(2023.07.10-ны өдрийн орчуулга)        Unofficial translation

LAW OF MONGOLIA

December 23, 2011                         Ulaanbaatar city

ON BUDGET

/Revised edition/

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Objective of the Law

1.1.The objective of this Law shall be to regulate the relations with regard to implementation of specific budget requirements by defining budget, its principle, framework, composition and classification and development, approval, allocation, recording, reporting and monitoring of budget by defining rights, obligations and responsibilities of stakeholders of budget relations.

Article 2.Legislation on budget

2.1.The legislation on budget shall comprise the Constitution of Mongolia, the Law on Development policy, planning and its management, the Law on Budget stability, the Law on debt management, the Law on administrative and territorial units and their governance of Mongolia, this Law and other legislative acts enacted in compliance with these laws.

/This paragraph was amended according to the law as of February 18, 2015/

/This paragraph was amended according to the law as of December 24, 2020/

/This paragraph was amended according to the law as of December 24, 2021/

Article 3.Scope of the Law

3.1.This Law shall apply to the budget organization, its officials, the Government and special local budget, the legal entities implementing services directed to the state and local functions on a contractual basis and state and local owned legal entities with state and local property participation responsible for centralizing income into the budget in accordance with legislation.

/This paragraph was amended according to the law as of December 24, 2020/

3.2.The regulation with regard to program planning, performance agreement and its execution and reporting set forth in this Law shall not apply to the executive work of competent authority engaged in executive work with regard to ensuring national security in accordance with legislation.

3.3.The regulation with regard to transparency set forth in this Law shall not apply to the executive work set forth in budget and paragraph 3.2 of this Law, which belongs to state secret in accordance with legislation.

3.4.Only this Law shall govern budget relations and it shall apply to any relation to legitimize and define financing sources in local and sectoral activity and its allocation likewise.

3.5.The Law on Debt Management shall govern the relations with regard to making loan by the Government and local municipality by means of creating debt, debt guarantee by the Government, lending borrowed money to a third party, recording, reporting and monitoring.

/This paragraph was added according to the law as of February 18, 2015/

Article 4. Definitions of legal terms

4.1.The following terms used in this Law shall have the following meanings:

4.1.1."specific budget requirement" means as stated in the article 6 of the Law on budget stability;

4.1.2."medium-term" means as stated in sub-paragraph 4.1.9 of the law on budget stability;

4.1.3."medium-term fiscal framework statement" means as stated in sub-paragraph 4.1.10 of the Law on budget stability;

4.1.4."budget project" means a budget proposal submitted by the Government to the State Great Khural and that submitted by the Governors of all levels to Khural of Citizens' Representative using budget classification per each budget stage according to the requirements stated by law based on medium-term fiscal framework statement;

4.1.5."budget" means a comprehensive sum of achievable results of property, income, liability, payment, financial commitment and obligation that are accumulated, allocated and spent under the state control, and financial activity, implementation measures and required input with regard to foregoing in order to create financial sources required for implementation of the state and local functions;

/This sub-paragraph was amended according to the law as of December 24, 2020/

4.1.6."state budget" means a budget approved by the State Great Khural belonging to the Government and the state budget, which shall be collected, allocated and spent by the budget generalizing administrator;

4.1.7."budget based on base-line level" means a budget calculation calculated in an assumption that there would be no modification in legislation, or state policy for the given year of budget implementation in compliance with macro-economic forecast;

4.1.8."annual budget ceiling" means a minimum income amount and a maximum expense amount to be observed by budget generalizing administrator when developing budget for a given year in compliance with specific budget requirement and medium-term fiscal framework statement;

4.1.9."budget income" means an income to compose the state and local budget in accordance with legislation and own operational income of budget organization;

4.1.10."budget expense" means a property to be allocated and spent by budget, which was approved to finance activity, program, project and event to be implemented by budget administrator;

4.1.11."budget balance" means a discrepancy of total budget income and expense of a given fiscal year;

4.1.12."budget profit" means a profit exceeding budget expense;

4.1.13."budget deficit" means an expense exceeding budget income;

4.1.14."income" means all types of transactions to receive externally apart from internal transactions of a given entity;

4.1.15."expense" means all types of transactions going out apart from internal transactions of a given entity;

4.1.16."program" means a set of measures focused on ensuring correspondent state functions, which could be calculated and reported in terms of result in order to allocate budget;

4.1.17."measure" means a service that shall be defined by quantity, time and quality criteria indicator included in program structure;

4.1.18."input" means property and non-property assets required for implementation of a given service;

4.1.19."expanded economic classification" means an integration and grouping of several subjects of detailed economic classification;

4.1.20."detailed economic classification" means a primary subject of economic classification;

4.1.21."financial support" means assets issued in order to compensate budget deficit;

4.1.22."income transfer" means assets calculated and issued to local budget from high-level budget income in order to support local budget;

4.1.23."financing of the state function to be executed through representation" means assets issued to local administrative organization from respective level budget in line with specifically set designation, conditions and requirements in order to finance the function set forth in paragraph 61.1 of this Law;

/This sub-paragraph was amended according to the law as of November 13, 2020/

/This sub-paragraph was modified according to the law as of April 22, 2022/

4.1.24."budget investment" means an expense of assets to be transferred into legal entity belonging to budget of a given level through financing of the state and local budget;

/This sub-paragraph was amended according to the law as of April 22, 2022/

4.1.25."tax expense" means a tax relief and exemption to be issued to taxpayer for a given year by tax law;

4.1.26."budget adjustment" means making modification into decision of competent authority that approved the budget of a given year;

4.1.27."local budget" means a budget approved by Khural of Citizens' Representative of aimag, capital city, soum and district and, which shall be collected, allocated and spent by generalizing administrator belonging to the budget of a given level;

4.1.28."unified local development fund" means assets for redistribution to grant for local budget from the state budget in order to support local development and ensuring regional stability;

4.1.29."base-line income of local budget" means a sum of income with tax that shall be included in budget of a given level at minimum percent and non-tax revenue;

/This sub-paragraph was amended according to the law as of November 02, 2018/

4.1.30."base-line expense of local budget" means a sum of current and capital expense with regard to implementation of administrative, territorial unit management, local functions and state functions to be executed through representation;

/This sub-paragraph was amended according to the law as of November 13, 2020/

/This sub-paragraph was modified according to the law as of December 24, 2020/

/This sub-paragraph was amended according to the law as of April 22, 2022/

4.1.31."basic balance loss of local budget" means a base-line expense of local budget exceeded base-line income of local budget;

4.1.32."budget of social insurance fund" means a budget approved by the State Great Khural in a given year, which shall be collected and spent according to the General Law on Social Insurance;

/In this sub-paragraph wording as "Law on Social Insurance" replaced with the wording "General law on Social Insurance" according to the law as of July 07, 2023 and it shall enter into force on January 1, 2024/

4.1.33."budget of human development fund" means the budget to be collected and spent in accordance with the Law on human development fund and approved by the State Great Khural;

/This sub-paragraph was invalidated according to the law as of February 05, 2016/

4.1.34."budget organization" means a state and local owned, non-profit legal entity that implements services pertaining to the state functions according to approved budget and registered by the state administrative organization in charge of state registration issues according to the Law on state registration of legal entity;

/This sub-paragraph was modified according to the law as of January 29, 2015/

4.1.35."budget administrator" means budget generalizing administrator, budget centralizing administrator and budget direct administrator;

4.1.36."budget generalizing administrator" means an authorized entity to plan the budget of issues under the scope of its responsibility, and allocate, monitor, spend the approved budget according to legislation and report its execution;

4.1.37."budget centralizing administrator" means an authorized entity that shall plan the budget of functions allocated by budget generalizing administrator, and allocate to direct budget administrator, monitor, spend according to legislation and report its execution;

4.1.38."budget direct administrator" means an authorized entity that shall plan the budget of functions allocated by budget generalizing administrator and budget centralizing administrator, spend according to legislation and report its execution;

4.1.39."provider of services pertaining to the state functions" means an entity that shall execute the services pertaining to state functions on a contractual basis and shall solely be responsible for quality, quantity and achievable results of such services;

4.1.40."activity of state fund" means activities related to realization of management for budget, monetary assets, liability and payment, payment settlement, and reporting of budget utilization;

4.1.41."consolidated account of state fund" means monetary assets account of all budget administrators placed in Mongol Bank belonging to general budget account with integrated coordination of the Government and integrated budget of Mongolia;

4.1.42."general budget account" means an account to consolidate and record cash flow of budget of a given level;

4.1.43."expenditure right" means a maximum limit of expense by budget organization for a month and a quarter within scope of approved budget;

4.1.44."Government debt management" is the process of developing and implementing strategies to determine the medium and short-term financial costs and risk levels of the Government;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

4.1.45."debt" means an obligation to repay in the future to a person other than that person through a debt instrument;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

4.1.46."debt instrument" means all types of loans, securities, and any agreement or transaction to create debt;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

4.1.47."government debt" means sub-paragraph 4.1.8 of the Law on budget stability;

/This sub-paragraph was amended according to the law as of February 18, 2015/ 4.1.48."contingent debts" means an expression of probable risk calculated in monetary value that could be created in budget with regard to policy measures to be implemented by the state and the partnership between the state and private sector in order ensure guarantee issued by the Government, or ensure national security, political, social, economic, financial and budget stability;

/This sub-paragraph was amended according to the law as of December 19, 2022 and it shall be enforced on December 12, 2023/.

4.1.49."internal audit" means an internal monitoring activity of budget focused on ensuring proper and efficient spending of budget assets and risk management;

4.1.50."working asset" means special budget account designated to refinance a given operation by spending own sources, which are implemented constantly between fiscal years more than one year, for operation stated by law, and income gained from such spending or payback of spent assets are used to refinance such operation;

4.1.51."budget of health insurance fund" means a budget approved by the State Great Khural for a given year, which shall be collected according to the General Law on social insurance and the Law on health insurance and be spent according to the Law on health insurance;

/This sub-paragraph was added according to the law as of January 29, 2015/

/In this sub-paragraph wording as "Law on Social Insurance" replaced with the wording "General law on Social Insurance" according to the law as of July 07, 2023 and it shall enter into force on January 1, 2024/

4.1.52."loan" means sub-paragraph 4.1.15 of the Law on debt management;

/This sub-paragraph was added according to the law as of February 18, 2015/

4.1.53."foreign aid" means a source of assets granted to Mongolia from international organization and partner countries via Governmental relationship in forms of irrevocable, humanitarian and technical aid terms;

/This sub-paragraph was added according to the law as of February 18, 2015/

4.1.54."future pension reserve fund budget" means the budget collected and spent in accordance with the Law on Future pension reserve fund and approved by the State Great Khural in the current year;

/This sub-paragraph was invalidated according to the law as of November 13, 2019/

4.1.55."future heritage fund budget" means a budget approved by the State Great Khural for a given year in order to collect according to the Law on future heritage in order to establish deposit;

/This sub-paragraph was added according to the law as of November 12, 2021 and it shall be enforced on January 1, 2022 and remain in force until December 31, 2022/

4.1.56."performance-based financing" means planning and allocation of operating expenses of budget organization in whole, or in certain part by total value in order to improve output performance such as achievable results of program, measures and state service quality;

/This sub-paragraph was added according to the law as of November 11, 2022/

4.1.57."Budget stability council" means as stated in paragraph 161.1 of the Law on budget stability.

/This sub-paragraph was added according to the law as of July 7, 2023/

/This paragraph was added according to the law as of January 22, 2016/

CHAPTER TWO

BUDGET PRINCIPLES AND THEIR IMPLEMENTATION

Article 5.Budget principles

5.1.The budget shall focus on implementing annual development of the State, aimag, and Capital city and the following principles shall be governed when planning, approving, implementing and reporting the budget:

/This paragraph was amended according to the law as of December 24, 2021/

5.1.1.to ensure budget stability;

5.1.2.to ensure budget completeness and accurateness;

5.1.3.to implement proper management of finance and budget;

5.1.4.to ensure transparency;

5.1.5.to be responsible.

Article 6.Implementation of budget principles

6.1.When planning, approving, implementing and reporting the budget, the competent authority and budget administrator are obliged to realize using budget principles as guidance.

6.2.The principle of ensuring budget stability set forth in sub-paragraph 5.1.1 of this Law shall be implemented as follows:

6.2.1.to satisfy the special requirement set forth in the Law on budget stability;

6.2.2.to plan and implement annual budget expense so that it shall be fully compensated by income and other sources of financing;

6.2.3.to balance budget by making adjustment in the budget of a given year by means of reducing budget expense or increase income sources if it is likely that budget income would reduce due to unforeseeable conditions, or budget deficit would increase due to increased expense;

6.2.4.any decision by the President of Mongolia, the State Great Khural, local municipality, the Government and the Governor should be based on the conclusion regarding impacts on budget;

6.2.5.if any far-reaching policy decision to reduce income and increase expense was made in the middle of year, it should be implemented from the subsequent fiscal year.

6.2.6.if the State Great Khural and local municipality are to make amendment into the budget project submitted by the Government and Governor, the following arrangement is made:

/This sub-paragraph was added according to the law as of November 10, 2017/

6.2.6.а.if expense of particular project, program and measure is to be increased, it should not increase total expense amount by reducing the expense of other project, program and measure at same amount;

/This sub-paragraph was added according to the law as of November 10, 2017/

6.2.6.б.If it is to reduce the amount of tax and payment to be centralized at budget, it should reduce the expense at same amount;

/This sub-paragraph was added according to the law as of November 10, 2017/

6.2.6.в.the amendment belonging to project and event to be implemented by the budget within budget project submitted by the Government and Governor should meet the requirement of budget investment planning set forth in this Law.

/This sub-paragraph was added according to the law as of April 22, 2022/

6.3.The principle of ensuring budget completeness and accurateness set forth in sub-paragraph 5.1.2 of this Law shall be implemented as follows:

6.3.1.to plan and report budget income, expense, assets and transaction of liability by their total amount without making entry to reduce;

6.3.2.to record and report any financial activity truly and accurately according to international and national standards of accounting within due time by expressing it on national currency;

6.3.3.to reflect Government debt guarantee guaranteed by budget income, foreign loan and agreement, covenant and activities with respect to all types of financial commitment onto budget;

/This sub-paragraph was amended according to the law as of February 18, 2015/

6.3.4.any income, source, loan, donation, aid that have arisen anew during the fiscal year and the expense of operation financed by them should be in composition of budget.

6.4.The principle of implementing proper management of finance and budget set forth in sub-paragraph 5.1.3 shall be implemented as follows:

6.4.1.to plan and spend budget so that it shall be efficient and economic;

6.4.2.not to finance program and measure that do not belong to state and local functions;

/This sub-paragraph was amended according to the law as of December 24, 2020/

6.4.3.any program and measure that can be executed by citizen, business entity and non-governmental organization should be encouraged;

6.4.4.to select entities that shall supply goods and provide service by method of free competition unless otherwise provided by law;

6.4.5.budget administrator should not pledge budget income and issue guarantee with it;

6.4.6.not to assign budget income specifically to any entity, or activity unless otherwise provided by law;

6.4.7.any activity, program, measure, taxation, or relief, guarantee, loan, liabilities, financial activity, contingent debts to be implemented by the state and their outcome should not create inequality between current and future period;

6.4.8.not to create receivables and liabilities by properly managing budget.

6.5. The principle of ensuring budget transparency set forth in sub-paragraph 5.1.4-т of this Law shall be implemented as follows:

6.5.1.to inform about budget planning, execution and reporting within fixed period in a manner that is publicly transparent and accessible by keeping budget discussion and approval activity open in public;

6.5.2.to ensure public involvement in activities of planning, collection, allocation and reporting of budget;

6.5.3.to provide public with monitoring opportunity so that they can monitor whether the budget utilization and expenditure are implemented according to plan;

6.5.4.to provide public with monitoring opportunity so that they can monitor any service provided by the state, measure under implementation and work and service purchased within their scope;

6.5.5.to consider public opinion in priority of program, project and event, implementation order and decision to define implementation approach;

6.5.6.to inform at each occasion on how the authorized entity has reflected the opinion and review provided by citizens and non-governmental organizations in terms of budget on its decision and the result of how public involvement within in budget activity was ensured.

6.6.The principle of being responsible set forth in sub-paragraph 5.1.5 of this Law shall be implemented as follows:

6.6.1.the budget administrator should carry responsibility in terms of budget before the organization and official that appointed him/her, or the higher-level budget administrator;

6.6.2.the budget administrator should resolve the budget issue through the higher-level budget administrator to whom he/she is affiliated to;

6.6.3.although the budget administrator may transfer his/her rights and obligations to the lower-level budget administrator, it shall not serve as grounds for relieving him/her from responsibility;

6.6.4.if the budget administrator has made adjustment by amendment in the budget of the given year within the scope of powers granted by this Law in the middle of fiscal year, the administrator should report its execution by comparison against originally approved target and achievable result;

6.6.5.if function other than the one that is set forth in this Law to be implemented by local budget was defined by other legislation, such function should be resolved jointly with its financing and transferred accordingly;

6.6.6.to implement the function defined by law to be financed by the budget of a given level only with financing of budget of a given level.

Article 7.Fiscal year

7.1.The fiscal year shall start on January 1 of a given year and end on December 31 of that year.

7.2.The fiscal year is divided into periods such as month, quarter, half-year and full-year.

7.3.The budget shall be approved and reported for one year and the approved budget shall be allocated by month and quarter and its implementation be organized.

7.4.The budget utilization information shall be prepared and reported monthly while the financial report and budget utilization report be prepared and reported quarterly, half-yearly and yearly.

7.5.The preparation work for implementation of approved budget may be organized starting from the day on which the budget of the given year was approved by competent authority.

7.6.When the fiscal year starts, the budget administrator shall be eligible to spend the approved budget of the given year.

7.7.In cases other than set forth in article 43 of this Law, the budget administrator shall not be eligible to spend the budget when the fiscal year ends and the unspent residue of the budget by the budget administrator shall be drawn and centralized into general account of budget of given level.

7.8.The budget planning shall be regulated according to method approved by the member of the Cabinet in charge of finance and budget issues if the budget implementation period is different from the fiscal year depending on sectoral operational characteristics.

7.9.Paragraph 7.7 of this Law shall not apply to the budget administrator of the state and local owned specialized hospital, united hospital, and medical center of soum and village.

