Act on the Financial Management of Municipalities (Municipal Financial Management Act, GemFHG) (Gemeindefinanzhaushaltgesetz, GemFHG) - Objectives and Purpose (GemFHG)

1. With this law, the municipal authorities and the municipal administration shall be enabled to

1. effectively implement the constitutional and statutory financial order;

2. obtain the necessary instruments for financial management.

2. This law aims to support financial policy and administrative management based on business principles, promote the efficient and effective use of public funds, and maintain budgetary balance.

3. This law regulates the overall budget management, expenditure approval, accounting, financial management at the administrative level, financial statistics, and the organization of financial matters.

1. This law applies to the following bodies and institutions

1. the eligible voters;

2. the administrative councils;

3. the municipal associations;

4. the municipal administration, including the administrations of dependent and independent institutions of the municipalities;

5. the municipal commissions.

2. It applies subject to differing provisions for independent institutions as well as for other authorities and organizations of municipal public law.

1. The Dependent and Independent Institutions of the Municipalities (Water Supply, Energy Supply, Wastewater Disposal, Waste Disposal, Installation Services, Cable Television, etc.) shall be operated according to commercial principles with their own accounts or as a specific section within the income statement and the investment statement; they shall, insofar as their purpose allows, be designed to be at least self-sustaining.

2. The institutions shall make appropriate contributions to administrative costs if the municipal administration handles administrative tasks for the institutions.

1. Financial assets include those assets that can be sold without impairing the fulfillment of public duties.

2. Administrative assets include those assets that directly serve the fulfillment of public duties.

1. Revenues are payments from third parties that increase the assets or occur with respect to administrative assets.

2. An expenditure is the commitment of financial assets to fulfill public duties. It requires a legal basis and a budget.

3. An investment is a financial transaction that has a freely realizable value and leads to a reallocation within the financial assets.

1. An expenditure is considered freely determinable if there is a relatively large degree of discretion regarding its amount, the timing of its execution, or other significant circumstances.

2. An expenditure is considered binding if it cannot be deemed new in the sense of paragraph 1.

1. An expense is considered as the total consumption of value within a specific period.

2. Revenue is considered as the total increase in value within a specific period.

1. The profit and loss statement shows the expenses and revenues for the accounting period.

2. The profit and loss statement includes

1. personnel expenses;

2. material and other operating expenses;

3. depreciation of administrative assets;

4. financial expenses;

5. allocations to funds and special finance accounts;

6. transfer expenses;

7. pass-through contributions;

8. extraordinary expenses;

9. expenses due to internal recharges;

10. tax revenue;

11. revenues from royalties and concessions;

12. remuneration;

13. various revenues;

14. financial income;

15. withdrawals from funds and special finance accounts;

16. transfer income;

17. pass-through contributions;

18. extraordinary revenues;

19. revenues due to internal recharges.

3. The balance of the profit and loss statement modifies the balance surplus or balance deficit.

1. The investment accounting includes expenditures with a multi-year useful life that are capitalized, as well as the related revenues.

2. The investment accounting comprises

1. Expenditures for tangible fixed assets;

2. Investments on behalf of third parties;

3. Intangible assets;

4. Loans;

5. Participations and equity capital;

6. Own investment contributions;

7. Transitory investment contributions;

8. Extraordinary investments;

9. Transfer of tangible fixed assets to financial assets;

10. Reimbursements;

11. Disposal of intangible fixed assets;

12. Investment contributions for own account, with repayments of loans;

13. Transfers of participations;

14. Repayments of own investment contributions;

15. Transitory investment contributions;

16. Extraordinary investment income.

3. The investment accounting forms the basis for determining the cash flow from investments and disinvestments in the cash flow statement.

