Decree of the Government of the Czechoslovak Socialist Republic No. 208 / 1989 Coll.
Decree of the Government of the Czechoslovak Socialist Republic on the financial management of state enterprises and certain other socialist organisations
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Effective from 01.01.1990
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208
GOVERNMENT REGULATION
Czechoslovak Socialist Republic
of 15 December 1989
on the financial management of state enterprises and certain other socialist organisations
The Government of the Czechoslovak Socialist Republic orders pursuant to § 71 of Act No. 88 / 1988 Coll., on State Enterprise, § 29 of Act No. 158 / 1989 Coll., on Banks and Savings Works, § 20 of Act No. 68 / 1989 Coll., on the Organisation of the Czechoslovak State Railways, and for the implementation of the Economic Code:
Preliminary provisions
This Regulation provides for financial management:
(a) public undertakings, (1) with the exception of public undertakings whose financial management is governed by a special regulation, (2)
(b) foreign trade undertakings, (3) equity companies (4) for foreign trade and associations (5) for foreign trade, with the exception of enterprises with foreign equity participation;
(c) banks and savings banks established as state monetary institutions, 6)
(d) Czechoslovak State Railways State Organisation. 7)
FINANCIAL MANAGEMENT OF THE STATE UNDERTAKING
Status of the State Enterprise as Financial Management Entity
(1) A public undertaking (hereinafter referred to as "undertaking") is responsible for the financial management under this Regulation, irrespective of the extent of the authorisation of internal organisational units to act on behalf of the undertaking in legal relations.
(2) All relationships arising from financial management between the internal organisational units of the undertaking are intra-corporate relationships.
Property funds
(1) The own funds of an undertaking are the basic funds and investments fund, the turnover fund and the securities fund.
(2) The undertaking shall pay for the purchase of securities from the Development Fund and, where appropriate, by the deposit of movable, immovable or property rights.
Own funds of the enterprise
The own financial resources of the undertaking are:
(a) profit generated from all of its activities recorded in the accounts (profit);
(b) depreciation of appropriations (hereinafter referred to as depreciation), 8)
(c) other financial resources of the undertaking (Section 7).
Use of profit
(1) The company uses profit in the following order:
(a) income and taxes contributions to the state budget, to the national committee budget and to the state funds, and to the regulatory and pricing levies (9) paid on profits;
(b) for the purposes referred to in paragraph 2,
(c) a single minimum compulsory allocation according to the normative provisions of the cultural and social needs fund;
(d) the single minimum compulsory allocation according to the normative procedure for the development fund;
(e) the mandatory allocation up to the uniform standard of the minimum reserve balance;
(f) further allocations to funds set up pursuant to Article 10 (1) to (3) and for the purposes referred to in paragraph 3 in accordance with its decision and, where appropriate, to pay a share of the profits of the combined activities after fulfilling all its annual contribution and allocation obligations.
(2) The company uses the profit referred to in paragraph 1 (b):
(a) transfers for the benefit of the relevant sickness insurance account for the payment of the premium for insurance under a special provision, (10) if the workers' protection facilities are not installed or properly operated, or if the undertaking's establishment does not comply with the rules on occupational safety or health rules, as well as with the reimbursement of sickness insurance benefits unduly paid as a result of the breach or negligence of obligations laid down by specific regulations or other malpractice in the performance of staff sickness insurance;
(b) to pay tax paid abroad.
(3) The company may use profit:
(a) to provide a financial reward to the relevant (race) social organisation for collecting waste industrial material organised by it under an agreement concluded with that organisation, up to a maximum of 30% of the value received by the enterprise for waste, after a reduction of the amount due to the costs incurred by the undertaking (for example by providing technical assistance) and to provide a contribution to the Youth Initiative Accounts under the conditions laid down, 11)
(b) pooling of funds pursuant to Article 8 (2);
(c) to cover entertainment, refreshments and gifts;
(d) for other purposes in accordance with specific rules.
(4) Undistributed profits may be transferred by the company to the next year at the end of the year.
