insurance special budget are not sufficient for covering its expenditures. That is, this accrual can also be used for creating a balance between the social security of different generations and the guaranteed adequacy of pensions. Article 7, Paragraph Three of the Law on Social Insurance provides that a reserve may be established for each special budget in which the excess income of the special budget over the amount of financing for the provided social insurance services is included. Thus, one can conclude that a decision to dispose of the social insurance budget accruals belongs to social policy. Well-considered and focused disposal of this accrual would facilitate its increase, and the accrual could be used for alleviating the budget situation when the demographic situation in the State starts to go down. On the one hand, the chosen procedure ensures that the social insurance budget accruals are subject to a lesser economic risk, because they are invested into sufficiently reliable financial instruments, and their value is relatively retained. Likewise, the practice in force guarantees that the social insurance special budget funds are adequately accounted for. On the other hand, there is no doubt that the practice in force, which governs the disposal of this accrual of several hundred million lats, delegates undue powers to the executive authority – the Minister for Finance – and the State Social Insurance Agency (hereinafter – SSIA) as the executor of the budget. For example, the procedure following which the director of SSIA and the representative of the State Treasury enter into simplified agreements for the investment of several hundred million lats from the social insurance budget accrual funds to the State Treasury cannot be deemed as transparent. Considering the lack of due control, there are sufficient grounds for doubting whether the social insurance special budget accrual funds have been, in this way, indeed, allocated most effectively. For this reason, the Applicants could have reasonable doubts regarding the purposes for which the said accruals have in fact been channelled. Likewise, there is no sufficient control, including the control exercised by the Saeima, ensuring that this large accrual is used as an instrument of social policy and the funds are allocated in a way that is most profitable to the national economy and social insurance budget. To the contrary, as M. Porsnova pointed out, it is possible that the respective accrual is being used for solving the State budget deficit problems as well as 59

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