1. The management of finances is guided by the principles of legality, budget equilibrium, frugality, urgency, economic efficiency, the polluter pays principle, compensation for advantages, the prohibition of earmarking major taxes, and results orientation. They are defined as follows

1. Legality: Every public expenditure requires a legal basis. Legal bases include: a constitutional or statutory provision, a court decision, or a public referendum;

2. Budget Equilibrium: Expenditure and revenue must be kept in balance over time;

3. Frugality: The necessity and affordability of expenditure needs must be examined;

4. Urgency: Expenditures are to be prioritized according to their urgency;

5. Economic Efficiency: For every project, the option that guarantees the economically most favorable solution given the objectives should be chosen;

6. Polluter Pays Principle: Beneficiaries of special services and those who cause specific costs are generally required to bear the reasonable costs. When passing on costs, particular consideration is given to the social and economic conditions of those affected;

7. Compensation for Advantages: For special economic benefits from public institutions or orders, reasonable amounts corresponding to the benefits derived from the advantage are to be demanded, and these amounts must not exceed the costs;

8. Prohibition of Earmarking Major Taxes: Fixed portions of major taxes shall not be used to cover individual expenditures through special financings or for the direct write-off of certain expenditures;

9. Results Orientation: Financial decisions are to be aligned with their impacts. The impact of an expenditure can be measured using indicators related to goal achievement and the cost-effectiveness ratio.

1. The financial plan is to be prepared annually by the administrative council for the two years following the budget. The financial plan for the capital account is to be prepared for an additional two years.

2. The administrative council submits the financial plan to the finance commission and, in the case of extraordinary organization pursuant to the law on the organization and administration of municipalities (Municipal Law, GemG), additionally to the residents' council for their information.

1. The Financial Plan serves the purpose of medium-term planning and management of finances and services.

1. In the financial plan, public state activity is presented according to the functional classification and the classification by type.

1. The Financial Plan Contains

1. the key financial and economic policy data;

2. the planned expenditures and revenues;

3. the planned investment expenditures and income;

4. the planned cash flow;

5. the estimation of financing needs;

6. the financing options;

7. the development of financial indicators.

1. The administrative council prepares the draft budget annually and submits it to the decision-making body by mid-December at the latest.

2. If the budget is not approved, a decision on the amended budget must be made within a four-week period; if it is not approved again, the government council shall set the budget for the relevant year.

1. The budget serves for short-term management of finances and services.

1. The budget is to be divided according to the functional classification. The chart of accounts (classification by type) is based on the Harmonized Accounting Model of January 25, 2008, established by the Cantonal Finance Directors.

2. The Government Council sets a binding chart of accounts.

1. Budgeting is governed by the principles of annuality, specification, completeness, comparability, and gross presentation. They mean

1. Annuality: The budget year corresponds to the calendar year;

2. Specification: Expenditures and revenues as well as expenses and income must be divided according to administrative units, the account framework classification, and, where sensible, according to measures and purpose of use. The principle of specification can be deviated from for the budget of administrative units with a performance mandate and a global budget;

3. Completeness: The budget must list all expected expenditures and revenues as well as expenses and income. Direct settlement via provisions, special financings, or similar should be avoided;

4. Comparability: The budgets of the municipality and the administrative units should be comparable with each other and over time;

5. Gross Presentation: Expenditures and revenues as well as capital expenditures and capital income must be shown separately, without offsetting each other, in their full amounts.

1. The Budget Contains

1. Expenses to be approved and estimated income in the profit and loss statement;

2. Expenditures to be approved and estimated revenue in the capital account.

2. The budget must be accompanied by information to the competent authority regarding financing as well as the use of outstanding commitment appropriations.

3. The administrative council must justify the individual budget items, particularly those with changes compared to the previous year, in an accompanying report.

1. In administrative units that are managed according to the principle of performance mandates and global budgets, tasks are generally divided into performance groups or services.

2. In these administrative units, the decisive budget credit is determined by the balance of expenditures and revenues or expenditures and incomes, either for the administrative unit as a whole or for its individual performance groups or services.

