21 Government Accounting and Financial Management in Latin American Countries

A. Premchand
Published Date:
June 1990
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Public sector management in Latin America has many deficiencies and most of these are found in government accounting and financial management. While accounting for government is not a priority in many countries, in Latin America it appears to have been accorded the lowest possible priority—for several reasons.

First and foremost, the accountancy profession is weak in most Latin American countries and commands little respect. Few talented young people therefore seek to enter it, thus perpetuating its weakness. In the private sector most businesses are family owned or closely held. Accounting records are limited to those necessary to run the business and to furnish tax information, which are not necessarily the same. There are few reasons for public disclosure of financial information or for its independent audit. Accountancy has thus been very slow to develop and is not held in the same high esteem as in some industrialized countries. Since private sector accounting is weak, public sector accounting is therefore far weaker.

Second, public sector financial management in general in Latin America is lax and rarely professional, partly owing to the low priority it receives. Among the various financial management functions, accounting is given even lower priority. Government accountants are often not really accountants but persons given posts through contacts, who learn the existing practices on a repetitive basis without understanding them or having the capacity or desire to improve them. Sometimes bright young people may hold a clerical accounting post at the beginning of their careers while attending college, but they are unlikely to continue in the accounting field as it lacks challenge and opportunity.

Third, government accounting is completely overshadowed by the budget function in most Latin American countries. Priority and emphasis are placed on budgeting. Foreign technical assistance is often received only for budgeting. Budget offices frequently maintain their own separate accounting records, which are more accurate, timely, and useful than those of the accounting offices. National treasurers’ offices often do the same. In such cases the national accounting offices, where they exist, tend to become appendages that reduce unemployment more than manage the government. In some countries public entities do not have accounting units—whatever accounting is done is performed by treasury or budget units.

Finally, government accounting in Latin America is so poor in quality, inadequate in content, and late in presenting data that no one pays much attention to it. It serves primarily the legal purpose of documenting and summarizing receipts and expenditures in a formal report that is presented several years after the execution of the transactions reported. Since government accounting itself is of such limited use, it cannot hope to merit priority for improvement, nor can it attract competent staff.

All the above factors may have contributed to the continuing economic instability and constantly recurring external debt crises that the Latin American countries experience.1

A better perspective of these issues can be obtained by considering the historical development of the systems in Latin American countries, which for the most part were influenced by the Spanish heritage. Brazil, which had a distinct Portuguese heritage, however, had several common characteristics with other Latin American countries.


Many of the characteristics of government, government accounting, and financial management in the Latin American countries are of course derived from the heritage bestowed by colonial governments in the distant past, by influential neighboring countries over the years since independence, and by multilateral and bilateral donor organizations in more recent decades. Under the Spanish system brought by the conquistadores to the new world, an accountable officer, called a rindente or cuentadante, responsible for financial and/or physical resources, was required to safeguard them physically, handle all transactions, maintain all records, and periodically present an account or rendir cuenta before a formally established legal authority known as a court of accounts or tribunal de cuentas. This system or equivalents thereof was practiced by most European countries, including Great Britain, over the centuries. In effect the accountable officer was responsible to the king for certain resources, and the court of accounts acted on the king’s behalf to assure that a proper accounting was made.

After independence the Latin American countries retained the courts of accounts, which were generally made responsible to the parliamentary bodies. The system in which an individual accountable officer acted as resource manager, custodian, and accountant continued. Accounts were formally presented by individuals who were solely and personally responsible for them and were judged by the courts of accounts on behalf of the state.

As governments grew in size and complexity, the system of presentation of individual accounts became untenable. Just as the concept of the corporation as a fictitious but legal entity grew to be accepted in commerce, the concept of the governmental entity gradually evolved. Learning from its private sector experiences, Great Britain had abolished the court of accounts system in favor of entity-based accounting supported by independent audit and the United States inherited this system; however, it too retained the concept of the individual accountable officer responsible for receipt, custody, disbursement, and accounting until the early twentieth century.

Major changes were made in the U.S. accountability systems in 1921. Within a few years these spread to the Pacific coast countries of Latin America through the Kimmerer Commission, one of the first U.S. efforts in international technical assistance. Working with several Latin American countries in the 1920s and 1930s, the Kimmerer Commission implanted numerous institutions on the U.S. model, including central banks, social security systems, and, in the area of governmental accountability, comptroller generals’ offices. The first comptroller generals’ offices were modeled closely on the U.S. General Accounting Office, which had been established in 1921 to provide central accounting for the U.S. Government. Several other Latin American countries that the Kimmerer Commission did not visit later adopted similar systems. All of these systems still retained the concept of the individual accountable officer who now presented accounts to the comptroller general for verification as to legality and regularity. Accounts and all supporting documentation were physically presented to the comptroller general’s central office for review there by staff members. This system continued both in the United States and in many Latin American countries during the 1930s and 1940s. The Atlantic coast Latin American countries and the Central American countries continued to maintain the court of accounts system during this time. Mexico set up a Comptroller General’s Office at one point, but it did not function on the U.S. model and was abandoned, to be re-established later in a rather unique manner.

After World War II the United States was forced to make drastic changes in all its financial management systems to cope with the vastly expanded scope and volume of public sector activities. The same happened in many Latin American countries, but many of them delayed financial management reforms until later, preferring to persist with traditional systems.

All but one of the Central American countries exchanged their court of accounts system for comptroller generals’ offices during the 1950s to 1970s. Several Latin American countries also initiated sophisticated attempts to utilize electronic data processing in financial management during this time; however, most processing was limited to payrolls and other specific isolated applications.2

The result of this evolutionary process has been that at the beginning of the 1990s quite a diversity of approaches was used by the various Latin American countries in government accounting and financial management. A few countries still maintain the court of accounts system, usually highly modified and adapted to their own experience and needs. Many countries have comptroller generals’ offices, but the functions of these offices vary considerably from country to country. Some comptrollers general are deeply involved in precontrol and accounting while others limit their activity to external audit. Some comptrollers general are required by law to perform only nonfinancial functions that have no relationship to their audit function.

Most countries have adopted, at the urging of international agencies, sophisticated systems of program and performance budgeting. Unfortunately these systems have not produced the desired results. Little has been done in government accounting and cash and debt management until very recently. The external debt crisis since 1982 has focused attention on determining the extent of, and controlling, external debt. Some countries have implemented microcomputer-based debt management systems, but again isolated from the other financial management systems, as they were when budgetary systems were improved.

