Public Governance, Administration and Finances Law Review


Legal remedies against state funding decisions
in Slovakia

Gábor Hulkó*

* JUDr. Gábor Hulkó, PhD. is associate professor for administrative law, Széchenyi István
University in Győr, Faculty of Law. (e-mail address: gabor.hulko@email.cz)

Abstract: Legal remedies against decisions of central state administration or special administrative bodies
instead of the standardly used appeal (which is more or less identical in all Visegrad states) special types
of legal remedies step in, which can be still considered as ordinary remedies. In Slovakia, the standard
legal remedy in administrative procedures is the appeal (in case of organs of central administration called
remonstrance) regulated by Act no. 71/1976 on Administrative Proceedings, however in case of special
organs this regulation is often overwritten by special rules and by special legal remedies. Latter mentioned
– from a jurisprudential point of view - raising the question, whether they can really serve as a tool for a
real legal remedy if they represent an e�ective tool of decision supervision. �e following case study
introduces the standard procedure of use of such special legal remedy against a decision of the State Fund
for Housing Development in Slovakia.

Keywords: administrative procedure; legal remedies; appeal; remonstrance; suggestion of error; bodies
of central administration; state funds

�e possibility to defend oneself against the decision of an administrative body
is one of the basic principles of administrative procedure. An appeal is a
universal tool against an administrative decision in the Slovak Republic; an
ordinary legal remedy. �e basic regulation of this legal institute is given by Act
no. 71/1967 on Administrative Proceedings (Administrative Code). �is statue
contains the basic principles and rules of administrative procedure, as lex
generalis. In the system of the Administrative Code, the ordinary legal remedy
is referred to as an ‘appeal’ or ‘remonstrance’, depending on whether it is used
against central administration bodies or not. Regarding regular administrative
organizations, the appeal applies, while in case of groups of central
administration, remonstrance is used. �e main di�erence between these two
is that remonstrance has no devolutive e�ect, and according to the regulation
(paragraph 61 section 2) ‘remonstrance shall be settled by the Chief O�cer of
the central body of public administration based on the motion of a special
committee established by the Chief O�cer’. �is legal construction in itself
raises the question of whether it can guarantee substantive and e�ective review
of a decision, because it is carried out by the same authority which issued the
decision in the �rst instance. Among the Visegrad states, this legal construction
can be considered universal, with the exception of Hungary. Hungary, in

10.53116/pgaflr.2016.1.7

https://doi.org/10.53116/pgaflr.2016.1.7


accordance with paragraph 100 Act no. CXL of 2004 on the General Rules of
Administrative Proceedings and Services, cannot submit an appeal ‘...against
any decision of the �rst instance adopted by a minister, by the head of an
autonomous government body, an autonomous regulatory agency or other
similar government agency;’ or ‘...against any decision of the �rst instance
adopted by the head of a central government body’. In these cases, ‘the
decision of the �rst instance may be subject to judicial review’.
�e regulation is somewhat di�erent in cases of special procedures. For

various reasons, the Administrative Code does not apply to administrative
procedures (proceedings in which the rights, the legitimate interests and the
duties of the citizens and organizations regarding the public administration are
decided), or applies, but only to a minor extent. �ese procedures are regulated
by special laws, which therefore contain special rules exclusively for these
procedures, the lex special derogat legi generali rule applies, and the use of the
Administrative Code can be excluded partially or completely. �e uniqueness
of these procedures can be due to numerous factors, such as by the specialty of
the organization making the decision. In the case of these procedures, the
extent to which basic principles and basic procedural rights (right to legal
remedy, fair procedure) apply is always problematic, as generally these special
rules do not contain a complex regulation of the given procedure.
Alternatively, there has to be a core regulation (mainly concerning principles
and basic party rights), which has to be part of every procedure, regardless of
its relation to the Administrative Code. For instance, such rule is to be found
in the Czech regulation. According to paragraph 177 section 1 of Act no.
500/2004 on Code of Administrative Procedure, in spite of which
‘fundamental principles of activities of administrative bodies... shall apply in
public administration also in cases where special law provides that
Administrative Procedure Code shall not apply but the special law itself fails to
contain relevant provisions corresponding with the principles’.
�e case in question deals with this kind of special procedure, with the

