Concept and Legal Significance of a Supplementary Budget
Ein Supplementary Budget is a supplemental budget law as well as a supplemental budget plan, used to adjust an already adopted budget plan if significant changes in revenues and expenditures arise or become necessary during the fiscal year. In Germany, the supplementary budget is an important instrument of budget management and control at both the federal, state, and municipal levels. It represents an indispensable element of budgetary flexibility and ensures compliance with constitutionally and statutorily mandated budgetary principles.
Legal Foundations of the Supplementary Budget
Federal Level
The legal basis for the supplementary budget at the federal level is particularly formed by the Basic Law (GG) as well as the Budgetary Principles Act (HGrG) and the Federal Budget Act (BHO).
Article 110 of the Basic Law (GG)
According to Article 110 para. 2 GG, the federal budget must generally be established in an annual law. Changes require a formal supplementary budget law. Thus, the principle of legality of the budget is paramount.
Federal Budget Code (BHO)
The BHO regulates in § 35 the requirements and procedures for supplementary budgets. A supplementary budget law must be drafted if, during the fiscal year:
- expenditures or commitment appropriations for individual items must be significantly exceeded,
- new tasks of substantial importance are assumed,
- the budgetary situation has fundamentally changed.
State and Municipal Level
The budgetary principles of the states and municipalities are set out in the respective state budget laws. These are fundamentally oriented towards the regulations of the BHO and HGrG, but contain state-specific particularities, especially regarding procedures and possible deadlines.
Conditions for Preparing a Supplementary Budget
A supplementary budget may only be prepared if there is a substantial change in the budgetary situation during the fiscal year. Typical reasons for a supplementary budget include, for example:
- Unexpected revenue shortfalls, e.g., tax deficits,
- Higher funding needs due to natural disasters, pandemics, or other unforeseeable events,
- New or expanded state functions,
- Exceeding significant budgetary items.
The prohibition against overspending the budget without a supplementary budget serves budgetary control and parliamentary oversight of budget management.
Procedure for Drawing Up a Supplementary Budget
Initiation
The federal government or the competent ministries of the states or municipalities are responsible for the preparation. The draft—analogous to the regular budget plan—requires the approval of parliament (Bundestag, state parliament, or municipal council). The supplementary budget is adopted through the formal legislative process.
Content and Scope
A supplementary budget includes all changes that must be made compared to the original budget plan. These include, among others:
- Adjustments in revenues and expenditures,
- New or modified commitment appropriations,
- Financing overviews and debt approvals,
- Well-founded justifications for the necessity of the changes.
As a rule, the principle of annuality in budgetary law also applies to the supplementary budget, so reference is still made to the current fiscal year.
Budgetary Boundaries and Limitations
When introducing a supplementary budget, budgetary principles must not be circumvented. In particular, the following continue to apply:
- The principle of budgetary truth and clarity,
- Compliance with the debt brake under Articles 109 and 115 GG (federal level),
- The prohibition of borrowing to cover ongoing expenditures outside the prescribed emergency regulations,
- The transparency requirement towards parliament.
Legal Consequences and Significance of the Supplementary Budget Law
A supplementary budget law has the same legal effect as the original budget law. The adjustments made in the supplementary budget take effect ex nunc, that is, from the entry into force of the law. Budgetary transactions that have already been completed can generally only be regulated by subsequent approvals.
The supplementary budget strengthens parliamentary oversight of budget management. It prevents far-reaching measures from being taken without the express consent of parliament.
Supplementary Budget and Constitutional Law
At the constitutional level, the importance of parliamentary budgetary rights as the “crown right” of parliament is emphasized. Every fundamental change to the budget requires a supplementary budget law, which must meet the same democratic and constitutional requirements as the original budget law.
The supplementary budget is particularly significant in the context of emergency situations, for example in the case of the suspension of the debt brake pursuant to Article 115 para. 2 GG. The identification of an extraordinary emergency and the resulting excess of debt limits require a separate justification in the supplementary budget law, as well as a repayment plan.
Overview: Supplementary Budget in the Legal System
| Level | Legal Foundations | Special Provisions |
|——————-|——————————-|———————————|
| Federal | GG, BHO, HGrG | Debt brake, emergency regulation|
| States | State budget law | State specifics, parliamentary law|
| Municipalities | Municipal budget law | Municipal constitution |
Significance for Administration and Parliamentary Oversight
Supplementary budget regulations are essential to ensure the flexibility and ability to act of the state, states, and municipalities, without undermining the principles of control, transparency, and democratic legitimacy. The obligation to submit a supplementary budget promotes the economic legitimacy of state expenditures and emphasizes the right of participation of representative bodies.
Literature and Further Information
- Basic Law for the Federal Republic of Germany (Art. 110, 109, 115)
- Federal Budget Code (BHO)
- Budgetary Principles Act (HGrG)
- State Budget Codes
- Municipal Budget Law
Note: This article provides a comprehensive legal presentation of the supplementary budget in German budgetary law and is aimed at readers seeking in-depth, structured information on the legal classification and practical significance.
