Nicaragua: Detailed Assessments Using the Data Quality Assessments Framework (DQAF)
Author: International Monetary Fund
Publication Date:
08 Dec 2005
eISBN:
9781451829242
Language:
English
Keywords:
ISCR; CR; Nicaragua; balance of payments; CPI; cross-sector consistency; hard copy; CBN website; flow of information; CBN law; Consumer price indexes; Monetary statistics; Balance of payments statistics; central government
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Nicaragua’s report on the Observance of Standards and Codes examines Data Module, response by the authorities, and detailed assessments using the data quality assessment framework. The Ministry of Finance and Public Credit provides an institutional environment for compiling budgetary transactions data but not for compiling statistics for general government and/or nonfinancial public enterprises. The environment fosters good arrangements for data sharing among agencies involved in government finance statistics compilation and dissemination.

Abstract

Nicaragua’s report on the Observance of Standards and Codes examines Data Module, response by the authorities, and detailed assessments using the data quality assessment framework. The Ministry of Finance and Public Credit provides an institutional environment for compiling budgetary transactions data but not for compiling statistics for general government and/or nonfinancial public enterprises. The environment fosters good arrangements for data sharing among agencies involved in government finance statistics compilation and dissemination.

I. National Accounts

0. Prerequisites of quality

0.1 Legal and institutional environment

0.1.1 The responsibility for collecting, processing, and disseminating statistics is clearly specified

The national accounts are compiled by the CBN on the basis of its Organic Law 371 of March 2001, which authorizes it to collect information for statistical and macroeconomic analysis purposes:

  • Article 60. Offices or units of the Central Government and municipal governments, as well as governmental credit institutions, are obliged to submit to the Central Bank such reports as the latter may request in the discharge of its duties. Likewise, the banks and any physical or juridical person with residence or domicile in Nicaraguan territory, whether a national or foreigner, are obligated to supply the Central Bank with statistical information requested by it in the discharge of the duties conferred upon it by Law. This information must be used solely and exclusively for the purpose of macroeconomic statistics and analysis.

Article 26/11 requires the President of the CBN to submit an annual report to the National Assembly. A section ofthat report is devoted to analyzing the behavior of the Nicaraguan economy, and is based primarily on data from the national accounts.

While the law gives the Bank broad powers to request information, it does not explicitly assign it the responsibility of compiling and disseminating the national accounts.

0.1.2 Data sharing and coordination among data-producing agencies are adequate

The Interagency Commission, which includes the main institutions producing statistics, is responsible for coordinating the work of the National Statistical System (NSS).

In practice, one of the main mechanisms used to facilitate coordination with other entities in the production of statistics, at least at the technical level, consists of the working committees that are set up for each survey and census. This mechanism has produced a better understanding of the statistical needs of the main institutions, and has made it possible to avoid duplication of effort and to take proper account of the implied burden on reporters, by examining carefully the corresponding questionnaires, for example.

These committees constitute mechanisms that facilitate consistency both for the methods used in producing statistics, and for the results. INEC and the Agriculture and Forestry Ministry (MAGFOR) as well as other ministries enlist the CBN as a technical partner. For example, the coordinator of the agriculture sector in the National Accounts Department of the CBN was a member of the technical committee for the Agricultural Census, and ofthat for the surveys of staple grains production prepared jointly with the INEC and the MAGFOR, respectively. The CBN’s household statistical expert is a member of the technical committee for the Living Standards Survey and for the employment survey conducted by the INEC. The CBN’s manager of censuses and surveys is a member of the technical committee for the Population and Housing Census, which the INEC will be conducting in 2005.

0.1.3 Individual reporters ' data are to be kept confidential and used for statistical purposes only

The Bank protects the confidentiality of data provided by reporters. Its organic law provides:

  • Article 61. The directors, officers, and employees of the Central Bank are obliged to safeguard the confidentiality of information, documents, and operations that they have knowledge of by virtue of their positions. Any violation of the confidentiality obligation enshrined herein will be sanctioned in accordance with the by-laws of the Bank, without prejudice to any punitive sanctions that may be applicable under criminal law.

The survey documentation advises reporters of their rights and obligations with respect to providing information, and they are informed that the data they provide will be used for statistical purposes. In all cases reference is made to the CBN Organic Law, Articles 60 and 61.

