The accounts for 2011 have been prepared in accordance with provisions. The National Audit Office draws special attention to the development of expenditure outside the spending limits.
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On the basis of the financial audit of the final central government accounts, the National Audit Office notes that the accounts for 2011 have been prepared in accordance with provisions.
On the basis of the audit of the fiscal policy information base, the estimate of underspending in relation to the spending limits that is presented in the Report on the Final Central Government Accounts for 2011 can be regarded as providing a true view. The National Audit Office considers it good that the Ministry of Finance has continued precise reporting on compliance with the spending limits in the Report on the Final Central Government Accounts for 2011.
In Finland the cyclic aspects and long-term objectives of fiscal policy are in conflict with each other now that the debt crisis in the euro area has worsened. Resolving this conflict requires that special attention must be paid to strengthening prerequisites for economic growth and measures aimed at improving public sector productivity and increasing the employment rate.
The National Audit Office draws special attention to the development of expenditure outside the spending limits. The spending limits procedure’s possibilities in ensuring the sustainability of public finances are reduced by their narrow coverage. The Ministry of Finance’s working group memorandum on the development of the spending limits system has clearly presented the purpose of the spending limits system: The purpose of spending rules is to restrict the total amount of spending that taxpayers must pay for. In the opinion of the National Audit Office, making an exception concerning the transfer Main content of revenue from the public service broadcasting tax cannot be considered consistent with this fundamental purpose of the spending limits system.
An essential part of ministries’ responsibility for administration within their purview according to section 68 of the Constitution is that ministries report to Parliament on the use of the funds appropriated to them in the budget for each fiscal year. It is the task of the National Audit Office as an independent external auditor of the financial management of the state and the state budget to audit the information in the final central government accounts and the Report on the Final Central Government Accounts to see if they present a true and fair view.
On the basis of the audit of information on social effectiveness in the final central government accounts, the Report on the Final Central Government Accounts does not provide a true and fair view of the achievement of social effectiveness objectives in all respects. Reporting has not been prepared in a uniform manner in different administrative sectors and does not cover all social effectiveness objectives linked to the use of state funds. Special attention should be paid to verifying accountability connected to the use of funds if the Government’s activity report and the Report on the Final Central Government Accounts are combined in form of the Government’s annual report.
In 2011 and 2012 the Government and the Ministry of Finance have improved the way in which information concerning liabilities and associated risks is presented in parliamentary documents. The audit did not observe essential errors in information concerning the state’s liabilities and associated risks in the final central government accounts for 2011 or the Report on the Final Central Government Accounts. The examination and analysis of risks in the Report on the Final Central Government Accounts needs to be improved in order to provide a more comprehensive picture.
The evaluation of financial impacts and risks associated with measures aimed at managing the crisis in the euro area needs to be improved so that Parliament can obtain a reliable and correct overall picture. The Ministry of Finance has developed the evaluation of the financial impacts and risks associated with measures aimed at managing the crisis in the euro area in the commentary to a government proposal (34/2012) that was submitted to Parliament on 26 April 2012 concerning the approval of an agreement on the establishment of the European Stability Mechanism.
The debt crisis still causes uncertainty and risks for the development of central government finances and the state’s financial position. Sovereign debt and large borrowing requirements in the euro area combined with dampened economic prospects, economies’ competitiveness problems and the sustainability gap in public finances have become a source of financial instability and a factor slowing economic growth. There are still considerable pressures and risks associated with the accessibility and price of state borrowing. The markets are still distrustful of lending to several countries in the euro area.
In the opinion of the National Audit Office, the information reported on central government debt management provides a true and fair view of central government debt and related risks. In evaluating risks attention should, however, be paid to maintaining Finland’s credit rating and possibility to implement an effective debt management strategy. The report contains the National Audit Office’s evaluation of matters concerning which Parliament has required a response from the Government in the Report on the Final Central Government Accounts.
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