3. In these administrative units, the competent body may also adopt the performance mandate along with the budget.

4. Despite budgeting with a performance mandate and a global budget, expenditures and revenues, as well as expenditures and incomes, must be reported in financial statistics according to type classification.

1. An administrative unit operated with a performance mandate and a global budget may exceed the global budget if it covers the excess by dissolving reserves formed earlier.

1. The account is to be submitted to the Finance Commission within 80 days after the end of the fiscal year; the Finance Commission must conduct the audit within 20 days (verification of the account and receipts in a formal, legal, and substantive manner) and provide a written audit report.

2. The administrative council submits the annual account to the competent authority for approval no later than the end of June.

3. If the account is rejected, the amended account shall be decided upon at the next opportunity; in the event of a further rejection, the government council decides on the approval.

1. The Financial Statement includes the following elements

1. Balance Sheet;

2. Profit and Loss Statement;

3. Investment Statement;

4. Cash Flow Statement;

5. Notes.

2. The Balance Sheet is structured according to the chart of accounts of the Harmonized Accounting Model.

3. The Profit and Loss Statement and the Investment Statement should be presented in the same format as the budget.

4. The competent authority should also be provided with the figures from the Balance Sheet, the Profit and Loss Statement, and the Investment Statement of the previous year for comparison.

1. In the balance sheet, the assets and liabilities are set against each other.

2. The assets are classified into financial and administrative assets.

3. The liabilities are classified into liabilities and equity.

1. The income statement shows at the first level the operating result and at the second level the extraordinary result, each with the respective surplus of expenses or revenues, furthermore the overall result, which changes the equity.

2. Expenses and revenues are considered extraordinary if they were unforeseen and do not belong to the operating area. Contributions to and withdrawals from equity are considered as extraordinary expenses or revenues, respectively.

3. The creation and dissolution of pre-financing and fiscal reserves are recorded as extraordinary expenses or extraordinary revenues, respectively.

4. Withdrawals from the fiscal reserves are permissible only up to a limit of 10 percent of the net tax revenue per accounting year.

5. An excess of expenses must be covered from the fiscal reserve, provided there is no balance sheet surplus.

1. The investment calculation contrasts the investment expenditures with the investment revenues.

2. Investment expenditures and investment revenues are considered extraordinary if they could not have been anticipated and do not belong to the operational domain.

1. The cash flow statement provides information about the source and application of funds.

2. It presents the cash flow from operating activities, investing activities, and financing activities in a categorized manner.

1. The Annex to the Financial Statement

1. specifies the accounting framework to be applied and justifies any deviations;

2. summarizes the accounting principles, including the essential principles for recognition and measurement;

3. includes the equity statement;

4. includes the provisions statement;

5. includes the investment and guarantee statement;

6. details capital investments in an investment statement;

7. includes additional information that is significant for assessing the asset and income position, obligations, and financial risks.

1. The Statement of Changes in Equity shows the causes of changes in equity.

1. In the provision schedule, all existing provisions must be listed individually and categorized accordingly.

2. The provision schedule includes

1. Designation of the type of provision;

2. Commentary on the type of provision;

3. Provision amount at the end of the previous year in Swiss Francs;

4. Provision amount at the end of the current year in Swiss Francs;

5. Commentary on the change in the provision;

6. Justification for the continuation of the provision.

1. The investment register must list both the equity participations and the organizations that are significantly influenced by the public authority.

2. The investment register includes for each organization

1. Name and legal form of the organization;

2. Activities and public duties to be fulfilled;

3. Total capital of the organization and share of the public authority;

4. Acquisition cost and book value of the participation;

5. Other significant participants;

6. Own participations of the organization;

7. Cash flows in the reporting year between the public authority and the organization as well as information on the services provided by the organization;

8. Statements on specific risks, including contingent liabilities and warranty obligations of the organization;

9. Consolidated balance sheet and consolidated income statement of the organization's most recent annual financial statements, including information on the accounting standards applied.