decision-making of state funds, namely the State Fund for Housing
Development. State funds in the Slovak Republic are legal persons, constituted
by law for �nancing specialized state tasks (see paragraph 5 of Act no.
523/2004 on Budgetary Rules of Public Administration). State funds are under
the supervision of a central state administration body, while their budget is
in�uenced by the Government. State funds can be considered administrative



bodies in a wider sense, legal persons of public law. State funds often decide on
rights, legitimate interests, and duties of the citizens, so in this regard they can
be considered as bodies of public administration; sometimes the
Administrative Code is applied for their procedures, but in many cases their
procedures are regulated by di�erent, special rules.
�e State Fund for Housing Development is constituted in Act no.

150/2013 on State Fund for Housing Development (hereinafter as Act on
Housing Development Fund). �e competence of the Fund for Housing
Development (hereinafter as Fund) has its own specialties as well, which must
be explained in some extent, according to the actual case, which is concerned
with the subsidies granted for local self-municipalities. Local self-municipalities
in Slovakia can apply for a subsidy combined from a non-repayable grant and a
long-term loan for housing acquisition. �e grant is provided by the Ministry
of Transport, Construction, and Regional Development of the Slovak Republic
(hereinafter as Ministry), while the loan is provided by the Fund. �e loan is
advanced under favorable terms (a mortgage loan with a 20-30 year duration
and a �xed 1% interest rate). As a thumbnail rule it is valid that the Ministry
�nances approximately 1/3 of the cost of acquisition, while 2/3 of the price is
�nanced through the Fund’s loan. �e decision-making of the Ministry is
regulated by Act no. 443/2010 on Grants for Housing Development and on
Social Housing (hereinafter as Act on Grants for Housing Development), the
decision-making of the Fund by the Act on Housing Development Fund. One
of the basic conditions of approving the loan is that the applicant did not
breach the �nancial agreement during the disposal with the Fund’s �nancial
assets (this refers to previous time periods). Additionally, a basic condition of
approving the grant is that the applicant has disposal over the remainder of the
acquisition price. In this way, the application for a loan goes hand-in-hand
with the application for a grant.

For approving the subsidy (neither for the grant, nor for the loan) there is
no legal entitlement, which means, that despite that the applicant ful�lls all
conditions, his/her application can be rejected. Of course even in these cases,
the negative decision cannot be arbitrary – it must be properly reasoned in line
with the expectation (or principle) of good administration. �e loan can be
declined due to the fact that the Fund ran out of its annual budget for this
objective or the application failed to ful�ll the conditions prescribed by the Act
on Housing Development Fund (see paragraph 15 section 19). Legal remedies



are determined by the Act on Housing Development Fund, which states that
against a negative decision a suggestion of error (hereinafter as suggestion)
could be submitted within 30 days after the delivery of the decision, while the
decision-review is carried out (in another 30 day period, after �ling the
suggestion) by the Ministry, as the supervisory body.

A particular case deals with the application for a subsidy (grant and loan) of
the local self-government Holice, which is a small settlement of approximately
2000 inhabitants in the southwestern region of Slovakia, on Great Rye Island.
An application for a grant was to �nance the acquisition of 13 housing units,
where 30% was �nanced from a grant, and 70% of the price from a loan.
�e application was submitted on 15th January 2015, rejected by the Fund’s

decision on 9th July 2015, with the justi�cation that the applicant breached
the budgetary discipline during the disposal with the Fund’s �nancial assets
(see above), due to the fact that the annual auditor’s report labeled the short-
term liability of the local self-government risky. In other words: the self-
government’s cash �ow was rather low. Based on this decision, the Ministry
also refused (23rd July 2015) acknowledgement of a grant, due to the fact that
the applicant could not prove the disposal over the 70% of the acquisition
price. Both decisions were �led on 24th July 2015 at the self-government. In
this way, the decision of the Fund a�ected the subsidy as a whole, as the loan
and the grant in this case are mutually dependent.

