Colombia - Public Financial Management Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 22884 IMPLEMENTATION COMPLETION REPORT (CPL-36690) ONA LOAN IN THE AMOUNT OF US$ 30.0 MILLION TO THE GOVERNMENT OF COLOMBIA FOR A PUBLIC FINANCIAL MANAGEMENT PROJECT 09/28/2001 Poverty Reduction and Economic Management Unit Country Management Department for Mexico, Colombia, Venezuela 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. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective June 30, 2001) Currency Unit = Colombian Pesos I Colombian Peso = US$ 0.0004333 US$ I = 2,305 Colombian Pesos FISCAL YEAR January I - December 31 ABBREVIATIONS AND ACRONYMS CAS - Country Assistance Strategy CGN - Contador General de la Nacion (National Accountant General) CGR - Contraloria General de la Republica (Comptroller General of the Republic) COCOR - Comite de Coordinaci6n (Coordination Committee) COMEX Automated System for Processing Imports and Exports CONPES - Economic and Social Policy Council CUN Cuenta Unica de la Naci6n (Single National Account) DAN - Direcci6n de Aduanas (Directorate of Customs) DANE - Departamento Administrativo Nacional de Estadisticas (National Statistical Department) DIAN - Direcci6n de Impuestos y Aduanas Nacionales (Directorate of National Taxes and Customns) DNP Departamento Nacional de la Planneacion (National Planning Department) GDP - Gross Domestic Product GOC Govemment of Colombia GTZ - German Technical Assistance Agency IBRD - International Bank for Reconstruction and Development IDB - hiter-American Development Bank IMF - International Monetary Fund LCR Latin America and Caribbean Region MAFP Modemizaci6n de la Administraci6n de Finanzas Publicas (Public Financial Management Project) MHCP - Ministerio de Hacienda y Credito Publico (Ministry of Finance and Public Credit) NDP - National Development Plan OSI - Oficina de Servicios Informaticos (Office of Informatics Services) PAD - Project Appraisal Document PFMP-I- Public Financial Management Project - I PFMP-II - Public Financial Management Project - 11 PIP - Project Implementation Plan PMU - Project Management Unit POA - Programa Operativo Annual (Annual Operational Program) SAR - Staff Appraisal Report SIAT - Sistema Informatico de Administraci6n Tributaria SICAT - System for Selection of Cases for Tax Audit SIGADE - UNCTAD'S Debt Manaerement Rvctm SIGLO XXI - Customs Iiformation System (Twenty First Century) SIIF- Sistema Itegrado de Informaci6n Financiera (Integrated Financial Managemnt System) SINERGIA - Sistema Namional de EvaluacI6n de Gest6n y Resltados (National System for Evaluation of Management and Results) SIPAC - System for Recovery of Tax Arreas SOE Staement of Expenses SUIP - Public Investment Inibomaton System of DNP USIRS - United States Intemal Revenue Service VAT Value Added Tax Vice President David de Fenanti Country Manager/Director: Olivier Lafourcade Sector Manager/Director: Enesto May Task Team Leader/Task Manager: Jit Gill  FOR OFFICIAL USE ONLY COLOMBIA PUBLIC FINANCIAL MANAGEMENT PROJECT I CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 9 6. Sustainability 10 7. Bank and Borrower Performance 12 8. Lessons Learned 14 9. Partner Comments 14 10. Additional Information 35 Annex 1. Key Performance Indicators/Log Frame Matrix 36 Annex 2. Project Costs and Financing 47 Annex 3. Economic Costs and Benefits 49 Annex 4. Bank Inputs 50 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 52 Annex 6. Ratings of Bank and Borrower Performance 53 Annex 7. List of Supporting Documents 54 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   Project ID: P006889 Project Name: CO PUBLIC FINANCIAL MAN Team Leader: Jit Bahadur S. Gill TL Unit: LCSPS ICR Type: Core ICR Report Date: October 1, 2001 1. Project Data Name: CO PUBLIC FINANCIAL MAN LIC/TFNumber: CPL-36690 Country/Department: COLOMBIA Region: Latin America and Caribbean Region Sector/subsector: BF - Public Financial Management KEY DATES Original Revised/Actual PCD: 12/15/1992 Effective: 05/10/1994 Appraisal: 06/03/1993 MTR: Approval: 12/07/1993 Closing: 06/30/2000 03/31/2001 Borrower/lImplementing Agency: GOVERMT OF COLOMBIA/MINISTRY OF FINANCE Other Partners: STAFF Current At Appraisal Vice President: David de Ferranti S. Shahid Hussain Country Manager: Olivier Lafourcade Yoshiaki Abe Sector Manager: Claudia Maria Costin Shahid Chaudhry Team Leader at ICR: Jit Bahadur S. Gill Alan Tobelem ICR Primary Author: Rita E. Parrilli 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: HL Institutional Development Impact: H Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S S Project at Risk at Any Time: No  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The objective of the Public Financial Management Project (PFMP) was to initiate a process to help improve the management of public finances in Colombia, including a spectrum of functions, from revenue generation, public expenditure management to evaluation of public policies at the national level. This was to be done through the definition, installation, and deployment of accountability principles and procedures within selected national entities, in the short to medium term (six years), as a preliminary step before implementation throughout the public administration in the longer term. The project represented an integrated approach to strengthening institutional capacity in public sector financial management in Colombia. The project's objectives were consistent with the Bank's Country Assistance Strategy (CAS) presented to the Board in November 1993 which emphasized inter alia the need to help Colombia consolidate and deepen its structural reforms and strengthen institutional capabilities. The objectives continued to be consistent with subsequent CASs which supported poverty reduction, social development and sustainable growth, inter alia through improved public sector responsiveness and efficiency. Strengthening of the institutional capacity of the government to raise revenues and ensure effectiveness and value for money in public expenditure was key to the attainment of these goals. This became even more important in view of the severe macro-economic problems faced by Colombia throughout the 1990s. 3.2 Revised Objective: N/A 3.3 Original Components: A. Resource Mobilization US$ (thousands) Tax Administration 15,000 Treasury and Public Credit 3,800 B. Macro-programming 500 C. Expenditure Management Program-based Budgeting (Budget Programming) 2,800 Budget Spending (Execution) Accounting 2,200 D. Control and Public Policy Evaluation Internal Control (Public Policy Evaluation) 1,040 External Control 550 E. Institutional Strengthening Government Informatics (SHF) 990 Project Administration 1,800 F. Physical Contingencies 1,400 Total: 30,000 The complexity of the project in terms of the number of government entities and components was unavoidable if the project's goal of establishing a comprehensive, transparent and integrated public financial management system was to be achieved. 3.4 Revised Components: -2 -  While the objectives of the project remained unchanged, some adjustments were made to facilitate project implementation, vary the composition of inputs in response to implementation experience and respond to emerging needs. First, a part of the funds earmarked for the Treasury, Accounting and Budgeting sub-components were combined with the Informatics component to finance the development of the Sistema Integrado de Informacion Financiera (Integrated Financial Management Information System - SIIF). Compartmentalized allocations, managed by separate departments in the Ministerio de Hacienda and Credito Publico (Ministry of Finance and Public Credit - MHCP), were found to inhibit development of a truly integrated system. Second, the loan agreement originally called for $20.6 million to be allocated for goods and $6.0 million for consultant services. While the hardware requirements of the Direcci6n de Impuestos y Aduanas Nacionales (Directorate of National Taxes and Customs - DIAN) and the SIIF were substantial, project financed consultancies, including those for development of various software systems, were higher than those initially estimated. The loan proceeds between categories were, therefore, reallocated in 1997 increasing the allocation for consultants to $14.03 million and decreasing the amount for equipment to $14.70 million. Third, at the outset of the project, strengthening of the Customs administration, which was merged with tax administration in 1993 to form the DIAN, was not included in the project. However, continuing weaknesses in customs administration became a major cause for concern for the DIAN. Therefore, some PFMP funds were reallocated to begin the development of a modem set of information systems for customs, collectively christened SIGLO XXI (21st Century). 3.5 Quality at Entry: N/A 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The PFMP's outcome is assessed as satisfactory. The project successfully achieved its development objectives related to reforns in revenue administration and public expenditure management, through a series of mutually reinforcing activities. The gains made by the project are expected to be maintained in the long term. These will also be reinforced by the Public Financial Management Project - II (PFMP-II). The project has significantly improved the ability of the Government to collect due taxes, through introduction of state-of-the-art information systems for processing tax returns and payments and monitoring, facilitating and enforcing compliance with the tax laws; and improvements in the DIAN's organization and management. It has also begun the process of strengthening the customs administration. At the same time, the project has substantially enhanced the ability of the MHCP and the Departamento Nacional de Planeacion (National Planning Department - DNP) in macro-programming and budget formulation; increased efficiency, transparency and accountability in budget execution, through improvements in accounting norms and procedures, implementation of the SIIF throughout the central govenmuent, and strengthening of the capacity of the Contraloria General de la Republica (Comptroller General of the Republic - CGR) in financial and performance audits and social control. The project was also instrumental in introducing an innovative National System for Evaluation of Results of Public Sector Performance (SINERGIA) to encourage a results-orientation in the public sector. Finally, the project modernized the informatics infrastructure of the DIAN, the MHCP and the DNP. At the institutional level, the project has benefited DIAN, the MHCP, the DNP, the CGR, and the Contador General de la Nacion (National Accountant General - CGN) by providing them with technical assistance, information systems, equipment and training, thus, enabling them to better perform existing and new functions. 4.2 Outputs by components: The ICR assigns satisfactory ratings to each of the component outputs based on the following evaluation of achievements of goals. In the case of Revenue Administration, the goals were exceeded and is, therefore, rated as highly satisfactory: -3-  I. RESOURCE MOBILIZATION (A) Revenue Administration (a) Tax Administration (i) Voluntary Compliance Since voluntary compliance is the bedrock of revenue collection, various steps were taken to help taxpayers comply with their legal obligations. These included setting up of special units to provide services to taxpayers, importers, and exporters; providing information regarding tax law changes and compliance procedures through publications, TV spots, the internet and over the telephone; establishing an Office of Grievances and Complaints and an Office of the Taxpayer Ombudsman ; and provision of the facility for electronic filing of tax returns to large taxpayers in five major regional administrations. The impact of these efforts is reflected in easier filing of tax returns for large taxpayers, increase in the number of tax and customs declarations filed, from 3.85 million in 1997 to 4.0 million in 2000 and a reduction in the compliance gap for VAT from 32.4% in 1994 to 23% in 2000. (*i) Processing Tax Declarations and Payments The PFMP provided DLAN with sophisticated tools to manage the heavy information flow associated with about four million tax declarations filed annually. A new taxpayer current account system was implemented, along with a system that automatically updates the current account by incorporating the irnpact of administrative decisions, such as assessments, penalties, appeals and refunds, on a taxpayer's tax liabilities. The system has been installed in all 32 national tax administration centers. In addition, systems have been commissioned for monitoring the performance of commercial banks that collect tax declarations and payments and linking their compensation to the quality of service; monitoring the deduction and payment of taxes by tax withholders; and controlling tax refunds and credits. The period for which banks retain tax receipts has been negotiated down from 22 to 14 days. A system for consolidation of accounts for tax and customs collection nationwide was implemented. As mentioned above, electronic filing of tax returns has been introduced for large taxpayers. So far about 1 1,000 taxpayers, accounting for more than 60% of tax payments, use this facility. The impact of these initiatives has been improved timeliness of receipt and processing of tax declarations and paymnents, elimination of filing errors in case of taxpayers filing electronically, reduction in the cost of services provided by banks to the DIAN; availability of updated information regarding taxpayer liabilitie within 20 days of payment; improved informnation on overall revenue collections and enhancement of DLAN's ability to monitor compliance and initiate remedial actions promptly. (iii) Enforcement In order to improve the enforcement capacity of tax administration, the project helped: (i) implement a system for automatically generating notices to taxpayers who fail to file returns on time and/or default on payment; (ii) develop and implement an advanced system for selection of cases for tax audit (SICAT); (iii) develop and implement a new tax arrears recovery system (SIPAC); (iv) develop methodologies for estimation of the extent of evasion in VAT and Income Tax; (v) create an input-output matrix for major industries to support auditors in investigation of cases. The impact of these measures, coupled with other actions taken by the DIAN, has been a significant improvement in the enforcement capacity of the tax administration. Additional revenue of Colombian Pesos 20.7 billion and Colombia Pesos 25 billion was - 4 -  generated in 1999 and 2000, respectively, by sending non-compliance letters to taxpayers who failed to file their tax declarations. Tax collections as a result of administrative and enforcement actions increased from US$ 35.8 million in 1995 to US$ 385.9 million in 1999 Source: DIAN and PFMP. Additional tax assessed as a result of tax audits increased from 1.55% of total tax collections in 1996 to 5.57% in 1999. Also, the gap between potential and actual VAT collections has dropped from 32.40% in 1994 to 23% in 2000 (the compliance gap for Income Tax and Business Tax has remained steady around 40%). (b) Customs Administration Following the merger of customs and tax administrations in 1993, the number of customs staff was reduced from 5,000 to about 2,000, resulting in a significant loss of expertise both at management and functional levels. The modernization of customs administration lagged behind tax in informatics capacity as well. In addition, the level of political interference and corruption in customs was perceived to be higher than that in tax administration. These factors resulted in a marked weaknesses in the institutional capacity of customs. In the meantime, the volume and sophistication of international trade increased. Some PFMP funds were, therefore, reallocated in 1998 to begin the development of a modem set of information systems, collectively called SIGLO XXI (21st Century), while providing assistance to update legacy systems for operation in the interim. A pilot of the new system of processing customs declarations and payments (COMEX) has been commissioned at BogotA airport, which accounts for 42% of the country's import declarations and about 30% of customs revenues. The system allows transporters to file manifests and brokers to file customs declarations electronically and currently has about 800 external users. The COMEX has made substantial improvements in processing of imports through the BogotA airport. In August 2001, COMEX was installed in Medellin. For improving the capacity of customs in risk analysis and post-release audits, a customs auditing system (SIFARO) was implemented. Also, a system for the management of sale of confiscated goods (ADA) has been put into operation. The impact of these measures includes quicker and more efficient clearance of goods at sites where COMEX has been installed: 43% of the import declarations are processed the same day and all processes, except physical inspection and payment, can be conducted via the internet. Discretion has been reduced due to standardization and greater transparency of processes. Also, post release audits have become more focused and management and sale of confiscated and abandoned goods has improved. (c) Organization and Management of the DIAN In the last ten years, important initiatives have been taken to strengthen the organization and management of revenue collection. In 1991, the Direcci6n de Impuestos (DIN) was converted into a Special Administrative Unit with increased budgetary autonomy and a special regime concerning its staff. Similar changes were made in the Customs administration, Direcci6n de Aduanas (DAN). In 1993, the DIN and the DAN were merged to form the Direcci6n de Impuestos y Aduanas Nacionales (DIAN) to exploit potential synergy between the two functions. This arrangement was partially modified in 1997 to create separate Directorates for Customs and Taxes under a common Directorate General, while keeping corporate and support functions unified. Under powers granted by Law 488 of 1998, the DLAN was designated as an essential public service, with its own legal personality and administrative autonomy. Its budgetary autonomy was increased by permitting it to retain proceeds of sale of confiscated goods as well as of other services provided to clients. Adjustments in the organizational structure were made to reduce duplication of functions and jurisdictional conflicts. New human resource management policies were instituted to ensure merit-based recruitment and promotion, facilitate inter-functional mobility, reward performance for team work, tax audit, tax collection and achievement of national level targets; improve performance evaluation, encourage professional and managerial development and strengthen institutional - 5 -  capacity for HR management A legal database providing access to legislation, case laws and regulations on tax, customs and foreign exchange control issue through the internet was implemented. To control corruption, the Office of Disciplinary Investigations was placed under the Director General and special administrative disciplinary regime was created for expeditious removal of corrupt employees. Improved financial management and pay-roll systems were implemented. Also, a detailed analysis of business processes was carried out to assess corruption risks therein and identify changes to mitigate the risk. Finally, a major overhaul of the informatics infrastructure of the DIAN was undertaken. This included creation of a wide area network, setting up of local area networks in each regional administration, procurement or upgrade of new communication systems, servers, PCs and printers. Impact: Improved management information systems have increased the ability of management to set strategic targets, monitor performance and ensure attainment of organizational objectives. Financial management and pay roll systems have improved efficiency in these areas. The legal database has enabled DIAN staff to take more informed decisions on legal and regulatory issues. Corruption risk maps have laid the basis for modification of business processes to reduce corruption. The modernization of the informatics capacity of the DIAN has empowered regional administrations by allowing them direct access to corporate databases for planning and execution of their operations, quickened information exchange between the headquarters and the regions, slashed processing time of major business processes and improved the quality of information. TIhe support provided by the project to the DIAN was complemented by assistance from other donors. In 1998, the government agreed with the IDB on the implementation of an Action Plan to reform tax and customs administration, in the context of structural adjustment loan Programa Inter-Americano de Reforma de las Finanzas Puiblicas (Loan No. 1166-OC-CO). The GTZ provided technical training to DIAN staff and helped the DIAN develop a medium term strategic vision. Under Plan Colombia, the USIRS and US Customs Service are providing training assistance to DLAN and other law enforcement agencies in criminal investigations of tax evasion, foreign exchange violations, black market operations and money laundering from the drug trade. (B) Treasurv One of the major outputs of the PFMP has been the development and implementation of the SIIF. Many of the sub-systems foreseen in the Staff Appraisal Report (SAR), for