(5) In the absence of profit to meet the needs referred to in paragraph 1, the company shall supplement the profit to be distributed from the reserve referred to in § 12 (3) and (4).
(6) An undertaking may not allocate more resources to the Funds, except for the single minimum compulsory allocation under the standard to the Fund of Cultural and Social Needs than it remains from profit (supplemented, where appropriate, from the reserve) after its application under paragraphs 1 (a) and 2 and 3. If the company exceeds the distribution of profits in that use or as a result of the loss incurred, the firm shall be obliged to pay that excess or loss on the distribution of profits of the following year prior to the allocation to the company funds.
(7) In the absence of a profit to be distributed at the end of the year after its application in accordance with paragraph 1 (a) and paragraph 2 and the exhaustion of the resources of the reserve fund and, where applicable, the resources of the funds set up in accordance with paragraph 10 (2), the uniform allocation according to the standard to the fund of cultural and social needs for the current year shall be guaranteed from the relevant national budget and, where appropriate, from the budget of the national committee. The firm shall, by means of the founder, request the competent authority to grant the grant to the sources of profit for distribution for that purpose by the deadline for the closure of its financial management. Any return on this subsidy shall be decided by the competent authority in agreement with the founder no later than two years after the year for which the subsidy was granted.
Use of depreciation
The company transfers depreciation monthly to the development fund up to the actual creation of the fund after any depreciation to the state budget or to the budget of the national committee under the special regulation12) and after transfers of depreciation from the facilities of corporate social consumption to the cultural and social needs fund, provided that their operation is financed from that fund.
Use of other own funds of the enterprise
Other own financial resources used to allocate to the Development Fund pursuant to Article 11 (1) (c), (d) and (e) (1), (2), (5) to (7) or, where applicable, to funds established under Article 10 (3) shall be transferred by the undertaking to the Funds during the respective monthly period of their establishment.
Allocation
(1) In the pooling of funds (13), the enterprise provides funds only from resources which are intended to finance these activities under specific regulations.
(2) Where an undertaking provides funds in pooling (13) for other activities of common interest to the undertaking and to the national committee, it shall use the profit referred to in Article 5 (1) (f).
Company contributions and how they are implemented
(1) Compensation for the temporary withdrawal of agricultural land 14) shall be paid by the holding on the basis of the distribution of profits, by the mining undertaking, where appropriate, from the damage and compensation fund. Fees for the permanent withdrawal of agricultural land (14) and its temporary withdrawal for construction site facilities shall be paid by the holding from sources intended to finance such investment construction.
(2) The company makes contributions to the department funds set up under Paragraph 20 (1). These contributions cannot be the subject of profit, depreciation and resources of corporate funds. The detailed arrangements for the implementation of these levies shall be laid down in the rules for the creation and application of these Funds.
Enterprise funds
(1) The undertaking establishes:
(a) the Development Fund;
(b) the reserve fund;
(c) a fund of cultural and social needs;
(d) the remuneration fund.
The arrangements for the creation and use of a fund of cultural, social and reward needs shall be laid down in specific provisions. 15)
(2) According to its decision, an undertaking may set up additional funds the source of which may only be the profit allocated to the funds under Paragraph 5 (1) (f).
(3) Undertakings for which the specificity of their economic activity so requires may set up additional special-purpose funds the source of which may be wholly or partly different from profit, namely:
(a) undertakings engaged in commercial, supply, sales, service, higher supply functions or foreign trade venture fund activities;
(b) undertakings producing a reclamation fund, a Geological Work Fund, a Damage and Compensation Fund and, in the uranium industry, a liquidation fund;
(c) transport undertakings a risk fund;
(d) forestry undertakings of an exhalation compensation fund consisting of fees and refunds of pollution organisations;
(e) undertakings set up by national committees, water management undertakings and undertakings which will not reimburse, by decision of the founder, expenditure on the repair and maintenance of basic funds and other tangible assets through the planned reserve, the repair and maintenance fund.
