92486
Improving Management of Public Funds in Guatemala                                                         April 26, 2006
Third Integrated Financial Management Project



Background                                                   Financing
When 36 years of armed conflict ended in the late            Total cost : US$33.20 million
1990s, Guatemala’s public sector institutions were
seriously degraded and needed urgent attention to            IBRD loan amount: US$29.75 million
fulfill even the most basic administrative functions. 
                                                             Government of Guatemala: US$3.45
Among these was the public expenditure                       million
management system, which falls under the Ministry
of Public Finance.                                           Implementation period: Expected April
                                                             2003 - September 2006
In 1996, the World Bank began helping Guatemala
                                                             Geographical area: the whole country
to modernize its fiscal management, by financing
reforms of the public expenditure and tax                    Implementing agency: Ministry of Public
administration frameworks.                                   Finance; Office of the Comptroller General

Guatemala was able to take advantage of the                  More details
development of integrated financial management
                                                                 Full project information & documents
systems (IFMS) in the region.  The country
deployed its first version, called SIAF, in 1998, with        
support from the Bank. 
                                                          
The Guatemala SIAF system is considered one of
the best systems in the region.  It incorporates          
state-of-the-art processes and systems in the
                                                          
areas of budgeting, treasury, accounting, as well as
substantial improvements in other areas such as           
human resources management.  The e-
procurement system it supports ( Guatecompras ) is
also considered regional good practice.
                                                          
The Bank is currently supporting SIAF through the
Third Integrated Financial Management Project.            

Project objective                                         

To extend and deepen ongoing reforms with the
aim of increasing the effectiveness, efficiency, and
transparency of public sector financial management
and control.

Project design

The project includes the following components:

       Consolidating SIAF in the central
       government and supporting the development
       of a medium-term expenditure framework for
       Guatemala
       Strengthening financial management by
       extending SIAF to Guatemala’s 332
       municipal governments
       Modernizing human resources management
       Strengthening the office of the Comptroller
       General
       Supporting the Government’s agenda for
       developing E-government

Project achievements
Financial Management of the Central Government
and Decentralized Institutions:

       Implementation of a state-of-the-art, web-
       based financial management system, which
       is a regional best practice that is being
       implemented in other countries.
       Deployment of a modern e-procurement
       platform, Guatecompras , in collaboration
       with CSOs, in order to promote transparent
       procurement processes.
       Implementation of a medium-term
       expenditure framework.

Financial Management for Municipal Governments: 

       A simplified version of the SIAF system was
       installed in 317 municipalities during 2003
       and 2004.  Since 2005, a more robust
       version has replaced the simplified version in
       110 municipalities.
       The two largest municipalities (Guatemala
       and Quetzaltenango) have adopted the
       central government’s version of the system. 
       In addition to SIAF, the municipalities are
       also using the e-procurement system,
       Guatecompras . 
       The deployment of SIAF and Guatecompras
       is helping increase transparency and
       efficiency, and curb corruption.

 
April 2006