Financial Management Reform in Guatemala

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13 Δεκ 2013 (πριν από 3 χρόνια και 11 μήνες)

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Financial Management Reform

in Guatemala

María Antonieta del Cid de Bonilla

Minister of Public Finance


May, 2006

Contents


Origin

of

the

Reform


Implementation

of

the

Reform


Components

of

the

Reform


Reform

Areas


The

reform

of

the

municipal


financial

administration


Covering

of

the

System


Assessment

of

the

Financial

Management

in

Guatemala

(CFAA
-
CPAR

/

WB
-
IADB)


Reform

Challenges

Origin of the Reform


The

financial

management

reform

in

Guatemala

began

at

the

middle

of

the

90
s,

with

two

essential

objectives
:


Enhance

the

efficiency

and

transparency

of

the

financial

administration

of

the

public

sector
;

and


Improve

the

delivery

of

public

services,

through

dis
-
concentration

of

the

management

of

financial

resources

to

the

public

entities
.

Origin of the Reform


Since

the

beginning,

the

process

has

counted

with

the

World

Bank
´
s

assistance,

and

it

started

with

an

integral

diagnosis

and

a

conceptual

design

of

the

financial

management

system,

worked

out

by

international

experts

in

budget,

accounting,

treasury,

public

credit,

auditing

and

procurement

fields
.



Guatemala
:

Conceptual

Design

and

Plan

for

the

Development

of

a

Governmental

Financial

Administration

and

Control

System
.

E
.

Perez,

E
.

Estrella,

C
.

Fernandez,

R
.

Jimenez,

C
.

Lara,

M
.

Pastor,

D
.

Turman,

J
.

Villalobos,

1994
.

Origin of the Reform


The

main

weaknesses

were
:



The

governmental

authorities

didn
´
t

have

accurate,

timely

and

relevant

financial

information

available

to

support

them

in

the

decision

making

process
;


The

Ministries

in

line

lacked

control

and

responsiblities

on

their

financial

operations
;


Administrative

defficiencies

concerning

the

formulation

and

execution

of

the

budget

generated

high

costs

in

efficiency

and

accountability

or

transparency

terms
.

Implementation of the Reform


The

design

and

implementation

of

the

reform

han

been

supported

by

international

experts

in

the

different

areas

of

financial

management
.



But

the

implementation

has

mainly

been

in

charge

of

national

officials

in

the

different

public

entities,

fact

that

has

generated

conditions

for

its

sustainability
.

Components of the Reform


Legal

reform


Function

reorganization


Procedure

reform


Information

system


Training

Legal Reform


The

financial

management

reform

is

based

on

a

legal

framework

in

agreement

with

its

objectives
.


In

1997
,

a

new

Organic

Law

of

the

Budget

was

approved,

which

regulates

the

budget,

governmental

integrated

accounting,

treasury

and

public

credit

systems
.


Legal Reform: budgetary system


The

budgetary

system

is

the

group

of

principles,

agencies,

norms

and

procedures

that

govern

the

budgetary

process

of

the

public

entities
.

The

Ministry

of

Public

Finance

is

the

principal

of

the

process

and

its

main

functions

are
:



To

dictate

the

norms

for

the

formulation,

programming

of

the

execution,

modifications

and

evaluation

of

the

budgets

of

the

public

entities
.



To

develop

the

management

control

tools

of

the

results

linked

to

the

fulfillment

of

the

objectives

and

goals

of

the

public

sector
.

Legal Reform: accounting system


The

governmental

system

of

accounting

is

the

group

of

principles,

agencies,

norms

and

procedures

that

permit

the

registration

of

the

facts

that

have

effects

on

the

budget

and

on

the

patrimony,

and

the

flows

of

public

funds
.



The

Ministry

of

Public

Finance

is

the

principal

of

the

system,

and

it

is

responsible

for

prescribing,

to

put

and

to

maintain

in

operation

the

system

in

the

whole

non

financial

public

sector
.

Legal Reform: treasury system


The

system

of

treasury

is

the

group

of

principles,

agencies,

norms

and

procedures

for

the

administration

of

the

public

resources

and

its

use

for

the

payment

of

the

government

obligations
.

The

main

attributions

of

the

Ministry

of

Public

Finances

are
:



To

administrate

the

Common

Fund
.



To

formulate,

execute,

control

and

check

the

cash

budget

of

the

Central

Government
.


To

control

and

to

guide

the

efficient

use

of

availabe

balance

of

cash

of

the

checking

acount

of

public

entities
,

no
t

incorporated

to

the

common

fund
.

