Three main functions of money are:
Function of money as mean for exchange and payment;
Function of preserving the values;
Function to determine the value of goods and services.
The areas covered by money are numerous and it can be explained by the following: operation of direct payments (transaction of cash), bank operations (transactions), and cash flow as well as the electronic payments (transfer of cash).
Currency used in Kosovo is Euro.
Central Bank of Republic of Kosovo (CBRK) –Central Banking Authority of Kosovo (CBAK) that inherited Banking and Payment Authority of Kosovo (BPAK) is a particular public entity which has the right to licence, oversee and regulate the financial institutions in the territory of Kosovo.
BPAK was founded based on the dispositions of United Nations Interim Administration Mission in Kosovo (“UNMIK”), Regulation nr. 1999/20 proclaimed on 15 November 1999 (amended on 1 October, 2001)”On Banking and Payment Authority of Kosovo”.
Apart from this, on 24 August 2006 SRSG signed the regulation on establishment of Central Banking Authority of Kosovo and transformed the Banking and Payment Authority of Kosovo (BPAK) to Central Banking Authority of Kosovo (CBAK). Based on this regulation, main objectives of the CBAK are the following:
Saving the power, payment capabilities and effective functioning of the stabile market based system, by encouraging the creation of secure financial systems; and
Without any prejudgement, supporting general policy in Kosovo to contribute to the effective allocation of the resources based on the principals of open market economy
CBAK apart from other, has the following specific competencies:
Recommending the general guiding policy for the SRSG and PISG in the fields of its own responsibilities;
Formulating and implementing the measures, fighting and regulating the systems of payments for the transactions in local currencies as well as in foreign ones in Kosovo;
Possessing and operating one or more payment systems;
Acting as banking and fiscal agent for the Ministry of Finance and Economy and providing advices as appropriate;
Holding the deposits in foreign currency, for banks, Ministry of Finance and Economy and other public entities;
To provide sufficient supply of the currency notes for completion of the transactions in cash;
To licence, supervise and regulate the financial institutions; and
Complete regular economical and financial analysis of the economy in Kosovo, publicizing the results and presenting proposals and measures to the Mission of Interim Administration of the United Nations in Kosovo and PISG, based on those analysis.
State Budget – State Budget is considered to be the economical plan of the state for the following fiscal year. State Budget is acting similar to the laws, and plan for the State Budget is always initiated by the Government of the Republic of Kosovo.
This plan foresees the expenditures for the forthcoming year based on the requests of governmental institutions for each separately and then this plan is approved by the Kosovo Assembly. It is not advisable to present all possible expenditures in this plan because during the year some unplanned expenditures might be faced. Depending on some cases for which additional urgent or unplanned expenditures are needed, respective budgetary organizations can apply to the Ministry for additional funds.
“Public money” is money or financial means which are accepted, are under the monitoring, are hold as provided or are in control of one budgetary organization, public authority or company under public control, or persons for or in the name of the above mentioned. Term “money or financial means” as mentioned above covers, but is not limited to, money in cash, notes, compared values with cash, bank notes, checks, financial instruments with high liquidity (as precious stones or half precious stones).
Public money covers, but is not limited to:
taxes, tariffs, duties or tariffs on usage;
interests, dividends or other payments;
incomes from selling, renting or purchasing of any property;
regulatory tariffs, licensing tariffs and similar taxes;
payments, tariffs and taxes for offering of services, supply of materials or completion of works;
incomes received or the ones directly realised by issuing permissions or from selling any rights on the public resources, including - but not limited to – rights on frequent flows, rights on usage of land, rights for exploration and exploitations of natural resources or the rights on its usage, as well as rights over the intellectual property;
security deposits and the conditioning;
fees, compensations for civil complaints, and incomes from the insurance; and
grants and donations from international organizations, foreign Governments and from any other sources.
All public money should be deposited in Consolidated Kosovo Fund based on Regulations of RFCM (Regulations for Financial Control and Management) and public money could be used or spent only in cases when it is properly allocated.
Ministry of Economy and Finance - All public money should be deposited in Consolidated Kosovo Fund based on Regulations of RFCM (Regulations for Financial Control and Management) and public money could be used or spent only in cases when it is properly allocated according to this law.
Treasury Department (“Treasury”) is established within the Ministry of Finance and Economy and is responsible for the management of Kosovo Consolidated Fund as well as for the fulfilment of all responsibilities as given based on the law.
Treasury has authorisation and exclusive responsibility for investments of public funds. Independently from this, Ministry is prescribing the conditions for investments of public money and investment activities of Treasury, and also prepares the policy for the investment of public money. This investment policy treats risks which are linked with opposite partners and respective states and should include dispositions for establishment of one investment commission.
Department of Budget is also established within the Ministry of Finance and Economy. Department of Budget is headed by General Director who is high nominated public official. Department of Budget is composed of two special units: unit for central budget and unit for municipal budgets.
Economy policies - Within the Ministry of Finance and Economy is established the Department for Economic Policies.
Department for Economic Policies is responsible for production of macroeconomic and fiscal scenarios (forecasts) as well as for determination of general parameters of Kosovo Consolidated Budget and budgetary mid-term strategies.
Department for Economic Policies can also develop analysis on fiscal risks and plan the possible scenarios in bigger programs for the forecasting.
All budgetary allocations for the fiscal year are expiring on 31 December; but in any case, budgetary allocations which are in connection with own source revenues that are not spent in one municipality will continue for respective municipality in the next fiscal year.
Municipal own source revenues – All money or the collected and accepted revenues by the municipality, independently of being qualified or not as “municipal own source revenues” should be immediately deposited in the official respective bank account.
The entire deposited amount that is covered by the limitation of being “municipal own source revenues” are the revenues dedicated to respective municipality.
Those revenues are allocated to respective municipality based on budget-proposal and requests for its budgetary allocation.
In case those revenues from participation, tariffs, obligations or taxes collected by one municipality overpass the amount planned for respective municipality, amount allocated by the budget for this municipality will be accompanied by some additional support.
Revenues above the planned limits can not be allocated or spent without having some correction measures taken by the Municipal Assembly in the respective municipality based on foreseen procedures by the Law on management and responsibility of public finances, promulgated by the UNMIK Regulation nr. 2003/17. Any correction of revenues of that kind should be registered in Accounting Registry of Treasury and should be included in future forecasts for budgetary reflections approved by Special Representative of Secretary General.