Budget for decentralisation of exceptional medical expenses assistance
Audit of the calculation
At the request of the State Secretary for Health, Welfare and Sport (VWS) and of the Association of Netherlands Municipalities (VNG), the Netherlands Court of Audit has audited the calculation of the budget that central government will transfer to the Municipalities Fund for the decentralisation of assistance with exceptional medical expenses insurance schemes (AWBZ). We investigated whether the ministry had calculated the budget in accordance with the administrative agreements made with the VNG, whether there was sufficient assurance on the reliability of the source material and whether the assumptions were adequately substantiated.
We concluded that the Ministry of VWS had calculated the budget largely in accordance with the agreements made with the VNG. It was clear where the ministry had departed from the agreements and why. In our opinion, one of the agreements – on volume growth – was not clear and we could not state whether the state secretary had used the right percentage for volume growth. The data and assumptions the ministry had used in the calculation were not always adequately substantiated and there were substantial uncertainties. The ministry had assumed that 32% of personal budgetholders would stop using publicly-funded care if they were no longer entitled to a personal budget (the personal budget measure). We found that the assumed decline in demand was based on assumptions for which the underlying studies could not offer sufficient assurance. The ministry also used figures on the annual inflow and the number of re-assessments for assistance. The significant fluctuations in these figures will have consequences for the 2013 budget.
The findings presented in our report relate chiefly to the substantiation of the figures used by the Ministry of VWS and the plausibility of the assumptions. The uncertainties we found work in both directions: the cost of assistance in 2013 and 2014 may be either higher or lower than the amount calculated by the Ministry of VWS. We cannot eliminate these uncertainties because, in so far as we could determine, better data are not available. It is up to the State Secretary of VWS and the VNG to decide whether our findings are cause to adjust the amount to be transferred.
Response of the State Secretary for VWS
The state secretary stressed that everything had been done to make sure the calculation method was consistent with the administrative agreements: the most reliable data sources had been used and the assumptions had been substantiated in so far as possible.
The state secretary wrote that owing to the fall of the government the status of the Bill was currently uncertain and it was not known whether decentralisation would still take place on 1 January 2013. The consequences of the Spring Agreement were also uncertain. Despite these uncertainties, the state secretary found our report relevant and useful. It offered her pointers for follow-up actions and further administrative consultation with municipalities and for reporting to the House of Representatives.
Response of the VNG
In its response, the VNG considered a number of the report's findings point by point. It commented, for example, on the assumed decline in demand owing to the personal budget measure. In its opinion, multiyear monitoring of the impact of the personal budget measure in the Social Support Act is necessary to prevent municipalities being plunged into uncertainty.
The VNG agreed with our observation that implementing the agreements on volume growth would be hard to follow. It thought the assistance would very probably grow faster than the AWBZ average.
Finally, the VNG considered the calculation of the budget for 2013. It thought the ministry had made changes at the last moment that were not in accordance with the administrative agreements. Furthermore, the VNG did not think the calculation of the 2013 budget was very transparent.
Court of Audit's afterword
Both the state secretary and the VNG responded to the assumed effects of the personal budget measure. Their reasoning, however, cannot be backed up by the audit and we accordingly cannot express an opinion on it.
Both the state secretary and the VNG commented on the administrative agreement on the growth in the volume of care in kind. We cannot express an opinion on how this agreement was reached. We would also note that the growth fluctuates and there are no specific estimates of the assistance required.
The VNG commented that, contrary to the agreements on the calculation method, the ministry had changed the calculation of the budget for 2013 at the last moment. We would note that the calculation method does not provide a definite answer to how the budget for 2013 should be calculated. It is up to the state secretary and the VNG to decide how the calculation should be made.
The report was submitted to the House of Representatives on 31 May 2012.
Owing to the fall of the government, it is uncertain whether the decentralisation will go ahead and, if so, when. The House of Representatives has stayed the Bill and it has been agreed in the Spring Agreement that decentralisation will not take place in 2013. Despite these developments, we have published our audit findings so that the state secretary, the VNG and the House of Representatives can use our conclusions if decentralisation goes ahead at a later date.