Good practices by country - Principle 10

 

< Insist on sound, transparent financial management


Czech Republic 

The Ministry of Finance has recently proposed to set up a Fiscal Council to improve budget preparation, implementation and monitoring, and a Committee for Budgetary Forecasts. The Council is to have 5 members nominated by the president, the senate, the central bank, the Ministry of Finance and local governments, and elected by parliament. The Fiscal Council could play an important role in assessing the budgetary stance of all government levels and recommending corrective actions.

 

Germany

The state courts of audit (Landesrechnungshöfe) examine the financial management of the states while the Bundesrechnungshof examines federal financial management. The Bundesrechnungshof (Federal Court of Auditors) and the (State Courts of Auditors) audit public investment projects and publish yearly reports that document instances of waste of money. Cooperation is necessary because applicable budgetary law is widely identical on federal and state level and is to be construed and applied as consistently as possible furthermore, the audit remits of the Bundesrechnungshof and its counterparts in the states overlap as the fiscal system of the Federal Government and of the states are intertwined, e.g., the revenue from the most important taxes is shared among the Federal Government and the states. Besides, a wide variety of programmes are funded jointly by the Federal Government and the states. The Bundesrechnungshof and the state courts of audit work closely and regulary meet at conferences of the Presidents and working groups specialised on particular subjects.

 

Ireland

As part of its 2014 local government reform, Ireland plans to introduce a new, independently chaired, National Oversight and Audit Commission for Local Government (NOAC). Its mission will be to provide independent, high-quality examination of local government performance in meeting national, regional and local mandates and in providing value for money in service delivery. The commission will examine financial and general performance, as well as results, reporting the findings and recommendations to elected members. In addition, the reports will be publicly available and provided to the relevant Minister(s), as well as Joint Oirechtas (Parliament) Committees. One key objective for the NOAC is to identify and promote best practice on efficiency measures at the local level.

 

Iceland

The government is required to submit a Fiscal Policy Statement to Parliament for approval at the beginning of its term, which covers both central- and local government and sets out numerical fiscal objectives for the long-term stock of liabilities and the medium-term budget balance. The government is also required each year to present a Medium-Term Fiscal Strategy (MTFS) to Parliament for approval. It covers the subsequent five years and lays out fiscal performance targets for central and local government in line with the Fiscal Statement. In preparing the MTFS, it is necessary to reach agreements with local governments on their targets. The MTFS must also include a discussion of fiscal risks.

 

Italy

The OpenCoesione web portal provides analysis and monitoring on the use of regional policy resources, offering information, accessible to anyone, on what is funded, who is involved and where. The web portal contains information about any single project carried out to implement cohesion policy, and more specifically: funds used, places and categories, subjects involved and implementation timeframes. It concerns more than 700 000 investment projects (around 17 billion EUR, funded by national and local governments). Users can either download raw data or surf through interactive diagrams itemised by expenditure categories, places and type of intervention, as well as have access to files on single projects and subjects involved. Data on the local economy and social context are provided as well.

 

Poland

Poland has recently introduced a new spending rule, covering 90% of general government expenditures. Spending growth will be capped by nominal targets based on a moving average of GDP growth, which will enhance transparency and credibility. It is also based on two corrective debt thresholds at 50 and 55% of GDP. The new spending rule could help to smooth the effects of EU transfers and the related public investment cycle.

 

Portugal

The revision on local and regional finances laws was passed in September 2013. It establishes a multi-year budget plan, spells out expenditure rules, budget balance and the debt by setting stricter debt limits and finally it gives the State greater fiscal oversight. Since 2012 the State Budget has included a chapter on contingent liabilities in general, which included contingent liabilities from PPPs.

 

Spain

The Independent Authority for Fiscal Responsibility was established in November 2013 in Spain and it became operational in July 2014. The Authority will monitor and report on compliance of all levels of government including regional and municipal. 11 out 17 regional governments complied with their deficit targets for 2013. Budgetary reporting at central, regional, and social security levels is now all published monthly on a national accounts basis. Local governments have quarterly budgetary reporting on a national accounts basis.

 

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