A majority of the central government’s non-profit special funds grew in size and spending last year, despite the Executive Yuan’s pledge to trim unnecessary spending, according to the National Audit Office’s report on government spending and the budget.
According to the Budget Act (預算法), the central government may establish four types of non-profit special funds to implement policy goals: debt service funds, operating funds, special revenue funds and capital project funds, which public watchdogs had panned for organizational inefficiency and wasteful spending.
In January last year, the Executive Yuan amended its guidelines on the funds in an effort to cut spending, and the Directorate-General of Budget, Account and Statistics in August last year named 17 funds to be cut or amalgamated.
However, most of the funds continued to grow, the report said, adding that the liquidity kept by the funds “impeded the allocation and utilization of funds held by the Treasury.”
From fiscal year 2011 to fiscal year 2015, a total of 105 budget proposals were submitted for the funds, while the number of affiliate organizations receiving the funds increased from 98 to 109, the office said.
In the same period, the total expenditure on non-profit special funds increased from NT$4.01 trillion to NT$6 trillion (US$126.8 billion to US$189.8 billion), the office added.
The funds are hoarding “vast sums of idle capital,” the office said, citing as examples an Aborigine job-creation fund and a National Palace Museum fund for the development of the arts.
By the end of fiscal year 2015, the job-creation fund had an accumulated surplus of about NT$1,48 billion and about NT$1,78 billion in cash and cash equivalents, while the arts fund had an accumulated surplus of about NT$360 million and NT$820 million in cash and cash equivalents, it said.
Since 2013, when the Executive Yuan approved a measure allowing the funds to keep their surpluses the job creation fund returned no money to the Treasury, while the arts fund returned NT$185 million, the office said.
The report attributed governmental inaction to the failure of the Executive Yuan to establish dissolution or amalgamation timetables for most of the funds, saying that many government departments and agencies overseeing the funds had dealt with the issue by holding discussions that failed to produce any plans.
The office called on the Executive Yuan to order the funds to hand over surpluses that are not needed for their overheads to save government resources.
In response, the Executive Yuan said it will direct its agencies and departments to comply with the office’s recommendations, and expedite the amalgamation or dissolution of the funds, adding that it would begin returning surplus funds if the measures are practicable.
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