the Treasury, were subsumed in the SIIF as modules. The project has also supported development or acquisition of systems for: (i) planning of treasury operations; (ii) management of investment portfolios; and (iii) management of legal information pertinent to the Treasury. The government also carried out an analysis of treasury processes and functions, using its own resources, and made appropriate organizational changes in the National Treasury Directorate. Impact the Treasury Directorate has been transformed into the public sector bank; a single national Account (CUN) has been established, idle balances in commercial banks and public sector entities have been reduced (see also SIIF below) and cash flow management has improved.. (C) Public Debt Management The project provided assistance to strengthen the public debt management function in the MHCP. The organizational structure, functions and procedures in the Public Credit Directorate were analyzed and improved. Also, performance and portfolio quality indicators were developed. The debt database was audited and cleaned up. The project assisted the Directorate in identification of options for the replacement of the existing debt management system. Based on the analysis, UJNCTAD's debt management system (SIGADE) was chosen. The first phase of system implementation and staff training was completed under - 6 -  the project. The system will be fully commissioned under the PFMP-II. In addition, a methodology for assessment and management risk in public debt management at the central government level was developed. This enabled the Government of Colombia (GOC) to better structure its debt portfolio and reduce risk. Similarly, a reliable database was established on debt at the territorial level and debt management assistance was provided. The project also supported development of the curriculum for post-graduate studies in public debt management at the University of the Andes to help staff maintain up-to-date skills. II. EXPENDITURE MANAGEMENT (A) Macro-Programming and Budget Formulation The PFMP helped: (i) support a multi-party Commission for the Rationalization of Public Expenditures whose recommendations have been an important input to policy reform in areas such as pensions, territorial transfers, and privatization; (ii) strengthen the capacity of MHCP and DNP in macro-economic analysis for the purpose of macro-programming, through strengthening and implementation of: (a) methodologies for production of quarterly national statistics and GDP estimates, monitoring of real economic activity, and preparation of social accounting matrices and related staff training in these areas; (b) models for economic analysis, including general equilibrium models and a model for fiscal projections; and (c) information systems for generating leading indicators, monitoring of public finances and monitoring of public sector cash flow; (iii) restructure the Unit for Territorial Development, implement an information system to monitor territorial transfers (more than 40% of central government revenues are transferred to lower levels of government by law) and provide training to the staff of DNP and decentralized entities; (iv) Terms of reference and bidding documents for the analysis and design of a Public Investment Information System (SUIP - Capital Budgeting) to help DNP formulate and monitor the investment budget (the actual design is being financed under PFMP II) and (v) provide online access to budgeting norms. The upgrading of the system for evaluation of territorial finances was also supported by the IDB's operation to strengthen territorial information systems (FOSIT). Impact: Improved macro-economic, sectoral and territorial information as well as better analytical tools are now available to the government for economic policy and budgetary decision making. (B) Budget Execution One of the major outputs of the PFMP has been the development and implementation of an Integrated Financial Management System (SIIF) encompassing the entire budget execution process. The main system modules are: Receipts, Expenditures, Annual Cashflow Plan, Single National Account, Accounting, Interfaces with other systems, including those of the DIAN, System Administration and Security. Decree 2806 of December 2000 sets forth the requirements for management of public resources and the application of the SIIF. The system was developed in coordination with MHCP, DNP, CGR and DIAN. It is in operation in all the 46 central government entities, and has over 1,000 users. It covers about 80% of the central government budget. A comprehensive user manual was developed and more than 400 government staff participated in 14 theoretical and practical seminars and about 1500 participated in 18 SIIF orientation seminars. Impact: Central government entities are able to execute their budget on line and payments are now made through the Single National Account (CUN). The SIIF automatically generates accounts based on transactional information (about 15,000 transactions daily) and the data is available to the CGR for real time audit. The system has significantly increased effectiveness, efficiency, transparency and accountability in budget execution (see Annex I for details). (C) Expenditure Accounting -7 -  The new Constitution (1991) created the Office of the Accountant General (CGN) in MHCP with responsibility for consolidating the national budget and establishing state financial statements based on an accounting plan for all government levels. Earlier, government accounts were prepared and audited by the CGR. The project supported the establishment of the Office of the CGN. The CGN has since developed and implemented a new chart of accounts and new accounting norms. In addition, the project has provided training to about 3,500 staff at central, regional and local levels in the new norms and procedures of accounting. Imnpact: the office of the CGN has been established by law as a regulatory entity for the public sector. Accounting and auditing have been separated as a result the creation of the Office of the CGN, thus eliminating the conflict of interest implicit in the preparation and auditing of national accounts by the CGR. A comprehensive accounting system has been established throughout the public sector, consistent with accounting guidelines, to ensure uniformity of accounting procedures and classification. Consolidated national accounts have been published annually by the CGN since 1995. (D) External Control Assistance was provided in developing methodologies and skills in 'second generation auditing' i.e. management and performance audits. The project helped the CGR to strengthen social control over public expenditure, by involving civil society in oversight and audit activities. The emphasis was on improving oversight of high impact and high risk projects where significant resources are being invested. The project provided training to about 580 staff of the CGR in financial, performance and management audits and social control, besides supporting dissemination activities relating to social control. (E) Monitoring and Evaluation With assistance from the PFMP, GOC embarked on an ambitious initiative to introduce results-oriented management in the public sector. A comprehensive National System for Evaluation of Results of Public Sector Performance (SINERGIA) was implemented in all 16 sector ministries and 170 public entities, as well as in two departmnents and three municipalities to institutionalize systematic evaluation of government policies, programs, projects and entities. Under this system Indicative Plans (IPs) are established for each sector and entity for each year. In the case of sectors, the IPs include the strategic objectives of the sector and specific indicators relating to the actual results to be achieved, along with targets for minimum, satisfactory and excellent performance. In the case of public entities, besides sector objectives, the objectives of the entity are also included. The system has been in operation since 1997. Performance evaluations of the sector ministries are carried out by the DNP. The entities carry out auto-evaluation and are also evaluated by the respective ministry. The project supported the design and establishment of DNP's Results Evaluation Directorate which oversees SINERGIA. An information system to manage the evaluation system has also been implemented. Impact: SINERGIA has changed the tenor of annual reports presented by the DNP to the Economic and Social Policy Council (CONPES) and to the Congress, by focusing attention on strategic objectives, performance indicators and actual performance, instead of on merely on levels of public spending. At the entity level, SINERGIA has helped clarify the key results areas of each entity and the results expected of it. Based on SINERGIA, the DNP and MHCP have started entering into Efficiency Agreements with specific ministries and public entities, under which, in exchange for commitments regarding availability of funds made by DNP and MHCP, the ministry or public entity concemed commits to deliver specific outputs. F. Strengthenina of Informatics Cavacity The Informatics Unit of MHCP was strengthened and hardware and software was provided to establish a - 8 -  local area network and intranet for the Ministry facilitating production of financial reports and linking all staff on line. A Local Area Network was also implemented for the DNP. Significant improvements in the level of automation also resulted in both the MHCP and the DNP on account of implementation of the SIIF and other thematic information systems. (III) PROJECT ADMINISTRATION The project was organized in three subprojects with complementary objectives, but independent implementing arrangements and budgets. Small Project Management Units (PMUs) in MHCP, DNP and CGR were organized and participated actively in project design. The PMU for the MHCP consolidated project accounts. A high level Project Coordinating Committee (COCOR), led by the Vice Minister in the MHCP was established to provide strategic guidance and oversight. Annual work programs (POA) were sent for the Bank's review as well as annual progress reports and project audits. UNDP and for a short period FONADE assisted the project with procurement and management of project funds. Since project activities related to multiple autonomous and semi-autonomous entities, coordination was sometimes difficult. However, the implementation experience was satisfactory once coordination issues were resolved. This required considerable direct involvement of the Bank team. 4.3 Net Present Value/Economic rate of return: N/A. 4.4 Financial rate of return: N/A. 4.5 Institutional development impact: The strengthening of the revenue administration, implementation and institutionalization of the SIIF, the establishment and strengthening of the CGN, the institutionalization of citizen participation in the work of the CGR and the implementation of SINERGIA in DNP, have all made major institutional improvements in the collection, management and control of public fund. The institutional development impact on participating entities, as described in Sections 4.1 and 4.2, is, therefore, substantiaL 5. Major Factors Affecting Implementation and Outcome 5. 1 Factors outside the control of government or implementing agency: The critical macro-economic situation faced by Colombia during project implementation imposed constraints on the government that led to budget cuts for the project and delayed some of its activities, necessitating project extension (see 5.3 below). 5.2 Factors generally subject to government control: There was significant turn-over of financial management personnel who were trained in the SIIF as well as of IT staff in DIAN, due to salaries which were not competitive with the private sector. Macro-economic constraints made significant improvements in salaries difficult. Also, in the early phase of the project there was inadequate involvement by the Directors of Budget, Public Credit and Treasury in the development of the SIIF. A productive retreat of all the key players helped build ownership for the system amongst them and secure their active participation in its successful development and implementation. 5.3 Factors generally subject to implementing agency control: The project spanned three different administrations and several Vice Ministers of Finance, Directors General of the DIAN, Sub-Directors of the DNP and Vice Controllers General. This resulted in delays in the taking decisions, while new officials became familiar with the project. Further, the IJNDP office, which -9-  assisted with procurement/contracting and fund management, was initially unfamiliar with Bank procedures and took considerable time to train its staff. These factors, in addition to budget cuts, led to some slippages that required project extension. 5.4 Costs andfinancing: See Section 3.4 and Annex 2 regarding allocation changes, and Section 5.3 regarding implementation delays and extension. About $29.0 million of the original $30.0 million loan were disbursed. Approximately $ 1.0 million was undisbursed due to: (i) some bidding delays in the final months of the project; (ii) the Government's use of their own funds for some expenditures originally slated for loan financing; and (iii) some exchange rate differences. 6. Sustainability 6.1 Rationalefor sustainability rating: Sustainability is highly likely in light of the strong indications of borrower commitment and ownership. Given the serious fiscal situation faced by Colombia, reforms in revenue administration and public expenditure management are among the top priorities of the government. This is reflected in the high priority attached to this project and PFMP II. The Government has also demonstrated the willingness to base critical revenue enforcement and resource allocation decisions on the objective information generated by different tools and systems provided by the project, rather than on purely political considerations. The government's commitment to the project was also indicated by the provisions it made in the national budget over the life of the project (see Section 10) and for the successor project in the FY2001 budget, in spite of the very tight fiscal situation. The main area of concem with regard to sustainability is the remuneration structure, especially for technical positions in tax and customs administration, financial management and information technology. Due to higher wages for these skills in the private sector, GOC is likely to see continued high turnover. This will require steady improvement in the pay scales, provision of non-monetary incentives and continuous training of new staff recruited to replace departing employees. 6.2 Transition arrangement to regular operations: Various systems developed under the project are already in operation and have been taken over by the concerned line agencies. For the most part, they do not require special transition arrangements. However, the improvements brought about by the project were only the first step in the modernization of revenue administration and public expenditure management in Colombia. Many institutional and organizational deficiencies, discussed in detail in the Project Appraisal Document of the PFMP-II, remain. Also the coverage and functionality of some of the systems developed under the project need to be extended. The PFMP II (Loan 7049-CO, approved March 22, 2001 for $35.47 million) will consolidate and extend the reforms introduced by the PFMP-I; undertake second generation reforms in selected areas and deal with deficiencies that have not yet been addressed. Specific follow-up activities supported by the Bank and other donors are described below. (I) RESOURCE MOBILIZATION: (a) Revenue Administration: (i) Voluntary Compliance: The system for electronic filing of returns will be expanded to cover medium and small taxpayers; its functionality will be enhanced to include payment of taxes and submission of claims for tax refunds; the Office of the Taxpayer Ombudsman will be strengthened to provide quick - 10 -  redress to taxpayers' problems; and efforts will be made to develop a stronger social consensus in favor of tax compliance. (ii) Routine tax administration processes: The complete suite of systems to manage declarations and payment information developed under PFMP I will be enhanced. In particular, older systems such as the Unique Taxpayer Register and the system for accounting of tax and custom receipts will be updated with the help of the USIRS, and a second generation version of the system for control of refunds and credits will be developed to enhance functionality. (iii) Enforcement: Systems and organizational arrangements to collect covert intelligence about tax evasion and smuggling will be developed. The SICAT and SIFARO systems for the selection of cases for tax and customs audit will be enhanced. Improvements in the functionality of SIPAC, the tax arrears recovery system, will be undertaken; and a system to integrate VAT invoicing via the internet will be developed. Methodologies will be refined for measuring tax evasion and contraband and auditors will be trained in the use of the newly developed system of external information. (iv) Customs Automation: Additional modules of the SIGLO XXI system to deal with imports under special regimes, goods in transit and exports will be developed. The taxpayer current account will be enhanced to include customs transactions. Methodologies and systems for measuring contraband will be refined. A system for collection of external information needed to support enforcement of customs and foreign exchange laws will be developed. (v) Tax Policy and Legal Framework of the Revenue Administration: Tax and customs policy, laws and regulations will be reviewed and revised to expand the tax base, reduce distortions and further simplify substantive and procedural provisions to reduce compliance costs and improve the legal authority of DIAN to enforce tax and customs laws. The DIAN's ability to participate in international tax and customs treaty negotiations will be strengthened through staff training. (vi) Organization and management of the DLAN: The organization and management of the DIAN will be further strengthened through: (i) implementation of a Management Information System developed under PFMP I at the Regional and Local levels of DIAN; (ii) implementation of an information system for the administration of career path and professional development of DIAN staff; (iii) training of 3000 staff in basic functions of the tax and customs administration, training of 250 staff in advanced technical functions and specialized training of the staff of the Office of Disciplinary Investigations in effective prevention and control of corruption; (iv) further modification of business processes in accordance with risks highlighted in the Corruption Risk Maps developed under PFMP I; (v) review and enhancement of the central information systems of DIAN, to ensure its ability to handle new technologies; (vi) improvement in archives and record storage; and (vii) the carrying out a sustained communication campaign to explain the objectives and implications of the modernization of DIAN to internal and external stakeholders in order to gain support for the reforms. (b) Treasury and Public Credit: PFMP II will help: (i) implement the system developed under PFMP I to improve the capacity of Treasury to better manage its investment portfolios, including improved control of investment transactions and optimization of return on investment; (ii) support implementation of phases II and III of public debt management system. II. EXPENDITURE MANAGEMENT - 11 -  (a) Macro-programming and Formulation and Monitoring of the Budget: The new project will: (i) assist in furither clarifying and adjusting the roles and responsibilities of entities that participate in the programming, budgeting, execution and evaluation of public expenditures; (ii) enhance and implement models and information systems for medium term and long term macro-economic projections and simulations and evaluation of expenditure and revenue policies; (iii) generate consolidated economic, fiscal and budgetary accounts of the public sector, and (iv) classify budget execution information contained in the SIIF according to economic categories. The project will also help develop methodologies and systems to: (i) quantify expenditures earmarked by different laws and develop options for reforms aimed at reducing earmarking; (ii) improve revenue projections; (iii) calculate unit cost of inputs and outputs; and (iv) improve interfaces between the information systems of the Budget Directorate of MHCP and those of the sector ministries, to improve budget formulation and monitoring. (b) Budget Execution: The PFMP II will improve the control of government over actual spending by extending the coverage of the SIIF to 145 regional offices of central government entities. The functionality of the system will be enhanced based on user feedback. Also, to increase the coverage of the system, a modified version of the system will be developed for implementation in decentralized entities that receive funds from the national budget. Further, a new SIIF module will be developed to eliminate the proliferation of accounting systems used by different projects funded by external donors and to increase control over funds executed by these projects. (c) Budget Expenditures Accounting. PFMP II will improve the quality of accounting information in public entities by: (i) supporting mechanisms for the registration and reconciliation of accounting records covering income, debt transactions, expenditures and physical assets; (ii) supporting dissemination, advisory services and training to improve accounting practices in public agencies; (iii) strengthening the information systems of the CGN to capture and integrate accounting information at the national, decentralized and territorial levels; and (iv) providing additional training to public officials in the evolving accounting norms and practices. (d) Control and Evaluation: The follow on project will help improve the current version of the information system supporting SINERGIA by including evaluation of recurrent expenditures and extending the system to public enterprises and territorial entities. The PFMP-II will not provide additional assistance to the CGR, which will be supported by the IDB. The project will , however, continue support for rationalization of information flows through implementation of existing inter-institutional agreements between MHCP, DNP, and CGR to reduce the costs of monitoring budgetary expenditures, by identifying shared information needs and eliminating duplicate reports. (e) Public Procurement and Contracting: PFMP I helped prepare the procurement and contracting component of PFMP II. This component will improve procurement and contracting practices to increase transparency and value for money. It will assist in revising the relevant normative and institutional framework, streamlining processes, implementing modernized information systems to disseminate procurement opportunities, bidding documents and contract awards to the public via the internet and carry out procurement transactions on-line. 7. Bank and Borrower Performance Bank 7.1 Lending: The Bank's performance in the identification, preparation and appraisal of the project was satisfactory. The design of the project was appropriate for achieving the above outputs. The project was one of the few - 12 -  projects that attempted to develop a truly integrated financial management system, including all component parts: revenue generation, debt management, treasury operations, macro-programming, budgeting, budget execution, accounting, audit and evaluation. At the time the loan was designed, there were few precedents for such a comprehensive reform. There was a strong mix of the specialist skills in the early missions, including local specialists, financed by GOC, that supported an accurate diagnosis of needs. PFMP objectives and activities were consistent with the CAS and the Government's development strategies (Section 3.1). They continue to be consistent as PFMP II moves toward consolidating and enhancing the advances made to date. As already mentioned, the original allocation of project funds between consultant services and goods needed adjustment during project execution. 