If the deadline is not met, the central government will take over the funding of most essential public services in the region, Mr Montoro said.
"What do you think we will do on October 1?"
The move comes after the Spanish Constitutional Court accepted an appeal by the Spanish central government and temporarily suspended the transition law approved in the Catalan regional assembly to pave the way for the independence of the region.
In a letter dated September 13, Catalan Deputy Governor Oriol Junqueras told Spanish Budget Minister Cristobal Montoro the region would no longer comply with the obligation to submit its accounts every week. "That's what the spending control means and that will be in place as long as the exceptional situation continues", Montoro added.
"Not one euro" to go to Catalan independence referendum, Spanish minister says.
Madrid was taking action because Catalonia's regional government has refused to comply with a request made back in July that it provide weekly instead of monthly accounts of its spending to ensure it was not using money to stage the contested referendum, Montoro said.
Prosecutors have also filed legal proceedings against the five members of an electoral board set up by the regional government to oversee the banned vote.
"They've lost the plot", said Albert Batet, mayor of the town of Valls and one of those summoned for questioning.
Governor Carles Puigdemont and Mayor Ada Colau said in a letter addressed to Prime Minister Mariano Rajoy and also sent to King Felipe that they wanted support from the Spanish state for the referendum. An open dialogue without conditions.
King Felipe was widely quoted praising Spain's democracy and social harmony at an awards ceremony on Wednesday, saying "the constitution will prevail over any rupture in that". The government warned the region would lose access to some public funds if it was found to be using state money to organize the vote.
The signatories also accused the Spanish administration, lead by Mr Rajoy of having gone "on the offensive with unprecedented repression".
'They can not try to break the law and with no consequences, ' she said, after harping on the illegality of such a scrutiny, with which the Catalonian separatist government wants to proclaim a sovereign State in that region of 7.5 million inhabitants.
Although polls show less than half of Catalonia's 5.5 million voters want self-rule, most in the wealthy northeastern region want the chance to vote on the issue, causing unease that is beginning to be felt in financial markets.