Legal Reform: public credit system


The

system

of

public

credit

is

the

group

of

principles
,

agencies
,

rules

and

procedures

with

regard

to

celebra
t
i
o
n,

execution

and

manage

of

debt

business

that

the

State

do,

with

the

object

to

obtain

financial

forms
.


The

Ministry

of

Public

Finance

is

the

agency

in

charge

of

the

public

credit,

with

the

function

to

guarantee

the

efficient

programming,

use

and

control

of

the

financial

forms

that

may

be

obtain

by

public

credit

operations
.

Function Reorganization


Under

the

principle

of

normative

centralization

and

operative

dis
-
concentration,

the

direct

responsibility

for

the

administration

of

the

financial

resources

was

transfered

to

the

Ministries

in

line,

which

assumed

more

control

over

their

budget
.




In

each

public

entity,

was

created

a

Financial

Administration

Unity,

with

the

purpose

of

carrying

out

the

functions

of

budget,

accounting

and

treasury

that

were

concentrated

in

the

Ministry

of

Public

Finance
.

Procedure Reform


Procedure

manuals

and

working

standards

were

defined

according

to

the

best

international

practices

to

process,

register

and

report

the

financial

information

of

the

public

sector
.



In

this

way

the

procedures

were

simplified

and

bottlenecks

were

removed,

which

propitiated

inefficiencies

and

lack

of

transparency

in

the

execution

of

public

resources
.

Information System


A

modern

integrated

system

of

financial

information

is

available,

which

operates

through

Internet

and

allows

a

more

efficient

execution

and

monitoring

of

the

financial

operations

of

the

government,

as

it

relies

on

a

single

database

at

the

central

level,

which

is

capable

to

transmit

automatically

the

data

between

the

subsystems

of

the

budget,

accounting,

treasury

and

public

credit
.

Training


Capacity

building

is

a

core

component

of

the

reform
.

Continuously,

staff

of

the

public

entities

is

trained

in

areas

of

the

budget,

accounting,

treasury

and

public

credit
.




The

international

experts,

who

have

supported

the

reform,

have

been

the

main

responsibles

for

the

training,

and

at

the

present,

also

national

experts

that

have

been

formed

during

the

process,

as

well

as

international

institutions

in

the

areas

to

be

innovated
.


Reform Areas


The

financial

administration

areas

that

have

been

reformed

are

the

following
:



Budget


Accounting



Treasury


Public

Credit


Governmental

Control


Procurement

Budget Reforms


The

public

budgetary

process

has

been

reformed

to

incorporate

the

multi
-
annual

expenditure

programming

and

the

assessment

of

the

execution
´
s

results
.

In

2005
,

a

proccess

to

define

performance

indicators

of

public

entities

was

started
.



Thus,

the

budget

could

be

an

accountability

and

social

auditing

instrument,

of

both,

the

financial

aspects

as

well

as

the

results

of

the

public

management
.

Accounting Reforms


The

accounting

records

are

performed

automatically

with

the

record

of

the

budgetary

execution,

through

one

single

bill
.

The

basis

of

accounting

records

is

the

accrual

system

(goods

and

services

already

received

and

pending

of

payment)
.



The

programming

of

the

budgetary

execution

is

carried

out

annually,

the

commitment

quotas

are

quarterly

approved
;

and

accrual

and

payment

quotas

are

monthly

approved
.


Treasury Reforms


There

is

one

single

account

of

the

Treasury,

which

applies

for

all

entities

of

the

Central

Administration

and

for

all

financing

sources,

with

the

objective

to

avoid

inefficiencies

in

the

use

of

resources
.


The

National

Treasury

performs

the

payments

of

the

accrued

expenses

charging

the

common

fund

it

maintains

with

the

Central

Bank,

through

electronic

deposits

to

the

bank

accounts

of

the

suppliers
.


Public Credit Reforms


A

registration

system

for

public

credit

operations

is

available,

based

on

the

system

of

financial

analysis

and

debt

administration

(SIGADE)

of

the

United

Nations

Conference

on

Trade

and

Development

(UNCTAD)

and

with

an

automatic

communication

link

for

the

updating

of

the

budgetary

execution

and

the

accounting

records
.


Reforms in the governmental control


In

2002
,

a

new

Organic

Law

of

the

Nation
´
s

Comptrollership

was

approved,

with

the

objective

to

modernize

and

strengthen

the

instruments

and

procedures

of

the

governmental

control
.




