Transcript Performance Budgeting and Cost Accounting in Brazil

Performance Budgeting and Cost
Accounting in Brazil: The State of
São Paulo´s recent experience
Asia-Pacific and Latin-America Interregional Forum on
Managing for Results Decentralization and the
Changing Role of Central Finance Agencies
Inter-American Development Bank
Manila, November, 2012
The State of São Paulo
2011 Data
Brazil
Argentina
São Paulo
191
40
41
GDP 2011 (US$ billion)
2,492
447.64
839.72*
GDP per capita (US$)
13,051
11,191
20,481
Population (million)
*GDP between the Netherlands ( US$ 840 – 17th) and Turkey (US$ 778 – 18th)
34%
-
of the total Brazilian GDP:
7% of the agribusiness production;
40% of the industrial production;
34% of the services activities;
23% of total exports and 36% of total imports of Brazil and
40% of the total tax collection;
Main gas reserves of Pre-Salt and estimated oil production of 1.8 million
gallons/day (2015 a 2031).
Sources: World Bank (2011), SEADE (R$/USD = 1,66)
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São Paulo´s Fiscal adjustment
The Fiscal Adjustment process in the State of São Paulo began
in 1995, focusing mainly on three major aspects:
1. Asset restructuring and implementation of a broad privatization program;
2. Debt restructuring: states fiscal agreement with the Federal Government
(PAF), which refinanced most of the state´s debt;
3. New management procedures and control systems – which improved tax
collection and reduced tax evasion without raising taxes; more efficiency in
government spending mainly by reducing public expenditures.
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São Paulo´s Fiscal adjustment
Institutional Framework
The fiscal adjustment has been nationally implemented under the
strict limits imposed by
• The States Debt Restructuring and Fiscal Agreement (PAF: Programa
de Reestruturação e Ajuste Fiscal, 1997) between the central
government and most of the states of Brazil, including São Paulo
• The Fiscal Responsibility Law (FRL), 2000 and the Fiscal Crimes Law
(FCL), 2000
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São Paulo´s Fiscal adjustment
Fiscal Adjustment Program in the State of São Paulo: Important Measures
 Expenditures control included: the revision of services and construction
contracts and the adoption of programs for voluntary retirement (15,000
employees retired between 1995 and 1998);
 Control of public expenditures was implemented through various
measures, specially the modernization of existing IT infrastructure, which
also improved transparency, accountability and social control of the state
management, such as: Financial Administration and Execution System
(SIAFEM) and the State level public purchases and procurement System
(Bolsa Eletrônica de Compras - BEC).
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Total Revenues (R$ billion)
Data
Growth
rate
Average
growth rate
Nominal Growth
170.3%
18.9%
Real Growth
(IPCA – index)
62.6%
7.0%
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Total Expenditures (R$ billions)
Growth
rate
Average
growth rate
Nominal
Growth
172.2%
19.1%
Real Growth
(IPCA – index)
64.5%
7.2%
Data
Source: São Paulo State
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Investments distribution
R$ Billion
PPA
2003 - 2007
PPA
2008-2011
PPA
2012- 2015
Total
Investment
28,674
67,029
85,200
Average
7,168
16,657
21,300
57.0
27.8
Growth
(%)
*Non-Depedent SOE Companies do not depend on the State’s treasury resources to fund their current expenditures.
Source: SIGEO
Investments distribution
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São Paulo fiscal overview
Primary Surplus (R$ billion)
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Net Debt/Net Current Revenues
Source: São Paulo State
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Performance Budgeting
Background – the introduction of Performance
Budgeting in the State of
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São Paulo
 1988 Federal Constitution: program budgeting already incorporated in the
multi-year plan (PPA) - in the State of São Paulo: fully adopted in the PPA
(2000-2003)
 1995 Federal State Reform Plan (Plano Diretor de Reforma do Aparelho do
Estado - PDRAE): established management autonomy and commitment to
results in all the three levels of government and in the three branches
 In the State of São Paulo: LC 846/98 – contract management, Payment by
Results (Sec. Education and Finance)
 Results-oriented strategic management and contractualization
FAD (IMF) technical assistance
Implementation of both Programs: Performance Budgeting and Public
Cost Accounting System
Performance Budgeting
Performance Budgeting:
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 Set goals with sector linkage regarding the strategic guidelines of the
government defined in the PPA;
 Identify data and information that are required to generate indicators,
and define the goals to be reached based on the timeliness of the PPA;
 The current PPA needs to incorporate some changes to improve its
management for results approach on information, standard
nomenclature and concepts, and allow for its execution to effectively
generate useful information on decision-making;
 Pilot project - Secretariat of Penitentiary Administration (2013)
opportunity for training, testing and adjusting the new methodology;
 Implementation of the new methodology on the existing financial
execution systems (SIAFEM) by 2014;
 Training program - implementation of the new methodology
Performance Budgeting
Performance Budgeting:
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 Preparation of a Manual on Managing for Results on Performance
Budgeting - gradually implement the new methodology in all the state´s
entities
 Effective implementation horizon of the new PPA methodology is 20162019, the next three years should be used to test and refine the
instrument.
