Revolving funds

The main question in this exploratory audit was ‘What does the landscape of central government’s revolving funds look like and how is the public money placed in the funds managed and accounted for?’. As the oversight of revolving funds, also known as revolving instruments, has not been centralised, we first determined how many revolving funds there were at central government level and how much public money had been placed in them. We then asked what consequences the specific characteristics of revolving funds had for the management of public funds and their accountability.

Bestuurlijke boodschap

Billions placed in revolving funds but little accountability

The Dutch government is increasingly using revolving funds to achieve social goals, for example to encourage domestic energy savings and promote trade with developing countries. The Netherlands Court of Audit has found that €3.6 billion has already been placed in revolving funds. But some matters have not kept pace with this means of financing. A specific minister, for example, is not responsible for oversight, the revolving funds are not subject to specific regulations and the House of Representatives receives only limited information about how much money is involved, how long the government will continue to use the funds and the results they achieve.



On the basis of our findings and conclusion, we make the following four recommendations:

  1. Designate a minister to be responsible and accountable for the structure and regulation of revolving funds and for the provision of information on them. The most obvious ministers for this would be the Minister of Finance or the Minister of the Interior and Kingdom Relations.
  2. Consider the benefits of establishing a separate legal framework for revolving funds that takes account of their specific characteristics. The five year horizon of the grant framework, for example, is too short for the long investment horizon of revolving funds. A separate legal framework with clear agreements, for example, could generate added value when deciding on the funds’ required rate of replenishment. It is currently difficult to compare the funds with each other because several methods are used to determine the rate of replenishment. Improved comparability would make it easier to determine the revolving funds’ effectiveness at achieving their social goals. Concrete goals and improved insight regarding the rate of replenishment in combination with a better understanding of the funds’ effectiveness would be a good step towards integrated reporting.
  3. Improve central insight into the number, nature and size of central government’s revolving funds and into how parliament can be informed about them by means of budget and accountability documents, similar to the government-wide grant statements.
  4. Reach agreement with parliament on the information it needs in budget documents to exercise its budgetary rights appropriately.

Why did we audit revolving funds?

The government is making greater use of revolving funds and placing significant amounts of public money in them but there is uncertainty about their size and effectiveness. To improve understanding of the use of public funds, we present an overview of the diversity of revolving funds. It is the first such overview to have been produced at central government level.

Methoden en normen

What methods did we use to audit revolving funds?

Remarkably few professional studies have been made of central government revolving funds. Our desk research consisted of analyses of literature, laws, policy documents, budgets and annual reports. We also carried out a trend analysis of the questions asked in the House of Representatives about revolving funds. The document analysis was supplemented with in-depth interviews, a limited case study of the management of and accountability for five revolving funds and four brainstorming sessions with experts from several ministries.

Hier zijn we

Current status

The Minister of Finance responded to our audit on behalf of the six ministers concerned: the Minister of Foreign Trade and Development Cooperation, the Minister of the Interior and Kingdom Relations, the Minister of Defence, the Minister of Agriculture, Nature and Food Quality, and the Minister of Education, Culture and Science. His response is presented in full in our audit report.