/This paragraph was added according to the law as of April 22, 2016/

/This paragraph was modified according to the law as of July 7, 2023/

Article 8.Budget timing

8.1.The strategical document of mid-term debt management of the Government /hereinafter referred to as "Strategical document"/ and Medium-term fiscal framework statement shall be developed and approved according to the following timing:

/This paragraph was amended according to the law as of February 18, 2015/

8.1.1.the state central administrative organization in charge of financial and budgetary issues shall develop the draft of Strategical document and the state central administrative organization in charge of economic and development issues shall develop the draft of statement of the medium-term budget framework based on the basic macroeconomic indicators and state forecasts submitted by the Budget stability council and submit it to the Government within April 15 of each year;

/This sub-paragraph was amended according to the law as of February 18, 2015/

/This sub-paragraph was modified according to the law as of July 7, 2023/

8.1.2.the Budget stability council shall calculate the basic macro-economic indicators and state forecasts for the development of the medium-term budget framework statement, and submit it to the state central administrative organizations in charge of financial, budgetary, economic, and development issues within March 15 of each year.

/This sub-paragraph was added according to the law as of July 07, 2023/

8.1.3.the Government shall discuss the draft of Strategical document and Medium-term fiscal framework statement and submit it to the State Great Khural within May 1 of each year;

/This sub-paragraph was amended according to the law as of February 18, 2015/

/The numbering of this sub-paragraph was amended according to the law as of July 7, 2023/

8.1.4.the State Great Khural shall discuss and approve the Strategical document and Medium-term fiscal framework statement within June 1 of each year;

/This sub-paragraph was amended according to the law as of February 18, 2015/

/The numbering of this sub-paragraph was amended according to the law as of July 7, 2023/

8.1.5.the State Great Khural shall publish the Strategical document and Medium-term fiscal framework statement within seven business days since it was approved6

/This sub-paragraph was amended according to the law as of February 18, 2015/

/The numbering of this sub-paragraph was amended according to the law as of July 7, 2023/

8.2.The main direction of development of the economy and society of the country shall be developed and approved according to the following timing:

8.2.1.The state central administrative organization in charge of finance and budget issues shall prepare the draft of the main direction of the development of the economy and society of the state by April 1 of each year and submit it to the Government;

/This sub-paragraph was amended according to the law as of August 17, 2012/

/This sub-paragraph was amended according to the law as of October 16, 2014/

8.2.2.The government shall review the main economic and social development projects stated in sub-paragraph 8.2.1 of this Law in accordance with the medium-term fiscal framework statement and submit it to the State Great Khural no later than May 1st of each year;

8.2.3.The State Great Khural shall discuss and approve the draft of the main directions of economic and social development of the country at the annual spring session.

/This paragraph was invalidated according to the law as of November 26, 2015/

8.3.The annual budget ceiling of the budget generalizing administrator based on Medium-Term fiscal framework statement shall be developed and approved according to the following timing.

8.3.1.the budget generalizing administrator shall submit the proposal of annual budget ceiling based on Medium-term fiscal framework statement to the state central administrative organization in charge of finance and budget within June 10 of each year;

8.3.2.the state central administrative organization in charge of finance and budget shall consolidate and develop the proposal of annual budget ceiling of the Budget generalizing administrator and submit it to the Government within June 20 of each year;

8.3.3.the Government shall discuss the project of annual budget ceiling of the budget generalizing administrator and approve within July 1 of each year;

8.3.4.the state central administrative organization in charge of finance and budget shall deliver the annual budget ceiling approved by the Government along with budget directive to the Budget generalizing administrator within July 5 of each year.

8.4.The state budget, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund for the given year shall be developed and approved according to the following timing:

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

8.4.1.the budget direct administrator belonging to the budget generalizing administrator shall submit the draft of annual budget to its affiliated budget generalizing administrator within July 9 of each year;

/This sub-paragraph was amended according to the law as of July 7, 2023/

8.4.2.the budget generalizing administrator and budget direct administrator not belonging to the budget generalizing administrator shall submit the draft of annual budget to its affiliated budget generalizing administrator within July 20 of each year;

/This sub-paragraph was amended according to the law as of July 7, 2023/

8.4.3.the budget generalizing administrator shall submit the proposal of annual budget to the state central administrative organization in charge of finance and budget issues, state audit organization, and the State Great Khural, and inform to public transparently within July 25 of each year;

/This sub-paragraph was amended according to the law as of December 24, 2021/

/This sub-paragraph was modified according to the law as of July 7, 2023/

8.4.4.the state central administrative organization in charge of finance and budget issues shall consolidate and develop the proposal of annual budget set forth in sub-paragraph 8.4.3 of this Law in compliance with the Medium-term fiscal framework statement and state development annual plan, have reviewed it by the state central administrative organization in charge of economy and development issues, and submit it to the Government and inform to public transparently within August 15 of each year;

/This sub-paragraph was modified according to the law as of July 7, 2023/

8.4.5.the Government shall submit the draft of annual budget to the State Great Khural within September 1 of each year;

/This sub-paragraph was amended according to the law as of July 7, 2023/

8.4.6.the Government shall inform the draft of annual budget in public within 3 working days since it was submitted to the State Great Khural;

8.4.7.the state central authority of audit shall submit the opinion regarding the draft of annual budget to the State Great Khural within September 25 of each year, and inform to public;

/This sub-paragraph was amended according to the law as of July 7, 2023/

8.4.8.the budget stability council shall submit the opinion regarding the draft of annual budget to the State Great Khural within September 20 of each year, and inform to public;

/This sub-paragraph was added according to the law as of July 7, 2023/

8.4.9.the State Great Khural shall discuss and approve the draft of annual budget within November 15 of each year during its autumn regular session.

/The numbering of this sub-paragraph was amended according to the law as of July 7, 2023/

8.5.The annual budget of aimag and capital city shall be developed and approved according to the following timing:

8.5.1.the Governor of aimag and capital city shall deliver the project of annual budget of the given level to national audit office within November 20 of each year and submit it to the Khural of Citizens' Representative of the given level within November 25;

/This paragraph was amended according to the law as of May 01, 2020/

8.5.2.the Khural of Citizens' Representative of aimag and capital city shall discuss the project of annual budget of the given level and approve within December 5 of each year;

8.5.3.the Governor of soum and district shall submit the project of annual budget of the given level to the Khural of Citizens' Representative of the given level within December 10 of each year;

8.5.4.the Khural of Citizens' Representative of soum and district shall discuss the project of annual budget of the given level and approve within December 20 of each year;

8.5.5.the Governor of aimag and capital city shall deliver the approved annual budget of the given level to the state central administrative organization in charge of finance and budget within December 31.

8.6.The monthly and quarterly schedule of State budget, budget of Future Heritage Fund, budget of Social insurance fund and budget of Health insurance fund shall be developed and approved according to the following timing:

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

8.6.1.the budget generalizing administrator and the budget direct administrator not belonging to the budget generalizing administrator shall deliver the proposal of budget schedule to its affiliated budget generalizing administrator within December 15 of each year;

8.6.2.the budget generalizing administrator shall submit the proposal of budget schedule to the state central administrative organization in charge of finance and budget within December 25 of each year;

8.6.3.the member of the Cabinet in charge of finance and budget shall approve the schedule of annual budget of State budget, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund within January 1 of each year.

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future Heritage Fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

8.7.The monthly and quarterly schedule of annual budget of aimag and capital city shall be developed and approved according to the following timing:

8.7.1.the Governor of aimag and capital city shall approve the monthly and quarterly schedule of annual budget of the given level within December 25 of each year;

8.7.2.the Governor of aimag and capital city shall deliver the approved monthly and quarterly schedule of annual budget of the given level to the state central administrative organization in charge of finance and budget within December 31 of each year.

8.8.The monthly execution information of the State budget, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund and aimag, capital city budget shall be developed and approved according to the following timing:

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future Heritage" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

8.8.1.the Budget Direct Administrator shall deliver the monthly execution information of budget to the affiliated Budget Centralizing Administrator within 2nd  of each month;

8.8.2.the Budget Centralizing Administrator shall deliver the monthly execution information of special fund and budget to the affiliated Budget Generalizing Administrator within 4th of each month;

8.8.3.the Budget Generalizing Administrator shall deliver monthly execution information of budget to the state central administrative organization in charge of finance and budget within 6th of each month;

8.8.4.the state central administrative organization in charge of finance and budget shall consolidate and produce monthly execution information of integrated budget within 8th of each month;

8.8.5.The state central administrative organization in charge of finance and budget issues shall publish the monthly performance data of the unified budget within 15th of each month.

/This sub-paragraph was invalidated according to the law as of July 01, 2014/

8.9.The budget utilization of quarter, half-year and full-year of State budget, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund and local budget and the consolidated financial report by the budget generalizing administrator shall be developed according to the following timing:

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

8.9.1.the budget direct administrator shall produce quarterly budget execution and financial report within 15 of the first month of subsequent quarter and submit to the affiliated higher-level budget administrator and produce annual budget execution and financial report within January 25 of the next year and submit to national audit office, then submit the audited financial report to the affiliated higher-level budget administrator within February 25;

8.9.2.the budget centralizing administrator shall produce half-year budget execution and consolidated financial report within July 25 of each year and submit to the budget generalizing administrator and submit annual budget execution and consolidated financial report to national audit office within March 5 of the next year, then submit the audited financial report to the budget generalizing administrator within March 25 of each year;

8.9.3.the treasury of soum and district shall produce half-year budget execution of the given level and consolidated financial report within July 25 of each year and submit to the higher-level budget generalizing administrator, submit annual budget execution and consolidated financial report to national audit office within May 5 of the next year, then submit the audited report to the higher-level budget generalizing administrator and inform the audited report in public within March 25 of each year;

/The term "and inform the audited report in public" in this sub-paragraph was invalidated according to the law as of July 01, 2014/

8.9.4.the budget generalizing administrator of aimag and capital city shall deliver the annual budget execution and financial report to national audit office within April 1 of each year and submit the audited report to the state central administrative organization in charge of finance and budget and inform the audited report in public within April 20;

/The term "and inform the audited report in public" in this sub-paragraph was invalidated according to the law as of July 01, 2014/

8.9.5.the budget generalizing administrator shall submit the half-year budget execution and consolidated financial report to the state central administrative organization in charge of finance and budget within August 15 of each year, the annual budget execution and consolidated financial report to the central authority of audit within April 5 of the next year and the audited report to the state central administrative organization in charge of finance and budget within April 25 of each year;

8.9.6.the budget generalizing administrator in charge of finance and budget issues shall produce the half-year budget execution and consolidated financial report within August 25 of each year;

8.9.7.the budget generalizing administrator in charge of finance and budget issues shall produce annual budget execution and consolidated financial report within April 15 of the next year and deliver it to the state central authority of audit then the state central authority of audit shall conduct audit within May 5 and render conclusion and recommendation;

8.9.8.the state and local owned legal entity with state and local property participation shall submit the year-ending financial report to the national audit office within February 15 of the next year and the audited report to the affiliated budget generalizing administrator and the state central administrative organization in charge of finance and budget issues within March 15.

/This sub-paragraph was amended according to the law as of November 10, 2015/

8.10.the integrated budget execution and the consolidated financial report of the Government shall be developed according to the following timing;

8.10.1.the state central administrative organization in charge of finance and budget issues shall deliver the integrated budget execution and the consolidated financial report of the Government to state central authority of audit of the state within May 10 of each year;

8.10.2.the state central authority of audit shall conduct audit on the integrated budget execution, Government debt report and consolidated financial report of the Government within a month and submit to the Government and the State Great Khural;

/This sub-paragraph was amended according to the law as of February 18, 2015/

8.10.3.the Government shall submit the integrated budget execution and the consolidated financial report along with audit opinion to the State Great Khural within 7 working days since the audit opinion set forth in sub-paragraph 8.10.2 of this Law was produced;

8.10.4.the State Great Khural shall discuss the report of integrated budget execution by spring session and approve the state budget execution;

8.10.5.The central state administrative organization in charge of finance and budget issues shall publish the budget performance and audited consolidated financial report.

/This sub-paragraph was amended according to the law as of July 01, 2014/

CHAPTER THREE

POWERS OF GOVERNMENT ORGANIZATION AND OFFICIALS WITH REGARD TO BUDGET

Article 9.Powers of the State Great Khural

9.1.the State Great Khural shall implement the following powers with regard to budget:

9.1.1.to approve Medium-term fiscal framework statement as set forth in 9.1.1 of the Law on budget stability;

9.1.2.to discuss and approve the state annual development plan, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund and their adjustments in compliance with Medium-term fiscal framework statement;

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this sub-paragraph, the term "budget of Future Heritage" was added in front of "budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

/This sub-paragraph was amended according to the law as of December 16, 2021/

9.1.3.to approve the state budget execution by discussing integrated budget execution;

9.1.4.to supervise the expenditure and outcome of budget assets;

9.1.5.to authorize to issue Government securities.

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

Article 10.Powers of the Government

10.1.The Government shall implement the following powers with regard to budget:

10.1.1.to submit the project of Medium-term fiscal framework statement to the State Great Khural;

10.1.2.to approve the annual budget ceiling per each budget generalizing administrator within Medium-term fiscal framework statement approved by the State Great Khural;

10.1.3.to submit the state annual development plan, annual budget project and budget adjustment project consistent with Government operational program and Medium-term fiscal framework statement to the State Great Khural; 

/This sub-paragraph was amended according to the law as of December 16, 2021/

10.1.4.to approve the plan for purchasing goods and services by each budget generalizing administrator;

10.1.5.to approve the state investment program;

/This sub-paragraph was invalidated according to the law as of December 16, 2021/

10.1.6.to monitor whether the budget project satisfies the requirements set forth in the Law on debt management and article 27 of this Law;

/This sub-paragraph was amended according to the law as of February 18, 2015/

10.1.7.to supervise the implementation of budget;

10.1.8.to report integrated budget execution to the State Great Khural;

10.1.9.to issue the Government securities with the approval of the State Great Khural;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

10.1.10.to establish, reorganize and liquidate budget organization in cases other than to establish by the decision of the State Great Khural;

10.1.11.to ensure the quality requirements of measures provided by budget organization of the state by efficiently allocating and spending budget assets;

10.1.12.to define and implement government credit and public debt management and its strategy;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

10.1.13.to approve the procedures for registering, coding, planning, financing, monitoring and reporting project and events to be implemented by budget investment;

/This sub-paragraph was modified according to the law as of April 22, 2022/

/This sub-paragraph was amended according to the law as of July 7, 2023/

10.1.14.to make investment regulation not exceeding the amount of budget package of the budget generalizing administrator without adding new measure into the list of investment measures approved by budget law of the given year by accommodating their execution process.

10.1.15.to approve the acceptance, assessment and selection procedures for proposal of project and events to be reflected in the state investment program.

/This sub-paragraph was added according to the law as of February 18, 2015/

10.2.To establish adjunct national board of budget, finance and economy next to Prime Minister having composition of 9 members comprising non-governmental organization, professional associations and sectoral scientists represented by taxpayers with the purpose of improving budget, finance and economic policy planning, ensuring its reporting and transparency and implementing public monitoring.

10.3.The national board set forth in paragraph 10.2 of this Law shall discuss the budget project and annual state development project and deliver the resultant opinion and review to the Government.

/This paragraph was amended according to the law as of December 16, 2021/

10.4.The Government shall adopt the rules of national board set forth in paragraph 10.2 of this Law.

10.5.The project code shall be based on when financing, monitoring, reporting and registering with state and local property, of projects and measures to be implemented under the budget investment as specified in sub-paragraph 10.1.13 of this Law.

/This sub-paragraph was added according to the law as of July 7, 2023/

Article 11.Powers of the member of the Cabinet in charge of finance and budget issues

11.1.The member of the Cabinet in charge of finance and budget issues shall implement the following powers with regard to budget management:

11.1.1.to have budget draft, budget adjustment draft and annual budget ceiling discussed by the Government meeting;

/This sub-paragraph was amended according to the law as of July 7, 2023/

11.1.2.to approve and release instruction and procedure regarding issues of finance and budget management within scope of own stated rights;

11.1.3.to define budget expense norms, structural and work position standard and limit of budget organization;

11.1.4.to develop proposal for sophistication of budget, financial management, planning and coordination and have it resolved by competent authority;

11.1.5.to approve detailed budget classification;

11.1.6.Upon authorization by the Government, in accordance with the provisions of the relevant legislation, to issue debt, guarantee debt, and grant permission to issue debt on behalf of the Government in accordance with subparagraph 62.6.2 of this Law;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

11.1.7.to make review whether the draft law regulating budget and tax relations is consistent with budget and financial policy documents;

11.1.8.to engage in service and registration activity in implementation of management of integrated policy and regulation for loan, contribution and aid financing;

/This sub-paragraph was modified according to the law as of October 25, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

11.1.9.to develop and implement debt management and its strategies;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

11.1.10.to provide the state fund activity with management;

11.1.11.to organize internal audit and inspection of budget and financing and provide with management;

11.1.12.to provide budget execution activity with integrated management;

11.1.13.to approve budget schedule set forth in sub-paragraph 8.6.3 of this Law and have it enforced as well as to make amendment hereof;

11.1.14.to determine the conditions of the Government securities issued for the purpose of financing the budget deficit, and to approve them together with the budget and budget amendments of the current year;

/This sub-paragraph was modified according to the law as of October 25, 2012/

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

11.1.15.to determine the terms and payment schedule of Government securities issued for investment purpose;

/This sub-paragraph was added according to the law as of October 16, 2014/

11.1.16.to issue the financing of program financed by the state budget for budget generalizing administrator, budget organization and other entities according to approved budget;

/The numbering of this paragraph was amended according to the law as of October 16, 2014/

11.1.17.to establish payment amount of using the assets of state capital;

/The numbering of this paragraph was amended according to the law as of October 16, 2014/

11.1.18.to approve the procedure for development of local budget project based on local proposal;

/The numbering of this paragraph was amended according to the law as of October 16, 2014/

/This sub-paragraph was amended according to the law as of December 24, 2020/

11.1.19.to establish the common procedure of designation and expenditure of Governor reserve capital based on local proposal;

/The numbering of this paragraph was amended according to the law as of October 16, 2014/

/This sub-paragraph was amended according to the law as of December 24, 2020/

11.1.20.to extract the information required for implementation of powers set forth in this Law from budget organization and other entities.

/The numbering of this paragraph was amended according to the law as of October 16, 2014/

11.1.21.to negotiate, establish agreement and covenant regarding the issues of receiving foreign aid and assistance in cases other than specifically authorized by the Government of Mongolia and sign on agreement and covenant representing the Government;

/This sub-paragraph was added according to the law as of October 30, 2015/

/This sub-paragraph was modified according to the law as of April 14, 2017/

11.1.22.to approve the procedures for planning, financing, expenditure and recording of the Local development fund based on local proposal.

