Abstract
This article discusses the use of unpaid commitments and its impacts on the credibility and transparency of public finances. Based on a typification of the four types of existing carry-over in current Brazilian regulation, the article shows evidence of the emergence of a “parallel budget” in the three levels of government with regulation and external control issues. The development of the balances and enrollment of the unpaid commitments was proxied by the sum of these accounts in the Federal Government balance sheet, as well as in 26 States and the Federal District, and for 4,100 cities. Additionally, the interpretation given by the Courts of Auditors for unpaid commitments usage by governments without financial ballast was observed as well as the level of transparency given by those governments with the larger amounts of unpaid commitments. The results indicate that, besides the growing debt, the weak regulation of unverified unpaid commitments is seriously reducing the credibility and transparency of the budget at all levels of government.
Keywords:
unpaid commitments; public budget; carry-over; indebtedness; transparency.
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(1) The FRL limits the balance of Uvuc in relation to the availability of resources and imposes evidence (article 55.III, b 3 and 4th), which is reinforced by the model suggested in the STN manual (Ministry of the Economy — MDF). (2) The FRL does not expressly limit the registering of VUC, but the 9th article determines limitation on commitments, which would then limit VUC. (3) Federal Constitution 1988, article 167, §2. (4) Article 43, §1, I, 4,320/1964. does not request disclosure of updated version of the budget. (5) Article 55 of the FRL was associated to Article 41, which was vetoed. (6) Budgetary appropriation during the last 4 months of the fiscal year can be reopened, even though they do not have financial support in the actual budget. (7) Net value of VUC and Uvuc. (8) It will consume cash, without guarantee of revenues or associated resources available. (9) Carry-over increases cash. (10) Net income. Source: Elaborated by the authors.
Note: Average population of the states: 7,5 million inhabitants. Total amount of VUC (2014): R$ 38,4 billion; Uvuc: R$ 21,1 billion. In federal government, for 205,6 million inhabitants in 2014, the balance of VUC was R$ 38,5 billion and the Uvuc was R$ 189,5 billion. States with larger VUC per inhabitant: Roraima (866); Amapá (542); São Paulo (516) and larger Uvuc per inhabitant: Distrito Federal (775); Roraima (418); Rondônia (245). States with lower Uvuc per inhabitant: Ceará (1); Rio Grande do Sul (29); and Pará (30), and lower Uvuc per inhabitant: Ceará (11); Piauí (17) and Santa Catarina (175). Source: Elaborated by the authors.
Note: (1) The height of the bars is the total of average VUC for Brazilian municipalities, considering data from 1998 to 2012 obtained in SISTN and those of 2013 and 2014 in Siconfi (marked bars with no details on their nature because the system does not disclose this information, reducing transparency on the management of unpaid commitments). (2) For all years, when the total amount show by the bars do not follow the continuous line (which represents the average total of municipalities VUC), it indicates that around 200 to 300 municipalities cannot be analyzed regarding the type of VUC, because the municipalities did not provide details on the nature of their balance of VUC when feeding SISTN with information. (3) The number of municipalities in the analysis from 1998 to 2014 is: average of 5,103 for VUC (min.= 3,570 in 1999 and max.= 5.451 in 2001); and average of 5.046 for Uvuc (min.= 4.581 in 2012 and max.= 5,425 in 2001). Included the municipalities that sent data to STN in that year, and that had balance of VUC in that year. Source: Elaborated by the authors.
Note: (1) Municipalities listed in each year are those that sent data to STN in that year and registered at the Uvuc. Data from 2015 was collected from Siconfi in February 2017. Source: Elaborated by the authors.