Due to the decree-law establishing new rules for reviewing public expenditure, introduced by the Government for Portugal to receive funds from the Recovery and Resilience Plan (PRR), the Office of Planning, Strategy, Evaluation and International Relations of the Ministry of Finance (GPEARI) is mandated to create a new organizational unit responsible for this review process.
This central structure will comprise three groups of teams. One team will handle “general coordination,” another will be devoted to “permanent technical monitoring,” and a third may consist of “thematic teams, by topic,” as per the decree.
With the decree requiring the establishment of these teams “within 90 days after its enactment,” the planning division of the Ministry of Finance must form the teams in the coming months.
The formalization of the main structure within GPEARI and its teams falls to the government member responsible for finance, with the authority to define “composition, competencies, operation, and duration,” according to the decree.
The creation of this structure was one of the commitments made by Portugal as a condition for receiving funds from the PRR, aiming to ensure monitoring of public expenditure across the entire public administration.
The decree aims to set the rules for ensuring a “continuous review process” to enhance “efficiency in resource allocation, reduce wastages, and optimize the prioritization of public spending.”
According to the decree-law, each government must define, at the beginning of the legislative session, the expenditure areas subject to reviews in the following years, coordinating this work with the new structure within GPEARI and the Public Policy Planning and Evaluation Center (PLANAPP).
For each area, an action plan is developed, which, according to the decree-law, should include six elements: “diagnosis; policy proposals; expenditure review and improvement measures; savings estimates; implementation plans and timelines; allocation of responsibilities and resources.”
Each year, the Finance Minister, alongside other government members, is obligated to conduct “thematic or comprehensive expenditure reviews” according to the “annual and medium-term budgetary objectives” outlined in the action plans.
“Each plan must include measurable indicators of economy, efficiency, effectiveness, and social impact, as well as efficiency gains, productivity improvements, impact on outcomes and service quality, and savings projections over a defined time frame,” the decree states.
The plans should also “identify risks” anticipated during the implementation of the expenditure review and “propose mitigating measures.”
If an expenditure adjustment has “a significant or relevant impact on budgetary matters and/or social and territorial cohesion,” the Government may appoint “an external evaluation panel,” as stipulated by the decree.
As the expenditure review pertains to the public sphere, the rules of this decree apply to all services and entities under the direct and indirect administration of the State.
The Government is also expected to progressively extend this expenditure review exercise “to local and regional administration, respecting autonomy and the principles of state unity and subsidiarity.”
