World Bank Document

Public Disclosure Authorized
Document o f
The World Bank
FOR OFFICIAL USE ONLY
Public Disclosure Authorized
Report No. 42804-GT
PROJECT PAPER
ON A
PROPOSED ADDITIONAL FINANCING LOAN
IN THE AMOUNT OF US%20.0M I L L I O N
Public Disclosure Authorized
TO THE REPUBLIC OF GUATEMALA
FOR THE
THIRD INTEGRATED FINANCIAL MANAGEMENT TECHNICAL
ASSISTANCE PROJECT
Public Disclosure Authorized
March 4,2008
Poverty Reduction and Economic Sector Management
Central America Country Managemeut Unit
Latin America and the Caribbean Region
This document has a restricted distribution and may be used by recipients only in the performance of their
official duties. I t s contents may not otherwise be disclosed without World Bank authorization.
CURRENCY EQUIVALENTS
(Exchange Rate Effective November 9,2007)
Currency Unit = Quetzal
Q$l = US$0.13
US$1 = Q$7.65
FISCAL YEAR
January I December 3 1
--
ABBREVIATIONS AND ACRONYMS
ICT
IDB
Additional Financing
Automatic Rate Fixing
Country Assistance Strategy
Computer-Aided Software Engineering
Country Financial Accountability Assessment
Comptroller General’s Office
National Commission o f Science and Technology
Country Procurement Assessment Report
Financial Accounting Reporting and Auditing Handbook
Free Trade Area o f the Americas
Global Legal InformationNetwork
Guatemalan E-procurement System
Information and Communications Technology
Inter-American Development Bank
IFML I1
Integrated Financial Management I1Project
IMF
INFOM
INTECAP
LAC1
MOF
InternationalMonitory Fund
National Institute o f Municipal Development
Technical Institute for Training and Productivity
Loan Administration Change Initiative
Ministry o f Finance (MINFIN)
AF
ARF
CAS
CASE
CFAA
CGC
CONCYT
CPAR
FARAH
FTAA
GLIN
GUATECOMPRAS
MTEF
Medium-Term Expenditure Framework
NFPS
OM
ONSEC
PAD
PCU
PER
PIU
SAT
SAG
SEGEPLAN
SIAD
SIAF
Non-Financial Public Sector
Operational Manual
National Civil Service Office
Project Appraisal Document
Project CoordinatingUnit
Public ExpenditureReview
Project ImplementingUnit
Superintendence o f Tax Administration
Government Audit System
Secretariat o f Planning and Programming
IntegratedAdministrative System
IntegratedFinancial Management System
IntegratedFinancial Management System for Municipalities
IntegratedAccounting System
Small and Medium Enterprises
National Public Investment System
Statement o f Expenses
UnitedNations Development Program
UnitedNations Trade and Development Commission
SIAFMUNI
SICOIN
SME
SNIP
SOE
UNDP
UNCTAD
,
FOR OFFICIAL USE ONLY
Vice President: Pamela Cox
Country Director: Laura Frigenti
Sector Manager: Nicholas Manning
Project Team Leader: Alberto Leyton
PP Team Leader: Alberto Leyton
This document has a restricted distribution and may be used by recipients only in the performance o f
their official duties. I t s contents may not be otherwise disclosed without W o r l d Bank authorization.
REPUBLIC OF GUATEMALA
THIRD INTEGRATED FINANCIAL MANAGEMENT
TECHNICAL ASSISTANCE PROJECT
ADDITIONAL FINANCING
TABLE OF CONTENTS
A. Introduction
1
B. Background and Rationale for Additional Financing
1
C. Proposed Changes
5
D. Consistency with CAS o r CPS
9
E. Appraisal of Scaled-up Project Activities
11
F. Expected Outcomes
11
G. Institutional Arrangements for Project Implementation
12
H. Benefits and Risks
13
I.Financial Terms and Conditions for the Additional Financing
14
J. Allocation o f Proceeds of Additional Financing by Category
15
Project Paper Data Sheet
Date: Jan 18,2008
Country: Guatemala
Project Name: Third Integrated Financial
Management Technical Assistance Project
Project ID: P106993
Team Leader: Albert0 Leyton
Sector Directorhlanager: Nicholas
Manning
Country Director: Laura Frigenti
Environmental Category: C
Responsible agency: The Ministry o f Finance
Revised estimated disbursements (Bank FY/US$m)
FY
I2008
I2009
I2010
Annual
3.0
7.0
7.0
Cumulative
3 .O
10.0
17.0
I2011
3 .O
20.0
Does the restructured or scaled-up project require any exceptions from
Bank policies?
Have these been approved by Bank management?
I s approval for any policy exception sought from the Board?
Source
IBRD/IDA
Others
Total
Local
12.00
Foreign
8.00
No
NA
No
Total
20.00
20.00
A. Introduction
1.
This Project Paper seeks the approval o f the Executive Directors to provide an additional loan in
the amount o f US$20 million to The Republic o f Guatemala to expand activities under the Third
Integrated Financial Management Technical Assistance Project (PO66175), Loan 7 104-GU (the
Project).
2.
The proposed additional loan would help finance the cost o f activities geared to deepen the
Government o f Guatemala’s public sector modernization process, by amplifying the impact and
development effectiveness o f this well-performing project, and addressing pending challenges to the
overall sustainability o f the reform process. Specifically, the proposed additional financing will
facilitate the provision o f technical assistance necessary to: i)further strengthen the budget, accounting
and treasury management functions; ii)institutionalize the respective integrated financial management
(SIAF) and the e-procurement (GUATECOMPRAS) systems within the Ministry o f Finance; iii)
support the municipalities’ capacity to adopt and consolidate new procedures and systems to carry out
efficient and transparent financial management; iv) strengthen the Comptroller General’s Office
(CGC); v) build-up and integrate public planning and public investment procedures and systems with
the budget;. and, vi) design and institutionalize a permanent knowledge management system in the area
o f public expenditure management.
3.
Partnership Arrangements. The proposed Additional Financing does not envisage formal
partnership arrangements with other international financing agencies. However, the Government of
The Netherlands wauld provide grant funds to complement activities to support the CGC component.
B. Background and Rationale for Additional Financing (AF)
4.
Original Project Design. The Project was approved on February 7,2002 for an amount o f USD
29.75 million, and became effective on April 18,2003. Thereafter, in June, 2006 the original project’s
closing date, September, 2006 was extended until June 2008. The project’s development objective i s to
extend and deepen the reforms pursued under the Integrated Financial Management I1 Project (IFML
II)which
,
aimed at increasing the effectiveness, efficiency, and transparency o f public sector financial
management and control.