As well, procedures have been established to prevent the disclosure of information on individual reporters. Among other provisions, the Internal Personnel Regulations of the CBN provide penalties for any person who discloses confidential data:

  • Article 56. All digital information that the Bank provides to staff for the performance of their functions is confidential and may not be disclosed even after termination of the employment relationship.

Any employee who violates this article is subject to punishment in accordance with Article 61 of the CBN organic law, with respect to banking secrecy, and under ordinary criminal legislation.

Access to individual data is restricted to staff who require that information in the course of their work, and special aggregation rules have been adopted to prevent residual disclosure when aggregations from surveys or other confidential data are published.

Confidentiality is respected in the dissemination of data from the national accounts, since the statistics from individual records are aggregated by economic activity, institutional sector, and product group. Before they are disseminated, all data are examined to ensure against indirect disclosure of confidential data in tables and accounts. Confidentiality of survey data is appropriately guarded during storage: the returned forms are kept in a restricted-access warehouse. All hardcopy records are destroyed by incineration after five years, and a notation of this procedure is kept in the respective offices of the institution.

0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response

As noted above, Article 60 of the CBN’s organic law makes it mandatory to provide the Bank with the data it requests “in the discharge of its duties.” The law also establishes penalties for failure to observe the reporting requirements (including misreporting), and stipulates that anyone who refuses to provide information, “or who provides false or incomplete information, will be penalized by a fine of one thousand to ten thousand córdobas for each occurrence, which will be imposed payable to the National Treasury Directorate General of Revenues, at the request of the Central Bank.” However, there are no regulations for applying the penalties established in that law. Moreover, because the fine is set in nominal terms, its real value has been eroded by inflation.

The Bank encourages cooperation by trying to deal with respondents’ complaints, indicating the purpose of the data collection, reducing response burden as far as possible, and providing information on the importance of good quality statistics. Any information request from a respondent is processed and answered by the appropriate CBN office.

0.2 Resources

0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs

The National Accounts Department has a professional staff of 18 persons for compiling the accounts, and one secretary. The academic qualifications of the staff are sound. All have at least a bachelor’s degree, mainly in economics, eight have done postgraduate studies, and seven have master’s degrees. Staffing levels are in principle adequate for the present coverage of the national accounts. However, data from the latest annual surveys have not been released, nor have definitive national accounts data generated from the revisions of the preliminary estimates based on those surveys. In fact, implementing the institutional sector accounts of the 1993 SNA will require resources much greater than those budgeted. Moreover, the planned change of base year from 1994 to 2005 will require additional staff. Staff turnover is low, and salary levels are competitive with public administration conditions in the country.

Computing resources are in general adequate and are used efficiently. Every employee has a computer, most of them Pentium IV. However, few have e-mail, and only the department head has Internet access. The department works with Office 2003, Office 2000 and SAS. SPSS is used for processing data from the annual surveys. The two available printers are sufficient to meet requirements.

Physical facilities, as well as office furnishings and equipment, are adequate to perform the required tasks. The offices have adequate heating and air-conditioning facilities.

Given resource constraints and the high cost of systematized survey processing, the CBN allocates its resources in the most efficient manner in order to guarantee the minimum quality and quantity of statistical information needed for compiling the national accounts.

Budgeting practices provide clear information to financing authorities: the budget is allocated on the basis of an annual work plan that contains detailed activities for each unit during the year. The funding horizon is also amenable to planning for statistical developments. The 2005 budget was based on a programming schedule for the main statistical activities to be pursued over the next three years, and these are part of the 2005–2007 strategic plan.

0.2.2 Measures to ensure efficient use of resources are implemented

The work plan and budget performance are evaluated every three months simultaneously, since budget allocation is done on the basis of the work plan. This evaluation is done at the level of managers, deputy managers, and department heads. Staff performance is evaluated periodically: this is done directly by the department head, in discussion with his staff.

When necessary, the CBN seeks outside expert assistance. An expert was hired in 2004 to evaluate statistical methodologies and survey data compilation systems with a view to designing a more efficient and effective alternative system for each of the stages of collecting, generating and processing monthly and quarterly survey data. The expert also conducted a thorough review of the contents of the survey forms in order to achieve greater integration among them and to reduce the response burden.