7.2 Supervision: The project benefited from stability in Bank task management (only one change in task managers during its life, ensuring consistency of approach) and the fact that the task managers were senior, experienced, able to offer high level technical advice, help resolve inter-ministerial coordination problems, and respond quickly to a high volume of requests for "no objections." A problem solving approach was adopted and, together with the national authorities, workable solutions to the difficulties encountered were found. The Bank's own budget limitations prevented having a similar specialist skill-mix during supervision to that enjoyed during project preparation. Nevertheless, the borrower viewed the Bank as being helpful, practical, and flexible where needed during the course of project implementation. Project supervision reports were comprehensive and aide memoir recorded progress and problems so they could be addressed in a timely way. Bank supervision was, therefore, satisfactory. 7.3 OverallBank performance: The Bank's overall performance was satisfactory for the reasons stated above. Borrower 7.4 Preparation: The Borrower's performance during project preparation was satisfactory. Significant progress was made towards completion of key legislative and institutional measures. The Constitution of 1991 created the office of the Accountant General (CGN) charged with consolidating the accounts of all levels of government; changed the role of the Controller General from ex-ante control to ex-post audit of government expenditures; and emphasized the establishment of modem financial administration based on efficiency and effectiveness in public spending. These reforms were also supported by other laws and presidential decrees that helped strengthen fiscal stability and macroeconomic coordination; introduced a new planning framework based on increased civil society participation; provided autonomy in budget execution to operative agencies; and introduced performance management in the public sector, thus paving the way for activities supported by the project. In addition, GOC financed an impressive cadre of specialists in treasury, informatics and expenditure management, who worked closely with the Bank team in preparing the loan. 7.5 Government implementation performance: The Government's performance in implementation was satisfactory. The Borrower expressed commitment to the project in several ways mentioned above, including setting the policies and passing the laws needed to reform the public sector and providing counterpart resources. GOC was effective and timely in meeting the loan covenants, although the pace of implementation sometimes slowed as mentioned in Section 5.3. The Project Coordination Units were adequately staffed and functioning throughout the life of the project and carried out their responsibilities as agreed with the Bank. 7.6 Implementing Agency: Implementing Agencies used project funding judiciously and adequately managed the work of consultants - 13 -  and procurement. The results of their work have been impressive, per Sections 4.1 and 4.2. Their performance is, therefore, satisfactory. 7.7 Overall Borrower performance: The Borrower's overall performance was satisfactory for the reasons stated above. 8. Lessons Learned 1. Achievement of complex and far-reaching institutional changes, such as those described above, require a long time horizon to take root. This, in turn requires long-term commitment, consistency and continuity of approach on the part of both the Bank and the Government, spanning multiple changes of government. For this reason, PFMP II was designed to support second generation reforms, building on progress made under PFMP I. 2. While computerization is necessary to improve efficiency and effectiveness in the Revenue Administration and Public Expenditure Management, it is not sufficient. It is imperative to address underlying institutional weaknesses in order to achieve lasting results. Therefore, a well-rounded institutional development approach has to be adopted. While supporting extensive information technology investments, it is important to deal with issues relating to normative framework, incentives, human resources, organizational arrangements, management systems, business processes and training. 3. Establishing a clear link between system improvements and broader social goals (e.g. transparency, accountability and citizen participation) helps to build support for institutional reforms within the government and improves the prospects for their sustainability. 4. Implementing a project involving autonomous agencies, like the MHCP, the DNP and the CGR, can pose serious coordination challenges. It is important that the Coordination Committee (COCOR) meets frequently to deal with inter-institutional issues. In order to operationalize the decisions of the COCOR and resolve technical problems, coordination arrangements at the technical level need to be put in place. 5. Due to their regular responsibilities, it is very difficult for line managers and staff to devote adequate attention to longer-term modernization activities. Yet their inputs are crucial to project success. Therefore, it is essential to create a dedicated group of individuals who are devoted full time to implementation of project activities, but work closely with line staff. 6. For developing integrated financial management systems, such as the SIIF, it is preferable to make a central allocation for the system as a whole, instead of allocating resources to different functional units, like the Budget Directorate, Treasury and Accounting. 7. When a complex new information system, like the SIIF, is presented to users for acceptance, they tend to discover additional needs that were not in the original system specifications and demand that these be met before the system is commissioned. This can delay system implementation. For efficient system development, a thorough requirements analysis should be done at the beginning and agreed with users. The system meeting these requirements should be implemented as Version 1. Additional requirements, save those of an absolutely critical nature, should be incorporated in subsequent versions of the system. Implementation of Version I should not be deferred in an attempt to satisfy all additional needs. Projects with significant informatics components have built-in obsolescence. Therefore, adequate provision should be made for upgrade and replacement of software and hardware in the course of the project. 9. Partner Comments (a) Borrower/implementing agency: ENGLISH TRANSLATION - 14 -  PUBLIC FINANCIAL MANAGEMENT PROJECT (PFMP) PERFORMANCE REPORT The Public Financial Management Project (PFMP) is nearing completion and the results achieved during its implementation are therefore described for each project component. PFMP OBJECTIVES The objectives of PFMP concerned three aspects: * Creation in the public sector of a system of integrated financial management and a system of supporting data ensuring the integrity, coherence, continuity, transparency and compatibility of public resource management. * Improvement of the functioning of the strategic subsystems of the financial cycle, such as evasion and collection monitoring, budget formulation and evaluation, management of the national treasury and general national accounting. * Support for improved governance of Colombia. This is one of the main objectives of the project, achieved through the national system of fiscal monitoring with emphasis on its principal organ, the General Accounting Office of the Republic. The project comprised the following components: 1. COMPONENTS: TAX AND NATIONAL CUSTOMS ADMINISTRATION (DIAN) The activities undertaken in the DIAN Component are summarized below: IT Infrastructure: New networks of power and data wiring and UPS were expanded and installed in 16 offices and 9 sites of DIAN, introducing technological innovations and providing an infrastructure to meet new requirements and use the latest hardware available on the market. With this platform of electrical networks and wiring, 1,600 PCs and 100 servers can be connected nationwide, thus improving worker productivity and working conditions. These improvements will provide better network coverage for business and support areas in the various offices, since 780 computers can be connected to the DIAN networks. The existing data infrastructure was strengthened by technology changes and upgrades and by staff training, by the installation of 235 pieces of WAN and LAN communication equipment, 1,586 client and production PCs, 85 servers, 235 printers, and Microsoft administration and productivity licenses and software. For this effort, 4,500 officials and 170 technicians were trained to use the tools. Expansion of RAM in 1,586 production PCs and 48 development PCs enables DIAN to use new applications such as Gestor, Sicar, Nomina, ADA, SIFARO, etc. As part of the upgrading of Baynenworks communication equipment, additional switches, routers and modules were installed for 5005 switches nationwide. This made it possible to expand the bandwidth from 10 mbps to 100 mbps at the primary and secondary wiring centers, improving coverage and flexibility of tax-collection activities. - 15 -  Coverage of the Gestor, Sifaro, SIPAC, Morosos, ADA and Salomon applications was improved, facilitating access and monitoring of data for user areas and taxpayers. For this purpose, the UNIX servers, 9 NCR machines and 7 IBM machines were upgraded. Support areas: MOISES accounting system. The provision of computer equipment and local communication networks for administrative and financial areas made it possible to use a financial package to manage the DIAN budget, treasury and accounting, with on-line recording and real-time processing of financial transactions for 29 offices, to replace manual recording and controlling, and to consolidate monthly data and financial statements. This system enhances the efficiency of budget execution and the flexibility of payments to suppliers, allows real-time monitoring of budget execution, on-time submission of financial statements and Treasury control. Payroll and Human Resources System. This system is installed in 45 DIAN offices in the client/server environment and with decentralized administration and centralized payment procedures, allowing administrative and financial areas to be provided with computer equipment and local communication networks and prompt payroll disbursements, payments of social benefits, introduction of innovations and quasi-fiscal contributions. The system permits better monitoring of the financial entitlements of employees and staff. Tax Audit: The Information System for Tax Oversight and Analysis (SICAT) was installed on 287 work stations and 565 users in 21 offices were trained nationwide, with the result that resources were generated for Colombia through audit activities carried out using this tool. Management efficiencies generated $64,288,185,102 for the year 2000. SICAT is installed in 22 offices. The subprogram had the following modules: ECOFI and ESTAD, which help to focus tax auditing; EPLAN and PISTA submodules which help in the selection of taxpayers to be audited; GEREN module, which helps to focus tax auditing and its possible outcomes. This module is installed only at the central level (legal entities and major taxpayers). PERCO module, which is the basis for the execution and evaluation of audit programs and taxpayer records over the last five years; LEGAL module, which permits on-line consultation of tax regulations. PARAM module, which provides values for the consumer price index and gross domestic product. Tax Collections and Recovery of Tax Arrears: Implementation of the Late Filing Planning System (SIPAC), Migration and Elite Group, allowed systematization, automation and standardization of the collection process at the national level. The software is installed in 8 offices, with virtual files that reduce the size of the physical archive; it generates consistent taxpayer data, and facilitates detection and encourages taxpayers to pay their taxes on time. As a result, it is expected that late filing will be reduced and seized assets will be incorporated. The tax collection process was modernized nationwide, reducing the size of the physical archive available for ongoing consultation. In this way, checking of returns and payments was streamlined, enhancing familiarity with the collection process. Using the Customs Current Account system, customs administrative actions can be incorporated in the DIAN databases in real time, reducing the size of physical files. In addition, taxpayers' account statements can be consulted and updated continually and it is easier to evolve strategies for review of balances and recovery of assets. The Refunds and Offsets System (DECO) allows greater flexibility and reduces the burden of "secretarial - 16 -  activities" in the Refunds and Offsets Unit. This system is being installed nationwide and will reduce the time needed to answer queries and reply to taxpayers' requests and initiatives and allow adjustments in the taxpayer's accounts with the Administration through refunds or offsetting of favorable balances. The tax filing and payment procedure was modernized following the acquisition of computer and communications equipment, basic software and applications, Web technology and Internet and intranet solutions allowing activities such as electronic filing of income and sales (VAT) documents, withholdings and payment receipts that provide consistent and timely data. The process also enables taxpayers to file tax returns and pay their dues to the State from their residence or workplace. A system was set up for the exchange of data between SIAT and tax documents received electronically (point of contact e-mail account). This enables the institution to update basic data continually, to retain documents in image form, to verify and validate information to be included in SIAT and to submit statistical queries with control and follow-up figures. Progress was made in automating DIAN tax data (thus reducing the size of DIAN's physical files needed for ongoing consultation) and obtaining accurate account balances. Once they have been automated, the data are not consulted regularly and may be relocated outside the offices. This creates an environment in which taxpayers have confidence in the consistency and timeliness of data. Data automation has made it possible to uncover an amount of approximately 4 billion pesos by reviewing data for the last 10 years. The regulatory accounting system applicable to DIAN will clarify the accounting rules applicable to it and the software to be developed. It will then be possible to generate ongoing reports on DLAN management in terms of total collections and to update balances in real time. As part of the project, software was developed for monitoring compliance with formal obligations, which generates "friendly" communication between DIAN and the taxpayer, in which the taxpayer is informed of the quality of the data provided. It is currently installed at the central level. A system was developed for checking on the collection of the financial transaction tax, with a view to monitoring the receipt of inputs from collections staff. In order to verify the behavior of collections staff and to impose sanctions in the event of irregularities, software was developed for the monitoring and supervision of banks: the SALOMON Sanctions System and Calculation of Consignment Indexes (CINCO). This software minimizes the cost of sanctions procedures and permits the establishment of time periods during which collections staff retain revenues. One of the most important achievements of this system is that it verifies and ensures that revenues are received by the Treasury in a timely manner to be used for govemment operations and social investment. Fiscal Studies: In this area, five types of activity were undertaken. Firstly, a query system was constructed using a data warehouse. The idea was to permit rapid and easy querying, without the cumbersome process of going through the Informatics Unit. Another idea was to include information filters so that figures could be reviewed statistically, by modifying values in returns showing inconsistencies. Secondly, methodologies were devised to estimate the tax base for VAT and income tax. The estimates are supplemented by models that permit rapid and simple calculations, while at the same time constructing scenarios for the design of tax policy. Manuals and training are supplied for use of the models. Thirdly, audit support was provided in two ways: by production chains and by a synthetic index. The - 17 -  chains refer to the grouping of activities involving the largest number of purchases and sales between them, so that flows of VAT tax debits and credits can be observed and points where sales and purchases are concentrated and where greater fiscal control is required can be identified. Cost and sales structures are also provided. The synthetic index is an audit program involving the integration of indexes breaking down Administrations by economic activity and indexes selecting on the basis of normal behaviors for each economic activity. This work is supplemented by a guide for auditors. Fourthly, figures for contraband and contraband routes are estimated. PFMP consultants made an estimate based on demand elasticities and a survey of customs officials, customs agents and labor unions. This work is part of a series of activities undertaken in the Survey Division. Fifthly, specialized technical training is provided in the form of cards to train staff in the actual work of the Survey Office. The commitment is to complete the cards on the subjects of national accounts, fiscal theory and research methodology. The goal is to enhance the analytical skills and capacity of the Office staff. Customs: The SIGLO XXI Customs Project involved a series of activities to improve, adapt and integrate all operations relating to customs administration. Information management solutions were provided for on-line transactions. There were clear benefits, among which mention may be made of: streamlining and enhanced timeliness of operations, since the system can be accessed seven days a week and 24 hours a day; less discretionality in the exercise of customs functions, through monitoring based on risk profiles and supported by data application; standardization of procedures and greater transparency of transactions; specialization in the functions of customs users, since this ensures that they will fulfill their obligations under the system; decrease in material errors, primarily in documents processing; improvement in the monitoring of fulfillment of obligations by the customs authority, specifically in the declaration and payment of duties; greater control by customs users of their own performance and by others involved in the chain of international trade; creation of the quality chain concept, whereby external actors become active subjects of the process of evaluation and improvement of customs services and controls; standardization of user registration and control activities; strengthening of the technological capacity of customs users, giving them access to numerous alternative uses of the infrastructure installed; improvement of the premises and of the computer and communications infrastructure of the customs administration. The ADA system guarantees proper warehouse management and disposal of merchandise seized, confiscated and abandoned for the benefit of the nation. The system also makes it possible to record goods arriving in and departing from specific depots for that purpose. Another advantage of the system is that it facilitates the organization, recording and monitoring of the disposal of goods and the liquidation process. The SIFARO system is installed in all customs and foreign exchange administrations with computerized infrastructure. The system has made it possible to review sources of customs data so as to improve the quality of monitoring programs and make arrangements for local dissemination of customs information. 