FEDERACION ESPAÑOLA DE MUNICIPIOS Y PROVINCIAS
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Guidance on management of municipal services through public corporation
The management of a municipal corporation and budget stability are individual processes, are closely linked and require effective coordination and communication between those responsible for the Corporation and the directors of the Company. The outcome of this understanding depends largely on the level of debt and the realization of this goal of stability. To facilitate this task has been presented today at the FEMP Guide, especially aimed at Secretaries and Auditors Local authorities and managers of state companies.
The Guide is the result of a process of analysis and reflection carried out during the last two years by the Working Group on Financing and Borrowing consisting of representatives of the Association of Public Advocates (AVS), FEMP and the Council of Secretaries, Auditors and Treasurers of Local Government (COSITAL).
The aim is to support and serve as reference for the actors involved in the management of services and infrastructure through public corporations, and does so by providing the basic information needed to determine the effects of different operations performed by such companies have an impact on key areas indebtedness, the financing capacity and compliance on budgetary stability, both in the institutions and in their administrations matrices.
In the presentation involved the President of AVS, Francisco Villanueva, Eulalio Avila COSITAL President, and Secretary General of the FEMP, Isaura Leal.
Isaura Leal said that the guide creates a framework to make it easier for corporations to help improve the sustainability of public finances through a "dual purpose": to reduce costs and become more efficient. Local governments will be more efficient, "he said if they can be more transparent, more streamlined work and continue to promote the modernization of all public sector structures.
COSITAL President, Eulalio Avila, praised the guide as an instrument of economic planning and said the municipal corporations need to reinvent their role because the public company is required as the engine of economic activity and as a direct service.
AVS President, Francesc Villanueva, meanwhile, said the idea of producing this guide from the need to combine in one document the questions about management of municipal services which received its association, bringing together 165 companies and public housing soil in Spain. He also expressed his hope that the guide will become the 'Vademecum' of utilities and municipalities secretaries and auditors.
Scope and extent
The paper argues, firstly, the need to improve vision to commercial companies, combining the principle of effectiveness with that of legality and respect for the law especially in areas such as recruitment or selection of staff. Similarly, noted as "crucial" the awareness of all those involved in the enforcement of budgetary stability and mutual understanding and basic responsibilities and powers of each.
From a functional standpoint, the Guide is focused on the area of borrowing, lending and compliance with budgetary stability legislation on the part of corporations and other publicly owned entities in the exercise of their functions are assigned. But also addresses issues relating to other areas such as legal or fiscal.
Similarly, a systematic structure of the process which in practice is usually followed regarding the selection, design and implementation of an entity by the Administration to manage services, facilities and public infrastructure. Most of the issues addressed in the Guidelines are fully applicable not only corporations but also for other forms of management under the legal public entities such as business or autonomous bodies.
For example, one chapter examines in detail all issues related to the rules on budgetary stability. It performs a review of the rules, procedures and the definition of budgetary stability with particular emphasis on the implementation of the "50% rule." Similarly, another section is dedicated entirely to the analysis of economic and financial viability of public corporations, a key element in ensuring the effectiveness of this method of administration, and especially for the analysis and verification of compliance with the requirements on stability budget.
