3.2 Further information on the administrative system (e.g. interlinkages between levels, institutions, etc.)

The roles of municipalities and the state and the division of responsibilities vary in different sectors of administration. In some sectors of administration, the State is responsible for both supervising operations and putting them into practice while in others (e.g. education, health care). Municipalities have responsibility at the operational level. The Local Government Act forms the basis for local government in Finland. Also the financial interlinkages adjust the relationship between municipalities and the state. Municipalities have broad powers in matters pertaining to their own administrative structures, such as institutions and their duties. Finnish local authorities have right to levy taxes the power to make financial decisions. Local authorities finance their annual expenditure out of taxes, central government transfers, various charges and sales revenues. Central government grants local authorities financial assistance in exchange for a wide range of statutory services. This balances financial inequalities between local authorities and ensures equal access to services throughout the country. The reforms in 1990s increased operational and economic independence of municipalities and decreased the number of staff coming under the State budget from 215,000 in 1988 to the current figure of 125,000.