Financial Management and Accounting Regulation for Municipalities (RGFCC) (RGFCC)

Revenue and expenses require a legal basis.

[1] The income statement must be balanced in the medium term. Equity cannot contain a budget deficit for more than four years.

[1] Art. amended by R 6.3.2024; in force since 1.4.2024 - BU 2024, 70.

Before proceeding with an expenditure, it is necessary to examine its need and the affordability of the direct and indirect costs arising therefrom.

For every decision, the variant must be chosen that allows the goal to be reached in the most economical way.

Beneficiaries of particular services will, as a rule, have to bear the costs thereof. The principle of causality, as provided for by cantonal and federal laws, is hereby invoked.

Fixed quotas of income statement or investment account revenues may not be permanently tied to the financing of specific expenses or investments. Special legal provisions are reserved.

1 Accounting must allow for a clear, complete, and true view of the financial management, assets, and liabilities of the municipality.

2 The presentation of accounts is based on the principles of gross value recognition, accruals basis, materiality, clarity, reliability, comparability, and continuity in presentation and valuation criteria.

3 The municipal executive is responsible for the proper maintenance of accounting records, in particular for the complete and orderly cataloging of supporting documents, including those for cash transactions.

4 The section for local authorities shall prepare a directive, in the form of a manual, with detailed provisions for the correct application of the rules concerning financial management and accounting.

5 The manual is binding for municipalities.

1 The financial plan must provide information on the evolution of the income statement, investments, and balance sheet.

2 The financial plan must extend for at least four years beyond the one in which it is approved. [2]

[2] Para. introduced by R 6.3.2024; in force since 1.4.2024 - BU 2024, 70.

1 The manual contains the detailed chart of accounts with the relative codifications, subdivided into balance sheet, income statement, and investment account.

2 The codifications by type of account and by function are binding.

3 Municipalities must provide for an institutional subdivision, which in principle is consistent with their own organizational structure, and whose numbering can be freely chosen. This may correspond to the functional subdivision.

4 Derogations from the use of the harmonized chart of accounts are granted only if provided for by special laws.

1 Investment expenditures must be recorded in the investment account and capitalized on the balance sheet starting from the following thresholds

Inhabitants of the municipality

Capitalization threshold

up to 1,000

fr. 25,000.–

1,001 - 5,000

fr. 50,000.–

5,001 - 10,000

fr. 75,000.–

over 10,000

fr. 100,000.–

2 For lower amounts, capitalization is optional.

3 The thresholds in paragraph 1 do not apply to groups 54 (loans) and 55 (participations and share capital), which must always be capitalized.

Special funds may be established if legal provisions earmark particular revenues for the fulfillment of a specific public task.

1 The accounting for legacies donated to the municipality for a particular purpose, or for other funds whose administration is entrusted to the municipality, must be integrated into the municipal accounting.

2 It is submitted to the municipal legislative body for approval as part of the annual financial statement with an accountability report.

3 If the purpose of the legacy can no longer be fulfilled, due to insufficient means or provisions that are no longer implementable or are obsolete, the municipality may decide to change its purpose, taking into account the original intention, or to dissolve it. In such a case, the decision may be made during the approval of the annual financial statements. [3]

[3] Para. modified by R 6.3.2024; in force from 1.4.2024 - BU 2024, 70.

[4] **1 Water supply services and waste collection and disposal services must be fully financed through user fees. To this end, the municipality shall establish specific equity funds.**

**2 All costs and revenues of the services mentioned in paragraph 1 shall be recorded in a specific cost center; the annual surplus of costs or revenues shall be fully attributed to the respective equity fund.**

**3 These services must adhere to the principle of financial equilibrium as per Article 2. The related funds may not be negative for more than four years.**

**4 Exceptions to the principle of self-financing under paragraph 1 are regulated in the manual.**

**5 The municipal regulation may designate other services of local interest financed through causal fees to be managed via equity funds, setting out their rules, particularly any derogations from the principle of causality.**

[4] Article amended by R 4.2.2026; in force from 6.2.2026 - BU 2026, 37.

1 All investments in administrative assets as well as tangible investments in property assets are recorded in the fixed asset accounting; this obligation does not apply to investments accounted for in the income statement because they are below the capitalization threshold referred to in Article 10.

