General government must now keep separate accounts for their economic activities in a competitive market environment. The accounting offices should identify activities conducted in a competitive market environment in a consistent manner, but this is challenging.
The audit mapped what kind of and how extensive activities central government conducts in a competitive market environment. In addition, it was examined whether the different accounting offices have identified the competitive activities of central government as consistently as possible, and whether the accounting offices apply acceptable calculation principles when preparing a profit and loss account for their competitive activities.
As from 1 January 2020, general government has had to keep separate accounts for economic activities conducted in a competitive market environment. The accounting offices must present the operational performance of these activities in their final accounts. The new provision ensures the transparency of business activities conducted by general government and improves the monitoring of competition neutrality so that public and private business activities have a level playing field for competition.
Central government has over 60 accounting offices, of which 26 carry out activities in a competitive market environment. Competitive activities in central government are diverse, and their annual revenues vary to a great extent by accounting office: from a few thousand to several million euros. The audit found that the profit and loss accounts for competitive activities give a true and fair view of the operational performance if the activities have been identified correctly. The accounting office must identify its competitive activities itself and present a profit and loss account for them. However, it is not unambiguous to identify competitive activities, as the concept is unclear and it is difficult to interpret the legislation related to them.
The NAOF recommends, for example, that the accounting offices should identify their competitive activities primarily on the basis of a legal assessment. When assessing the competitive nature of their activities, the accounting offices should document the grounds for their interpretation appropriately in view of their internal control. The accounting offices should also review their competitive activities together with the ministry steering their operations and ensure that the legislation, decrees on charging, and performance targets concerning their tasks are consistent and up to date.