Cash availability clearly dictates the priorities of public spending today. Since many major expenditures are “uncontrollable” or practically so, governments and donor organizations are realizing that cash management is perhaps the most important component needing reform, and first attempts have been initiated in at least three countries to improve simultaneously all the financial management systems on a coordinated and integrated basis.

No country in Latin America may be considered to have a model accounting or financial management system. Inflation has made most budgetary systems superfluous. Cash flow forecasting is practically unknown. External debt poses an insoluble problem. The urgent need is to determine what strategy might work to improve government financial information quickly and assure its availability on a timely basis. Even with such a strategy, however, the resources to provide the dramatic improvements needed are not in sight. In Latin America, as elsewhere, true financial management reform only comes about in the aftermath of extensive internal scandals and/or catalytic external events that lead to complete economic collapse. It may be reasonably concluded therefore that the chances for such reform are improving.


A “Typical” Latin American Government Financial Management System

At the outset it must be admitted that there is really no such thing as a “typical” financial management system anywhere. What will be described in this section are some of the features commonly found in several Latin American government accounting and financial management systems at the entity and central levels. Those aspects of Latin American government accounting and financial management that are considered “different” or “unique” compared with similar functions in the industrialized countries will be especially highlighted.

Central Government Accounting

Our fictitious “typical” Latin American Government would have the central government accounting function located in the finance ministry but not at the level of an undersecretary, as it might be in regard to budgeting, public debt, and even sometimes treasury. In late 1989 one Latin American country set up the first undersecretariat for government accounting. A directorate or general directorate of government accounting is normally responsible for prescribing accounting requirements (normally not called principles or standards) and for centralizing the accounting information reported to it by the various ministries and other entities of the central government. Such information would normally be required on a monthly basis but would arrive between three and nine months after the close of the month reported. It would consist primarily of a summary of expenditures made during the month being reported, in addition to directly collected revenues, if any. In a more sophisticated system it might consist of a monthly summary of transactions in the form of a trial balance showing amounts budgeted, allotted, committed or obligated, and expended, together with balances available for future commitment or expenditure.

Some countries also centralize information on assets, liabilities, and net government equity from reports filed by ministries and other entities but rarely is this information complete, consistent, or useful. In a few countries the comptroller general’s office receives and compiles the centralized information. In any case the centralized information cannot be reported until all or nearly all entities have made their reports, and it is often not available until a year or so after the close of the month being reported.

Curiously, a typical central government accounting office records the summarized monthly information received from the entities in double-entry accounting records consisting of a general journal in which summary entries are recorded and a general ledger to which entries are posted. This is done even though no real original transactions are recorded, only summaries of transactions originally recorded on a single-entry basis in the entities. In this manner governments pay lip service to requirements for double-entry accounting without receiving any of the benefits that it provides.

Since monthly information is received, recorded, and summarized far too late to be useful, monthly reporting, which is useless anyway, is not carried out. At year-end the annual information accumulated, when finally complete, is published in great detail in a formal report to the Parliament, which is presented about two to five years after the end of the year being reported and is totally disregarded except when occasionally used as a source of historical information.

Thus, in our typical government accounting system the centralized accounting information serves no useful purpose whatsoever. The central accounting office has therefore no prestige. The accounting staff positions are awarded to individuals who, without any accounting credentials but with considerable recommendations from appropriate persons, need employment and therefore obtain it.

While the foregoing may be typical, a few “atypical” countries exist that produce relatively timely monthly and annual summaries of revenues and expenditures based upon a similar system that incorporates sufficient discipline to provide fairly timely data. In addition, the very small countries (both geographically and in terms of volume of financial transactions) are highly centralized, thus avoiding the necessity of centralizing information from decentralized entities by processing all transactions through the central treasury and recording them in the central accounting records.

Returning to our typical country, we must complete the description of what happens when the accounting information is usually produced very late. The national budget office, located in the finance ministry, normally maintains a single-entry accounting system in which all expenditure transactions or summaries thereof are recorded. While these data may not be completely on time, they are invariably more so than data from the accounting office, and thus become the source of whatever internal information is actually used in managing the government.

For cash management purposes, the central treasury office maintains a duplicate set of single-entry records of revenues deposited, classified by source, and of disbursements made, normally not classified by budgetary categories. Some treasury offices maintain cash basis, double-entry accounting records. In the worst cases, where few, if any, records are kept, cash flow information is simply obtained from the central bank.

Typically, the central accounting office located in the finance ministry or the comptroller general’s office prescribes through directives, regulations, or some formal process the requisites for entity accounting to produce the information to be reported monthly for centralization. It may prescribe standardized reporting formats or forms and usually prescribes standard account classifications.

The major difference between government accounting in Latin America and accounting in most of the industrialized countries lies in the segregation in Latin America of “budgetary” accounting and “patrimonial” or equity accounting. Completely separate records are maintained for “patrimonial accounts,” which include assets, liabilities, and government equity. These accounts are considered minor, are incomplete, and are rarely used. Fixed asset information may be excluded altogether, understated owing to partial reporting, or overstated owing to failure to record assets retired from service or disposed of.

Often a separate office is established to record and control acquisitions of supplies and fixed assets in a manner completely isolated from the accounting office and the accounting system. Such offices usually expend considerable resources taking physical inventories but are unable to devise means of updating data for asset acquisitions and retirements and thus immediately lose control of the assets for which they are expected to account.

Only a very few Latin American countries are considering the application of modern accounting techniques to produce timely and useful information for use by management.3

Other Central Government Financial Management Functions

Usually the central budget, debt management, and treasury functions are located within the finance ministries of the Latin American countries at the level of undersecretariats or general directorates. The auditing function is typically located in a comptroller general’s office, which is usually responsible to the legislature, though at least four countries still maintain a court of accounts. One country has set up at the cabinet level a secretariat of controllership, which oversees the internal audit function in the government in addition to a separate legislative audit function. Few Latin American countries have followed the U.S. model of locating the budget function in the Presidency.

The typical Latin American national budget directorate or undersecretariat operates under the authority of an “organic” or fundamental budget law that sets out the budget responsibilities, methodology, and process. The program and performance budget methodology long recommended by the international donor community is normally set out in this law. The central budget office is responsible for coordinating the budget with the national planning ministry or agency, establishing the budget formulation process, setting the financial parameters (including the revenue estimates), providing and communicating the budget calendar, obtaining agency expenditure requests, providing financial analysis, compiling the budget document, and submitting it to the minister of finance for presentation in turn to the executive and legislative branches of the government.

