-v GOVERNMENT OF THE REPUBLIC OF LITHUANIA R E S O L U T I O N No. 478 26 April 2001 Vilnius ON THE APPROVAL OF THE PROC

-v GOVERNMENT OF THE REPUBLIC OF LITHUANIA R E S O L U T I O N No. 478 26 April 2001 Vilnius ON THE APPROVAL OF THE PROCEDUREs TO BE FOLLOWED IN PLANNING, ADJUSTING, USING, ACCOUNTING FOR AND CONTROLLING PUBLIC FUNDS ALLOCATED FOR PUBLIC CAPITAL INVESTMENTS Invoking Article 14.3 of the Law on Investment of the Republic of Lithuania (Žin., 1999, No. 66–2127; 2000, No. 42–1187) the Government of the Republic of Lithuania h a s r e s o l v e d:

1. To approve the procedures to be followed in planning, adjusting, using, accounting for and controlling public funds allocated for public capital investments (attached).
2. To recommend to local authorities that they should plan capital investments from their funds according to the procedures approved under Item 1 hereof.
3. To repeal 13 November 1997 Resolution No. 1251 On the Approval of Procedures to Be Followed in Planning, Using, Accounting for and Controlling Public Investments of the Government of the Republic or Lithuania (Žin., 1997, No. 104–2639). Prime Minister Rolandas Paksas Minister of Finance Jonas Lionginas Approved by 26 April 2001 Resolution No. 478 of the Government of the Republic of Lithuania PROCEDURES TO BE FOLLOWED IN PLANNING, ADJUSTING, USING, ACCOUNTING FOR AND CONTROLLING PUBLIC FUNDS ALLOCATED FOR PUBLIC CAPITAL INVESTMENTS I. general provisions
4. These Procedures shall regulate the planning, adjustment, use, accounting for and control of the funds of the State Budget of the Republic of Lithuania (including specific purpose grants to municipalities), the Privatisation Fund, loans re-lent from domestic and foreign loans, and loans taken with State guarantees (hereinafter referred to as ‘public funds’) for the creation, acquisition or the increase of the value of fixed tangible or intangible assets of governmental institutions, authorities and enterprises, municipal institutions and enterprises as well as of other economic entities (hereinafter referred to as ‘public capital investments’).
5. The Programme of Public Capital Investments shall be developed in accordance with: 2.
6. the strategic objectives (priorities) approved by the Government of the Republic of Lithuania); 2.
7. the Activity Programme of the Government of the Republic of Lithuania, its implementation measures and the strategic plans of individual economic sectors; 2.
8. Lithuania’s Pre-Accession Programme, the National Programme for the Adoption of the Acquis (LAPP-NPAA) and the NATO Membership Action Plan (MAP); 2.
9. the National Development Plan based on the long-term economic development strategy and the documents on the implementation of its measures; 2.
10. obligations of the State to use public funds to co-finance investment projects the implementation of which uses funds donated as financial assistance, domestic and foreign loans or loans taken with a State guarantee; 2.
11. the reference amounts of public capital investments approved by the Government for a specific year, and the proportional amounts to be invested in individual economic sectors.
12. In drawing up bilateral or multilateral agreements, financial memoranda, financial agreements or other documents with foreign assistance suppliers, State and municipal institutions and public institutions shall co-ordinate their investment projects as well as the amounts of public funds they will need for their implementation with the Ministry of Finance.
13. In developing the Programme for Public Capital Investments priorities shall be given to investment projects co-financed with the European Union and projects which meet the requirements of the NATO Programme (MAP) and the European Union.
14. Procurement contracts with contractors (suppliers) on the implementation of an investment project shall be made for the total value of all works, products and services or for their technically acceptable part. Procurement contracts shall provide that the payment for work, services or products will be conditional on the availability of financing and that no penalty interest or other sanctions shall be imposed for delayed settlement of accounts with contractors (suppliers).
15. State institutions and public agencies shall arrange discussions of strategies of individual economic sectors, while agencies and enterprises as well as other business entities not mentioned in Item 8 hereof shall arrange similar discussions of investment projects constituting part of the strategic plan of the respective economic sector necessary for the implementation of the assigned objectives and functions (hereinafter referred to as the ‘Investment Programme’) with industrial, business organisations, municipal organisations and other social and economic partners.
16. Methods for planning public capital investments indicating the criteria for assessment and selection as well as other requirements for projects that may be included in the Programme of Public Capital Investments for a specific year shall be approved by the Ministry of Finance. II. SUBMISSION OF INVESTMENT PROJECTS
17. The proposed investment projects (investment programmes) necessary to carry out certain mandates provided for by law and other legal acts as well as to perform the functions of public administration shall be submitted, within the time limits set in the plan for drafting financial indicators of the State and municipal budgets, to the Ministry of Finance by: 8.
