Government mistakes and dismissals, the budget accumulates 33 million euros in liabilities from court decisions

The government's arbitrariness in contractual relations with third parties and with its employees is turning court decisions into a huge cost for the state budget and taxpayers.

At the end of June 2022, the Ministry of Finance estimated that the stock of budget liabilities resulting from court decisions reached 4 billion ALL or 33 million euros.

These liabilities mostly belong to employees who were unfairly dismissed from their jobs, but also lawsuits that were won by companies that had contracts for work and services with the government.

In the total stock of budget arrears, the item of court decisions is higher than the other 10 items that create budget invoices not settled on time.

At the end of June 2022, the stock of arrears reached 15.4 billion ALL, while court decisions took 26% of the stock.

More detailed data from the Ministry of Finance show that 84% (3.4 billion ALL) of liabilities stemming from court decisions are owned by the central government.

While 16% (645 million ALL) belongs to the local government. Most of these obligations have been created by court complaints of dismissed administration employees. Most of them have won their rights in court, winning compensation and reinstatement. The dismissals from the administration were made in violation of the legislation in force for the civil servant and the labor code.

Despite the fact that public entities have continued to implement the decisions of the courts by systematically repaying the sums to former employees, but the occasional dismissals have caused that there is always a stock of obligations that cannot be paid off in time to this category.

The stock of unpaid debts expanded in six months by 1.6 billion ALL (13.8 million euros) or 12.5 percent more than in January of this year. Compared to June 2021, the stock of obligations has decreased by about 12 percent.

Bad debts have become a regular budget item even though the government after 2014 strengthened the laws to prevent their creation.

A detailed audit in 2014 revealed about 71 billion ALL in arrears, which included all invoices, including unpaid energy bills of public entities to OSHEE.

To repay these obligations, the government increased external borrowing. But the donors who gave the loans, the World Bank and the International Monetary Fund, imposed the strengthening of the rules for budget administration in order to prevent the creation of new ones./Monitor