According to the original Project Document, the Project focused on: i)deepening reforms in the
areas o f budget formulation and execution, multi-annual budgeting, accounting, cash management,
debt management, public investment, public procurement, and increased relevance o f monitoring
performance and results; ii)extending the (SIAF) to the remaining agencies and social funds within the
central government, and reaching executing units’ levels in central government agencies; iii)
supporting Guatemala’s decentralization effort, by underpinningthe design and implementationo f new
financial management procedures and systems in the 33 1 municipal governments; iv) developing and
integrating a human resource management information sub-system into the Government’s overall F M
system; v) strengthening o f the main audit institution (CGC); and, vi) promoting several e-government
initiatives.
5.
6.
In pursuing these objectives, the Project currently supports the implementation o f the following
components: i) consolidating the SIAF via the implementation o f inter alia a Medium-Term
Expenditure Framework (MTEF) and more effective procedures, and the system’s expansion to
decentralized agencies including social funds and all budget executing units; ii)strengthening the
municipalities through the development and implementation o f new procedures and systems
underlying a more efficient, transparent and accountable financial management within the framework
o f the Organic Budget Law and the annual budget laws ; iii)modernization o f human resource
5
management, via the strengthening o f the Civil Service Office (ONSEC) and line units’s capacity to
efficiently manage human resources, the design and implementation o f a decentralized payroll system
and a single database o f public employees; iv) strengthening o f the CGC by supporting the
modernization o f i t s organization, internal processes, and internal audit u n i t s (UDAI) throughout all
government agencies, increased transparency and access to information, and the expansion o f the audit
training program; and, v) design o f a national e-government framework primarily focused public
finance and procurement functions.
Project Performance to Date. From the project’s approval and as observed in the 12
Implementation Status Reports (ISR) that have been submitted to date, the overall project
implementation has consistently been rated satisfactory in each o f the six components that are expected
to meet their original objectives. A mid-term review conducted in November 2005, also rated progress
towards achieving the Project Development Objective (PDO) satisfactory and found no major issues
requiring attention, thereby obviating the need for project restructuring. In June, 2006 the project team
sought and received approval o f a 21 month closing date extension to June 2008 on the basis o f
progress achieved and to accommodate the lag in effectiveness by a lengthy process o f loan approval
in Congress. It i s expected that the project will commit and disburse the around 90 percent o f the loan
amount before the current closing date. N o outstanding issues with audits, financial management (FM)
or procurement performance, or compliance with legal covenants are currently observed.
7.
8.
The key project outcomes already accomplished towards achieving the PDO include:
rn
Increased effectiveness, efficiency and transparency o f public sector financial management
and control, as evidenced b y progress towards meeting the main outcome indicators identified
at Appraisal: (i)the national budget now includes improved performance indicators consistent
with the medium-term expenditure framework; (ii)
the SIAF has been extended to all central
the budget, accounting and treasury functions are
government budget executing agencies; (iii)
more efficient; and (iv) budget execution, debt service, transfers and procurement information i s
accessible to the public through the internet.
8
The SIAF system i s now considered one o f the best regional practices in automated public
financial management. The system was upgraded to operate under web-based technology and
i s now fully operational in all central government agencies and most o f the decentralized
entities, and furthermore covers approximately 300 executing-level units. I t includes most o f the
public financial management functions
rn
New financial management procedures and systems were successfully implemented in all
municipalities. The new framework for municipal financial management SIAFMUNI has
allowed for a more efficient and transparent model. New municipal financial management
procedures and systems are gradually being implemented in all municipal governments in
Guatemala.
rn
The e-procurement application GUATECOMPRAS i s now operating and registering all
central government agencies transactions and i s gradually being expanded to decentralized
entities and municipalities. Although the application has yet to support online transactions
(such as electronic bidding or electronic purchasing), this system has successfully promoted
higher degrees o f transparency in the public procurement practices evidenced by improvements
in users perceptions and a recent award granted by the private sector association in Guatemala.
An automatic and fully integrated payroll system i s being implemented throughout all
central government agencies, including the health and education sectors. Nearly all central
government employees are now paid through the banking system and an updated database o f
public sector employees has been developed and integrated with the SIAF system. However
Human Resource Management applications s t i l l need to be developed.
6
.
An automated workflow system to support the Comptroller General’s Office’s audit
processes has been developed and i s under implementation. Although not completely
operational and subject to further evaluations, the government audit system (SAG) i s supporting
the core business processes o f the CGC.
An e-government strategy to support key public sector services and processes has been
developed. In addition to successful experiences in automating financial management and public
procurement applications, the government i s now pursuing the expansion o f these practices to
other government services.
9.
Actual impact and economic gains yielded from these project outputs are not easy to quantify
but are evident as the project i s having a direct impact on the quality o f the State’s macro and fiscal
management. Moreover, enhanced budget management capacity has increased the efficiency o f public
resource allocation thereby contributing to better use o f public funds as discussed in the recent Public
Expenditure Review (PER); transparency and competition in public procurement processes have
already generated important fiscal savings from lower costs and better quality o f goods and services
acquired by public entities as discussed in the recent Country Procurement Assessment Report
(CPAR); and enhanced control o f public finances and automation o f processes in municipalities have
improved the overall quality o f expenditures; increased tax collection and better public services quality
and delivery at the local and community levels as discussed in the recent Country Financial
Accountability Assessment (CFAA). Overall, it i s reasonable to expect that increased transparency o f
public sector management has a very significant impact on improving the country’s economic and
investment climate.
10. Despite the notable progress achieved to date, the public sector modernization agenda in these
areas has yet to be completed. Additional efforts are required in the above cited areas to both complete
and consolidate the reform process and to ensure i t s sustainability. To this end, the CFANCPAR o f
June, 2005 (updated in 2007) identified a number o f opportunities for improvement following
recognized international good practices. According to these reports, important issues that remain to be
addressed include:
i) Further development and integration o f budget management with planning processes in order to
fully develop a medium t e r m expenditure framework (MTEF) integrated with meaningful and
consistent performance and results-based indicators;
ii) Review and update the budget and accounting codifications to aligned them with international
standards and guidelines developed by the IMF for government finance statistics;
iii) Expansion o f e-procurement practices to reach online transactional applications including ebidding and e-purchasing, to support a fully automated and transparent system;
iv) Institutionalization and development o f the Ministry o f Finance’s own capacities to completely
absorb the SIAF systems’ operation and maintenance including further and permanent conceptual
and technological upgrading;
v)
Further development o f appropriate and specific applications to support the entire municipal
management cycle while maintaining integration capabilities with central systems;
vi) Institutionalization o f permanent and continuous capacity-building and knowledge management
systems for central and municipal governments in areas related to public sector management; and
vii) Continue the strengthening and reform processes o f the CGC to consolidate i t s capacity to perform
high quality independent evaluations at the central and municipal levels.
