Finances - State Court of Auditors takes a critical view of the government's financial plans
In the opinion of the State Court of Auditors, the state government of Mecklenburg-Vorpommern is playing for time with the state budget that has now been adopted, thereby jeopardizing the state's financial performance. As early as 2025, it is expected that there will be an annual shortfall of 300 to 400 million euros to finance the state's expenditure. "The planned expenditure cannot be financed with regular revenues, although these are also increasing," stated Court of Audit President Martina Johannsen.
She had personally followed the final budget deliberations in the state parliament on Wednesday and now regretted that her authority's warnings had been insufficiently taken into account in the financial planning. The need for action to balance the deficits is growing. The ruling of the Federal Constitutional Court largely blocks the way to closing gaps via emergency loans in the future. "There are no clear approaches as to how these "needs for action" are to be resolved," complained Johannsen. The remaining reserves would be used up quickly. "Sustainable consolidation efforts or even an overall strategy as to how the state wants to position itself for the future are not apparent."
Johannsen explained that personnel expenses in particular were contributing to the cost increases, referring to the recent high wage settlements for the public sector. Additional new appointments are also planned in some state authorities. Johannsen also referred to the interest expenses for loans for the multi-billion MV protection fund, which are to be repaid within 20 years as planned. Social spending is expected to increase by around 22 percent by 2028. "All of these items are consumptive expenses that make up an increasingly large proportion of total expenditure," emphasized the head of the Court of Audit.
Johannsen reiterated her call to improve the effectiveness of the state administration through a higher degree of digitalization, ultimately saving time and money. A detailed review of tasks is long overdue. This would provide the basis for a well-founded decision on which tasks could be eliminated, which would need to be fully or partially automated in the future and which would still need to be carried out by qualified staff due to their high level of complexity. "Only then can structures and processes be adapted and optimized," emphasized Johannsen.
Criticism also came from the Taxpayers' Association. In a press release, the state association called for transparent budget management, the reduction of duplicate structures, the abandonment of prestige projects and lower expenditure on external consulting, among other things. "Despite record revenues, the state is left with nothing," stated Managing Director Sascha Mummenhoff. Only with difficulty and by drawing on reserves has it been possible to present a balanced budget. The main reason for this was not current and past crises, but "a policy that lacks long-term strategies and the will to save", explained Mummenhoff. He also called for digitalization to be consistently driven forward.
Financial planning MV
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- The State Court of Auditors has expressed concern about the state government of Mecklenburg-Vorpommern's financial plans, particularly their handling of the recently adopted budget.
- The state government's strategy to manage financial deficits, expected to emerge as early as 2025 with an annual shortfall of 300 to 400 million euros, has been criticized by the State Court of Auditors.
- The State Audit Office's President, Martina Johannsen, has highlighted the need for digitalization in the state administration to improve efficiency and reduce costs, such as personnel expenses and interest on loans for the MV protection fund.
- Associations, like the Taxpayers' Association, have also voiced their concerns, urging for transparent budget management, reduction of duplicate structures, and lower expenditure on external consulting, among other measures, to address the state's financial challenges.
Source: www.stern.de
