45% also do not deliver their annual results within the legal term and even 29% have not “systematically” comply with this obligation since 2018
The local public sector has been passing the annual budget review for several years with surpluses or at most small deficits. But this good work still has an obvious negative side, as hiding their accounting records is a widespread practice, so much so that it has been the subject of serious criticism by the Court of Auditors (TCu).
The most obvious, but also recurring reproach is the laxity in fulfilling their obligations. Of the 14,151 existing local entities (municipalities, councils, councils, provinces and associations), almost half (45%) have failed to provide their overall accountability – in their latest report they analyze data from 2020, the first year of the covid pandemic . to the supervisor within the statutory period. Of these, 14% did so six months too late (end of 2021) and of the rest (31%) there is no news that they have done so.
Despite this widespread non-compliance, there is a conviction among accountants that it is not a matter of time, but of will. In fact, the TCu believes that, given the development of new technologies, the legal deadlines for filing accounts for local entities are “excessively long”.
Extending its argument that it is more a matter of attitude, the court points to the large differences in the levels of accountability according to the autonomous community of origin. So while in Andalusia only 35% of local entities present their accounts on time, in the Valencian Community they represent 97% and in Aragon 93%.
Among the town halls chosen for this slowness, ten are considered large, with a population of over 100,000. These are Cádiz, Córdoba, Jaén, Málaga, Marbella, Badalona (Barcelona), Las Palmas de Gran Canaria and Palma (Mallorca) – the largest consistory of the 111 that never presented their balance on time – along with the inhabitants of Madrid from Getafe and Mostoles. In addition, the provincial councils of Cuenca, Ávila, Zamora, Lleida and again Cádiz, in addition to a large part of the island councils. None of them had filed the 2020 bills a year after they were closed.
The situation gets worse when you look back. As the regulatory body points out, “a significant number of local entities do not systematically impose their general accounts.” For example, practically 29% (3,746 in total) had yet to submit the information related to 2018, 2019 or 2020, or even in 567 cases out of three years. In that last year, local entities managed a global budget of 63,550 million euros, of which they realized 76%.
Where some sort of black hole can be seen in the fulfillment of its statutory duties is with regard to public procurement. 33% of the local entities submitted the data related to these commitments on time, while 31% did so after the deadline. However, 36% (5122 municipalities, provinces and municipalities) did not provide any information about this. If we add that of those who sent their communications, 3,076 entities declared not to have entered into any contract, the rate of default rises to 57.9%, ie practically six out of ten. And it is that since 2019 the law on government contracts obliges them to provide this data, regardless of the amount of the contract, whether it is more or less.
Because public accountants are clear that in all cases “the activity of the exercise requires the conclusion of some kind of contract”. In other words, they estimate that if the municipalities don’t send them this information, it’s not because they don’t have it, but because they’re hiding it from their control magnifying glass. Most of the agreements signed by the entities relate to services (42%), given the type of competences they have taken on, followed by supplies (29%) and works (23%).
For orders with a larger volume (more than 600,000 euros in works or concessions, more than 450,000 in deliveries and more than 150,000 in services), local entities must send the extracts of these files to the TCU. But after several checks, the technicians discovered that 1,463 extracts were hidden from him for a total amount of 1,478 million euros. This allowed them to check 34,057 contractual agreements to a greater or lesser extent for a value of 8,021 million.
The panorama is not improved by analyzing the agreements signed by the municipalities and the rest of the local entities: only 38% sent the corresponding information to the Court of Auditors, so that 8,837 (62%) did not comply with their legal obligation. A later analysis revealed that the missing data included 353 files worth EUR 593 million. In addition, a total of 16,906 files – amounting to 770 million – were processed by the local public sector, skipping the mandatory pre-inspection.
Concerned about this situation, the president of the court, Enriqueta Chicano, has repeatedly asked parliament and the government to cut state funding to municipalities that are not accountable to them or even very late. They consider the legally provided alternative of imposing fines ineffective, because their small amounts (in the largest cases barely 1,000 euros) remove their binding character.
The Court of Audit has again reprimanded the municipalities for the disorganization that their technicians value in the local public sector and that, moreover, has been dragging on for years. So much so that, in its latest report, it gravely warns that “the sustainability” of the municipal treasury is “affected by the existence of instrumental entities that systematically suffer losses or find themselves in a situation of patrimonial imbalance”.
And this, the regulatory body warns, “implies the need to take measures aimed at its correction.” At the end of 2020 (the last year analysed), one in ten municipal companies – a total of 806 were registered – was “in legal grounds for dissolution” (the assets were less than half of the share capital) or “without activity”, almost the double in church councils with less than 5,000 inhabitants. At 29 of these listed companies, they had been in technical bankruptcy for more than five years.
Similarly, 30% of local government companies (notably 243) ended the past year with losses and a third of those also ended 2019 with negative results. Added to this complicated scenario is the fact that municipal companies (including municipalities and municipalities) supported a debt of 5,956 million euros, of which 42% was due on short term. The situation was doubly worrisome in nearly 35% of them, as their commitments were added to their reds for at least two years in a row.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
