Off-budget operations in Czech cities: Extent and transparency

Abstract

Entrepreneurial activities of municipalities, according to Czech budget rules for local budgets, are not a part of their budget. Their extent is significant as 53% of rental revenues, 28% of revenues from the sale of immovable property, and 14% of repair and maintenance costs were recorded off-budget in 2020. The purpose of this paper is to explore regulations related to municipal off-budget operations and the actual practice using a sample of the 27 Czech statutory cities. It finds that only ten cities reported some of their activities off-budget and that another four abolished this praxis in the last decade. The current praxis is caused by insufficient complementarity of valid regulation and it is not in line with the budget principles of comprehensiveness and universality.