The Fiscal Discipline Council acknowledges the legal issue and is working on resolving it  19 May 2017

After receiving and discussing the report from the State Audit Office (approved on 26 April), which claims that the Council has exceeded its institutional mandate by hiring three full-time experts, the Council acknowledges the existence of a legal problem and, in cooperation with the Ministry of Finance and the Saeima, will attempt to resolve it as soon as possible. The Council stresses that the problem arose due to the fact that the execution of its functions objectively requires more than one full-time employee. This has also been acknowledged by the Ministry of Finance and the Saeima.

Upon commencing work it was determined that the available resources (one full-time employee) were insufficient for the execution of the Council’s functions (monitoring fiscal rules during the preparation and execution of the budget, and endorsing macroeconomic forecasts). Furthermore, in order to be able to organise its affairs independently of the Ministry of Finance, the Council has to be able to manage its own records, human resources, procurements, business trips, reports and financial planning etc. Accounting services are provided by the Treasury, and IT services are provided by the Ministry of Finance.

The Saeima acknowledged the situation and granted additional funds to hire three full-time experts, but did not introduce the necessary amendments to the Fiscal Discipline Law. In accordance with Saeima’s decision, the Council exercised its legal rights and hired three experts for full-time work and introduced the necessary changes to the Council’s regulations. It should be noted that all Council members are employed elsewhere and are only compensated for their participation in Council meetings and preparation for these meetings.

Consequently, the Council maintains that the report prepared by the State Audit Office has identified a technical issue whose resolution requires a formal solution.