The Czech Fiscal Council (hereinafter referred to as “CFC“) in line with Act No. 23/2017 Coll., on the rules of budgetary responsibility (hereinafter referred to as the “Act”), Section 21(2) evaluates compliance with numeric fiscal rules. The process involves the drawing up of a report on compliance with those rules and its presentation to the Chamber of Deputies of the Parliament of the Czech Republic. The Report on Compliance with the Rules of Budgetary Responsibility for the Year 2018 is the second Report on Compliance with Numeric Fiscal Rules issued by the CFC.
The CFC presented its first report to the Chamber of Deputies in December 2018. At that time, however, it was not yet possible to evaluate compliance with the rules specified in Section 10 and 12 of the Act (determination of total public institution sector expenditures and derivation of the expense framework of the government budget and state funds), as the Act had not yet been in force in 2016, when the Act on the State Budget for 2017 as well as the budgets of other relevant entities (extra-budgetary state funds, etc.) were being drafted. For the same reason, it was not possible to provide a comprehensive evaluation of the fiscal rule for self-governing units in the 2017 Report, as its part pertaining to the reduction of the debt of territorial self-governing units, pursuant to Section 17 of the Act, was not yet applicable.
The 2018 Report does contain an evaluation of compliance with all the rules for budgetary responsibility defined in the Act, as the preparation of state budget and the budgets of state funds for 2018 was already governed by that Act.
The Report is divided into four parts. The first part features a characterisation of the development of the financial management of the public institutions sector to date,1 part two features information about an evaluation of compliance with the rule for the indebtedness of public-sector institutions, part three describes the determination of total public institution sector expenditures and derivation of the expense framework of the government budget and state funds, and part four is dedicated to the issue of adherence to the rule of budgetary responsibility of territorial self-governing units.