2 Fixed asset accounting also serves as an inventory of municipal assets; for this purpose, the municipality may provide for its completion as needed by the municipality.

1 Financial assets are revalued annually at fair value, as indicated in the manual.

2 Tangible assets are revalued at least every four years at fair value. It is permitted to use the official appraised value multiplied by a factor of 1.5. [5]

3 Revaluations from the preceding paragraphs are recorded as a contra entry to the income statement.

[5] Para. amended by R 6.3.2024; in force since 1.4.2024 - BU 2024, 70.

Administrative participations are booked in the balance sheet at their acquisition value and depreciated in accordance with Article 17. They may be exceptionally revalued when there is a manifest divergence from their proven market value.

1 Administrative assets are depreciated using the straight-line method according to their useful life.

2 Depreciation is first carried out in the year following that of their initial use. The municipality decides the depreciation rate to be applied to the initial net value, in compliance with the parameters of Annex 1; for well-founded reasons, the Section for Local Authorities may authorize a derogation from these parameters. [6]

3 The initial net value corresponds to the acquisition or construction cost less any revenues.

4 The rates in paragraph 2 are fixed at the time of the investment decision and remain unchanged until full depreciation. Article 165 paragraph 3 LOC (unplanned depreciation) is reserved.

5 The investment credit message indicates the estimated useful life and depreciation rate. If necessary, the work must be divided into individual parts with differentiated useful lives.

6 Water supply works are depreciated using the same system, applying the parameters of Annex 2. [7]

7 Plants and infrastructures for the production and distribution of electricity, gas or other industrial services are depreciated by applying the depreciation recommendations of the respective sectoral organizations.

[6] Para. amended by R 9.3.2022; in force since 1.4.2022 - BU 2022, 60.

[7] Para. amended by R 9.3.2022; in force since 1.4.2022 - BU 2022, 60.

1 Communal assets cannot be used in speculative operations.

2 According to Article 168 of the LOC, speculation is understood to mean the use of communal assets in purely commercial operations, which typically involve an economic risk and are primarily aimed at achieving a profit within the market economy.

1 The budget must be presented in accordance with the harmonized chart of accounts and accompanied by a municipal message justifying the proposals.

2 The documentation required for the presentation of the financial statement under Article 22, limited to letters a-d, appropriately adapted, must be attached to the budget message. [8]

3 Foreseeable expenses and revenues, including interest and depreciation resulting from investments not yet approved, for which the necessary legal basis is still lacking at the time of budget presentation, must be highlighted in the message and may not be used until the legal basis comes into force.

[8] Para. modified by R 25.1.2023; in force since 1.3.2023 - BU 2023, 23.

1 The municipal regulations establish

a) the option to use the global expenditure forecast in accordance with Article 172 LOC;

b) in an annex, an integral part of the municipal regulations, the list of services referring to the municipal chart of accounts for which the budget is to be presented according to the global expenditure forecast system.

2 The services according to letter b of paragraph 1 must in principle be identifiable by analogy with the subdivisions of the 3-digit functional classification (or lower level). Motivated derogations may be approved by the Section for Local Authorities during the ratification of the amendment to the municipal regulations.

1. The annual financial statements shall be presented in accordance with the harmonized chart of accounts and shall be accompanied by a municipal message which must provide information on the main differences compared to the budget; in particular, it must highlight and justify any overruns of credits for individual items.

2. The message must also provide information on the balance sheet, as well as on the investment account with particular regard to works completed and settled in the year under review. [9]

[9] Art. introduced by R 9.3.2022; in force since 1.4.2022 - BU 2022, 60.

