Managers Of State-Owned Companies Forced To Meet Regular Performance Criteria

Update 04.29.2011 By Bostan Radu

Romanian autonomous administrations and state companies will be required to inform the Finance Ministry about their financial indicators, monthly or quarterly, while managers will be fined or sacked if their companies fail to meet certain performance criteria.

These new rules were included in an emergency ordinance adopted by the Government on Friday.

According to the ordinance, the managers of autonomous administrations and state companies will be required to send the Finance Ministry regular reports, analyses or any other information on the economic-financial indicators provided by their budgets.

In their budget statements, the companies must include targets for the reduction of arrears, losses and subsidies, as well as follow the Government's wage policy.

The heads of ministries, central or local public administration bodies, and other public bodies must submit the draft budgets for the current year, as well as forecasts for the next two years, of the companies under their authority to the Government or local authorities for approval, together with appendixes comprising the economic indicators' quarterly distribution for the current year, the company's investments, organized according to financing source, its procurement program, arrear reduction plan, as well as the status of debts from loans due that year.

Failure to follow the arrear reduction program, exceeding the budgeted procurement plan and expenditure, as well as failure to transmit economic information to the Finance Ministry, will attract a fine between 5,000 and 10,000 lei (EUR1200-2500).

"The current economic context shows the effects of the crisis have not yet gone and it is necessary to continue combative action, requiring stricter economic-financial discipline. The Government has set certain budgetary constraints, such as reducing arrears until their elimination, reducing subsidies, limiting salary raises to 3.2% for profitable economic agents," says the document.

Prime Minister Emil Boc said the ordinance will improve financial discipline in autonomous administrations and state companies. Each company will have its own restructuring plan and performance criteria for its management.

Earlier, people close to the matter told MEDIAFAX that the Government has decided to restrict the purchase of cars and furniture by autonomous administrations and state companies, as well as public institutions. Boc asked the Cabinet to present a list of goods managed by each public body, in order to avoid useless purchases.

President Traian Basescu said Wednesday, on the public TV station, that reforms must be extended to the large autonomous administrations, which must become more competitive, given that they control 25-30% of the economy.

He added that restructuring these administrations is a priority of the program agreed upon with the International Monetary Fund, with a deadline for September.

Keywords:: GOVERNMENT; , COMPANIES; ,