Introduction

In the last decade the Spanish municipalities have faced huge budget deficits derived from the difficulty of controlling expenses in services such as health, education or dependency, etc. At the same time, they have found funding problems to make some of the social benefits entrusted to them sustainable. After the economic crisis and the great fiscal adjustments that Spanish municipalities have had to carry out, the prior to-crisis level of provision of essential public services, has been questioned.

In this sense, it has been demonstrated that the problems of budgetary stability, the financial sufficiency of the municipalities and the sustainability of welfare are closely interrelated. Following authors such as ^{Albi and Onrubia, 2016}, we defend the need to design a budgetary management control system oriented towards the results of the budget account of the organizations both internally and externally. In addition, in order to achieve a more efficient management of public spending, it is necessary to put in place an organizational-institutional model in accordance with the management requirements imposed by a new international economic scenario, in which public policies are due to coexist with the strong demands of resources and processes of fiscal consolidation with strong restrictions. Responsible Public Management is linked to two concepts: on the one hand, the Social Responsibility (SR) associated with business management and, on the other, the Good Governance of the Public Administrations, as a commitment to human, labor and environmental rights and with the search for a more transparent public management.

With regards to the source of information used, in order to attain this objective, we have used a database with the budget accounts of the approximately 9,500 municipalities and local Spanish entities that have been audited by the Spanish Court of Auditors, the body in charge of overseeing the economic-financial management of the public sector.

The study discloses how the size of the municipalities, the different forms of financing, the volume and type of expenditure, as well as the net variation of financial liabilities (increase or decrease of debt of a financial nature), have an effect on the budgetary result (Deficit, Balance or Surplus). At the same time, the results show that there is a direct relationship between expenditure policies, financing methods and the situation of surplus or deficit presented by Spanish municipalities.

The main findings are outlined in three conclusions:

I. that municipalities with budget deficits prioritize the reduction of their debt with financial institutions while delaying payment to suppliers;

II. that the relationships between the income and expenditure policies of each municipality have a direct impact on their level of CSR; and that, by means of a logit probability model, the hypothesis is confirmed according to which the CSR of the municipalities can be explained based on the size of their population and the way in which they are financed.

The normative principles for a responsible public management in Spanish municipalities based on their budgets

In the last two decades, there have been important changes in the way of managing and administering public bodies that have led to various research works such as; Hughes; (1997); cit. ^{Fernández Santos et al. (2008)}, ^{Subirats Humet (2003)}, ^{Pollitt, (2006)}, ^{Lonti and Gregory, (2007)}, ^{Portillo, M. J. (2009)}, ^{Hildebrand and McDavid, (2011)}.

At the same time, a great interest has arisen in the elaboration of ethical and conduct codes for civil service employees and managers that has generated a new culture of the public sector. This institutional culture and the new control systems have also played a role in Spain and have developed in parallel to the citizen’s concern of corruption in public life and the struggle to combat it. In 2005, the Good Government Code of the State General Administration was approved in Spain and, in 2009, the Spanish Federation of Municipalities and Provinces (FEMP) approved its own Code of Good Governance, proposing to the municipalities the adoption of the following two types of measures:

In Spain, many municipalities have developed the recommendations of the FEMP, through citizen participation standards, good practice manuals, codes of conduct for their employees, and service letters, etc. These recommendations for responsible management of public services are included in the Report of the Subcommittee of the Congress as follows: “The State and Autonomous Communities Administration, the, Public Enterprises and Local Administration must be exemplary in the integration of the principles and practices of the RS in their own operation”. They must integrate the principles of CSR both in their own activities and direct responsibilities and in their interactions with third parties, demanding a minimum level of SR to the companies with which they collaborate or contract. In reference to all those administrations that play a central role in health services, education, safety, environmental quality, social cohesion or the promotion of good business practices, etc. and to which corresponds the challenge of launching processes to create public value in more dynamic and demanding social and economic environments.

