The command system and the management of the Hungarian Defense Forces

With the integration of the Ministry of Defense and the Defense Staff, the MoD besides its public administration tasks as a ministry is also responsible as a military organization for the command and organization of the Hungarian Defense Forces (HDF). The high-level supervision of the Hungarian Defense Forces is thus carried out by the MoD, the intermediate level executive organizations are the Land Forces Command, Air Force Command and the Joint Logistics and Support Command.

Executive and professional control are separated in the MoD and the HDF. Heads of departments and directorates within the MoD, as functional managers are responsible for professional issues, they are professional supervisors of the HDF in issues pertaining into their scope of activity.

The management of the Hungarian Defense Forces is primarily set forth by rules and regulations pertaining to every budgetary organizations, but any exceptions to the general rules are set forth in separate government decree that covers the management of public funds and public assets.

The minister exercises his authority as an executive in certain issues through the commander (leader) of the defense organizations, and has the right to centralize certain responsibilities and obligations of the commander, and delegate them to designated defense organizations.

Regulations related to the management of budgetary organizations detail the tasks that their financial organization has to perform. Defense organizations

characteristically do not have their own financial organization, the majority of such tasks are performed in a centralized way, and designated organizations specialized in each area provide those services as supplies in kind.

The ministerial regulation setting out the detailed regulation on the management of funds by the defense organizations set forth that the management is mainly done centrally through central services and central supplies in kind, and the institutional level of management only has a secondary role.

The planning, procurement and management of resources required by the defense organizations to perform their duties, and the planning, implementation, supervision of the budget is carried out by designated defense organizations.

The following tasks are carried out centrally: - allocation of human resources for the whole HDF; - management of salaries except for civil servants;

- development, investment, renovation, decommissioning, and scrapping of assets of military technology;

- investment in real estate, construction, renovation; - housing;

- management and sale of state assets; - insurance on personnel and assets;

- execution of centrally managed procurement;

- environmental protection, safety regulations and fire protection.

The following are also managed centrally, but the budget provisions covering the expenses are approved in the budget of the defense organizations:

- the calculation, settlement and payment of salaries to the personnel;

- certain financial and accounting services for defense organizations that do not have a financial organization;

- providing fixed assets, stocks, services, and information that is related to supplies in kind;

The management of state assets is also carried out centrally, the rights and responsibilities of a trustee, such as the sale of assets do not belong to the commander of the defense organization. The commander has the right and the responsibility to manage the assets available for the defense organization, but has little influence on the quality and quantity of those assets. Even if an asset becomes unnecessary for the operation, the commander has to obtain the approval of the functional managers who are responsible for the portfolio level management of that asset, and after that the Chief of Defense Staff will certify for the trustee, that it is unnecessary for the operation of HDF.

The salaries and the social security expenses attached to them, which amounts to approximately 40 percent of the defense budget, are calculated and settled centrally. Law regulates most of the components of the salaries, the amount depends on the rank, appointment etc., but not on the performance of the individual, consequently, the commander has almost no influence on them.

43,5 34 22,5 42,7 31,3 26 40,6 42,4 17 40,3 40,4 19,3 42,6 38 19,4 0 10 20 30 40 50 Percent 1998 1999 2000 2001 2002 Years

The composition of the defense budget 1998-2002.

Salaries and social security Operational expenditures Capital expenditures

Figure 9: The composition of the defense budget 1998-2002. Source: Four years of defense 1998-2002. p. 206.

The commander of a defense organization has limited influence on the selection and employment of personnel either, since employer rights are also centralized. The promotion of military personnel, which is the precondition for the appointment to a higher position, is also determined by law, there is no possibility of promotion by merit or performance.

The revenue side of the defense budget is also an exception compared to other portfolios, because after becoming a NATO member, the government undertook the commitment to appropriate a fixed percent of the GDP to national defense. It follows from this that the defense organizations receive public funds from the State Treasury to cover all of their approved budgetary expenditures, while other portfolios are expected to generate some revenues to cover a part of their expenditures. In return, defense organizations have to transfer their revenues to the State Treasury.

The reasons behind these special regulations stem from the special designation of defense and the fact that meeting the strategic objectives of the defense portfolio is impossible without overarching programs. Defense organizations are unable to defend the territory of Hungary without coordinating their individual efforts. It is therefore necessary to unify the requirements vis-à-vis military assets, to guarantee interoperability, and the level of supplies should also be identical.