The Finance Ministry has sent out a circular to semi-government organisations, municipalities and other local authorities in Cyprus warning of possible financial risks they may be confronted with next year.
The Ministry also called on them to write down whatever they consider to be of financial risk so that this is assessed and included in the fiscal risk report to go along with the 2020 state budget.
For semi-government organisations fiscal risks stem from lower anticipated revenue, contingent liabilities, guarantees, loans, court orders and amendments in macroeconomic data.
For local authorities, financial risks stem from legal actions taken either by employees in the municipality or by third parties hired to execute various contracts. As well as by debtors and creditors.
In addition, risks arise from non-performing loans, delays in repayment, high inelastic costs, and reduced gross revenue from that anticipated.
The Finance Ministry underlines that risk assessment should be the basic element of every organisation’s management strategy. That is, to identify, monitor, and methodically and systematically tackle risk so as to minimise it.
The circular stresses that good management is synonymous with the prompt identification of risks which are confronted in a timely and effective way. And that every six months boards should inform the Finance Ministry of risks and measures taken to confront them.