Regional, Local Authorities : Innovative Financial Regime

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Law N° 2019/024 of December 24, 2019 to Institute the General Code of Regional and Local Authorities has landmark innovations with regard to the financial regime. 

Regional and Local Authorities in Cameroon will henceforth operate with an innovative financial regime with all clarifications made to avoid overlapping of functions of the various actors, all with the aim to ensure effective local development.

The bill to Institute the General Code of Regional and Local Authorities was adopted by parliament during the December 2019 extraordinary session and President Paul Biya on December 24, 2019 enacted it into law.

Book five of the law is dedicated to the Financial Regime of Regional and Local Authorities. It lays down all the rules relating to the nature, content, presentation, preparation, adoption, execution, and control of execution of the budgets of regions, councils, city councils, council unions, regional and council public establishments and any other authority set up by law.

Common Decentralisation Fund

Henceforth, the Common Decentralisation Fund that was hitherto a decree is now enshrined in the law. Section 25 of the law states that, “A Common Decentralisation Fund for the partial financing of decentralisation is hereby instituted. In the sub- section it clarified that each year, the Finance Law shall determine the fraction of State revenue to be allocated to the Common Decentralisation Fund.

In respect of the recommendations of the Major National Dialogue, the law in Section 25 (3) indicates that, “The fraction referred to in sub-section 2 may not be less than 15 per cent.”

Alignment To Other laws

Section 372 (2) of the Code specifies that, “ the provisions of the law to lay down the Cameroon Code of Transparency and Good Governance in public and finance management and those of the law relating to the fiscal regime of the State and other public entities shall apply to local authorities subject to the specificities provided for in the law.”

The Budget

Henceforth, Regional and Local Authorities will have the initial and amending budgets. As for the preparation of the initial budget, Section 373 (1) explains that each deliberative organ shall establish a medium-term budget framework defining, based on a realistic economic assumptions, the trends over a minimum period of three years in all expenditure and revenue of the local authority and its public establishments.

Section 374 (1) of the law further states that the executive organ of the local authority shall each year before August 1, forward to the deliberative organ, the medium- term framework documents, alongside a report on the regional or local economic situation and level of execution of the budget for the current financial year.

As for the amending budget, the law in Section 387 (2) provides that, “The amending budget shall, where appropriate be voted by the deliberative organ during the financial year.”

The amending budget has as purpose to adjust the initial budget forecasts. Hence, it shall include extra appropriations required during the financial year, new revenue not provided for in the initial budget, revenue and expenditure transactions brought from the previous financial year.

Budget Approval

The budget would have to be approved by order of the representative of the State within 15 days following its receipt by the latter. Beyond this period, the budget shall be deemed to have been approved. Section 427 (1) confers some powers on the State representative.

It specifies that, “ The representative of the State who approves the budget of the local authority may, after a formal notice remains unheeded, amend it as of right where: the budget voted is not balanced; appropriations allocated to cover compulsory expenditure are insufficient; expenditure is forbidden as per the provisions of Section 406 of this law and the ratios provided are not respected.”

Lire aussi : Law No. 2019/024 of 24 December 2019