/This sub-paragraph was added according to the law as of September 09, 2016/

/This sub-paragraph was amended according to the law as of December 24, 2020/

11.1.23.to approve the preliminary evaluation method of the state budget.

/This sub-paragraph was added according to the law as of April 22, 2022/

Article 111.Powers of the Cabinet member in charge of economic development

111.1. The member of the Cabinet in charge of economic development shall exercise the following powers regarding budget management:

111.1.1.to establish the conditions of the Government securities issued for investment purposes and resolving the payment schedule of these securities in consultation with the member of the Government in charge of budget matters;

111.1.2.to implement a unified credit and aid policy and regulatory management.

/This article was added according to the law as of October 25, 2012/

/This article was invalidated according to the law as of October 16, 2014/

Article 112.Powers of the Cabinet member in charge of economic and development issues

/This article was added according to the law as of July 7, 2023/

112.1.The Cabinet member in charge of economic and development issues shall discuss the draft of Medium-term fiscal framework statement developed in accordance with paragraph 122.1 of this Law at the Government meeting.

Article 12.Powers of the state central administrative organization in charge of finance and budget issues

12.1.The state central administrative organization in charge of finance and budget issues shall implement the following powers with regard to budget management:

12.1.1.to develop Medium-term fiscal framework statement and economic and budget assumption to include in it;

/This sub-paragraph was invalidated according to the law as of July 7, 2023/

12.1.2.to develop the projects of the state budget, Future heritage fund, Social insurance fund, Health insurance fund and the projects of their adjustment;

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this sub-paragraph, the term "budget of Future heritage fund" was added in front of "budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

12.1.3.to develop annual budget ceiling per each budget generalizing administrator within medium-term fiscal framework statement approved by the State Great Khural;

12.1.4.to prepare the directive for development of annual budget project by observing the project timing and deliver it to the budget generalizing administrator;

12.1.5.to develop the Government proposal regarding conducting budget adjustment;

12.1.6.to monitor the budget execution of budget generalizing administrator;

12.1.7.to prepare report of integrated budget execution;

12.1.8.to prepare the consolidated financial report of the Government in accordance with international accounting standard;

12.1.9.to develop Mongolian accounting standard in accordance with international accounting standard and ensure its implementation;

12.1.10.to change the conditions of the Government securities issued for the purpose of financing the budget deficit, develop loan repayment proposals;

/This sub-paragraph was modified according to the law as of October 25, 2012/

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

12.1.11.to issue the permit to open bank account to budget organization;

12.1.12.publicize half-yearly forecasts of outstanding public debt and medium-term debt service;

/This sub-paragraph was invalidated according to the law as of February 18, 2015/

12.1.13.to accommodate budget assets and reserve fund by implementing the primary function of state fund;

12.1.14.to provide the offices in charge of economy, budget and financial issues with professional methodic management;

12.1.15.to monitor the process of execution of measures implemented by budget organization under budget generalizing administrator and execution of purchasing measures from local organization by the assets of state budget;

12.1.16.to implement budget internal audit and inspection activity;

12.1.17.to minimize financing and spending rights within scope of monetary assets regulation in consistent with budget income collection;

12.1.18.to submit the issue of establishment and operation of independent center with function to engage in investigation and research of economic, financial and budget policy to competent authority and have it resolved;

12.1.19.to administrate the integrated information system of budget planning, budget execution, accounting and reporting;

12.1.20.to extract the information required for implementation of powers set forth in this Law from budget organization and other entities.

12.1.21.to develop a proposal to exempt the project and events to be implemented by foreign aid from tax and charge and provide relief on such initiatives.

/This sub-paragraph was added according to the law as of February 18, 2015/

12.1.22.to issue the corresponding approval stated in the Law on state and private sector partnership.

/This sub-paragraph was added according to the law as of April 14, 2017/

/This sub-paragraph was modified according to the law as of December 09, 2022 and it shall be enforced on December 31, 2023/

12.1.23.the state central administrative organization in charge of finance and budget issues shall prepare the preliminary assessment of state investment projects between February 1 and April 1 of each year and organize the work to coordinate with the project of medium-term fiscal framework statement at Government level.

/This sub-paragraph was added according to the law as of April 22, 2022/

12.2.The state central administrative organization in charge of finance and budget issues shall implement the following rights with regard to budget planning:

12.2.1.to develop a project of the main directions for the development of the country's economy and society and submit it to the Government;

/This sub-paragraph was invalidated according to the law as of December 16, 2021/

12.2.2.to draft the state investment program project;

/This sub-paragraph was invalidated according to the law as of December 16, 2021/

12.2.3.to develop a proposal to amend the Government securities and loan terms issued for investment purpose.

/This sub-paragraph was added according to the law as of October 16, 2014/

Article 121.Powers of the state administrative organization in charge of National development issues

/This article was added according to the law as of July 21, 2016/

/This article was invalidated according to the law as of December 16, 2021/

121.1.The state administrative organization in charge of national development shall exercise the following powers:

121.1.1.develop proposals and conclusions about the main direction projects for the development of the country's economy and society, and submit them to the central state administrative organization in charge of financial and budgetary matters;

121.1.2.to draft the state investment program project.

Article 122.Powers of the state administrative organization in charge of economy and development

/This article was added according to the law as of July 7, 2023/

122.1.The state central administrative organization in charge of economy and development shall prepare a draft Medium-term fiscal framework statement based on the basic macroeconomic indicators and state forecasts submitted by the Budget stability council.

Article 13.Powers of the central state administrative organization in charge of development policy and planning

/The title of this article was amended by the law as of August 17, 2012/

13.1.The central state administrative organization in charge of development policy and planning issues shall exercise the following powers regarding budget planning:

/This paragraph was amended by the law as of August 17, 2012/

13.1.1.develop a project of the main directions for the development of the country's economy and society and submit it to the Government;

13.1.2.to draft the state investment program project;

13.1.3.to develop proposals to change the conditions of the Government securities and loans issued for investment purposes, and resolve the payment schedule of the securities in consultation with the member of the Cabinet in charge of budget matters.

/This paragraph was added by the law as of October 25, 2012/

/This article was invalidated according to the law as of October 16, 2014/

Article 14.The Budget generalizing administrator and its powers

14.1.The following official shall be budget generalizing administrator:

14.1.1.the head of office of the President of Mongolia administers budget of the President of Mongolia;

14.1.2.the chairman of the State Great Khural administers budget of the State Great;

14.1.3.the head of organization that directly reports to the State Great Khural administers budget of that organization;

14.1.4.the Prime Minister administers budget of the organization that was subordinated to him/her by legislation;

14.1.5. /This sub-paragraph was invalidated according to the law as of March 07, 2012/

14.1.6.the Deputy minister administers budget of the organization that was subordinated to him/her by legislation;

14.1.7.the head of the Government secretariat administers budget of the Prime minister, office budget of the Deputy minister, budget of the Government secretariat and budget of other organizations that were subordinated to him/her by legislation;

/This sub-paragraph was amended according to the law as of March 07, 2012/

14.1.8.the minister of Mongolia in charge of border point restoration administers budget of the organization that was subordinated to him/her by legislation;

/This sub-paragraph was added according to the law as of August 29, 2022/

14.1.9.the minister of Mongolia in charge of the issues of minimization of traffic jam of capital Ulaanbaatar administers budget of the organization that was subordinated to him/her by legislation;

/This sub-paragraph was added according to the law as of August 29, 2022/

14.1.10.the minister of Mongolia in charge of the issues of Olympic and public sport administers budget of the organization that was subordinated to him/her by legislation;

/This sub-paragraph was added according to the law as of August 29, 2022/

14.1.11.the member of the Government administers budget of the respective state central administrative organization and of the organization that was subordinated to him/her by legislation;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.12.the head of Constitutional court administers budget of Constitutional court;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.13.the General judge of the state supreme court administers budget of the same court;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.14.the head of judicial general council administers budget of office of Judicial general council and budget of aimag, capital city, and inter-soum and specialized court;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.15.the State general prosecutor administers budget of prosecutor organization;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.16.the secretary of National security council administers budget of same council;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.17.the head of the Independent authority against corruption administers budget of the same organization;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.18.the head of aimag, capital city, soum and district Khural of Citizens' Representative administers budget of Khural of Citizens' Representative of the given level;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.19.the head of organization that reports to aimag, capital city, soum and district Khural of Citizens' Representative administers budget of the same organization;

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.20.the Governor of aimag, capital city, soum and district administers local budgets of the given level apart from those set forth in sub-paragraphs 14.1.18 and 14.1.19 of this Law.

/This paragraph was amended according to the law as of August 29, 2022/

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.1.21.the head of Judicial Disciplinary Committee administers budget of the same committee;

/This sub-paragraph was added according to the law as of January 15, 2021/

/The numbering of this sub-paragraph was amended according to the law as of August 29, 2022/

14.2.The budget generalizing administrator shall implement the following powers with regard to budget management:

14.2.1.to develop budget project within annual budget ceiling;

14.2.2.to realistically define the financing of program to be implemented within scope of issues that it deals with;

14.2.3.to manage budget effectively within scope of issues that it deals with and ensure its execution;

14.2.4.to develop the investment measures to be implemented during the given budget implementation year and mid-term in consistent with all types of financing sources without exceeding annual budget ceiling within scope of issues that it deals with;

14.2.5.to ensure normal operation of agency and budget organization within scope of issues that it deals;

14.2.6.to prepare the report of program result and budget execution and present it at the Cabinet meeting;

14.2.7.to consolidate half-year and year-ending financial report containing project report implemented by agency within scope of issues that it deals, other budget organization, the special Government fund, foreign aid and assistance and deliver it to the state central administrative organization in charge of finance and budget issues;

14.2.8.to monitor the implementation of budget measures in the course of budget execution and report it quarterly to the state central administrative organization in charge of finance and budget issues;

14.2.9.to deliver the report regarding investment result to the state central administrative organization in charge of finance and budget issues after the investment measure is implemented and completed;

14.2.10.to implement internal audit activity within scope of issues that it deals.

14.2.11.to conduct full analysis of function and outcome once in 3-5 years on agency within scope of issues that it deals and other budget organizations in order to improve budget expense efficiency, increase operational effect, eliminate functional duplication, or functional gap, maximize performance and improve the quality and access of services provided by the state to citizens. Once the result is present, it shall be delivered to the Government;

/This sub-paragraph was added according to the law as of November 10, 2016/

14.2.12.to redefine functional and organizational structure within approved job position limit and budget in order to increase operational outcome of budget organization within scope of issues that it deals with, eliminate functional duplication, optimize workload and maximize efficiency.

/This sub-paragraph was added according to the law as of November 10, 2016/

14.3.The budget generalizing administrator shall be fully responsible for the budget execution fulfilment belonging to it in front of the state central administrative organization in charge of finance and budget issues, Khural of Citizens' Representative of the given level, the Government and the State Great Khural by ensuring rationality, efficiency and outcome execution of budget income and expense regarding the issues that it deals with.

14.4.The budget generalizing administrator may transfer its powers with regard to budget allocation and expenditure to budget centralizing administrator, or subordinated budget direct administrator and such transfer shall not serve as grounds for relieving him/her from responsibility.

14.5.The budget generalizing administrator shall have financial unit, accountant and personnel that shall be responsible for budget issues belonging to him/her.

14.6.The Government shall approve the method of conducting full analysis of function and outcome and reassigning of functions set forth in sub-paragraph 14.2.11 of this Law.

/This paragraph was added according to the law as of November 10, 2016/

Article 15.The Budget centralizing administrator and its powers

15.1.The budget generalizing administrator may have budget centralizing administrator under him/her that is authorized to subordinate budget direct administrator.

15.2.Governors of aimags and capital cities are the central budget governors who receive special purpose transfers under the contract stated in paragraph 39.1 of this Law.

/This paragraph was invalidated according to the law as of April 22, 2022/

15.3.the Government shall define budget centralizing administrator and budget direct administrator subordinated to him/her.

15.4.the budget centralizing administrator shall implement the following powers with regard to budget belonging to him/her:

15.4.1.to implement the powers of budget generalizing administrator set forth in sub-paragraphs 14.2.2, 14.2.3, 14.2.5 and 14.2.8 and that of budget direct administrator set forth in paragraph 16.5 of this Law;

15.4.2.to consolidate the report set forth in sub-paragraph 14.2.8 of this Law and submit to budget generalizing administrator.

Article 16.The Budget direct administrator and Its powers

16.1.The budget organization has a budget direct administrator that is obliged to ensure the balance of the work by providing it with effective management in its operation.

16.2.The affiliated budget generalizing administrator shall define the budget direct administrator of an organization that directly reports to the State Great Khural.

16.3.The affiliated budget generalizing administrator shall define the budget direct administrator of an organization that reports to aimag, capital city, soum and district Khural of Citizens' Representative.

16.4.The following officials shall be budget direct administrator:

16.4.1.the deputy chairman of office of the President of Mongolia administers budget of the President of Mongolia and his office;

16.4.2.the general secretary of the State Great Khural administers budget of the State Great Khural;

/This paragraph was amended according to the law as of May 07, 2020/

16.4.3.the deputy chairman of the Government secretariat administers budgets of the Prime Minister, the Deputy minister, the minister in charge of border point restoration issues, the minister in charge of the issues of minimization of traffic jam of capital Ulaanbaatar, the office of the minister in charge of the issues of Olympics and public sport and the Government secretariat;

/This sub-paragraph was amended according to the law as of March 07, 2012/

/This sub-paragraph was amended according to the law as of August 29, 2022/

16.4.4.the State Secretary of the state central administrative organization administers budget of the same organizations;

16.4.5.the head of agency administers budget of the same agency;

16.4.6.the head of Constitutional court office administers budget of Constitutional court;

16.4.7.the head of office of National security council administers budget of the same council;

16.4.8.the head of State supreme court office administers budget of State supreme court;

16.4.9.the secretary of the General judicial council administers budget of the General judicial council office;

16.4.10.the head of the Independent authority against corruption office administers budget of the same organization;

16.4.11.the department head of aimag, capital city, and inter-soum, district court and specialized court administers budget of the court of given level;

16.4.12.the department head of prosecutor general's office administers budget of the prosecutor general's office;

16.4.13.the department head of aimag, capital city and prosecutor's office administers budget of prosecutor organization of the given level;

16.4.14.the secretary of aimag, capital city, soum and district Khural of Citizens' Representative administers budget of Khural of Citizens' Representative of the given level;

/This sub-paragraph was amended according to the law as of April 22, 2022/

16.4.15.the department head of aimag, capital city, soum and district Governor's office administers budget of Governor's office of the given level;

16.4.16.the project head of the project being implemented by assets of credit on easy terms of the Government and non-repayable subsidy administers budget of the given project;

16.4.17.the administrator of special Government fund administers budget of the given fund;

16.4.18.the head of other budget organization (director, principal) administers budget of the given organization.

16.4.19.the head of Judicial disciplinary committee office administers budget of Judicial disciplinary committee office.

/This sub-paragraph was added according to the law as of January 15, 2021/

16.5.The budget direct administrator shall implement the following powers with regard to budget:

16.5.1.to manage daily activities of budget organization;

16.5.2.to manage budget assets within scope of agreement made with budget generalizing administrator regarding implementation of approved budget and program and monitor its expenditure;

16.5.3.to define work position and salary of employees at budget organization within approved salary fund and work position limit;

16.5.4.to maximize operational outcome of budget organization;

16.5.5.to spend approved budget in accordance with its intended use;

16.5.6.to implement internal audit activities;

16.5.7.to accurately prepare financial and budget execution information, report and fulfilment of performance agreement and report within fixed period;

16.5.8.to make information demanded by the state central administrative organization in charge of finance and budget issues available in due time.

16.5.9.to redefine internal organizational structure of the organization within approved job position limit and budget as approved by higher-level budget administrator in order to increase operational outcome of budget organization, eliminate functional duplication, optimize workload and maximize efficiency.

/This sub-paragraph was added according to the law as of November 10, 2016/

Article 17.Budget organization

17.1.The unit of the project that shall be implemented by loan and aid granted to Mongolia from international organization and contributor countries through the Government shall be budget organization.

17.2.In accordance with the Law on state registration of legal entities, the budget organization shall be registered by the state administrative organization in charge of finance and budget matters.

/This paragraph was invalidated according to the law as of January 29, 2015/

17.3.The unit that shall implement the function of performing non-regular activity of one-time nature shall be subordinated to budget administrator, which shall directly govern it and enters into budget relations.

Article 18.Special fund

18.1.An activity to implement certain state and local functions may be executed through special fund.

/This paragraph was amended according to the law as of December 24, 2020/

18.2.The special fund shall the following have two types: special Government fund and special local fund.

18.3.The law shall regulate the establishment of special Government fund, its operational principle, functions to implement, income of the fund, and the relations with regard to its expense.

18.4.This Law shall regulate the establishment of special local fund, its operational principle, functions to implement, income of the fund, and the relations with regard to its expense.

18.5.The special Government fund is component of state budget while the special local fund is component of local budget.

18.6.The issue to draw and centralize the residue of working assets set forth in 4.1.50 of this Law into budget shall be resolved by budget law of the given year.

18.7.The Law on special Government fund shall regulate the relations with regard to establishment of working asset, income, designation, expense and reporting of working asset.

Article 19.Appointment and dismissal of the budget general accountant

19.1.Projects of all level have budget general accountant for the given level.

19.2.The Budget Generalizing Administrator set forth in sub-paragraphs 14.1.3, 14.1.7, 14.1.11, 14.1.14, 14.1.15 and 14.1.19 of this Law shall have budget general accountant.

/This paragraph was amended according to the law as of August 29, 2022/

19.3.The budget generalizing administrator, budget centralizing administrator and the budget direct administrator shall have senior budget accountant and accountant in cases other than stated in paragraphs 19.1 and 19.2 of this Law.

19.4.The Budget Generalizing Administrator set forth in sub-paragraphs 14.1.3, 14.1.7, 14.1.11, 14.1.14 and 14.1.15 of this Law shall appoint and dismiss the general accountant of the given project upon consultation with the state secretary of the state central administrative organization in charge of finance and budget issues.

/This paragraph was amended according to the law as of August 29, 2022/

19.5.The budget generalizing administrator of soum and district shall appoint and dismiss the general accountant of its project upon consultation with the budget generalizing administrator of aimag and capital city and the budget generalizing administrator of aimag and capital city shall appoint and dismiss the general accountant of its project upon consultation with the state secretary of the state central administrative organization in charge of finance and budget issues.

