Some public tasks require a high level of financial and organisational engagement on the part of municipalities, and so in practice it may prove much more effective for them to carry these out in co-operation with other municipalities. This is especially evident in the case of small municipalities, for whom performing certain tasks on their own, such as pertaining to local public transport, may be not only more expensive but also less useful for the residents of a given municipality. One solution may be for several municipalities to form an inter-municipality association and charge the association with carrying out certain public tasks which are common to all the municipalities concerned.

Joining forces

An inter-municipality association is a specific form of legal person which performs tasks assigned to it on its own behalf and on its own responsibility, whereas the municipalities belonging to the association lose both the rights and the duties associated with the performance of those tasks. In theory, an inter-municipality association is therefore an instrument by which municipalities join forces in order to more effectively carry out their duties. Unfortunately, in practice this model has not proved itself in many cases, and the fault lies with the municipalities themselves. As results from a register kept by the minister competent for public administration matters, there was a relatively large number of municipality associations as at 30 September 2015 – as many as 215. In practice, however, many of these are only façades, and do not in fact carry out their statutory duties. Inspections of the financial management of inter-municipality associations conducted by the National Board of Regional Accounting Chambers in April 2007 showed that, of 247 inter-municipality associations registered in 2005, only 176 were active, while the remaining 71 did not conduct any activity. Such a state is highly undesirable. Theoretically, after municipalities hand over specific tasks to be conducted by an association, the municipalities themselves should not carry those tasks out. This relates to the principle that, as at the date on which the statute of an association is announced, the rights and obligations of the municipalities belonging to the association relating to the performance of the tasks assigned to the association are transferred to the association. The existence of an association which does not conduct any activity, but to which the municipalities belonging to it transferred certain public tasks, creates a state of uncertainty as to what entity is responsible for carrying out those tasks.

Mandatory elements of a statute

The Municipal Government Act regulates basic issues relating to the functioning of inter-municipality associations, but leaves municipalities a lot of freedom in establishing the content of an association’s statute. The mandatory elements of the statute of an inter-municipality association are: the name and registered office of the association, the participants and duration, tasks, bodies of the association, their structure, scope and mode of operation, the rules for using facilities and equipment of the association, the rules of sharing the costs of joint activity and profit, and of covering losses, the rules of members joining and leaving, and the rules of settling assets, liquidating the association and other rules determining co-operative activities.

LOCAL GOVERNMENT \ Provisions allow municipalities to perform public tasks jointly in the form of associations. In practice, many of these are only façades, and do not carry out their statutory duties. One of the most important elements of a statute is to set forth the tasks which the association is to perform. Unfortunately, in practice it happens that the tasks are described in the statute in a way which is too general, for example, by indicating certain areas of local government activities in a cursory way which makes it impossible to unambiguously state what specific task the association is supposed to perform. Even worse, as results from information on the results of an inspection of how inter-municipalities manage their property prepared by the Supreme Audit Office in January 2011, in the statutes of 12 out of 32 inter-municipality associations established in the years 2003-2009 there was no definition at all of what public tasks the association was to perform, while in 5 cases those tasks were defined only by some of the municipalities taking part in the association. In contrast, the inspection by the National Board of Regional Accounting Chambers in April 2007 showed that cases occur of tasks being entered in the statutes of associations which do not fall within the remit of the municipalities at all, and which therefore cannot be carried out by the association; there were also cases where the situation was reversed, and inter-municipality associations were carrying out tasks which had not been assigned to them. At the moment a statute is announced, the public tasks specified therein become the tasks of the association, while the municipalities involved lose those rights and obligations, which is why those tasks should be defined as precisely as possible.

Definition of financial rules

The joint performance of tasks relates directly to the issue of how they are to be financed. In handing over certain public tasks to an association, municipalities must at the same time cover the costs of implementing these. One of the necessary elements of an association’s statute, then, is a definition of the rules of sharing in the costs of the joint activities, in profits, and in covering losses. From the Supreme Audit Office report of January 2011 it results, however, that the statutes of many associations lack a definition of such a vital issue as the membership fees to be paid by the municipalities. As many as 85 per cent of the inter-municipality association statutes inspected contained no provisions whatsoever concerning the amounts or payment dates of contributions to be paid by the participating municipalities. Even where statutes did contain relevant provisions, the majority of municipalities made payments late, while the associations did not make use of the possibility of seeking payment of statutory interest on such untimely contribution payments. The absence of proper financing by municipalities makes it impossible for associations to carry out the tasks assigned to them, or forces them to borrow excessively. Neither of these situations is proper. The statute of an association should also define the rules under which the municipalities involved are to cover any losses incurred by the association, as well as the rules of sharing in any profits of the association. Where the content of an association’s statute is correctly formulated in respect of the rules of how it is to be financed, this makes it possible to avoid any doubts as to the financial obligations of the municipalities participating in the association so that the association can function efficiently.

Lack of books of account

In practice, other irregularities are also visible in the functioning of inter-municipality associations. From the report of the National Board of Regional Accounting Chambers of April 2007, it results that many associations do not keep books of account, or keep them in a manner which is not consistent with the provisions of the Accounting Act. They make serious lapses when drawing up budget reports, and disburse public funds without applying the provisions on public procurement or without concluding a written agreement with a contractor. Further, as noted by the Supreme Audit Office in its report of January 2011, it happens that associations disburse public funds in an illegal manner and exceed the statutory allowable debt threshold. It is evident that, while the structure of inter-municipality associations offers municipalities an excellent way of carrying out public tasks jointly, municipalities are not fully able to take advantage of this. Hastily forming associations which do not conduct any activity at all, the absence of many provisions in statutes, and insufficient financing of the activities of associations all point to municipalities’ improper utilisation of the structure of inter-municipality associations.