0.3 Relevance

0.3.1 The relevance and practical utility of existing statistics in meeting users’ needs are monitored

Although there is no formal mechanism for systematic consultations with users on the relevance of its statistics, the Bank receives specific demands through various means. It receives comments by e-mail at the address provided for users at the Bank’s Internet site, and these are passed on to the appropriate units. The methodological notes on indicators, which are published at the same site, provide the name and telephone number of a contact person in each case. Staff of the National Accounts Department maintain good contact with the principal users in both the public and private sectors. They also consult the opinion of interested institutions when planning new surveys and censuses. INEC conducted a survey in 2003 to determine the statistical needs of the major public sector institutions. The Coordinating Committee of the SEN has met to implement a strategy for national statistics development that will meet users’ major demands.

0.4 Other quality management

0.4.1 Processes are in place to focus on quality

Management is sensitive to all dimensions of data quality, and enhancing the quality and timeliness of publications is one of the explicit institutional objectives in the CBN’s strategic plan.

Although there is no permanent program for quality control of statistical products, when there is a need to improve the quality in a specific area of statistics, the CBN turns to outside technical expert assistance.

0.4.2 Processes are in place to monitor the quality of the statistical program

For the national accounts, the dissemination and revision cycle itself constitutes an adequate procedure for monitoring quality in terms of the factors explaining discrepancies between preliminary and revised estimates. This allows steps to be taken to reduce those discrepancies when feasible. Although the revision cycle is not regularly completed, a final consumption module was included in the 2003 employment survey to provide an annual indicator of this variable. This would assist in constructing a final consumption series that would include years in which there is no survey of household incomes and expenditures or no living standard surveys, within which one of the main variables studied is final consumption.

0.4.3 Processes are in place to deal with quality considerations in planning the statistical program

Quality issues must be taken into account in the planning process for the national accounts work program. These include quality improvements identified during the revision cycle and new data needs reported by users.

During 2004 the monthly and quarterly survey forms were redesigned to reduce the response burden for businesses and to provide information of better quality and timeliness.

1. Assurances of Integrity

1.1 Professionalism

1.1.1 Statistics are produced on an impartial basis

Article 1 of the CBN’s organic law describes the institution as “a Decentralized Central Government Entity, which is technical in nature, of unlimited duration, and has juridical personality, its own capital, and full authority to acquire rights and incur liabilities, with respect to those transactions and contracts that are necessary to accomplish its purposes and duties as established by this Law.”

Recruitment and promotion are based on professional aptitude or expertise. Vacant positions are open to all staff. Interested staff members apply for these positions, and the most suitable candidate is selected to assume a position of greater responsibility, in accordance with the technical requirements of each position. Contract hiring take into account professional profiles for specific jobs.

Staff are encouraged to attend seminars and pursue professional training. CBN members attend annual meetings of national accounts experts hosted by the Economic Commission for Latin America (ECLAC) as well as regional meetings organized by the Central American Monetary Council (CMCA). Staff also participate in courses sponsored by CEMLA (Center for Latin American Monetary Studies) and CESD (the European Center for Statistics Training for Developing Countries) in Madrid, among others.

Staff are encouraged to conduct research projects. For example, a study on agro-industrial production chains was undertaken to guarantee internal consistency in the supply and use table. Staff also prepare analytical text boxes relating to national accounts topics for publication in the CBN’s annual report.

1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations

The choice of source data, whether from surveys or administrative records, and the selection of statistical techniques are based solely on measurement objectives and the resulting data requirements. Cost considerations may sometimes determine the selection of sources and methods as well. Decisions to disseminate data are based on technical and cost considerations.

1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics

The CBN seeks to prevent misinterpretation or misuse of its statistics by providing explanatory materials and publishing press releases. In addition, training seminars have been held for journalists to reduce possible errors in interpreting the statistics produced by the CBN. The Bank monitors media coverage of its data closely. If any serious misinterpretation should appear in the media, an explanatory note is sent out.

1.2 Transparency

1.2.1 The terms and conditions under which statistics are collected, processed, and disseminated are available to the public

The CBN’s organic law is published on the Bank’s web page. That site contains information on the terms and conditions under which statistical series are compiled and disseminated. Survey questionnaires advise respondents of those conditions, including the legal obligation to provide the information requested, and the confidential nature ofthat information.

1.2.2 Internal governmental access to statistics prior to their release is publicly identified

There is no governmental access to the statistics before they are released to the public.