7
11. Rationale Underlying Request for Additional Financing. The proposed AF would support the
implementation o f complementary activities necessary to complete, consolidate and expand ongoing
government public sector reform efforts. The proposed additional loan would address pending issues in
the areas o f public expenditure planning and monitoring, fiscal and financial management, public
procurement, and strengthening o f internal and external control functions. It would furthermore take
advantage o f new windows o f opportunity to advance and consolidate the already successful state
reform process. The project development objective (PDO) will remain valid given that the new
activities, proposed within the context o f this AF, will continue to support the same reform agenda.
12. The Additional Financing i s the most suitable financial instrument to support these
complementary activities because: i) the outcomes made by this operation offer a window o f
opportunity to consolidate and expand achievements made via an‘ incremental approach --the AF
seems to provide the most effective mechanism to respond to the Government’s request for additional
support in a timely manner, ii)the PDO remains the same and implementation arrangements will not
suffer major changes,; iii)the Government o f Guatemala has expressed its agreement to process this
new project on the basis o f additional financing to the ongoing loan in order to consolidate reforms
obtained under the original project; iv) the new activities can easily be accommodated within the
context o f the government’s existing implementation capacity and therefore full implementation o f
proposed activities i s expected to be completed within a three-year period; v) no environmental or
other safeguard related issues are expected to arise as a result o f this proposal .as it will continue with
the implementation o f technical assistance activities in the same areas as the original project; and,
finally vi) all proposed activities are fully aligned with the original PDO and therefore consistent with
the priorities set out in the current Country Assistance Strategy (CAS).
C. Proposed Changes.
13. Proposed Additional Financing Project. The objective o f the Project i s to extend and deepen
the Borrower’s financial sector reforms being pursued under the Original Project with the aim o f
increasing the effectiveness, efficiency, and transparency o f public financial management. Although
the original PDO will remain valid, project components as well as the outcomes and results framework
will be restructured to accommodate the scaling up o f existing components as well as the addition o f
new components, geared to ensure that the remaining challenges will be addressed both effectively and
efficiently within the 36-month duration o f the proposed AF.
14. The proposed AF i s expected to deepen and consolidate reforms initiated under the SIAF project
geared to increase public sector efficiency and transparency at the central and municipal levels in the
areas o f public finance planning, management, and control by strengthening the processes and systems
and supporting the institutionalization o f these processes and systems through the transfer o f
ownership to the relevant institutions. To this end, it will support the provision o f technical assistance
to: i)consolidate and institutionalize the SIAF within the Ministry o f Finance; ii)implement and
consolidate efficient and transparent public financial management at the municipal level; iii)strengthen
the public financial control framework; iv) strengthen an integrate public planning and investment
procedures and systems to improve the design, evaluation and monitoring o f public investment; v)
design and institutionalize a permanent knowledge management system in the area o f public
expenditure management
15. Project Components. Four o f the ongoing project components will be scaled-up/expanded and
continue to be supported by the additional loan: a) Consolidating and institutionalizing SIAF within the
Ministry o f Finance; b) Strengthening Municipal Governments’ Financial Management; c)
Strengthening o f the CGC; and d) Project coordination. Expanded activities for components on Human
Resource management modernization and e-Government will be included as part o f Component 1.
Finally, two new components will be incorporated under the new AF: a) Strengthening and integrating
8
planning and public investment procedures and systems; and b) Designing and institutionalizing a
permanent knowledge management system in the area o f public expenditure management. A detailed
description of activities to be supported under all projects components i s provided below. Tables 2 and
3 show the proposed allocation o f resources among scaled-up/expanded and new components.
Onpoing scaled-upmxpanded components:
Project Component 1: Consolidating and institutionalizing SIAF within the Ministry o f Finance
16. New or expanded activities under this component aim at consolidating and institutionalizing the SIAF
project within the Ministry o f Finance. Provision o f technical assistance, training and equipment as
necessary to: (i)
continue expanding SIAF coverage throughout the Borrower’s central government to
expand the reach o f
include all decentralized entities, social h d s and Congress o f the Republic; (ii)
SIAF down to the Borrower’s budget execution u n i t s within ministries and entities; (iii)
consolidate the
-
medium-term expenditure framework implemented under the Original Project; (iv) deepen the
Borrower’s budget reform (as designed and being implemented under the Original Project) through the
strengthening o f macro-budget controls; (v) review and update o f SIAF modules in order to make them
consistent with international accounting, debt and budget standards; (vi) enhance the coverage o f eprocurement procedures and consolidate and deepen GUATECOMPRAS; and (vii) provide support to
MOF for the development o f a strategic plan for the institutionalizationo f SIAF.
17. Support a gradual transference to the MOF o f the administration, operation, maintenance, and the
development and upgrade o f SIAF operational modules.
18. Sub-component l.a: Consolidation of the achievements in the area of multi-annual and
results-oriented budget. This sub-component will support i)the strengthening o f the Budget Technical
Office through the provision o f necessary technical resources, training in the evaluation and budget
performance, and the implementation o f effective norms and procedures, ii)building-up o f the sector
planning system in the areas o f multi-annual and results-oriented budget formulation, execution and
monitoring and performance; iii) assistance to central government entities in the design and
implementationo f performance indicators through technical support and training.
19. Subcomponent 1.6: Gradual incorporation of international standards to public financial
management in the areas of accounting, budget andpublic debt. This sub-component will prepare an
international standards adoption plan that will include the 200 1 IMF’s Government Finance Statistics
Standards Manual and InternationalPublic Accounting Standards. This will ensure the implementation
o f a first set o f international standards, including modifications in several accounting and budget codes,
the required changes in the I T systems and the necessary training for i t s effective execution. In
addition, international standards and new procedures to expand the local debt capital markets and the
use o f debt instruments will be implemented.
20. Sub-component 1.c: Consolidation of the budget, treasury and accounting’s capabilities
within the Ministry of Finance to take over the management and operation of the S I A F system and
the development of specific tools to support S I A F management. This subcomponent aims at
strengthening the capacity o f all relevant departments to manage their respective SIAF subsystem. It
will also include the preparation o f a diagnostic to identify financial management needs not covered by
the SIAF, the definition o f an action plan to meet them, and the development o f new procedures and I T
tools to complement the SIAF as identified by the relevant departments.
2 1. Sub-component l.d: Expansion of GUATECOMPRAS’s scope and functionality and
consolidation of the system as the country’s public procurement framework. This subcomponent will
develop and implement new procurement planning and policies to increase cost-effectiveness and
9
define a strategic framework for the GUATECOMPRAS system. It will also expand the transactional
functionality o f GUATECOMPRAS and incorporate new products and services to both handle
automated purchasing capabilities and facilitate easier access o f Small and Medium Enterprises
(SMEs) to serve as vendors for the public sector.