1 The following documentation must be attached to the report on the annual accounts

a) the general summary, comprising the income statement, the investment account, the financing account, and the balance sheet. The income statement must be divided into the three stages provided for in Article 156 paragraph 2 LOC;

b) the detailed income statement, investment account, and balance sheet. The income statement and the investment account must be accompanied by a comparison with the budget and the annual accounts of the previous year; the balance sheet only by a comparison with the previous annual accounts;

c) the recapitulation by type of account (4 digits), with totals at 3 and 2 digits for the income statement, investment account, and balance sheet, with comparisons as per letter b;

d) the recapitulation by departments of the income statement and the investment account with subtotals up to the last level of subdivision and comparisons as per letter b;

e) the summary table of assets; [10]

f) the table for the control of investment credits, particularly showing the amounts utilized and still to be utilized and, if possible, an estimate of the annual accounts;

g) the table of liabilities;

h) the detailed table of provisions;

i) the list of contingent commitments;

j) the table of participations;

k) …; [11]

l) the cash flow statement for the fund "liquidity and short-term placements" (no. 100);

m) the summary table of taxes to be collected;

n) every 4 years, the details of revaluations made on tangible assets;

o) a financial analysis with the calculation of the following financial indicators

– net indebtedness ratio

– degree of self-financing

– share of interest expenses

– net public debt I per capita

– share of investments

– share of equity;

p) any additional information that allows for a better assessment of the state of assets, finances, and revenues, as well as financial risks (unactivated financial leasing contracts, etc.).

2 The municipal regulations may provide for other attachments.

[10] Letter amended by R 25.1.2023; in force from 1.3.2023 - BU 2023, 23.

[11] Letter abrogated by R 9.3.2022; in force from 1.4.2022 - BU 2022, 60.

1 Investments are relevant within the meaning of Article 174 paragraph 4 of the Municipalities Act (LOC) if they entail a net expenditure exceeding 10% of the commune's cantonal tax revenue or 1,000,000 Swiss francs.

2 The message must at a minimum indicate the interest and depreciation resulting from the investment, as well as foreseeable expenses and revenues that the work might generate. [12]

[12] Para. introduced by R 16.4.2025; in force since 1.5.2025 - BU 2025, 85.

These are definitive projects and cost estimates within the meaning of Article 13, paragraph 1, letter g) of the law, projects and cost estimates with a margin of error of +/- 10% based on the regulations issued by the Swiss Society of Engineers and Architects (SIA).

The deadline in Article 13 paragraph 3 LOC is met if the utilization of the credit begins within its expiration.

[13] 1 The framework credit may be used for infrastructural works provided for by a general program, the realization of which is feasible in stages, such as the construction and/or extraordinary maintenance of roads, water drainage and disposal systems, water, electricity or gas supply systems, or other structural works, as well as investment programs related to supplies. Construction works are in principle excluded, with the exception of extraordinary maintenance programs for real estate.

2 The legislative body's resolution must at least provide for the ratification of

a) the project and the preliminary estimate of the work as a whole and of the individual parts of the work, subject to paragraph 3;

b) for supplies, the characteristics, the main quantities, and the preliminary estimate of each item or group of items;

c) the total gross amount of the credit for the completion of the entire program;

d) the foreseeable implementation times of the entire program and the deadline by which the credit lapses if not used.

3 The municipal council, when approving the framework credit, may decide to derogate from the criteria of letter a of paragraph 2 for works concerning electricity, water, gas or heat distribution infrastructures.

[13] Art. amended by R 5.2.2020; in force since 1.4.2020 - BU 2020, 32.

These are preliminary projects and estimates within the meaning of Article 26 paragraph 2 letter a), projects and estimates with a margin of error of +/- 20% according to the regulations issued by the Swiss Society of Engineers and Architects (SIA).

1 For the determination of credit overrun, the gross global amount of the credit submitted for initial approval in relation to the gross global liquidation expenditure shall be decisive, even when the credit or the work is divided into multiple parts.

2 In the event of exceeding the delegation limits according to Article 13 paragraph 2 LOC, the legislative body must be involved according to the rules of Article 176 paragraphs 2 and 3 LOC.

1 In the event of a budget deficit, when approving the next budget, tax multipliers must be set so that the budget itself provides for a balanced operating result; the tax requirement must include the amortization of one-quarter of the cumulative budget deficit. [15]

2 The following year, the amortization of the cumulative budget deficit to be included in the budget must be at least one-third thereof, and so forth.

3 For the calculation of paragraphs 1 and 2, the last ascertained basic cantonal tax yield shall apply; multipliers shall be rounded to the nearest whole point. [16]

[15] Para. amended by R 16.4.2025; in force since 1.5.2025 - BU 2025, 85.