The State of São Paulo´s Public
Cost Accounting System (SCSP)
FAD (IMF) technical assistance, IDB loan (PROFISCO)
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 Provide consistent information to support
decision making; strong link
between costs of services and the activities, according to the multi-year
plan (PPA) → a ‘toolbox’ that enables managers to improve the
operational and strategic management of their public sector units.
 Benchmark costs for public services (provided by public entities of the
same sector, such as: schools, hospitals, prisons...) by using a standard
methodology for all the state´s entities: using the data of the existing
financial execution systems (SIAFEM)
 Support the formulation of the multi-year plan (PPA) as well as the budget
plan itself, bringing more realism and accuracy to the financial forecasts
 Better accountability and transparency with quality information on the
costs of public services
The State of São Paulo´s Public
Cost Accounting System (SCSP)
In its first stage, the system will aim15at estimating the cost of public
services at the cost center level (hospitals, schools, penitentiaries, etc.),
Due to its conceptual and operational complexity, the
implementation will be gradual and based on pilot projects in four
different secretariats, such as: Health, Education, Penitentiary
Administration and Social & Educational Services for criminal teenagers
(CASA Foundation).
Pilot projects: identify the products and services provided by each
unit, as well as its organizational structure; describe its responsibilities,
activities, existing physical and financial resources, its clients and its
main operational systems.
The State of São Paulo´s Public
Costs System (SCSP)
The definition of services to use the
16 new system should be aligned
with the services identified in the PPA 2012-2015 and its subsequent
revisions, according to the new methodology of managing for results
on performance budgeting.
The Finance Secretariat (SEFAZ) will be responsible for the regulation,
supervision and quality control of the cost accounting generated data,
as well as the validation and production of cost accounting reports.
Conceptual and Logic Model of São Paulo´s Public Cost Accounting System
Methodology?
-WP1 – Publc Services
-WP2 – Cost Methods
-WP3 – SIAFEM
-WP4 - Questionnaire
SUCCESS
CRITERIA:
- Alignment
- Sustainability
- Availability
- Use
- Utility
-Replicability
- Academic research
- International experience
- Characteristics of public services
- Decision making models
- Adherence to the State of SP´s
reality
- Availability of systems and
resources
- Existing legislation
SIAFEM (incl.payroll)
PPA (SIMPA)
Systems?
Property/Estate
Warehouse
Siafísico/BEC (public purchases
and procurement state system)
Information Systems
Ajdusted Financial Execution
Decision
making
$
Methodology
MAIN PRODUCTS:
- Working Papers
- Manual (handbook) on Costs
- Reports on pilot projects
- Specifications on the conceptual
model for costs using existing systems
- Reports on Costs model
- Training program
- Communication model
#
Information
on Costs
Management
Evaluation
and
Control
Quant.
Governor
PPA (planners)
Budget authorities
Sectorial Secretaries
Sec.of Finance
Sec. of Management
Public Entities
Managers
State Assembly
State Audit Courts
Society
General
Cost objects
Specífic: 4
pilot projects
Cost center
1) Health,2)Education,
3) Prisions and
4)Soc.Educational
services for criminal
teenagers (Fundação
CASA).
Budget
Aggregated
Service 1
PPA (activities)
Proposed Methodology
What kind of
information
does each of
these agents
need?
Public Private Partnerships Projects
(traduzir)
Thank you.
Giulia Puttomatti
Cabinet Advisor – Foreign Funding Dept.
Finance Secretariat of the State of São
Paulo
[email protected]
Av.Rangel Pestana, 300 – 3th floor
01017-911
São Paulo - SP
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