19.6.The budget generalizing administrator and the budget centralizing administrator shall appoint and dismiss the senior project accountant as follows and consult with:

19.6.1.the budget generalizing administrator and the budget direct administrator of the project belonging to the State budget, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund shall consult with the State secretary of the state central administrative organization in charge of finance and budget issues for the accountant of its project;

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

19.6.2.with the head of state fund of aimag and capital city for senior accountant of budget organization subordinated to the budget centralizing administrator that was transferred to local area by the agreement set forth in article 39 of this Law;

19.6.3.the budget centralizing administrator and the budget direct administrator of an organization belonging to aimag and capital city budget shall consult with the head of state fund of aimag and capital city for accountant of its project. The budget direct administrator of an organization belonging to soum budget shall consult with the department head of state fund of aimag and capital city for accountant of its project;

19.6.4.the budget direct administrator of an organization belonging to district budget shall consult with the department head of district state fund for accountant of its project.

19.7.The state central administrative organization in charge of finance and budget issues shall define the requirements and procedure of criteria on general accountant of budget organization and state-owned and business entity with state property participation.

Article 20.Integrated framework of financial information

20.1.Project development of all levels, budget execution, accounting and reporting shall be implemented through integrated project information network.

20.2.The information within integrated framework of financial information shall be verified by respective decision, legislative act and accounting evidences.

20.3.The respective organization and official are obliged to enter true and accurate information into project information network, collect, record, store and protect the principal document of information.

CHAPTER FOUR

BUDGET STRUCTURE

Article 21.Budget stage

21.1.The integrated budget of Mongolia comprises the state budget, local budget, budget of Future heritage fund, budget Social insurance fund and budget of Health insurance fund.

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

21.2.The local budget comprises aimag, capital city, soum and district budget.

21.3.The higher-level budget of aimag, capital city budget is the state budget while the higher-level budget of soum and district budget be aimag and capital city budget.

21.4.The law shall define the income assigned to each budget level and the functions to be implemented by budget of the given level.

Article 22.Budget classification

22.1.Project shall be planned as per fixed classification and its execution be implemented, recorded and reported.

22.2.Project shall be classified as follows:

22.2.1.by its level;

22.2.2.by its administrator;

22.2.3.by economic class;

22.2.4.by program;

22.2.5.by measure;

22.2.6.by financing source

22.3.The classification set forth in paragraph 22.2 of this Law shall be the primary classification of project.

22.4.If deemed necessary, the state central administrative organization in charge of finance and budget issues may define other budget classification and level for budget classification numbering (code).

22.5.It is prohibited to modify the amount of budget income and expense by deliberately entering wrong information into budget classification item.

22.6.The budget classification shall be used as follows at each phase of budget planning, approval, implementation, and reporting:

22.6.1.to define performance indicator of medium-term fiscal framework statement per each phase;

22.6.2.to define the maximum budget expense ceiling by each budget stage and budget-generalizing administrator subordinated to him/her in expanded expense classification;

22.6.3.to prepare budget planning, recording and reporting by each type of budget classification according to their classification detailed;

22.6.4.the competent authority for budget approval shall approve budget by each stage, budget generalizing administrator subordinated to it, program to be implemented by them, achievable result, investment project and event, special fund, income and financing source;

/This sub-paragraph was amended according to the law as of October 25, 2012/

22.6.5.the budget generalizing administrator shall approve the approved budget by each budget centralizing administrator, and the budget not belonging to budget centralizing administrator by each budget direct administrator in classification set forth in sub-paragraphs 22.2.3-22.2.6 of this Law along with achievable result;

22.6.6.the budget generalizing administrator shall approve the approved budget by each budget direct administrator in classification set forth in sub-paragraphs 22.2.3-22.2.6 of this Law along with achievable result;

22.6.7.the budget direct administrator shall record and report the approved budget in classification set forth in sub-paragraphs 22.2.3-22.2.6 of this Law;

22.6.8.the process inspection of budget execution shall be conducted in classification set forth in paragraph 22.2 of this Law and the inspection level may be defined by expanded classification within detailed economic classification.

22.7.The state central administrative organization in charge of finance and budget issues shall determine the procedure for setting detailed classification by each budget classification type as set forth in paragraph 22.2 of this Law and using it for budget planning, reporting and execution.

22.8.The state central administrative organization in charge of finance and budget issues shall determine the method of converting budget classification in consistent with budget classification into international standard of Governmental financial statistics.

22.9.The Government shall determine and enforce the common procedure for determining the right to transfer and spend between items of budget established by classification set forth in sub-paragraph 22.6.8 of this Law by each budget administrator classification and determining expanded inspection level.

Article 23.Budget income

23.1.The budget income comprises tax income and non-tax income.

23.2.The tax income comprises tax, payment and charge determined by general tax law.

23.3.The non-tax income comprises the dividend of shares imposed on state and local property of state and local owned legal entity with state and local property participation, payment for using assets of state and local property, income from leasing state and local property, penalty income, income from secondary activities of budget organization, Government loan, aid and other income to be centralized into budget in accordance with legislation.

/This paragraph was amended according to the law as of February 18, 2015/

/This paragraph was amended according to the law as of April 14, 2017/

23.4.The tax income of state budget comprises the following incomes:

23.4.1.60 percent of corporate income tax;

/This sub-paragraph was amended according to the law as of December 24, 2020/

23.4.2.value added tax;

23.4.3.excise tax;

23.4.4.customs duty;

23.4.5.petrol and diesel fuel tax;

23.4.6.payment for utilizing mineral resources;

23.4.7.royalties for mineral resources exploration and exploitation special license;

23.4.8.air pollution payment;

23.4.9.State stamp fee set forth in paragraph 11.2 of the Law on state stamp fee.

23.4.10.water pollution payment;

/This sub-paragraph was added according to the law as of May 17, 2012/

23.4.11.70 percent of payment for utilization of petroleum reserve;

/This sub-paragraph was added according to the law as of July 01, 2014/

23.4.12.70 percent of payment for special license of petroleum exploration and exploitation;

/This sub-paragraph was added according to the law as of July 01, 2014/

23.4.13.payment for efficiency of using genetic resource and traditional knowledge with regard to genetic resource.

/This sub-paragraph was added according to the law as of December 30, 2021/

23.5.The non-tax income of state budget comprises the following incomes:

23.5.1.dividends of shares imposed on state property other than set forth in sub-paragraph 7.1.1 of the Law on Future heritage fund of state-owned legal entity with state property participation;

/This paragraph was amended according to the law as of February 05, 2016/

23.5.2.payment for using and income from selling assets of state property;

23.5.3.other income to be centralized into state budget in accordance with legislation.

23.6.The tax income of aimag and capital city budget comprises the following incomes:

23.6.1.capital city tax;

23.6.2.60 percent of the land fees;

/This sub-paragraph was amended according to the law as of November 13, 2019/

/This sub-paragraph was invalidated according to the law as of December 24, 2020/

23.6.3.real estate tax;

/This sub-paragraph was invalidated according to the law as of December 24, 2020/

23.6.4.tax on motor vehicles and self-propelled vehicles.

23.6.5.payment of water use for industrial and service purpose;

23.6.6.Income tax according to paragraph 7.1 of the Personal income tax law;

/This sub-paragraph was amended according to the law as of March 22, 2019/

/This sub-paragraph was invalidated according to the law as of December 24, 2020/

23.6.7.inheritance and gift tax;

23.6.8.state stamp fee other than those stated in sub-paragraph 23.4.9 of this Law;

23.6.9.20 percent of payment for special license of petroleum exploration and exploitation;

/This sub-paragraph was added according to the law as of July 01, 2014/

23.6.10.40 percent of corporate income tax.

/This sub-paragraph was added according to the law as of December 24, 2020/

23.7.The non-tax income of aimag and capital city budget comprises the following incomes:

23.7.1.dividends of shares imposed on local property of local-owned legal entity with s local property participation;

23.7.2.payment for using and income, interest and penalty income from selling assets of local property;

23.7.3.other income to be centralized into aimag and capital city budget in accordance with legislation.

23.8.The tax income of soum and district budget comprises the following incomes:

23.8.1.personal income tax other than those set forth in paragraph 7.1 of the Law on personal income tax;

/This sub-paragraph was amended according to the law as of March 22, 2019/

23.8.2.firearms tax;

/This sub-paragraph was amended according to the law as of August 07, 2015/

23.8.3.state stamp fee other than those stated in sub-paragraph 23.4.9 of this Law;

23.8.4.payment for using hunting reserve, fee for permit of hunting and trapping wildlife;

23.8.5.permit fee for right to use natural resources other than mineral resources;

23.8.6.payment for using natural plants;

23.8.7.payment for using firewood and lumbering from forest;

23.8.8.payment for utilization of common minerals;

23.8.9.payment for using water and mineral water for drinking and domestic purposes;

23.8.10.income tax of individual self-employed persons whose income cannot be determined from time to time;

/This sub-paragraph was invalidated according to the law as of March 22, 2019/

23.8.11.dog tax;

23.8.12.service fee for waste;

/This sub-paragraph was added according to the law as of May 17, 2012/

23.8.13.10 percent of payment for special license of petroleum exploration and exploitation;

/This sub-paragraph was added according to the law as of July 01, 2014/

23.8.14.land fees;

/This sub-paragraph was added according to the law as of November 13, 2019/

/This sub-paragraph was amended according to the law as of December 24, 2020/

23.8.15.tax for livestock head count;

/This sub-paragraph was added according to the law as of November 13, 2020/

23.8.16.immovable property tax;

/This sub-paragraph was added according to the law as of December 24, 2020/

23.8.17.tax imposed on income set forth in paragraph 7.1 of the Law on personal income tax.

/This sub-paragraph was added according to the law as of December 24, 2020/

23.9.The non-tax income of soum and district budget comprises the following incomes:

23.9.1.dividends of shares imposed on local property of local-owned legal entity with local property participation;

23.9.2.payment for using and income, interest and penalty income from selling assets of local property;

23.9.3.other income centralized into soum and district budget in accordance with legislation.

23.10.The aid income set forth in article 25 of this Law shall be the component part of budget income.

23.11.The income constituted with regard to ownership, use and spending of land and natural resources shall be budget income.

23.12.Despite article 23 of this Law, the income from privatization of property shall not be recorded in budget income; it shall be recorded in source for financing budget deficit. /This paragraph was added according to the law as of April 14, 2017/

23.13.The member of the Cabinet in charge of finance and budget issues shall approve the procedure and method for allocation of the income set forth in sub-paragraph 23.6.10 of this Law into aimag and capital city budget.

/This paragraph was added according to the law as of April 22, 2022/

Article 24.Budget expense

24.1.The budget expense comprises the net sum of loan from which current expenses, capital expenditure, and payback amount are subtracted.

/This paragraph was modified according to the law as of June 07, 2018/

24.2.Any creation and purchasing of state and local property in forms other than self-financing of state and local owned business entity, cost of incorporating legal entity, capital invested in interest and equity fund, and all types of financial instruments thereof shall be budget expense of the given level.

24.3.Tax expense shall be reflected and reported in detail in budget execution by planning it by each type and sector.

24.4.Investment shall be restrained from budget if the activity to purchase goods and services by budget assets was not arranged in accordance with legislation.

24.5.The measure and service to be implemented by budget generalizing administrator, agency and subordinate organization within scope of issues that budget generalizing administrator deals with should be involved with any program that shall be implemented by budget generalizing administrator of the given project.

24.6.The planning and execution monitoring of current and capital expense for activity, program, project and event to be implemented by budget administrator shall be based on corresponding norms, approved standard and budget.

/This paragraph was added according to the law as of June 07, 2018/

24.7.It shall be prohibited to spend the budget assets and the assets belonging to state and locality of the state and locally owned legal entities as well as of the legal entities with participation of state and local property, for public holidays and observances specified in sub-paragraphs 3.1.1 and 3.1.2 of the Law on Public Holidays and Observances, and any event or anniversary equivalent with them.

/This paragraph was added according to the law as of July 7, 2023/

Article 241.Issuance of Government loan

/This sub-paragraph was added according to the law as of February 18, 2015/

241.1.In case the source was approved by budget law of the given year, a loan may be issued from state budget for the following purposes:

241.1.1.to finance seasonal income insufficiency of aimag and capital city budget;

241.1.2.from special Government fund for a purpose stated by law;

241.1.3.lending borrowed money to a third party according to the Law on debt management.

Article 25.Aid income and its financing expenses

25.1.The aid income has the following types:

25.1.1.development aid to be received according to international agreement;

25.1.2.aid and donation from non-state and non-locally owned entity.

25.2.Unless otherwise provided by law, only the budget organization that provides the social service mentioned below may be granted with aid and donation according to the procedure set forth in this Law:

/This paragraph was amended according to the law as of November 13, 2019/

25.2.1.medical care;

25.2.2.educational service of all levels;

25.2.3.cultural service.

25.2.4.free legislative assistance.

/This sub-paragraph was added according to the law as of July 01, 2022/

25.3.The amount of aid and donation for budget generalizing administrator shall not exceed 50 percent of the approved budget of the given budget organization.

25.4.The budget organization may receive aid and donation in form of monetary asset and movable property from non-state and non-locally owned entity through its budget generalizing administrator in the following cases:

25.4.1.to continue program and measure that are in shortage of financing sources;

25.4.2.to implement training program towards strengthening human resources competency of the organization.

25.5.It is prohibited for a budget organization to receive aid and donation in the following cases considering that there are conflicts of interest:

25.5.1.If the entity providing aid and donation supplies own goods and provides service for the need of budget organization;

25.5.2.If it is intended to resolve social problem of an employee of the organization other than those set forth in sub-paragraph 25.4.2 of this Law;

25.6.When financing from aid income, the same requirement on financing activity from the budget shall apply likewise.

25.7.The income from aid and donation shall be recorded according to respective procedure and its execution be reported.

25.8.The budget generalizing administrator shall deliver the copy of document regarding receiving aid and donation to the state central administrative organization in charge of budget issues, or aimag, capital city, district state fund within 1 month.

25.9.Unless otherwise provided by law, the non-state and non-locally owned legal entity shall give donation and aid from the after-tax profit.

25.10.It is prohibited for state and locally owned legal entity to give donation and aid.

25.11.The Government shall regulate the relations with regard to receiving, spending, managing, recording and reporting foreign aid through its own approved procedure.

/This paragraph was modified according to the law as of February 18, 2015/

25.12.Unless otherwise provided by international treaty to which Mongolia is a party, the aid income shall be placed in the consolidated account of state fund.

25.13.The state central administrative organization in charge of finance and budget issues shall develop the procedure set forth in paragraph 25.11 of this Law and enforce its implementation.

/This paragraph was added according to the law as of February 18, 2015/

25.14.The state central administrative organization in charge of finance and budget issues shall approve the procedure with regard to activity of exemption and providing relief on goods received by non-repayable subsidy and humanitarian aid of foreign Government, non-government organization, international organization and charity organization from value-added tax and customs duty and enforce its implementation.

/This paragraph was added according to the law as of February 18, 2015/

Article 251.Payment of Government debt service

/This article was added according to the law as of February 18, 2015/

251.1.The payment for Government external loan aimed at investment purpose with commercial condition and debt service of securities, payment for Government debt guarantee shall be paid by means of reduction of payment for Government debt guarantee from budget investment expense.

251.2.The payment set forth in paragraph 251.1 of this Law and the debt service payment created with purpose for re-financing shall be paid by means of reduction from budget investment expense.

Article 26.Accounting and respective standards

26.1.The budget organization shall keep track of accounting on full accrual basis according to international accounting and national accounting standards.

26.2.The budget organization shall record and report the budget recording on adjusted accrual basis.

26.3.The state central administrative organization in charge of finance and budget issues shall develop and enforce the national accounting standard to be used in the state sector and budget recording.

CHAPTER FIVE

DEVELOPMENT, SUBMISSION AND APPROVAL OF BUDGET PROJECT

Article 27.Requirements on development of budget project

27.1.In the development of budget project, the following requirements are present apart from those set forth in the Law of Budget Stability:

27.1.1.to comply with budget principles;

27.1.2.to be based on macro-economic prospect, analysis and calculation developed by the Budget stability council;

/This sub-paragraph was amended according to the law as of July 7, 2023/

27.1.3.to be focused on maximization of budget financing efficiency by increasing quality and accessibility of state service;

27.1.4.to be based on annual budget ceiling;

27.1.5.budget project must be determined for each program and budget generalizing administrator;

27.1.6.budget of all organizations to be financed by budget must be involved in budget project of any budget generalizing administrator;

27.1.7.income and expense must be planned, recorded and reported in amount of total transaction other than internal transaction.

27.1.8.to be based on annual development plan of the state;

/this sub-paragraph was added according to the law as of December 24, 2021/

27.1.9.to be in consistent with money policy target of the state;

/this sub-paragraph was added according to the law as of December 24, 2021/

27.1.10.to be reflected the balance amount of the Budget stability fund and the Future heritage fund in the budget draft of the given year.

/This sub-paragraph was added according to the law as of July 7, 2023/

27.2.The annual budget ceiling to be delivered to Budget Generalizing Administrator must satisfy the following requirements:

27.2.1.budget ceiling to be determined by current and capital expense;

27.2.2.to reflect new and continuing project and event to be included in investment program by classifying its financing source.

27.3.The state central administrative organization in charge of finance and budget issues shall deliver the directive reflecting detailed instruction for preparation of budget project of budget generalizing administrator belonging to state budget to budget generalizing administrator.

27.4.The budget directive shall contain the following:

27.4.1.explanation of the relevant body on calculation of medium-term fiscal framework statement and decision made;

/This sub-paragraph was amended according to the law as of July 7, 2023/

27.4.2.annual budget ceiling approved by the Government;

27.4.3.policy directive with regard to activity plan of the Government;

/This sub-paragraph was amended according to the law as of December 16, 2021/

27.4.4.general and special requirements on development of budget project;

27.4.5.general conditions of budget project financing application;

27.4.6.special form of budget project preparation and its instruction;

27.4.7.deadline of budget project submission.

27.5.The detailed instruction for preparation of local budget project shall be reflected in budget directive and be delivered to Governor of aimag and capital city.

27.6.When planning project and event of budget investment, the following priority applies:

27.6.1.project and event to be transferred or carried over for implementation;

27.6.2.project and event of overhaul and maintenance care;

27.6.3.project and event to be implemented newly.