22. Sub-component 1.e: Transfer of S I A F I T operation to the Ministry of Finance’s Department
of Information Systems. This subcomponent will develop a plan led by the functional and I T areas o f
the Ministry that will define the process by which the SIAF, GUATECOMPRAS and other relevant
systems will be transferred to the Ministry with the necessary information security requirements. It
w i l l also support the development o f a strategic plan that will identify alternatives to ensure the system
sustainability, including outsourcing alternatives and other shared “best-practices” in I T systems
support. Finally, it will support the Information Systems Department’s ability to incorporate the
financial and human resources necessary to adequately manage and sustain all SIAF systems.
Project Component 2: Strengthening Municipal Governments’ Financial Management
On the basis o f the results already achieved in the implementation o f SIAF-MUNI in all 331
municipalities, the proposed additional financing will: (i)design and implementation o f simplified
financial management systems for all municipalities; (ii)
organizational restructuring o f municipalities
and design and preparation o f related procedural manuals to implement the above mentioned systems;
(iii)
design and implementation o f a training program for municipal-level staff; (iv) development and
implementation o f further specific applications to support financial management related processes in
all municipalities; and (v) strengthening o f MOF’s capacity to provide technical support to
municipalities.
23, Sub-component 2.a: Further development and consolidation of the revamped municipal
financial management system and procedures. This sub-component will support the preparation o f a
framework document that defines the key aspects o f municipal financial management- procedures,
norms and systems’ functionalities and a sustainability model. The development and implementation
o f the updated financial information system (SIAFMUNI-WEB), including training o f relevant staff at
the municipal level and capacity building in the area o f municipal public debt management.
24. Sub-component 2.b: Strenghtening of the Ministry of Finance to provide support in the area
of financial management. This subcomponent will strengthen the Ministry o f Finance’s capacity to
support and advise the municipalities in the area o f financial management by creating a governmental
unit for municipal financial management support that will have the necessary financial and human
resources; the IT department will take over the I T aspects o f the system.
Project Component 3: Strengthening o f the Comptroller General’s Office
25. Continuing with ongoing activities under this component, the AF will include: (i)consolidation
o f previous achievements under the Original Project in the area o f public financial control; (ii)
strengthening o f specialized non-financial auditing capabilities; and (iii)strengthening o f CGC’s
functions and promotion o f public participation in the public financial management oversight.
Sub-component 3.a: Consolidation of the previous achievements in the area of public financial
control. This subcomponent will support the: i)strengthening o f the investment planning and
management capacity at the ‘municipal level; and ii) conceptual analysis o f SNIP and i t s
integratiodcoordination with SIAF.
10
26. Sub-component 3.6: Strengthening of specialized non-financial audit capabilities. This
subcomponent will support the establishment o f specific methodologies to perform Environmental,
Human Resources and Value for Money audits and the development o f the CGC’s institutional
capacity to carry out specialized non-financial audits to complement and enhance external control.
27. Sub-component 3.c: Strengthening of CGC’sfunctions and promotion of public participation
in the publicfinancial management oversight. This subcomponent will strengthenthe CGC’s internal
functions to improve i t s performance and efficiency and promote public participation in public sector
financial management oversight, including the creation o f a claims and allegation center concerning
public finance mismanagement.
Project Component 4: Project coordination
28. Strengthening o f the operational capacity o f the Ministry o f Finance through the provision o f
training, technical assistance (including audit services) and the acquisition o f equipment required
therefore in order to ensure that the Ministry o f Finance carries out i t s tasks efficiently.
New components to be supported bv the additional loan:
Project Component 5: Strengthening and integrating planning and public investment procedures
and systems
29. T h i s component will strengthen SEGEPLAN’s Public Investment system by supporting the
implementation o f its operational model, based on two strategic pillars: i) strengthening o f the
investment planning and management capacity at municipal level and ii)conceptual analysis o f SNIP
and integratiodcoordinationwith the SIAF.
30. Sub-component 5.a: Strengthening of investmentplanning and management capacities at the
regional and municipal levels. This subcomponent will support: i)the strengthening o f a new regional
model for SEGEPLAN and development o f the mechanisms for training and certification o f public
servants, ii)the analysis and update o f the Municipal Public Investment System (SMIP) and , iii)the
development o f a e-learning system in the area o f public investment at the regional and local level.
3 1. Sub-component 5.6: Conceptual analysis of the SNIP and integration/coordination with the
SIAF. This subcomponent will include the preparation o f an analysis and diagnostic o f the current
investment cycle and i t s management tools, strengthening o f the Public Investment Directorate to
manage the SNIP and carry out a strategic plan for the integratiodcoordination between SNIP and
S IAF.
Project Component 6: Designing and institutionalizing a permanent knowledge management
system in the area o f public expenditure management
32. The project will provide support to develop and implement a knowledge management system,
with the participation o f public and private institutions geared to disseminate and train public officials
at all government levels, on topics related to planning, monitoring and evaluation, financial
management, public procurement, human resource management and auditing.
33. This component will furthermore support the preparation o f a comprehensive training plan for
public servants involved in the above-mentioned areas, taking into consideration the current needs and
requirements under the SIAF model and according to international best-practices in these areas. It
would also make extensive use o f e-learning.
11
-
D. Consistency with CAS o r CPS
34. The proposed AF is consistent with the CAS and the Government’s reform agenda. B o t h the
CAS and i t s 2007 Progress Report have emphasized the results achieved in building a strong, efficient
and transparent public financial management and the critical importance o f carrying on with reforms in
other areas. Accordingly, this AF aims at deepening and consolidating the progress achieved under the
previous public financial management operations, both at national and sub-national levels and focuses
on key areas that are identified as critical to ensure the sustainability o f these achievements.
E. Appraisal o f Scaled-up Project Activities
35. Economic and financial analyses. As in the case o f the original project, the expanded activities
under the proposed AF will focus on technical assistance and capacity building activities. I t i s
therefore difficult to quantify outputs and benefits, and to precisely calculate rates o f return.
Nevertheless, and as mentioned earlier, since positive fiscal impacts are expected, project
implementation is projected to generate economic gains. The most noteworthy economic and fiscal
savings are expected to result from: (i)
the strengthening and integration o f planning, public investment
and budget systems which are estimated to increase the economic returns o f overall public expenditure
and particularly public investments; (ii)
the consolidation and expansion o f the SIAF would render the
budget preparation process as well as treasury and accounting operations more transparent and
effective, thereby permitting better budget allocation decisions and generating substantial fiscal
savings and enhanced returns in terms o f more effective and extended public services; (iii)more
transparent and automated procurement processes will discourage inefficiencies and corruption in
public procurement and will immediately generate fiscal savings; (iv) strengthened financial
management at the municipal level would generate incentives for further accountability and
effectiveness o f fiscal transfers as well as local taxes to produce more effective and beneficial
investments and other services; and (v) strengthening the institutional capacity o f the CGC would
ensure greater accountability and therefore more effective monitoring and control o f financial flows.
