Accounts 2015 have errors materially relevant – the Observer

The Court of Auditors has found errors "materially relevant" in the State accounts in the year 2015 and has a set of "reservations on the legality, accounting, internal control and financial correction" of the Account General of the State of 2015, remembering that there is a set of disabilities that have already been identified in the past, some of them repeatedly, but that still correct.

At the end of each year, the services of the State are required to compile what is the final balance sheet of the implementation of the budget each year (in public accounting). This record arrives in the middle of the following year, and will be assessed later by the Court of Auditors that only in December presents its evaluation, as has happened now. In festive season, the tradition remains also in the accounts of the State: there are errors and deficiencies in the accounts that repeat year after year, even after you warned the Government and the services of the State, and this year is again the case this even.

according To the Court of Accounts, only a little more than half of the recommendations made in 2013 to the Assembly of the Republic and to the Government have been corrected in full or partially. Even so, of the 98 recommendations made this year, a part are recommendations from the past that are repeated.

But starting with the shortcomings in the accounts, there are several errors that are pointed out repeatedly, or even "relevant cases of non-respect of budgetary principles, like those that dictate that we need to be fit for the budget in the expense categories corresponding to payments being made in this direction, mislabeling of impacts on the total expenditure and the actual expenditure, with an impact on the final balance, and even entities that are missing in the accounts.

what is that mean? The services are spending on things for which they have authorization amounts that are not authorized, that there are services that simply are not to submit accounts and therefore are not reflected in the accounts and that there are expenses and revenues that are not accounted for in the correct manner.

One of the examples used repeatedly by the Court of Auditors is provisional appropriation. This appropriation is mandatory and usually have a few hundreds of millions of euros (between 500 and 600 million euros in recent years) for use in exceptional expenses and that could not be foreseen when the budget was prepared. However, this money has been used by successive governments, and has returned to be in 2015, to pay expenses that were predictable of items or services that have not received all the budget they needed.

This example not only puts into question the legality of the expenditure, which must be provided on the respective item in accounting terms, as it prevents the democratic scrutiny of the Parliament to the Government, helping to hide what are the real costs, or the real cuts, in some sectors, as for example in Health or Education. If one of these sectors present an account lower at the beginning of the year, may indicate that the accounts may even be under control, but in fact the expenses are larger because they have to be offset via provisional appropriation.

The misuse of this money, which is just one of the flaws pointed out by the Court of Accounts. Another is that, after 19 years of the approval of the Public Accounting Official Plan (POCP), the General Account of the State still does not have a balance sheet or an income statement, which causes the true financial situation of the State is not reflected.

This is one of the criticism is repeated by the president of the Court of Auditors, Vítor Caldeira, who on Tuesday criticized the delay in the introduction of these records and to the postponement of the new system of budgetary accounting, and financial management of public administrations. These system, that comes to replace the POCP, should enter into force on the 1st of January next, but its application in full has been postponed for a year.

"we don’t have a complete picture of all the responsibilities of the State, of all of the assets of the State", said the responsible person.

in addition To these reviews for more comprehensive, the Court of Accounts still reminds more some of the faults mentioned are recurrent, such as for example:

• The tax expenditure is subavaliada. Or is that what it costs to the State certain tax benefits or lower fees in the various taxes does not account for everything. One of the examples given is not to be accounted for in the accounts as costs to the State, the exemption given from the payment of stamp duty land tax declared by taxpayers, estimated (conservatively) by the Court of accounts in 117,9 million euros.
• Neither the report of the Budget or the Stability Programme, nor is the General Account of the State present sufficient information on the macroeconomic assumptions used and their relationship with the budgeting and execution of public revenues and expenditure that are in the budget. The own of the Account General of the State quantifies the impact of the budgetary consolidation measures, that is, there is only the forecast of the result of the measures, and not the result itself.
• An analysis of the revenue demonstrates that "relevant cases of breach of budgetary principles, non-compliance of legal provisions that regulate the execution and the accounting of revenues and inadequacies of the accounting systems and control", thus opening the space for "omissions in the materials and financial autonomy of the entities that improperly record revenue from the State’s own revenue".
• The General Account of the State still does not quantify what are the results of fighting fraud and fiscal evasion, having still the Court received part of the Tax Authority, for the first time, an estimate of the revenue in question: (239 million euros in 2015, more than 60 million in 2014.
• the Values stipulated in the Framework of the Multiannual Budget Programming, binding for the year in question, have been changed successively to all the programs budget, all up, being that in the five budget programmes have been exceeded up to the limits revised, thus making irrelevant the principle behind the creation of this picture, which was to discipline the public accounts.
• The Stabilization Fund of Social Security, which should have a value equivalent to two years of pension payment, you can pay a little more than 14 months this time.
• The value of the net result of the exercise of "Social Security ” is not reliable", says the Court of Accounts, because there are several inaccuracies in the accounting of transactions related to fixed assets and a breach of the principle of accrual accounting.
• it is Not possible to validate the debt to the taxpayers by cross-checking data with the values recorded in the current accounts of the taxpayers.
• The debt contributors to Social Security is assessed by low in at least 662 million euros, this is taken into account only the numbers since 2010.