As pointed out by ^{Melle Hernández, M. (2007)}, the traditional principles of action of the administration (transparency, budgetary discipline, independence, accountability and impartiality) should be joined by the concept of SR, in order to be able to consider a true Responsible Public Management (GPR). This author points out the following general principles of responsible management in Public Administrations:

In this context, the municipalities and Spanish local entities, in their relations with companies and with third parties, should define public policies with incentives for those companies that allocate resources to social benefits. In such a way that public spending (sustainable public procurement) can be linked to the behavior of socially responsible companies. At the same time, local administrations can also promote socially responsible investment (SRI) with SR incentives in financial markets. We refer, therefore, to the intrinsic values of Social Responsibility in the Public Sector and by extension to those that must be incorporated by the municipalities through their spending policies, control of the deficit and form of financing/funding. As ^{Longo, F. (2012)} points out, the creation of public value through changes in strategies that incorporate values of economic rationality, social responsibility, efficiency and control of public spending is essential.

Brief review of the Spanish regulatory framework

In Spain, the commitment to SR in Public Administrations is evident in the different laws enacted in the last decade and oriented in the following three directions:

Regarding information, it must be public (Law 19/2013, of December 9, on transparency, access to public information and good governance); to help restore trust in institutions with a double scope: on the one hand, increase and reinforce transparency of public activity through obligations of active disclosure for all public administrations and entities; and on the other, recognize and guarantee access to information; specifically its art. 8: “Economic, budgetary and statistical information” lists the different items that must be published, and the consequences in case of non-compliance.

Regarding the control of commercial debt, Organic Law 9/2013, of December 20, on Control of Commercial Debt in the Public Sector establishes the obligation for Public Administrations to make disclose their average payment period (PMP) to suppliers, generating a monitoring tool for commercial debt and the obligation for the Administrations to include details on payment to suppliers in their treasury plans.

In addition to the regulatory framework described, the Ministry of Employment and Social Security has published “The Spanish Social Responsibility Strategy 2014-2020 for companies, public administrations and other organizations to move towards a more competitive, productive, sustainable, integrative and productive society and economy”. This Strategy defines the vision, principles, objectives, action lines and planned measures in the field of SR and its integration in education, training and research. However, in the case of Spanish municipalities, information on performance indicators and budget management is still very scarce and insufficient to test the efficiency of spending and compare the level of services provided with its form of financing (Tax Rate / Transfer Rate).

Aims of the research and description of the empirical study

We aim to analyze the most relevant relationships between budget stability (showing its deficit or surplus) and the municipal financing system (Tax Rate / Transfer Rate). In accordance with the principle of budgetary stability, we have carried out an exploratory analysis according to the population of the municipalities and in relation to the grouping by autonomous communities.

Figura 1 Objetivos 

Likewise, we have analyzed the most relevant characteristics of local funding to disclose the strengths and weaknesses of the current municipal financing/funding system (MFS) and discover possible correlations with the spending policies they carry out. To do this, we have explored and analyzed the relationships between budget management and the percentage and per capita expenditure allocated to the area of expenditure (EA1) of Basic Public Services and in the area of expenditure (EA2) of Actions of Protection of Social Promotion.

Figure 2 Relationship budget and CSR 

The two areas of expenditure EA1 and EA2 are representative of the social benefits entrusted to the municipalities and, therefore, representative of Corporate Social Responsibility policies attributable to the Spanish municipalities. In this sense, it is fundamental to analyze how they are spending and in what services they do it and, at the same time, to know the origin of the resources that finance them and to define an indicator of CSR in each municipality.

Therefore, the fundamental objective is to have a predictive/explanatory model of municipal CSR and for this we intend to contrast the following hypothesis:

H1: The CSR of the municipalities can be explained based on the size of their population and the way in which they are financed

Results obtained from the exploratory study

Proposal of a model of regression Logit to explain the CSR

From the study of the previous findings using IBM SPSS statistics 22, a test is made and reveals the majority not normality of the about 170 independent variables. Because of non-normality, non-parametric correlations (Kendall) are calculated and are significantly associated with the CSR dependent variable: Population, taxes, transfers, other income, transfers per capita, Per capita taxes, other per capita income.