36. Moreover, better qualification and training o f the government’s human resources, promoted
through a comprehensive knowledge management program, should lead to improved performance and
efficiency gains by expediting processes, minimizing risks o f errors or deficient operations and making
reform achievements sustainable over time.
37. Technical Analysis. Recent analytical work carried out by the Bank, including the
C F A N C P A R and the PER, have both identified the remarkable strides made in public financial
management as well as the need to consolidate reforms and to focus on planning activities.
38.
While the PER identified a number o f significant achievements in public financial management,
it also highlighted several areas where more profound reform i s needed in order to achieve a higher
degree o f transparency and accountability. In particular, this report underscored the need to strengthen
the audit process carried out by the CGC, and to increase information o n budget execution - both o f
which will constitute key challenges to be addressed within the context o f the proposed Additional
Financing Loan.
39. As suggested in the CFANCPAR, this additional financing project will support the process by
which the government and the Ministry o f Finance in particular, take full ownership o f the public
financial management processes and systems; and, deepen the public procurement system by
expanding the public procurement strategy and improving i t s regulatory framework.
40. Besides recommendations from such recent analytical work, participatory workshops with
relevant stakeholders in all participating agencies were conducted to further refine the set o f actions
and activities to be supported by the extended project. It was determined that the continuation and
12
.
consolidation o f activities supported under the three first components o f the original project were
necessary to complete and institutionalize the financial management reform in the country. Additional
efforts to further update existing systems and applications in both central and local FM systems will be
also undertaken on the basis o f the same technical analysis. Plus, as the FM reform advances to i t s
institutionalization at the Ministry o f Finance, expansion to the planning systems appears as an
unavoidable step to fulfill the main objective o f creating and effective Medium Term Expenditure and
Financial framework (MTEF).
41. All new activities under both ongoing and new components will continue to be implemented
using the original technical approach, which consists o f the use o f a set o f technical assistance
activities provided by external experts and consultants for the design, development and implementation
o f tailored applications and extensive training o f relevant users at all levels. In this case, such set o f
actions will be expanded to further transfer capacities, expertise and operational responsibilities to line
employees in all participating agencies, complemented with a selective absorption o f key experts and
consultants into government permanent structure to ensure project sustainability.
42. Institutional Analysis. The Ministry o f Finance has led the implementation o f important
changes in public financial management. The results achieved so far make further reform easier,
reducing barriers to change. The institutionalization o f the reforms at the ministry’s level i s the natural
end to the reform process that was initiated a decade ago. The Borrower has confirmed i t s commitment
to consolidate and expand proposed activities by actively involving top level authorities o f concerned
agencies as well as technical personnel needed to take over responsibilities for operating and
maintaining and expanding system applications developed under the project. They have also confirmed
the decision to increase budget allocations to absorb a number o f specialized consultants to enhance
their own capacities to facilitate project sustainability. The new activities can be accommodated
relatively easily within the government’s existing implementation capacity for the project.
43. Although the technical capacity o f most agencies responsible for the execution o f project
activities i s s t i l l limited, the Project Implementation Unit (PIU) has been successful in establishing a
strong team o f consultants who are called by the project design to be further assimilated into Ministry’s
line units as well as to transfer and share their knowledge and experience to facilitate project
institutionalization. This means that some selected technical positions w i l l be created in the Ministry of
Finance as well as in other concerned agencies to incorporate specialized consultants and convert them
into permanent civil servants. In addition, external consultants will be hired to carry out specialized
tasks when deemed necessary. Therefore, core necessary capacities are considered to be sufficient
given the long country experience in this field.
44. Fiduciary Analysis. Fiduciary and capacity assessments o f the P I U in the Ministry of Finance
as well as on other participating entities have been undertaken as part o f ongoing project supervision
activities. Also an update o f the FMA recent supervision report was prepared to provide the
information necessary under the new legal format for AF. In light o f the Ministry o f Finance’s decision
to take on management o f project fiduciary functions, a capacity assessment update o f the PCU-MF to
implement procurement tasks was conducted on November 12,2007, the findings o f which confirm the
Average risk rating assigned during the preparation stage o f the Third Integrated Financial
Management Project. N o major changes to existing institutional arrangements are expected and
fiduciary aspects related to the implementation o f new activities under the AF are deemed adequate.
Further assessments will be undertaken as necessary as the government advances the absorption of
implementation responsibilities within line ministries and units.
45. At the time this project paper i s being prepared, country systems are being evaluated to agree on
the establishment o f a Single Treasury Account system for External Aid. In this case the Designated
Account would be held by the National Treasury and would be used by the project through the P F M
system SICOIN. However, the adoption o f a Single Treasury system for designated accounts s t i l l needs
13
a specific assessment by F M and clearance by the Bank via LOA. Therefore until the Single Treasury
system i s adopted, the project will simply open an additional designated account in the Central Bank in
order to maintain a separate record o f disbursements under the AF and ensure a proper closure o f the
previous project in June.
Social and Environment. This project currently triggers none o f the Bank’s environmental or
social safeguard policies.
46.
F. Expected Outcomes
47. Proposed new activities will allow for additional outputs and outcomes as presented in Table 2
below. More detailed description o f expected outcomes and results indicators are discussed in the
outcomes and results framework for project components in Annex 1.
Table 1: Expected Outcomes and Indicators
Expected Outcome
Original Outcome Indicators
Additional Outcome Indicators
Development objective
Deepen and consolidate the reforms initiated with the SIAF project aim at increasing the efficiency and transparency of the
public sector at the central and municipal levels in the areas o f public finance planning, management and control by
strengthening the processes and systems and supporting the institutionalizationof these processes and systems through the
transfer o f ownership to the relevant institutions
Expected outcomes and indicators by component
Ongoing scaled-udexpanded compc ents
Component 1. Consolidating and in tutionalizing SIAF within the Ministry o f Finance
All SIAF developments and updates
Implementation of adjustments made in
Performance-basedbudgeting and
have been completed and transferred FY2005 budget proposals based on
single treasury account management
to the Ministry o f Finance, assuming efficiency and effectiveness studies in
applications are fully operational and
SIAF systems
under implementation.
its functional and technological
management and maintenance
Progress in making real time reporting of
SIAF systems have been transferred
disaggregated budget execution accessible and are operated by line units in at
to public on internet
the Ministry of Finance.