18. State institutions – ministries, judicial, control (supervisory), law enforcement and other institutions; 8.
19. State institutions – the Office of the Seimas of the Republic of Lithuania, the Ombudsmen’s Office, the President’s Office, the Office of the Government of the Republic of Lithuania, Governmental agencies (departments, control and supervisory institutions, inspectorates and other institutions, the administrations of County Governors); 8.
20. Municipal institutions.
21. Institutions, enterprises and other economic entities not mentioned in Item 8 hereof shall submit their investment projects to state or municipal institutions or state agencies within their field of subordination.
22. Institutions or other economic entities which do not belong to the field of subordination of state or municipal institutions or state agencies shall submit their proposed investment projects to the institutions or agencies mentioned in Item 8 which are assigned, under law, the task of the implementation of public policy in the respective area.
23. In drawing up their investment projects, institutions and enterprises, municipal institutions and enterprises as well as economic entities referred to in Items 9 and 10 shall take into consideration the recommendations and comments made by State institutions and agencies referred to in Item 8 to adjust, if necessary, their investments project.
24. The investments projects shall be submitted together with the indication of the need of funds necessary for the implementation of the project and calculations of the projected changes in the expenditure of the national budget during the life-cycle of the investment which may arise after the implementation of the project as well as the projected sources for covering the expenditure. The changes in the expenditure shall be computed in the procedure laid down by the Ministry of Finance.
25. Only investment projects which comply with the requirements laid down in Item 2 and in the methods of planning for public capital investments determined by the Ministry of Finance may be included in the Programme of Public Capital Investments. III. DRAWING UP AND ADJUSTING THE PROGRAMME OF PUBLIC CAPITAL INVESTMENTS
26. State institutions and state agencies, in the procedure established in the plan for the development of financial projects of the State Budget and municipal budgets of the Republic of Lithuania, shall develop strategies for the development of economic sectors and submit them to the Ministry of Economy.
27. In accordance with the strategic objectives (priorities) approved by the Government of the Republic of Lithuania, the Ministry of Economy shall develop and submit for the Government’s approval the following measures of public investment policies: 15.1 having considered the development strategies of individual economic sectors submitted by state institutions and state agencies, the Ministry of Economy shall draw up (adjust) the general development strategy and priorities of all the economic sectors; 15.2 proportionate investments in individual economic sectors.
28. Taking into consideration the decisions of the Government on the measures of investment policy referred to in Item 15 hereof, the Ministry of Finance shall submit, in the established procedure, for the Government’s approval the reference amounts of public capital investments, including the amounts of Lithuania’s public funds to be used to finance joint projects with the European Union.
29. Taking into consideration the information provided by the Ministry of Finance, state and local institutions and state agencies shall make adjustments, within their field of competence, to the investment programmes already submitted and submit those adjustments the Ministry of Finance in the established procedure and within the established time limits.
30. Taking into consideration the investment projects (investment programmes) received from state and municipal institutions and state agencies, the Ministry of Finance shall draw up and submit to the Office of the Government and the Prime Minister’s Office the Outline of the Investment Programme set out by its own categories of expenditures for the performance of state functions.
31. The Office of the Government and the Prime Minister’s Office shall analyse the Outline of the Programme of Public Capital Investments and present its opinion to the Ministry of Finance.
32. Taking into consideration the opinion of the Office of the Government and the Prime Minister’s Office on the Outline of the Programme of Public Capital Investments, the Ministry of Finance shall make the necessary adjustments and submit the Outline to the Governmental Committee for Strategic Planning.
33. Having received and taken into consideration the opinion of the Governmental Committee for Strategic Planning on the Outline of the Programme of Public Capital Investments as well as the proposals of state and municipal institutions and state agencies on the inclusion of investment projects (investment programmes) in the Draft Programme of Public Capital Investments, keeping in mind the reference amounts of public capital investments and proportionate investments in individual economic sectors set for the respective year, the Ministry of Finance, with the participation of the institutions and agencies referred to in Item 8, shall draw up the Draft Programme of Public Capital Investments and submit it to the Government of the Republic of Lithuania.
34. Having considered the Draft Programme of Public Capital Investments, the Government shall submit it to the Seimas of the Republic of Lithuania together with the draft law on the approval of the financial indicators of the state and municipal budgets for the respective year.
35. If necessary, the Programme of Public Capital Investments shall be updated and adjusted every year taking into consideration the changes in the documents of economic policy referred to in Item 2 hereof and the public funds allocated for investments.