The typical organic budget law provides a model budgetary formulation process including bottom-to-top participation by the public entities. In practice the budget process is highly centralized with little if any input by the operating agencies. The national budget office typically proceeds to formulate and recommend the budget without much regard for the requests submitted by the entities—which are traditionally unrealistically high in anticipation that they will be drastically reduced in the budget review process. Time and resources often do not permit realistic budget review, and the annual budget is primarily prepared based on the previous year’s budget adjusted incrementally for those expenditure increases or decreases desired by the executive as well as for the estimated effects of inflation.

Budget proposals are rarely available for legislative consideration before the beginning of the year and the annual budget appropriation law is often approved long after the year has begun. There is usually a long delay between the adoption of the annual budget law and the issuance of spending authorizations so that it may well be beyond midyear before the budget is actually in operation. During the first part of the year expenditures are commonly limited strictly to salaries of employees and any government operating expenses that are absolutely necessary. Discretionary expenditures normally occur therefore in the latter part of the year, especially when delayed further by cumbersome competitive acquisition requirements. Major discretionary disbursements will often actually be made in the following year. Because of these delays some governments hold their budgetary books open well into the next year to record the disbursement of funds that were planned to be spent in the previous year. Thus two or more separate parallel budget and accounting systems may be maintained for two or more years depending upon the delays accepted. The effects upon sound financial planning, budgeting, and accounting are of course devastating.

Cash availability in reality drives the entire budget expenditure process in the Latin American countries. In recent decades only a few Latin American countries—those blessed with petroleum—have experienced periods of relative ease in raising revenues sufficient to finance their expected expenditures. Since the beginning of the external debt crises in 1982 all countries have been subject to recurring cash shortages in relation to planned and budgeted expenditures. The pressure to maximize the use of available cash is gradually causing interest in improved cash forecasting and management; however, few real reforms have yet been made. The typical national treasury office still performs only routine “cashier” functions for the government, leaving cash management, if there is any, to the central bank. Large amounts of idle cash funds are typically on deposit in the accounts of autonomous entities and in “special bank accounts,” often outside the budgetary and accounting systems, even in periods of the most dire need for cash to pay basic recurring government costs.

The shock of the debt crisis has caused many Latin American countries to turn attention to managing debt, or at least external debt. With the help of international donor organizations many countries have established controls over existing external debt and the incurring of new debt. These new debt management systems have usually been set up separately from the existing budget, accounting, and treasury functions and cause therefore further disintegration of the financial management system. Debt management is rarely considered an integral part of cash management. Long-term government cash flow planning, including the systematic planning of needs for external financing, does not normally exist.

The proliferation of public corporations and other autonomous or semiautonomous entities outside the normal central government financial management system has resulted in the exclusion of major portions of public sector financial resources and debt from the financial management process. This situation has often been justified by the cumbersome central financial management process, but it has created more problems than it has solved. In recent years many Latin American Governments have been experimenting with ad hoc mechanisms for regaining control over these autonomous entities, often creating yet another layer of bureaucracy in the financial management process and further acting to disintegrate government financial management. Financial management of the public corporations has sometimes been better than that of the central government, but it appears to deteriorate over time even in the best cases.

In summary, the Latin American central government budgeting, cash, and debt management agencies do not function efficiently. Only budgeting has been highly developed in theory, but it has not worked in practice. Cash management is an abandoned area, and debt management only newly discovered. Isolated approaches to improving these areas as well as accounting are the rule rather than the exception. Only one country has established a central coordinating function intended to assist in the integration of the government’s financial management systems. Only one country has a unified organic law that governs all aspects of financial management in its public sector. Only two countries have attempted to unify and coordinate all secondary provisions relating to public sector financial management, including the issuance of standards, policies, and other measures on a coordinated basis.

Entity Accounting and Financial Management

Most Latin American government ministries, departments, agencies, and enterprises are bewildered by the still confused concept of the individually responsible “accountable officer” or rindente and the modern need for managing the organization as an entity. Many countries have not recognized each government ministry and agency as an accounting entity responsible for its own financial management through its own chief executive officer. Legal systems continue to exclude the chief executive officer from financial responsibility and hold only each accountable officer responsible for those resources under his direct responsibility.

The modern concept of internal control is largely unknown or unrecognized by most governments, especially in legislation and organizational arrangements. Thus the financial management of entities is largely disintegrated. Responsibilities cannot be clearly fixed in such circumstances, and the entire process foments irresponsibility and irregularity. In effect, the old system of presenting individual accounts is obsolete and inoperative and a new system has not yet replaced it in many countries. Most countries have initiated piecemeal attempts to improve on the old system, often paying lip service to modern techniques. But the modern techniques have rarely been sanctioned by law, and antiquated legal provisions and regulations based on them often maintain entity financial management in a strait-jacket. All of this, of course, obviates the possibility of applying modern managerial techniques and holds the entire public administration hostage to obsolete tradition embodied in unchangeable law.

Where attempts have been made to modernize financial management laws the parliamentary bodies (largely composed of legalists in the old tradition) are reluctant to make the breaks with the past that are necessary. Politically based charges are often made that new and modern techniques seek ulterior motives, and where these allegations prevail, financial management reform becomes impossible.

The real victims of stagnated financial management legislation and regulations are the persons responsible at the entity level for making government work. Some years ago in one Latin American country a procedural flow chart was developed showing all the different processes, paperwork, approvals, clearances, documentation, recording, and handling of a single financial transaction in one entity from beginning to end. The flow chart was 17 meters long! Innumerable public officials at various government levels intervened in the process, inevitably registering their approval or clearance and requiring copies of documentation. That flow chart convinced the government to modernize its transaction process, eliminating various layers of false controls and useless approvals and clearances. This case was perhaps extreme but many entities could well measure the delays in the bureaucracy of financial transaction processing in meters of flow charts.

The major problem that entities experience results from the fact that they are rarely delegated the authority to carry out the programs for which they are responsible. The existence of innumerable well-intentioned external checks and controls makes efficient execution impossible.

The typical central government entity in Latin America, following the lead of the central government itself, places a low priority on financial management, and accounting is considered an unnecessary evil. Because numerous external controls are imposed on all transactions, entity management takes the attitude that financial management is really an external function that can be handled between the accountable officers and the central financial organizations. Management therefore assumes no responsibility for financial management or control within the entity. If irregularities occur, they are the problem of the accountable officers and the central officials, not of entity management.

