7.8 C
Nicosia
Sunday, January 29, 2023

Debt settlement plans for communities

Must read

Debt settlement plans for communities

Eleftheria Paizanou

A plan for the repayment of accumulated debts should be prepared by the Community Councils in the context of the preparation of their budget for 2022. The accumulation of liabilities without proper planning for their repayment is a great financial risk for the state, which takes measures to prevent it. The Ministry of Finance has prepared a circular with recommendations calling on the communities to prepare a timetable for the repayment of the specific obligations.

With the circular, the ministry clarifies that in the plan that will be prepared by the communities, they should include the amount of debts and the payments that they will make each year. In fact, Community councils will have to fully explain the payments and analyze which ones are due to delays and which ones are related to expenditures for the year. At the same time, they will have to make an extensive analysis of the debts that are 90 days late, as well as the way and the time of their repayment. In addition, community councils will have to record the loans they have and their repayment schedule, as several communities have been found not to include their loans in their budgets. At the same time, they should list the plan for how and when they will be repaid. In addition, they will have to prepare a list of new loans they will receive over the next three years. Community councils should have their budgets ready by 11 November so that they can be considered by the relevant ministry in a timely manner.

Realistic estimates

According to the circular of the Ministry of Finance, the community councils will have to prepare their budgets on the basis of receipts, payments and the cash base, while they will have to take into account the amount of state sponsorship. Also, the budgets, according to the Ministry of Finance, should be governed by the principle of a balanced budget, ie the revenues from the operation of each community council, including the state sponsorship, to cover its operating expenses, including the installments for repayment of loans. As the ministry points out, revenue estimates should be realistic and should take into account the current economic situation, and the prospects for the course of the economy as well as the financial or tax collection capabilities of each community. According to the finance ministry, the total amount of budgets to be approved will not vary during the year. “It is important that budgets are prepared prudently and that expenditure is rationally assessed and that priorities for submitting integrated budgets are prioritized, within the financial capabilities of each community council,” he added.

Exactly the costs

As the ministry suggests, community councils should calculate costs rationally and accurately and take into account the financial capabilities of each community. According to the circular, the budget for next year should be accompanied by an explanatory memorandum which includes full explanations, analyzes and data for each item, both expenditures and receipts. In relation to the new projects, the ministry calls on the community councils to evaluate them, so that it becomes clear whether each project is affordable and sustainable and has a high added value.

Source: www.philenews.com

- Advertisement -AliExpress WW

More articles

- Advertisement -AliExpress WW

Latest article