The right of a public finance sector entity to incidental receivables in commercial transactions

Purpose: The aim is to determine whether public finance sector entities in Poland charge compensation for debt recovery costs and to verify if this practice poses a risk of violating public finance discipline. Concerns regarding this issue were reinforced by a European Court of Justice Judgment (C-327/20).Methodology/approach: To achieve the research objective, three research questions were formulated: (1) do public finance sector entities charge compensation for recovery costs? (2) have entities ceased calculating compensation as a result of the ECJ Judgment? (3) does the amount of calculated compensations pose a risk to public finance discipline? Answers were obtained through a survey addressed to randomly selected local government units. The study covered the period 2019–2023. Findings: In at least 37.5% of the surveyed units, interpretations of the provisions accept that public finance sector entities have the right to compensation. The ECJ Judgment did not result in a widespread cessation of compensation calculation by public finance sector entities. However, the average annual value of calculated compensations exceeds the minimal amount accepted in public finance discipline regulations, posing a risk of disciplinary responsibility.Research limitations/implications: Many units do not charge compensation. However, determining whether they have the right to charge the compensation was not within the scope of this article’s research focus.Originality/value: The study provides insights into practices among public finance sector entities in Poland regarding the calculation of incidental claims in commercial transactions and assessing the impact of the ECJ’S Judgment.