Curiously, the accountable officers often claim that they go to jail or otherwise suffer for simply carrying out the orders of the higher-level officials who are excluded from responsibility. Another curiosity is that, notwithstanding all the external controls and legal requisites that are commonly blamed for the interminable bureaucratic delays in processing financial transactions, when the entity chief executive orders some specific transaction to be carried out immediately—especially one of interest to higher levels of government—a way is found to process that transaction speedily. Without this possibility, of course, government could not operate at all.

In the typical entity the principal financial official is the paymaster or cashier, who is often responsible for making disbursements in cash or for drawing checks and distributing them. Each entity often has a number of separate paymasters. They deal directly with central treasury offices, bypassing the entity accounting system. If the entity has significant self-generated revenues, a special-purpose revenue collection or treasury office may handle them, including single-entry detailed accounting by revenue source. If collections are minor the paymaster may handle them.

Employee salaries are typically handled exclusively by the personnel department, including all checks and verifications on eligibility for pay and hours or days worked. These departments usually deal directly with central data processing offices that likewise bypass the entity accounting system. Acquisitions of goods and services are subject to specific legally mandated procedures that are administered by a designated acquisitions department but are often subject to numerous controls outside the entity that are likewise handled by bypassing the accounting system, which thus cannot obtain information on the status of expenditure commitments until long after they have been made.

Since the accounting department is usually understaffed by unqualified clerical employees of low status and pay and has little access to financial data on transactions, it is often reduced to maintaining a historical record on a cash basis of transactions long since made. Emphasis is placed on the historical recording of receipts and disbursements of cash, not on their classification according to budget category. Sometimes goods and fixed asset acquisitions are also recorded based on reports of expenditures made. Since there is no real pressure to produce the historical accounting data, accounting offices may produce only monthly, quarterly, or annual reports of global cash and resource balances and summary totals of transactions. No formal financial statements are prepared. All entity financial reporting is so late that the information could not be used for making managerial decisions if it was sought, and since managers are not accustomed to receiving such information, it is not sought.

Because accounting reports are so late and limited, those persons who need some form of financial data must devise ad hoc mechanisms for obtaining it. Usually the paymasters will maintain an ad hoc single-entry system for determining cash balances. Invariably budget offices will maintain an ad hoc system of budgetary accounts on a single-entry basis to control appropriations, allotments, monthly allocations, commitments, and final disbursements classified according to the official budgeted categories. These have become so institutionalized that in many countries “budgetary accounting” is considered the responsibility of the budget department.

In summary, since on an ad hoc basis the personnel office handles payroll accounting, the budget office handles expenditure-classified accounting (including data on the status of commitments received from the acquisitions office), and the paymaster handles global cash receipt and disbursement accounting and detailed revenue accounting, if applicable, it does not really matter whether the accounting office functions or not. It usually does not.

Entity accounting offices thus rarely generate data used in the entity. Their main role consists of furnishing finalized transaction summaries to the central government accounting office for it to consolidate. Since the accounting office does not in fact serve the entity, it is not strange that entity management considers it a low-priority unit and uses it primarily as a means of providing employment for persons who can find no other useful role in government but who are due to be employed.

Thus typical entity financial management is fragmented, information is partial and limited to that necessary to operate, and official accounting reports are late, useless to the entity, and used only for historical consolidation. In most entities there is no organized accounting system.


The following presents the levels and functions of government accounting in the central government of a Latin American country recognized as producing timely, centralized financial data.

Entity Branch Office

Conducts detailed financial and patrimonial accounting (which does not include details of expenditures by budget category) based on single-entry records. Presents accounts to the entity accounting office.

Entity Principal (Regional) Accounting Office

Conducts detailed single-entry accounting of financial and patrimonial movements (does not include details of expenditures by budget category). Incorporates branch office accounting and consolidates transactions. Presents accounts to the national accounting office or, as appropriate, to the central entity accounting office.

Central Entity Accounting Office

Incorporates accounting reports of principal offices. Consolidates transactions of subordinate units. Presents accounts to the national accounting office.

Central Entity Budget Office

Conducts “budgetary accounting” (details of expenditures by budget category) on a single-entry basis. Presents budgetary movements to the national accounting office.

National Accounting Office

Conducts detailed accounting of national public debt. Accounts for national capital projects. Accounts for the execution of the budget and its integration with the financial subsystem. Incorporates accounting movements from accounts presented from other levels. Consolidates transactions among the subordinate units that present accounts. Determines the period’s patrimonial results. Prepares the public accounts of the budget and of the treasury and of the balance sheet of the government.4


These two areas are discussed together owing to the dependence of modern auditing upon adequate internal control structures.

It should be obvious from the preceding discussion that the modern concept of internal control cannot exist in the traditional system in which the accountable officer is responsible for a multitude of functions, such as receipt, custody, disposal or disbursement, recording and reporting of resources given to personal and individual responsibility, without adequate segregation of these functions. Because many Latin American countries cling to the traditional system or to some modified version of it, internal control structures do not and cannot exist, nor can a modern audit system.

On the other hand a number of Latin American countries have initiated or implemented “national systems of control” that attempt to establish appropriate internal control structures including internal audit to permit the execution of modern systems based on government external audits. Their approaches have varied but some common elements persist. Several countries have prepared and promulgated government-wide standards of internal control and of professional government audit that usually include both internal and external audit. Several have also recognized through legislation the function of internal audit as a part of the internal control structure. Also, a number have modernized the legislation governing their supreme audit institutions (usually offices of the comptroller general).

Unfortunately, progress in actually implementing sound internal control structures and professional approaches to auditing in Latin American Governments has been slow and disappointing. Some countries have made improvements only to fall back into old customs and procedures when the government or comptroller general changed.

The major problem in implementing sound internal control structures is that drastic modernization of the country’s entire approach to financial management is required. Few major programs to achieve it have been launched, since they require extensive development and design of legislation, standards, procedures, and systems, and massive training efforts.5

One major issue in this area involves the placement of responsibility for performing the precontrol function. This task, often miscalled “preaudit” in English, involves verifying the legality, propriety, actuality, arithmetic accuracy, due approval, budgetary authority for, and overall authenticity of, proposed financial transactions prior to their execution. Over the years many Latin American legislatures have imposed this function on the supreme audit institution, and some have established special units within the finance ministry to perform external precontrol. In extreme cases external control may be performed by all the central financial units (budget, treasury, and audit) and by other specialized units before a transaction is approved, first for commitment of funds, then again by the same process before disbursement.

