The payment arrears of Bulgarian ministries to the business sector may reach the record rate of BGN 400 M by end-2014, according to the Finance Ministry.

The data was published Tuesday after inspections of the Public Financial Inspection Agency and the internal audit units at the respective ministries.

According to the results of the audits of the implementation of the budget at all ministries, payment arrears of Bulgarian ministries to businesses stood at BGN 156.7 M by the end of July 2014.

In Q1, 2014 and Q2, 2014, Bulgarian ministries owed businesses BGN 150 M and BGN 176 M, respectively (the statistics does not include the debts of state-owned hospitals).

However, Bulgaria's Finance Ministry expects a significant increase in arrears over the next few months.

"By the end of 2014, payments under existing contracts worth BGN 1.44 B are to be made, while the available resources amount to BGN 1.176B. This means that there is already a shortage of BGN 267.33M under upcoming payments and if we fail to cover them, these sums will also be added to the total of arrears," said Temenuzhka Petkova, caretaker Finance Minister, as cited by Sega daily.

She pointed out that the analysis had been drafted at the end of July.

Similar rates of arrears have not been recorded since the crisis year of 2009, when the state owed BGN 602 M to the business sector, according to Sega daily.

The problem with the shortage of funding to cover payments under existing contracts may deteriorate further unless the ministries conduct a careful analysis of the planned public procurement procedures.

According to plans of the ministries, a total of 3593 public procurement deals worth BGN 3.047 B are to be launched in the period August - end-December 2014.

If all of the public procurement procedures are launched and awarded to contractors, a shortage of over BGN 1 B will open, according to the Finance Ministry.

The Regional Development Ministry, the Sports Ministry and the Agricultural Ministry should exercise caution with public procurement deals as they are closest to the cap on new expenses which they can make under budget 2014, with the Regional Development Ministry having used up 72% of its allocation and the Sports Ministry 73% of its allowance.

By end-July 2014, Bulgarian ministries had overdue receivables of BGN 136.44 M.

The Agriculture Ministry had the largest amount of overdue receivables, at BGN 25.86 M.

The Transport Ministry, the Interior Ministry and the Regional Development Ministry also had large sums of overdue receivables.