/This paragraph was added according to the law as of April 22, 2022/

Article 271.Preliminary assessment of the state investment

/This article was added according to the law as of April 22, 2022/

271.1.The projects to be implemented by budget investment shall be those that have been assessed by cumulative criteria of preliminary assessment of the State investment in accordance with method set forth in sub-paragraph 11.1.23 of this Law.

271.2.The budget generalizing administrator shall prepare the project proposal to be included in preliminary assessment of project of the state investment in accordance with method set forth in sub-paragraph 11.1.23 of this Law and deliver to the state central administrative organization in charge of finance and budget issues within January 15 of each year.

271.3.The state central administrative organization in charge of finance and budget issues shall provide assessment on projects of the State investment by cumulative criteria in accordance with preliminary assessment method and determine the required source for implementation of the given project.

Article 28.Planning of the state investment program

28.1.The State investment program shall cover project and event of infrastructure and development investment with cost of more than 30.0 billion tugrugs that shall be implemented for a period of more than one year focused on ensuring economic and social.

/This paragraph was amended according to the law as of November 26, 2015/

/This paragraph was amended according to the law as of December 16, 2021/

28.2.The budget generalizing administrator shall develop its proposal of the project and measures to be reflected on the state investment program under the following procedures and deliver it to the state central administrative organization in charge of economy and development issues.

28.2.1.proposals for projects and measures to be included in the state investment program shall have been publicly discussed at all stages of proposal development;

28.2.2.local people's opinion shall be taken in the project of the state investment program.

/This paragraph was amended according to the law as of August 17, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

/This paragraph was amended according to the law as of July 21, 2016/

/This sub-paragraph was modified according to the law as of July 7, 2023/

28.3.The state central administrative organization in charge of economy and development issues shall determine the priority and implementation cycle of the project and measures to be reflected on the State investment program in consideration of the followings:

/This paragraph was amended according to the law as of August 17, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

/This paragraph was amended according to the law as of July 21, 2016/

/This paragraph was amended according to the law as of July 7, 2023/

28.3.1.long and mid-term policy of state development;

28.3.2.economic efficiency and return on investment;

28.3.3.social relevance;

28.3.4.Government action program and top priority;

28.3.5.service standard provided by the state to public;

28.3.6.sector development policy;

/This sub-paragraph was invalidated according to the law as of December 16, 2021/

28.3.7.regional development policy;

/This sub-paragraph was amended according to the law as of November 26, 2015/

/This sub-paragraph was invalidated according to the law as of December 16, 2021/

28.3.8.local development needs;

28.3.9.medium-term fiscal framework statement;

28.3.10.contingent debts and other financial risk assessment.

28.3.11.Law on debt management and requirement set forth in Strategical document;

/This sub-paragraph was added according to the law as of February 18, 2015/

28.3.12.proposals discussed by public.

/This sub-paragraph was added according to the law as of July 7, 2023/

28.4.The state central administrative organization in charge of economy and development issues shall conduct preliminary feasibility study on the project and measures valued more than 30.0 billion tugrugs that shall be reflected on the state investment program by taking into account of sub-paragraphs 28.3.1-28.3.8 and 28.3.12 of this Law.

/This paragraph was amended according to the law as of August 17, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

/This paragraph was amended according to the law as of July 21, 2016/

/This paragraph was amended according to the law as of July 7, 2023/

28.5.The state central administrative organization in charge of finance and budget issues shall inspect and verify whether the project to be reflected on the state investment program satisfies the requirements set forth in sub-paragraphs 28.3.9 and 28.3.11 of this Law.

/This paragraph was amended according to the law as of February 18, 2015/

/This paragraph was amended according to the law as of July 21, 2016/

/This paragraph was amended according to the law as of April 22, 2022/

28.6.The state central administrative organization in charge of economy and development issues shall conduct calculation of design layout and feasibility study in case the project in question was determined to be effective when taking into account of economic efficiency and social relevance set forth in sub-paragraphs 28.3.2 and 28.3.3 of this Law.

/This paragraph was amended according to the law as of August 17, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

/This paragraph was amended according to the law as of July 21, 2016/

/This paragraph was amended according to the law as of July 7, 2023/

28.7.The study and calculation set forth in paragraphs 28.4 and 28.6 of this Law shall not apply to the following project and event.

28.7.1.project and event related to national security and state defense activity;

28.7.2.project and event for elimination and restoration of consequences of natural disaster.

28.8.As part of the Government's policies and national programs, the Government approves the state investment program once every four years and revises it every year.

/This paragraph was amended according to the law as of November 26, 2015/

/This paragraph was invalidated according to the law as of December 16, 2021/

28.9.The state administrative organization in charge of national development shall submit to the Government the draft of the investment program for the current year by May 15 of each year.

/This paragraph was amended according to the law as of August 17, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

/This paragraph was amended according to the law as of July 21, 2016/

/This paragraph was invalidated according to the law as of December 16, 2021/

28.10.The state investment program shall include the project and event to be implemented by financing of budget, foreign loan, aid and partnership agreement of state and private sector, state and private sector partnership, Government debt guarantee and Development Bank.

/This paragraph was amended according to the law as of February 18, 2015/

/This paragraph was amended according to the law as of December 16, 2021/

/This paragraph was amended according to the law as of December 9, 2022 and it shall be enforced on December 31, 2023/

28.11.The member of the Cabinet in charge of finance and budget issues shall approve the method for calculation of economic efficiency and social relevance of project to be implemented by the State investment.

/This paragraph was amended according to the law as of August 17, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

/This paragraph was modified according to the law as of December 16, 2021/

Article 281.Ensuring public participation in budget drafting

/This article was added according to the law as of July 7, 2023/

281.1.Public participation in the drafting of the current year's budget shall be provided as follows:

281.1.1.to organize public discussion in the budget drafting;

281.1.2.to operate a permanent website and hotline for voting.

281.2.The discussion specified in sub-paragraph 281.1.1 of this Law shall be held by the state central administrative organization in charge of finance and budget issues in August of each year, and no later than 14 days before the submission of the draft budget amendment, in accordance with the following procedure:

281.2.1.to have participated citizens, civil society organizations, the Council specified in paragraph 10.2 of this Law, the state audit organization, the budget generalizing administrator in charge of matters related to the discussion issue, agencies within the scope of his/her responsibility, management officials of budget organizations, and relevant officials in charge of finance and budget matters;

281.2.2.to conduct discussions in each sector;

281.2.3.to sum up and prioritize the economically efficient, socially significant, and cost-reducing proposals from the discussion, and to include them in the preparation of the current year's budget draft;

281.3.The budget amendment specified in paragraph 281.2 of this Law shall not apply to the budget amendment prepared on the basis of Article 8 of the Law on Budget Stability.

281.4.The state central state administrative organization in charge of economy and development issues shall organize a public discussion to develop the draft of the Medium-term fiscal framework statement within the month of March, and the draft of amendments to the Medium-term fiscal framework statement in the period not less than 14 days from the submission in accordance with the procedure specified in this article.

281.5.The Government shall approve the procedure for organizing public discussions on the draft of the budget and Medium-term fiscal framework statement.

Article 29.Investment budgeting

29.1.The state central administrative organization in charge of economy and development issues shall prepare the proposal of investment projects and measures to be implemented newly and continually within scope of the state investment program.

/This paragraph was amended according to the law as of August 17, 2012/

/This paragraph was amended according to the law as of October 16, 2014/

/This paragraph was amended according to the law as of July 21, 2016/

/This paragraph was amended according to the law as of December 16, 2021/

/This paragraph was amended according to the law as of July 7, 2023/

29.2.The proposal of investment project shall be supplemented with corresponding estimations such as current expense, work position and financing source related to capital utilization and an opinion regarding burden impact on budget must be made.

29.3.The state central administrative organization in charge of finance and budget and the Governor of the given level shall reflect the overall proposal of investment project and event onto annual budget project as follows:

29.3.1.to contain within medium-term fiscal framework statement and annual budget ceiling;

29.3.2.to reflect total expense of project and event included in the state investment program, starting and ending period by amount to be spent during fiscal year;

29.3.3.to estimate and reflect current repair of short-term assets, property renewal, equipment and projects of another asset project that shall be implemented and completed within one year per program and budget generalizing administrator;

29.3.4.to reflect each project in full amount irrespective of financing source;

29.3.5.to finance and complete construction, investment project and event to be initiated newly within three years;

/This sub-paragraph was modified according to the law as of November 11, 2022/

29.3.6.not to reduce the financing amount of investment project and event approved within the given year by budget adjustment.

/This sub-paragraph was added according to the law as of November 11, 2022/

29.4.The project and event to be included in investment project shall have feasibility study conducted, design layout approved, and other permits set forth in law issued.

29.5.The requirement set forth in paragraph 28.3 of this Law shall be applied likewise to investment project and event with total budgeted cost less than 30.0 billion tugrugs.

29.6.The estimation and feasibility study of investment project and event with total budgeted cost less than 30.0 billion tugrugs shall be conducted by the state central administrative organization in charge of such issues and the state central administrative organization in charge of finance and budget shall include it into budget in case the investment project in question was determined to be effective in compliance with legislation.

/This paragraph was amended according to the law as of December 16, 2021/

29.7.In case the price index of production raw materials has grown twice the amount estimated in approved budget, it shall be changed by reflecting it onto budget adjustment of the given year.

29.8.The emergence of situation set forth in paragraph 29.7 of this Law depending on guilty activities of contractor organization shall not serve as grounds for changing the estimated investment cost.

Article 291.Requirements on Budget Investment Project and event

/This article was added according to the law as of April 22, 2022/

291.1.The project and event of construction and building to be implemented newly by budget investment shall be the projects with economic efficiency and social relevance that have been met by the requirements set forth in this Law and prioritized by assessment criteria according to corresponding method.

/This paragraph was added according to the law as of April 22, 2022/

291.2.The project and event to be implemented by budget investment shall meet the following requirements:

291.2.1.land permit of the place where the project shall be implemented and other necessary approvals must be obtained;
291.2.2.in terms of construction and building, it must have design layout set forth in sub-paragraph 4.1.30 of the Law on construction and budget verified by inspection carried out for a period of the last two years;

/This sub-paragraph was modified according to the law as of November 11, 2022/

291.2.3.feasibility study and preliminary study must be conducted for project and event that require feasibility study;
291.2.4.the current expense of the project that requires current expense must be estimated;

291.2.5.to be consistent with development policy targets within budget ceiling of the given year;

291.2.6.to have discussed in public.

/This sub-paragraph was added according to the law as of July 7, 2023/

291.3.The state central administrative organization in charge of finance and budget issues shall conduct preliminary assessment of project and event to be implemented by budget investment and define its financing source by prioritizing sources such as budget, state and private sector partnership, foreign aid and grant.

291.4.Activities such as planning, implementation, financing, monitoring and establishing database for project and event of budget investment shall be realized at electronic management system of state budget investment.

291.5.Representatives of sector experts, academicians, and civil society organizations shall have participated in the public discussion to be organized during the discussion of the project of the state investment program by the Government and the State Great Khural.

/This paragraph was added according to the law as of July 7, 2023/

Article 30.State and private sector partnership

/This article was modified according to the law as of December 09, 2022 and it shall be enforced on December 31, 2023/

30.1.The project of state and private sector partnership may be implemented by partnership agreement of state and private sector at public infrastructure and state service sector in order to ensure optimized management for budget investment and budget risk.

30.2.The Law on state and private sector partnership shall govern the relations with regard to state and private sector partnership.

30.3.The payment obligation to be financed by budget of partnership agreement of state and private sector shall a component part of budget.

30.4.The information with regard to the project to be implemented by partnership agreement of state and private sector, payment obligation, contingent debts, and risk estimation shall be entered into consolidated financial report of the Government in form of disclosure and reported accordingly.

30.5.The project that has failed to satisfy the requirements stated in the Law on State and Private Sector Partnership and this Law shall not be implemented by state and private sector partnership and financed by budget.

Article 31.Annual budget project of budget generalizing administrator

31.1.The annual budget project of budget generalizing administrator must satisfy the following requirements:

31.1.1.to determine budget by scope of program and measure concerning primary function;

31.1.2.to determine the objective, goal and indicators of achievable results of program;

31.1.3.to contain within annual budget ceiling;

31.1.4.to reflect investment measure and amount of assets required for it onto respective program within scope of assumed issues;

31.1.5.to reflect type and amount of pension, allowance and other financial support to be financed by budget onto respective program within scope of assumed issues;

31.1.6.to attach project of the plan to purchase and acquire goods and service;

31.2.The budget generalizing administrator shall deliver the proposal that was not included in the budget ceiling set forth in sub-paragraph 31.1.3 of this Law along with corresponding justification and explanation without reflecting it in budget project estimation.

31.3.The state central administrative organization in charge of finance and budget issues shall reject the budget project of budget generalizing administrator that has failed to meet the requirements set forth in 31.1 of this Law.

31.4.The budget generalizing administrator shall attached the following estimations into the budget project:

31.4.1.estimation of income to be centralized at budget;

31.4.2.estimation of income from own operation of budget organization;

31.4.3.estimation of program, project and event to be implemented;

31.4.4.proposal and estimation for suspension, or reduction of financing of program, project and event that have become socially and economically insignificant;

31.4.5.analysis report of budget execution and forecast of prospective budget execution of the given year;

31.4.6.estimation of expense allocation of input, budget, financing source and achievable result required for project implementation expressed by program and economic classification;

31.4.7. /This sub-paragraph was invalidated according to the law as of October 25, 2012/

31.5.The Government and the board of Governor shall discuss the budget project by each budget generalizing administrator.

Article 32.Submission of budget project to the State Great Khural

32.1.The Government shall submit the project of state budget, budget of Future heritage fund, budget of Social insurance fund, budget of Health insurance fund to the State Great Khural along with presentation set forth in paragraph 32.2 of this Law according to the timing set forth in paragraph 8.4 of this Law.

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 5, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 1, 2022 and remain in force until December 31, 2022/

32.2.The Government shall reflect the following into the presentation of budget project:

32.2.1.assessment of current macroeconomic conditions, projections and estimations of future trends developed by the Budget stability council;

/This sub-paragraph was amended according to the law as of July 7, 2023/

32.2.2.Government policy in terms of ensuring macro economy and budget stability for the given year, top priorities and issues concerning their implementation;

32.2.3.estimation of budget balance target performance;

32.2.4.assessment of risk that may potentially affect budget execution;

32.2.5.calculation of tax expense of fiscal year by each type of tax income, execution of preceding two years and speculation of subsequent two years;

32.2.6.list of investment measures /by type and financing source/;

32.2.7.list of program and measure to be suspended and reduced, their impact on budget and corresponding explanation;

32.2.8.list of program and measure to be implemented by property of foreign loan and aid /by type, object and value/;

32.2.9.estimation of special fund income and expense;

32.2.10.amount of dividend to be paid by state and locally owned legal entity with state and local property participation into budget;

32.2.11.program and measure to be implemented by each budget generalizing administrator, input required for them, achievable result, execution criteria and explanation and presentation related to them;

32.2.12.description regarding consistency with special project requirement and medium-term fiscal framework statement;

32.2.13.ground and proposal in case special project requirement shall not be observed temporarily;

32.2.14.summary of indicators of the consolidated budget income and expense;

32.2.15.estimation of budget structural revenue;

32.2.16.proposal for financing of loss if budget was planned with loss;

32.2.17.Government debt residue, internal source amount of project loan, guarantee issued by Government and its value;

32.2.18.contingent debts equal to amount that exceeds one percent of consolidated budget revenue, estimation of potential risk due to such liabilities;

32.2.19. /This sub-paragraph was invalidated according to the law as of October 25, 2012/

32.2.20.legislation project to be resolved with respect to budget project.

32.2.21.information about inspection regarding presentation, information, realization, outcome and consistency with project of the projects that established agreement to be implemented by partnership according to the Law on state and private sector partnership, and payment schedule paid by budget and proposal to include in budget project of the projects that established agreement by type to be financed by budget. Such inspection must be submitted by the state central administrative organization in charge of partnership issues and included in budget project;

/This sub-paragraph was added according to the law as of April 14, 2017/

/This sub-paragraph was modified according to the law as of December 9, 2022 and it shall be enforced on December 31, 2023/

32.2.22.information on how the proposals resulting from the discussion in accordance with sub-paragraph 281.2.3 of this Law are included in the current year's budget draft and budget amendment draft.

/This sub-paragraph was added according to the law as of July 7, 2023/

32.3.The proposal for financing of loss specified in sub-paragraph 32.2.16 of this Law shall be consistent with the statement of the Medium-term fiscal framework, and the source and period of its financing shall be clearly stated.

/This paragraph was added according to the law as of July 7, 2023/

Article 33.Adoption of budget by the State Great Khural

33.1.The State Great Khural shall legitimize and enact the project for the State budget, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund according to the timing set forth in paragraph 8.4 of this Law.

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 1, 2022 and remain in force until December 31, 2022/

33.2.The following shall be reflected in budget and be approved:

33.2.1.income to be centralized into budget of the subordinate level by budget generalizing administrator for the given year, own income of affiliated budget organization;

33.2.2.maximum budget expense amount of budget generalizing administrator for the given year, maximum amount of current and capital expenditure;

/This paragraph was amended according to the law as of April 22, 2022/

33.2.3.source to finance budget deficit, the maximum amount of debt to be created newly by the Government, and restriction with regard to cash flow;

/This sub-paragraph was amended according to the law as of February 18, 2015/

33.2.4.income transfer, financial support to issue to budget of other level;

33.2.5.program to be implemented by each budget generalizing administrator, quality, and quantitative indicators of achievable result of project by attachment;

33.2.6.list of investment projects and measures by attachment /title, location, capacity, project code, implementation period, estimated cost, initial budgeted cost, financing source, annual financing amount of the given budget, and the amount of funding for the given fiscal year/;

/This paragraph was amended according to the law as of November 11, 2022/

/This sub-paragraph was amended according to the law as of July 7, 2023/

33.2.7. /This sub-paragraph was invalidated according to the law as of October 25, 2012/

33.2.8.the maximum financing amount of project and event to be implemented under condition to be paid back by budget for the given year by total amount.

/This sub-paragraph was added according to the law as of January 20, 2015/

33.2.9.information set forth in sub-paragraph 32.2.21 of this Law by attachment /These include project title, location, capacity, implementation period, type and form of agreement, information of private sector partner and partnership agreement, estimated cost, information and sum of payment and contingent debts to be paid by budget for the given year, information on Government guarantee and support provided by state set forth in the Law on State and private sector partnership/.

/This sub-paragraph was added according to the law as of April 14, 2017/

/This sub-paragraph was modified according to the law as of December 9, 2022 and it shall be enforced on December 31, 2023/

33.2.10.The project code set forth in paragraph 33.2.6 of this Law shall be valid for a period until the given project and event is implemented and completed since it was approved by law.