Component 2. Strengthening Munic
The municipalitieshave
implemented procedures and systems
to make financial management more
efficient, transparent and accountable
al Governments’ Financial Management
Number of municipalities operating
financial management systems (100
municipalities by 2003,200 by 2004, and
300 by 2005)
A framework document that defines
the key aspects of municipal
financial management: procedures,
norms and systems’ functionality
and sustainability model has been
prepared and disseminated among
municipalities.
New budget practices at the
municipal level linking planning and
medium-term budgeting processes
have been development and are
under implementation.
An updated financial information
system (SIAFMUNI-WEB) has been
14
~~
Expected Outcome
Original Outcome Indicators
Additional Outcome Indicators
developed.
Number o f municipalities(or % of
total municipal budget) covered with
the new procedures and systems with
SIAFMUNI-WEB in place,
including a support and maintenance
plan (June 2011)
Component 3. Strengthening of the Comptroller General’s Office
Enhance the efficiency level o f I Progress in restructuring the CGC
Public Control System -through the
increased capacity and efficiency o f
Public control institutions.
SAG has been implemented and
used in CGC, UDAIs and a
significant number of UDAIMs
A significant number o f specialized
non-financial audits are included in
CGC Annual Audit Plan performed
by CGC staff.
I
Claims and Allegation Center i s in
place and responding efficiently to
citizens
Component 4. Project Coordination
New comDonents
Component 5. Strengthening and integrating public planning and public investment procedures and systems
The
capacity
for
planning,
The municipal public investment
management and evaluation of public
tools have been improved and a
investment and development policies
permanent system for training in the
has been improved at national and
areas of public investment at
municipal level
regional and local level i s in place.
I
I
I
A strategy to ensure consistency and
integration between the SNIP and
I the SIAF has been implemented
Component 6. Designing and institutionalizing a permanent knowledge management system in the area o f public
expenditure management
A comprehensive set o f training has
been designed and piloted
Designing and institutionalizing a
throughout the central and municipal
permanent knowledge management
administration with the participation
system in the area of pubic
of ministries’ experts, universities,
expenditure management
private sector, and leveraging elearning
I
G. InstitutionalArrangements for Project Implementation
48. The proposed AF will not introduce any major change to existing administrative and supervision
procedures, except for management o f procurement and financial management functions in view of the
Government’s decision to take direct responsibility for performance of such fiduciary functions and
discontinue the use of the UNDP as an external procurement and financial management agent. Based
15
on the above, the Ministry o f Finance will now directly perform overall project management
coordination and administrative functions.
49. The Government has also requested that administrative functions to implement components
under the supervision o f other entities as the CGC and SEGEPLAN, be gradually transferred to those
institutions. The PCU will coordinate with CGR and SEGEPLAN to agree on a gradual plan to transfer
administrative functions including project procurement and financial management. The PCU in the
Ministry o f Finance will perform overall project coordination fimctions and will continue consolidatihg
and preparing project implementation records and reports. Steps to transfer these functions to other
entities will be authorized by the Bank at the Government’s request after assessing institutional
capacities and agreeing on specific actions plans to ensure that new implementing units are capable
and trained to follow Bank procedures.
50. The project would abandon the use o f UNDP as administrative agency in use for the ongoing
operation and instead the PCU would assume the responsibilities o f reporting on the use o f funds and
preparing and submitting disbursement applications. The following methods o f disbursement would be
used by the PCU:
0
0
0
Advances to a Designated Account @A).
Reimbursement
Direct Payments
5 1. M o F would open a Designated Account @A). The flow o f funds will be channeled through the
DA, as expenditures arise. In this way funds will only be withdrawn from the DA for specific amounts
related to expenses incurred. The designated account would be held in dollars in Guatemala’s Central
Bank (BANGUAT), and as the local legal framework only allows public bank accounts held in other
currency than quetzals if specifically agreed with International institutions, it’s recommended to
include the requirement in the minutes o f negotiations.
52. The PCU w i l l use Statements o f Expenditures (SOEs) to report on the use o f funds and w i l l
report on the payments made from the DA on a quarterly basis. The specific documentation
requirements will be detailed in the Disbursement Letter. All supporting documentation will be
maintained by MoF for post-review and audit purposes for up to one year after the final withdrawal
from the loan.
53.
References to Bank procurement and sanctions guidelines have been updated in the legal
document in order to reflect the applicability o f the 2004 Procurement and Consultants Guidelines as
revised in October, 2006. Such adjustments have been also incorporated into the Operational Manual
approved by the Bank. An updated Procurement Plan has been prepared to include new activities to be
supported by the project. Both the Procurement Plan and updated Operational Manual have been
approved prior to negotiations.
54.
Project closing date will be extended for three years until June 30,201 1.
16
H. Benefits and Risks
55.
The benefits associated with the proposed additional loan are explained previously in the paper.
In summary, the loan would help the Government o f Guatemala to undertake activities needed to
amplify the impact and effectiveness o f its financial management reform program, while ensuring its
sustainability.
56.
The additional finance will also face risks, o f which the most significant are:
Risk
Risk
Rating
Further institutionalization o f SIAF
within the Ministry o f Finance may
be affected by difficulty in attracting
qualified staff in IT-specific areas,
where market salaries are high and
skills are very specific.
S
Limited capacity o f the 333
municipalities to implement the
reform and ensure its sustainability.
S
Risk Mitigation Measures
Residual
Risk
This risk will be mitigated by enhancing
the training and capacity building
component at the Ministry.
M
Options to outsource certain I T specialized
services will also be considered.
Mitigation o f this risk w i l l involve a
thorough analysis o f the capacity o f each
municipality, and the correlated provision
o f technical assistance and capacity
building programs.
The project will also support the
establishment o f a Unit within the Ministry
o f Finance to assist municipalities in
financial management development.
M
Risk rating: H (High Risk), S (Substantial Risk), M (Moderate Risk), and L (Negligible or Low Risk)
I. Financial Terms And Conditions For The Additional Financing
57. Actual terms have been included in the Legal Agreement as discussed and agreed upon during
negotiations. The terms were selected by the borrower via the loan choice worksheet which i s an annex
to the minutes o f negotiation.
J. Project Costs and Allocation o f Proceeds o f Additional Financing
Table 2: Total Proiect Costs by ComDonent
{Exmessed in USD Millions)
~
Project Components
OnPoing scaled-udexuanded comuonents
Consolidating and institutionalizingSIAF within the Ministry o f
Finance
Strengthening Municipal Governments’ Financial Management
Strengthening o f the Comptroller General’s office
Project Coordination
New comuonents
Strengthening and integrating planning and public investment
procedures and systems
Designing and institutionalizinga permanent knowledge management
Original
costs
Additional
costs
Total costs .