Externally imposed precontrol poses three major problems and appears to solve none. The most obvious is the delay the outside approval process imposes on the completion of financial transactions. Second, external precontrol infringes on the authority supposedly delegated to heads of entities to carry out their duly authorized programs. It dilutes responsibility and results in a sense of false security by the entity, leading it to propose transactions that might otherwise be more closely scrutinized in the hope that they will be approved, since approval responsibility is in the hands of third parties. Most important, the external precontrol mechanism creates a new opportunity for corruption of public officials, because those outside the entity who must approve the transaction may be subjected to offers of payment to “speed up” the approval process. When such abuses become institutionalized, there is a danger of a purposeful “slowing down” of the approval process to increase opportunities for, and amounts of, illegal payments to expedite transactions. Some Latin American public officials feel strongly that external precontrol serves only as a false security while it foments corruption and extortion. Others feel that entities cannot be trusted to carry out their duties honestly and must be subjected to strict external precontrol to protect public resources from abusive and unnecessary expenditure.

Obviously, an external precontrol structure, once institutionalized and even though apparently corrupt, cannot be dismantled until a corresponding sound internal control structure can be put in place. The modern tendency is to eliminate external controls in favor of stronger internal controls that are established at natural points in the flow of transaction processing and are applied by those individuals who normally process transactions, not by specially established groups or units. Such procedures seek to speed up the flow of transactions, minimize opportunities for corruption, and fix managerial responsibility within the entity. A few Latin American countries have successfully eliminated all vestiges of external precontrol. Most still have it in one form or another.

Some countries have concentrated efforts to improve internal control structures only for public enterprises and other decentralized institutions outside the framework of the central government. In these organizations internal controls have a stronger probability of success, especially where private enterprise managerial techniques and structures are used. Two countries have published internal control standards applicable only to decentralized entities.

There are several major problems in implementing modern professional auditing in central governments. The principal problem, of course, is the one mentioned above for internal controls. A modern, documented, auditable financial management system must exist. Furthermore, because modern audit must rely upon sound internal control structures to some degree at least, it cannot precede the modernization of internal control structures. The other major problem has been how to modernize supreme audit institutions that are steeped in traditional legal requirements having nothing to do with auditing and that compromise the independence of the audit institution as external auditor.

Quite a few Latin American countries have formally recognized in legislation the importance of a professional internal audit function in government. Those countries that have established “national systems of control” have placed emphasis especially on internal audit as a key component of such systems. Supreme audit institutions in several countries have strongly supported the expansion of internal auditing, aware of its importance in fulfilling their own responsibilities. In a few countries, however, internal audit has been interpreted as synonymous with internal control, instead of being a key component thereof. They have attempted to hold the internal auditors responsible for the quality of internal control systems instead of the chief executives of the entities for whom the internal auditors work and to whom they should be responsible for evaluating, not implementing, internal controls. In a few countries, some confusion seems to have developed between the internal audit function and the supreme audit institution function in attempting to give internal auditors more independence, at times to such a point that the “internal” auditors are appointed by the supreme audit institutions and are responsible to them, thus becoming external rather than internal auditors. This situation in turn indicates the need for coordinated efforts to unify the criteria on the role of professional internal audit in Latin American Governments.


Fund Structure

Fund accounting as known in English speaking countries is not practiced in Latin America. Attempts to transplant multiple-fund accounting in the U.S. state and local government model have failed in Latin America owing to its complexity and general inapplicability in the Latin American cultural context. Something similar to U.S. fund segregation has been accomplished by creating a multiplicity of autonomous and semiautonomous, off-budget entities of all descriptions by Latin American Governments. Normally the accounting entity in Latin America has a single general purpose fund. Trust and agency funds are not common. Where they exist and are recorded they are shown as liabilities.

Basis and Coverage

The cash basis of accounting is the standard in Latin American government. One country has legally established the modified cash basis, recording revenues when collected but recording commitments as expenditures when the liability to pay is established. Another country formally utilizes the accrual basis based on end-of-period adjustments, but day-to-day accounting is on a cash basis. “Budgetary” accounting records, which are usually maintained by budget offices, normally record budgetary appropriations, allotments, commitments, and disbursements, thus providing, for expenditures only, accounting on a commitment and a cash basis. Revenues are uniformly accounted for on a cash basis and estimates of accrued but uncollected revenues are rare.

Most original entry accounting at the entity level is recorded on a single-entry basis notwithstanding legal provisions and technical requirements for double-entry accounting that date back as far as the 1930s in some countries. Centralized accounting is often done on a double-entry basis to simulate observance of the double-entry requirements or to give the appearance of a formal accounting system.

Coverage of national government accounting systems is normally limited to the officially prescribed budget, in spite of the enormous amounts of public financial resource transactions that are segregated by special laws into off-budget organisms and “special accounts.” At least one country has attempted unsuccessfully to expand its national accounting system to include all public resource flows of all types whether or not included in the budget. In many countries military and defense expenditures are maintained off budget and therefore outside the accounting system for national security reasons.

Accounting Classification

Traditionally revenue and expenditure classifications as prescribed in national budgets constitute those used in central government accounting systems. Since “budgetary accounting” is often carried out by budget offices, not accounting offices, government accountants are rarely consulted in establishing classification categories.

The use of sophisticated program and performance budget expenditure classifications has complicated the accounting process in some countries and has tended to make responsibilities for resource use unclear. For example, one country on introducing program budgeting in the 1960s established an excessive number of programs and subprograms and nearly 1,000 specific line-item expenditure accounts, each of which was theoretically applicable within each subprogram. The classification system was inoperable owing to the excessive detail.

In some countries complicated public employee remuneration systems have also complicated the budgetary and accounting classification systems through the creation of diverse categories of special types of bonus payments as well as “extra month” salary payments. For example, an employee might receive a total of 16 “monthly” salary payments during a year, each of which includes special bonuses for categories such as “exclusive dedication” (a prohibition on holding another job), “years of service” (seniority), “numerous family members” (more than a certain number of children), or for working in a difficult region. Instead of simply recording in the accounting records the gross salary of each employee in these cases, attempts are usually made to include the entire detail of all bonus payments within the budgetary and accounting classification system so as to determine the impact of each type of bonus on the entire budget. As a result a vast number of unnecessary expenditure account categories have been created. The use of computerized payroll and accounting systems has made this type of detail feasible; however, where financial reports based on such detail are not summarized appropriately, they can be too voluminous and detailed to be useful.