2. MINISTRY OF FINANCE AND PUBLIC CREDIT (MHCP) As far as this component is concerned, the goal of the project for the modernization of public financial management was to create a data infrastructure for decisions on the management of public resources that will guarantee integrity, coherence, continuity and compatibility in the production, processing and presentation of data and results, as well as better management of issues such as the public debt and budget - 18 -  execution. This goal was covered by the component through the following subcomponents: Public credit: The PFMP project assisted in the creation of machinery to strengthen resource utilization and management. Basically, an information system was created for the public debt, strengthening of the general management of public credit, debt management in the territorial administrations and an auditing system for public debt databases. In order to develop the infonnation system, the project supplied equipment to strengthen the data network in the department of public credit, and software and hardware were acquired to update and validate existing databases by redesigning the process. The division's comprehensive needs were identified and the division itself was able to evaluate the SIGADE system, revealing the need for additional software developments to provide complete coverage for all functions. After identifying requirements and drafting a paper on functional needs, a logical design was produced of improvements to enable the SIGADE system to become operational in the second stage of the project. Because of the need for suitable staff, personnel training and consulting took place in order to identify problems and possible solutions. The result was a better communication flow and reliable information on the public debt; the Government was able to monitor the public debt and know its obligations. The improvement in the organizational climate is also noteworthy. Procedure manuals were produced, giving quality benchmarks and process management benchmarks for the public credit division. In addition, there was improved awareness of the indebtedness of the territorial administrations. All these processes are essential for future initial uploading of SIGADE data. Macroeconomic pro2ramminn: Linkages were established between the total data of the subsystems that make up the overall system of public financial management, with vast improvements in the macroprogramming of public spending. For this purpose, methodologies were developed on the basis of studies conducted in the various sectors of the economy. Computer applications were developed for the use of accounting data from the Colombian public sector and accounting data from the public accounting sector was made compatible with DANE data requirements. In the development of information systems, a cash basis (Operaciones Efectivas de Caja, OEC), system was formulated that is useful for reports on budget execution. During the development of analytical tools, methodology was devised for the quarterly issuance of national accounts statistics, giving more accurate measurements and political economy indexes and reliable data from projection results. Treasury: Under the project, tools were created for centralized management of the investment of liquid funds from the public financial systems. These tools include the treasury investment portfolio system, which reduces opportunity costs for the management of Treasury resources and generates additional data to define cash flows. This has resulted in technical financial efficiency, greater fiscal discipline and transparency of execution. In order to achieve the desired strengthening, staff had to be trained in investment portfolio management systems and in the legal data management system, which had to be made operationally efficient and run by better trained and better informed staff. Treasury activities are related to the development of SIIF, which has a module for the management of the Single National Account; through the Account's transactions and procedures, all obligations assumed under the national budget can be paid and tax receipts can be controlled, with statements of funds. Another achievement was the reduction of average balances in the accounts of government agencies and commercial banks. Bud2et: Improvements were made in the monitoring, handling and recording of public spending, with data provided to administrations on budgeting practices, budget execution and recording. As part of the project, the Government enacted the Expenditure Rationalization Law, which focused on management of the budget for all government agencies. This government tool is used to analyze institutional weaknesses and spending policies in order to produce suggestions for the Government. Budget monitoring and evaluation are based - 19 -  on management and development indexes, which show how government resources have been used. The GESTIONE system, in which DNP was involved, promotes efficient monitoring of the education sector by providing more reliable data to project costs of active and retired staff in that sector. Consultancies pernitted monitoring of contingent liabilities. They also covered the topic of budget sectors and comprised a whole technical study on national budget management indexes. Together with SIIF, this will strengthen the system of comanagement by this office. Accounting: General accounting was consolidated within the civil service. The accounting office has been preparing the nation's overall balance sheet since 1995. All government bodies follow the same accounting policy, issuing annual consolidated balance sheets for the national Government. As a result, the necessary accounting, budgetary and fiscal data for the public sector are available on line in real time. Under tile modemization policies, accounts management was decentralized and standardized. Public accounting was organized as an integrated system in a single database. MHCP Information Systems Unit: The infrastructure of the Ministry of Finance and Public Credit was upgraded to provide the necessary technological support enabling systems to function efficiently. The network was installed in the Ministry and is generating reports on fnancial activities and permitting on-line communication among all staff inside the Ministry. A data-oriented culture was promoted by involving users in systems development and training staff to use the new tools. The software created for the Ministry was designed to meet its needs and the needs of the nation. Integrated Financial Information System (SIIF): The system introduced under the project modernized the country's financial management system in order to achieve transparency, efficiency and decentralized management of public resources. The SIIF information program is a system of computerized data required to provide effective and efficient support for financial administration, guaranteeing consistent data and timely, uniform and rational information flows. Other outcomes closely related with the start-up of the system are public resource management conducted economically, efficiently and transparently, monitoring of resources and public spending, introduction of integrated accounting in the administrations, guarantees of compliance with the obligations of national budget administrations and availability of real and timely indexes for management evaluation and control. The design, development and testing of software for SIIF resulted in the creation of the system module (receipts, expenditures, annual cash flow plan, single national account, accounting, interfaces and administration); the treasury planning module is in its final phase prior to implementation. The modules described above resulted in more homogeneous and timely management of data, optimal use of resources and ease of monitoring. Currently 46 national administrations are able to prepare their budgets on line. In addition, the management of administrations can obtain budget execution data quickly for their decision-making. Staff training was extremely important during the implementation and start-up of the system. Courses and seminars were held, manuals, cards and leaflets were prepared for distribution and a data-oriented culture was thus gradually created. This clarified the division of responsibilities within the user entity and facilitated internal communication between the financial area and the other units through efficient use of technological resources. 3. NATIONAL PLANNING DEPARTMENT (DNP) PERFORMANCE REPORT FOR THE PUBLIC FINANCIAL MANAGEMENT PROJECT (PFMP I) By implementing the components of the Public Financial Management Project entrusted to it, the National Planning Department has strengthened its institutional capacity to discharge its duties as the body responsible for managing public resources. Especially noteworthy are the successes registered with respect to macroeconomic planning, budgeting of public investrnent, allocation of territorial transfers, public policy - 20 -  evaluation, and information systems for budgetary and financial management and control of public investments. These achievements are reflected in the outcomes described below for each component for which DNP was responsible: Macroeconomic analysis. Macroeconomic analysis and modeling tools were developed with a view to improving institutional capacity and the quality of information flows for macroeconomic programming. Support was provided to develop models facilitating analysis of the behavior of macroeconomic variables, including computable general real and financial equilibrium models, a computable general equilibrium model reflecting real rigidities (for trade policy analysis), a fiscal projection model, and a macroeconomic consistency model (RMSM-X). In addition, staff received specialized training in these areas and funding was provided for the periodic publication of current economic indicators. Other activities focused on strengthening information systems, particularly those needed for economic policy decision-making. These include systems for generating leading indicators, preparing social accounting matrices, monitoring real economic activity, producing quarterly supply-based and demand-based GDP estimates, monitoring public finances, and updating national accounts. The PMFP also financed the purchase of information system support equipment. Budget. Another project objective was to help rationalize financial management by strengthening systems that monitor budget execution and financial performance and improving management of entities' financial surpluses. The results achieved in this regard are outlined below. Firstly, the initial phase was completed for the development of the Public Investment Information System (SUIP), which involves designing a system for integrating the budgetary processes managed by DNP. Bids have been invited for the design of the system, to be implemented under PMFP II. Progress was also made in measuring the quality, efficiency, and effectiveness of public expenditures; evaluating Colombia's budgeting processes; establishing monitoring indicators to measure the impact of central government investments; developing plans for rationalizing the education sector and monitoring and generating financial projections for the electric power sector; and devising methodologies for developing sectoral indicators. Results achieved with regard to investment planning include improving methodologies for formulating and evaluating projects of the Project Bank and strengthening the management of information systems for external borrowing and budget monitoring. Of particular note is the support provided for the efforts of DNP and CGR to monitor public expenditures with the aim of implementing a unified system for monitoring expenditures of and managing government entities. As a parallel measure, human resources were strengthened through staff participation in national and international seminars. Finally, funding was provided to purchase computer equipment needed to streamline data processing and management of the large volume of information required. In addition, follow-up reviews were issued on investments and public finances, as were analyses of budget execution for investments in the water, cultural, recreation and sports, education, and employment sectors. Territorial transfers. Under the PFMP, DNP was able to restructure the Unit for Territorial Development (as called for in Law 60 of 1993), entrusting it with responsibility for establishing procedures for the allocation, payment, and control of territorial transfers. - 21 -  Specifically, the results achieved focused on promoting the implementation of Law 60 of 1993, helping strengthen local finances, improving capacity for monitoring and evaluating transfers, and ensuring the consistency of information systems relating to territorial entities. In addition, staff responsible for managing the decentralization process were able to strengthen their skills by attending meetings for territorial authorities, seminars to update their skills, and seminars on fiscal decentralization. Management training provided to staff, along with training on software facilitating infornation system consolidation and management and on tools for evaluating and managing the tasks of territorial entities supplied strategic support for achieving project objectives. With development of the territorial information system on the horizon, DNP's technical and technological capacity was bolstered via equipment purchases and, in support of the management of territorial entities, assistance was provided for the distribution of booklets containing guidelines on the operation Law 60 of 1993 and of guides on how to strengthen local development. Control and evaluation. During the project preparation stage, it was decided that one key objective was to assist the National Planning Department in designing a properly functioning, self-sustaining national results and management evaluation system for the public sector. Accordingly, the PFMP helped the National Planning Department to conceptualize, design, and strengthen what is now known as the Results-Oriented Management Evaluation Directorate (DEGR). The results of this effort are as follows: Firstly, DEGR was organized and became operational, and the National System for Evaluation of Results of Public Sector Performance (SINERGIA), which supports the national evaluation system and currently covers 170 national entities, was designed. The System focuses on all institutional objectives, which correspond to the sectoral objectives set out in the National Development Plan. The next step will see the extension of the System to the decentralized and territorial levels. Another achievement was the systematization of evaluations of policies, plans, programs, and projects. The annual reports DNP provides to CONPES and the Congress are now presented in a different form reflecting the evaluation criteria established by SINERGIA. To this end, information strategies were devised focusing on objectives, indicators, and performance. A number of ex-post strategic evaluations were conducted, including those on the Regional Councils on Economic and Social Planning (CORPES), the Magdalena Medio highway, and water and basic sanitation projects. Arrangements were also put in place to monitor and evaluate public sector entities. The basic manual established for this purpose is the Indicative Plan, which contains basic norms and criteria (indicators and performance) developed when the Efficiency Agreement was designed. Systematic internal evaluations of public sector entities were also introduced, and seminars were held enabling most entities to strengthen their capacity to design, monitor, and evaluate their Indicative Plan. Assistance was also provided to boost technological capacity for this purpose, via the acquisition of computers and training for staff at national and international seminars. PFMP I initiated preparations for the contracting and public procurement component of PFMP II, as follows: assistance for the preparation of regulations relating to the draft amendment to Law 80; a study of contracting and government procurement arrangements not covered by Law 80; design of a system for monitoring and evaluating contracting practices; design and implementation of a strategy for harnessing - 22 -  computer and communications technology to improve government contracting and disseminating information on bidding procedures and public contracts that have been awarded; and, finally, implementation of a training program to inform civil servants of existing conceptual and legal tools and technical issues involved in the contracting process. Strenuthenina information systems. Special emphasis was placed on activities to ensure coordination for components for which both the Ministry of Finance and DNP are responsible, particularly on matters relating to the Integrated Financial Management Information System (SIIF). SIIF is now up and running in parallel with DNP's Financial Division. Project outputs include the strengthening of the Division with information systems and equipment for accounting and treasury management in order to prepare it for SIIF implementation; agreement with the Ministry of Finance to include DNP's budget execution monitoring and evaluation requirements in the SIIF design; participation in surveys to gather data for the design of SIIF modules for entities responsible for budget execution; and identification of the data to be transmitted to DNP via SIIF for budget monitoring. In addition, a number of steps were taken to strengthen DNP's data network, including acquisition of server software; acquisition of the operating system for workstations and applications software; acquisition of two servers for the DNP network; installation of a fiber optic backbone; and acquisition of network administration software. OFFICE OF AUDITOR GENERAL OF THE REPUBLIC (CGR) PERFORMANCE REPORT FOR THE PUBLIC FINANCIAL MANAGEMENT PROJECT (PFMP-CGR) The expenditure component of the PFMP included an external control subcomponent for which CGR was responsible. The following results were achieved: PFMP helped to transform the General Accounting Office of the Republic into a center of excellence on financial control matters. Establishment of social control. The project set the stage for creating a structure and culture for citizen participation in the financial control process. Training for CGR staff provided them with required skills and fostered greater citizen involvement in the institution's work, forging links between Territorial Comptrollers' Offices. As to CGR's structure, the use of new tools such as complaints and grievances software and the introduction of citizen watchdog committees paved the way for decentralizing activities to the various entities, thereby enhancing efficiency and strengthening auditing processes and sectoral studies. Project assistance to update CGR's technological capacity led to the creation of an institutional intranet. Dissemination of social controL Interaction between CGR staff and the populace brought the institution closer to Colombia's citizens. The establishment of research centers and dissemination of documentation on citizen participation in financial control equipped citizens to take well-founded action, thereby enhancing their ability to play an important interactive role in monitoring government resources. At the territorial level, a strategy for coordination between CGR and the Territorial Comptrollers' Offices was formulated and led to the design of SIT, a system enabling them to communicate with one another. Trainin2 of a system-wide auditor. The project prompted a shift in "culture" among audit personnel, - 23 -  improving receptivity among audited entities and enhancing citizen trust of the auditor's work. Dissemination of the new control discourse. This effort enabled CGR to position itself as facilitator of the Government's work to ensure the efficient and effective execution of public expenditures. To this end, instruments were developed to provide operational support to help CGR carry out its mission, including risk maps (the SIRI system), government procurement mechanisms (the SICE system), and regulatory guidelines to facilitate proper fiscal oversight in the legal sphere (the SINOR system). WORLD BANK AND GOVERNMENT PERFORMANCE WITH RESPECT TO PROJECT DESIGN AND IMPLEMENTATION PFMP is consistent with the policies contained in the Colombian Government's development plan and with the Bank's policies to promote development and modernize the State. Throughout project implementation and execution, the Colombian Government, as borrower, complied with World Bank regulations with respect to disbursements, recruitment, procurement of goods, and adherence to indicators established in the SAR in the early stages of project development. The World Bank, as lender, provided the support required throughout project implementation and execution, remaining in constant contact by conducting supervision missions focusing on the various project components. This supervision was provided by a highly qualified team, enabling valuable lessons to be learned in preparation for the second phase of the project. IMPACT OF THE PROJECT ON FINANCIAL MANAGEMENT The project had a significant impact, enabling the Government of Colombia's management of public finances to become more transparent, consistent, and efficient. The computer applications that were created were particularly impressive: the systems developed to manage tax recovery, oversight, collections, and refunds provided DIAN with SICAT; electronic filing capability and a taxpayer current account system were developed; and SIGLO XX facilitated the processing of customs declarations and the management and sale of confiscated goods. Computer tools also were created to track cash transactions, thereby enabling the Government to monitor the cash deficit. The Commission for the Rationalization of Public Expenditures has been a major source of input for policy reform in the areas of pensions, transparency, and privatization. The Integrated Financial Information Management System (SIIF) and the General Accounting Office established new standards for the management of government finances. PFMP II. PFMP II will provide continuity for activities currently under way as part of the strategy to strengthen the management capacity of entities responsible for transactions involving public resources. Steps will be taken to extend the use of tools already developed for tax recovery, taxpayer current account reporting, oversight, persuasive and coactive tax collection, and tax refunds. To this end, the project will support the establishment of methodologies conducive to a more reliable budget formulation process, as regards both revenue and public expenditures. Assistance will also be provided to develop - through SIIF - reliable data on the country's public sector national accounts. PFMP II will also enhance the reliability of budget planning and facilitate more objective evaluations of the results of entities' management efforts; foster expansion of the current account systems managed by DLAN; assist in strengthening management capacity within DIAN; and support the Colombian Government's efforts to modernize the regulatory framework for government contracting. ORIGINAL SPANISH VERSION PROYECTO DE MODERNIZACION DE LA ADMINISTRACION FINANCIERA DEL SECTROR PUBLICO- MAFP - 24 -  INFORME DE EVALUACION DEL PROYECTO MODERNIZACION DE LA ADMINISTRACION FINANCIERA DEL SECTOR PUBLICO MAFP El Proyecto de Modernizaci6n de la Administraci6n Financiera del Sector Publico - MAFP, llega a su finalizaci6n, por tal raz6n cada componente que integra el proyecto presenta el desarrollo obtenidos durante su ejecuci6n. El componente MHCP lo integran dos grandes subcomponentes gasto representado por MHCP y el recaudo por la DIAN. COMPONENTE: DIRECCION DE IMPUESTOS Y ADUANAS NACIONALES - DIAN. El siguiente resumen hace una relaci6n de las actividades desarrolladas en el Componente DLAN. INFORMATICO: Se ampliaron e instalaron nuevas Redes de Cableado E1ectrico, Estructurado y UPS utilizadas en 16 Administraciones y 9 sitios de la DIAN, generando un cambio tecnol6gico y dotando de infraestructura acorde con los nuevos requerimientos y hardware disponibles en el mercado. Con esta plataforma de redes electricas y de cableado se pueden conectar 1.600 microcomputadores y 100 servidores a nivel nacional, pudiendo mejorar las condiciones de productividad y ambiente de trabajo para los funcionarios. La ampliaci6n permite tener una mayor cobertura de redes para las areas de negocio y apoyo en las distintas administraciones, con la posibilidad de conectar 780 computadoras a las redes de la DIAN. Se fortaleci6 la infraestructura informatica existente mediante el cambio y actualizaci6n de tecnologia y capacitaci6n del recurso humano, la instalaci6n de 235 equipos de comunicaciones para redes WAN y LAN, 1586 microcomputadores cliente y de producci6n, 85 servidores, 235 impresoras, licencias y software de administraci6n y productividad de Microsoft. Para todo esto se capacit6 a 4500 funcionarios y 170 ingenieros en el uso de las herramientas. La ampliaci6n de memoria RAM en 1586 microcomputadores de producci6n y 48 de desarrollo, permite atender nuevas aplicaciones de la DIAN como Gestor, Sicat, Nomina, ADA, SIFARO, etc. En la actualizaci6n de equipos de comunicaciones Baynenworks, se instalaron switches, enrutadores y m6dulos adicionales para los switches 5005 a nivel nacional. Esto permiti6 ampliar el ancho de banda de 10 mbps a 100 mbps en los centros de cableado principales y secundarios, creando una mayor cobertura y agilidad en las funciones propias del recaudo de los tributos. Mayor la cobertura de las aplicaciones: Gestor, Sifaro, SIPAC, Morosos, ADA, y Salom6n, facilitando el acceso y control de la informaci6n para las areas usuarias y contribuyentes. Para lograr lo anterior se ampliaron los servidores UNIX, 9 maquinas NCR y 7 maquinas IBM. AREAS DE APOYO: Sistema contable MOISES. Mediante la dotaci6n a las areas administrativas y fmancieras de equipos de computo y redes locales de comunicaci6n, se contrat6 un paquete financiero para el manejo del presupuesto, tesoreria y contabilidad de la DIAN, teniendo un registro en linea y un tiempo real de las transacciones financieras para 29 administraciones; la sustituci6n de procesos de registro y control manual y la consolidaci6n de la informaci6n y estados financieros mensuales. Con este sistema se tiene una mayor eficiencia en la ejecuci6n del presupuesto y agilidad en el pago de proveedores, control de la ejecuci6n presupuestal en tiempo real, prestaci6n de los estados financieros dentro de los plazos establecidos y control de Tesoreria. - 25 -  Sistema de N6mina y Recursos Humanos. Este sistema se encuentra instalado en 45 administraciones de las DIAN en el ambiente cliente servidor y con administraci6n descentralizada y procesos de liquidaci6n centralizados, permitiendo dotar a las areas administrativas y financieras de equipos de computo y redes locales de comunicaci6n y genera oportunidad en el pago de la nomina, prestaciones sociales, atenci6n de novedades y aportes parafiscales. Con el sistema se logra tener un mayor control sobre los derechos econ6micos de los empleados y funcionarios. FISCALIZACION: Se instal6 el Sistema de Informaci6n para el Control y Analisis Tributario - SICAT - en 287 estaciones de trabajo y se capacito a 565 usuarios en 21 administraciones a nivel nacional, generando recursos para el pais a traves de los programas de fiscalizaci6n realizados con esta herramienta. El recaudo por gesti6n efectiva para el afio 2.000 fue de $64.288.185.102. El Sicat se encuentra instalado en 22 administraciones. En el subproyecto se desarrollaron los siguientes m6dulos: ECOFly ESTAD , que ayudan a la orientaci6n de la fiscalizaci6n tributaria; Submodulos EPLANy PISTA, que ayudan en la selecci6n de contribuyentes a fiscalizar; Modulo GEREN, el cual ayuda a la orientaci6n de la fiscalizaci6n tributaria y sus posibles resultados. Este modulo se encuentra instalado iuicamente en el Nivel Central, Personas Juridicas y Grandes Contribuyentes. Modulo PERCO, sirve de base para la ejecuci6n y evaluaci6n de programas de fiscalizaci6n y la hoja de vida fiscal del contribuyente en los filtimos 5 ainos; Modulo LEGAI, que permite la consulta en linea del estatuto tributario. Modulo PARAM, que consulta valores Indice Precios al Consumidor y Producto Intemo Bruto. RECAUDO Y COBRANZAS Se desarroll6 el sistema de Planeaci6n de la cartera morosa - SIPAC - Migraci6n y Grupo Elite, que permite la sistematizaci6n, automatizaci6n y estandarizaci6n del proceso de cobro a nivel nacional. El software se encuentra instalado en 8 administraciones, contando con expedientes virtuales que reducen el tamafio del archivo fisico, generando informaci6n consiente del contribuyente, ademAs de facilita la detecci6n y disuade al contribuyente a estar al dia con la Naci6n. Con lo anterior se espera una reducci6n de la Cartera Morosa y la incorporaci6n de bienes producto de embargos. Se logr6 modemizar el Proceso de Cobro a los Contribuyentes a Nivel Nacional, pudiendo reducir el tamafio del archivo fisico disponible para consultas permanentes. , y asi agilizar la detecci6n de declaraciones y pagos, y garantizar el mejor conocimiento del proceso del recaudo. Con el sistema de Cuenta Corriente Aduanera se puede incorporar Actos Administrativos Aduaneros a las Bases de Datos de la DIAN en tiempo real reduciendo el tamafio de expedientes fisicos. Tambien se puede consultar y actualizar permanentemente los estados de cuenta de los contribuyentes y facilitar el desarrollo de estrategias para depuraci6n de saldos y recuperaci6n de cartera. Mediante el Sistema de Devoluciones y Compensaciones -DECO- se logra una mayor agilidad en las actuaciones, reducir la carga de "actividades secretariales" al Grupo de Devoluciones y Compensaciones. Este sistema se encuentra en procesos de instalaci6n a nivel nacional, el cual permitira reducir el tiempo de consulta y respuesta a la solicitud y tramite del contribuyente y ademas le permite el ajuste de la contabilidad del contribuyente en la Entidad mediante la devoluci6n o compensaci6n de saldos a favor. La modernizaci6n del Proceso de Declaraci6n y Pago de Impuestos permiti6 la adquisici6n de equipos de Computo y comunicaciones, software de base y aplicativos, tecnologia WEB y soluci6n de Intemet e intranet lograndose el desarrollo de actividades como: declaraci6n electr6nica de documentos de renta, venta (IVA), retenciones y recibos de pago, permitiendo tener una informaci6n consiente y oportuna. El proceso permite tambien que los contribuyentes puedan presentar desde su sitio de residencia o de trabajo las declaraciones y pagos de sus obligaciones con el Estado. - 26 -  Se creo el sistema de informaci6n para el intercambio de datos entre el SIAT y los documentos tributarios recibidos electronicamente - Buz6n Punto de Contacto -, que permite a la instituci6n actualizar permanentemente la informaci6n basica, conservar la imagen de documentos, verificar y validar la informaci6n que se integra al SIAT y disponer de consultas estadisticas con cifras de control y seguimiento. Se logro avanzar en el proceso de sistematizaci6n de la informaci6n de impuestos de la DIAN y en los procesos de obtenci6n de saldos correctos de contabilidad. Lo anterior permiti6 reducir el tamafio de los archivos fisicos de consulta permanente d la DIAN. Una vez son sistematizados, no son consultados regularnente y pueden reubicar en areas diferentes a las oficinas. Esto perrnite generar un ambiente de confianza a los contribuyentes respecto a la consistencia y oportunidad de la informaci6n. Con el proceso de sistematizaci6n de la informaci6n se ha detectado un monto cercano a los 4 mil millones de pesos por depurar informaci6n de los iultimos 10 anos. Mediante el sistema contable con reglamentaci6n aplicable a la DIAN se podra ofrecer claridad en la reglas contables aplicables a la entidad y para el software que se construya. Esto permitira generar reportes permanentes de la gesti6n de la DIAN en terminos del total recaudado y actualizar los saldos en tiempo real. A traves del proyecto se desarrollo el software sobre el control del cumplimiento de la obligaciones formales, que genera una comunicacion "amigable" entre la DLAN y el contribuyente en donde se notifica a este ultimo sobre la calidad e la informaci6n suministrada. Actualmente se encuentra instalado en el nivel central. Se desarrollo un sistema de control de recaudo del impuesto a las transacciones financieras pudiendose monitorear el cumplimiento de los aportes respectivos por las entidades recaudadoras. Para poder conocer el comportamiento de las entidades recaudadoras y para su respectiva sanci6n en caso de irregularidades, se desarroll6 un software para el monitoreo y control de los bancos - Regimen sancionatorio SALOMON- y - Calculo de Indice de Consignaci6n- CINCO. Con este software se puede se puede minimizar el costo de los procesos sancionatorio y permite establecer tiempos de permanencia del recaudo en poder de las entidades recaudadoras. Una de las operaciones mas importante de este sistema es que controla y asegura que los recaudos lleguen oportunamente al fisco para la operaci6n del estado y la inversion social. ESTUDIOS ECONOMICOS Para esta area se desarrollaron cinco lineas de trabajo, asi: En la primera, se construy6 un sistema de consulta con base en bodega de datos. La idea de utilizar este sistema era permitir unas consultas rapidas y faciles, sin la engorrosa utilizaci6n de los servicios de la unidad informatica. Una segunda idea era lograr que la informaci6n tuviera filtros que permitieran depurar las cifras desde el punto de vista estadistico, es decir, modificando valores de las declaraci6n en los cuales pudiera presentarse inconsistencias. La segunda area tiene que ver con el desarrollo de metodologias para estimar la base gravable de los impuestos de IVA y renta. Los estimativos estan complementados con modelos que permiten realizar los calculos de manera rapida y sencilla, al tiempo que permiten la construcci6n de escenarios para disefio de politicas de tributaci6n. A lo anterior se suman los manuales y capacitaci6n para manejo de los modelos. - 27 -  La tercera area corresponde a Apoyo a Fiscalizaci6n. Este apoyo se venido brindando de dos maneras: en primer lugar, cadenas productivas; en segundo lugar, indicador sintetico. Lo primero se refiere a la agrupaci6n de aquellas actividades que mas compras y mas ventas tienen entre si, lo cual permite en IVA observar flujos de debitos y cr&ditos fiscales, ademAs de los puntos de concentraci6n de ventas y compras, en donde se debe ejercer un mayor control fiscal. Tambien ofrecen estructuras de costos y ventas. El indicador sintetico es un programa de fiscalizaci6n que tiene que ver con la integraci6n de indicadores que diseccionan por actividad econ6mica en las Administraciones, e indicadores que seleccionan a partir de comportamientos normales segun actividad econ6mica. Esta labor esta complementada con una guia para los auditores. La cuarta area de trabajo corresponde a estimaci6n de cifras de contrabando y sus rutas. Los consultores de MAFP realizaron un trabajo de estimaci6n con base en elasticidades de demanda y una encuesta aplicada a funcionarios aduaneros, agentes de aduana y gremios. Esta metodologia forma parte de un grupo de trabajos realizados en la Divisi6n de Estudios. El uiltimo de los trabajos se refiere a Formaci6n Tecnica Especializada. La participaci6n en este trabajo consiste en la elaboraci6n de algunas cartillas para preparar a los funcionarios en el trabajo propio de la Oficina de Estudios. El compromiso adquirido es terminar las cartillas correspondientes a Cuentas Nacionales, Teoria Fiscal y Metodologia de Investigaci6n. Con esto se busca un aumento en la eficiencia y capacidad de analisis de los funcionarios de la Oficina. ADUANAS El Proyecto Aduanas SIGLO XXI ha desarrollado a traves del proyecto una serie de servicios que ha permitido mejorar, ajustar e integrar todas las operaciones relacionadas con la administraci6n aduanera. El sistema SIGLO XXI, a proporcionado soluciones informaticas para la ejecuci6n de los tramites en linea, mostrando claros impactos dentro de los cuales podemos destacar, la ejecuci6n de las operaciones de manera agil y oportuna gracias al acceso al sistema siete dias a la semana y 24 horas del dia, La disminuci6n de la discrecionalidad en el ejercicio de las funciones aduaneras, mediante el ejercicio de controles con base en perfiles de riesgos y con el apoyo de la aplicaci6n informatica; la estandarizaci6n en los procesos y mayor transparencia en los tramites; especializaci6n de las funciones de los usuarios aduaneros ya que se garantiza el desarrollo de sus obligaciones a traves del sistema; disminuci6n de los errores formales principalmente en el diligenciamiento de los documentos; mejoramiento en el control al cumplimiento de las obligaciones por parte de la autoridad aduanera y especificamente a la declaraci6n y pago de tributos; mayor control por parte de los usuarios aduaneros, a la gesti6n propia y de los otros actores de la cadena del comercio intemacional; creaci6n del concepto de cadena de calidad, mediante el cual, los actores extemos se convierten en sujetos activos del proceso de evaluaci6n y mejoramiento del servicio y control aduanero; normalizaci6n de las acciones de registro y control de los usuarios; robustecimiento de la capacidad tecnol6gica de los usuarios aduaneros, lo que les abre las puertas a muiltiples usos altemativos de la infraestructura instalada; mejoramiento de la infraestructura locativa, informatica y telemAtica de la administraci6n de aduanas. El sistema ADA, permite garantizar una adecuada gesti6n de almacenamiento y disposici6n de mercancias aprehendidas, decomisadas y abandonadas a favor de la naci6n. El sistema ademas permite el registro del ingreso y salida de mercancias de los dep6sitos determinados pam tal efecto. Otra ventaja del sistema es facilitar el desarrollo, registro y control de los eventos de enajenaci6n de mercancias asi como facilitar el proceso de liquidaci6n. El sistema SIFARO, se encuentra en todas las administraciones aduaneras y cambiarias con infraestructura computacional.. El sistema ademas a pernitido depurar las fuentes de datos de - 28 -  informaci6n aduanera en procura de mejorar la calidad de los programas de fiscalizaci6n. Generar los mecanismos para distribuir a nivel local la informaci6n aduanera, es otro de las ventajas que arroja el sistema. MINISTERIO DE HACIENDA Y CREDITO PUBLICO El proyecto de modemizaci6n de la administraci6n de las finanzas publicas, en lo que tiene que ver con este componente, busc6 crear una infraestructura de informaci6n para las decisiones del manejo de recursos piiblicos, que garantizaran la integridad, la coherencia, la continuidad y la compatibilidad en la producci6n, el tratamiento y la presentaci6n de los datos y resultados; asi como un manejo mas adecuado de temas como la deuda puiblica y la ejecuci6n del presupuesto.. Estos objetivos han sido cubiertos por el componente a traves de los diferentes subcomponentes que lo integran tales como: CREDITO PUBLICO El Proyecto MAFP, contribuy6 en la creaci6n de mecanismos que buscaran fortalecer la ejecucion y manejo de los recursos. Dichos mecanismos estan enfocados en crear un sistema de informaci6n para la deuda puiblica, fortalecimiento de la direcci6n general de credito publico, manejo de la deuda en las entidades territoriales y un sistema de auditoria sobre las bases de datos de la deuda puiblica. En el desarrollo del sistema de informaci6n, el proyecto suministro equipos para el fortalecimiento de la red informatica a la direcci6n de credito publico, se adquiri6 software y hardware para actualizar y validar las base de datos existentes, realizando una tarea de redisefno, de este proceso se identificaron los requerimientos integrales de dicha direcci6n, que le permitieron a la misma evaluar el sistema SIGADE, encontrando la necesidad de hacer desarrollos adicionales a dicho software que le permitan cubrir el total de sus funciones , es asi que identificando y estructurando un documento de requerimientos funcionales, se procedi6 a hacer el disefio l6gico de las mencionadas mejoras que le permitirin al sistema SIGADE entrar en funcionamiento en la segunda etapa del proyecto. La necesidad de contar con personal id6neo, llevo a que se capacitaran funcionarios y se realizaran consultorias para diagnosticar y dar las posibles soluciones. Los resultados obtenidos se reflejan en, una mejora en el flujo de comunicaciones, confiabilidad de la informaci6n sobre la deuda publica, ademas del gobiemo contar con un seguimiento sobre la deuda del pais y saber cual es son las obligaciones. La mejora en el clima organizacional otro factor de enfatizar, se crearon manuales de procedimientos y funcionen indicadores de calidad, indicadores de gesti6n de procesos de la direcci6n de credito pu.blico. Por otro lado se mejor6 el conocimiento del endeudamiento de las entidades territoriales, procesos todos indispensables para la futura carga inicial de la infornaci6n SIGADE. PROGRAMACION MACROECONOMICA Se establecieron nexos entre la informaci6n total de los subsistemas que conforman el sistema general de gerencia fmanciera pablica, mejorando enormemente la macroprogramaci6n del gasto puiblico. Para tal fin, se establecieron metodologia soportadas en estudios realizados de los diferentes sectores de la economia, se desarroll6 aplicaciones computacionales para la utilizaci6n de la informaci6n contable del sector piiblico colombiano, compatibilizando