1. In the Warranty Register, matters must be listed that may give rise to a significant obligation for the community in the future. The Warranty Register shall include, in particular

1. Contingent liabilities where the municipality undertakes an obligation in favor of third parties, including sureties, guarantee commitments, deficit guarantees, etc.;

2. Other matters of a contingent nature, if these have not already been recorded as provisions, such as penalties, forfeit money, etc.

2. The Warranty Register contains, for each liability

1. The name of the receiving entity or contractual partner;

2. Owners or major co-owners of the receiving entity;

3. Typology of the legal relationship;

4. Cash flows during the reporting year between the community and the receiving entity;

5. Information on the services secured by the warranty;

6. Depending on the type and scope of the warranty, specific additional information about the receiving entity or the contractual partner.

1. The asset schedule includes the total asset book values and the accumulated depreciation at the beginning and end of the period.

2. The gross book values must be reconciled with respect to the following movements

1. Additions;

2. Disposals and sales;

3. Increases or decreases during the period resulting from revaluations, appreciations, or impairments;

4. Depreciation;

5. Exchange rate differences;

6. Other movements.

1. The cumulative result of the profit and loss account should be balanced in the medium term.

2. If the balance sheet shows a deficit, it must be depreciated annually by at least 10 percent of the book value; the corresponding amounts must be taken into account in the budget.

1. The financial situation is indicated by the following financial ratios

1. Net debt I and II per inhabitant in Swiss francs;

2. Net debt ratio;

3. Self-financing rate;

4. Interest burden share;

5. Self-financing share;

6. Gross debt ratio;

7. Investment share;

8. Capital service share.

2. For the calculation of these financial ratios, the recommendations of the Swiss Public Sector Accounting Standards (SRS-CSPCP) apply.

1. A credit is the authorization to incur financial obligations for a specific purpose up to a certain amount.

2. Credits must be obtained before entering into new obligations.

3. Credits must be applied for in the form of commitment credits, additional credits, budget credits, or supplementary credits.

4. Credits are to be used for the purpose for which they were approved.

5. Unclaimed credits generally expire.

6. Credits are determined based on careful estimates of the anticipated needs.

1. Commitment Loans must be authorized as either Project Loans or Framework Loans; they must have a fixed term.

2. A Project Loan authorizes commitments for a single project up to the approved amount.

3. A Framework Loan authorizes commitments for multiple individual projects grouped in a program up to the approved amount.

4. Commitment Loans are necessary for one-time new expenses for a specific purpose exceeding 250,000 francs, as well as for recurring new expenses for a specific purpose exceeding 25,000 francs.

5. Commitment Loans must be submitted to the competent authority with an explanatory report.

1. The commitment credit is determined based on careful calculation conducted in accordance with professional standards.

2. The commitment credit may include a price adjustment clause. In the event of a price decrease, the credit will be reduced accordingly.

3. To ascertain the scope and financial implications of extensive projects, a planning credit should be requested if necessary.

1. An obligation credit may be approved as the balance between expenditures and revenues if the contributions of third parties are legally binding in their amount, or if the obligation credit is granted subject to certain performances by third parties.

1. The requirement for funds from commitment appropriations must be included as an expense or capital expenditure in the respective budget.

1. A commitment credit expires when the time period for which it was granted has expired, the purpose has been achieved, or the project has been abandoned; the respective body must be presented with the account statement.

2. The administrative council may extend the validity period of a commitment credit under extraordinary circumstances.

1. Commitment appropriations must be recorded in the annual accounts.

2. Each administrative unit that holds commitment appropriations shall conduct audits of the commitments entered into, the utilization of the appropriations, the payments made, as well as the allocation of framework credits into individual projects.

1. The supplementary credit is the addition to an insufficient commitment credit.

2. If it becomes apparent before or during the execution of a project that the approved commitment credit will be exceeded by more than 5 percent, the administrative council must request a supplementary credit without delay before assuming new obligations; paragraphs 3 and 4 remain reserved.

