Annex 2: The Organizational System

Planning and Budgeting System

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  Preparation of the national strategic plan.
  
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  Formulation of national, sector, and regional plans aimed at promoting economic and social development.
  
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  Preparation of budget guidelines and annual budgets.
  
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  Administration of the planning and budgeting process.
  
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  Promotion of links with municipalities, so as to encourage the harmonization of norms and related tasks.
  

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  DGP, as the central structure in the Planning System, will have the following responsibilities:
  
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  Coordination, orientation, and supervision of the Plan and special development projects preparation.
  
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  Identification, analysis, and evaluation of government strategic capital investments and their articulation with private investments, as well as provision of institutional and management support in their implementation.
  
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  Coordination and orientation of evaluation activities of the Plan and special development projects.
  
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  DGO, as the central structure in the Budgeting System, will have the following responsibilities:
  
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  Coordination, consolidation, and supervision of the budget guidelines and budget proposal preparation in articulation with DGP.
  
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  Establishment of the necessary norms required to prepare and implement budgets.
  
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  Proposal of measures to improve the Planning and Budgeting System.
  
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  Monitoring, without damage to the responsibilities of other structures, the physical and financial budget execution.
  
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  Preparation of studies and surveys aimed at developing and improving the budget process.
  
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  Technical orientation, coordination, and supervision of the budget sector units.
  
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  Establishment of the functional, institutional, and programmatic classifications of public expenditure, in articulation with DGP.
  
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  Planning and coordination of the activities related to data technologies for budgeting.
  

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  Planning, coordinating, and supervising execution of activities related to planning, budgeting, financial management, and accounting systems in that ministry.
  
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  Promoting articulation with the central structure, as well as data and guidance regarding the ministerial structures, insofar as the established norms and regulations are concerned.
  
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  Coordinating, preparing, and consolidating the ministry’s plans and programs, as well as forwarding them to a higher decision-making body.
  
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  Monitoring and promoting projects and evaluation of activities.
  

The Financial Management System

The Financial Management System will have DGT as its central structure and the State Financial Balance as its main function. In this context, it will include the following activities: financial planning, control of duties and assets, and control of guarantees and obligations that are the responsibility of Treasury, as well as technical and normative orientation insofar as budget and financial execution is concerned.
DGT, as the central structure, and the line structures will be part of the Financial Management System. The line structures will receive normative orientation and technical supervision from the central structure of the System, regardless of subordination to the body under which the administrative structure is integrated.¹²³ The structures in charge of activities of the Financial Management System will have the following responsibilities:

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  Ensuring the financial balance of the Treasury.
  
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  Managing the real estate and financial assets of the Treasury.
  
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  Preparing the financial plans of the Treasury, administering the Single Treasury Account, and contributing to the preparation of the public expenditure funding policy.
  
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  Managing the Treasury’s public and external debt.
  
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  Controlling debt resulting from credit operations under the direct or indirect responsibility of the Treasury.
  
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  Managing Treasury credit operations.
  
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  Maintaining control of commitments that represent, directly or indirectly, state payments to international organizations.
  
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  Preparing and disseminating norms of financial planning and financial and budget execution, as well as promoting the monitoring, systematization, and standardization of public expenditure execution.
  
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  Promoting integration among government sectors regarding issues of financial planning and administration.
  

The Public Accounting System

DGPC will play the role of central structure in the Public Accounting System, which will have as its main objective the registration of the acts and facts related to the state budget, finance, and equity administration. The system will provide data regarding the following:

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  Operations undertaken by governmental structures or entities and their consequences affecting the equity position of the state.
  
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  Resources of the current budget and its changes, estimated and effective revenues collected, expenditure submitted to commitment analysis, and liquidated and paid expenditure against these resources, as well as the availability of financial resources.
  
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  The position of all these who, regardless of circumstances, collect revenues, have expenses, and administer or keep goods and chattels belonging to state institutions or that are currently entrusted to it.
  
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  The asset position of public institutions and its variation.
  
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  The costs of Public Administration programs and units.
  

The Accounting System will comprise the activities of registration, treatment, and control of the state budget, financial, and asset administration operations. The main objective will be to prepare accounting statements. To implement asset accounting in the public sector, these operations that are a result of debits and credits of a financial nature and are not integrated into the budget execution will also be a target for registration, individualization, and accounting control.
As far as the administrative structure of the Public Accounting System is concerned, it will be composed of DGCP (as the central structure) and line structures. The line structures are the internal management units of the ministries and will be the object of normative orientation and technical supervision by the central structure in the System and of subordination to the body under which the administrative structure is integrated. It will be the responsibility of the units to integrate the Public Accounting System to do the following:

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  Maintain and improve the National Plan of Public Accounts.
  
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  Establish norms and procedures to promote adequate accounting registration of acts and facts related to the budgetary, financial, and asset management of Public Administration structures and entities.
  
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  Based on illegal or irregular acts or facts detected, undertake the relevant registration and adopt the necessary measures to encourage responsibility of the agent by reporting this fact to the authority to whom the agent is subordinated and to the structure responsible for the Internal Control System.
  
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  Establish, maintain, and improve the data systems that render possible the accounting of acts and facts related to the state budgetary, financial, and asset management, as well as prepare management data for ministerial supervision and decision making.
  
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  Prepare quarterly preliminary accounts and General State Accounts.
  
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  Promote integration with other government structures insofar as accounting issues are concerned.
  

The Internal Control System

The Executive Internal Control System will be implemented by an entity, which could be called State General Inspectorate (IGE), having as its main function the evaluation of the public administrator’s management. IGE will be directly subordinated to the Prime Minister’s office to provide it with the necessary authority in carrying out its responsibilities. The System will use as its main instruments auditing and inspection and will have the following objectives:

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  Evaluating compliance with the objectives established in the plans, insofar as the execution of government programs and budgets is concerned.
  
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  Undertaking the concomitant control of budgetary execution and supervising the juridical and financial correctness of budgetary and financial management, legality, regularity, economy, effectiveness, and good financial management.
  
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  Verifying legality and evaluating results concerning the effectiveness and efficiency of the Public Administration’s budgetary, financial, and asset management, as well as the use of public resources by private entities.
  
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  Controlling credit operations, guarantees, and state duties and assets.
  
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  Supporting external control as part of its institutional mission.
  

The Internal Control System will evaluate executive actions through supervision of accounting, financial, budgetary, and operational acts and assets and will support external control as part of its institutional mission. The Executive Internal Control System will have as its administrative structure IGE and the line structures, which will be under the normative orientation and technical supervision of IGE, without detriment to their subordination to the body under which the administrative structure is to be integrated. They will:

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  Evaluate the accomplishment of the goals established in plans.
  
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  Supervise and evaluate the execution of government programs, including decentralized actions paid with resources from public budgets, as far as the level of achievement of the goals and objectives and the management quality are concerned.
  
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  Evaluate the execution of budgets.
  
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  Control state credit operations, guarantees, duties, and assets.
  
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  Provide data about the physical and financial position/situation of projects and activities included in the budget.
  
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  Audit management of public resources under the responsibility of public and private entities.
  
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  Discover illegal or irregular acts or facts, undertaken by public or private agents, while using public resources and, when appropriate, inform the responsible accounting unit.
  
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  Undertake audits in the accounting, financial, budgetary, and human resources systems, as well as other administrative and operational systems.
  

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