la informaci6n contable del sector publico de la contaduria con los requerimientos de informaci6n del DANE. En el desarrollo de sistemas de informaci6n, se elabor6 OEC (operaciones efectivas de caja) util en los reportes sobre ejecucion presupuestal. En el desarrollo de herramientas analiticas, se elaboraron metodologia para la trimestralizaci6n de las estadisticas de las cuentas nacionales, dando como resultado mediciones mas certeras asi como indicadores de politica economica e informaci6n confiable de los resultados de las proyecciones. TESORERIA Se crearon a traves del Proyecto, herramientas que han hecho posible el manejo centralizado de la - 29 -  inversi6n de la liquidez del sistema financiero puiblico. Entre las herramientas desarrolladas esta, el sistema de portafolio de inversi6n del tesoro el cual representa menores costos de oportunidad para el manejo de los recursos de DTN para contar con la informaci6n adicional para defmir los flujos de caja.. Esto a repercutido en eficiencia tecnica fmanciera, mayor disciplina fiscal, transparencia en la ejecuci6n. Para el fortalecimiento que se perseguia, se necesit6 capacitar al personal en los sistemas de manejo de portafolio de inversiones y para el sistema del manejo de la informaci6n legal, dotandolo de eficiencia operacional asi como de funcionarios mas capacitados y con mayor conocimiento. Las actividades del tesoro estan relacionadas con el desarrollo del SIIF, el cual presenta un modulo para el manejo de la cuenta unica nacional; la cual posibilita a traves del uso de sus transacciones y procesos, el pago de todas las obligaciones contraidas con cargo a presupuesto nacional y el control de los recaudos con situaci6n de fondos, de los recursos del presupuesto nacional. Otro avance conseguido, fue el de reducir los saldos promedios en las cuentas de las entidades piTblicas y bancos comerciales. PRESUPUESTO Se desarroll6 mejoras en el control, manejo y registro del gasto piiblico, suministrando informaci6n a las entidades sobre practicas de presupestaci6n, ejecuci6n presupuestal y registro. A traves del proyecto, el gobiemo emiti6 la ley de racionalizaci6n del gasto enfocada para el manejo del presupuesto para todas las entidades pliblicas. Esta herramienta del gobiemo, sirve para analizar las debilidades institucionales y las politicas de gasto para dar sugerencias al gobiemo. Seguimientos y evaluaci6n presupuestal, esta soportado en indicadores de gesti6n y desarrollo, haciendo posible mostrar como se ha utilizado los recursos del gobiemo. El desarrollo del sistema GESTIONE, en el cual intervino el DNP, contribuye con el seguimiento eficiente del sector educativo, permitiendo contar con la informaci6n mas confiable que permita proyectar los costos de las plantas activas y pensionadas de dicho sector, se elaboraron consultorias que permitieron hacer un seguimiento a los pasivos contingentes , asi como tambien el tema de los sectores del presupuesto y todo un estudio tecnico sobre indicadores de gesti6n del presupuesto nacional, el cual fortalecerA con el SIIF , el sistema coadministrativo por esa direcci6n. CONTABILIDAD Se consolid6 la contabilidad general dentro de la administraci6n puiblica. Desde 1995 la direcci6n de contabilidad emite el balance general de la naci6n. Todos los organismos del gobiemo utilizan la misma normatividad contable, emitiendo anualmente los balances consolidados del gobiemo nacional. El avance alcanzado es tal que se tiene la informaci6n contable, presupuestal y fiscal del sector pudblico requerida en linea y tiempo real. Dentro de las politicas de modemizaci6n tambien se descentralizo el manejo contable y se unificaron criterios. Se organiz6 la contabilidad puiblica como un sistema integrado, en una base de datos uinica. UNIDAD DE INFORMATICA MHCP La infraestructura del ministerio de Hacienda se adecu6 para realizar el soporte tecnol6gico requerido, posibilitando que los sistemas se desarrollen efectivamente. Se implant6 la red para el ministerio, pennitiendo la posibilidad de generar informes sobre actividades financieras, asi como una comunicaci6n en linea de todos los funcionario al interior del ministerio. Se incentivo la cultura infommatica a traves de la participaci6n de los usuarios en el desarrollo de sistemas y la capacitaci6n de los funcionarios en el uso de las nuevas herramientas. Es de resaltar que el software creado para el ministerio se acomod6 a las necesidades tanto de este como de la naci6n. SISTEMA INTEGRADO DE INFORMACION FINANCIERA-SIIF El sistema realizado por medio del proyecto, logr6 modemnizar el sistema de manejo financiero del pais con miras a buscar transparencia, eficiencia y manejo descentralizado de los recursos puiblicos. El programa informatico SIIF, el cual plantea un sistemas de informaci6n computarizados necesarios para - 30 -  proveer un apoyo efectivo y eficiente a la administraci6n financiera, que garantice coherencia en la informaci6n, asi como oportunidad, uniformidad y racionalidad en los flujos de informaci6n. El logro de realizar una gesti6n puTblica realizada con economia, eficiencia y transparencia y efectividad, el control de los recursos y del gasto piiblico, la implantaci6n de una contabilidad integrada en las entidades, el aseguramiento del cumplimiento de las obligaciones de las entidades del presupuesto nacional, disponer de indicadores reales y oportunos para la evaluaci6n y control de la gesti6n, son resultados que estan muy relacionado con la puesta en marcha del sistema. El SIIF, realiz6 actividades tales como el disefno, desarrollo y prueba de software que dio como resultado la creaci6n del m6dulo del sistema (ingresos, egresos, PAC, CUN, contabilidad , interfaces y administraci6n), el m6dulo de planeaci6n del tesoro la cual se encuentra en su etapa final para luego ser implementado. Los m6dulos anteriormente descritos le suministr6 al sistema un manejo homogeneo y oportuno de la informaci6n, optimizaci6n en el uso de los recursos y facilidad para gestiones de control. Existen en la actualidad 46 entidades del orden nacional que puede ejecutar sus presupuestos en linea, ademas de que los directivos de las entidades pueden obtener la informaci6n de ejecuci6n presupuestal oportunamente para la toma de decisiones. La capacitaci6n del recurso humano, fue una tarea de gran importancia durante la implementaci6n asi como en la puesta en marcha del sistema, para tal fin se realizaron cursos, seminarios, se elaboraron manuales, cartillas folletos para ser distribuidos y de esta forma creando cada vez mas una cultura de la informatica. Los resultados mostrados son: la delimitaci6n de las responsabilidades al interior de la entidad usuaria, facilidad en la comunicaci6n intema del Area financiera con el resto de las dependencias gracias a la utilizaci6n eficiente de los recursos tecnol6gicos. DEPARTAMENTO NACIONAL DE PLANECION - DNP INFORME DE EVALUACION DEL PROYECTO MODERNIZACION DE LA ADMINISTRACION FINANCIERA DEL SECTOR PUBLICO MAFSP I El Departamento Nacional de Planeaci6n a traves del Proyecto "Modernizaci6n de la Administraci6n Financiera del Sector NPblico" logr6 como resultado de la ejecuci6n de los componentes a su cargo, el fortalecimiento de su capacidad institucional para cumplir con las funciones bajo su responsabilidad como organismo responsable de la administraci6n de los recursos piublicos. En particular vale destacar los logros alcanzados en las areas de programaci6n macroecon6mica, la presupuestaci6n de la inversi6n publica, la asignaci6n de los recursos de transferencias a los entes territoriales, la evaluaci6n de las politicas puiblicas y los sistemas de informaci6n para el manejo y seguimiento presupuestal y financiero de los recursos de la inversi6n puiblica. Lo anterior se concreta en los siguientes resultados en cada uno de los componentes a cargo del DNP: ANALISIS MACROECONOMICO: Teniendo en cuenta el objetivo de mejorar la capacidad institucional y la calidad de los flujos de informaci6n para la elaboraci6n de los programas macroecon6micos, se logr6 el desarrollo de herramientas para el analisis y la modelaci6n macroecon6mica; se apoy6 el desarrollo de modelos que permiten un mejor analisis del comportamiento de las variables macroecon6micas, especialmente los modelos de equilibrio general computable con parte real y parte financiera, modelo de equilibrio general computable con rigideces reales para el analisis de politicas comerciales, modelo de proyecciones fiscales, modelo de consistencia macroecon6mica (RMSM-X), entre otros. En forma complementaria, se apoy6 la capacitaci6n de los funcionarios en cursos especializados en estas Areas asi como la publicaci6n peri6dica de indicadores de coyuntura econ6mica. - 31 -  Por otra parte, se fortalecieron los sistemas de infommacion, en especial para la toma de decisiones de politica econ6mica tales como: sistema de indicadores lideres; matriz de contabilidad social; metodologia para el seguimiento de la actividad real, PIB trimestral por el lado de la oferta y por el lado del gasto; sistema de informaci6n para el seguimiento de las finanzas puiblicas, actualizaci6n de las series de las cuentas nacionales. Como complemento a traves del MAFSP se financi6 la adquisici6n de equipos requeridos para el soporte de los sistemas de informaci6n. PRESUPUESTO: En el marco del objetivo planteado de contribuir a la racionalizaci6n del manejo financiero fortaleciendo los sistemas de seguimiento a la ejecuci6n presupuestal y fmanciera y el tratamiento de los excedentes fmancieros de las entidades se lograron los siguientes resultados. En primer lugar, se ha realizado la primera fase para el desarrollo del Sistema de Informaci6n de la Unidad de Inversiones y Finanzas Puiblicas (SUIP), que consiste en la conceptualizaci6n de un sistema para la integracion de los procesos presupuestales que maneja el DNP. Actualmente se encuentra en curso la licitaci6n para el analisis y el disefno del sistema cuya implementaci6n esta contemplada en el MAFSP II. Por otra parte, se lograron resultados en la medici6n de la calidad, eficiencia y eficacia del gasto de inversi6n puiblica; en la evaluaci6n del proceso presupuestal colombiano; en el establecimiento de indicadores de gesti6n que penmiten medir el impacto de la inversi6n del Gobiemo Central; en la elaboraci6n de planes de racionalizaci6n del sector educativo y seguimiento y proyecci6n financiera del sector electrico; y elaboraci6n de hojas metodol6gicas de indicadores sectoriales. Con relaci6n a la programaci6n de la inversi6n, se obtuvieron resultados en el fortalecimiento de las metodologias de formulaci6n y evaluaci6n de proyectos del Banco de Proyectos. De igual manera, se fortaleci6 el manejo de sistemas de informaci6n de credito extemo y de seguimiento presupuestal; particularmente vale resaltar el apoyo al proceso de seguimiento al gasto puiblico que viene realizando el DNP y la CGR con el prop6sito de implementar un sistema unificado de seguimiento al gasto y a la gesti6n de las entidades del Estado. En forma concomitante, se fortaleci6 el recurso humano en esta temAtica a trav6s de la asistencia a seminarios nacionales e intemacionales. Finalmente vale resaltar la financiaci6n para la compra de equipos de c6mputo necesarios para agilizar el procesamiento de los datos y el manejo de los voliumenes de informaci6n requeridos. De igual manera, se han publicado revistas de seguimiento a la inversi6n y a las finanzas puiblicas, asi como los analisis de ejecuci6n presupuestal de la inversi6n en los sectores de agua potable, cultura, recreaci6n y deporte, educaci6n y empleo. TRANSFERNECIAS TERRITORIALES: Con el apoyo del MAFSP, el DNP logr6 la reestructuraci6n de la Unidad de Desarrollo Territorial, en cumplimiento de la Ley 60 de 1993, de modo que qued6 responsabilizada para establecer los procedimientos para la asignaci6n, liquidaci6n y seguimiento de las transferencias territoriales. En forma particular, los resultados que se lograron estuvieron centrados en el apoyo al proceso de implementaci6n de la Ley 60 de 1993, en su contribuci6n al fortalecimiento de las finanzas locales, el mejoramiento de la capacidad de seguimiento y evaluaci6n de las transferencias y la conformaci6n de sistemas de informaci6n sobre las entidades territoriales. En forma complementaria, se logr6 fortalecer la capacidad de los gestores del proceso de descentralizaci6n mediante la organizaci6n de encuentros de autoridades territoriales y seminarios de actualizaci6n y descentralizaci6n fiscal. La capacitaci6n a funcionarios sobre gesti6n y en el software de apoyo a la consolidaci6n y manejo del sistema de informaci6n y en los instrumentos de evaluaci6n y direccionamiento del desempeiio de las entidades territoriales fue un apoyo estrategico para el - 32 -  logro de estos resultados. Para fortalecer la capacidad tecnica y tecnol6gica de la entidad con miras al desarrollo del sistema de informaci6n de las entidades territoriales, se adquirieron equipos y adicionalmente como apoyo a la gesti6n de las entidades territoriales, se apoy6 la divulgacion de cartillas para la orientaci6n del manejo de la Ley 60 de 1993 y de guias para apoyo al fortalecimiento del desarrollo local. CONTROL Y EVALUACION: El Proyecto MAFSP apoyo al DNP en la conceptualizaci6n, disenlo, confornaci6n y fortalecimiento de lo que es hoy en dia la Direcci6n de Evaluaci6n de Gesti6n por Resultados DEGR, ya que en el momento de la formulacion del Proyecto se consider6 como uno de los principales objetivos apoyar al DNP en la conformaci6n de un sistema nacional de evaluaci6n de resultados y de gesti6n, operacional y autosostenible en el sector publico de Colombia. Los resultados alcanzados son los siguientes. En primer lugar la organizaci6n y puesta en funcionamiento de la DEGR y la conformacion del Sistema Nacional de Evaluaci6n de Resultados (SINERGIA) que soporta el sistema nacional de evaluaci6n y cubre actualmente 170 entidades del nivel nacional. El sistema presenta todos los objetivos institucionales los cuales corresponden a objetivos sectoriales del Plan Nacional de Desarrollo. Como fase siguiente se preve la implementaci6n a nivel descentralizado y territorial de dicho sistema. Por su parte, se logr6 la sistematizaci6n de evaluaciones de las politicas, planes, programas y proyectos. Los reportes anuales que el DNP presenta al CONPES y al Congreso han adquirido una nueva forma basada en los criterios de evaluaci6n disefiados por SINERGIA. Para el logro de lo anterior, se configuraron estrategias de informaci6n en terminos de objetivos, indicadores y logros. Es importante anotar que se han realizado evaluaciones estrategicas ex post entre las cuales valle mencionar: evaluacion de los Corpes, de la Troncal del Magdalena Medio, de proyectos de agua potable y saneamiento basico, entre otros. Se logr6 adicionalmente la creaci6n de monitoreo y evaluaci6n en las entidades del sector publico. El manual basico que se ha establecido para prop6sitos de evaluaci6n a traves del sector publico es el Plan Indicativo. Este presenta las norimas basicas y criterios (indicadores-logros) que han sido materializados a traves del diseilo del Acuerdo de Eficiencia. Por otra parte, se logr6 la sistematizacion de evaluaciones intemas en entidades del sector puiblico; a traves de la realizacion de seminarios se ha apoyado a la mayoria de las entidades a que se capaciten directamente en su conocimiento para diseniar, hacer seguimiento y evaluar el Plan Indicativo. Adicionalmente se apoy6 la adecuaci6n tecnol6gica requerida para este proposito a traves de la compra de computadores y el apoyo para la capacitaci6n de los funcionarios en seminarios nacionales e intemacionales. A traves del MAFSP I se inici6 la preparaci6n del Componente de Contrataci6n y adquisicion puiblica del MAFSP II, a traves de lo siguiente: apoyo para la reglamentaci6n del proyecto de modificaci6n de la Ley 80; el diagn6stico sobre modalidades de contratacion y adquisicion estatal por fuera de Ley 80; el disefio de un sistema para el seguimiento, evaluaci6n de las practicas de contrataci6n; el disefio e implementacion de una estrategia para el aprovechamiento de tecnologias informrticas y de comunicaciones para el mejoramiento de la contrataci6n del Estado y difusi6n de normas de licitacion y contratos puiblicos otorgados; y finalmente la implementacion de un sistema pedag6gico orientado a dotar al servidor piiblico con las herramientas conceptuales y legales vigentes, asi como la tecnica especifica en los procedimientos contractual. FORTALECIMIENTO SISTEMAS DE INFORMACION: - 33 -  En esta area se le ha dado especial enfasis en las actividades de coordinaci6n en los componentes comunes entre Ministerio de Hacienda y el DNP en especial en lo que tiene que ver con el SIIF. Actualmente se encuentra instalado el SIIF y funcionando en paralelo en la Division Financiera del DNP. Los progresos alcanzados son: el fortalecimiento de la Divisi6n Financiera del DNP con sistemas de informaci6n y equipos para el manejo de contabilidad y tesoreria para adecuarla a la implantaci6n del SIIF; concertaci6n con el Ministerio de Hacienda para articular dentro del disefio del SIIF los requerimientos del DNP para efectos de seguimiento y evaluaci6n de la ejecuci6n presupuestal; participaci6n en el levantamiento de informaci6n para el disefio de los m6dulos que tendri el SIIF en las entidades ejecutoras de presupuesto; definici6n de la informaci6n que el SIIF debe entregar al DNP para realizar el seguimiento al presupuesto. Por otra parte, se logr6 el fortalecimiento de la red de datos del DNP a traves de lo siguiente: Adquisici6n del software de servidores; adquisici6n del sistema operacional de las estaciones de trabajo y el software aplicativo; adquisici6n de dos servidores para la red del DNP; tendido de un back-bone en fibra 6ptica; adquisici6n del software de administraci6n de la red. CONTRALORIA GENERAL DEL REPUBLICA - CGR INFORME DE EVALUACION DEL PROYECTO MODERNIZACION DE LA ADMINISTRACION FINANCIERA DEL SECTOR PUBLICO MAFP-CGR El proyecto MAFP, dentro del componente gasto desarrollo un subcomponentes enfocado al control extemo, cuya tarea qued6 bajo la supervisi6n del CGR. Los resultados obtenidos son los siguientes: El proyecto MAFP contribuyo en convertir a la contraloria general de la republica en un centro de excelencia en el control fiscal. LA FORMACION DE UN CONTROL SOCIAL A traves del proyecto se gener6 el punto de partida para crear la estructura y la cultura de participaci6n ciudadana como parte del ejercicio del control fiscal. La participaci6n y la capacitaci6n de los funcionarios de la Contraloria General de la Repiulica, dio como resultado personal id6neo en el ejercicio de las funciones, un mayor acercamiento de la instituci6n a los ciudadanos, uniendo a las contralorias territoriales. Por otra parte la estructura de la instituci6n, a traves de la utilizaci6n de las nuevas herramientas tales como el software de recepci6n de quejas y denuncias, la puesta en marcha de los comites de vigilancia ciudadana crearon condiciones favorables para descentralizar las actividades al interior de la entidad y asi aumentando la eficiencia en las tareas, fortaleciendo los procesos de auditoria y los estudios de caracter sectorial. La modernizaci6n tecnol6gica de la instituci6n, conseguida con la colaboraci6n del proyecto, estableci6 una red para intermunicar a la instituci6n. DIFUSI6N DEL CONTROL SOCIAL Acerc6 a la instituci6n a los ciudadanos a traves de la interacci6n de los funcionarios. La creaci6n de centros de investigaci6n, documentaci6n sobre participaci6n ciudadana en el control fiscal, logr6 permitir que la ciudadania cuente con herramientas que le permitan un accionar cualificado, fortaleciendo ademas la capacidad de interactuar activamente en los procesos de vigilancia del patrimonio estatal. En lo que tiene que ver con el fortalecimiento del Sistema Nacional de Control Fiscal, para las contralorias Territoriales se formulo una estrategia de coordinaci6n entre EL CGR y las contralorias territoriales dando como resultado el disefio del SIT, el cual las intercomunica. FORMACI6N DE DIFUSION DEL NUEVO DISCURSO DE CONTROL - 34 -  Logr6 posicionar a la contraloria general como un facilitador del estado, en la ejecuci6n eficaz y efectiva de los recursos publicos. Dentro de este tema tenemos, los instrumentos de fortalecimiento misional que prestan el apoyo operativo como son los mapas de riesgos (sistema SIRI), mecanismos que aseguren las adquisiciones del estado (sistema SICE) e informaci6n normativa para el adecuado ejercicio de control fiscal en el ambito juridico(sistema SINOR). (b) Cofinanciers: (c) Other partners (NGOs/private sector): 10. Additional Information N/A - 35 -  Annex 1. Key Performance Indicators/Log Frame Matrix Subcomponent I Performance Expected Output and Current Status Activity Indicators Impact Progress Impact A. RESOURCE MOBILIZATION Al. TAX ADMINISTRATION Operational Subsystems SAT: Taxpayer Services Reduction of the cost Taxpayer welfare identifying The electronic filing and payment 8000 major taxpayers in Bogota, of taxpayer how to make voluntary tax system went into production on January Medellin, Cali, Barranquilla and Palmira. => COLLECTIONS compliance, compliance easier I st, 2000 for 1,500 major taxpayers *Electronic filing and measured by The Administration obtains the retums of payment independent analyses Number of routes to The point of contact e-mail account has these taxpayers on-line with 100% quality. *Intemet queries before and after the compliance been established and is up and nining project Increased quality and Intemet query facility is up and running % of revenue timeliness of tax information collected nationally by this means *Taxpayer Current Account Taxpayer Current Taxpayers and [tax] staff Current Account includes GESTOR Taxpayer Current Account balance *GESTOR [Tax Account balance promptly have complete administrative actions. updated and complete 20 days after Management system]: updated and balances taxpayer filing or payment complete 30 days Size of the physical archive available after taxpayer filing for ongoing consultation is reduced. or payment This product is installed at all Colombian tax offices. =>CUSTOMS Real time monitoring Efficiency of user The COMEX Bogota "ordinary mode The Bogota and Aeropuerto El Dorado *COMEX: Customs of 100% of compliance with customs importation system" version I is in administrations have a goods loading, operations shipments reported processes, reducing the time production (airport shipment and inventory declaration and customs release in the information it takes for customs inventory, banks and customs release system system, in the clearance to a maximum of modules completed). receipt, storage, 24 hours. Version 1. warehousing and customs clearance 43% of customs clearances are processes. completed same day as acceptance of the customs declaration. ==ADMINISTRATIVE Setup of the Frequently Asked Questions Complete "Thesaurus" of Customs, Unification of concepts at the national SUPPORT Colombian Center regarding Customs, Taxes Taxes (last 2 years) and Foreign level and reduction of time to issue -Legal Database for Legislative, Case and Foreign Exchange for Exchange databases concepts. Law and Doctrine staff and taxpayers (Customs, Taxes and Foreign Exchange Intemet Consultations) SIF: Oversight Maximize the Development of audit SICAT installed at the following Through effective management of the accuracy of in-depth strategies and built-in offices: central office, major taxpayers, oversight area, DIAN obtained =TAX OVERSIGHT audits to combat compliance incentives legal entities, individuals, Barranquilla, $655,184,000,000 in 2000 evaders Bucarainanga, Cali, Cartagena, Development of integrated Cuicuta, Ibague, Manizalez, Medellin, Through management of SICAT programs Additional revenue audits that analyze tax, Palmira, Santa Marta, Neiva, Tulua, DIAN obtained $3,654,748,439 in totaling 0.4% of customs and foreign Monteria, Sogamoso, Pasto, Popayan. 