The revenue classifications of some countries do not fully disclose or follow revenue sources while those of others are unduly detailed and complex. These classifications also become complex as a result of the practice of legislatively dedicating specific tax revenues for specific purposes and/or entities. Thus one single revenue source may be divided according to percentage deductions to 20 or 30 or more purposes or entities. Again while this practice is feasible, albeit unwise, where financial reports show such degree of detail, they tend to obscure the real purpose. The basic problem here is the tendency to utilize the official account classifications as the legally authorized format for financial reporting for all purposes, which is why many countries’ annual financial reports are so voluminous.

Unlike revenue and expenditure classifications, the classifications of assets, liabilities, and government equity are generally too simple and are inadequate for providing sufficient segregation of diverse types of assets and liabilities. This reflects the heavy emphasis on “budgetary accounting.”.

A category of accounting classification unique to Latin America consists of memorandum accounts (cuentas de orden), which consist of a segregated group of self-balancing accounts in which formal entries are made to record and control minor items (such as officially numbered blank pages or unissued tax stamps). They are shown separately at the bottom of trial balances and balance sheets. They often disclose items that might otherwise be disclosed in notes to financial statements according to international accounting standards. Some governments record uncollected taxes and other revenues under this category to establish a form of accounting control while not recognizing them as revenue until collected.

Public enterprises similar to commercial enterprises often do maintain adequate accounting classifications but are sometimes criticized for not following the official government budgetary categories. In some countries they have been obliged to maintain a separate classification compatible with the official budget classification for expenditures.

Most Latin American Governments do not have integrated charts of accounts at the entity or national level that provide a comprehensive coding system for all possible financial transactions arranged on a logical basis for processing electronically to produce financial statements automatically from the accounting system.

Management, Cost, and Public Works Accounting

Few Latin American Governments have explored this area. One government has attempted to design and put into practice a cost system for the central government, but it has not been completed.

Public works accounting constitutes an important area, especially owing to major internationally financed development projects. The latter are normally stand-alone accounting entities with their own accounting systems supervised by the financing organization and maintained in accordance with its minimum requirements.

Where ministries or other large government agencies carry out internationally financed development projects the financing organization often requires the establishment of a special project administrative and accounting unit to handle all project accounting and financial management outside the regular entity financial management and accounting system.

The recording of fixed assets by national governments in Latin America is accorded a low priority and assets are rarely compared physically with accounting records. Fixed asset records are usually incomplete, undervalued, or nonexistent. Obsolete and fully expended assets rarely are removed from records once recorded. Governments periodically attempt nationwide inventories of assets, the cost of which seems highly questionable in the light of the failure to establish adequate accounting records and controls. Information reported on fixed asset values by central governments is dubious.

Inflation Accounting

All Latin American countries have been subject to inflation of varying degrees. As a result financial data from any two years are rarely comparable without adjustment. In a few countries hyperinflation has made comparability impossible even from one day to another. Most countries publish official indices that are used for adjusting historical values by private sector enterprises and by public enterprises as well. Central governments rarely use these indices in their accounting systems, although they may be used to adjust columns of comparative historical information in some financial reports. Because government financial reporting is not well developed in Latin America, government entities or central government accounting offices have not given much consideration to inflation accounting.

One of the best annual financial reports published on time by a Latin American Government presents a comparative ten-year summary of revenues and expenditures and a comparative three-year summary of assets and debt, both adjusted to current year values using the official index. No explanation is given of any inflation accounting techniques or adjustments. The financial statements for the current year, however, are not presented in comparative form, and no mention is made of the effects of inflation.6 Another country’s annual financial report, also issued on time and quite comprehensive in presentation, does not deal with inflation except that two tables are shown in “current pesos.” The official financial statements are not presented in comparative form and the “Notes to the Financial Statements” do not mention inflationary effects.7 The two countries cited have not recently experienced the severe inflation that many other Latin American countries have.

While most businesses in Latin America have had to adjust the values of historical asset acquisition periodically over the past few years, many governments have not done so, except for government corporations. Thus government-owned assets are often significantly undervalued, where they are recorded and reported.

Electronic Data Processing Systems

Large mainframe computer systems are used in Latin American financial management primarily for taxpayer records, payroll processing, and budgetary control over appropriations, allotments, commitments, and, in some cases, expenditures. Many large ministries have computer capabilities far beyond their human ability to put the computers to use. Few really modern computerized accounting systems exist. Those that do are usually for public enterprises not central government entities.

The lack of charts of accounts referred to earlier has prevented countries from taking advantage of the computer’s ability to reorder and restate information through preparation of financial reports based on the initial entry of properly coded transaction data.

Many obsolete or unneeded computer systems have been sold to Latin American Governments, sometimes financed by international organizations. Fortunately, the advent of powerful microcomputers portends the demise of large mainframe systems. But there is a real danger in the proliferation of noncompatible, obsolete, or uncontrolled microcomputers throughout governments. They should be a great blessing to Latin American Governments if they can be wisely used in carefully planned accounting systems on an entity basis. On the other hand, if accounting systems tend to become further fragmented so that different pieces of data are maintained in different uncoordinated offices, the microcomputer could doom all prospects for some governments of ever achieving adequate government accounting.


As already indicated, Latin American financial managers tend to agree that the information presently produced by government accounting and financial management systems is “not acceptable.” Only two countries appear to produce timely and comprehensive annual financial reports that may be considered useful to the users of government-wide financial information.

It would probably not be overly pessimistic to state that financial reports are rarely used in public sector management in Latin America—reflected in the continuing state of economic chaos and crisis involving internal deficit and external debt in most Latin American countries. The two countries that seem to have least economic and external debt problems are those two that publish timely and what appear to be reliable summary annual financial reports. Another characteristic that these two countries have in common is that the office of the comptroller general is responsible for overseeing accounting systems and centrally gathering and consolidating entity financial information into annual reports and in each country that office is strong, well financed, highly respected, and well disciplined.

Interim Reporting

For all practical purposes there are few, if any, interim accounting reports issued during the year in the typical Latin American government entity or central government. One may logically ask, therefore, how do governments and entities manage to operate? As noted previously, there are a number of unofficial, possibly unreliable, ad hoc reports or data summaries of financial information prepared outside the accounting system that furnish the minimum information necessary to keep government going.