9.98
5.42
15.4
13.09
3.57
3.23
5 -90
5 -40
1.40
18.99
8.97
4.63
0.00
1.37
1.37
0.00
0.50
0.50
system in the area o f public expenditure management
Ongoing comDonents not to be exDanded
Modernizinghuman resource management information
0 e-Government
1.39
1.64
0.00
0.00
1.39
1.64
Total costs
32.90
20.00
52.9
Bank financing
29.75
20.00
49.75
Table 3: Allocation o f Proceeds o f Additional Financinp bv ComDonent
(Emressed in USD Thousands)
ComDonent o r SubcomDonent
1. Consolidating and institutionalizing SIAF within the Ministry of Finance
1.a. Consolidation o f the achievements in the area o f multi-annual and results-oriented budget
1.b. Gradual incorporation of international standards to public financial management in the areas o f
accounting, budget and public debt
1.c. Consolidation o f the budget, treasury and accounting’s capabilities to take over the management
and operation o f the SIAF system and development o f specific tools to support SIAF
management
1.d. Expansion of GUATECOMPRAS’ scope and hnctionality and consolidation of the system as the
country’s public procurement framework
1.e. Transfer of the SIAF I T operation to the Ministry’s Department o f Information Systems
2. Strengthening Municipal Governments’ Financial Management
2.a. Further development and consolidation o f the new municipal financial management systems and
procedures
2.b. Creation of a department within the Ministry of Finance that, without interfering with the
municipalities’ legal autonomy, coordinates and provides support in the area o f financial
management under Article 46 of Organic Budget Law
3. Strengthening of the Comptroller General’s office
3.a. Consolidation of the previous achievements in the area o f public financial control
3 .b. Strengthening of specialized non-financialaudit capabilities
3.c. Strengthening of CGC’s functions and promotion of public participation in the public financial
management oversight
4. Project Coordination
5. Strengthening and integrating public planning and investment procedures and systems
4.a. Strengthening of the investment planning and management capacity at municipal level
4.b. ConceDtual analysis o f SNIP and integratiodcoordinationwith the SIAF ____
~~~~~
125
2,300
600
2,200
5,900
5,000
900
5,400
5,000
300
100
1,400
1,375
675
700
~~~~
6. Designing and institutionalizing a permanent knowledge management system in the area o f
public expenditure management
Total Additional Financing
Total US$’OOO
5,425
200
500
20,000
58. The Government may withdraw the proceeds o f the Loan in accordance with the provisions o f
World Bank Disbursement Guidelines for Projects dated May 2006, as revised from time to time by
the Bank to: (a) finance 100% (inclusive o f Taxes) o f Eligible Expenditures, consisting o f goods,
consultant and non-consultant services, and Training under the Project up to an aggregate o f
$19,455,000; and (b) finance 50% (inclusive o f Taxes) o f Eligible Expenditures consisting o f
Operational Costs under the Project, up to an aggregate o f $545,000.
18
Annex 1: Outcomes and Results Framework
Objectives
Project Components
Deepen and consolidate the reforms
initiated with the SIAF project aim at
increasing the efficiency and transparency
o f the public sector at the central and
municipal levels in the areas o f public
finance planning, management and control
by strengthening the processes and
systems and supporting the
institutionalization o f these processes and
systems through the transfer o f ownership
to the relevant institutions
Ongoing scaled-uolexoanded comoonents
Component 1. Consolidating and
institutionalizing SIAF within the Ministry o f
Finance
Component 2. Strengthening Municipal
Governments’ Financial Management
Component 3. Strengthening of the public
financial control framework
Component 4. Project Coordination
Expected Outcomes
New comaonents
Component 5. Strengthening and integrating
planning and public investment procedures
and systems
Component 6. Designing and
institutionalizing a permanent knowledge
management system in the area of public
expenditure management
Ionents
ComDonent
- - ._.
- ..- ... 1Consolidating and institutionalizing SIAF
within the Ministry o f Finance
Subcomponents
Expected Outcomes
Subcomponent 1.a.- Consolidation o f the
achievements in the area o f multi-annual and
results-oriented budget
Subcomponent 1.b.- Gradual incorporation
o f international standards to public financial
management in the areas o f accounting,
budget and public debt
Subcomponent 1.c.- Consolidation of the
budget, treasury and accounting’s capabilities
to take over the management and operation o f
the SIAF system and development o f specific
tools to support SIAF management
Subcomponent 1.d.- Expansion o f
GUATECOMPMS’ scope and functionality
and consolidation o f the system as the
country’s public procurement framework
Subcomponent 1.e.- Transfer o f the SIAF I T
operation to the Ministry’s Department of
Information Systems
All S I A F developments and updates have
been completed and transferred to the
Ministry o f Finance, assuming its
functional and technological management
and maintenance
Subcomponent 1.a
Consolidation o f the achievements in the
area of multi-annual and results-oriented
budget
Activities
1.a.1.- Strengthening o f the Budget Technical
Office with the necessary technical resources,
training in the evaluation and budget
performance, implementing effective norms
and procedures
1.a.2.- Build-up institutional capacities in the
areas of multi-annual and results-oriented
budget formulation, execution and monitoring
and performance
1.a.3.- Support central government entities in
the design and implementation o f
performance indicators through technical
assistance and training
Expected Outcomes
The budget monitoring and performance
indicators are incorporated into the
budget-related decisions for pilot sectors.
Starting 2010, the budget is formulated
including monitoring and performance
indicators
-
Subcomponent 1.b
Gradual incorporation o f international
standards to public financial management
in the areas o f accounting, budget and
public debt
Activities
1.b.1.- Preparation o f an international
standards adoption plan which includes the
2001 IMF’s Government Finance Statistics
Standards Manual and International Public
Accounting Standards
l.b.2.- Implementation ofa first set o f
international standards, including
modifications in several accounting and
budget codes, the required changes in the I T
systems and the necessary training for its
effective implementation
1.b.3.- Implementation o f international
standards and new procedures to expand the
19
Expected Outcomes
Starting 201 1, public financial
management operates under international
standards
The Ministry of Finance manages and
issues debt more efficiently
local debt capital markets and the use o f debt
instruments
-
:.: ExpectedOutcomes , ’
The relevant Ministrv’s deDartments have
taken over the managemeniand operation
o f SIAF
Consolidation of the budget, treasury and
accounting’s capabilities to take over the
management and operation o f the SIAF
system and development o f specific tools
to support S I A F management
1.c. 1 Strengthening o f all relevant
departments in order for them to manage their
respective subsystem of SIAF
1.c 2.- Cany out a diagnostic to identify
financial management needs not covered by
the S I A F and define an action plan to meet
them
l.c.3.- Development o f new procedures and
I T tools complementary to S I A F identified by
relevant departments
Expansion o f GUATECOMPRAS’ scope
and functionality and consolidation o f the
system as the country’s public
procurement framework
1.d.l.- Progress in developing and
implementing new procurement planning and
policies to increase cost-effectivenessand
definition o f a strategic framework for the
GUATECOMPRAS system
Government purchasing procedures have
been simplified and new product and
services have been included in the
catalogue
l.d.2.- Development o f transactional
functionality in GUATECOMPRAS and
incorporation o f new products and services
and SMEs to the system
Online transactional capability has been
developed and implemented in the system
1.e. 1.- DeveloD a Dlan under the leadershio o f
the functional ’and IT areas to define the .
