Between two three-to-four-day detailed political debates on general principles in the Bundestag, the
parliamentary committees examine more specific aspects of the budget (specialised committees,
decision-making process in the Budget Committee, rapporteur meetings). Here, too, the detailed
estimates result in all individual items being subjected to a further critical examination. By contrast, the
financial plan is only passed on to the legislative bodies for information purposes.
The principles of economic efficiency and thrift are observed during both the preparation and the
execution of the budget (section 7 of the Federal Budget Code).
Budget execution
The execution of the budget is the exclusive responsibility of the ministries: every minister is responsible
to Parliament for the proper management of their budget. In the event of an unexpected and unavoidable
need, the Ministry of Finance with the participation of the Budget Committee may agree to over-budget
or unbudgeted expenditure. A budget freeze – the extend of which is decided by the Ministry of
Finance – can be imposed to restrict the power of disposal of the individual ministries.
Evaluation and control in the budget process
The efficiency of all expenditures is systematically examined during the process of drawing up the
budget. The individual ministries are obliged to file documents along with their budget submissions
justifying their financial needs. The Ministry of Finance then examines the objective necessity and
amount of the expenditure in its "shadow departments", each of which is specialised in the field of
activity of one of the ministries. There are no standardised procedures for efficiency monitoring apart
from this.
Effectiveness monitoring, i.e. observing the effect of government measures (outcome), begins in the
individual ministries. For the most part, the ministries also determine the consequences (cutting or
cancelling programmes or redistributing the funds) on their own responsibility. There is no central
agency that carries out studies according to standardised procedures. As already mentioned, however,
effectiveness criteria are comprehensively and systematically taken into account – and appropriate steps
taken when results are poor – in the context of the budget process and medium-term financial planning.
Furthermore, the appropriate processes in each case are used in the individual research sections, e.g.
- Evaluations are used predominantly in the field of programme expenditures that can be structured
and are at the ministries' disposal (e.g. employment promotion measures, the research field). - As a rule, projections are used in the field of statutory services (e.g. advance calculations on the
financial development of statutory pensions insurance). - Cost-benefit analyses are prescribed by law for all suitable measures of major financial
importance (section 7 of the Federal Budget Code) and are mainly conducted in the preparation of
investment decisions. These analyses are constantly being updated. - Subsidy reporting is an additional instrument for regularly reviewing financial aids and tax
privileges. Every two years the Federal Government submits a report to Parliament on the
development, types and amounts of subsidies. This report forms the basis for policy on subsidies;
its main focus is directed towards subsidy cuts. - A subsequent efficiency control is carried out by the Federal Audit Office in its function of
monitoring the Federation's budgetary activities. Among other things the Federal Audit Office
publishes annual reports on areas where efficiency improvements are possible. As the "agency
responsible for operational efficiency in the administration," it also gives advice before projects
and measures are launched.