Statement of state property missing: audit of the Court of Auditors is necessary

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The national government does not have a complete overview of its assets. The current value is also not completely visible. This is stated in a statement from the Court of Auditors.

A property inspection and the associated budgets for management, maintenance and replacement should be the most natural thing in the world, but it is not, the Court of Auditors believes in its report ‘View of state property’.

Ministerial balance not mandatory

Unlike other public and private organizations, such as hospitals, municipalities and companies, ministries are not legally obliged to show the current value of the property through a balance sheet. The Court believes that the government should do the same. After all, the empire’s assets involve hundreds of billions.

The overview is important not only for accountability, but also for determining whether a minister budgets enough money for maintenance and administration. That budget is currently not enough for, for example, locks and bridges, ICT systems and for the military barracks.

If it is not known exactly what the property is, what the value and depreciation are, then it obscures the overview of the necessary budget for maintenance and replacement. As a first step towards such an overview, the Court of Auditors has mapped the assets of the individual ministries.

Focus on ministries with large investments

Minister of Finance Hoekstra states in his answer that he agrees with the importance of ensuring the maintenance and upkeep of state property, but to keep track of and value all assets requires, according to the Minister, a significant effort. The Minister therefore wants to focus on ministries with the largest investment budgets. According to him, this is where the greatest added value lies.

The government’s desire to get started with these components is a compliment, according to the Court, but it should not stop there. In the selection of the Minister, important assets in other parts of the state are omitted from the picture. For example, all ministries have ICT and software, which play an increasingly important role in the public service. If they are not replaced or upgraded in time, it can cause problems; just as this is the case with the ‘classic’ infrastructure.

earnings basis

Moreover, this approach does not benefit the uniformity of the state reporting system. According to the Court of Auditors, it is also difficult to maintain that the government sets reporting rules for others, but not for itself. With the exception of the ministries, all organizations of any importance in the Netherlands – private and public – are legally obliged to account for their assets via a balance sheet.

In the vast majority of countries within the EU and the OECD, it is also common practice to draw up a balance sheet from the central government. The Court of Auditors has long argued for the introduction of an accrual system for the state.

state property

The assets of the national government include all types of real estate, of varying economic value. Think of ministries and tax offices, palaces, embassy buildings in, for example, Germany and the United Kingdom. The infrastructure with roads and waterways, bridges and locks and six associated traffic centers and 24 lighthouses also belong to the state. Furthermore, the state property ranges from works of art, cultural heritage collections and the National Archives to concessions for the operation of petrol stations along motorways, CO2 emission rights and permits for the use of air frequencies.

The government also has laboratories, weapons systems, vehicles and ships, aircraft, leased farms, nature reserves, a pipeline network, a submarine fiber optic cable, many IT systems and software applications (more than 900 in tax and customs alone). The state is also (partly) the owner of significant mineral resources and various companies.

The overall overview is subdivided by ministry and is included in the report ‘View of state property – The most normal in the world?’, Which the Court of Auditors sent to the Folketing on 1 December 2021 and published.

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