The determination of the amount of deferrable appropriations is steered mainly by the spending limits in annual budgeting as part of the multi-annual spending limits procedure. The transparency of budgeting is undermined by the fact that, as a rule, appropriations carried over from previous years are not presented in the budget by item. The Ministry of Finance should ensure the appropriateness and transparency of budgeting.
The audit examined whether the ministries have appropriately justified the determination of deferrable appropriations in their budget proposals and whether the appropriations carried over from previous years have been taken into account in the preparation of budget proposals. The audit also examined whether the Ministry of Finance has appropriate procedures to control the determination of deferrable appropriations in the budget process.
The deferrable appropriations included in the budget for 2023 totalled EUR 23.1 billion, of which EUR 6.9 billion was carried over to 2024. When the deferrable appropriations budgeted in previous years are also taken into account, the appropriations carried over to 2024 totalled EUR 9.8 billion. The key objective of the audit was to make the appropriations carried over more transparent.
A considerable part of the appropriations carried over to 2024 was committed to known expenditure, but a substantial part remained uncommitted at the time of the final accounts. The transparency of budgeting is undermined by the fact that, as a rule, appropriations carried over from previous years are not presented in the budget by item.
The determination of deferrable appropriations is steered mainly by the spending limits in annual budgeting as part of the multi-annual spending limits procedure. The spending limits procedure sets a maximum for about 85 per cent of the state budget expenditure. In practice, the annual spending limits also set a minimum, as the administrative sectors have no incentives to deviate downward from the spending limits in their budget proposals.
Discretionary determination of deferrable appropriations primarily means budgeting changes from the previous year’s budget. The proposed changes are partly technical and do not always directly indicate whether an individual change concerns only the appropriation or both the appropriation and the purpose.
The National Audit Office recommends that the Ministry of Finance should request the ministries to report item-specifically on the proportion of appropriations carried over to 2025 that are committed to known expenditure. In addition, the Ministry of Finance should specify the steering so that budgeting is appropriate and transparent.
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