Home Volumul 1 THEORETICAL FOUNDATIONS REGARDING THE IMPORTANCE, NECESSITY AND USAGE OF MULTIANNUAL BUDGETS IN ROMANIA

THEORETICAL FOUNDATIONS REGARDING THE IMPORTANCE, NECESSITY AND USAGE OF MULTIANNUAL BUDGETS IN ROMANIA


Lăpăduşi Mihaela Loredana, Căruntu Constantin
„Constantin Brâncuşi” University from Tg-Jiu, Faculty of Economics and
Business Administration, Victoriei Street no. 24, Tg-Jiu, Gorj, România,
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Abstract
The material is intended to be an easy to read one, structured in a way to be a theoretical
framework concerning the importance, necessity and usage of multi-annual budgets in
Romania. The article puts particular emphasis on explaining the terminology specific to the
domain regarding multi-annual budgeting, on principles and less on methodology, which
once learned and applied, can lead to the improvement of the financing mechanisms
through multi-annual budgets. Without constituting a monograph of the legislation in force,
the article refers also to the legal regulation that will be applied. In Romania budgets are
voted on annually, and this short time horizon has often been criticized that it would
adversely affect the efficient management of expenditures. Decisions on resource allocation
are taken without an overall vision, ignoring the implications of past decisions or set on a
time horizon longer than one year. Most European countries have implemented in one form
or another, multi-annual budgets, to counter the disadvantages of annual budgets. For the
most part, universities that will apply multi-annual budgets will build a direct relationship
related to expectations regarding the evolution of the activity, not with the objectives set by
the university. In the case in which the expectations regarding the evolution of the
university are not expressed in clearly stated objectives, and are not employed in
developing budgets, the answers received by performing an efficiency analysis of the
university, from the verification analysis of the projected and budgeted amounts, are very
simple and do not give added value to the budget process.
Keywords: budgeting policy, multi-annual budgets, management, revenues and
expenditures, forecasting, efficiency.
JEL Classification: H11, H61

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