• 24.02.2025 at 06.45
• Compliance audit

Determination of deferrable appropriations

Follow-up completed: 18.06.2026

Following the audit focusing on determination of the amount of deferrable appropriations, it was recommended that the Ministry of Finance request the ministries to report on the proportion of items carried over to 2025 that is committed to known expenditure. The Ministry of Finance did not request these reports, however. On 31 December 2025, the items carried over still amounted to almost EUR 10 billion.

Photo: photographer Hanne Salonen/Parliament of Finland

Summary of the follow-up

The analysis of spending limits and accounting information for 2025 further highlights the fact that the annual spending limits set not only a maximum but also a minimum amount for approx. 85% of state budget expenditure, as there is no incentive for the administrative branches to deviate downwards from the spending limits in their budget proposals. While cuts targeting transfer items, in other words non-reciprocal expenses, have reduced the item carried over, the way savings measures have been implemented in government agencies has clearly increased the item carried over in operating expense appropriations on average.

The follow-up has been completed. The report is available in Finnish only.

About the audit

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.