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The d ebt of the local government units in Poland

The d ebt of the local government units in Poland. Iwona Zyman, Director of the Regional Branch in Opole SUPREME AUDIT OFFICE OF POLAND www.nik.gov.pl. Vilnius, 9-11.09.2014. government structure. Poland has a three-tier local government structure:

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The d ebt of the local government units in Poland

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  1. The debtof the local government units in Poland Iwona Zyman, Director of the Regional Branch in Opole SUPREME AUDIT OFFICE OF POLAND www.nik.gov.pl Vilnius, 9-11.09.2014

  2. government structure Poland has a three-tier local government structure: The basic local government unit - commune (gmina)

  3. DIVISION Currently Poland is divided into: 2479communes: 305 urban, 608 urban-rural and 1566 rural

  4. Local government units qualities • legal personality • ownership right • independence protected by the law • not organized in a hierarchical manner • the activity scopes of different local government levelsare separated

  5. local government tasks • OWN fulfilment of the citizens’ needs • COMMISSIONED government administration tasks such as: - conducting the elections - issuing vital records - paying out permanent benefits

  6. local government revenues Local government units execute their tasks on the basis of the budget plan The main sources of revenues: • own income, including local taxes and fees • general subsidies • designated subsidies out of the state budget The share of local government units in the public revenues depends on their tasks

  7. AUDIT AND SUPERVISION

  8. AUDIT AND SUPERVISIONregional Accounting chambers • The activity of local government unitsis supervised with regard to legality • The audit of financial management of the local government units in the scope of government administration tasks is also conducted with regard to purposefulness, reliability and sound management • At least once in four years carry out a complex audit of the financial management of local government units

  9. The Supreme Audit Office (NIK) may audit, beside other entities, also the activity of local government units, communal legal persons and other communal organisational units with regard to legality, sound management and reliability

  10. Due to the fact that the Supreme Audit Office presents to Parliament: 1) the analysis of the state budget execution and the monetary policy objectives, 2) opinion on the approval for the Council of Ministers, it is obliged to conduct annual audits of the state budget and the utilisation of financial resources designated to the execution of tasks commissioned by the local government units • In the first quarter of each year all of the NIK organisational units, including regional branches, conduct budget audits, among others in local government units • The regional branches conduct audits of all three local government levels

  11. A budget audit in a local government unit encompasses among others:

  12. SAO AUDIT Apart from typical financial audit of state budget execution and local government units NIK conducts audits of mixed character: during the typical compliance or performance audit the reliability of funds used to execute tasks is also audit

  13. NIK conducted, among others, the below listed audits concerning the local government units and their debt:

  14. INCREASE OF THE POLISH DEBT

  15. INCREASE OF THE POLISH DEBT

  16. INCREASE OF THE POLISH DEBT

  17. EU budget Unsatisfied needs in the scope of social and technical infrastructure forced the local government units to seek external financial sources, in particular those out of the EU budget, whereby the obligation of national input determined the decision on the incurring of debt liabilities. During two, three years local government units conducted investments that, considering their economic and financial potential, should have been executed in a time perspective twice or thrice longer.

  18. Undertookactivities: The localgovernmentunits undertook activities aimed at the increase of the operational surplus (in particular by a more efficient use of the resources ascribed to them and expenses optimisation), however such activities were not adequate in relation to a rapid increase of the debt, as well as the costs connected with its service (discount, interest rates)

  19. The audits connected with the debt of local government units revealed the following irregularities:

  20. Such situation in the local government units requires greater accuracy in the scope of local government activities connected with the incurring and repayment of debt. Financing expenses with debt liabilities should be connected with:

  21. Thank you

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