Two basic types of information are indispensable to the internal operation of entities and governments: (1) data on availability of cash to meet disbursement needs, and (2) data on the rate of expenditures compared with cash available and expenditures planned, usually in the form of comparative presentations of amounts budgeted and amounts expended. Alternate sources of information are sought to meet these needs.

Information on cash availability may be obtained direct from the central bank, in effect using the central bank’s information system instead of the government’s. Central banks can provide summary information on receipts deposited to government accounts and on checks for government funds drawn and paid. While this information is not complete (data on checks drawn but still outstanding are particularly lacking), it is better than none, and it is often what is used in central government financial management. In some countries the national treasurer maintains accounting records for cash transactions and is able to furnish interim information on cash availability, thus avoiding dependence on the central bank’s records. Interim cash availability reports usually contain bad news, and their circulation is therefore limited to only a few key officials who must have these data.8

Data on expenditures compared with budgets should, in principle, be available from official accounting systems. Most frequently, they are not, but they are available from the entity or national budget that maintains its own “budgetary accounting system.” This practice is generally accepted in many countries. Thus it is the budget office of the entity or the central government that produces interim financial reports used in ongoing management. One reason for this practice is that the accounting offices are so concerned with legalistically exact, detailed accounting that they are unable to close out their records on a timely basis each month to produce reports useful to managers.

Some smaller countries with highly centralized disbursement systems are able to provide monthly interim reporting of receipts and disbursements for the central government as a whole. Such data are rarely available early enough to be useful to management. One small country has a highly computerized system for “budgetary accounting” that is operated by the comptroller general’s office and provides timely interim information on budgetary execution for the entire government.

Where interim reporting exists, it is normally not designed to meet managerial needs through summarization according to levels of responsibility. Data are typically reported in the maximum detail possible within the classification system. Managers responsible for specific programs who are conscientious are forced to maintain their own ad hoc records of commitments and expenditures to know the financial status of the activities for which they are responsible.

In summary, most central government and entity interim financial reporting is unofficial, limited to the minimum, and questionably reliable since it comes from outside the government’s systems or from ad hoc data accumulation systems.

Annual Reports

The main reason for the existence of the central government accounting offices appears to be the preparation of the annual general accounts (Cuenta General) or official financial report from the executive branch to the legislative branch of the government. This responsibility usually lies with the finance ministry, but is sometimes performed by the comptroller general. More typically the comptroller general’s role is to perform a legality and regularity “audit” (fiscalización) of the public accounts and present a separate report to the congress.

As noted above regarding the closure of monthly accounts, the tendency to ensure that all possible information has been recorded in exact detail in accordance with often archaic legal provisions results in very long delays in closing out the annual accounting records. The difficulty of achieving the discipline necessary to enforce timely presentation of annual information by the entities (especially the smaller ones) is a further complication. The low prestige of the accounting function and the low priority the government places on financial reporting contribute to an environment in which little attention is paid to deadlines for presenting information to the central accounting office. This problem appears to have been solved in only a few countries with extremely strong comptroller general’s offices, themselves responsible for central accounting, which enforce discipline in financial reporting.

Some of the smaller countries, particularly in Central America, have highly centralized financial management systems and do not face the problem of enforcing reporting by entities. They are able to produce more timely central information.

There is no generally accepted format for annual government financial reporting. Since 1977 various Inter-American Accounting Conferences have recommended that governments adhere to generally accepted accounting principles; however, few have attempted to do so. Only one has legislation requiring the entities and the government to present financial statements prepared according to generally accepted accounting principles (GAAP) and has promulgated such principles applicable to the public sector. Unfortunately it has been unable to produce government-wide financial statements because most component entities still do not do so.

Several other Latin American Governments enumerate in their accounting manuals specific accounting principles to be observed, but none has concerned itself with financial reporting based on generally accepted accounting principles. Each government traditionally uses its own approach to the financial “statements” prepared, and often they bear little resemblance to the financial statements known to the accountancy profession. This practice is defended by those who contend that government is “different” from business and has little in common with it.

Government corporations in Latin America usually observe private sector generally accepted accounting principles as established within each country. Most issue annual financial statements and some issue annual financial reports including audited financial statements.

Quasi-corporate organizations owned by governments (often called “decentralized” entities to indicate they are not a part of the central government) have proliferated in Latin America. Where they are not clearly comparable with similar private sector activities, their accounting and reporting responsibilities usually follow the provisions set out for the central government, though sometimes they follow private sector generally accepted accounting principles or some combination of the two.

Most Latin American Governments recognize three major groupings of government entities:

  • The central government, including the ministries and all other entities included in, and financed entirely by, the national budget.

  • Decentralized entities, including independent agencies, government-owned corporations, universities, and “autonomous” entities, which may be fully self-financed from operating revenues, but most frequently are partially or principally dependent on budgetary transfers from the central government to finance their operations.

  • Regional and local governments, which in many countries are financed fully or largely through budgetary transfers from the national government.

Based on the above or a similar scheme, Latin American Governments seek to provide annual financial information on a combined, though usually not consolidated, basis at each of the foregoing levels. Thus their centralizing accounting measures become extremely complicated owing to the problems of achieving uniformity to permit reporting. All countries have problems in enforcing timely reporting, and all countries have gaps in data owing to the failure of some entities to report.

The traditional public accounts required by constitution and/or law in most countries usually contemplate only central government reporting. No country is known to achieve timely reporting of combined information at all three of the above levels.


A number of major problems have already been mentioned. They may be summarized as follows.

  • The professions that support public sector financial management in Latin America are weak, especially the accountancy profession. There are few established criteria or standards for government accounting, budgeting, cash and debt management, internal control, financial reporting, or auditing. Professional organizations, where they exist, are weak and in the case of accountancy groups, primarily concerned with the private sector. The financial management professions, especially accountancy, are not attractive to talented young people who might be expected to improve and strengthen them. Public sector financial management in Latin America is largely in the hands of nonprofessionals or weak professionals. The characteristically low remuneration scales in the public sector ensure the continuation of this situation.

  • An underlying absence of discipline permeates government in Latin America. Proper accounting and sound financial management depend on a disciplined environment under the control of disciplined officials. Failure to observe the prerequisite of timeliness invalidates whatever other benefits accounting and financial management might offer. Discipline is demanded in the daily recording of financial transactions in such a way that they can be summarized and reported in a useful format. Most Latin American government accounting systems collapse at the very beginning of the accounting process because transaction data are not comprehensively captured and recorded adequately and promptly.

