Adjusted budgetary outturn
The adjusted budget result forms part of the settlement statement of the budget and is the difference between the collection rights that have been settled during the year and the payment obligations recognized in the same period. Therefore, it is a magnitude that reflects the surplus or deficit of the exercise of the City. The budgetary outturn has to be adjusted with the obligations being funded from the general cash surplus and the year-to-date financing deviations from the financing costs, as these circumstances distort the budgetary outcome. When the adjusted budget result for the year is negative, we are faced with a financial situation that has to be analyzed and -if needed- corrected, since this balance shows the incapacity of the rights recognized in the exercise to meet its obligations and, therefore, a breach of the principle of budgetary stability.
Average payment period
The Average Payment Period (PMP) indicator measures the time period that elapses since the delivery of the goods or the provision of the services borne by the supplier and the material payment of the transaction. According to current regulations, this period can not exceed 30 days.
Cash surplus for general expenses
The cash surplus for general expenses is part of the settlement statement of the budget and is the sum of the receivables (from the same year and the previous year) plus cash, minus receivables (from the same year and the previous). It shows the financial situation of the City Council at the end of the year. It is an accounting statement that provides cumulative data for the year that is closed and of the previous ones. If it is positive and the necessary provisions have been made, it constitutes a source of financing for greater budgetary expenses. The cash surplus has to be calculated taking into account the reduction of receivables that are considered difficult or impossible to collect.
It is the VAT quota that can be recovered from the acquisition of goods or services linked to an economic activity that liquidates VAT also.
Economic classification of the expenditure budget
The economic classification of the expenditure budget informs of how it is spent. The appropriations in the expenditure budget are ordered according to their economic nature, distinguishing between appropriations for current operations, such as expenditure necessary for the operation of public services (personnel costs and goods and services), loans for capital operations (such as real investment expenditures) and loans for financial operations (such as repayments of loans received by local entities).
The Expenditures Rule establishes a spending ceiling for the budget of public administrations. The current regulations establish that the computable expenditure of the City Council budget can not exceed the reference rate of the medium-term gross domestic product (GDP) of the Spanish economy, being possible to overcome it only in the event that this excess is compensated by increases in permanent income.
The capacity or need for funding of a City Hall is measured as the difference between non-financial income and non-financial expenses. When the result is positive (financing capacity), it indicates that the entity has financing capacity or non-financial budget surplus. On the other hand, if the result is negative, it indicates that the entity needs financing, that is, that it has to resort to borrowing.
How the income budget is classified
The income budget can be classified according to the following classifications:
- Economic classification, which presents the information according to the economic nature of the budgetary rights.
- Institutional classification, classifying revenues according to the internal structure of the local entity.
How the spending budget is classified
Budget expenditures are classified according to three different classifications:
- Institutional: who makes the expenditure.
- By programs, which reports on what is spent for, i.e., the purpose of the expenditure.
- Economic, which informs about what is spent, the economic nature of spending.
Institutional classification of the expenditure budget
The institutional classification of the expenditure budget informs of the organic unit of the City that manages the expenditure, that is, the Area, District or Autonomous Organism responsible for its execution.