U-I-474/18

Reference no.:
U-I-474/18
Objavljeno:
Official Gazette RS, No. 195/2020 | 10.12.2020
ECLI:
ECLI:SI:USRS:2020:U.I.474.18
Abstract:
[Publisher's Note: The full text of this Decision/Order is available only in Slovene. This is a summary that has been prepared for informational purposes only.]
 
Financial (i.e. Budgetary) Independence of the National Council, the Constitutional Court, the Court of Audit, and the Human Rights Ombudsman
 
 
By Decision No. U-I-474/18, dated 10 December 2020 (Official Gazette of the Republic of Slovenia, No. 195/20), upon the request of the National Council, the Constitutional Court reviewed the provisions of the Public Finance Act (hereinafter referred to as the PFA) that regulate (1) the inclusion of the proposed financial plans of direct budget users in the draft of the state budget; (2) measures to balance the budget during a fiscal year; (3) the inspection supervision carried out by the Ministry of Finance over the implementation of the Public Finance Act and other public finance regulations by non-governmental users; and (4) the authorisation of the Minister of Finance to issue detailed instructions regarding the end of the fiscal year for the central and local government budgets no later than by 30 September of the current year. The Constitutional Court reviewed the challenged provisions insofar as they refer to the National Council, the Constitutional Court, the Court of Audit, and the Human Rights Ombudsman.
 
It established that these are constitutionally determined authorities that are ensured by the Constitution an autonomous and independent position, an element of which is financial (i.e. budgetary) independence. This independence is (inter alia) ensured by these authorities proposing to the National Assembly by themselves the determination of an appropriate amount of funds in the state budget for their effective and undisturbed operation, such that they independently decide on the expenditure of the allocated funds, and such that the expenditure of these funds is supervised by another – equally autonomous and independent – authority such as the Court of Audit, which is independent of state power. According to the Constitutional Court, it does not follow from the Constitution that influence by the executive power on the financial independence of autonomous and independent constitutional authorities is admissible, which entails that the amount of funds for the operation of these authorities must not depend on the Government but only on the National Assembly, which is the general representative body. In order for these independent constitutional authorities to be able to exercise their constitutional role, in the procedure for drafting the state budget adopted by the National Assembly they must have a position that is constitutionally equivalent to that of the Government.
 
The Constitutional Court concluded that Article 20 of the Public Finance Act, which enables the Government to request that necessary alignments of proposed financial plans submitted by independent constitutional authorities be carried out and requires these authorities to align their proposals with those of the Government, causes them to yield to the will of the line ministry, which is part of the executive power. Since this Article interferes with the right of independent constitutional authorities to formulate a proposal regarding the funds necessary for their operation independently of the Government, it establishes their financial dependence on the executive power. In the assessment of the Constitutional Court, this finding cannot be changed by the fact that while the Government by itself formally proposes a different financial plan for independent constitutional authorities, it includes the proposal submitted by these constitutional authorities in the reasoning of [its own] draft state budget. In this respect, the Constitutional Court stressed that the financial independence of autonomous and independent constitutional authorities does not entail that in the procedure for including proposed financial plans in the draft state budget the Government or the competent ministry thereof should not be allowed to warn the independent constitutional authorities of possible departures from the fundamental economic starting points for drafting a budget in their financial plans. Namely, in order for the state power as a whole to be able to operate, it is necessary for the authorities in different branches of power to cooperate, as it is also necessary for the Government and the other independent constitutional authorities to cooperate. However, the Government must not require independent constitutional authorities to submit to its policies and interests when drafting the budget. Therefore, the Constitutional Court decided that Article 20 of the Public Finance Act, insofar as it refers to the National Council and the Constitutional Court, is inconsistent with the second sentence of the second paragraph of Article 3 of the Constitution, that insofar as it refers to the Human Rights Ombudsman, it is inconsistent with the first sentence of Article 159 of the Constitution, and that insofar as it refers to the Court of Audit, it is inconsistent with the third paragraph of Article 150 of the Constitution.
 
 
As regards the measures to balance the budget during a budget year (Article 40 of the Public Finance Act), the Constitutional Court established that the provisions intended for the adoption of urgent temporary measures by the executive power in the event of significant imbalances in the budget caused by unforeseen events merely provide for temporary measures with a strictly determined time of validity that apply equally to all direct budget users, with regard to which the measures are to be determined in cooperation therewith, i.e. also in cooperation with the constitutional authorities that are independent of the Government. Therefore, such regulation does not reduce the financial independence of the autonomous and independent constitutional authorities, which are also independent of the Government. Conversely, the provision that allows the Government to also determine that under conditions involving the temporary suspension of individual expenditures direct budget users must obtain the prior consent of the Ministry of Finance to enter into any contract – i.e. independent constitutional authorities as well – prevents the National Council, the Constitutional Court, the Human Rights Ombudsman, and the Court of Audit from determining by themselves the use of funds for their operations provided from the state budget. This authorisation allows the executive power to intensively and inadmissibly interfere with the work of the autonomous and independent constitutional authorities; therefore, insofar as the authorisation refers thereto, it is inconsistent with their constitutionally guaranteed financial independence.
 
In the assessment of the Constitutional Court, observance of the financial independence of the National Council, the Constitutional Court, the Human Rights Ombudsman, and the Court of Audit can only be ensured by a regulation determining supervision over the expenditure of budgetary funds that is performed by an autonomous and independent state authority, or, insofar as the Court of Audit is concerned, by an institution independent of state power. The statutory regulation that authorises public officials of the Ministry of Finance to carry out that task does not meet that requirement and is thus unconstitutional.
 
The Constitutional Court also established that neither the the statutory provision that authorises the Minister of Finance to adopt rules annually regarding the end of the implementation of the state and local government budgets for an individual fiscal year, nor any other provision of the Public Finance Act includes any framework or guideline for the issuance of more detailed implementing regulations by the Minister of Finance. Therefore, the Constitutional Court decided that the first paragraph of Article 95 of the Public Finance Act, to the extent to which it was subject to [constitutional] review, is inconsistent with the second paragraph of Article 120 of the Constitution.
 
 
Note:
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Document in PDF:
Type of procedure:
review of constitutionality and legality of regulations and other general acts
Type of act:
statute
Applicant:
Državni svet Republike Slovenije
Date of application:
10.11.2018
Date of decision:
10.12.2020
Type of decision adopted:
decision
Outcome of proceedings:
annulment or annulment ab initio establishment – it is inconsistent with the Constitution/statute establishment – it is not inconsistent with the Constitution/statute
Document:
AN04028