3. If the excess is up to 50,000 francs, no supplementary credit needs to be obtained. However, the cost overrun must be justified in the settlement.

4. No supplementary credit needs to be obtained for additional costs due to inflation if the expenditure authorization contains a price level clause. Obligated expenditures also remain reserved. Additional costs due to obligated expenditures do not require a supplementary credit.

5. The competent authority shall decide on the supplementary credit.

1. Through the budget credit, the competent body authorizes the administrative council to charge the annual account for the specified purpose up to the established amount.

2. The budget credit may be allocated as an individual credit or, in the case of administrative units with a performance mandate and global budget, as a balance item (global credit).

1. Predictable expenses or expenditures arising from commitment credits, as well as proposed changes in revenues or income for which the final approval of the competent authority is still pending at the time of the budget resolution, shall be included in the budget with a blocking notice. They shall remain blocked until the legal basis is in effect.

1. The supplementary credit is the addition to an insufficient budget credit.

2. If it becomes apparent before or during the utilization of the budget credit that it is insufficient, the administrative council must, without delay, request a supplementary credit before entering into new commitments. Exceptions are made for credit overruns in accordance with Art. 47.

3. The responsible body decides on the supplementary credit.

1. If the incurrence of an expense or expenditure for which no credit or insufficient credit has been approved in the budget cannot be postponed without adverse consequences for the municipality, or if it is a mandatory expenditure, the administrative council may decide on the credit overrun.

2. Credit overruns are also permissible for expenses and expenditures for which there are corresponding subject-related revenues and income in the same fiscal year, as well as for administrative units with a performance mandate and global budget through the dissolution of previously formed reserves.

3. The administrative council must justify the credit overruns to the competent organ on the occasion of the approval of the annual financial statements.

1. Unclaimed budget and supplementary credits lapse at the end of the fiscal year, subject to the provisions below.

2. In the event of delays in the realization of investment projects, individual measures, or projects, the administrative council may carry forward unclaimed budget and supplementary credits to the following year.

3. Administrative units with a performance mandate and global budget may create reserves if global credits are not or not fully claimed due to project-related delays, or if adherence to defined performance targets results in additional unbudgeted revenue or savings that lead to a net improvement.

4. The administrative council reports to the competent authority on the items according to paragraphs 2 and 3 during the approval of the annual accounts.

1. Special financing occurs when funds are allocated for specific public tasks. The establishment of special financing requires a legal basis. Major taxes cannot be earmarked.

2. Expenses and revenues of special financing are recorded in the income statement, while capital expenditures and receipts are recorded in the capital account. Balances of special financing are noted in the balance sheet.

3. In general, all direct and imputed expenses and expenditures, as well as revenues and receipts, shall be charged or credited to the special financing in accordance with a full cost accounting approach.

1. The financial reporting shall present a picture of the financial budget that corresponds to the actual situation of assets, financial, and income position.

1. Financial reporting shall adhere to generally accepted standards.

2. The government council designates the applicable framework. The administrative council may deviate from the framework in specific points. Every deviation must be explained in the notes to the annual financial statements.

1. Financial reporting shall adhere to the principles of gross presentation, accrual basis, going concern, materiality, understandability, reliability, comparability, and consistency. Specifically, these principles mean

1. Gross Presentation: Expenses and revenues, assets and liabilities, as well as investment expenditures and investment incomes, must be reported separately and in full, without netting off against each other;

2. Accrual Basis: All expenses and revenues must be recorded in the period in which they are incurred. The balance sheet must be maintained as a cut-off date statement;

3. Going Concern: Financial reporting shall be based on the assumption of the continuation of state activities;

4. Materiality: All information necessary for a quick and comprehensive assessment of the asset, financial, and income situation shall be disclosed;

5. Understandability: Information must be clear and understandable;

6. Reliability: Information should be factually correct and credible (accuracy). The economic substance should determine the depiction in the financial reporting (substance over form). Information should be presented without bias or value judgment (neutrality). Presentation should adhere to the principle of prudence (prudence). No important information shall be overlooked (completeness);

7. Comparability: The accounts of the municipality and administrative units should be comparable with each other and over time;

8. Consistency: The principles of financial reporting should remain unchanged as much as possible over an extended period.

