Court of Auditors points out “lack of political commitment” in public finance reform
The Court of Auditors (TdC) points to a “lack of political commitment” in the reform of public finances, with financing from the Recovery and Resilience Plan (PRR), adding that the production of financial information is not assured.
The TdC concluded that “the risks in implementing the reform continue to focus on its management and planning. To these is added the lack of political commitment evident. The operational plan, which involves the implementation of 51 projects by the end of 2027, never had formal approval from the supervisory authority”, he indicated, in a statement.
According to the court report on the reform of public finances, initiated in 2015, the production of financial and state management information “is not assured even with PRR financing”.
As he pointed out, there are “considerable delays” in all projects within the scope of a governance model “which has suffered various instabilities”.
The TdC also said that, even after the rescheduling, of the 122 million euros in PRR financing, 2.5% of the total was applied.
By the end of 2023, 14 contracts were signed with regard to financing the PRR, totaling 4.3 million euros.
The execution of contracts contributes to the achievement of milestones, which together with the PRR goals are essential for Portugal to receive disbursement requests.
“Of the 13 that should have already been implemented, only six were completed, three were rescheduled and four were in default”, he indicated.
The report released this Friday also highlights the need to complement the operationalization of information systems with the “allocation and training of human resources internal to public administration”.
Also until December 2023, a quarter of the contracted value (one million euros) involved the conclusion of five contracts subject to an audit by the TdC.
The “Business Architecture” and “Budgetary and economic-financial control model” contracts produced useful information for the preparation of specifications for contracting technological solutions, said the court.
In turn, the “Consolidation Algorithms” contract, which was not concluded, revealed inconsistencies in the base data and obstacles in the consolidation process, while the “electronic invoicing” contract reinforced the adherence of public entities to this project.
Regarding the “Project Management Office”, which is intended to support the strategic management of projects, the report says that the “usefulness of the results is conditioned by gaps in terms of the reform planning process”.
In view of this, the TdC recommends that the Minister of Finance, Miranda Sarmento, ensure, within the scope of the new governance model, that the coordination between the Implementation Unit of the Budgetary Framework Law, the General Directorate of Budget and the Services Entity Shared Public Administration promotes synergies that ensure the implementation of the Public Finance reform, “not limited to PRR investments”.
In addition to this, the allocation of human resources to ensure the development of reforms and their practical implementation, as well as the training of human resources with skills to produce and report information provided for in the Budgetary Framework Law and in the accounting framework.
The Budget Framework Law Implementation Unit, the General Directorate of Budget and the Shared Services Entity for Public Administration are recommended to strengthen coordination “at the level of intervention in the implementation of the reform”.