1.2.3 Products of statistical agencies/units are clearly identified as such

Data released to the public are clearly identified as the CBN’s product: every publication of the institution carries the logo and the name of the CBN. In the case of joint publications with INEC and other institutions, the institutions involved in the publication are identified.

1.2.4 Advance notice is given of major changes in methodology, source data, and statistical techniques

The CBN gives advance notice to the public when major changes are introduced. For example, this was done for the change of base year in the national accounts and adoption of 1993 SNA. Prior to presentation of the new series of national accounts (produced in May 2003), the annual report for 2002 published a text box on the methodology for the 1994-base national accounts and a table summarizing the major methodological differences between 1980-base GDP and 1994-base GDP.

1.3 Ethical standards

1.3.1 Guidelines for staff behavior are in place and are well known to the staff

Chapter 8, Article 77 (i) and (j) of the Internal Personnel Regulations of the CBN requires staff:

  • (i) To safeguard the confidentiality of information, documents, and operations that they have knowledge of by virtue of their positions (Article 61 of the Organic Law of the CBN).

  • (j) Consequently, any employee who discloses information on Bank activities of which he becomes aware through his duties or otherwise is subject to the sanctions established in Article 171 (4 and 7, final part) of the Comptroller General Act (administrative sanctions), without prejudice to any applicable criminal penalties.

No Bank employee is authorized to alter or change any information received from a respondent, if this results in an improper interpretation of the data.

All new permanent staff are given a copy of the internal regulations (which are also published on the Internet). Among the first points of guidance that a person receives upon joining the National Accounts Department is the need to respect the proper use of confidential information, with the emphasis on statistical secrecy, as well as the importance of the work that person will be doing, and the possible consequences of an unintentional error in the macroeconomic figures.

2. Methodological soundness

2.1 Concepts and definitions

2.1.1 The overall structure in terms of concepts and definitions follows internationally accepted standards, guidelines, or good practices

The Bank undertook a project to update the base period for its national accounts and to implement the 1993 SNA in stages. The concepts, definitions and classifications used to compile the new series are broadly consistent with the guidelines of the 1993 SNA, with exceptions that are due more to lack of data than to conceptual considerations.

Deviations from the above concepts and definitions are kept under review (see also Section 5.2.1).

2.2 Scope

2.2.1 The scope is broadly consistent with internationally accepted standards, guidelines, or good practices

The 1993 SNA tables and accounts that the ISWGNA1 determined as minimum requirements for its implementation, as listed below, are compiled on a regular basis:

  • — annual value added and GDP at current and constant prices by activity;

  • — annual expenditures of GDP at current and constant prices;

  • — annual value added components at current prices by activity;

  • — sequence of accounts for the total economy (up to financial accounts) with an annual frequency;

  • — annual rest of the world accounts (until net lending).

Annual supply and use tables are also compiled.

Quarterly output estimates are being prepared, but they are at the review stage. Quarterly GDP is being estimated, but still not disseminated, for both the production and expenditure approaches, although the first of these is more advanced. The recommendations in the IMF’s Manual of Quarterly National Accounts are used as the frame of reference.

The delimitation of the constituent units of the economy is in accordance with the 1993 SNA. Own-account production of all goods for own final consumption, and output of goods for own-account fixed capital formation, are included in the production boundary. Nicaragua’s embassies abroad and the free zone are included as part of the economy. Workers who work part of the year in another country are included as members of resident households, although their incomes cannot be measured for practical reasons.

Nevertheless, and as a deviation from the 1993 SNA guidelines, the following are not included: production of entertainment, literary, or artistic originals; production of computer software; illegal output sold to willing buyers.

The assets boundary is broadly in accordance with the 1993 SNA. In particular, the following assets are included:2 Among tangible assets, defense related assets that could be used for civilian purposes and agricultural work-in-progress. On the other hand, valuables and historical monuments are excluded. Among intangible assets, computer systems and programs purchased on the market are partially included, but those produced in-house are excluded. Also excluded are: mineral exploration (whether successful or not); entertainment, literary or artistic originals; patented entities; and leases and other transferable contracts.

Deviations from the above scope are kept under review (see also 5.2.1).

2.3 Classification/sectorization

2.3.1 Classification/sectorization systems used are broadly consistent with internationally accepted standards, guidelines, or good practices

The 1993 SNA is followed to classify institutional units and transactions.

