“Just as the honorable Minister of Finance just said from this lectern, referring to the assessment of the National Audit Office, the accounts of the state continue to be correct,” Karis said, addressing the Riigikogu. “The audit of the National Audit Office demonstrates that the annual accounts of the state are correct in all material respects, which means that they give a true and fair view of the state’s financial position as well as its financial performance and cash flow.

“The accounting of state agencies, state-controlled foundations and companies is well managed for the most part, and the annual accounts are largely free of material errors,” he added.

The National Audit Office is of the opinion that the state’s economic transactions were performed in all material respects in accordance with the State Budget Act, the 2016 State Budget Act and its amendment act, Karis noted.

At the same time, the head of the National Audit Office made several proposals on how to improve the clarity and understandability of the state budget.

“From the perspective of the National Audit Office, it would have been welcome if making the budget position rules more flexible would have been accompanied as a counterbalance by a decision with which the Riigikogu would have set an optimum size of the stabilization reserve and the rule that if the budget is not balanced, payments into the stabilization reserve would increase,” Karis said, referring to the Riigikogu’s decision to adjust the rules of the budget position, which allowed a 0.5-percent structural deficit in certin special circumstances.

“It would be wise if the state would sustainably increase the stabilization reserve to an agreed level by directing a certain amount towards it with the annual state budget for example,” he continued. “That would be in addition to the profit distribution of the Bank of Estonia, which is not very large, or some other extraordinary income.”

Karis also noted that it would be reasonable to stipulate an appropriate policy and principles of maintaining and collecting the state’s reseves in the State Budget Act, adding that the supervision of the fulfillment of those requirements could be within the jurisdiction of the Riigikogu.

“The Riigikogu undoubtedly has the full right to make our own rules more flexible in the framework of the EU’s general set of rules,” Karis said. “The reserve of making it more flexible has not even been put into use to its full extent, but only halfway — a structural deficit of one percent is allowed in the EU.”

Source: ERR.ee

The Baltic Review

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