An

Informatic

System

of

Governmental

Auditing

is

available,

which

interacts

with

the

Information

System

of

the

Financial

Administration,

thus

optimizing

the

auditing

function
.


Procurement Reforms


There

is

an

information

system

of

public

procurement,

GUATECOMPRAS,

the

use

of

which

is

compulsory

in

all

entities

of

the

non

financial

public

sector

and

the

Municipalities
.



In

the

norms

of

budgetary

execution

of

the

year

2006

was

established

that

international

or

not

governmental

agencies

that

administer

public

funds,

should

publish

their

acquisitions

with

these

funds

in

GUATECOMPRAS
.


Procurement Reforms


A

draft

bill

on

procurement

han

been

elaborated

which

seeks

to

make

the

public

administration

more

efficient

and

transparent,

and

which

will

be

submitted

to

the

Congress

for

approval
.



In

the

initiative

of

law

it

is

proposed

to

establish

in

a

permanent

way

the

obligatory

use

of

GUATECOMPRAS,

for

all

public

or

private

entities

that

administer

public

funds
.

The reform of the municipal


financial administration


In

2002

a

new

Municipal

Code

was

approved,

which

defines

the

organization

and

functioning

of

the

municipal

governments

and

includes

the

integrated

municipal

financial

administration,

according

to

the

guidelines

established

by

the

Ministry

of

Public

Finance
.


At

the

present,

the

implementation

of

the

Integrated

System

of

Financial

Administration

is

being

executed

in

33
%

of

the

municipal

governments
.


In

2006
,

the

General

Comptrollership

of

the

Nation

approved

the

rules

of

technical

character

for

accountability

of

the

Municipalities

of

the

Republic
.


These

rules

establish

that
:

“the

accounting

information

shall

be

generated

by

the

SICOINWEB,

SIAF
-
MUNI

and/or

SIAFITO
-
MUNI

systems,

which

are

the

only

ones

recognized

by

the

General

Comptrollership

of

the

Nation

as

official

registration

and

control

systems

for

the

municipalities

and

their

utilities”
.


The reform of the municipal


financial administration

Covering of the System


The

system

covers

at

the

present

100
%

of

the

agencies

of

the

Central

Administration,

77
%

of

the

decentralized

and

autonomous

entities,

and

33
%

of

the

municipalities
.



For

2007
,

the

target

is

to

cover

100
%

of

the

decentralized

and

autonomous

entities

and

66
%

of

the

municipalities
.

This

will

allow

the

consolidation

of

fiscal

accounts

of

the

non

financial

public

sector

in

an

automatic

manner,

through

the

system
.

Assessment of the Financial
Administration in Guatemala



The

implementation

of

the

integrated

financial

management

system

(SIAF),

built

upon

a

good

normative

framework

and

facilitated

by

a

modern

technological

platform,

has

contributed

to

efficiency

in

executing

financial

transactions

and

to

the

production

of

opportune

information

on

most

government

finances

.



Guatemala: Country Financial Accountability and
Procurement Assessment Report

. World Bank and
Interamerican Development Bank, 2005.

Assessment of the Financial
Administration in Guatemala



Effective

controls

of

government’s

cash

position,

including

an

efficient

common

fund

system

and

rather

complete

central

government

debt

records,

are

in

place
.

Both

the

annual

budgets

and

financial

reports

provide

considerable

government

financial

data

that

is

publicly

available

.



Guatemala
:

Country

Financial

Accountability

and

Procurement

Assessment

Report
.

World

Bank

and

Interamerican

Development

Bank,

2005
.

Reform Challenges


To

consolidate

the

integration

between

the

planning,

budget

and

procurement

systems,

in

order

that

the

budgetary

programming

fully

responds

to

the

governmental

policies

and

the

working

plans

of

the

entities
.



To

consolidate

the

reform

of

the

municipal

financial

administration,

through

the

production

of

conditions

that

have

allowed

the

system
´
s

sustainability

at

the

Central

Government
.

Reform Challenges


To

support

the

strengthening

of

the

capacities

of

the

Nation
´
s

Comptrollership
,

in

order

that

it

can

control

in

an

efficient

way

the

public

expenditure

and

to

evaluate

its

quality,

according

to

its

constitutional

law
.


To

achieve

that

the

decentralized

and

autonomous

entities

make

public

their

financial

information

and

their

results

of

management

through

the

financial

management

system,

in

order

to

facilitate

the

social

auditing
.

Financial Management Reform

in Guatemala

www.minfin.gob.gt


www.guatecompras.gt


Thanks for your attention