1. Assets in financial assets are recognized in the balance sheet when they provide a future economic benefit and their value can be determined.

2. Assets in administrative assets are recognized in the balance sheet when they lead to future asset inflows or have a long-term public benefit and their value can be determined.

3. Liabilities are recognized in the balance sheet when their fulfillment is expected to result in an outflow of resources and their value can be determined.

4. Provisions are made for existing obligations where there is uncertainty regarding the timing of fulfillment or the amount of future outflow of resources.

5. Pre-financing is arranged for foreseeable tasks and for reductions in revenue; each pre-financing must be disclosed separately.

6. Fiscal reserves are created or dissolved to influence the budget and the annual financial statements.

1. Liabilities and financial assets are valued at nominal value.

2. Financial assets are initially recorded at acquisition cost. If no expense arises, they are recorded at fair value at the time of acquisition. Subsequent valuations are made at the fair value on the balance sheet date, with a systematic revaluation of financial assets annually, and other assets every five years.

3. If a permanent impairment of a financial asset is foreseeable, its recorded value shall be adjusted.

1. Assets in administrative assets are recorded at acquisition or production cost. If no costs are incurred or no price is paid, the fair market value is recorded as the acquisition cost.

2. Assets of the administrative assets that are subject to depreciation through use are depreciated linearly according to the assumed useful life for each asset category. An asset accounting must be maintained. Depreciations are to be made as follows

1. Tangible goods are depreciated linearly based on their useful life, usually starting from the beginning of their operation;

2. Tangible goods with an indeterminate operation start date are depreciated linearly based on their useful life, starting from the calendar year following the investment;

3. Investment grants to public institutions or private organizations are depreciated linearly based on their useful life, starting from the calendar year following the disbursement;

4. Loans and equity interests are adjusted in value according to commercial principles.

3. If a permanent impairment is foreseeable for a position of administrative assets due to an unforeseen event, its recorded value is adjusted.

4. The Government Council sets the useful life of tangible goods and investment grants in the enforcement regulation. It may specify deviations in the depreciation method for cost-based businesses of the municipalities.

1. The initial consolidation stage includes the political municipalities and the school municipalities. In the case of unified municipalities, the first stage is omitted.

2. Independent institutions of the municipalities that maintain their accounts in accordance with the chart of accounts of the Harmonized Accounting Model are consolidated at a second stage. The other independent institutions are listed in the participation and guarantee report in the annex to the annual financial statement.

3. The government council regulates the details in the implementing ordinance.

1. Political municipalities and school municipalities are integrated into the annual financial statements using the full consolidation method.

2. The independent institutions of the municipalities, which maintain their accounts according to the chart of accounts of the Harmonized Accounting Model, are integrated into the annual financial statements either using the full consolidation method or using the proportional equity value or the proportional period success (equity method), if a consolidation is conducted.

1. The activities of the municipalities are controlled by an appropriate controlling system. For administrative units with a performance mandate and global budget, controlling is mandatory.

2. Controlling generally includes goal setting, planning of measures, managing, and reviewing the actions of the municipality.

1. Controlling typically extends over the following areas

1. Performance;

2. Effectiveness;

3. Finance;

4. Personnel.

2. Administrative units are fundamentally responsible for controlling within their own areas of responsibility.

3. The overarching controlling supervises certain areas of responsibility on behalf of the administrative council, particularly cross-departmental tasks and the municipality's participation in institutions of public or private law. It periodically reviews the implementation of directives by the administrative units. If directives are violated, the responsible entity is notified, and recommendations for further action are provided.

4. The administrative council issues the necessary instructions.

1. The accounting records chronologically and systematically capture the business transactions with external parties as well as the internal allocations.

