s savings and provides channels and machinery for their investment;

b) it provides ... safe, speedy and convenient means of payment without the actual use of banknotes or coins;

c) through the medium of... Foreign Exchange Market it makes it possible to exchange one currency for another;

d) it provides the organization to finance, transport and insure foodstuffs, manufactures and raw materials on their way from producer to consumer.


Ex. 11.a) Supply the prepositions where necessary, b) Make a summary of the text and deliver it to the class.


Date: 2015-02-28; view: 1164

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