Italy's Senate Approves Court of Accounts Reform: Key Changes & Debates

The Italian Senate has definitively approved the reform of the Court of Accounts, a move championed by Tommaso Foti (FdI). The bill garnered 93 votes in favor, 51 against, and 5 abstentions, solidifying the text previously endorsed by the Chamber. This reform, once published in the Official Gazette, will officially come into effect.

Government's Stance vs. Critics

The government presents this measure as a tool to unlock public administration, while opposition parties and accounting magistrates decry a weakening of controls on public funds.

Here's a breakdown of the key changes, along with the declared advantages and criticisms.

Core of the Reform: Financial Liability

At the heart of the reform is the responsibility for financial damage. The financial shield, introduced during the 2020 pandemic and extended until 2025, is now structural. In cases of damage without malice or illicit enrichment, the Court of Accounts can condemn the responsible party to a maximum compensation equal to 30% of the assessed damage, within two annual gross salary payments. Malicious conduct or conduct characterized by gross negligence remains fully punishable.

Defining Gross Negligence

Gross negligence is defined only in the presence of a manifest violation of the rules, misrepresentation of the facts, or incontestably erroneous statements; acts committed with gross negligence are no longer included. In the most serious cases, the accounting judge can suspend the management of public resources for six months up to three years, and those who assume positions with the management of public funds must stipulate a specific insurance policy. For mayors and councilors, liability is limited by the presumption of good faith, unless proven otherwise.

Application to Pending Proceedings

The new rules also apply to proceedings pending on the date the law enters into force, not yet defined with a final judgment. Pecuniary sanctions are foreseen for delays exceeding 10% compared to the times established for procedures related to the Pnrr-Pnc. The government argues that this system will allow for a more effective recovery of damages compared to the current one, which is around 10%.

The government sustains that the new system would allow a more effective damage recovery than the existing one.

Changes to Preventive Controls

The reform also modifies the preventive controls on the acts of public administration. Administrators can choose whether to request an opinion from the control section, submit the act to preventive control, or proceed directly to the adoption of the act. The Court of Accounts will have 30 days to express itself, extendable up to 90 days for Pnrr acts or above the EU threshold; after the deadline without a response, tacit consent is triggered and the act is considered legitimate, exempting the administrator from liability.

Administrations will be able to request opinions on legal issues related to the Pnrr of an amount exceeding one million euros: once the opinion has been received, gross negligence can no longer be challenged. This measure, designed to reduce the “fear of signing,” however, risks increasing the workload of the Court, according to accounting magistrates.

Future Implementation via Legislative Decrees

The second part of the reform will be implemented through legislative decrees within 12 months, based on the delegation of Parliament. The merger of the central and regional sections and a redefinition of the functions of the magistrates are foreseen, who will have to deal with control, jurisdiction, and advisory activities. The separation between prosecuting and judging magistrates and the strengthening of the powers of the general prosecutor, also towards the regional prosecutors, is foreseen. The goal is to increase the efficiency of the Court and clarify the discipline of legal expense reimbursements in administrative liability judgments.

Government and Majority Perspectives

For the government and the majority, the reform serves to unlock administrative action. Pierantonio Zanettin (FI) explained that the Court of Accounts, in its current configuration, is perceived as a brake on development. Tommaso Foti speaks of a political turning point to accelerate and make decision-making processes safer. Undersecretary Alfredo Mantovano rejected the accusations of a punitive measure towards the accounting magistrates after the events of the Bridge over the Strait, recalling that the process has lasted for about two years and that there is no coverage for fraud or intentional crimes.

Opposition's Strong Reactions

The opposition parties and the Association of Magistrates of the Court of Accounts reacted harshly. Pd, M5S, and Avs consider the reform a weakening of controls on public spending, with excessive protection for administrators and politicians. Giuseppe Conte has called it a step towards a “Republic of Impunity,” while Francesco Boccia speaks of possible preventive safe conducts. The accounting magistrates denounce a “dark page for citizens,” emphasizing that the cap on compensation could reduce the recovery of financial damages, shifting part of the cost to public finances.

Impact on Administrative Decisions

The reform of the Court of Accounts marks a significant change in the relationship between controls and administrative decisions. For the government, it is a response to bureaucracy and delays, for critics, a step back in the protection of public resources. The concrete application of the new rules will determine whether the balance between efficiency and legality will stand the test of facts.

Key Aspects of the Reform

The reform introduces significant changes to the Court's operations.

Financial Implications

The financial implications are a key point of contention.

Timeline and Implementation

The reform's implementation will unfold over the coming months.

Positions

Potential effects of the Reform on Court of Accounts

Potential Effects on Public Administration