1. Record Keeping is governed by the principles of Completeness, Accuracy, Timeliness, and Verifiability. They mean

1. Completeness: Financial events and accounting entries must be recorded in a complete and period-appropriate manner. Direct accounting through provisions, special financings, or similar means should be avoided;

2. Accuracy: The entries must correspond to the facts and must be made according to instructions;

3. Timeliness: The accounting must be kept up-to-date, and cash flow recorded on a daily basis. Transactions must be documented chronologically;

4. Verifiability: Transactions must be recorded clearly and understandably. Corrections must be marked, and entries must be substantiated by documents.

1. Administrative units shall keep the records together with the accounting for 10 years. Further-reaching provisions in special legislation remain reserved.

1. In asset accounting, the assets (fixed assets) that are used over multiple years are recorded.

2. Based on the values of the fixed assets, depreciation is calculated, which flows into financial accounting as an expense and into cost and performance accounting as calculated costs.

3. In addition to the calculations described in paragraph 2, additional data (inventory data, master data, etc.) is recorded for each object in asset accounting.

1. Administrative units maintain asset and inventory records and update them continuously. As a rule, they perform a physical count as of the balance sheet date to verify the inventory.

2. Asset records include capitalized, while inventory records include non-capitalized assets, supplies, and stock inventories.

1. The financial administration of the municipality is responsible for the proper maintenance of the accounts.

2. The administrative council issues directives regarding the professional, organizational, and technical structuring of the accounting system for the financial administration and the administrative units for which independent accounting has been authorized.

1. Administrative units maintain a cost and performance accounting system tailored to their needs. For administrative units with a performance mandate and global budget, maintaining cost and performance accounting by product groups is mandatory.

2. The cost and performance accounting supports administrative units in their operations and provides the basis for the preparation and evaluation of budgets and accounting.

3. The administrative council issues the necessary directives.

1. Internal Settlements are credits and debits between administrative units of the municipality. They must be carried out insofar as they are essential for determining expenses and revenues, or for the fulfillment of economic performance.

1. The internal control system includes regulatory, organizational, and technical measures. The administrative board issues the necessary directives in consultation with the finance commission.

2. The management of the administrative units is responsible for the implementation, operation, and monitoring of the control system within their area of responsibility.

1. The administrative board takes the necessary measures to protect assets, ensure the appropriate use of funds, prevent or detect errors and irregularities in bookkeeping, and guarantee the compliance of accounting and reliable reporting.

2. In doing so, it takes into account the risk situation and the cost-benefit ratio.

1. The administrative council publishes a financial statistical statement along with the annual accounts.

2. The financial statistical statement includes a time series comparison.

3. It is aligned with the requirements of the federal financial statistics and must be comparable between entities of the same level as well as between entities of different levels.

1. The administrative council ensures the proper delivery of the data required by the federal financial administration for the federal financial statistics.

1. The administrative council is particularly responsible for

1. establishing fundamental guidelines for the investment of financial assets; subject to differing statutory provisions;

2. changing the purpose of administrative assets, provided this does not result in an expenditure;

3. converting administrative assets that are no longer needed into financial assets; subject to the decommissioning by repealing an ordinance within the jurisdiction of the competent body;

4. drafting the budget, commitment credits, supplementary and additional credits as well as the annual financial statement for the competent body;

5. the financial plan;

6. approving budget overruns;

7. approving budget transfers;

8. organizing the accounting system;

9. issuing instructions on financial matters;

10. procuring funds;

11. investment and management of financial assets;

12. preparation of financial statistics.

1. The Duties and Powers of the Finance Commission are governed by the provisions of Articles 105-107 as well as Article 109 of the Municipal Act.

1. Administrative units are responsible for the careful, economical, and thrifty use of the loans and assets entrusted to them, as well as for asserting financial claims against third parties.

2. They may only incur obligations and issue payment instructions within the scope of approved loans. They carry out the necessary controls for this purpose.