1999 and $ 64,288,185,102 in 2000 GDP per year over exchange issues. the next 5 years. The scope of SICAT was broadened to Evasion measurements have been used to Supplementary information include Individuals and GEREN and calculate Administration goals. Reduce VAT and tax and customs AUDITORIA modules were created evasion to 20% over selection systems (Implemented) Considerable reduction of VAT evasion five years. using tools created by DIAN and tools 565 users trained nationally on 287 established for the project. workstations. Today more than 80% of Oversight with local information at the offices - 36 -  VAT and income tax evasion methodologies and measurements designed and delivered to the administration Constructed and delivered to the admninistration the Model and production chains system Data Warehouse installed and in use at the central administration. =>CUSTOMS Carry out effective Carry out in-depth customs SIFARO in production at 21 Any customs administration can consult OVERSIGHT oversight of all staff investigations and permit administrations with customs operations the SIFARO data of other customs *SIFARO: Selection of involved in the increased management and that have a computerized infrastructure, administrations on line. non-complying importers customs process decrease technical on 400 computers, and 1050 staff eMeasurement of contraband identifyring technical contraband by developing trained in the use of the tool. All customs control operatives have access contraband and pre- and post-oversight to SIFARO data on line via using current data radiotelephone. Identification of principal 90 % of administrations covered by Offer independent contraband sectors and their Colombian customs function The percentage of returns of seized good access to significance was reduced because there is certainty system-wide customs regarding the legality or illegality of information to bringing the goods in Administrations There is an effective exchange of Measure real information on import declarations for contraband investigative purposes among institutions (DEA, INCOMEX, GREMIOS etc.) Recognition of SIFARO as a basic customs control tool. =nTRAINING Capacity at administrations to generate Use of e-mail, ODBC, modem, *Area specific local oversight programs standardized office tools. *Computer tools *Instilling receptiveness to Use of new tools change SIR: Collection Compliance Minimize the Operational application Reengineering of the data validation transaction time for supporting all transactions in Data organization and review processes processes has substantially improved =>COLLECTIONS the taxpayer connection with collections constructed and operating. quality and timeliness. *Studies of the quality and from taxpayers SIPAC installed at 8 administrations timeliness of data Ihmediate Collection procedures have been unified. *Reengineering of the data availability of data Immediate, system-wide Have virtual files that reduce the size of validation processes for internal availability of collections physical archives. Systematization, automation and *SIPAC : Systematization of processing by the data standardization of the collection process collections administration nationwide. Selective review of historical data Consistent taxpayer data fa,c,ilitates detection and dissuades [sic) taxpayers from being up-to-date with the Goverunent *Oversight of formal Automated Continual reminders to Operating Letters were generated to registered obligations identification of taxpayers with formal taxpayers late in filing or failing to file, registered taxpayers non-compliance issues Detection of taxpayer inconsistencies improving revenues. As of June, 1999, who are late in filing nationwide gross revenues obtained were or fail to file or Generation of authorizations $20,707,982,411, generated by whose returns are as part of the system-wide Software in design and construction notification of 23,713 taxpayers who inconsistent. data failed to file. In 2000, revenues obtained Authorizations to were $25 billion generated by notification taxpayers for of 150,000 taxpayers who failed to file. self-withholding and special deadlines. Oversight of Peace Bonds *Refunds and offsets Automation of the Oversight of refunds and System to automate the administrative administrative automated generation of collection and refund process built process and refunds oversight of automated refunds eCINCO: consignment Automated rating, Files by administration with CINCO Software built and in continual Evaluation and sanction criteria were - 37 -  indexes oversight and consignments, index, use formalized *SALOMON Oversight sanction of sanctions, actions, etc., and sanctions processes collections staff. available system-wide SALOMON 40% built Administrative actions were unified *Accounting Tax and Customs Monitors the behavior of collections staff and minimizes the cost of the sanctions process. Permits establishing time period collections staff retain revenues Ensures that revenues are received by the Treasury in a timely manner to be used for government operations and social investment. Guarantees that appropriations for use by the financial system do not exceed resolutions passed *Automated Nationwide Automated Automated consolidated Software built and implemented The processes that had been dropped have Consolidation of Tax and nationwide accounting system for tax been reactivated, favoring areas such as Customs Accounting consolidation 24 and customs revenues and centralized oversight and collections. hours after the close nationwide monthly and of the last annual close administration Administrative Subsystems SIB: Goods and Inventories Compliance with Improved handling of state The contract process has not been mnaintenance property to enhance the carried out. ADMINISTRATIVE standards for existing internal efficiency of the DIAN obtained free software for this SUPPORT goods administration, purpose -Goods and inventory system Adequate lead time for purchases Optimized use of goods and equipment SAF: Financial Sufficient, timely Improved handling of state Integrated budget, accounting, and Capacity to present accounting and budget Management financial support for property to enhance the treasury system operating at the central and cash control data on a timely basis and tax and customs intemal efficiency of the administration and major branch in accordance with regulations, in a ADMINISTRATIVE administration administration offices, manner consistent with the new national SUPPORT operational structure *MOISES: Financial, requirements accounting and budget oversight system SAP: Personnel New labor relations Improved personnel The payroll software is running at 45 Elimination of individual payrolls Management based on administration DIAN administrations. productivity-based Incorporation of Administrative Actions ADMINISTRATIVE compensation SUPPORT Timely payment of payroll *Personnel and payroll system Greater control over economic rights of *Review and compilation of employees and staff. historical data *Improvements to management control systems (will be replaced by GESTOR tax management system) SAO: Office Management Quicker production Improved operation of the With GESTOR arild SIPAC, The use of office tools and staff training of documents and tax administration offices administrative actions are being allow the Administration to offer improved *GESTOR: communications to through automation of most reviewed and unified nationwide. services to taxpayers *SIPAC: taxpayers functions *DATA SUPPORT With the improved management control *TRAINING systems reports and statistics are being built to monitor productivity at all levels. - 38 -  The office automation described in the following item SGI: Informatics Optimal use of Optimization of hardware The administration has state-of-the-art Management available hardware and software communication Local equipment and networks are local area networks nationwide. and software capacities installed nationwide and have permitted =DATA SUPPORT resources local access to data (ODBC), work in The administration has discovered that the *Logical and electrical Permit the use of groups and e-mail. outsourcing of services allows it to focus networks system-wide data directly by on its core activities. *Office equipment and area staff. Computer network platform cabling networks structured to connect 1600 PCs and 100 Technological changes introduced and *Server equipment Modernize and integrate servers nationwide. infrastructure established in accordance *Software DIAN's entire data with new requirements. .Network Administration infrastructure 235 data communications units for Outsourcing LAN/WAN networks, 1586 Client and Reinforcement of the existing data -Workuingroups production PCs, 85 servers, 235 infrastucture, technological change and LWora incess to data printers, Microsoft administration and updating, training of human resources. *Local access to data productivity licenses and software. *ODBC *E-mail Capacity to connect 780 computers to the DIAN networks =>TRAINING More than 4,500 administration staff While it might not totally eliminate the *Area-specific training members have been trained problem of rejection of technology, -Computer tools instilling receptiveness to change has *lnstilling receptiveness to The administration of the entire local minimized it. change area networks system and office hardware and software has been outsourced. SAI: Internal and Sustainability of Feedback system for GESTOR in place at 14 administrations Basic administrative actions unified Management Audit attained performance administration management and is the only tool offering nationwide. levels by hierarchical levels management data to all the areas. COLLECTIONS *GESTOR tax management Administrative Data on administrative system: Generation of actions that affect actions available to all administrative actions CCC and accounting administration staff and provide basic => management control ADMINISTRATIVE uploaded to the SUPPORT system-wide facility *Management control system *lntemal Control System hicreased Development of an effective The agreement with the Civil Service The administration is aware of the hotbeds (Civil Service Agreement) effectiveness of Intemal Control and Administrative Department included a of corruption. Institutional Oversight and Control risk matrix as mechanism to focus on management based System corruption The intemal control system will be on mechanisms to implemented at MAFPII prevent and detect cases of staff corruption SAE: Tax Analysis and The relationship Built-in feedback of tax Complete methodologies and The measurements of evasion have been Studies between the system performance under measurements of total VAT evasion, by key indicators for defining administration executive and various scenarios economic activity and by policies and are beginning to be used as =*OVERSIGHT legislative branches administration. tools to give direction to oversight, as well *Methodologies for has improved from a as for the calculation of goals by measuring income tax and technical standpoint Methodology and measurements of administration. VAT evasion as a result of general income tax evasion by *Productive chains improved quality of economic sector and by administration Measurement of DIAN's fight against *Measurement of contraband execution reports for being tested. contraband and awareness of the level of *Data warehouse the tax and customs contraband. system 472 x 472 input-output table, and verification with fmns by surveys. VAT and income tax evasion: Possibility of more active presentation of evasion Data warehouse implemented at the figures in the design of tax policy. DIAN is administration, in the vanguard in Latin America with respect to such estimates. Customs Operations Control Streamline customs Information system that The COMEX Bogota "ordinary mode The entire administration and its various operation for legal permits real time monitoring importation system" version I is in offices are pursuing the same objective =*CUSTOMS imports, reducing of the entire customs production (airport shipment and under a formal, common customs plan *COMEX: Operations customs clearance clearance process (arrival, inventory, banks and customs release time to 24 hours. warehousing, declaration modules completed). and payment and customs Version 1. - 39 -  Offer data in real release). time for operative 43% of customs clearances are control and good completed same day as acceptance of quality data for the customs declaration. subsequent oversight *ADA: Marketing Increase revenue Decentralized system System in production in Medellin. The massive review of data and inventory index for sales of supports arrangements for of merchandise seized or abandoned has seized merchandise defining the legal status of been carried out for ADA. 10% over its merchandise seized or administrative cost abandoned and the processes Control of merchandise apprehended and for disposal of such seized. merchandise. A. 2 TREASURY AND GOVERNMENT CREDIT Public Credit Analysis of the historic -Obtain a profile of * Historical debt * Diagnostic study of the level of Reliability of government debt data profile of goverrnent debt government debt as information provides information and staff attitudes in the of 1994 framework for future debt face of changing technology. * Analytical tools strategy used as guidelines for debt strategy * Improve administration * Government debt by establishing institutional bulletin published memory beginning in 1995 Review of intemal * By 1995, draft all * Rationalization of the With Ministry of Finance and Public Improved organizational climate. procedures, functions and job and procedure govemment credit office Credit resources the analysis of responsibilities manuals procedures and functions moved Development of Article 6, Law 48, of * Establish intemal * Evaluate human forward, and this process is now nearly 1998. Establishment of contingency fund. control procedures resources completed. Definition and development of procedures and indicators for office workflow quality and management. Review of extemal * Have reliable * Reliable database of * Development of methodology Improved awareness of indebtedness at procedures replaced by: govemment debt territorial administrations' and support for the Public Credit the territorial administrations Support for territorial records at territorial debt Office indebtedness administrations' headquarters * Advise territorial * Audit of the government debt administrations on database has been completed. methodologies for taking on and managing their debt Development of an Implement a debt Precise and timely * KPMG conducted an audit of The flow of communications is information system for administration system information available for the debt database improving. govemrnent debt in 1996 economic, financial and administration. statistical analysis * Redesign and development of A debt audit is being conducted for the *Generate the database: govenmment debt information systems. govenmment debt recording division of *Review of procedures DGCP to improve the quality and *Information system for * During the development of reliability of existing data. debt administration SIGADE the information was migrated into a new platform. Conversion of the database to the SIGADE format. * Requirements are defined for SIGADE The SIGADE system will provide the General Public Credit Administration * Tests of SIGADE in the with support regarding: implementation phase. *Management, processing and hiring *The law on indebtedness * Software and hardware .Operation of special disbursement purchased to update the existing account database *Debt service *Accounting, accruals and differential. * Consultants were hired to Assignments and assumptions support the Office's management IT *Debt profile unit. *Guarantees *Risk assessment. -40 -  * Equipment was bought to strengthen the Public Credit Office's computer network. * Consultants were brought in to run diagnostics on the current system and propose a solution. * Relationships established between entities and the government debt system *Train staff on managing * 50% of staff * Train staff to increase * Staff received training on *Public Credit Office and other government debt trained by 1994 and efficiency and create a managing debt risk government agency staff trained in 100% by 1998 public credit "culture" and managing debt risk an institutional memory *The debt risk of the Central Government and of some decentralized oDefine the strategy for agencies was reduced through SWAP managing debt risk * Number of * Standardize * Salomon Brothers created the transactions entities advised on the methodologies for managing tool for assessing risk and trained the management of debt debt risk staff in the methodologies. risk * Development for the central Govemment of methodology for managing debt risk. * Agreements with Ecopetrol, Carbocol, ISA and other decentralized agencies so they can take advantage of the risk management methodology Treasury Administrative * Compendium of * Increase in time allotted The analysis of procedures and jobs Strengthening of Treasury reorganization of the all standards and for planning activities was carried out with Ministry of administration. Treasury decrees that affect * Allow the Treasury to Finance and Public Credit resources. *Rationalization of treasury operations invest in other funancial MAFP did not participate. administrative processes and reduce by 50% all markets *Review and modification regulatory obstacles to * Systematize procedures of Treasury legal the efficient operation and manuals that facilitate framework of the Treasury. Treasury operations *Development of an * Reduction in internal control system interventions by and restrictions imposed by Central Bank J Job and procedures manuals by 1994 Transform the Treasury * Reduce to zero * Accurately determine Treasury activities are related to the With the establishment of CUN, the into a public sector bank idle balances at current public sector development of SIEF. Colombian Treasury became the bank for *Establish a single account commercial banks expenditures the central administration of the system * Create an on-line A module was developed within SIIF Colombian Govemment *Develop financial system connecting the * Improve cash flow for the Colombian Treasury to operate planning information Treasury and the planning the Single National Account. Efficiency in the handling of Treasury system banking system resources, by decreasing the average idle * Increase * Streamline the payment Reduce average balances in the money in agencies' authorized accounts. efficiency of budget system accounts of govemment agencies and execution commercial banks. This permits improved cash flow * Increase revenue * Reduce unnecessary planning, streamlines the payment system through short-term financial cost of loans and reduces unnecessary financial costs. investment of idle balances at Moreover, the use of intermediaries is commercial banks reduced. Intermediaries were considered a * By 1994 source of corruption. participate in the formulation of the financial plan Development of an * An up-to-date * Increase efficiency by Design tables and general content of Lower opportunity costs for handling Integrated Information information system reducing the time required the system for integration of the Treasury resources, given the availability System for the Treasury containing all the to process information following modules: Expenditures, of additional information with which to variables affecting * Flexibility in analysis Revenues, PAC, CUN and accounting. establish cash flow projections. - 41 -  economic policy through financial models * Increase * Reduce risks of Treasury On-line communication. Technical financial efficiency. efficiency operations * Include database Acquisition of software and hardware. Greater fiscal discipline. on cash basis operations Adaptation of the physical Preparation of balance sheet and infrastructure of the information statement of income for Colombia. systems unit. Transparency of execution. Installation of the Network at the Ministry. Software tests for Treasury planning are in the final phase. Training and * 1994: basic * Training designed to * THESAURO - a system for *Operating efficiency Strengthening of Treasury training programs promote Treasury efficiency handling legal information - was oBetter-trained staff * Establish an * Development of purchased *Increased familiarity with the investment ongoing training programs to increase the * A system for managing the portfolio program as of 1995 Treasury's operating investment portfolio was purchased. * Programs for efficiency * The necessary training was handling legal developed for each of these systems. information * Programs for managing the investment portfolio B. MACROPROGRAMMING MODELS (Ministry of Finance and Public Credit) Establish Methodologies * Operations and * Technical training * Studies of the various sectors of the The Macro Policy Office has more sector for macroprogramming technical manuals available economy data to assist with economic policy * Written decisions. management * Development of methodologies and procedures computer applications to use * Develop training Colombian public sector accounting data Harmonization of public sector accounting data from Colombia's General Accounting Office with DANE requirements for production of national accounts Development of * Standardize the * Inventory and diagnosis * A cash basis (Operaciones Efectivas *The OEC system is being used by the Information systems process manuals for of the data required for de Caja, OEC) information system was Budget Office and by CONFIS within the obtaining minimum macroprogramming developed Ministry of Finance and Public Credit. data required * Comprehensive system * Reduce the data allowing flexibility in data * The system was implemented at the oThe OEC system is useful for reports on delay to three months retrieval Macroeconomic Policy Office, budget execution at the centralized and * Employ a total of * Timely data CONFIS, the Ministry of Finance and decentralized levels. 