Frequently Asked Questions
What legal requirements must be met to draw up a supplementary budget?
A supplementary budget may only be drawn up for reasons prescribed by law. The legal basis for this is provided both by the Basic Law (in particular Art. 110 GG for the federal budget) and by corresponding provisions in the budget codes of the states and municipalities, for example § 37 Federal Budget Code (BHO) and the respective state budget codes. A supplementary budget is required if unforeseen expenditures become necessary, significant changes in revenues or expenditures occur compared to the original budget plan, or new budget items must be established that cannot be covered by budget shifts. It is also regulated by law under which circumstances a supplementary budget must obligatorily be presented, such as in the case of significant additional expenditures or further commitment appropriations exceeding the limits set in the main budget. The preparation of a supplementary budget is subject to the same procedural requirements as the regular budget plan and must be discussed and adopted by parliament. Every change requires parliamentary legitimacy in the form of a formal budget law or, in the municipal sphere, through approval by the respective council.
How does the legislative procedure for a supplementary budget work?
The procedure for adopting a supplementary budget law essentially corresponds to that of a regular budget plan. The federal government or the competent executive at the state or municipal level issues the draft, which is then submitted to the competent parliament, state parliament, or municipal representative body. In the Bundestag, for example, the introduction is usually followed by referral to the budget committee, which examines and, if necessary, amends the draft. After the committee deliberations, a parliamentary debate follows. Changes can be introduced by parliamentary members through amendment motions. Finally, formal adoption by majority vote takes place. The supplementary budget law is also subject to any constitutional review and becomes legally binding upon promulgation in the respective law gazette. The legal requirements for documentation and transparency apply in the same way as for the regular budget law.
What legal restrictions exist in the context of a supplementary budget?
A supplementary budget is subject to the fundamental principles of budgetary law, particularly the principles of budgetary truth and clarity as well as annuality and total coverage. No provisions may be made that fall outside the material scope or the temporal limitation of the current fiscal year. Binding requirements regarding the debt brake pursuant to Art. 109 GG (or respective state constitutional provisions) must be observed, so that supplementary budgets must also comply with the prescribed debt limits, unless extraordinary emergencies under Art. 115 GG apply. Furthermore, a supplementary budget must not regulate matters unrelated to the budget, but must be limited to adjustments for the current fiscal year. All requirements for legality and professional supervision as well as the audit rights of the courts of audit remain fully in effect.
What impact does a supplementary budget have on previous budget decisions?
Upon entry into force of a supplementary budget, the relevant changes—such as additional expenditures, new commitment appropriations, or adjustments to appropriations—become legally effective and replace the previous regulations of the main budget to the extent affected. Existing legal obligations generally remain, but new expenditures must now be made on the basis of the updated budget funds. The supplementary budget thus has a direct impact on administrative practice and can have immediate legal consequences, especially in areas where expenditures were previously frozen or new projects are approved. Existing management measures may also be lifted, modified, or supplemented by the supplementary budget. Legal remedies against the supplementary budget adopted by parliament are generally excluded, unless there are obvious violations of higher-ranking law (e.g. the Basic Law).
What control mechanisms exist regarding the legality of a supplementary budget?
There are numerous ways to review a supplementary budget: Initially, the respective court of audit examines compliance with the budgetary provisions pursuant to §§ 88 ff. BHO or the corresponding state budget codes. In addition, constitutional judicial review is possible. At the federal level, every member of the Bundestag, a parliamentary group, or the federal government may appeal to the Federal Constitutional Court if there are doubts as to compatibility with the Basic Law—for example, in the event of violations of the debt brake or budgetary clarity. Parliamentary oversight by budget committees as well as public transparency through publication obligations are also central. At the municipal level, legal and municipal oversight authorities may intervene and raise objections under certain conditions.
What deadlines must be observed for supplementary budgets according to law?
Specific deadlines for submitting a supplementary budget are prescribed by budget codes. In general, a supplementary budget must be drawn up as soon as it becomes apparent that one of the legal requirements is present and the issue can no longer be resolved by internal budget management measures. The exact timeline—from submission to adoption—generally coincides with that of the regular budget law. The supplementary budget must be prepared for the current fiscal year; retroactive legal effect is not permitted. Adoption must take place early enough to allow the administration to use the approved funds within the current fiscal year. Individual federal states or municipalities may stipulate further binding deadlines.
To what extent can amendment proposals or interim solutions be used as alternatives to a supplementary budget?
Strictly in terms of budgetary law, a significant change in the budget plan may only be made through a formal supplementary budget if the legal thresholds and requirements for a supplement are met. Minor adjustments that can be covered within the flexibility of budget law—for example, through shifts, coverage notes, or separate internal budgetary measures—do not require their own supplementary budget law. However, as soon as the established framework of the approved budget is exceeded or surpassed, recourse to parliament via the supplementary budget is mandatory. Interim items, decreased or increased appropriations are only permissible within and on the basis of existing legal regulations; informal circumvention is legally excluded.