For compiling the national accounts of Nicaragua, a national classifier of activities and products, known as CNIC, was prepared. The classification of activities is consistent with the International Standard Industrial Classification of All Economic Activities (ISIC rev.3), while the classification of products is consistent with the Central Product Classification (CPC). A national version of the Classification of Individual Consumption by Purpose (COICOP) is used for household consumption, and the Classification of the Functions of Government (COFOG) is used for those activities.

Deviations from the above classifications/sectorizations are kept under review (see also 5.2.1).

In addition to the foregoing, the Nicaraguan national accounts also make use of the Central American Customs System (SAC) and the Classification by Economic Use and Destination (CUODE) for international transactions.

2.4 Basis for recording

2.4.1 Market prices are used to value flows and stocks

The valuation rules used for recording flows and stocks are in accordance with the 1993 SNA.

Market output is valued preferably at basic prices. Output for own use is valued at equivalent market prices. If not deductible, sales and excise taxes are included in the valuation of intermediate consumption. The value added tax, excluding the deductible part, is included in the valuation of intermediate consumption. The same applies to the valuation of final uses, from which the deductible part of the value added tax is excluded.

Corrections are made when transfer prices are detected, which occurs, for example, in the sugarcane industry. Where there is vertical integration, the sugarcane transferred to the refinery is valued at the price paid to independent producers (market price).

Exports are valued FOB and imports CIF, in the accounts for goods and services, but total imports are valued at FOB prices. Exports and imports are valued in córdobas using the daily exchange rate according to the date of the policy or the transaction. Transactions in foreign currency are converted using the mid-point exchange rate prevailing in the market at the moment they take place.

Deviations from the above valuation are kept under review (see 5.2.1).

2.4.2 Recording is done on an accrual basis

Transactions and flows are recorded on an accrual basis, except for government output, which is generally recorded on a cash basis.

Deviations from the above accrual accounting are kept under review (see 5.2.1).

2.4.3 Grossing/netting procedures are broadly consistent with internationally accepted standards, guidelines, or good practices

Transactions between establishments within the same enterprise are recorded on a gross basis. Aggregates such as domestic product, capital formation, disposable income and savings are recorded only in gross terms, because fixed capital consumption is not estimated.

3. Accuracy and reliability

3.1. Source data

3.1.1. Source data are collected from comprehensive data collection programs that take into account country-specific conditions

The data collection programs employed to compile the national accounts statistics are generally adequate. The CBN has created a National Statistics Executive Coordination Office, which conducts a broad series of surveys for producing the basic statistics required to generate the national accounts, economic indicators, and other Bank products. The data sources of the data collection program are broadly sufficient to compile a major portion of the production accounts and of the supply and use table for the national accounts. The Executive Coordination Office surveys a broad selection of establishments on a monthly, quarterly and annual basis. These surveys include economic surveys of activities such as manufacturing, construction, trade and others, with varying periodicity. Output and costs of selected agricultural products are obtained from surveys conducted jointly with MAGFOR.

A Business Directory provides the sample frame for surveys of establishments. The Business Directory is updated every five or six years. In periods between censuses, information is provided from administrative records of the institutions that authorize the opening of new establishments, such as municipal governments and revenue/income administration offices that exist throughout the country. A census will be conducted in 2006 to update the Directory. The sampling techniques used are adequate. Sample design ensures that the population in scope is represented properly. Establishments are stratified by industry to the 4-digit ISIC level, and by size. Sample selections are assessed regularly, and at the end of each survey the variance of the most important variables is examined and sample sizes are recalculated to meet the required levels of confidence and margins of error. Population benchmarks and weights used in the estimation process are also reviewed and updated periodically: this applies principally to the gross value of output and personnel employed, which are used to form homogeneous groups and strata within each group. Survey questionnaires are reviewed with users and are field tested to determine whether the wording of the questions adequately covers the concepts of interest. The enumerators and their interview methods are supervised, as well as respondents’ answers. The survey framework supports supplementary data collection to provide information on the relevant variables for each establishment. Data collected are sufficiently detailed to estimate, in particular, the gross value of output, intermediate consumption, fixed capital formation, and changes in inventories.