/This sub-paragraph was added according to the law as of November 11, 2022/

Article 34.Budget adjustment

34.1.The Government shall develop the project of budget adjustment of the given year and submit to the State Great Khural in the following cases:

34.1.1.the situation with which the special project requirement set forth in the law on budget stability shall not be followed has arisen;

34.1.2.the increase in consolidated budget deficit by three percent of GDP with reduced state budget income and increased expense due to unforeseeable situation;

34.1.3.to make amendment into the estimated cost of approved program, project and event in case the ground set forth in paragraph 29.7 of this Law has arisen;

34.1.4.to make project coordination between budget generalizing administrators;

34.1.5.the assets for the Government debt guarantee have become insufficient when executing the payment obligation of the government debt guarantee as stated by law and agreement.

/This sub-paragraph was added according to the law as of February 18, 2015/

/This sub-paragraph was amended according to the law as of November 13, 2019/

34.2.Governor shall develop budget adjustment of the given year and submit to the Khural of Citizens' Representative of the given level in the following cases:

34.2.1.the budget adjustment of the given level has become necessary due to adjustment made into the budget of higher level;

34.2.2.the situation of reduced budget income, increased expense, and unprofitable local budget has arisen due to unforeseeable conditions;

34.2.3.to make amendment into the estimated cost of approved program, project and event in case the ground set forth in paragraph 29.7 of this Law has arisen.

34.3.The implementation and financing of the following program, project and event may be suspended until the completion of adjustment on budget of the given year for a short time:

34.3.1.if it has been reflected in budget adjustment so that the financing amount would be reduced, or deducted;

34.3.2.if there is an absence of any agreement with regard to implementation of the given program, project and event.

CHAPTER SIX

BUDGET IMPLEMENTATION AND EXECUTION

Article 35.Consolidated account of state fund

35.1.The financial assets shall be managed through consolidated account of state fund placed in Mongol Bank.

35.2.The budget organization shall place the centralized budget income and the income from own operation into consolidated account of state fund.

35.3.All transaction belonging to budget apart from opening separate bank account upon approval of the state central administrative organization in charge of finance and budget shall be executed by consolidated account of state fund.

35.4.It shall be prohibited to open account for any budget organization without permission in written by the state central administrative organization in charge of finance and budget issues.

35.5.The budget organization account that was opened outside of consolidated account of state fund at bank shall be inspected by state fund and state audit organization and the accounts opened without approval set forth in paragraph 35.3 of this Law shall be closed along with centralization of asset at consolidated account of state fund.

35.6.The state central administrative organization in charge of finance and budget shall approve the procedure with regard to opening bank account outside of state unified account and closure of it jointly with Mongol Bank.

Article 36.State fund framework

36.1.The framework of the state fund comprises the central state fund, state fund of aimag and capital city, state fund of soum and district, unit of state fund of the state central administrative organization, and budget accountant /hereinafter referred to as "state fund"/.

36.2.The central state fund shall be at the state central administrative organization in charge of finance and budget issues, the state fund of aimag, capital city, soum and district be next to Governor's office of the given level.

36.3.Unified office to provide accounting service may be established for budget organizations operating in soum and district by diversifying their course of action and budget amount.

36.4.The Governor of aimag and capital city shall resolve the issue to establish the office of accounting service set forth in paragraph 36.3 of this Law as approved by the state central administrative organization in charge of finance and budget issues.

36.5.It is prohibited for a budget organization to create work position that implements duplicated function with the same office in case the office set forth in paragraph 36.3 of this Law was established.

36.6.The state central fund shall implement internal financial monitoring in the activity of state fund of aimag, capital city and state fund of state central administrative organization while the state fund of aimag and capital city implement such in the activity of district state fund, respectively.

Article 37.Common functions of the state fund

37.1.The State Fund shall exercise the following common functions:

37.1.1.to organize budget implementation and monitor;

37.1.2.to conduct daily transaction of budget income and expense;

37.1.3.to implement budget monitoring by amount of grouped expense;

37.1.4.to determine priority of budget expense payment;

37.1.5.to monitor by implementing budget transaction through electronic system;

37.1.6.to record payment commitment of budget by comparison of record for agreement of purchasing goods and services and payment order;

37.1.7.to record and report budget income, expense, assets and liabilities in respective account according to the Law on Accounting;

37.1.8.to issue financing and expenditure right to accounting records of budget organization based on monthly and quarterly budget schedule.

37.2.The Government shall approve the operational procedure of the state fund.

Article 38.Functions of the state fund

38.1.The state central administrative organization in charge of finance and budget issues shall implement the following functions of the central state fund:

38.1.1.to manage integrated account fund of the state fund;

38.1.2.to develop operational procedure for the state fund, and procedure for execution procedure of income and expense transaction and ensure its implementation;

38.1.3.to develop and implement training program towards qualification of employees of the state fund;

38.1.4.to develop and implement the procedure and instruction of the state fund activity;

38.1.5.to implement integrated management of monetary assets;

38.1.6.to constitute the source of monetary asset that shall be the state budget expense to be financed constantly from financial market;

/This sub-paragraph was amended according to the law as of February 05, 2016/

38.1.7.to create and compose monetary assets receivable so that the source of monetary assets to finance constantly the state budget expense shall be closed to the state budget and budget generalizing administrator of the state within scope of the unified account of state budget;

/This sub-paragraph was amended according to the law as of February 05, 2016/

38.1.8.to resolve the issue of free residue of property to be included in short-term investment through Mongol Bank;

38.1.9.to provide financial service to project administrator;

38.1.10.to implement integrated management of financial assets and liabilities;

38.1.11.to develop report and consolidate information of consolidated budget execution;

38.1.12.to provide billing service to budget administrator.

Article 39.Representative execution of certain state functions

/This article was modified according to the law as of April 22, 2022/

39.1.The budget generalizing administrator set forth in sub-paragraphs 14.1.6 and 14.1.11 of this Law may establish agreement for implementation set forth in paragraph 61.1 of this Law with Governor of aimag, capital city and district.

/This paragraph was amended according to the law as of August 29, 2022/

39.2.The following shall be reflected in the agreement set forth in paragraph 39.1 of this Law.

39.2.1.intended use and restriction of financing;

39.2.2.scope;

39.2.3.quantitative and qualitative criteria of achievable results;

39.2.4.financing and reporting;

39.2.5.monitoring and accountability.

39.3.The financing for execution of certain state functions set forth in article 27 of the Law on Mongolian administrative, territorial unit and its management shall be estimated as follows and assigned to the respective budget administrator:

39.3.1.to reflect on local base-line expense as planned in advance;

39.3.2.to issue as an additional financing in case it is not possible to estimate in advance.

39.4.The respective budget generalizing administrator shall review the fulfilment of the agreement set forth in paragraph 39.1 of this Law by half and full year and conduct internal audit.

Article 40.Performance agreement

40.1.The budget direct administrator and budget generalizing administrator shall establish performance agreement with the subordinate higher-level budget administrator prior to the start of fiscal year.

40.2.The performance agreement set forth in paragraph 40.1 of this Law shall reflect the program and measure to be implemented during the fiscal year of organization, their budget, achievable results and their evaluation.

40.3.The respective higher-level budget administrator shall review the fulfilment of performance agreement by half and full year.

40.4.The entity authorized to review the performance agreement shall take the following measures based on fulfilment and implementation progress of performance agreement:

40.4.1.to monitor by consigning obligation regarding performance improvement and implementation intensification;

40.4.2.to reward and charge within scope of powers set forth in law.

40.5.The budget generalizing administrator shall take account of implementation of the Law on glass accounts when reviewing the fulfilment of performance agreement set forth in paragraph 40.1 of this Law.

/This paragraph was added according to the law as of July 01, 2014/

Article 41.Organizing budget execution

41.1.The detailed schedule to implement the approved budget, detailed budget allocations, monitoring on budget expenditure and collection shall be implemented in accordance with the approved monthly and quarterly schedule of budget.

41.2.Budget administrators of all level shall have the following obligations with regard to budget implementation:

41.2.1.to fully centralize the income to be collected at state and local budget according to law and the income from own operation of the given budget organization;

41.2.2.to spend within scope of the approved budget;

41.2.3.to implement and report the budget execution in accordance with legislation;

41.2.4.to operate by observing monthly and quarterly schedule of budget;

41.2.5.to finance the expenditure of budget organization within scope of right set forth in 37.1.8 of this Law;

41.2.6.to finance the execution financing of goods and service to be purchased by assets of state and local property based on procurement agreement of purchasing goods and services and payment schedule;

41.2.7.to monitor program implementation and ensure the achievable results.

41.3.The authorized entity set forth in paragraphs 65.1, 66.1 of article 11 of this Law shall approve and enforce the monthly and quarterly budget schedule based on the proposal of budget generalizing administrator.

41.4.The authorized entity set forth in paragraph 41.6 of this Law shall determine the temporary financing procedure until the budget is approved in case of situation where the budget has not been approved at the start of fiscal year, and finance the budget expenditure as follows:

41.4.1.by minimum wage amount of budget organization employee;

41.4.2.by minimum amount of social care and social insurance pension and allowance;

41.4.3.by the level of preceding year in terms of Government reserve fund and reserve capital of governor;

41.4.4.by the level of preceding year in terms of current expenses of operating activities of defense, health, education, border protection, national security, court and prosecuting organizations, police, domestic troops, emergency management agency, tax and customs organizations and other state regulatory bodies;

/This sub-paragraph was amended according to the law as of January 16, 2014/

/This sub-paragraph was amended according to the law as of February 09, 2017/

/This sub-paragraph was amended according to the law as of November 11, 2022/

41.4.5.by 50 percent of current expenses of operating activities of the preceding year in terms of budget organizations other than those set forth in sub-paragraph 41.4.4 of this Law;

41.4.6.by observing the terms and payment amount of the given loan agreement in terms of principal and interest payment of Government loan and.

41.5.Short-term loan may be issued from higher-level budget in order to finance the financial shortage of the activity belonging to lower-level budget set forth in 41.4 of this Law.

41.6.The state central administrative organization in charge of finance and budget issues or Governor of aimag and capital city shall determine and enforce the temporary financing procedure and monthly and quarterly budget schedule to implement it.

41.7.The Government shall approve the procedure, which determines the approved budget of budget organization, own income, expenditure savings, their spending, satisfaction of execution transparency, and requirements and conditions of being open for public and collective of organization.

Article 42.Regulation on the budget of budget administrator

42.1.The budget regulation between budget generalizing administrators shall resolved only by making regulation into budget of the given year.

42.2.The budget administrator may conduct regulation into its budget as follows:

42.2.1.the budget-generalizing administrator may regulate:

42.2.1.а.between programs belonging to its own budget package;

42.2.1.б.between budgets of centralizing administrators directly subordinated to him/her;

42.2.1.в.between budgets of budget centralizing administrators and budget direct administrators;

42.2.1.г.between budgets of get direct administrators directly subordinated to him/her.

42.2.2.between budgets of budget direct administrators directly subordinated to the budget generalizing administrator;

42.2.3.only the current expense of the budget generalizing administrator.

42.3.The issues of conducting regulations into budget by the budget generalizing shall be resolved as follows:

42.3.1.The budget administrator shall deliver his/her proposal to conduct regulation into budget to respective budget centralizing administrator and to budget generalizing administrator if he/she is not subordinated to budget centralizing administrator;

42.3.2.the budget centralizing administrator shall deliver his/her proposal to respective budget generalizing administrator;

42.3.3.the budget generalizing administrator shall deliver his/her proposal of regulation to the state central administrative organization in charge of finance and budget issues if the proposal involves the state budget, budget of Future heritage fund, budget of Social insurance fund and budget of Health insurance fund. The budget generalizing administrator shall deliver the proposal to the Governor of aimag, capital city, soum and district if the proposal involves local budget;

/This paragraph was amended according to the law as of January 29, 2015/

/This paragraph was amended according to the law as of January 22, 2016/

/This paragraph was amended according to the law as of February 05, 2016/

/This paragraph was amended according to the law as of November 13, 2019/

/In this paragraph, the term "budget of Future heritage fund" was placed in front of "Budget of Social insurance fund" according to the law as of November 12, 2021 and it shall be enforced starting from January 01, 2022 and remain in force until December 31, 2022/

42.3.4.the organization, or official set forth in sub-paragraph 42.3.3 of this Law shall resolve the proposal by making changes into monthly and quarterly budget schedule according to the reviewed and approved proposal of the budget generalizing administrators set forth in paragraph 42.2 of this Law.

42.4.The permission of higher-level budget administrator shall be obtained when conducting regulation set forth in paragraph 42.2 of this Law.

42.5.The budget centralizing administrator set forth in 15.2 of this Law shall resolve the issue of conducting regulation in the budget of budget direct administrator directly subordinated to him/her by making changes into monthly and quarterly schedule of his/her own approved budget.

42.6.The member of the Cabinet in charge of finance and budget issues shall approve the limit, conditions and procedure to conduct regulation in the budget of budget administrators.

42.7.It is prohibited to assign capital and current expenses in-between and finance new program and measure that are not reflected in the budget.

Article 43.Regulation on event to be implemented between fiscal years

43.1.The following budget residue that has not been spent for the given year may be continually spent for the subsequent fiscal year:

43.1.1.Government promissory note, principal and interest payment of loan;

43.1.2.budget for investment project and event whose implementation cycle differs from the budget year due to the specifics of projects and events;

/This sub-paragraph was invalidated according to the law as of November 7, 2013/

43.1.3.budget of projects and events to be implemented by agreement in-between Governments ratified by the State Great Khural and credit on easy terms by international organization;

43.1.4.budget incentives other than those stated in paragraph 44.6 of this Law;

/This sub-paragraph was invalidated according to the law as of November 10, 2016/

43.1.5.aid and donation received from non-state and non-locally owned entity.

43.2.The total amount of budget who's spending right has passed over to the subsequent fiscal year other than those set forth in sub-paragraph 43.1.3 of this Law shall not exceed three percent of budget of budget generalizing administrator for the given year and the amount exceeded such percent shall be drawn and centralized into general budget account of the given level.

43.3.The issue to draw and centralize the residual property of working assets stated in the Law on special government fund into budget at the end of fiscal year shall be resolved according to paragraph 18.6 of this Law and the assets in question shall be spent in line with the approved budget of the subsequent year.

43.4.The budget administrator shall be entitled to spend the budget stated in subparagraph 43.1.2 of this Law until March 31 of the next budget year.

/This paragraph was invalidated according to the law as of November 7, 2013/

43.5.The budget administrator shall not spend the budget other than those set forth in sub-paragraphs 43.1.3 and 43.1.5 of this Law through two fiscal years.

43.6.Transferring budget spending right over to the subsequent fiscal year shall not serve as grounds for reducing target level of achievable results of program and measure to be implemented by the approved budget for the given year.

Article 44.Secondary activities

44.1.The budget organization may earn revenue by conducting secondary activities in case the following requirements are met;

44.1.1.to be approved in written by budget generalizing administrator in advance;

44.1.2.budget source to compensate any loss if such loss is caused by secondary activities must be planned;

44.1.3.financial report and performance agreement must reflect such activities appropriately;

44.1.4.must not dismiss the employee that has not used the assets of an organization for unintended use from his/her obligatory position;

44.1.5.engagement in secondary activities should not conflict with functions and operating activities of the given budget organization.

44.2.The expense of secondary activities shall include all types of direct and indirect expense, payable, and financial commitment related to engaging in such activities.

44.3.It is prohibited to spend assets directly and indirectly from the expense of operating activities for secondary activities.

44.4.If the approval of secondary activities was obtained in the middle of fiscal year, its budget shall be reflected and implemented in form of additional budget, and be reflected in budget of the given year in other cases.

44.5.The profit resulted from secondary activities shall be spent for the following:

44.5.1.to reduce budget financing of operating activities of the given organization;

44.5.2.to make investment intended to support the activities of the given sector and organization;

44.5.3.to resolve social issues of employees of the given sector and organization;

44.6.At the end of the fiscal year, the remaining profit will be transferred to the general budget account of that stage

/This paragraph was invalidated according to the law as of November 10, 2016/

44.7.The profit resulted from secondary activities and the relations with regard to spending for purposes set forth in sub-paragraphs 44.5.2 and 44.5.3 of this Law shall be governed by article 46 of this Law.

Article 45.Budget expense savings

45.1.The following unspent residue of the budget of budget administrators shall be considered as budget expense savings:

45.1.1.the residue resultant from reduction of cost and price per unit during procurement activities of goods and services to be implemented by current budget;

45.1.2.the residue resulted from reduction of cost and expense per unit by increasing efficiency of operation expenses of budget organization without degrading operational quality;

45.1.3.the residue resulted from reduction of cost and expense per unit of the projects and events whose budget was approved through estimation of norm per unit without degrading operational quality.

45.1.4.the residue resulted from reduction of construction and equipment operational cost such as equipment and technological alteration;

/This sub-paragraph was added according to the law as of November 10, 2016/

45.1.5.the residue of wage and other current expenses of reduced work position if downsizing has occurred due to renewal of organizational structure in accordance with sub-paragraphs 14.2.12 and 16.5.9 of this Law;

/This sub-paragraph was added according to the law as of November 10, 2016/

45.1.6.the residue resulted from organizing the planned program and measure by more effective and optimized variation without degrading the achievable results and quality.

/This sub-paragraph was added according to the law as of November 10, 2016/

45.2.The following unspent residue of the budget of budget administrator shall not be considered as budget savings and the given residue shall be centralized into general budget account of the given level:

45.2.1.the residue whose budget was approved through estimation of norm per unit and if the residue whose execution is less than originally estimated unit quantity;

45.2.2.the residue resulted from planned projects and events that have not been implemented, or reduction in quantity;

45.2.3.the residue resulted from reduction in cost, price and quantity per unit during investment procurement activities;

45.2.4.budget balance resulting from the budgetary institution working with fewer staff than the approved quantity.

/This sub-paragraph was invalidated according to the law as of November 11, 2022/

Article 46.Procedure for spending budget expense savings and additional income from operating activities

46.1.The Budget Administrator may allocate and spend the budget expense savings and additional income from operating activities in order to improve budget efficiency within the given fiscal year.

46.2.The member of the Cabinet in charge of finance and budget issues shall approve the procedure for spending, reporting, inclusion in accounting and monitoring of the budget set forth in paragraph 46.1 of this Law.