Against the decision of the Fund, a suggestion of error was �led, which is an
ordinary-like legal remedy regulated by the Act on Housing Development
Fund. �e suggestion highlighted that the annual auditor’s report cannot serve
as a reason for breaching the budgetary discipline. Since the report was
positive, the auditor stated no breach of law. It only declares that the self-
government’s capacity of settling short-term debts has a higher risk factor.
Furthermore, low cash �ow alone is not enough to ful�ll the condition of
breaching the �nancial agreement in accordance with disposal of the Fund’s
�nancial assets, as there must be a connection between the low cash �ow and
the using of (previous) �nancial assets of the Fund, while this connection
simultaneously causes a breach of the Act on Budgetary Rules of Public
Administration - otherwise it cannot be considered as breaching the �nancial
agreement. �e suggestion was handed over to the Fund on 27th July 2015,
the overview was ensured by the Ministry in rejecting the suggestion on 4th
September 2015. According to its argument, having a low cash �ow alone does



not mean there was a breach of the �nancial agreement. However, during the
review process it was determined that the local self-government failed to pay
on-time the credit installment from previous loans from the Fund, so these late
payments can be considered as breaching budgetary discipline.

From a boarder perspective, the procedure is legal, but not �awless in all
regards. It is certainly positive, in that in accordance to the principles of
legality and material truth, the decision can be changed also to the
disadvantage of the applicant. �is shows that the suggestion can serve as a
tool of objective legal protection. Furthermore, the decision-review does not
limit itself only to legality, but also extends to technical issues, and it is quicker
when compared to judicial review. On the other hand, this standard procedure
has its own issues. Probably the most important among these is the (legal and
practical) e�ect of a successful suggestion – in such case a restitutio in
integrum would be in place, so that the applicant should regain his former
status and legal position among the other applicants. �e problem is that: 1)
submitting an suggestion has no delaying e�ect (the Fund’s loans can be
approved to other applicant instead), so it can lead to a situation, where the
Fund depletes its �nancial assets for loans meantime and despite the successful
suggestion the restitution is de facto impossible; and 2) submitting an
suggestion has no e�ect whatsoever on the Ministry’s grant (so the grant can be
awarded to another applicant meanwhile), which could lead to a similar
situation, because budgetary limitations on grants are serious. From the
applicant’s point of view, the loan without the grant is practically worthless,
and the grant without the loan is legally inaccessible. Additionally, the factual
impossibility of the restitutio in integrum cause, that the use of suggestion in
this case is mostly formal, so there is a little to no chance of a review favorable
for the applicant. In this way the subjective legal protection of the applicant is
negligible – and it raises the question of whether a formal guarantee of legal
remedy could really serve as an e�ective tool of decision-overview.



Book reviews

Tax Ordinance – Directives on Constituting 
a New Regulation1

Damien Czudek*

* Dr Mgr. Damian Czudek, Ph.D., assistant professor, Masaryk University, Faculty of Law,
specialized in �nancial law. (e-mail: damian.czudek@law.muni.cz)

 