A number of household surveys are conducted. The survey of household incomes and expenditures is performed roughly every five years. The last was done in 1999, and the next is scheduled for 2006. The survey covers 17 departmental capitals. It is conducted by the CBN. Results from the household living standards survey are available for the years 1993, 1998, and 2001, and the next survey will be conducted in 2005. The survey is nationally representative and is conducted by the INEC. There is also an employment survey covering urban and rural households. The INEC conducts this survey jointly with CBN and the Labor Ministry (MITRAB).

The CBN investigates the so-called informal sector by means of a survey of microenterprises with one to three employees. Given the high cost of the survey, it is scheduled every three years. It would be useful to investigate informal activities, the number of workers defined as informal and their incomes through the living standards survey as well, since this is a nationally representative household survey and would cover the rest of the urban area not included in the other household survey.

Government finance statistics are available to estimate output, intermediate consumption, and government fixed capital formation. In the national accounts, final consumption expenditure of general government is estimated via production costs, without subtracting the value of services sold. The data are derived from budget expenditure reports and financial statements for each year. Capital projects are purged of components that must be recorded as current expenditure, for example any training expenses that a project may call for. The data are recorded on a cash basis, but they are not adjusted to move to an accrual basis.

Various price indices are constructed for deflating current price aggregates, and to move from a volume estimate to a current price estimate. These indices include those for consumer prices, agricultural prices, industrial prices, construction material prices, and others. Price statistics are generally consistent with the variables being deflated in terms of price concept, coverage, and reference period. Foreign trade volume variables are estimated with unit values instead of prices, and this is done also for highly heterogeneous tariff lines such as machinery and equipment. Because most of these products are imported from just a few countries, it would be useful to construct weighted price indices using producer price indices for those headings from the main source countries.

The tables A to D below list the main sources of data used for estimating GDP from the production and the expenditure approaches.

Table A.

Summary of Sources and Techniques Used to Derive Estimates of Value Added by Type of Activity

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Table B.

Summary of Sources and Techniques Used to Derive Estimates by Type of Expenditure

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Table C.

Summary of Sources and Techniques for Deriving Quarterly Estimates of Value Added by Type of Activity

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Table D.

Quarterly Estimates by Type of Expenditure

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3.1.2 Source data reasonably approximate the definitions, scope, classifications, valuation, and time of recording required

Source data are broadly consistent with the definitions, scope, and classifications of the national accounts statistics. Most source data are also consistent with the time of recording, reference periods, and valuation of national accounts statistics. Although roughly 80 percent of businesses, and particularly the largest ones, observe a fiscal year that runs from July 1 to June 30, when they close their books, the business establishment surveys investigate transactions on a calendar year basis. General government transactions are recorded on a cash rather than on an accrual basis.

3.1.3 Source data are timely

Data collection and processing timetables are adequate to meet timeliness and periodicity for disseminating the national accounts statistics. However, because businesses close their books at the end of the fiscal year in June, with three months’ grace, this means that information from one year is available in many cases only until September of the following year. For this reason, and others having to do with the need to complete and disseminate the new series of national accounts for 1994–2000, which was done in 2003, preliminary estimates were published for the years 2001 to 2003, based primarily on the use of short-term monthly indicators, the most important of which was the IMAE (Monthly Index of Economic Activity). This meant the excessive use of coefficients and ratios more than five years old. Preliminary statistics have been published since 2000. This situation will be partially resolved when survey data to 2002 are incorporated into the CBN annual report in March 2005. Data in the Annual Report are final.

3.2 Assessment of source data

3.2.1 Source data—including censuses, sample surveys, and administrative records—are routinely assessed, e.g., for coverage, sample error, response error, and nonsampling error, the results of the assessments are monitored and made available to guide statistical processes

To keep sampling errors to an acceptable minimum the CBN ensures that the size of the sample is adequate, that selection is probabilistic, and that the interview is conducted with sampling units selected in accordance with the sample frame. In the case of nonsampling errors, the process for collecting field data is reviewed as the work proceeds, and the final results are assessed.

Outliers and other atypical differences in periodic responses from individual survey units are examined. Extreme values are confirmed with respondents, and records maintained on the confirmation: any unit that provides atypical data is visited a second time to confirm their validity. Before calculating the sample, any confirmed extreme values - maximum and minimum - are analyzed to ensure adequate sample size.

Temporal consistency, and consistency with other related source data, is analyzed to correct for underreporting or misreporting.

