Carry-overs or leftovers? Tackling year-end spend-downs at the central government level

Sanja Korac, Birgit Moser, Paolo Rondo-Brovetto and Iris Saliterer

Public Money & Management, 2019, vol. 39, issue 6, 393-400

Abstract: Year-end spend-downs have received a lot of attention in public policy and public administration, and a number of budgeting and accounting reforms have been made to tackle this issue. While carry-overs have been thought to be a remedy, their effect remains empirically under-investigated. This paper applies a mixed-method approach to provide empirical evidence for year-end spending surges, and to analyse the effect of changing carry-over rules in Austria. The authors uncover the reasons behind spend-downs: uncertainty about carry-overs and their use, and the risk of losing unspent appropriations and efficiency savings seem to explain year-end spend-downs. The findings offer support for prior calls in the academic literature to take time and volume limitations into account when designing and implementing carry-over rules. The evidence presented here has important implications for policy-makers and managers.Using the case of Austria, this paper investigates year-end spend-downs in government, and one of the most common ‘remedies’—carry-overs. Unrestricted carry-overs are likely to jeopardize aggregate fiscal targets, and highly restrictive rules about carry-over can lead to a loss of trust between central government entities and the ministry of finance. Surprisingly, carry-over rules themselves have led to year-end spend-downs. The authors explain the criteria/limitations that policy-makers, treasury officials, and financial directors and managers in central government departments and agencies need to consider when designing and implementing carry-over rules.

Date: 2019
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DOI: 10.1080/09540962.2019.1583909

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