�e publication Tax Ordinance – Directives on Constituting a New
Regulation [Ordynacja podatkowa – Kierunkowe założenia nowej regulacji]
was the e�ort of a team of authors led by Professor Leonard Etel, an expert in
the �eld of tax law, and Chairman of the General Tax Law Recodi�cation
Commission [Komisja Kody�kacyjna Ogólnego Prawa Podatkowego]. �is
Commission was established in November 2014 in order to prepare and
submit to the Council of Ministers complex and systemic changes in Polish tax
procedure. Over the next two years, the bill (new act) was to be prepared.
During the preparation of the o�cial opinion of the Commission, there were
various compromises and modi�cations when compared to the original draft.
Authors therefore decided that they would write and issue their ideas and
suggestions regarding new regulations of tax administration in Poland in the
form of a currently peer-reviewed monograph. �is type of format allows more
space for the presentation of various ideas, currently insurmountable for several
reasons (whether political or with regard to conservatism).
�e current Tax Ordinance [Ordynacja podatkowa] came into e�ect in

1997. But since the Polish economy has changed and developed over time, and
Polish taxpayers and their internationalization have changed with it. It now
seems more than appropriate to consider a comprehensive and systematic
change in the legal regulation of tax administration. �ese changes are also
necessary for the proper functioning of �nancial management and e�cient tax
collection. Keeping this in mind, it is necessary to continue to ensure the
fundamental rights of taxpayers. More and more often (and as we see in Czech
courts) there is a misunderstanding of the function and role of taxes in the
state regarding its fundamental duty – the production of material to ensure the
creation of public goods. Taxes are often viewed as quite the opposite, similar



to restrictions on economic activities of entities operating in the market. �is
leads to measured and varied interests of the state versus interests of the
individual.
�e Commission also worked interactively, and during the work partial

results were presented, and numerous suggestions from the tax and customs
administration were collected. One such example was IX scienti�c conference
‘Ordynacja podatkowa w teorii i praktyce’ organized by the Faculty of Law,
University of Białystok in the picturesque Augustów, in May 2015.
�e book is a compilation of proposals for changes to improve the quality of

legislation with regard to its impact on public budgets and the addressees of
legal norms–tax subjects. �e authors analyzed a number of sources: scienti�c
literature, case law and legal regulation, and were inspired by a wealth of both
international experience and foreign regulations. �e book contains a number
of theories on what the new regulation of tax administration should look like.
�ere are three di�erent opinions and approaches to solving the current
problems with the aim to improve the future regulation, but not at the cost of
its rigidity and casuistry, but in order to simplify and streamline the system.
�is publication is highly recommended. Its concepts and settings of the

e�ective functioning of �nancial management, with the maintenance and
guarantee of taxpayers’ rights, makes it a recommended read both for those
who are involved in tax procedures, and legislators outside of �nancial law.

References

1. Leonard Etel (ed.), Tax Ordinance - Directives on Constituting a New
Regulation [Ordynacja Podatkowa. Kierunkowe założenia nowej regulacji]
(Białystok, Temida 2, 2015).



Chapters on Special Public Administration1

Júlia Fehér*

* Dr. Júlia Fehér, PhD student, specialized in administrative law, Széchenyi István University in
Győr, Faculty of Law. (e-mail address: juliafmail@gmail.com)

 

�e main aim of the three-volume series, Chapters on Special Public
Administration is to place practical public administration into focus. �rough
creating an awareness-raising presentation of national basic functions,
economy, infrastructure, and human public services based on legislature, in a
comparative way with historical analyses, and ful�lling the need of course
books and professional books as well. It is the �rst relevant publication in
Hungary which attempts a comprehensive analysis and description of as much
particular sectors of public administration as possible. For this reason, a
nationwide ‘work group’ was established (the series has over 30 authors) under
Editor András Lapsánszky. �e volumes are special and unique in this way,
because they are also the result of a work group which is characterized by a
high degree of professionalism and true collegiality. It is the common,
harmonized work of Hungary’s departments of public administration and the
National University of Public Service.
�e relationship of general (general administration) and special public

administration (special administration) must be clari�ed, because of the
possibilities of shade and sharp demarcation in the Hungarian doctrinal
system. In understanding this system, general administration is indispensable,
but the distinction between the two branches is mostly virtual. �e system is a
theoretical basis and general doctrine of special administration. �erefore the
general notional order and structure of public administration is described by
the general public administration (science of public administration and legal
systemic) – ensuring unity in the more particular world of special
administration. �e law of special administration focuses on individual sectors
of public administration. However, it cannot be separated from the basic
notions, apparatus, or procedure of public administration, nor can it be
understood in itself, since it cannot be scienti�cally analysed without the
general doctrines.