15 p/m for * Define institutional Public Credit Budget Office and at programming responsibilities for DNP. *A single methodology is used for information processing and gathering and processing OEC data. transfer * The system has been updated and projections through 2010 have been made. * Training on national accounts. Development of analytical * Capacity to * Altemative -Complete historical series of ftnancial *The Macro Policy Office has better tools and models determine extemal and methodologies for data financial data macroeconomic policy macroeconomic policies impacts * Coordinate short-term *Development of methodology for *The Macro Policy Office and DANE can * Methodologies to and long-term objectives quarterly issuance of national accounts issue quarterly bulletins containing coordinate the statistics national accounts data. development of planning and sector oHiring staffto monitor on a timely oQuarterly issuance allows for economic policies based on the basis economic activity in such areas policy studies, measurements and macroeconomic as: monetary statistics, monitoring and indicators that are closer to real time. environment construction of economic indicators, advice on Intemet tools for monitoring -42 -  *Reliable data available on results of the economy. macroeconomic projections *Investment in equipment was carried EXPENDITURE MANAGEMENT (Ministry of Finance and Public Credit - MHCP) _.1 EXPENDITURE BUDGET PLANNING Integration of the * 100% * Establish parameters for Acquisition of THESAURO, Amendment to the law establishing the expenditure budget expenditure budget more efficient expenditure permitting on-line consultation of all Budget Office. planning processes execution budget planning current budget guidelines *Establish standards, * Budget standards and parameters and procedures procedures manuals for all The Gestione System was developed Greater efficiency in monitoring the public sector agencies under an inter-agency agreement in education sector, providing for more *Train staff * Increased institutional conjunction with DNP and staff reliable data allowing cost projections for commitment to expenditure responsible for the general budget of active facilities. budget Colombia * A budget that better reflects needs * Training at all levels Expenditure budget * Consolidate * Timely flow of data Budget monitoring and evaluation This activity is being transferred in its execution, consolidation budget execution * Consolidation of criteria, supported by management and entirety to the new Annual Operating Plan and evaluation within 15 days of methodologies and data development indicators, with (12: SIIF) component. *Systematization of data closing date sources. Colciencias and DANE *Data validation and * Reduce budget * Obtain daily expenditure analysis data input process time budget data Development of a functional and to one week * Regulation of Treasury economic classification system for the _________________ monetary expansion Colombian budget Upgrade system capacity * Laws, decrees * Laws and decrees Consulting services have been used in This process is being carried out with IDB for transfer and execution and resolutions on goveming transfer processes two areas: under the FOSIT Project of the Ministry of territorial finances territorial transfers for at the municipal and *Detemsination of territorial of Finance. *Establish standards and DNP departmental levels administrations' financial data sources procedures * Periodic ex-post * Information system to -Study to establish standards for *Development of an evaluations. support the transfer process possible tax reform information system to monitor the fiscal deficit. A contract to systematize and rationalize financial data circuits affecting the territorial administrations is in process This activity is being transferred in its Treasury Planning entirety to the new Annual Operating Subsystem Plan component examined in the foregoing item. Government Expenditure Establish the Expenditure Rationalization The Govemment passed an All government agencies apply the Rationalization parameters for Law Expenditure Rationalization Law based Expenditure Rationalization Law to Commission government policies to on the reconmnendations of the manage their budgets. rationalize Public Expenditure Commission Sector spending and Government tool to analyze institutional reduce the fiscal deficit weaknesses. Analyze expenditure policy and make suggestions to the Government. C2. EXPENDITURE ACCOUNTING (Ministry of Finance and Public Credit - MHCP) Organize and start up the * Standardize Uniform accounting and All accounting standards were All govemment agencies use the same General Accounting Office accounting standards legal standards standardized at the central and accounting standards. and the central level decentralized levels. * Consolidated There is a public sector regulatory balance sheet and the A consolidated balance sheet was agency. central and established at the central and decentralized levels decentralized levels. Consolidated accounting statements for * Law establishing the Colombian Government are issued the General The General Accounting Office was annually. Accounting Office established by law as a regulatory agency. - 43 -  * Establishment of a regulatory agency Transfer of functions to General Accounting General Accounting Office The General Accounting Office was The central Govemment has an office that General Accounting Office Office up and running organized established and is currently operating reports to it the actual and official as a Special Office of the Ministry of financial condition of Colombia Finance and Public Credit Review and establish Accounting manuals in Standardize accounting All General Accounting Office All procedures of the General Accounting standards and procedures use by 1994 procedures and train staff accounting procedures were Office have been defined at the central for financial reporting at determined and General Accounting and decentralized levels. public sector agencies Office functions were defined. All staff trained in govemment accounting Staffwas trained in accounting standards and procedures at the central and decentralized levels. Organize and start up Accounting office at Enforcement of accounting Accounting offices were established at Accounting procedures were accounting offices at all each agency of the standards a decentralized level decentralized and criteria for public levels ofthe central central Govemment accounting were unified Government. Prepare opening balance Value all accounts at Balance sheets adjusted and Since 1995 the accounting office has The Govemment has accounting data on sheets for Colombia current market values valued at current market been issuing Colombia's balance sheets the entire balance sheet. values. Development of an Accounting data and * Monthly accounting This activity is transferred in its integrated public sector consolidation of all consolidation of the central entirety to the new Annual Operating information Govemment agencies Govenmment and Plan component - SIIF accounting module decentralized agencies * Integrated information systemr Training Staff trained byl995 Knowledge and relevance of Staff trained at the central and accounting function decentralized levels in public accounting standards and procedures and in the New Accounting Plan D.2 EXTERNAL CONTROL TRAINING 582 stafftrained by the Convert Colombia's *Training - social oversight *Provided the starting point for end of 1998. General Accounting Office establishing a structure for citizen into a center of excellence in *Dissemination of social oversight participation, and then fostering citizen fiscal involvement as part of the fiscal exercise. oversight Stafftraining on fiscal matters. Created *Training of an auditor for the entire strategies encompassing govemment system agency contributions with respect to citizen oversight of Govemment. Staff *Dissemination of new oversight trained to form and/or consolidate citizen discourse oversight committees. Decentralization of activities within the agency. Strengthening of audit procedures. *Citizens getting closer to the agency. Positioning of the accounting office selected for citizen participation with the agency. *Development of a leaming process to improve the oversight system. Articulate the relationship of the agencies audited. Change in attitude regarding receptivity of the agencies audited. Community that believes in the audit process. *Positioned the General Accounting Office as the Govemnment's facilitator in the efficient and effective use of its resources. Reached out to the people to encourage reflection on the investment of public funds. E. INSTITUTIONAL DEVELOPMENT El. STRENGTHENING OF THE DATA PROCESSING UNIT - 44 -  System Management and * Methodologies * Establish standards for Adaptation of physical infrastructure of Development of software that responds to Control fully adopted in 1997 software construction the data processing unit the needs of the ministry and of the *Software construction * [At] all ministries * Reduce costs nation. *Software acquisition by 1994 * Successful Installation of the network at the *Oversight of software * Procedures implementation of systems ministry Capacity to generate reports on financial development manuals containing * Monitor sequence of activities. contingency plans, activities in system access policies and development Data on the central Govemment's organization of * Reducc risk of finances is available. ministries: by 1995 modification or loss of data. Training: * Annual strategic * Motivated, productive, In conjunction with the Data Data Processing staff and staff from other eHuman resources plans. well- trained staff Processing Unit, MAFP trained Unit Ministry of Finance and Public Credit planning * Improve the quality of and Ministry of Finance and Public areas trained in the use of the new *Annual training program the Unit's results Credit staff to use the new technology. -Expanded incentive technologies. system *Manuals, functions and competitive salary ranges Activities to: * Increase use of * High user participation The Ministry of Finance and Public Data Processing staff and staff from other *Create a data-oriented systems by 90% in systems development Credit trained staff to use the new Ministry of Finance and Public Credit culture * Database * Acquire systems information tools. MAFP worked with areas trained in the use of information *Construct a data bank containing information * Improve quality control the Unit to provide the training. tools. *Improve technology system projects [by] * Improve user interfaces 1995 and used to monitor 95% of all projects [by] 1997 Tools for software development and multimedia technology [by] 1994 Integrated All staff communicate Facilitate internal Ministry The Intranet was installed in the first All staff use the intemal Ministry of Telecommunications on-line communication half of 1997 Finance and Public Credit communication System - tool and have been trained in new Replaced by: Installation technologies. of the Ministry's Intranet Development of an * An information Increase efficiency and *An integrated govermnent financial 46 central government agencies can Integrated Financial system that standardize the processes for infomiation system was designed, execute their budgets on line Information System - SIIF incorporates day-to-day managing govemment funds developed and implemented at 46 economic management and ensure a smooth flow of agencies. Agency management can obtain budget processes information execution information promptly for use in *Design and content of general system decision-making. tables to integrate the system modules (expenditures, revenues, PAC, CUN, Transparency in budget execution accounting, interfaces and administration and security) Operating efficiency in budget execution. *Definition of requirements for Operating under the principle of Treasury Treasury module, unity. *Pilot plan at ten (10) central A single record is used for budget and Government agencies to test software. accounting management. *Definition of user profiles Installation of WAN and LAN equipment at the Ministry of Finance and *user manual Public Credit and at user agencies *Service catalogues Efficiency and effectiveness of *Service catalogues administrative and financial management *Decree 2806 of December 29/2000 based on principles of law. issuing provisions regarding the Standardized, timely data management. management of govemment funds and the applicability of the Integrated Presentation of available data based on Financial Information System - SIIF the requirements of the requester. *Resolution 2404 was issued on Ease of internal and subsequent controls. - 45 -  October 15, 1998 assigning the management of the system to the Modernzation of communcations and the Budget Office. data iEfi-structure. eOn-line communication and practical Knowledge of the status of budget and theoretical training of user agency execution for adequate follow-up and technicians in SIIF and in how to analysis of budget management. operate and manage the Intranet. Efficiency in managing goverment *Procedures giude resources as a result of a decrease in average idle funds in agencies' authorized Installation of WAN and LAN accounts. equipment at the Ministsy of Finance Lwropruiycssfrhnln andqFubicpm rentt the Miniseryof Frnanci. Treasury resources, given the availability of additional information with which to establish cash flow projections. Validation with the Banco de la Reptiblica of bank accounts of final beneficiaries prior to confirmation of payment orders. Monitoring of annual and monthly goals established by CONFIS. Distribution of the annual and monthly Pac. Evaluation of monthly Pac modification requests and their impact on Colombia's cash flow. Knowledge of rights to collection of Colombian Budget revenues. Knowledge of the nation's revenue receipts. Standardized account records for transactions with an economic impact among all SIIF user agencies. Availability of balance sheets for central Government executing agencies, and of - 14 theory and practice seminars (400 national balance sheets and income attendees) statements. - 18 update conferences (1500 attendees). Elimination of inadequate administrative practices. Training Ease of internal financial area communication with the rest of the agencies' offices. SIIF training for user agencies. -46 -  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal ActuallLatest Percentage of Estimate Estimate Appraisal Project Cost By Component US$ million US$ miilion A. Resource Mobilization Tax Administration 28.60 25.20 103 Treasury and Public Credit 6.20 2.10 34 B. Macro-programnming 1.30 1.76 106 C. Expenditure Management Program-based Budgeting (Budget Programming) 5.47 2.33 20 Budget Spending (Execution) Accounting 3.83 0.66 7 D. Control and Public Policy Evaluation Intemal Control (Public Policy Evaluation) 2.39 2.24 68 Extemal Control 2.15 2.24 249 E. Institutional Strengthening Govenmuent Informatics(SIFF) 1.97 13.06 816 Project Administration 3.26 4.68 100 Total Baseline Cost 55.17 54.27 Physical Contingencies 2757.70 Total Project Costs _ 2812.87 54.27 1 Total Financing Required | 2812.87 54.27 _ Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Me'thodl : Expenditure Category ICB r MNthot lcs ~ NC KterONXBF Total Cost 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 21.20 0.00 0.30 0.00 21.50 (21.20) (0.00) (0.30) (0.00) (21.50) 3. Services 0.00 0.00 4.20 20.40 24.60 (0.00) (0.00) (4.20) (0.00) (4.20) 4. Training 0.00 0.00 2.50 3.60 6.10 (0.00) (0.00) (2.50) (0.00) (2.50) 5. Procurement Agent 0.00 0.00 1.80 3.90 5.70 Arrangements (0.00) (0.00) (1.80) (0.00) (1.80) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 ..__ _ .__ (0.00) (0.00) (0.00) (0.00) (0.00) Total 21.20 0.00 8.80 27.90 57.90 (21.20) (0.00) (8.80) (0.00) (30.00) -47 -  Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) Expend00:00:4 000.titure category Procurement Method ExpenditureCategoryt i ICB NCB Other N.B.F. Total Cost 1. Works 0.00 O (0.00) 0 (0.00) (0.00) 2. Goods 11.60 1.60 1.30 4.30 18.80 O (0.00) 0 (0.00) (0.00) 3. Services 11.30 0.30 1.70 18.70 32.00 (0.00) (0.00) 0 (0.00) (0.00) 4. Training 0.00 0.00 0.80 2.30 3.10 (0.00) (0.00) 0 (0.00) (0.00) 5. Procurement Agent 0.00 0.00 0.30 0.30 Arrangements (0.00) (0.00) 0 (0.00) (0.00) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 22.90 1.90 3.80 25.60 54.20 (0.00) (0.00) (0.00) (0.00) (0.00) The breakup of project costs by procurement arrangement in terms of source of financing is awaited from the borrower. "Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2'Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) Percentage ;of Appraisal1 Compne 2 t Appraisal Estimate Achialatest Estimate _ __________________S :; ;; X gBan i Govt. CoP Bank Govt. CoF. Bank Govt CoF. Goods 20.60 14.68 4.18 71.3 Services 6.00 20.40 13.53 18.48 225.5 90.6 Training 2.50 3.60 0.81 2.28 32.4 63.3 Procurement Agent 0.90 3.90 0.30 0.0 7.7 Arrangements Total 30.00 27.90 29.01 25.25 96.7 90.5 -48 -  Annex 3. Economic Costs and Benefits N.A. - 49 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 03/93 7 Task Manager, 2 Tax Specialists, S S Informatics Specialist, Audit and Procurement Advisors, Consultant Appraisal/Negotiation 06/93 2 Task Manager, Operations S S Analyst Supervision 06/94 4 Task Manager, Systems S S Specialist, Tax Admin. Specialist, Operations Analyst 10/94 3 Task Manager, Prin. Inst. Dev. S S Spec., Tax Admin. Specialist 06/95 3 Task Manager, Procurement S HS Specialist, Operations Analyst 06/96 4 Task Manager, Tax Admin. S S Specialist, Procurement Specialist, Operations Specialist 09/96 4 Task Manager, Procurement HS HS Specialist, Operations Specialist, Sr. Tax Admin. Spec. 02/97 4 Task Manager, Procurement S S Spec., Operations Analyst, Audit/Accounting Specialist 12/97 3 Task Manager, Operations S S Analyst, Project Officer 06/98 3 Task Manager, Operations S S Analyst, Project Officer 06/99 3 Task Manager, Sr. Fin. Mang. S S Spec. 02/00 3 Task Manager, Sr. Fin. Mang. S S Spec. 08/00 2 Task Manager, Operations S S Anaylst ICR 05/01 2 Task Manager, Consultant (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) - 50 -  Identification/Preparation 92.0 178.3 Appraisal/Negotiation 12.3 27.1 Supervision 160.3 357.8 ICR 3.0 15.0 Total 267.6 578.2 - 51 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating 3Macro policies O H OSUOM O N * NA Sector Policies O H *SUOM O N O NA 0 Physical O H OSUOM O N * NA 3 Financial OH OSUOM O N * NA