The Court of Auditors revealed today that the use of special appropriations almost doubled between 2019 and 2022, being used mainly to respond to under-budgeted expenses in Education and Health, warning that this distorts the objective of budgetary management.
The data is contained in the Court of Auditors’ opinion on the General State Account (CGE) for 2022, delivered today to Parliament, which highlights that the funds have been used to meet needs, above all, in the areas of education (staff costs) and health (namely to reduce arrears).
“There has been an increase in the use of special appropriations in the Ministry of Finance’s budget which, during the year, are mainly used to cover under-budgeted expenditure in Education and Health,” the opinion states.
The TdC points out that the use of these appropriations to reinforce others rose from 760 million euros in 2019 to 1,506 million euros in 2022.
“This practice goes against the principle of specification, reduces the usefulness of forecasting expenditure by budget programs and distorts the purpose of these budget management instruments,” he warns.
For the Court of Auditors, “the intended effect of controlling and limiting expenditure could be undermined, since this type of use has not only been intended for situations of an exceptional and unforeseeable nature, but also to overcome recurring limitations in the budgeting process”.
In contradiction, the opinion states that the Ministry of Finance explains that “the increase in provisional and centralized appropriations in 2021 and 2022 is intrinsically related to the enormous uncertainty generated by the covid-19 pandemic, the war in Ukraine and the consequent increase in price levels”.
“It is understood that, at these times, safety margins must be created to allow budget execution to take place with the greatest possible stability,” he argues.
However, the TdC considers that “the use that is occurring, again in 2022 and in increasing amounts, to cover costs that should be known and duly budgeted, particularly in the aforementioned areas of education and health, does not eliminate the Court’s criticism of the use of this appropriation to make up for shortcomings in the budgetary process or as a means of containing expenditure”.
The institution chaired by José Tavares points out that the provisional appropriation – of 564 million euros and intended to cover “exceptional, unforeseeable and unavoidable expenditure” – was used mainly to reinforce under-budgeted appropriations, including expenditure on education staff (220 million euros).
The opinion also points out that the centralized appropriation for the “settlement of liabilities and investment of assets” (433 million euros), entered under financial assets (with no impact on the balance), was used to reinforce actual health and social security expenditure (with an impact on the balance).