Ordinance on the Financial Supervision of Municipalities (FiAV) - Scope, Subject Matter, Purpose (FIAV)

1. This ordinance applies to the municipalities and correspondingly to the civic communities, regions, municipal associations, and other entities responsible for outsourced municipal tasks, provided that they are not subject to other specific supervisory regulations.

2. It specifies the rights and obligations of the municipalities and correspondingly of the other bodies referred to in paragraph 1, as well as of the Office for Municipalities (Office) as the supervisory authority, particularly in the context of financial supervision.

3. The activities of the Office are intended to contribute to ensuring that the municipalities and the other bodies referred to in paragraph 1 can identify potential adverse developments in their financial management at an early stage. A sound financial situation should be secured with appropriate measures and, if necessary, restored as quickly as possible.

1. Municipalities shall ensure the maintenance of an orderly financial budget.

2. Municipalities are obligated to cooperate in supervision. In particular, they shall provide the authority with the documents required for the exercise of financial supervision and furnish the necessary information for this purpose.

3. The municipal audit committee or its external audit body shall examine whether the recognized financial budgeting principles are adhered to and whether the accounting is conducted in accordance with the relevant standards.

1. The office executes, on behalf of the department, the financial supervision of the municipalities in accordance with Article 81 et seq. of the Municipal Act. It advises the municipalities on fundamental issues of budget management and auditing. It may provide guidelines and similar aids to the municipalities and may visit the municipalities at any time for control purposes.

2. The government is to be regularly informed in an appropriate manner about the supervisory activities and their results.

1. The Office shall maintain a municipal financial statistics and regularly publish the results in an appropriate manner.

2. The Office may evaluate and publish additional relevant data in compliance with data protection and personality rights regulations.

1. The Office exercises further cantonal supervision over the municipalities, insofar as special provisions do not assign this task to other cantonal authorities. It advises the municipalities on general administrative matters and participates in training and continuing education as well as in municipal mergers.

2. All cantonal authorities that perform supervisory functions shall inform each other about significant incidents, insofar as another cantonal authority is affected by the matter.

3. The employees of the Office may not belong to the audit commission or the audit office, nor to the board of a municipality. The Department decides, depending on the involvement of the employee, on the possibility of membership in other authorities or commissions of a municipality.

1. The office examines whether the provisions of the Municipal Act, the Financial Budget Act, and the Financial Budget Ordinance for municipalities are being complied with.

2. The examination is generally conducted in a summary manner. In this process, the formal and substantive audit procedures as well as the audit results of the business audit commission or the external audit body may be included in the assessment.

1. The Office monitors the submission of annual accounts and audit reports with respect to timeliness and completeness.

1. The results of the evaluation of the annual financial statement are recorded in a confidential financial oversight report for each municipality.

2. The financial oversight report is presented and explained to the board and the audit committee upon request. It is delivered ex officio if there is a need for supervisory intervention in accordance with Article 82 of the Municipal Act or if other significant financial and budgetary deficiencies are identified.

3. If ambiguities, discrepancies, or similar issues arise during the evaluation of the annual financial statement, the office may conduct additional inquiries with the municipality and request supplementary documents, particularly additional reports from the audit committee or the external audit institution.

1. The Office conducts a non-public financial status assessment when

a) it is evident or suspected that the conditions as per Article 82, paragraph 1 of the Municipal Act occur and the issues cannot be resolved otherwise;

b) additional circumstances exist that evidently or presumably lead to a financial imbalance in the municipality.

2. The financial status assessment includes statements on whether and to what extent the conditions pursuant to Article 82 of the Municipal Act are met, and what measures the municipality intends to take to restore financial balance.

3. The municipality's action plan includes, in particular, binding deadlines and measures to ensure budgetary balance while adhering to the principles of budget management and accounting.

4. The Office may obtain further relevant information from cantonal offices.

1. If a relative net debt of 5000 francs per inhabitant is exceeded, the government may subject a municipality to an intervention level based on a financial situation assessment in accordance with Article 83 of the Municipal Law. The value, if not consistent with generally accepted valuation principles, is adjusted and related to the resource potential according to the most recent available fiscal equalization calculation and adjusted upwards or downwards accordingly to the resource index.

2. The prerequisite for a possible measure under paragraph 1 is also fulfilled if

a) the critical value would be reached within a year when extrapolating the growth rate of the past two years;

b) planned expenditures or forfeitures of income lead to an increase in net debt to the critical value.

3. On the basis of its assessment, the office informs a vulnerable municipality of its obligation pursuant to Article 82 paragraph 2 of the Municipal Law.

1. If a balance sheet deficit is reported, the government may subject a municipality to an intervention level based on a financial situation assessment in accordance with Article 83 of the Municipal Act. The value is adjusted if it does not comply with generally accepted valuation principles.

2. The condition for a possible measure according to paragraph 1 is also met if, based on the extrapolation of the trends over the last two years, a balance sheet deficit is likely to be reported within a year.

1. Should the principles of budgetary management and accounting be significantly disregarded, the government may subject a municipality to an intervention stage pursuant to an assessment of the financial situation as described in Article 83 of the Municipal Act.

2. The principles of budgetary management and accounting are significantly disregarded when they are obviously and grossly ignored or insufficiently observed.

1. Within the scope of the first stage of intervention, the office advises the municipality particularly on budget management and accounting, as well as on investment decisions.

2. By order of the government, the office may be entrusted with the audit and may intensify supervision over the activities of the executive board and the audit committee.

1. Within the framework of the second stage of intervention, the municipality must submit a budget with a balanced profit and loss account as well as an investment and financial planning limited to the necessary to the office for approval. The office may order measures and issue instructions that facilitate the objective of budgetary consolidation.

2. Resolutions of greater financial significance are those that result in non-budgeted expenses of more than 10,000 Swiss Francs. They must be approved by the office.

3. Furthermore, resolutions include all measures and legal acts that are associated with corresponding expenditures, such as the enactment and amendment of municipal laws and regulations, contract conclusions, joining associations and organizations with permanent cost participation, or outsourcing of municipal tasks.

4. If the instructions are not followed or the measures ordered have no or insufficient effect, the government may order substitute measures. In particular, it may establish tax rates and fee tariffs.

1. If the measures taken within the scope of the second intervention stage do not succeed or if the orders of the government are not followed, the affected municipality will be placed under guardianship.

2. Article 85 of the Municipal Code shall apply mutatis mutandis.

1. The government decides, based on the report of the office, to terminate or amend the intervention.