[16] Para. amended by R 16.4.2025; in force since 1.5.2025 - BU 2025, 85.

[17] Reports with which the management committee proposes or expresses an opinion regarding amendments to the multipliers with respect to the municipal council's message proposal pursuant to Article 177 paragraph 3 of the LOC must indicate at least the consequences on the operating result.

[17] Art. amended by R 16.4.2025; in force from 1.5.2025 - BU 2025, 85.

The management committee, in particular

a) reviews the report of the external audit body and adopts appropriate measures to correct any deficiencies or errors in the municipal administration. It may conduct further checks or request additional information or verifications from the external audit body, through the municipal executive;

b) scrutinizes the budgets and financial statements with a view to verifying the appropriateness of expenditures and the reliability of revenues, as well as compliance with the principles of Article 151 of the Municipalities Act (LOC);

c) analyzes the financial situation of the municipality and guides the legislative body accordingly;

d) examines in depth the financial implications of messages with investment proposals pursuant to Article 174, paragraph 4 of the LOC, of messages assigned to other committees pursuant to Article 181, paragraph 3, letter b of the LOC, as well as of all other messages assigned to it in parallel with other committees.

The municipal regulations may provide for the obligation to attach the report of the external audit body to the municipal and company accounts; in such cases, the principles of data protection must be respected.

1 The accounts of municipal enterprises are kept and presented separately from those of the municipality. For the presentation of accounts, budgets, and financial statements, the applicable reference norms valid for municipalities shall apply, if pertinent.

2 They must allow for the determination of the actual result of each service managed by the enterprise, taking into account all related costs and revenues.

3 Notwithstanding paragraphs 1 and 2, the enterprise's regulations may provide for the keeping of special enterprise accounting if sound commercial management and sectoral laws or directives require it. However, paragraph 1 is reserved for the presentation of accounts to the legislative body.

The regulations of companies may establish the mandatory nature of the financial plan and the rules for its submission.

On the company's long-term debts to or credits from the municipality, interest analogous to the average rate paid by the municipality on its onerous debts is calculated.

1 A financial participation of the municipality in the management of a service undertaken through a municipal enterprise is permitted only if provided for by the respective sectoral law. In the absence of a reference sectoral law, the enterprise's regulations shall prevail.

2 Enterprises may transfer annual surpluses from the individual services they undertake to the municipality if, cumulatively

– the enterprise's regulations provide for it;

– equity has reached an amount at least equal to the value of the administrative assets recorded in the balance sheet;

– a reduction in tariffs is not economically reasonable.

Provisions of special law are reserved.

3 The balance sheet may not show a passive excess for more than 4 consecutive years.

Companies depreciate their investments in accordance with Article 17, particularly paragraphs 6 and 7.

[18] 1 After the judgment has become final, the municipal administration shall promptly send the following documents to the Section for Local Authorities, including the municipal message, the management committee report, and all attachments required by these regulations

a) budget;

b) financial statement;

c) full report of the external control body;

d) financial plan and its updates.

2 In order to enable the preparation of financial statistics for Ticino municipalities, the municipal administration shall also send the financial statements in electronic form to the Section for Local Authorities.

[18] Art. amended by R 4.2.2026; in force since 6.2.2026 - BU 2026, 37.

1 The new accounting model will be introduced in three stages starting from the year 2020. For this purpose, the municipalities will be divided into three groups.

2 For municipalities awaiting the introduction of the new accounting plan and until its introduction, articles 153 to 161, 164, 165, 169 paragraph 1, and 173 paragraph 2 of the LOC are not applicable. Articles 153-155, 158, 159, 160, 161, 167, and 171 of the LOC in force before the amendment of December 10, 2018, remain applicable, together with the relevant implementing provisions of the regulation on financial management and accounting of municipalities of June 30, 1987, and the accounting manual for Ticinese municipalities of 1989.

The Regulation on the financial management and accounting of municipalities of 30 June 1987 is repealed.

This regulation is published in the Official Bulletin of Laws and enters into force on July 1, 2019.

Published in OB 2019, 172.

Annex 1 [19]

[19] Annex introduced by R 9.3.2022; in force since 1.4.2022 - OB 2022, 60.