The method of making and using these funds, including, where appropriate, the standard of allocations to these funds, shall be determined by the founder in agreement with the Federal Ministry of Finance, or according to his jurisdiction with the Ministry of Finance, Prices and Wages of the Czech Socialist Republic or with the Ministry of Finance, Prices and Wages of the Slovak Socialist Republic (hereinafter referred to as the "Ministry of Finance, Prices and Wages of the Republics'). In so doing, the amount of the cost contribution to the repair and maintenance fund shall be determined in the manner set out in Section 14 (7). For undertakings set up by national committees, the competent Ministry of Finance, Prices and Wages of the Republic shall determine how such funds are to be created and used.
(4) The allocation of profits to funds may be made by the undertaking during the year up to the amount of actual profit to be distributed according to its decision after its application pursuant to § 5 (1) (a) and § 5 (2) and (3); the allocation of profits to funds pursuant to § 5 (1) (f) may be carried out by the undertaking in such a way that it does not jeopardise the performance of its obligations for the year as a whole resulting from the use of profit under § 5 (1) (a) to (e) and the coverage of the funds under § 13 (5).
(5) The funds referred to in paragraphs 1 to 3 may be deposited by the undertaking in the current account or in full or in part by the undertaking in the separate fund holding accounts, as its decision; deposits the funds of the Fund of Cultural and Social Needs in a separate deposit account.
(6) The undertaking shall ensure its solvency in such a way that it has sufficient funds to fulfil its due obligations in the use of loans in its current account or in the separate fund holding accounts and does not use its funds above the available resources of each fund during the year.
(7) The standards for allocations to funds established under paragraph 1 (a) to (c) are:
(a) uniform standards on the minimum mandatory allocation of profits to the development fund;
(b) a sector-wide, binding standard on the contribution from costs to the Development Fund to finance expenditure on scientific and technological development;
(c) uniform standards for the minimum balance of the reserve fund;
(d) a uniform standard of minimum, compulsory allocation of profits to the fund of cultural and social needs.
(8) The basis for the calculation of the standards referred to in points (a) to (c) of paragraph 7 is set out in the outputs of the comprehensive State Economic and Social Development Plan (hereinafter referred to as the "State Plan") for 1990 and the five-year State plans. The basis for the calculation of the standard referred to in paragraph 7 (d) and its amount shall be laid down in a specific regulation. 16)
Development Fund
(1) The Development Fund shall consist of:
(a) the minimum statutory profit allocation by normative and profit allocation by virtue of Article 5 (1) (f);
(b) by transfer of depreciation pursuant to Article 6,
(c) a contribution included in the costs referred to in Article 10 (7) (b);
(d) by transfer from the turnover fund pursuant to § 13 (6),
(e) from other sources:
1. revenue from the sale of basic funds and investments, with the exception of revenue from the sale of basic funds and investments of corporate social consumption facilities, the operation of which is financed by the Fund for Cultural and Social Needs;
2. Contributions to pooling funds to finance investments and expenditure on the development of science and technology,
3. the special-purpose subsidies from the state budget, the national committees and the state funds,
4. allotment of depreciation concentrated in the state budget, 17)
5. revenue from the management of scientific and technological development tasks pursuant to Article 15,
6. from sales of securities,
7. of the special-purpose contributions from the Fund for Damages from Insurance Companies.
(2) The Development Fund is applied:
(a) to finance investments and project documentation, including copyright pursuant to Article 14 (4);
(b) repayments of investment credits;
(c) to finance expenditure on the development of science and technology pursuant to Article 15;
(d) to provide contributions to the pooling of funds to finance investments and expenditure on the development of science and technology;
(e) to complement the turnover fund pursuant to Paragraph 13 (5);
(f) as an additional resource to finance the repair and maintenance of the basic funds and other tangible assets, provided that the resources of the Fund are not sufficient to finance such expenditure,
(g) purchase of securities;
(h) to provide a contribution to the buyer to pay the purchase price for the sale of the apartment from the company's housing to personal property.
