The Portuguese Public Finance Council (CFP) informs that, due to the lack of necessary information, it will not publish the report on "Local Government budget outturn up to June 2020", scheduled for 24 November.
In the context of the transition to the Accounting System for the General Government Sector (SNC-AP), the Directorate-General for Local Government (DGAL) has initiated the implementation of an information system to which municipalities will have to report data of a wide variety, namely accounting.
The implementation of the Information System for the Local Government Subsector (SISAL) led to discontinuity in access to fiscal and accounting information of municipalities under the conditions previously established for the CFP. The CFP expects to have access to SISAL-resident data as soon as its implementation allows.
As a result of this transition to SNC-AP, the most recent developments about the situation regarding the reporting of data by municipalities were known at the end of October. On 30 October, the DGAL provided budget execution data under the cash basis of accounting(receipts and payments) to the CFP. In addition to this information, the calculation of the municipalities indebtedness under the terms of the law was also made available.
Despite the progress in obtaining the abovementioned data, substantive limitations remain as to the number of municipalities with reported information with relevant impact on the evaluation and the conclusions to be presented in the report, which impairs the credibility and usefulness of the report. In fact, more than a third of municipalities are still at fault with budget outturn by the end of the first half of 2020 and, regarding the measurement of the debt situation, data from around half of the municipalities is available. Furthermore, for the average payment period (PMP) and arrears, the data for 2020 is not available.
In this context, the CFP considers that the conditions for the report’s publication on the scheduled date are not met. Without prejudice to the foregoing, the CFP expects that in May next year it will be possible to have full information for the elaboration of the report on the budgetary developments of the Local Government in 2020, which includes the fiscal and accounting developments of this subsector that occurred in the first half of that year.
Finally, the CFP expresses its concern about the information gaps regarding the budgetary outturn of some municipalities in a year in which new pandemic-related spending commitments are being made, which would require more timely scrutiny that is thus hampered.