Author(s)

Oriana Vinciguerra¹, Vincenzo Golini², Luigi Di Lorenzo³

¹HR, Piedimonte Matese, Italy.
²ASL Caserta, Piedimonte Matese, Italy.
³Ao San Pio BN, Benevento, Italy.

When a group of elected administrators is given the responsibility to hold, use or dispose of resources not belonging to him, they must be held fully answerable to the owner (Municipality, Region, etc.) of the resources for what he does with them. This, in essence, is the obvious principle of financial accountability. The local Administrators of a Municipality have the power to manage and use large sums of public funds collected in the form of taxes, fees and other receipts. In a democracy like Italy, this power is given to each local Government, Province, Region or Municipality elected by the citizens. The Local Administration is thus accountable to the citizens for the manner in which the public funds are managed and used. This paper tries to explain what to our knowledge none have done: synthesize and describe old and recent rules, the concept of public accountability and how a Public local institution in Italy can arrive at a financial default, how and which public bodies are held answerable to Ministry of the Interior and Court of Auditors for the management and use of the public fund and moreover for part of those ones having a violated destination. Materials and Method: in the drafting of ours, after an exhaustive narrative review of the history and evolution of the regulations regarding the financial distress of local authorities in Italy from 1998 to the present day, we critically but briefly analyze the salient points of the management of the criticality of the services financial statements of Italian municipalities in trouble. Subsequently, we report the guidelines of the Italian Ministry of the Interior, local authorities section, which masterfully describes regulations and responsibilities. Starting from this decisive and authoritative opinion, we then report an exhaustive 2019 opinion issued by the Court of Auditors of the Campania Region to the former Mayor of the Municipality of Piedimonte Matese, a city in Southern Italy and seat of the authors of the work, who voted for the financial distress chosen in January 2019. Subsequently, we report the 2021 Guidelines approved by the local liquidation commission of the institution. Discussion: Since the 2000s there have been so many reforms, some under the pressure of increasingly widespread Federalism and others that paradoxically have had the result of limiting the freedom of municipalities tightened between increasingly stringent constraints than even in some municipalities in the balance. They also made impossible a hypothetical attempt at multi-year realignment through a programmable prudent financial management. With the historical rules and recent changes referred to and in particular with Article 36 of Legislative Decree n.50/2017 (converted into law n.96/2017) things change drastically since the Extraordinary Liquidation Commission (CSL), as amended by Article 255 of the TUEL, is also assigned tasks of managing the amounts for restricted use. To this responsibility is added the obligation for CSL to manage them separately from the unconstrained mass with the right to settle and settle in full. This change is substantial and falls not so much in the action of determining the passive mass but rather in the action of raising funds. Conclusions: Once the regulatory description is finished, it is clear to the reader that in Italy, once the Distress Resolution and the appointment of the CSL members have been approved, this appointment of the CSL actually determines the start of the procedure. The management of the Entity is thus split in two dividing it between the CSL which is responsible for the level of the previous debt and the institutional bodies of the Municipality which remain the task of eliminating the previous management criticality and ensuring stable conditions of equilibrium without having to worry anymore debt management. Past debts will thus be managed by CSL through a laborious procedure that will lead to a new balance sheet and cash balance with some decisive advantages such as the temporary inability to undergo foreclosures or seizures for enforcement procedures as well as the suspension of interest on all debts.

Public Default, Municipality Bankruptcy, Public Management

Vinciguerra, O. , Golini, V. and Lorenzo, L. (2022) Management of Tied up Revenues and Funds after Bankruptcy of a Municipality: Old and Recent Rules and Guidelines in Italy. Open Journal of Business and Management, 10, 1853-1866. doi: 10.4236/ojbm.2022.104095.