The final central government accounts for 2009 have been prepared in accordance with provisions. International support arrangements aimed at stabilising the euro zone and the euro made after the final accounts will, however, increase Finland’s financial commitments.
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It is the opinion of the National Audit Office that the final central government accounts for 2009 have been prepared in accordance with provisions.
The information in the Report on the Final Central Government Accounts concerning compliance with central government spending limits in fiscal year 2009 can be considered true. International support arrangements aimed at stabilising the euro zone and the euro made after the final accounts will, however, increase Finland’s financial commitments.
The spending limits for 2009 were not exceeded and the entire amount was used. The drop in gross domestic product was larger than projections during the fiscal year and the assumptions in the budget proposal. Nominal central government debt rose to 64 billion euros at the end of 2009, which was nearly 10 billion euros more than at the end of 2008. The drop in the volume of gross domestic product by 7.8 per cent is the largest drop in a single year that has taken Place since 1918. The sustainability gap has risen to 5.5 per cent of GDP according to the latest update of the stability programme. The National Audit Office concurs with the view that there is a considerable sustainability gap in Finland’s public finances. With regard to the sustainability gap in central government and structural problems in the economy and public finances, preparing a plan to stabilise public finances and close the sustainability gap is thus an extremely important and urgent task.
Commitment to the central government spending limits procedure is a key element in Finland’s fiscal-policy provisions, and it has curbed growth in central government expenditure. The spending limits are Limited in their scope, however, since a large part of public spending is not covered by them. In addition to central government, public finances include local government and social security funds. In ensuring the sustainability of public finances and in complying with fiscal-policy provisions it is beneficial to use outside control with sufficient expertise covering public administration as a whole. Public finances as a whole should be brought within the sphere of the external audit and evaluation of the fiscal-policy information base and effectiveness, together with the right to obtain information.
Productivity development in public services has been weaker than in the rest of the economy. The rise in costs is fastest in local government. In evaluating the efficiency of public finances and services, special attention should be paid to cost-effectiveness.
In the Report on the Final Central Government Accounts the Government has reported on the implementation of the measures called for by Parliament in parliamentary communications 11/2009 and 30/2009. The information on social effectiveness that is provided to Parliament in the Report on the Final Central Government Accounts does not provide a true and fair view in all respects on how well social-policy objectives have been achieved. The audit did not find significant misstatements or numerical errors in effectiveness information, however. The reporting procedure clearly needs to be developed so as to serve Parliament’s fiscal power. As an audit finding the National Audit Office notes that internal control in the state group as a whole has not been arranged in a way that ensures the implementation of the requirements in the State Budget Act and good governance. As a result of shortcomings in the division of responsibility between government agencies and the shared service centre for financial administration and human resources management, internal control as a whole is not sufficiently efficient and comprehensive.
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