In addition, it notes that “in the case of operations instrumented through extraordinary or additional financing mechanisms, in addition, a systematized summary of the destination of the funds obtained should be added.” “Similarly, future issues of debt or any other appeals to the public credit that occur should be published in the future with that same degree of detail.”
The Board of the Audit Office approved this report on June 29 relative to the subjective scope of the Administration of the Principality of Asturias (APA), so that not all regional public debt is analyzed, but specifically that attributed to budget program 011C the APA. The audit refers to the year 2015, notwithstanding that when it was considered necessary, transactions that occurred before or after that year were analyzed.
It also observes as convenient that the Ministry of Finance and Public Sector “had documentation accrediting the calculations made in a format / file that would facilitate the review by this external control body, as well as by other possible recipients of the information”. “The fact of not having the above is an important weakness of internal control for the Administration of the Principality of Asturias”, point out from the External Control Body (OCEX) in a press release.
The Sindicatura, likewise, appeals to the principle of financial prudence to advise that the Administration of the Principality of Asturias “set interest rate thresholds from which the study of the possibility of refinancing existing loans began”.
LIMITATIONS AND INCORRECTIONS
Except for the possible effects of limitations on the scope and effects of the material improprieties described, the Audit Office indicates that the regulatory framework is complied with.
Among the limitations on scope, the Syndicate says that it does not know “the specific expenses that have been financed with a part of the loan formalized by the APA with the ICO under the Financial Facility Fund of the Autonomous Communities, since a detail has not been provided of the invoices or obligations financed with these funds “. “The General State Administration has not demanded justification of the destination of these funds to the autonomous community, beyond using it to finance the deficit target of 2015.”
“It has not been possible to verify the number of financial cost savings included in the Governing Council Agreement of March 25, 2015. After having detected erroneous data in the calculations provided by the Financial Policy Service, this Audit Office was sent a new calculation, whose saving figure did not coincide with the one gathered in the aforementioned Agreement of the Governing Council, the explanation has not allowed to resolve the differences, “says the OCEX.
Regarding material misstatements, the Receivership notes that the public debt refinancing operation carried out by the Principality’s Administration in 2015 “was accounted for extra-budgetary through a movement of high and low in the account 170 ‘ Long-term debts with credit institutions’ In this regard, it considers that “it should have been accounted for as a budgetary operation and this despite the fact that the effect of its allocation is null, since it implies income and expenses for the same amount”.
It also indicates that of the total of credit modifications accounted for in the audited program that reduced the initial credit for interest payments by 67.7 million euros, those made for a total of 43.8 million euros “failed to comply with the provisions of the autonomic budget regulation, which prohibits modifying the interest expense and repayments of loans and debt as long as the conditions in which the operations were arranged do not change “.
The report also mentions that at 31 December 2015 the Administration of the Principality had a total of 190 loans with a outstanding balance for a total amount of 3,239.4 million euros. In the 2016-2020 period, public debt maturities amount to 1,843.8 million euros derived from loans with outstanding balance as of December 31, 2015 (excluding housing loans).
For the Audit Office, the General Budgets of the Principality of Asturias for 2015 do not contain in their memorandum of objectives “a specific and individualized description of the audited budget program in which the objectives assigned to it are explained, quantified and detailed with specific indicators to determine its degree of compliance. ” “This lack, in addition to a regulatory breach, prevents analyzing the effectiveness, efficiency and economy in the use of public resources allocated to the aforementioned program.” For all these reasons, the Audit Office can not express an opinion on the degree of economy, effectiveness and efficiency achieved, “he explains.