Off-budget fund (Germany)

An off-budget fund (German: Sondervermögen) in Germany refers to a government fund that is legally separate from the core federal or state budget (Haushalt). These funds are typically established to achieve specific policy goals, often related to infrastructure projects, economic development, or social programs.

Sondervermögen are typically financed through a variety of sources, including government appropriations, loans, revenues generated by the fund itself, and contributions from third parties. Although they are not directly included in the main government budget, they are still subject to parliamentary oversight and auditing. The creation of an Sondervermögen usually requires a specific law or regulation.

The rationale for establishing off-budget funds often revolves around the desire for greater flexibility in managing resources, circumventing budgetary constraints imposed by balanced budget rules, or isolating funds dedicated to long-term projects from annual budget cycles. They can also be created to manage specific risks or liabilities.

While Sondervermögen can offer advantages in terms of efficiency and targeted resource allocation, they have also been subject to criticism. Concerns include a lack of transparency, reduced parliamentary control over government spending, and potential for misuse of funds. The sheer number and diverse nature of Sondervermögen can also complicate the overall picture of government finances. German courts, particularly the Federal Constitutional Court (Bundesverfassungsgericht), have established certain limitations on their creation and use to safeguard budgetary sovereignty and parliamentary control.