Public sector employees accounted for 29% of the community's spending in 2023.

PalmThe Balearic Islands' auditor, Joan Rosselló, presented the institution's latest report to Parliament this Friday, analyzing the autonomous community's accounts for 2023. This year saw the coexistence of the governments of Francina Armengol and Marga Prohens, who won the elections in July, although, he said, this made no difference to the accounts. As he explained, the year closed with a surplus of 0.35% of GDP and a reduction in public debt of approximately 290 million euros. The main expenditure was personnel costs, which accounted for 29% of the total (and 50% of the expenditure by IB-Salut, the Balearic Islands Health Service). As Rosselló explained, personnel costs are one of the items that "increase the most each year," due, among other things, to the salary increases approved by the central government, which are then "applied to the regional government." However, the ombudsman, who met with the Speaker of Parliament, Gabriel Le Senne, explained that "since 2020 the financial situation has been very positive." Nevertheless, he warned that spending increased more in 2023 than the economy grew: 10.5%, while GDP growth was 3%. He emphasized that if the current spending rule had been applied at that time, the Balearic Islands' spending should have been around 2.9% or 3%, meaning it would have been in breach. But in 2023, with the territory still emerging from the Covid-19 crisis, the rule was not in effect.

"Risk of mismanagement"

When asked about the most significant exceptions in the report, Rosselló emphasized an "accounting issue" that has persisted for "more than ten years." He was referring to the amount allocated by the regional government to cover pending litigation, which, according to the auditor, should be higher than the current amount of €495,434. He also highlighted an issue within the Health Service, where approximately €200 million is spent annually without a budget or supporting documentation. Due to the progressive increase in budgets, this figure is becoming less significant relative to the overall total. However, he warned that "these expenditures without budgetary coverage or documentation" carry the "risk of resource mismanagement." The Audit Office report analyzes the accounts of the regional government, the Health Service, and the Balearic Islands Tax Agency (ATIB). Regarding the instrumental public sector, the report lists dependent, affiliated, and other entities related to the regional administration, but the agency only conducts a formal review and general analysis of the annual accounts and financial audit reports prepared by external auditors. Furthermore, it includes 55 recommendations to improve the region's economic and financial management, advising both the general administration and the Health Service to develop more careful budget revenue forecasts. It also proposes a modification of the regulations so that "all economic and financial activity of the public sector is presented in a consolidated manner." As for the Health Service, it urges it to establish more standardized billing procedures that guarantee coverage of all activity carried out with third parties who are obligated to pay, and to establish "procedures for reviewing invoices that include reconciliations, follow-ups, and commitments to collection and adjustments for discrepancies or errors." Furthermore, he demands that the company pay its suppliers sooner, as he has detected that it has settled debts late, as well as with other organizations such as the Balearic Water Agency (ABAQUA), the Consortium for the Development of Improvement and Construction of Infrastructure in Palmanyola, and the Balearic Islands Infrastructure Consortium. This entails having to pay late payment interest later. Regarding ATIB, the ombudsman requests, among other things, that it include all relevant information in the annual report "to present a true and fair view of the annual accounts and significant subsequent events that occurred after the close of the financial year."

Separate budgets for IBDona and SOIB

The Ombudsman raises, among other issues, the need for the Balearic Institute for Women (IBDona), the Employment Service (SOIB), the Balearic Institute of Statistics (IBESTAT), the Balearic School of Public Administration (EBAP) and the Balearic Institute of Occupational Safety and Health (IBASSAL) to have their own budget instead of being integrated into the existing system, as this would allow for better analysis.