(3) The undertakings referred to in Article 15 (2), which include expenditure on the development of science and technology directly into costs, do not apply paragraphs 1 (c) and (e) (5) and 2 (c) and do not use the Development Fund to pool funds to finance expenditure on the development of science and technology.
(4) The use of the Development Fund shall not be linked to the type of resources from which the Fund is made up. The undertaking may freely use the resources of the Development Fund, except for the resources referred to in paragraph 1 (e) (2), (3) and (7) for all the purposes for which it serves, up to the amount of the resources of the Development Fund, plus the loan granted for the development of science and technology.
Reserve Fund
(1) The reserve fund shall be made up of a profit allocation pursuant to Article 5 (1) (e) and, where appropriate, Article 5 (1) (f).
(2) For the reserve fund, the minimum amount of the fund's end-of-year balance shall be determined in accordance with Paragraph 10 (7) (c).
(3) The reserve fund is used to cover losses and fluctuations in the company's financial management to add profits to the distribution for the purposes set out in Article 5 (1) (a) to (d), and to supplement those resources to the allocation of profits to the development fund for its use under Article 13 (5), even below the minimum amount of the reserve balance.
(4) According to its decision, the holding may use the reserve fund to supplement the profit to be distributed and to continue to use it in accordance with Paragraph 5 (1) (f) only at an amount exceeding the fixed minimum balance of the fund.
Financing of circulation
(1) The following are the funds and sources of cover shown on the balance sheet of the undertaking.
(2) The usual means are:
(a) money, prizes, deposits and participating interests;
(b) claims and other similar settlement;
(c) stocks,
(d) costs of future periods;
(e) other devices.
(3) The company uses a turnover fund, other own and similar resources and non-investment loans to cover its circulation.
(4) Other own and similar sources of circulation coverage are:
(a) balances of other funds and accruals;
(b) permanent liabilities;
(c) other sources of funding;
(d) undistributed profit.
(5) The undertaking shall, in order to ensure its financial equilibrium at the end of the year at the latest, supplement the Turnover Fund from the Development Fund at an amount by which the total of the circulation appropriations (as referred to in paragraph 2) exceeds the total of the sources of coverage of the circulation funds (as referred to in paragraph 3), minus the non-investment liabilities of the firm after maturity. If the resources of the Development Fund referred to in Article 11 (4) are not sufficient to complement the Turnover Fund, the enterprise shall supplement them for this purpose by an additional allocation of profit, if any, if the profit allocation is reduced or the total cancellation of the profit allocation made in the current year to other funds under Article 5 (1) (f) and using the reserve fund under Article 12 (3).
(6) A reduction in the turnover fund by transfer to the development fund shall be carried out by the firm in agreement with the lending bank or savings bank in the long term.
Financing of the reproduction of basic funds and other tangible assets
(1) The financing of the reproduction of basic funds and other tangible assets involves the financing of expenditure on:
(a) investment and project documentation, including copyright;
(b) repair and maintenance of basic funds and other tangible assets ("repair and maintenance").
(2) The investments under this Regulation are:
(a) the acquisition of basic funds, i.e.:
1. the supply of construction and assembly works and the costs associated with the disposal of basic assets;
2. supplies of machinery and equipment and their assemblies, means of transport and inventory including transport and installation costs;
3. supplies of works of art, provided that they form an integral part of the basic appropriations;
4. the first planting of permanent crops, if it corresponds to the concept of basic material, i.e. planting costs and subsequent cultivation incurred until the maturity of permanent crops (except for the costs of new planting for dead, unproduced plants, etc.),
5. purchase (transfer) of real estate and used objects of the nature of basic funds from organisations and citizens, with the exception of items purchased to obtain spare parts;
(b) superstructures, superstructures and superstructures of basic resources and real-estate cultural monuments, and interventions in their building and technological parts, which result in changes in technical parameters, changes in function (reconstruction) or in increasing their equipment or, where appropriate, increasing their applicability (modernisation);
(c) compensation granted to eliminate economic damage to agricultural organisations and the levy on the permanent withdrawal of agricultural land and its temporary withdrawal for construction site facilities;
d) safety and preservation work (possibly maintenance and decontamination work) for stopped buildings;
(e) the technical part of the replacement reclamation.