1. The municipalities may levy taxes for the fulfillment of their duties in accordance with cantonal legislation.

1. Once a tax rate has been determined, it remains in effect until it is newly established; the determination of the tax rate must be placed annually on the agenda of the regular autumn municipal assembly.

2. If the tax rate is to be changed, the amendment must be put to a vote before the start of the fiscal year.

1. For natural persons, discounts may be granted based on the adopted tax rates with effect for the following year, whereby the net tax rate must be set to a maximum of two decimal places.

2. The autumn municipal assembly has final authority for this decision.

3. Any pre-financing must be shown in the balance sheet as equity within the context of the approval of the annual financial statement.

1. Municipalities levy official charges for all official acts, services, orders, and decisions defined by cantonal legislation, according to the applicable tariffs, unless gratuity is provided for.

2. The exceptions under Art. 8 of the Fees Act apply accordingly.

3. Municipalities may impose additional fees through regulations within their autonomous sphere of action.

1. Expenses for facilities and measures that do not equally benefit all members of the municipality may, according to the provisions of the law, be covered in whole or in part by contributions from the beneficiaries.

1. The municipalities are entitled to all additional resources to which they are entitled under the legislation or which accrue to them through economic activities.

2. Municipalities have a right to compensation for expenses incurred in their delegated sphere of activity only if this is expressly provided for in the decree transferring the task to the municipality.

1. Municipalities may raise loans and issue bonds to cover their financial needs.

1. The resources of the municipality shall only be used for the fulfillment of municipal tasks, in accordance with their intended purpose; moreover, municipalities may decide to make contributions to accomplish charitable purposes.

2. Municipalities may only provide guarantees and other assurances or grant loans if this is permitted by federal or cantonal legislation or if it is in the direct local interest of the municipality.

1. All expenditures of the municipalities are to be decided with the budget or through special proposals; Article 88 Nos. 8-11 and Article 134 Nos. 4-8 of the Municipal Act remain reserved.

1. The municipal code stipulates, within the framework of legislation, which one-time and annually recurring expenditures the administrative council, and in the case of extraordinary organization the residents' council, can freely determine, with the possibility of tiering the amounts according to the nature of the task; the municipal code may specify that other municipal authorities or commissions may also have limited financial competence for their respective areas of responsibility.

2. The financial competence may not be used if the voters or the residents' council have decided otherwise.

3. Where the budget allocates funds for specific tasks, the administrative council or the residents' council is not bound by the financial competence according to paragraph 1.

1. Insofar as the budget or the credit resolution does not specify the authority over the individual allocation of funds, the administrative council shall decide, subject to any differing legal provisions.

1. If the financial resolutions or property management of a municipality are incompatible with the provisions of this law, the government council may take the measures provided for in Articles 207-211 of the Municipalities Act.

2. Likewise, it is entitled to intervene if a municipal resolution endangers significant assets.

1. The admissibility of filing appeals and the appeal procedure are governed by the Municipal Code and the Administrative Procedure Act.

1. The Government Council shall enact the provisions necessary for the implementation of this law.

1. Upon the enactment of this law, a re-evaluation of financial assets, provisions, and accruals will be conducted.

2. Revaluation gains will be recognized in equity as "Revaluation Reserve for Financial Assets." This revaluation reserve is typically earmarked for offsetting any potential future adjustments on positions of financial assets.

1. The municipalities shall implement the provisions of this Act concerning accounting within four years after the Act comes into effect.

1. The accumulated additional depreciations in the administrative assets included in the balance sheet as of December 31, 2014, are to be transferred as fiscal reserves into the equity of the municipalities.

1. The Law of April 28, 1974, concerning the Organization and Administration of Municipalities (Municipalities Act) is amended as follows: ...

1. The Act of 17 April 2002 on Direct Financial Equalization (Financial Equalization Act) is amended as follows: ...

1. This law is subject to an optional referendum.

2. It enters into force on January 1, 2010.