  • The historical absence of useful and timely financial information has led Latin American public officials to learn to operate governments without it or with a minimum of ad hoc data (often unreliable estimates) acquired through any means possible. Officials have learned to expect nothing useful from government financial management, and they are not disappointed when that is what they receive. Therefore it receives a low priority in public sector management, and the lowest priority of all the functions in financial management is given to accounting—the discipline that should be expected to process and provide all basic managerial decision data.

  • Antiquated legalistic provisions and practices continue to prevail in most Latin American countries’ financial management systems, obviating the possibility of utilizing modern techniques and technology. When modern technological equipment such as computers is used, it is most likely to be misused, increasing the cost of government without bringing tangible benefits to it.

  • Approaches to reform of financial management systems in Latin America have been highly theoretical, concentrating primarily in the budget area, and have almost uniformly failed in practical implementation, causing them to be left in worse condition than they were in before the reform efforts were initiated.

  • Latin American government financial management systems are fragmented and uncoordinated. Often those that work are extra-official or ad hoc. The different units responsible for budgeting, accounting, cash management, debt management, and auditing rarely communicate and coordinate their activities or share information. Each tends to set up its own information system instead of sharing and relying upon a single source and depository of financial data to which all contribute and in which all share.

  • The modern managerial concepts of entity-wide responsibility through the organizational framework, accountability for resources and results, sound internal control structures, and the systems approach to planning, recording, processing, and auditing financial transactions cannot function within the straitjacket imposed by law, tradition, and irrational political decision making that characterize many Latin American Governments. The volume of financial transactions both in number and in value has caused the collapse of traditional approaches to public sector financial management. No rational framework has been able to replace them. Therefore almost all financial management data of Latin American governments lack reliability and credibility. Macroeconomic decisions must be based upon the best estimates, which could better be described as the best guesses.

  • The extremely strong emphasis on central economic planning in the Latin American countries is dependent by its nature on a source of timely, reliable public sector economic data that have never existed in most countries. Thus central economic planning was condemned to fail from the start.

  • The present chaotic economic situation that demands many severe austerity measures of Latin American Governments makes it highly unlikely that any government will be in a position to improve the quality of its present financial management systems without massive external assistance directed to that end.

Initiatives to Improve Government Financial Management

There have been few real initiatives to improve government accounting and financial management in Latin America on the part of the governments and on the part of international donor organizations. Both groups fail to realize that such reforms must involve a long-term commitment.

Most initiatives to date have been limited in scope and duration. A typical reform effort, for example, might be to implant a program budgeting system in a period of 18 months. This type of initiative has failed repeatedly in Latin America because (1) it does not help to improve the budgeting system without making the necessary simultaneous improvements in accounting, cash management, etc., and (2) a short time frame measured in months does not permit the acceptance, adaptation, and durable implementation of the reforms proposed.

Most reform initiatives have involved either budgetary systems or audits by comptroller generals’ offices. It has become abundantly clear that reforms in government audit capability not accompanied by improved internal controls leave auditors with little to audit. Time frames for reform initiatives typically involve periods of one to four years. Within five years after their conclusion, no evidence exists that they were ever carried out.

More and more governments and international and bilateral donors are coming to realize that financial management reform initiatives are long term, comprehensive propositions. The concept of the integrated financial management system (IFMS) is being proposed and accepted in some countries.

The first Latin American initiative based on the IFMS approach was carried out during the late 1970s by a country that relied upon its own resources and very limited external contracted technical advice. It produced a legislative and normative framework for an integrated financial management system and achieved limited implementation. Its major limitation was the failure to implement fully the reforms planned in the national accounting system.

A second IFMS initiative began in the mid-1980s in another country, primarily financed by international donor funds and based on considerable contracted external advisory assistance. Its results are not yet apparent. No other such initiatives are known to be under way though one or two countries have expressed interest in the IFMS approach.

The development of an IFMS for the public sector involves a very long-term commitment of financial and human resources and, under present economic conditions, does not appear to be a viable approach in most countries using their own resources. Donor organizations likewise are reluctant to commit the resources necessary to develop an IFMS for a single country.

The most recent initiative to improve public sector financial management in Latin America has been the Regional Financial Management Improvement Project for Latin America and the Caribbean (LAC/RFMIP) initiated by the U.S. Agency for International Development in 1989. The project’s goal is to increase the ability of Latin American and Caribbean Governments to utilize and evaluate their scarce monetary resources more efficiently.

Government accounting in Latin America was described by its own practitioners in a workshop held in late 1988 in similar terms. See, for example, U.S. Agency for International Development (AID), Improvements Needed in Managing Public Resources in Latin America, report of a workshop sponsored by AID, Miami, Florida, December 6–8, 1989, pp. 14–16.

Since the 1950s international and bilateral donor or lender organizations have made technical assistance available to the Latin American countries in many areas, including government financial management. There has been little or no coordination among the donor organizations. Much of this assistance, especially at the beginning, concentrated almost exclusively on developing the budget system. Little attention was given to accounting, and none to cash and debt management. Some countries received considerable assistance while others received little. Most attempts to improve public administrative systems failed during this period, including those in budgeting and financial management. As a result some donor organizations became reluctant to continue technical assistance to improve public administration in the developing countries. During the 1970s few major efforts to improve government financial management were considered by the donor organizations. Some specific short-term technical advisory services were made available by some international organizations. Only in the late 1980s has there been a reawakening of interest by the donor organizations to the need to modernize central government financial management.

A number of countries may have been affected by poorly conceived and delivered technical assistance offered by well-meaning but incompetent organizations that have furnished technical advisers and instructors not professionally qualified as accountants or inexperienced in modern government accounting, thus further complicating the task of improving government accounting and financial management.

Colombia, Contraloría General de la República, División de Contabilidad Nacionai, Manual de Contabilidad Gubernamental (Bogotá, 1988), pp. 31–32.

Only one such activity has been attempted in Latin America without foreign financial assistance. Another recent effort was financed by several donors in a joint effort because of its magnitude.

Chile, Contraloría General de la República, Informe Gestión Financiera del Estado, Año 1988 (Santiago: Contraloría General).

Colombia, Contraloría General de la República, Informe Financiero de 1988 (Bogotá: Contralor General).

These two sets of data may often not be reconcilable, particularly in regard to above-and below-the-line items of the budget.

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