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

• Published in: Public money & management 2019-08, Vol.39 (6), p.393-400
• Main Authors: Korac, Sanja, Moser, Birgit, Rondo-Brovetto, Paolo, Saliterer, Iris
• Format: Article
• Language: English
• Subjects: Appropriations; Budgeting; Budgeting and accounting reform; Budgets; carry-overs; Central government; central level; Departments; Expenditures; Finance; Government agencies; Government spending; Mixed methods research; Policy making; Public administration; Public finance; Public policy; Savings; spend-downs; Uncertainty; wasteful year-end spending
• ISSN: 0954-0962; 1467-9302
• DOI: 10.1080/09540962.2019.1583909

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.