process by which the SIAF,
GUATECOMPRAS and other relevant will be
transferred to the Ministry with the necessary
information security requirements;
The DeDartment o f Infomation Systems
within {he Ministry of Finance has taken
the responsibility of technological aspects
o f SIAF, including specific developments
of the SIAF, having implemented the
necessary organizational structures, norms
and procedures and human and financial
resources to ensure its sustriinability
Complementary systems have been
developed to satisfy additional ministry’s
needs
Expected Outcomes
.
Expected Outcomes
Subcomponent 1.e
Transfer the SlAF I T operation to the
Ministry’s Department o f Information
Systems
’
l.e.2.- Cany out a strategic plan that will
discuss alternatives to ensure the
sustainability o f the system, including
outsourcing alternatives and other alternatives
provided by the sharing of “best-practices” in
I T systems support
1.e.3.- Support the Information Systems
Department to manage and support all SIAF
Component 2
Strengthening Municipal Governments’
Financial Management
Expected Outcomes
Subcomoonent 2.a.- Further develoDment
and consolidation o f the new municipal
financial management systems and procedures
Subcomponent 2.b.- Strengtheningthe
Ministry o f Finance that provides support in
the area o f financial management
Activities
Further development and consolidation o f
the revamped municipal financial
management system and procedures
2.a. 1.- Drafting of a framework document that
defines the key aspects of municipal financial
management: procedures, norms and systems’
functionality and sustainability model
The municiDalities have imolemented
procedures i n d systems to make financial
management more efficient, transparent
and accountable
.
Expected Outcomes
The municipal management has become
more effective, transparent and integrated
2.a.2- Development and implementation of
the updated financial information system
(SIAFMUNI-WEB), including training o f
relevant staff at municipal level
2.a.3.- Capacity building in the area of
~
Subcomponent2.b.
Strenatheninathe Ministrv o f Finance that
provides support in the aria of financial
management
Develop specialized capacities at the MOF to
support and strengthening of the IT
Department to take over the I T aspects of the
SIAFMUNI.
Strengthening and consolidation o f the
public financial control framework
Subcomponent 3.21 Consolidationofthe
previous achievements in the area o f public
The MOF has been strengthen and i s
providing continuous support to the
Municipalities.
Subcomponents
-
20
Enhance the efficiency level o f Public
Control System through the increased
financial control
-
capacity and efficiency o f Public control
institutions.
Subcomponent 3.b Strengthening of
specialized non-financial audit capabilities
-
Subcomponent 3.c Strengthening ofCGC’s
functions and promotion of public
participation in the public financial
Expected Outcomes
Consolidation o f the previous
achievements in the area o f public
financial control
3 a 1.- Strengthening, implementation and
transfer of ownership to the CGC o f the
Governmental Audit Planning System (SAG),
including its security certification
3.a.2.- Strengthening o f the financial audit
functions o f the CGC through the
implementation o f new processes,
methodologies and systems
SAG has been implemented and used in
CGC, UDAls and a significant number o f
UDAlMs
New processes and systems have been
implemented to carry out public financial
control activities more efficiently at
national and municipal
-
3.a.3 Strengthening ofthe internal control
framework in the public sector, increasing the
capacity of internal control entities to improve
the public sector management and
accountability
3.a.4.- Strengthening of municipal audits and
expansion of the CGC regional capacity to
oversee sub-national finances
Subcomponent3 .b
Activities
Strengthening o f specialized non-financial
audit capabilities
3.b.l.- Establishment o f specific
methodologies to perform Environmental,
Human Resources and Value for Money audit.
Development o f the CGC institutional
capacity to carry out specialized nonfinancial audits to complement and enhance
external control.
Subcomponent 3.c
Strenethenine o f CGC’s functions and
promotion oflpublic participation in the
public financial management oversight
Expected Outcomes
A significant number o f specialized nonfinancial audits are included in CGC
Annual Audit Plan performed by CGC
staff.
otiviti
3.c. 1.- Strenethenine CGC’s internal
functions to improve its performance and
efficiency
Claims and Allegation Center i s in place
and responding efficiently to citizens
3.c.2.- Promotion o f public participation in
public sector financial management oversight,
including the creation of a claims and
allegation center concerning public finance
Exnected Outcomes
Strengthening and integrating planning
and public investment procedures and
systems
Subcomponent 5.9 Strengthening of
investment planning and management
capacities at the regional and municipal levels
The capacity for planning, management
and evaluation of public investment and
development policies has been improved
at national and municipal level
Subcomponent 5.b. Conceptual analysis o f
SNIP and integratiodcoordination with the
SlAF
. Activities
Subcomponent 5.a.
Strengthening o f investment planning and
management capacities at the regional and
municipal levels
5.a. 1.- Strenethenine o f a new reeional model
for SEGEPL-kl anddevelopmen; o f the
mechanisms for training and certification o f
public servants
The municipal public investment tools
have been improved and a permanent
system for training in the areas o f public
investment at regional and local level i s in
place
5.a.2.- Analyze and update the Municipal
Public Investment System (SMIP)
-
5..a.3 Development of a e-learning system in
the area of public investment at regional and
local level
Subcomponent 5.b.
Conceptual analysis of the SNIP and
Expected Outcomes
-
5.b.l Analysis and diagnostic ofthe current
21
A strategy to ensure consistency and
integratiodcoordination with the SIAF
investment cycle and its management tools
integration between the SNIP and the
SIAF has been implemented
5.b.2.- Strengthening o f the Public Investment
Directorateto manage the SNIP
5.b.3.- Carry out a strategic plan for the
Designing and institutionalizinga
permanent knowledge management
system in the area o f public expenditure
management
6.a.- Designation o f a unit within the Ministry
o f Finance responsible for the coordination o f
the knowledge management system
6.b.- Design and implementation o f training
courses with well-defined objectives
22
A comprehensive set o f training has been
designed and piloted throughout the
central and municipal administration with
the participation o f ministries’ experts,
universities, private sector, and leveraging
e-learning
*