THEORETICAL FOUNDATIONS REGARDING THE IMPORTANCE, NECESSITY AND USAGE OF MULTI-ANNUAL BUDGETS IN ROMANIA
THEORETICAL FOUNDATIONS REGARDING THE IMPORTANCE, NECESSITY AND USAGE OF MULTI-ANNUAL BUDGETS IN ROMANIA

Summary/Abstract: The material is intended to be an easy to read one, structured in a way to be a theoretical framework concerning the importance, necessity and usage of multi-annual budgets in Romania. The article puts particular emphasis on explaining the terminology specific to the domain regarding multi-annual budgeting, on principles and less on methodology, which once learned and applied, can lead to the improvement of the financing mechanisms through multi-annual budgets. Without constituting a monograph of the legislation in force, the article refers also to the legal regulation that will be applied. In Romania budgets are voted on annually, and this short time horizon has often been criticized that it would adversely affect the efficient management of expenditures. Decisions on resource allocation are taken without an overall vision, ignoring the implications of past decisions or set on a time horizon longer than one year. Most European countries have implemented in one form or another, multi-annual budgets, to counter the disadvantages of annual budgets. For the most part, universities that will apply multi-annual budgets will build a direct relationship related to expectations regarding the evolution of the activity, not with the objectives set by the university. In the case in which the expectations regarding the evolution of the university are not expressed in clearly stated objectives, and are not employed in developing budgets, the answers received by performing an efficiency analysis of the university, from the verification analysis of the projected and budgeted amounts, are very simple and do not give added value to the budget process.

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