As for the theoretical basis, it is important to note that national tasks and
functions provide a certain framework for special administration: the activity
of authorities belonging to public administration is the route of carrying out
state administration. As a result, modern public administration is essentially
special administration, as public administration bodies carry out their activities
with regards to one sector, in one given area. �e rapid improvement of society
generates newer and newer needs, and ful�lling them occurs through newer
and newer national engagements (therefore, the restrictive listing of tasks is
impossible, as it is constantly changing). �e realizations of these tasks occur
mostly via public administration, in the frame of the modern ‘administrative
state.’ �e general aim of nearly all cases is to increase citizens’ quality of life
and to realize social wealth.2
�e administrative tasks of the state prevail in many areas (and this is by no

means an exhaustive list): operation of national economy; health and social
insurance administration; social administration (decreasing social di�erences,
labour administration, social net); public education; cultural (human)
administration; protection of nature and the environment; consumer
protection; transportation administration; communication and media
administration; police administration (averting catastrophes, acting against
terrorism); energy and industry administration; etc. �e volumes elaborate on
the most signi�cant branches of special administration, and endeavour to
highlight information which conveys the important theoretical basis both for
students and professionals, such as: reasons and degree of national
intervention; most signi�cant institutions of the sector; relevant legislature;
historical characteristics of sectorial administration; international comparative
analysis; and regulative models. �erefore the dual objective, so the volumes
may serve as course books and special books as well, has been fully realized.
Also, it should be emphasized, that the volumes present elaborate on such areas
of special public administration which have not been previously discussed in
Hungary. While most of the areas explored are rich in literature, in these cases
a systematization and a dogmatic uni�cation is carried out.
�e theory of organizing special administration chapters into a book can be

understood in the wider subject of administration. Based on this, the �rst
volume details the basis of special administration and state functions. It
presents the current form of European public administration law, as well as: its
expected means of improvement; the system of national registers; the basis of



police administration and police law; administrative rules referring to
foreigners; regulations of the right of asylum; national defence administration;
tax and customs administration; judiciary administration; public �nance
administration; and the special administration basis of e-public administration.
�e second volume covers economic and infrastructure administration, such
as: the administration of the national economy; economic competition; energy
and mining administration; water administration; information
communications; the construction administration; trade; rules of regional
development and area management; administration of environmental
protection; the special administration basis of �nancial services; hunting
administration; transportation administration; and the law of national support.
�e third volume centers on: connections to human administration, such as
health law and administration; education; the administrative basis of public
education; child protection and social service administration; cultural
administration; social administration; and media regulation.

To summarize, these three volumes are professional, accurate, and rooted in
law. �ey are not only interesting, but can be learned, taught, and utilized.
�ey will greatly assist those to better understand such a comparative analysis
that takes multiple perspectives, from not only international and European
viewpoints, but also from the perspective of students and researchers.
�e discovery and understanding of public administration beyond

administrative procedure proves to be a serious challenge, but the three
volumes of Chapters on Special Public Administration provide an outstanding
guide in this endeavour.



References

1. András Lapsánszky (ed.), Fejezetek szakigazgatásaink köréből [Chapters on
Special Public Administration], vol. I-III. (Budapest, Wolters Kluwer, 2013).

2. Adrián Fábián, Közigazgatás és szakigazgatás [Public administration and
special administration], 13, in Lapsánszky András (ed.), Fejezetek
szakigazgatásaink köréből [Chapters from our special administration],
(Budapest, Wolters Kluwer, 2013).