Municipality declares financial emergency to contain deficit of R$5 million

The city's budget estimate for 2025 is R$132 million, which represents an average of R$11 million per month. However, according to the municipal administration, expenses have grown in the last three months without transfers keeping up with the same pace, generating a deficit in the accounts.

The decree was published on September 8th and is now in force. Among the measures adopted to contain expenses are the reduction of daily expenses for travel, courses and lectures, as well as restrictions on new hiring of servers, outsourced workers and consultancies.

"The decree is for this, to be able to contain these expenses and for us to be able to fulfill all our obligations. Some daily trips were cut for courses, lectures, hiring, both staff and outsourced, consultancy, and so, the decree is quite extensive, so I am only mentioning a few points", explained the Secretary of Finance and Planning, Larissa Marquete Barbosa.

According to the secretary, the municipality accumulates a debt of around R$5 million. She stated, however, that essential services should not be impacted by the containment measures.

"Today, talking about our own resources, we don't have health in cash, because what comes in we use to cover expenses. So, what we have in cash today are the linked resources. These resources that come, but they are destined for each activity. So, there is no way for us to use them for anything", he added.

"The decree has a commission, this commission will evaluate our goals, our actions, so that we can cut these expenses and achieve financial balance", explained the city hall's accountant, Cleidisson Xavier dos Santos.

"Analyzing the transparency portal, you see employees receiving a very high amount of overtime. Then you notice that there is a discrepancy. And this goes hand in hand with hiring third parties, outsourcing services, which in my opinion is also exaggerated", he stated.

"We are technicians, right? This issue of lack of planning, suddenly, can be a more political issue that we don't understand as much. But I believe that this happened not because of a lack of planning, but that within the planning we were unable to cover our expenses because they increased", he said.

For the accounting professor at UEMG de Passos, Sandra Antônia Franklin Brasileiro, the declaration of a financial emergency is an appropriate measure to rebalance public accounts, as long as the restrictions are effectively complied with.

"It helps with the issue of the municipality having a foot on the brake to control its expenses. The decree minimized it, there was a 10% reduction in personnel expenses. He created the management committee to have a more rigorous criteria in the expenses that the municipality is having. He also proposed renegotiating the contracts in force. This way, he manages to stabilize expenses and tax revenue", he assessed.