The Court of Auditors detects salaries in kind outside the contract for managers of the public sector

The Court of Auditors has detected in its audit salaries in kind to directors of entities of the non-financial business public sector outside their contractspointing specifically to Enaire, SEPI, Tragsa and CDTI, and others not included in the payroll, as is the case of Navantia.

This is stated in its ‘Report on the inspection of the remuneration system and on the appointment or hiring of the governing bodies of the entities of the non-financial state business sector, financial year 2018’ collected by Europa Press.

In his inspection, the Court of Auditors summons these entities to reflect in the contracts of their directors the flexible or in-kind remuneration, their concepts and amounts, and to send this information to the Public Sector Management Personnel Registry. It also urges them to cut from these remunerations in kind the position supplement, if it exists, since this extra variable is conditional on the fulfillment of objectives.

In any case, it establishes that the directors’ payroll should be adjusted to the remuneration concepts stipulated in the contracts and these should be drawn up adapting the model approved by the Ministry of Finance and Public Administration to the particularities of each position, and collect for civil servants their seniority complement.

A) Yes, points out how Enaire pays its directors medical, life and accident insurance not stipulated in their contracts -to a manager the maximum complement of 40%-, as in Tragsa or CDTI, which also included a ‘meal check’ in their variable remuneration, exceeding the maximum remuneration for their managers.

Also in the Barcelona Free Zone Consortium, with remuneration in kind not contemplated in the contracts (car, life and accident insurance, health insurance, pension contributions and retirement plans) which, according to the Court, should in any case be deducted of the position complement and not of the variable, subject to meeting objectives.

Nor does the variable complement in the payroll of directors correspond to SEPI with the provisions for management contracts. But it is also that the Court points to remuneration in kind that is not related to the information communicated to the Managerial Personnel Registry or to the data declared to the Tax Agency.

Thus, in the payroll of the presidents -in the audited year there were two-, the vice president and nine directors appear the concept ‘exempt income’, which is deducted from the incentive of the directors or from the base salary in the case of senior positions.

The Court highlights that the pay slips do not detail the nature of these supplements –food stamps, health insurance or child study aidin different cases, and stresses that “the ultimate purpose of this remuneration modality is to reduce the tax base for work income subject to personal income tax”.

“Given the tax implications and for reasons of transparency, this remuneration should be reflected in detail in senior management contractsas well as in the information sent to the Public Manager Registry and deducted from the position complement, since the perception of the variable complement is subject to the fulfillment of objectives”, sentence.

From SEPI they explained to Europa Press that the amounts of the remuneration in kind of the directors of the entity “do not exceed in any case the total remuneration established in the contract” and that none of them receives, therefore, any additional amount to what is established in their contract.

Thus, they indicated that SEPI carries out a “rigorous control” of directors and senior officials who have species, in order that the sum of monetary perceptions and species does not exceed the maximum authorized annual remuneration.

“To date, the General Comptroller of the State Administration, in its annual audits of SEPI on remuneration issues, has never commented on it“, they underlined. In addition, they pointed out that the contracts are communicated to the State Attorney and all the remuneration of the managerial staff to the Registry of Managerial Personnel and reports the remuneration in kind (whether or not they are exempt from withholding).

From SEPI they pointed out that, according to the observation of the Court of Auditors, will facilitate the breakdown of the discounts of the species (exempt and non-exempt) in the payroll receiptwhich are currently reflected together in a single concept.

“There is no desire to reduce the tax base. The Personal Income Tax Law itself, in its article 42, expressly establishes that certain payments in kind to be received by the worker are exempt,” they said.

On the other hand, it is studying discounting this type of income from the position supplement instead of the variable “if that is understood in terms of greater transparency”, although they indicated that this “is not decisive since it does not exceed in any case the total authorized in contract”.

On the other hand, it also points out to Navantia, although not for remuneration in kind outside the contracts of its directors, but for not including them in the payroll, that together they showed a difference of 374,410 euros against the data declared before the Tax Agency.

Mainly, it points Tax-free travel and accommodation allowances, for which their accounting record appears as foreign service expenses, not personnel expenses. An “inappropriate” way of proceeding, in the opinion of the auditor, because the remuneration in kind must be reflected in the payroll as a remuneration concept.

The Court clarifies that it does not question the accounting record of locomotion, accommodation and maintenance expenses, but rather their inclusion in the Treasury model of withholdings for work income when they are not reflected in the payroll.

After its audit, the Court It also urges avoiding the payment of compensation derived from non-compliance with the period of notice stipulated in the contracts of its directors and senior officers.as well as accompanying the dismissals with a reason that justifies them.

And it is that during the dismissals of the heads of entities in 2018 – the year of the motion of censure that caused the departure of the Government of Mariano Rajoy and the arrival in Moncloa of Pedro Sánchez -, in general, the term of notice. This had a cost of at least 76,315 euros, in addition to the corresponding compensation.

Another aspect analyzed by the Court is the payment of compensation for attendance at meetings of the board of directorswhich in 2018 amounted to around 850,000 euros, of which 213,000 euros corresponded to senior officials, which were deposited in the Public Treasury, in accordance with the incompatibility provided by law.

On the other hand, the Court warns that attendance by representation accounted for 18% of all and that 80% of them were voting delegations in favor of the president, especially in CDTI, Cetarsa ​​and IDAE (100% of all), Tragsa (95%) and the Port Authority of Bilbao (90%).

In a SEPI meeting, the president came to represent seven directors, concentrating 50% of the votes, while in CDTI and Cetarsa ​​(Spanish Tobacco Company in Branch) she came to agree on the majority. In Enaire, the president managed to concentrate the voting delegation of two directors, despite the statutory limitation.

Multiple voting delegations in the presidency of the entities that increase the power of decision and that, on occasions, the Court warns, has been able to affect the good governance of the entities.