Budget expenses from previous years grow with amendments by the rapporteur

The creation of the rapporteur’s amendments, an instrument used by congressmen allied with the Jair Bolsonaro (PL) government to irrigate electoral strongholds, has driven the accumulation of expenses inherited from previous years, the so-called remainders to be paid.

In 2021, the liability with amendments by the rapporteur from previous years was R$ 12.2 billion, according to data from the National Treasury. The value rose to R$ 18.9 billion earlier this year.

The accumulation of these expenses is carefully monitored within the economic team, as it can make the management of public accounts difficult.

The rapporteur’s amendments are currently the key part of the political game in Brasilia, being responsible for supporting Bolsonaro’s allied base in Congress. The modality was included in the 2020 Budget by Congress, which now has control of almost twice the federal budget of previous years.

To pay the expenses, the transfers need to fit within the payment limit of the Executive Branch, given by the spending ceiling, a fiscal rule that limits the advance of expenses to the variation of inflation. It means that the remaining payables compete for space on the ceiling with the expenses of the Budget for the current year.

Even if the effective payment of the rapporteur’s amendments scheduled for 2022 is slower, leaving the financial limit available to pay expenses indicated by congressmen in previous years, there are fears that the invoice will snowball into the future.

To give you an idea, the allocation of these amendments for this year is R$ 16.5 billion. The value usually serves as a reference for the financial limit, although it can be changed according to need and availability. The accumulated liabilities are already greater than that.

In addition, the TCU (Court of Accounts of the Union) has already issued recommendations to the Executive to reduce the balance of outstanding payments. The current trend of amendments goes in the opposite direction and worries the technicians of the court of accounts.

In 2022, the move prevented a more consistent drop in accumulated spending from previous years, after an increase caused by the inherited bill of expenses to combat Covid-19. The total bill was BRL 233.7 billion, a nominal increase of 2.6% compared to 2021.

wanted by sheetthe TCU stated that the issue has been monitored by the court and that the analyzes and conclusions will be the subject of a specific topic in the government accounts report.

The registration of payables, by itself, does not constitute an irregularity. It is common for some expenses to pass from one year to the next, as part of the INSS (National Social Security Institute) benefits for the month of December, effectively paid only in January.

Investments are also frequent expenses in the remaining payables, since their realization depends on the project, licenses and can last for months.

However, the expressive increase in outstanding amounts has already been associated in the past with maneuvers by the Dilma Rousseff (PT) government to artificially improve the situation of public accounts.

The economic team of PT management pedaled expenses, which translated into a billionaire skeleton that began to be regularized in 2015.

Now, what draws attention is the low execution of the rapporteur’s amendments, an instrument criticized by experts for its low efficiency. Of the BRL 19.7 billion committed in 2020, BRL 12.7 billion were registered in outstanding payments in 2021. Of this last amount, BRL 8.4 billion is pending until today.

A similar proportion was repeated at the turn of 2021 to 2022. Of the BRL 16.7 billion committed, BRL 10.3 billion remained to be paid in the future — an amount that increases when the liabilities of the previous year are added.

Commitment is the first phase of public spending, in which the government signals its commitment to purchase a good or service. The release of the money, however, depends on the delivery of what was purchased. When there is no proof of completion, the amount is recorded in outstanding payments.

In the opinion of technicians, if the low execution continues, the volumes will only accumulate year after year. TCU sources do not rule out an alert for this risk in government accounts.

The protagonist of the increase in the balances payable of amendments by the rapporteur is the Ministry of Regional Development, led by Rogério Marinho. The portfolio is also one of the main beneficiaries of the instrument, as it concentrates a series of investments of interest to congressmen.

In 2022, the account inherited from previous years by the MDR was BRL 10.6 billion, a value 78.6% higher than in 2021 (BRL 6 billion). The folder did not respond to requests for clarification until the conclusion of this text.

Increases were also recorded in the Ministries of Health and Agriculture, but in less significant amounts (an increase of R$ 800 million in each case).

The Ministry of Health stated that the remainders to be paid “are instruments of budgetary and financial management”. “It is worth remembering that it is natural for some oscillation in the volume of resources entered in outstanding payments between one financial year and another”, he said. Agriculture did not respond.

The rapporteur’s amendments are criticized by experts for functioning as a political bargaining chip. Even though they consume a considerable part of the budget, they are distributed through agreements sealed between the Planalto Palace and allies in Congress.

In addition, they finance works and other actions of interest to congressmen, often configuring a dispersed expense, of low efficiency and not necessarily aligned with the government’s strategy.

The instrument ended up taking space from other government expenditures. In 2022, for example, Bolsonaro shielded the rapporteur’s amendments from any cut, even in the face of the need to cut almost R$ 9 billion to meet the needs of ministries. The veto ended up being only R$ 3.2 billion.

Economist Vilma Pinto, director of the IFI (Independent Fiscal Institution) of the Senate, said that an increase in the remaining payables of rapporteur amendments was expected, given that an important part of this expenditure is directed to investments, which usually have a multi-annual execution.

Even so, the expert warned that a significant increase in the invoice inherited from previous years could compromise the fiscal framework. “You decrease your availability for current expenses,” she said.

She also drew attention to the fact that the current account of payables is higher, in nominal values, than the peak observed in 2015 (R$ 228 billion), the height of the skeleton left by fiscal pedaling. “It’s an expressive volume that deserves attention,” she said.

UNDERSTAND THE IMPASSE OF EXPENSES FROM PREVIOUS YEARS

What are payables?

Government expenditures provided for in the one-year Budget, but whose execution is pending to be completed in subsequent years. Each RAP (Remains Payable) can be in the initial or more advanced stages of the expenditure execution

What are the rules for paying off outstanding amounts?

The RAP can be cancelled, re-enrolled for the following year or finally paid. The settlement of the amount depends on the existence of financial limits and space in the spending ceiling (whose compliance is verified by the amount of expenses actually paid)

Are there problems with a high volume of payables?

The accumulation of expenses from previous years can make it difficult for ministries to manage financially, as they need to use the spending space in the year to meet current and past demands. The TCU (Union Court of Auditors) has already made recommendations to the government to reduce the amount of RAP

What are rapporteur amendments?

Instrument created by Congress to increase the volume of resources directed by government allies to electoral strongholds. Distributed in a fragmented and unequal way among congressmen, they are considered a less efficient expense