Financial takeover 101: unprecedented scrutiny of Catalan spending

Spain’s Treasury will require the Catalan authorities to report all spending and will create a whistleblowing "panic button" for Catalan government employees

The Spanish government has taken a definitive step in its takeover of Catalonia’s finances and will submit all Catalan government spending to scrutiny by the Spanish Treasury. Even though Spain’s Finance Minister Cristóbal Montoro denied that this is a full-blown takeover, the control to which the Generalitat's finances will be submitted will be so strict that, even though there are no "men in black" in Catalonia’s Economic Ministry at the moment, the accounts of the Generalitat will undergo a level of intervention never seen before in the history of Catalan self-rule.

Monitoring every expenditure

The principal novelty of this takeover is the obligation imposed on the Comptroller General of the Generalitat's accounts  --a figure that reports to the Catalan government-- to report on any and all of the administration's spending on a monthly basis. Up until now, the Spanish government only monitored the expenses paid through the Regional Liquidity Fund (FLA in Spanish), requiring that invoices be submitted in exchange for cash. From now on, this oversight will be extended to all of the Catalan administration's expenditures, including payments made with Catalonia’s own taxes or extraordinary income, such as the sale of assets, which so far had gone unmonitored by Spain’s Treasury.

If the Comptroller fails to comply with these requirements, he could be held personally accountable, according to Spanish Treasury sources, who noted that he is also subject to Spain’s transparency laws.

"Panic button" for government employees

The Spanish government will also give "protection" to civil servants in the Catalan administration who believe that these measures are being breached. The Treasury will add a "panic button" to its webpage for civil servants, large companies, or senior office holders in the regional government to blow the whistle. The complaints will not be forwarded to the Generalitat, but straight to the central government, which will be able to decide how to act accordingly.

Online connection with the Spanish government

The Generalitat will also be required to set up an online connection with the Spanish government via an entry point for electronic invoices. According to Minister Montoro, this will allow for greater "traceability" of spending --in other words, the central government will be able to see what every euro from the Generalitat is being used for, and act accordingly if it believes that the use of the money does not comply with the law.

Oversight of borrowing operations

The Spanish Treasury will also increase its control over the Catalan government's borrowing operations. Although nowadays the Generalitat has no access to credit, as its debt is rated as junk bonds, should the government want to issue debt, it would have to be individually approved by the Spanish Treasury, which could request to know the use to which this money will be put to and veto it, if appropriate.