With the seven selected variables a multivariable analysis is carried out, applying a logit model, to explain the value of the dependent variable CSR according to these independent variables. With this purpose was used the software GRETL 1.9.91 CVS (GNU Regression, Econometric and Time Series Library)

Model 1 After several trials has proved to be the one that correctly predicts a greater number of cases and has lower value of the criterion of Akaike, so it becomes our proposed model. The model reveals that the seven variables studied (population, taxes, transfers, other income, transfers per capita, taxes per capita and other income per capita), are sufficiently significant and contribute to explain the CSR of the Spanish municipalities, except the absolute value of the transfers received and other income (c5 + c6) both because of their elevated P-value.

Discussion and conclusions

According to the objectives we have raised, in this exploratory study we have found that the budgetary stability, the financial sufficiency of the municipalities and the sustainability of social welfare are closely Interrelated. As for our first objective, we have highlighted that the majority of municipalities, 46.02%, obtain fundamentally their income from local taxes (Tax Rate). However, when grouped by autonomous communities there are significant differences between the municipalities of each. In the autonomous communities with a lower "per capita" income level, their income from municipalities comes mostly from transfers or from the state or from the autonomous community to which they belong. At the same time, we have found that, although budgetary stability varies according to the different autonomous communities, as it is a principle established by both the Government of Spain and the institutions of the European Union, only 11% of the Spanish municipalities present deficits and prioritize the reduction of their debt with financial institutions. However, both deficit and surplus municipalities reduce debt to financial institutions and dilate payment to suppliers. As a result, it seems that the form of financing or the origin of the income does not condition the fulfillment of the budgetary stability.

In addition, by cluster analysis combining the factors of; form of financing, budgetary result, net variation of financial liabilities and population we know that the majority of the Spanish population lives in municipalities that are financed via taxes, have surpluses and reduce debt to financial institutions.

At the same time, this exploratory analysis confirms that a characteristic of the budget management model is that it is strongly rooted in a purely legalist tradition and little-oriented of results and efficiency in the management of Services, so that the sustainability of local administrations can be jeopardized. In this sense, expenditure control is a common concern for the various public organizations that offer services and, therefore, the application of the resource to its rightful extent, within the framework of legality, becomes a necessary condition.

With regard to the relation of the budget and the social items, relations have been demonstrated between the system of financing of the municipalities (SFM) and the percentage of expenditure and per capita in the programs of social expenditure selected (EA1 and EA2). That is, from the economic classification of the budget, in the income-related items, we have identified the type of funding by municipality and autonomous Communities, as well as the expenditure programs where they are applied. In our study we found that 39.35% of municipalities do not have among their priorities social programs, in addition to being the least contributing to reduce their debt, compared to 24.7% of the total municipalities that do comply with social spending programs Proposed and also devote funds to reduce debt.

According to our knowledge, this is the first study in which has been defined CSR indicators from the expenditures obtained from the budget settlements and also categorize the municipalities according to their level of CSR. Consequently, we have discovered to what extent the way to obtain the income the Spanish municipalities, can explain their commitment to the policies of social expenditure and consequently be factors that explain the level of CSR assignable. Specifically, in our study, 48.99% of the Spanish municipalities, which are financed with taxes, meet the two indicators and therefore have a higher level of CSR. However, to the municipalities whose majority source of income is the transfers from the State or the autonomous community, can be attributed a lower level of CSR.

This study, therefore, shows that the origin of the income of the public entities can condition the type of expenditure policies that they carry out, their efficiency and level of CSR. Consequently, the relations between the income and expenditure policies of each municipality have a direct impact on their CSR level. In addition, we have been able to ascertain the relationship between the level of expenditure devoted to the devolution of debt and interest, the level of CSR to meet the two indicators and how to obtain the income. From this relationship between these three factors we can conclude that the municipalities financed with taxes better comply with the indicators of CSR and with the budgetary stability that those that are financed by means of transfers.

In this paper we also note the importance of analyzing the data of the budget settlements because from this and appropriate indicators on social policies and CSR, we can model the behavior of the Spanish municipalities before Certain budget items. For this purpose we have formulated the logit model of probability, which has allowed us to confirm the hypothesis that the CSR of the municipalities can be explained from the size of their population and the way they are financed.

Therefore, it is necessary to develop indicators of public ethics that show us the cost and usefulness of the services and allow their evaluation. Local administrations must evolve into a good government that incorporates the principles of SR (complete transparency, accountability, environmental sustainability, dialogue with its stakeholders and alliances with multiple groups of Interest).