46.3.The budget expense savings and additional income from operating activities may be spent for the following measures based on expected budget execution:

46.3.1.to finance the current expense of operating activities that are lacking source, or have generated liabilities;

46.3.2.to reward and encourage collective and employee of an organization taking account the work performance;

46.3.3.to resolve social issues of all employees;

46.3.4.to make investment with purpose of supporting the activities of the given sector and organization;

46.4.The issue of allocating the reward set forth in sub-paragraphs 46.3.2 and 46.3.3 of this Law shall be resolved through collective meeting of the organization with the attendance of all employees of the organization and the state fund of the given level shall issue spending right based on collective meeting minutes and decision.

46.5.The budget expense savings and additional income from operating activities shall not be spent for the following measures:

46.5.1.in the following cases that imbalance the normal operation of organization:

46.5.1.а.the situation where employee's wage cannot be issued within period set forth in law;

46.5.1.б.the quality and accessibility of state service has been reduced.

46.5.2.to generate liabilities within fiscal year, or by budget execution report of two consecutive quarters;

46.5.3.to receive guests and representatives and finance the cost of foreign business trip;

46.5.4.to increase current costs by creating permanent positions and new structures.

/This sub-paragraph was invalidated according to the law as of April 22, 2022/

46.6.Sub-paragraph 44.5.1 and paragraph 46.3 of this Law shall not apply to the public service organization financed by the principle of performance-based financing.

/This paragraph was added according to the law as of November 11, 2022/

/This article was modified according to the law as of November 10, 2016/

Article 47.Additional budget

47.1.The budget administrator may spend the following additional budget for respective projects and events:

47.1.1.aid and donation received from non-state and non-locally owned entity;

47.1.2.loan by agreement in-between Governments ratified by the State Great Khural during the course of fiscal year and credit on easy terms to be received from international organization;

47.1.3.assets allocated to the given budget administrator from Government reserve fund, Governor's reserve capital and equivalent unclassified reserve capital in accordance with decision of the corresponding organization;

47.1.4.assets allocated to lower-level budget administrator from the budget reflected in the budget of higher-level budget administrator;

47.1.5.additional income generated within scope of operating activities of budget organization;

47.1.6.budget incentives;

/This sub-paragraph was invalidated according to the law as of November 10, 2016/

47.1.7.additional income of Health insurance fund;

/This sub-paragraph was added according to the law as of November 13, 2020/

47.1.8.additional income earned by the public service organization financed by the principle of performance-based financing.

/This sub-paragraph was added according to the law as of November 11, 2022/

47.2.Additional income and its related activities shall be component parts of financial and budget execution report like budget.

47.3.The income set forth in sub-paragraphs 47.1.2 and 47.1.6 of this Law shall only be spent within the scope of approved budget.

/This paragraph was amended according to the law as of November 10, 2016/

CHAPTER SEVEN

PROPERTY, ASSETS AND CONTINGENT DEBTS

/The title of this chapter was amended according to the law as of February 18, 2015/

Article 48.Property and assets

48.1.The special law shall regulate the relations with regard to the state and local property, asset management, regulation, spending, recording and reporting.

Article 49.Government to create debt

49.1.The government can create debt for the following purposes:

49.1.1.to fund government projects and programs;

49.1.2.to increase the Mongol Bank's net foreign reserves in order to support the country's balance of payments;

49.1.3.to finance the budget deficit;

49.1.4.to refinance debt to reduce interest rates and costs;

49.1.5.to finance seasonal revenue shortfalls of the state budget.

49.2.In accordance with Article 49.1.4 of this Law, it shall be prohibited to extend the term of debt when refinancing.

49.3.The resources generated by the debt shall be used only to finance the programs, projects and measures included in the budget and approved.

/This article was invalidated according to the law as of February 18, 2015/

Article 50.Government to provide loans

50.1.If the source is approved by the budget law of the current year, the state budget may grant loans for the following purposes:

50.1.1.to finance the seasonal revenue shortfalls of provincial and capital budgets;

50.1.2.special funds of the Government for the purposes stated by law;

50.1.3.loans received from foreign countries and international organizations are to be relent through their purpose.

50.2.The resources generated by the debt shall be used only to finance the programs, projects and measures included in the budget and approved.

/This article was invalidated according to the law as of February 18, 2015/

Article 51.Government guarantee

51.1.The government may issue debt guarantees on the basis of the law.

51.2.In case the source is approved by the budget law of the current year, the guarantee stated in paragraph 51.1 of this Law shall be granted.

51.3.Government guarantee is a budget component.

51.4.Debt guarantees to be issued by the Government within the scope of the budget for the current year and approved by the Government will be discussed and approved by the State Great Khural.

/This article was invalidated according to the law as of February 18, 2015/

Article 52.Contingent debts

52.1.The State Great Khural shall announce the information regarding contingent debts of the Government in public.

52.2.The information regarding contingent debts of the Government shall be fully reflected in annual and adjusted budget project, and half and full-year budget execution report.

52.3.The state central authority of audit shall monitor the contingent debts; debt guarantee and the information related to them and render conclusion.

52.4.Estimation and reporting of contingent debts, loan guarantee and potential risk and payment amount that may be caused by them shall not be considered that they have been accepted and payable generated.

52.5.The state central administrative organization in charge of finance and budget issues shall execute the functions for producing review and information by estimating and recording contingent debts recording, monitoring, regulation, study and probability and expense amount that could be spent by budget.

/This paragraph was added according to the law as of February 18, 2015/

52.6.The respective entity is obliged to deliver the following information immediately regarding contingent debts to the state central administrative organization in charge of finance and budget issues:

52.6.1.debt generated by the special Government fund;

52.6.2.debt of the state and locally owned business entity in which the state and local holds a majority of the issued;

52.6.3.guarantee issued according to the Law on state and private sector partnership;

/This sub-paragraph was amended by the law of December 9, 2022 and will be enforced from December 31, 2023/

52.6.4.projects and events implemented by loan assets in which the Government debt guarantee was issued;

52.6.5.other respective information with regard to contingent debts and required by the state central administrative organization in charge of finance and budget.

/This paragraph was added according to the law as of February 18, 2015/

52.7.if any risk has been created to execute the given payment within scope of contingent debts, the member of the Cabinet in charge of such issues shall present it to the State Great Khural upon basis of consultation with the member of the Cabinet in charge of finance and budget issues and have it resolved.

/This paragraph was added according to the law as of February 18, 2015/

Article 53.Government debt management

53.1.The central state administrative organization in charge of financial and budgetary issues shall implement the government debt management as follows:

53.1.1.to develop and implement a debt management strategy based on the Government's financial needs and risk assessment;

53.1.2.to determine and manage the Government's debt management goals, debt size, structure, and risks in the short and medium term;

53.1.3.to approve the ceiling of newly created debts and guarantees of the Government according to the budget law of the current year;

53.1.4.to determine the upper limit of the amount of loans to be taken by state-owned and legal entities with 51 percent or more of state-owned participation;

53.1.5.to establish the upper limit of the amount of debt that Governors of aimags and capitals can take from the state budget;

53.1.6.to create a database of government debt and debt guarantees;

53.1.7.to ensure transparency of government debt information;

53.1.8.to ensure creditor equity.

/This paragraph was invalidated according to the law as of February 18, 2015/

53.2.The relations with regard to property and liabilities management, receipt and issuance of Government loan, lending borrowed money to a third-party, issuance of debt guarantee, and their requirements, condition, restriction and implementation of contingent debts management shall be regulated by law.

CHAPTER EIGHT

BUDGET REPORTING

Article 54.Financial and budget execution report

54.1.The consolidated financial report of the Government shall encompass the financial report of the state and local budget, the consolidated financial report of budget generalizing administrator and the financial report of state and local owned legal entity with state and local property participation.

54.2.The consolidated financial report shall encompass the report of budget organization within the scope of assumed issues of budget generalizing administrator, the financial report of project and program implemented by the credit on easy terms and non-repayable subsidy granted and received through Government, the financial report of state and local owned legal entity with state and local property participation.

54.3.The budget generalizing administrator shall prepare the budget execution and the consolidated year-ending financial report in accordance with international accounting standards.

54.4.The consolidated financial report shall be composed of:

54.4.1.performance report of activities;

54.4.2.report of financial position;

54.4.3.report of cash flow;

54.4.4.statement of stockholders' equity;

54.4.5.disclosure of financial statement.

54.5.Budget execution report shall be composed of:

54.5.1.execution of budget income and expense for the given year /by total value, each program, budget administrator and investment measure/;

54.5.2.tax expense along with respective legal justification by each legal entity and sector;

54.5.3.execution of goods and services purchased for the given year;

54.5.4.budget spent for program and measure, achieved result and its presentation /program execution fulfilment, implementation of policy target and conclusion conducted in its effect, and fulfilment of investment measure implemented within scope of program and reason of interruption if any/;

54.5.5.additional budget execution and its presentation;

54.5.6.information on Government debt and Government debt guarantee.

/This paragraph was added according to the law as of February 18, 2015/

54.6.The program execution shall be reported in a way of comparison of the originally planned achievable target in case the budget was regulated according to article 42 of this Law.

Article 55.Pre-election report of economy, finance and budget prospect

55.1.The state central administrative organization in charge of finance and budget issues shall submit the information regarding Mongolian economy, finance and budget prospect prior to not less than one month from announcement of election of the President of Mongolia and of the State Great Khural.

55.2.The member of the Cabinet in charge of finance and budget issues shall present the information set forth in paragraph 55.1 of this Law before the joint session of the State Great Khural.

55.3.The state central administrative organization in charge of finance and budget issues shall prepare the pre-election report of macro economy, finance and budget prospect and inform it in public after the State Great Khural was presented with the information set forth in paragraph 55.1 of this Law.

55.4.The pre-election report of macro economy, finance and budget prospect shall reflect the following information:

55.4.1.economic, financial and budget policy implemented by the Government during the term of office of Mongolian President and the State Great Khural election and whether its result has met the special budget requirements set forth in article 6 of the Law on Budget stability;

55.4.2.assumption of macro-economic and budget prospect for the incoming four years;

55.4.3.Government debt and amount of contingent debts, its intended use and terms, principal debt and interest payment amount of loan that is unpaid within due time;

55.4.4.total amount of residue of budget stabilization fund of Mongolia, whether it complies with budget stability and assessment regarding change in source of the given fund for the period of next two years;

55.4.5.contingent debts;

55.4.6.pending measure that has been included in the Government action program and, the amount of expense to be spent for such measure and its source;

55.4.7.pending Government debt payment and guarantee amount that have been reflected in Government agreement and negotiation;

55.4.8.performance of the decision made by the Government during election year to affect the financial and budget prospect of the subsequent years;

55.4.9.explanation with regard to the mid-term assumption of economy, finance and budget complies with Medium-Term Fiscal Framework Statement approved by the State Great Khural, or with budget of the given year and the special budget requirements set forth in the Law on budget stability.

55.5.The information set forth in sub-paragraphs 55.4.5-55.4.8 of this Law and its effect into budget shall be demonstrated by quantitative indicators.

CHAPTER NINE

LOCAL BUDGET RELATIONS

Article 56.Relation between budget levels

56.1.Transfer shall be issued from upper level budget into lower level budget as follows:

56.1.1.financial support to be issued by upper level budget in order to finance the fundamental balance loss of lower level budget;

56.1.2.income transfer to be issued by upper level budget in order to implement investment, program, projects and events of lower level budget;

56.1.3.a special purpose transfer from the state budget for implementation of some functions of the government on representation of local communities.

/This paragraph was invalidated according to the law as of April 22, 2022/

56.2.Budget shall be centralized from the fundamental balance profit of lower level budget into upper level budget as follows:

56.2.1. 60 percent of fundamental balance profit shall be centralized for 2017 fiscal year, 40 percent for 2018 fiscal year, 60 percent for 2019 fiscal year, and the remaining portion shall be centralized at upper level budget by retaining 70 percent in budget of the given level starting from 2020 fiscal year in case the fundamental balance profit of lower level budget is less than and equal to base-line expense.

/This sub-paragraph was amended according to the law as of April 14, 2017/

56.2.2. 60 percent of portion equal to base-line expense shall be centralized for 2017 fiscal year, 40 percent for 2018 fiscal year, 60 percent for 2019 fiscal year, and the remaining portion shall be centralized at upper level budget by retaining 70 percent in budget of the given level starting from 2020 fiscal year in case the fundamental balance profit of lower level budget is more than base-line expense.

/This paragraph was modified according to the law as of November 10, 2015/

/This paragraph was modified according to the law as of September 09, 2016/

/This sub-paragraph was amended according to the law as of April 14, 2017/

56.3.The state central administrative organization in charge of finance and budget issues is entitled to suspend the financial support and income transfer to be issued to aimag and capital city budget while the Governor of aimag and capital city entitled to suspend those to be issued to soum and district budget in case the following violations are discovered. The suspension shall be valid until such violations are eliminated: 

/This paragraph was amended according to the law as of April 22, 2022/

56.3.1.violation of legislation on budget;

56.3.2.if Khural of Citizens' Representative has approved its budget for the given year by ungrounded increased amount;

56.3.3.Violation of the conditions and requirements of special purpose transfers;

/This sub-paragraph was invalidated according to the law as of April 22, 2022/

56.3.4.total budget has been occurred with deficit due to failure of observing service standard to be financed by local budget;

56.3.5.local budget stability has been lost;

56.3.6.local budget has not been approved within period fixed by this Law.

56.4.The Government shall determine the method for estimation of base-line expense of budget, service standard to be financed by local budget and their input and budget normal.

56.5.The conditions and requirements for the purpose and spending of the special purpose transfer stated in sub-paragraph 56.1.3 of this Law shall be specifically determined by the agreement stated in paragraphs 39.1 and 39.2 of this Law, and the Government shall supervise.

/This paragraph was invalidated according to the law as of April 22, 2022/

56.6.The Government and the Governor of aimag and capital shall implement stabilization program in the given territory in order to eliminate violations set forth in paragraph 56.3 of this Law, ensure implementation of legislation and local budget stability, and increase the strength of stakeholders in budget relations.

Article 57.Local budget

57.1.The types of income to be allocated to local budget shall be governed by this Law and the functions to be implemented by local budget be governed by the Law on Mongolian Administrative and Territorial Unit and Its Governance.

/This paragraph was modified according to the law as of April 22, 2022/

57.2.Local budget shall be planned, approved and implemented without deficit.

57.3.The expense to be financed from local budget residue of the previous year shall be reflected in budget for approval and implementation and its expense shall not exceed its financing source.

57.4.Short-term loan may be issued from aimag and capital city budget in order to finance seasonal income insufficiency of soum and district budget.

57.5.It is prohibited to generate debt and issue guarantee in local budget in cases other than those set forth in the Law on debt management and paragraphs 41.5, 57.4 and 62.2 of this Law.

/This paragraph was amended according to the law as of February 18, 2015/

Article 58.Financing of local functions

/This article was modified according to the law as of December 24, 2020/

58.1.The base-line expense of local budget set forth in sub-paragraph 4.1.30 of this Law shall be financed by the following sources:

58.1.1.tax and non-tax revenues of aimag, soum, capital city and district;

58.1.2.income transfer issued by the state budget;

58.1.3.financial support issued by the state budget.

58.2.The cost of investment projects and events with regard to local functions may be financed by the state budget on a basis of reflecting in the list set forth in sub-paragraphs 32.2.6 and 33.2.6 of this Law.

/This paragraph was amended according to the law as of April 22, 2022/

Article 59.Unified local development fund

59.1.The unified local development fund comprises the following source:

59.1.1. 5 percent of the revenue from value added tax on goods, works and services other than imports;

/This sub-paragraph was modified according to the law as of November 10, 2015/

/This sub-paragraph was amended according to the law as of September 09, 2016/

/This sub-paragraph was invalidated according to the law as of November 12, 2021/

59.1.2. 10 percent of payment income for using mineral resources other than those set forth in 473 of the Law on mineral resources;

/This sub-paragraph was amended according to the law as of November 10, 2016/

/This sub-paragraph was amended according to the law as of November 12, 2021/

59.1.3.aid and donation of domestic non-governmental organization and official foreign organization issued with purpose of supporting local development, incentive and assistance granted by international project and program being implemented jointly with upper level organization;

/This sub-paragraph was amended according to the law as of April 14, 2017/

59.1.4.funds to be collected as stated in paragraph 56.2 of this Law;

/This sub-paragraph was invalidated according to the law as of September 09, 2016/

59.1.5. 30 percent of payment income for using petroleum oil reserve.

/This sub-paragraph was added according to the law as of July 01, 2014/

59.2.The aimag and capital city shall allocate the transfer issued by Local development fund and the state budget into the Local development fund of soum and district as mentioned below:

59.2.1.to transfer the portion allotted to the service cost set forth in paragraph 60.11 of this Law into the Local development fund of soum and district;

59.2.2.to allocate the percent not less than 50 percent of portion other than that set forth in sub-paragraph 59.2.1 of this article taking account the population, distance and territorial size;

/This sub-paragraph was amended according to the law as of November 12, 2021/

59.2.3.to allocate the income transfer set forth in sub-paragraph 60.2.7 of this Law from the state budget into the Local development fund of aimag and capital city by the rate set forth in paragraph 60.6 of article 60.

/This paragraph was modified according to the law as of May 21, 2015/

/This paragraph was modified according to the law as of September 09, 2016/

/This sub-paragraph was amended according to the law as of November 12, 2021/

59.2.4.In case the beneficiary has been indicated specifically by the contributor and the organization providing incentive and assistance, the sources set forth in sub-paragraphs 59.1.3 and 60.2.5 of this Law shall be directly allocated into the Local development fund of the given soum and district and shall not be considered as assets to be allocated by index.

/This sub-paragraph was added according to the law as of April 14, 2017/

59.3.When determining transfer to be issued from the Unified local development fund into local budget for the given year, it shall be based on the following index:

59.3.1.local development index;

59.3.2.population;

59.3.3.population density, distance and territorial size;

59.3.4.local tax initiatives.

/This sub-paragraph was invalidated according to the law as of November 12, 2021/

59.4.When distributing royalties for mineral resources from the United fund for local development, the amount per person in the locality where mineral extraction took place shall be increased by up to 10 percent from the per capita amount in other localities.

/This paragraph was invalidated according to the law as of November 12, 2021/

59.5.The Government shall approve the method for estimation of transfer to be issued from the Unified local development fund and Local development fund.

59.6.The resources stated in sub-paragraph 59.1.3 of this Law from the United local development fund shall be directly distributed to the local development fund in cases where the recipient is specifically designated by the donor or the incentive or support organization, and shall not be considered as funds to be distributed by proxy.