36. The Programme of Public Capital Investments shall be updated in the same procedure as is used for its approval. Applications for the adjustment of investments provided for in the Programme of Public Capital Investments of the current year shall be submitted by the institutions and agencies referred to in Item 8 hereof according to the provisions hereof on the inclusion of investment projects in the Programme of Public Capital Investments. IV. PLANNING FOR LITHUANIA’S PUBLIC FUNDS TO FINANCE JOINT INVESTMENT PROJECTS WITH THE EUROPEAN UNION
37. Institutions which administer the structural assistance funds of the European Union shall develop the methodology of technical and financial implementation of projects in accordance with the agreements between the European Commission and the Republic of Lithuania, and the rules (regulations) of the European Union, and shall be responsible for the timely submission of investment projects so that could be included in the Programme of Public Capital Investments.
38. Investment projects as implementation measures of the National Development Plan shall be developed according to the rules (regulations) of the European Union and the agreements between the European Commission and the Republic of Lithuania. Investment projects together with the applications drawn up according to the requirements of Item 28 hereof for public funds to finance the implementation of joint projects shall be submitted to the Ministry of Finance within its established time limits.
39. Funds to finance joint projects with the European Union may be allocated from the National Budget, the Privatisation Fund, loans received on behalf of the State as well as other monetary resources available to the Government of the Republic of Lithuania.
40. An application for public funds to finance the implementation of an investment project must indicated the relation of the investments to the strategy of the respective economic sector, the total size of the project, the amount of financial assistance by the European Union, the amount of public funds necessary to implement the project and the date of the implementation of the project. V. PLANNING FOR PUBLIC FUNDS FOR MUNICIPAL INVESTMENT PROJECTS
41. Public funds (special grants) may be provided only for those municipal investment projects that are necessary for the performance of the assigned (partially independent) and state (delegated to municipalities) functions of municipalities. Other municipal investment projects shall be implemented from the own, borrowed, received as grants in financial assistance or other funds of the municipalities.
42. In developing the Programme of Public Capital Investments, priority is given to municipal investment projects which intend to use at least 20 per cent of own funds (including borrowed funds or funds received from other financing sources) and which would reduce the operating expenses of the municipality or would create new jobs. VI. USE OF PUBLIC CAPITAL INVESTMENTS
43. State institutions, agencies and enterprises, municipal agencies and enterprises as well as other economic entities shall use the funds provided for under the Programme of Public Capital Investments only for the implementation of investment projects included in the Programme within the amounts allocated for the respective period of their implementation.
44. Public funds shall not be used for investment in private business except in cases where this has been provided for in the discharge of the obligations of the State under international agreements.
45. If the funds saved on ordinary expenses are intended to be used for the implementation of new investment projects (to create or acquire fixed assets or for territorial planning), the Ministry of Finance shall be notified of the fact.
46. The information presented to the Ministry of Finance together with the application for the allocation of additional funds (for the creation, acquisition of fixed assets or territorial planning) from the funds saved on ordinary expenses must include the name of the investment project the funds will be used for, the relation of the project to the programmes of the manager of assignments from the State Budget and the economic classification of the expenses, while the information on new investment projects shall include, according to Item 12 hereof, calculations of the changes in ordinary expenses related to the allocation of additional funds. VII. CONTROL AND ACCOUNTING FOR THE USE OF PUBLIC CAPITAL INVESTMENTS
47. State institutions, state agencies and enterprises, municipal agencies and enterprises as well as other economic entities (clients) shall be responsible for the use of public investments only for the intended purposes, and the prices provided for in contracts with contractors (suppliers). They shall send the state and municipal institutions and state agencies referred to in Item 8 hereof regular information (at least once in half a year) on whether they use public investments allocated to them efficiently and in compliance with the contracts. State and municipal institutions and state agencies sum up this information and send the summary to the Ministry of Finance.
48. After the implementation of an investment project, municipalities, administrations of county governors, agencies, enterprises and other economic subjects send information, in the procedure set by the Ministry of Finance, on the effectiveness of the public funds (special grants for specified purposes) to state institutions and agencies referred to in Item 8, which sum up the information and send the summary to the Ministries of Finance and Economy.
49. The Department of Statistics under the authority of the Government of the Republic of Lithuania (hereinafter referred to as ‘the Statistics Department’) shall collect data from state and municipal institutions, enterprises and other economic entities and draw up quarterly reports on the use of public funds for investment as well as semi-annual and annual reports on the implementation of the Programme of Public Capital Investments. The format of the reports and the procedure for presenting data shall be determined by the Statistics Department in co-ordination with the Ministries of Finance and Economy.
50. Before May 1 of each year, on the basis of the reports of the Statistics Department and the information received under Items 35 and 36 hereof, the Ministry of Finance shall send the Office of the Government of the Republic of Lithuania information on the use of the public funds allocated for capital investments. –––––––––––––––––––––––