FINANCE

State entity spending reined

Platform to monitor inventory and procurements of the entire general government sector

state-entity-spending-reined

The government aspires to contain public expenditure and procurements in an effort to acquire a better picture of what is being stored by broader public sector entities such as hospitals, universities etc, as well as the equipment owned by budget-funded general government entities.

A special platform will be created to record all contracts, procurements and invoices online. This way the government expects to rein in waste and save significant amounts of money that can be channeled to entities and agencies that have greater need of the funds or into other actions in the service of citizens.

The new system will allow the State General Accounting Office to better distribute spending per entity and to stop the horizontal reduction of operating expenditure (which occurred in previous years, especially during the bailout period), which has created significant problems for many agencies. It is also unknown whether the practice ever brought real results.

Sources say that the government will demand that all entities and ministries produce a full inventory of their equipment (from chairs and desks to ink cartridges), procurement contracts and new orders. It will also introduce electronic pricing.

This means that the State General Accounting Office will have a complete picture of each entity’s “valuables” and everything stored in the back room. Each service supply contract, meanwhile, will be assigned a code number so that the ministry can monitor and classify all purchases. This data will also become comparable, so as to compare the procurements of two hospitals, for example, and identify cases of waste.

Electronic pricing is the exchange of digital invoices between two or more entities involved in a transaction. Once the e-pricing system is in place, the ministry will consider the creation of a “central warehouse” for the entire public sector. This means that all general government entities will have to refer to that warehouse for their supplies.