/This paragraph was added according to the law as of April 14, 2017/

/This paragraph was invalidated according to the law as of November 12, 2021/

59.7. 5 percent of income composed of source set forth in sub-paragraph 59.1.2 of this Law shall be allocated in equal proportion in aimag that composes 20 percent and percent more than that of the given source, 15 percent be allocated in aimag that composes 1 and percent more than that up to 20 percent of the given source by proportionating its composed amount, respectively. 30 percent of income composed of source set forth in sub-paragraph 59.1.5 of the same law shall be allocated in equal proportion in aimag that composes 1 and percent more than that of the given source.

/This paragraph was added according to the law as of November 12, 2021/

Article 60.Local development fund

60.1.The budget generalizing administrator of the given level shall have Local development fund with purpose to support local development.

60.2.the local development fund shall comprise the following sources:

60.2.1.transfer to be issued by Unified local development fund;

60.2.2.assets stated in paragraph 59.2 of this Law;

/This sub-paragraph was invalidated according to the law as of November 12, 2021/

60.2.3.the part that remains after deducting the part equal to the basic expenditure from the profit of the basic balance of the local budget;

/This sub-paragraph was modified according to the law as of November 10, 2015/

/This sub-paragraph was invalidated according to the law as of September 9, 2016/

60.2.4.additional source created by means of increasing tax share and cost savings;

60.2.5.domestic and foreign aid and donation issued in order to support the given local development and incentive and assistance granted by international project and program being implemented jointly with upper level organization;

/This sub-paragraph was amended according to the law as of April 14, 2017/

60.2.6. 10% of the discrepancy that has deducted payment income for using mineral resources paid by legal entity implementing major projects and events with nationwide significance from payment income for using mineral resources other than those set forth in article 473 of the Law on Mineral Resources;

/This sub-paragraph was added according to the law as of May 21, 2015/

/This sub-paragraph was amended according to the law as of September 9, 2016/

/This sub-paragraph was amended according to the law as of November 10, 2016/

/This sub-paragraph was invalidated according to the law as of November 12, 2021/

60.2.7. 50 percent from payment income of special license for mineral resources exploration for 2019 fiscal year, 100 percent starting from 2020 fiscal year, and 50 percent from payment income of special license for mineral resources exploitation starting from 2020 fiscal year;

/This sub-paragraph was added according to the law as of May 21, 2015/

/This sub-paragraph was modified according to the law as of November 02, 2018/

60.2.8.tax revenues of livestock head count. the source of this revenue shall be spent for pastoral management improvement, pastoral and agricultural water supply increase, protection of livestock health, prevention from infectious disease, improvement of livestock quality, and protection from criminal impingement and natural disaster, precipitation increase, cultivation of forage plants, maintaining fodder resources, environmental protection, combatting against rodents, and cost of training and promotion for herders;

/This sub-paragraph was added according to the law as of November 13, 2020/

60.2.9.Donation and aids given to local municipal organization by special license holder in accordance with agreement set forth article 42 of the Law on Mineral Resources.

/This sub-paragraph was added according to the law as of November 11, 2022/

60.3.The assets of Local development fund shall not be spent for the following:

60.3.1.program and measure other than functions stated by law to finance by local budget.

60.3.2.expense of political party and non-governmental organization;

60.3.3.expense of holiday, celebration, anniversary event, religious ritual and ceremony other than national festival as naadam;

60.3.4.any activity that is not consistent with public interests;

60.3.5.to issue loan and guarantee with financial consequences and assume an obligation to reimburse damage;

60.3.6.any expense and measure that have not included proposal of local people and that have not included in local budget plan.

60.4.The functions stated by law set forth in sub-paragraph 60.3.1 of this Law shall not apply to the function that shall implement aimag, capital city, soum and district management.

60.5.The local development fund of the aimag and capital will allocate not less than 33 percent of the income stated in sub-paragraph 60.2.6 of this Law to the local development fund of the sum and district where exploration and exploitation is located.

/This paragraph was added according to the law as of May 21, 2015/

/This paragraph was invalidated according to the law as of November 12, 2021/

60.6.The Local development fund of aimag and capital city shall issue the percent not less than 50 percent of the income set forth in sub-paragraph 60.2.7 of this Law into the Local development fund of soum and district where the area issued by special license of mineral resources exploration and exploitation is located.

/This paragraph was added according to the law as of May 21, 2015/

60.7.Resources specified in sub-paragraph 60.2.6 of this Law shall be allocated to the regional development fund of provinces and capitals where minerals have been used, and resources specified in sub-paragraph 60.2.7 of this Law shall be allocated from the state budget to the regional development fund of aimags and capital cities in which areas granted licenses for mineral exploration and exploitation are located.

/This paragraph was added according to the law as of May 21, 2015/

/This paragraph was invalidated according to the law as of November 12, 2021/

60.8.The Government shall approve the list of legal entities implementing major national projects and events specified in sub-paragraph 60.2.6 of this Law.

/This paragraph was added according to the law as of May 21, 2015/

/This paragraph was invalidated according to the law as of November 12, 2021/

60.9.If the territory set forth in paragraph 60.6 of this Law covers two administrative and territorial units more than that, the local development fund transfer shall conducted by means of proportionating.

/This paragraph was added according to the law as of May 21, 2015/

/This paragraph was amended according to the law as of November 12, 2021/

60.10.The member of the Cabinet in charge of finance and budget shall approve the detailed method of conducting income transfer set forth in paragraphs 60.6-60.9 of this Law.

/This paragraph was added according to the law as of May 21, 2015/

/This paragraph was amended according to the law as of November 12, 2021/

60.11.Service charges in connection with executions of sub-paragraphs 58.1.8, 58.1.12, 58.2.11, 58.2.12, 58.2.15, 58.3.4, 58.4.3, 58.4.4, 58.4.9 and 58.4.10 shall be implemented in sub-paragraph 60.3.6 of this Law shall not be applied.

/This paragraph was added according to the law as of September 09, 2016/

/This sub-paragraph was invalidated according to the law as of November 11, 2022/

Article 61.Representative implementation of certain functions of the government in local area

61.1.The Governor of aimag, capital city, soum and district shall execute certain functions set forth in article 27 of the Law on Mongolian Administrative and territorial unit and its governance and paragraph 8.2 of the Law on legal status of Ulaanbaatar city of Mongolia through representation.

/This paragraph was modified according to the law as of December 24, 2020/

/This paragraph was amended according to the law as of July 07, 2021/

/This paragraph was amended according to the law as of April 22, 2022/

61.2.The representative implementation functions set forth in paragraph 61.1 of this Law shall be financed by budget of the respective level according to article 39 of this Law.

/This paragraph was modified according to the law as of August 28, 2020/

/This paragraph was modified according to the law as of April 22, 2022/

61.3.The Governor of aimag, capital city, soum and district shall prepare the proposal to perform financing allocation by each representative implementation function set forth in paragraph 61.1 of this Law along with local budget project and submit to the Khural of Citizens' Representative of the given level within period stated by law.

61.4.The Khural of Citizens' Representative of aimag, capital city, soum and district shall approve the financing allocated by each representative implementation function based on the agreement set forth in article 39 of this Law and the proposal submitted by Governor as part of local budget project. In doing so, the Khural of Citizens' Representative shall not decrease the financing from the total amount transferred by the agreement set forth in article 39 of this Law.

61.5.Transfers for special purposes shall be transferred to the state fund of aimags and capital cities according to the monthly and quarterly schedule specified in this Law.

/This paragraph was invalidated according to the law as of April 22, 2022/

Article 62.Creating debt for local needs

62.1.The Governor of aimag and capital city may create a debt from the state budget under condition to be paid back within the given fiscal year for the purpose set forth in paragraph 41.5 of this Law.

/This paragraph was amended according to the law as of February 18, 2015/

62.2.The Governor of the capital city may finance the investment project required for the implementation of the functions specified in paragraph 58.1 of this Law by creating debt for a period of up to four years.

/This paragraph was invalidated according to the law as of February 18, 2015/

62.3.The amount of debt stated in paragraph 62.2 of this Law shall not exceed the amount of the basic budget income of the previous year, and the total amount of debt service to be paid shall not exceed 15 percent of the basic budget income of the previous year.

/This paragraph was invalidated according to the law as of February 18, 2015/

62.4.It shall be prohibited to use the following assets and income as collateral for the debt in the capital budget for the purposes specified in paragraph 62.2 of this Law:

62.4.1.capital property belonging to the implementation of the functions stated in paragraph 61.1 of this Law;

62.4.2.all revenues of the capital city budget.

/This paragraph was invalidated according to the law as of February 18, 2015/

62.5.Special purpose transfers shall prohibited as collateral for debt.

/This paragraph was modified according to the law as of February 18, 2015/

/This paragraph was invalidated according to the law as of April 22, 2022/

62.6.When creating debt for the purposes specified in paragraph 62.2 of this Law, the Governor of the capital shall adhere to the following points:

62.6.1.to publicize the purpose of the debt and, if necessary, hold an open discussion involving the public;

62.6.2.to obtain permission from the state central administrative organization in charge of finance and budget issues when creating debt;

62.6.3.for the debt-financed investment projects to be discussed and approved by the City Council of Representatives.

/This paragraph was invalidated according to the law as of February 18, 2015/

62.7.Within 10 working days after signing the loan agreement or any other debt-generating agreement, the Governor of the capital city shall deliver a copy of the agreement to the state central administrative organization in charge of finance and budget issues.

/This paragraph was invalidated according to the law as of February 18, 2015/

Article 63.Ensuring citizens and public engagement in local budget

63.1.The Governor of bag and khoroo shall conduct a public and open survey with regard to investment, program, projects and events to be implemented by the assets of Local development fund and priority and method of their implementation within scope of bag and khoroo.

63.2.The Public Khural of citizens of bag and khoroo shall discuss the proposal set forth in paragraph 63.1 of this Law and the proposal issued by Public Khural of citizens and select the significant projects and events by top priority.

63.3.As set forth in paragraph 63.2 of this Law, the Governor's office of soum and district shall submit the proposal delivered by Public Khural of citizens of bag and khoroo to the Khural of Citizens' Representative of soum and district by prioritizing it in consistent with significance and the given local development policy and by including it in budget project.

63.4.The Khural of Citizens' Representative of soum and district shall discuss and approve the proposal set forth in paragraph 63.3 of this Law by including it in budget project.

Article 64.Powers of the Khural of Citizens' Representative

64.1.The Khural of Citizens' Representative of aimag, capital city, soum and district shall exercise the following powers in terms of local budget management and financing:

64.1.1.to discuss, approve and monitor the Governor's action program;

64.1.2.to discuss and approve the budget of the given year and its adjustment project, monitor its implementation and inform the public;

64.1.3.to discuss and approve the budget execution;

64.1.4.to heed the information regarding budget execution report and financial report of Governor.

Article 65.Powers of the Governor of aimag and capital city

65.1.The Governor of aimag and capital city shall exercise the following powers in terms of local budget management and financing:

65.1.1.to develop, discuss and approve the budget project and the adjustment project of the given level and report before the Khural of Citizens' Representative of the given level by organizing budget execution;

65.1.2.to develop and consolidate budget project of local budget organization and representative execution of state functions, execution, monthly and quarterly report and financial report and deliver to the respective budget generalizing administrator;

/This sub-paragraph was modified according to the law as of April 22, 2022/

65.1.3.to establish agreement for representative execution of state functions in administrative and territorial unit with respective budget generalizing administrator;

/This sub-paragraph was amended according to the law as of December 24, 2020/

65.1.4.to establish agreement for purchasing goods and services to be implemented by assets of local property in compliance with respective law;

65.1.5.to deliver the local budget approved by the Khural of Citizens' Representative to the state administrative central body in charge of finance and budget issues within the timeframe set forth in paragraph 8.5.5 of this Law;

65.1.6.to constantly and fully finance the planned expense of state budget organization for its intended use within due time in accordance with agreement set forth in 39.1 of this Law;

65.1.7.to approve and enforce the monthly and quarterly schedule of annual budget of aimag and capital city;

65.1.8.to approve the work position of budget organization of the given level by each budget administrator.

Article 66.Powers of the Governor of soum and district

66.1.The Governor of soum and district shall exercise the following powers in terms of local budget management and financing:

66.1.1.to develop, discuss and approve the budget project and its adjustment project of the given level and report before the Khural of Citizens' Representative of the given level by organizing budget execution;

66.1.2.to develop and consolidate budget project of local budget organization and representative execution of state functions, execution, monthly and quarterly report and financial report and deliver to the Governor of aimag and capital city and respective budget generalizing administrator;

/This sub-paragraph was modified according to the law as of April 22, 2022/

66.1.3.to establish agreement for representative execution of state functions in administrative and territorial unit with the Governor of aimag and capital city;

/This sub-paragraph was amended according to the law as of December 24, 2020/

66.1.4.to deliver the local budget approved by the Khural of Citizens' Representative to the Governor of aimag and capital city within seven working days since it was approved;

66.1.5.to constantly and fully finance the planned expense of state budget organization for its intended use within due time in accordance with agreement set forth in paragraph 39.2 of this Law;

66.1.6.to approve and enforce the monthly and quarterly schedule of annual budget of soum and district;

66.1.7.to approve the work position of budget organization of the given level by each Budget Administrator.

Article 67.Development and submission of local budget

67.1.The Governor of aimag, capital city, soum and district shall develop local budget project and submit to the Khural of Citizens' Representative of the given level along with the presentation set forth in paragraph 67.2 of this Law.

67.2.The presentation of local budget project shall reflect the following apart from sub-paragraphs 32.2.1-32.2.12, 32.2.19 and 32.2.20 of this Law:

67.2.1.mid-term plan reflecting local budget policy targets;

67.2.2.budget project estimation and presentation developed according to budget classification set forth in article 22 of this Law;

67.2.3.financial support and income transfer proposal planned to be issued to soum and district budget from aimag and capital city budget;

67.2.4.property amount to centralize into upper level budget reflected and approved in upper level budget.

67.3.During the development of the aimag, capital city, soum and district budget projects, the Governor of that level shall present the draft to the public, and the opinions and requests of the citizens of that province, capital, sum, and district shall be presented to the Khural of Citizens' Representative.

Article 68.Approval of local budget

68.1.The local budget project shall reflect sub-paragraphs 33.2.1-33.2.7 of this Law and be approved.

68.2.The investment projects and events to be reflected additionally in the course of discussion of budget project by the Khural of Citizens' Representative shall be reflected upon basis of receiving proposal and opinion from the entity that has submitted the budget of the given level regarding whether they have satisfied the requirement set forth in article 29 of this Law.

68.3.The budget of the given year approved by the Khural of Citizens' Representative shall be informed in public in open and equally accessible manner.

CHAPTER TEN

MONITORING AND INSPECTION

Article 69.Internal Audit

69.1.Every budget generalizing administrator shall establish internal audit office and employ internal auditor focused on monitoring over implementation of legislation, conducting financial inspection on budget assets, liabilities, payment, income, expense, program, measure and investment and conducting assessment, rendering conclusion and making recommendation and providing with risk management.

69.2.The state central administrative organization in charge of finance and budget issues shall provide the internal audit office of budget generalizing administrator with operational standard and methodical management.

69.3.The internal audit shall apply to the financial activities of budget organization within scope of assumed issues of budget generalizing administrator, state and locally owned legal entity and legal entity in which the state and local community hold a majority of the issued shares.

69.4.The internal auditor shall have the state inspector rights of financial inspection.

69.5.The Government shall approve the regulation of internal audit office.

CHAPTER ELEVEN

LIABILITY FOR THE VIOLATORS OF THE LAW

Article 70.Liability for the violators of the law

70.1.In case that the actions by a civil servant violating this Law have not a criminal nature, they shall be subject to liabilities stated in the Public service law.

/This article was modified according to the law as of December 04, 2015/

70.2.If it is determined that the management or executive officer has not followed the provisions of paragraphs 281.2 and 281.4 of this Law, it shall be grounds for dismissal from his/her position.

/This paragraph was added according to the law as of July 7, 2023/

70.3.If the budget generalizing administrator exceeds, mis-categorizes, or misuses the expenses specified in the Budget law of the current year, it shall be grounds for dismissal from his/her position.

/This paragraph was added according to the law as of July 7, 2023/

70.4.If it is determined by the budget performance that when the budget generalizing administrator and the state central administrative organization in charge of finance and budget matters, have developed and approved the budget draft on the basis of unreasonable data and quantity, it shall be grounds for dismissal from his/her position.

/This paragraph was added according to the law as of July 7, 2023/

Article 71.Entry into force of the Law

71.1.The provisions other than set forth in paragraphs 71.2 and 71.3 of this Law shall enter into force on January 01, 2013.

71.2.The articles and sub-paragraphs with regard to development, submission, approval and public announcement of budget and medium-term fiscal framework statement, enforcement of budget timing, preparation of pre-election report of economy, finance and budget prospect, submission to the State Great Khural and informing the public shall be enforced starting from February 01, 2012.

/This paragraph was amended according to the law as of December 16, 2021/

71.3.Paragraph 71.2 of this Law shall not apply to the relations with regard to development, submission and approval of 2012 budget adjustment project.

71.4.Sub-paragraph 43.1.2 and paragraph 43.4 of this Law shall be enforced from December 30, 2011.

/This paragraph was invalidated according to the law as of November 07, 2013/

71.5."budget, of Health insurance fund" in paragraphs 8.4 and 8.6 of article 8, sub-paragraph 8.6.3 of the same article, of paragraph 32.1 of article 32, "budget of Health insurance fund" in sub-paragraph 9.1.2 of article 9, "budget, budget of Health insurance fund" in paragraph 33.1, article 33 shall be enforced starting from July 01, 2017 and "budget of Health insurance fund" in sub-paragraph 12.1.2 of article 12, sub-paragraph 19.6.1 of article 19, paragraph 21.1 of article 21, of sub-paragraph 42.3.3, article 42, and "budget of Health insurance fund" in paragraphs 8.8 and 8.9 of article 8 of this Law be enforced starting from January 01, 2018, respectively.

/This paragraph was added according to the law as of November 10, 2016/

/This paragraph was modified according to the law as of January 19, 2016/

/This paragraph was amended according to the law as of November 2, 2018/

/This paragraph was amended according to the law as of November 13, 2019/

71.6.Sub-paragraph 60.2.6 of this Law shall enter into force on January 01, 2020.

/This paragraph was added according to the law as of April 14, 2017/

/This paragraph was amended according to the law as of November 02, 2018/

THE CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA DEMBEREL.D