(3) The basic means and other tangible assets are the articles under a special rule. 18)
(4) The enterprise shall cover investment and project documentation, including copyright ("investment expenditure '), from the development fund, in the absence of corporate social consumption facilities, the operation of which is financed by the cultural and social needs fund or where it does not use an investment loan to finance them. Investment expenditure for multi-purpose installations shall be borne by the undertaking from one source, from the source established to finance such expenditure, according to the predominant activity foreseen in the installation.
(5) Corrections under this Regulation shall be such as to remove partly physical wear or damage to the basic device and other tangible property in order to put them into working condition, restore technical characteristics, remove functional, visual and safety deficiencies. Repair of machinery and equipment may also be carried out in exchange for the basic equipment already repaired.
(6) Maintenance under this Regulation is the regular care of essential resources and other tangible property which slows down the course of physical wear, prevents its consequences in order to ensure their operational condition and safe operation, or to eliminate minor defects.
(7) The company shall cover expenditure on the repair and maintenance of costs by means of a fund of repairs and maintenance or planned reserves in accordance with the standard laid down in its 1990 economic and social development plan and in the five-year economic and social development plans or, exceptionally, in accordance with Section 23, directly from costs. As an additional resource in financing expenditure on repair and maintenance, the enterprise may use the Development Fund in accordance with Article 11 (2) (f). Expenditure on repairs and maintenance in facilities of corporate social consumption financed by the Fund of Cultural and Social Needs shall be borne by the undertaking only.
(8) The undertaking may cover expenditure on the repair and maintenance of the basic resources in temporary use referred to in paragraph 7.
Financing of the development of science and technology
(1) The financing of the development of science and technology includes expenditure on:
(a) preparing and addressing the tasks of developing science and technology;
(b) the acquisition of industrial rights and technical knowledge by industry from both domestic and abroad;
(c) the activities of scientific, technological development and scientific, technical and economic information centres;
(d) contributions to international organisations whose activities are research and development and the Czechoslovak enterprise is entitled to participate in the activities of that organisation.
(2) The enterprise shall cover expenditure on the development of science and technology from the development fund, excluding research and development base enterprises, project and business firms where innovation needs are not continuous and continuous. These undertakings shall bear expenses for the development of science and technology from costs with a possible temporal distinction. The founder, in agreement with the Federal Ministry of Finance, or with the relevant Ministry of Finance, Prices and Wages of the Republic, shall identify undertakings in which innovation needs are not continuous and continuous.
(3) In addressing the tasks of scientific and technological development, the contracting authority may, from its sources, acquire the instruments, machines and equipment and, where appropriate, the structures needed to deal with the task and transmit them to the investigator for temporary use for the period necessary to deal with the task; by analogy, the contracting authority may, by agreement, provide the task solver with funds for the acquisition of those items, such as the use of the Development Fund, specifying in the agreement how those items will be handled and, where appropriate, the method of financial settlement after the completion of the task.
(4) Revenue from solving the task of developing science and technology are:
(a) the revenue for the work carried out and the performance carried out in the course of the task of developing and spending on science and technology was part of the cost of the solution;
(b) revenue for articles usable or, where applicable, not usable in addition to the items of gradual use which have been acquired for the purpose of solving the task of developing science and technology and which are no longer necessary for the further solution of the task or have been left after the end of the task and which have been developed or produced in the course of the task of developing science and technology and which have been incurred as part of the cost of the solution.
(5) The revenue referred to in paragraph 4 shall be transferred to the source from which the expenditure on the development of science and technology has been financed; where expenditure has been financed from several sources, it shall be carried over in proportion to the proportion in which they have contributed to the financing.
(6) Articles corresponding to the concept of basic means developed in the management of and expenditure on scientific and technical development tasks from the Development Fund shall be transferred to basic funds without further application of the Development Fund, no later than 12 months after the end of the solution.
