The 2025 Audit Report: Budget Discipline is Urgently Needed - ORH
Budgetary Discipline Needs Tighter Enforcement, Advocates EU Audit Court - Budgetary Stricter Measures Urged by Audit Court
Here's the skinny on it: The Bavarian Supreme Audit Office (ORH) is crying out for tight budget discipline, urging the government to prioritize state tasks in a tricky economic climate. In essence, they're saying, "Streamline our spending to secure future investments." Finance Minister Albert Füracker (CSU) agreed, stating, "We'll comb over their suggestions like hawks."
Now, let's dive into some of the ORH's findings:
Border Police
Turns out, Bavaria's been footing the bill for a chunk of the border police work that falls under the federal government's jurisdiction. But they've yet to receive a dime in reimbursement. The ORH report, set for official unveiling on Tuesday, reveals this unfortunate situation. In 2020, 2021, and 2023, the feds requested support from the Bavarians. Yet, zero cents went back to the Bavarian pot.
At airports like Nuremberg and Memmingen, the local boys and girls in blue have been keeping federal territory safe. The man-hours ran up a whopping €42.5 million from 2020 to 2023. The ORH appeals to the Interior Ministry to negotiate a cost-sharing agreement with the fed to safeguard Bavaria's coin purse. Over the years, the federal government had reimbursed the Free State a pathetic €17.5 million for support. But the reasoning behind this change or continued silence remains cloudy, with the auditors sounding off about the mystery.
Forest Conversion
The ORH also grumbled that Bavaria's forest conversion is lagging behind due to overpopulation of wildlife. The responsible Economics and Forestry Ministry needs to wrangle driving solutions ASAP. The ORH insists, "Balanced wildlife populations are the key to a successful and cost-effective forest conversion."
Midwife Bonus
Since 2018, freelance midwives in Bavaria have been pocketing a yearly €1,000 bonus for tending to at least four deliveries annually as part of voluntary services. In 2022, €923,000 was dished out to ensure comprehensive obstetric care. But the ORH cried foul because the Health Ministry hadn't a clue about the scope of midwifery service demand. Despite this, they were still doling out the dough for another three years. The ORH suggests granting subsidies only if there's evidence of real demand.
Expensive Road Construction Projects
Three major road projects examined by the ORH saw construction costs soar from €34 to €90 million. The projects were 2.2 to 4.5 times more expensive than anticipated. The ORH points fingers at poor planning, faulty cost estimates, and a lack of cost discipline. They recommend improving planning quality, making cost estimates more reliable, and enforcing cost discipline.
Local Mandate Holder Remuneration
As per the ORH, incorrect taxation of remuneration for local mandate holders is rampant - they found this mistake in 58% of all cases examined. The main issues, according to the ORH, are muddled regulations regarding free and minimum amounts, inadequate info to mandate holders about their tax obligations, and the frequent absence of notifications from municipalities for control.
The ORH advocates for measures before the next 2026 municipal elections that enable honorary local mandate holders to fulfill their additional tax obligations effortlessly and bureaucracy-free.
Taxation of Energy Transition Funding
According to the ORH's report, over half of landlords haven't declared state-funding as part of the energy transition in their tax returns. The omission, transferred to subsequent years, translates to a potential tax loss of around €340 million by 2023. The ORH suggests implementing digital data exchange between state funding institutions and the tax administration to avoid this loss.
- The 2025 ORH report highlights the lack of reimbursement from the federal government to Bavaria for the cost of supporting border police work, which amounts to €42.5 million from 2020 to 2023, and calls for a cost-sharing agreement to protect Bavaria's funds.
- In the forest conversion sector, the ORH has expressed concern over the lagging progress due to wildlife overpopulation and urges the Economics and Forestry Ministry to find solutions promptly, as maintaining balanced wildlife populations is crucial for successful and cost-effective forest conversion.
- The ORH has recommended implementing digital data exchange between state funding institutions and the tax administration to avoid a potential loss of approximately €340 million in tax revenue by 2023 due to energy transition funding omissions in landlords' tax returns.