(7) Expenditure on the nominal tasks 19) of the State Plan for the Development of Science and Technology is borne by the wearer from his own resources or from his own resources with the participation of the State Budget or entirely from the State Budget. When financing from the state budget, it proposes the amount of the relevant state budget according to the competence of the State Commission for Scientific, Technical and Investment Development, the Czech Commission for Planning and Scientific and Technological Development or the Slovak Commission for Planning and Scientific and Technological Development; At the same time, it shall lay down the conditions for the provision of State budget appropriations and shall ensure that the right of management to the results of the management of the nominal tasks fully financed by the State budget.
Financing of expenditure on corporate social consumption and certain other activities of the enterprise
Expenditure on corporate social consumption and certain other activities of the enterprise are defined by specific rules, 20) which also specify the source of their reimbursement.
Penalties
(1) The undertaking shall be obliged to pay periodic penalty payments to the relevant national budget or to the budget of the national committee if:
(a) fail to comply with the provisions on the creation and use of farm funds; non-compliance with the provisions on the creation and use of the Funds shall also be considered as non-compliance with the Fund's drawing-up in excess of its available resources,
(b) reduce the creation of profit or loss or use the profit or loss generated in a way which is not authorised under the special rules in respect of other organisations or persons, even if, in the context of this, there is no reduction in income (tax) payments to the State budget or to the national committee budget;
in cases where such deficiencies in the financial management incurred during the year are not remedied at the latest by the deadline set for the dispatch of the annual accounts.
(2) The amount of the periodic penalty payment is 1% of the amount of the shortfall found in the financial management of the holding by the external control authority authorised to do so.
(3) No periodic penalty payments shall be made where:
(a) the penalty payment for the sum of the deficiencies in the financial management of the undertaking for the year in question does not exceed CZK 1000;
(b) the firm shall notify its internal control of the deficiencies identified in its financial management to the managing authority of the levy and remove the deficiencies before the start of the inspection by the external control authority;
(c) a penalty payment has been imposed on the undertaking under the Law on contributions to the State Budget or under the Pension Tax Act, or under the Agricultural Tax Act, or an economic fine has been imposed on it.
(4) The penalty payments imposed under paragraphs 1 and 2 may, where justified, be authorised by the Federal Ministry of Finance to undertakings under the jurisdiction of the Federal Central Authorities and by the competent Ministry of Finance, Prices and Wages of the Republic to undertakings under the jurisdiction of the Central Authorities of the Republics and national committees.
(5) The undertaking is obliged to correct the deficiencies in the financial management by the deadline set for sending the annual accounts for the year in which the deficiencies in the financial management were identified. In the case of deficiencies in the financial management referred to in paragraph 1 (b), the undertaking shall correct them, unless specific rules prevent this. 21)
(6) Failure to correct the deficiencies in the financial management of the undertakings referred to in paragraph 1 (b), even where, for the reasons referred to in paragraph 5, the correction cannot be made and the periodic penalty payments paid under paragraphs 1 and 2 are considered to be a pest (22) of the undertaking.
Financial management of enterprises with a number of up to 100 workers and housing enterprises
(1) Undertakings with up to 100 employees shall proceed in their financial management unless otherwise provided by the founder, in accordance with Sections 2, 4 to 12 and 14 to 17, with:
(a) profit is the difference between cash income and expenditure minus depreciation; For this purpose, the revenue and expenditure of the Funds and the expenditure borne by the distribution of profits shall not be included in the revenue and expenditure and depreciation shall not include depreciation on the basis of basic appropriations, the acquisition of which within the meaning of Article 14 (4) shall be borne by the Fund of Cultural and Social Needs,
(b) compulsory profit allocations shall be made only to the fund of cultural and social needs;
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Regulation Information
| Citation | Decree of the Government of the Czechoslovak Socialist Republic No. 208 / 1989 Coll., on the Financial Management of State Enterprises and certain Other Socialist Organisations |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 30.12.1989 |
|---|---|
| Effective from | 01.01.1990 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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