All secondary information sources are reviewed and evaluated each year, including government finance statistics, merchandise trade statistics, volume and price statistics, and other secondary sources used to compile national accounts statistics.

The tables provided below indicate the main sources of data used to generate GDP estimates from the production and expenditure approaches, at current and constant prices.

3.3 Statistical techniques

The following section describes the main sources of data used and the techniques applied for each component of GDP estimates both by production and by expenditure at current and constant prices. It also describes how the supply and use table (“SUT”, Spanish COU) is used to achieve consistency for the main aggregates. Tables A and B summarize the sources and methods for estimating annual GDP from the production and expenditure approaches. Tables C and D provide a similar summary for quarterly GDP.

The SUT contains a great volume of information. Once the various databases, corporate financial statements and government budget reports are received, the information is critically reviewed and processed to compile the production and primary income generation accounts for 84 economic activities, specifying principal and secondary production.

Next, supply and use analyses are performed for 150 product groups, using as the main input the results of the production account from the previous step. At this stage, for calculating constant values, price indices (producer, final consumer, export, import prices) and volume indices are used to deflate or retrapolate the nominal series.

Once the production accounts and balances are completed, the SUT is prepared: the first version usually has discrepancies that are eliminated, primarily in the intermediate use quadrant.

In principle, the information contained in the balances is accepted, given the comparative advantage of the disaggregation with which they are prepared. Only after a careful and exhaustive analysis of each of the elements that make up the balance will any modification be made to eliminate the discrepancies detected.

The major discrepancies are identified and the structure of the balances is again reviewed, in order to identify any possible inconsistency in preparing the balance or the production account, in particular those relating to homogeneous products.

Figures are identified and assigned to the fixed boxes, which are those where the destination of output for a specific product is known with certainty. For example, crude oil, unhusked rice and sugarcane are inputs to the oil refining, white rice, and sugar refining industries respectively. The total value of intermediate consumption is taken from administrative records for some activities, such as electricity, water, financial intermediation and public administration. Thus, intermediate consumption is not adjusted during the process of balancing the supply and use tables.

Once the major discrepancies have been eliminated, the remaining ones are distributed proportionately using a modified RAS method.

3.3.1 Data compilation employs sound statistical techniques to deal with data sources

Data compilation procedures are generally sound and seek to minimize processing errors such as coding, editing, and tabulation errors.

Adjustments to unit records are made only when clearly warranted, for which purpose historic information is compared with secondary or indirect data. Imputation for nonresponse is based wherever possible on data for establishments from the same ISIC group. For some major businesses, an attempt is made to persuade the respondent to provide information at least on certain relevant variables.

In order to adjust data for missing observations in statistical collections, the CBN uses trends and historic data and in other cases it characterizes the units that present this problem and then examines a subsample of units with characteristics similar to those that have not responded.

Based on the experience acquired in this field, in ISIC activities where there is a high nonresponse rate the field sample is normally increased by an additional percentage beyond that statistically required for a given sample error.

Adjustments for undercoverage in the surveys follow appropriate guidelines. For example, in the case of the cattle industry, the annual survey covers all industrial slaughterhouses but not the municipal slaughtering that is done in rural areas, for which an output adjustment is made based on municipal slaughtering statistics from the Agriculture and Forestry Ministry (MAGFOR). Grossing-up factors are derived scientifically, based on sample design.

3.3.2 Other statistical procedures (e.g., data adjustments and transformations, and statistical analysis) also employ sound statistical techniques

Production approach procedures

Output accounts are constructed for 84 economic activities, primarily from survey data, administrative records and financial statements.

The balances on the supply and use accounts by product are done for 150 product groups at the most detailed level, but in the SUT they are aggregated into 37 product groups, and the same is done with the 84 output accounts.

The annual surveys provide relatively detailed information on the output of the main products generated and on intermediate consumption of the principal inputs, which can be used to estimate the production accounts and a significant portion of intermediate transactions for the table on use of goods and services, at current prices. However, the survey’s results have not been incorporated since the publication of the new series, which primarily rely on the short-term volume and price indices that are used, to generate estimates at current prices by extrapolation (see details in Table A on sources and methods for the production approach). As noted separately, data from the 2001 and 2002 surveys are incorporated into the national accounts data that will be published, as preliminary estimates, in March 2005.

Proper techniques are used to address specific issues of GDP compilation. An exception comes with estimation of the volume of taxes on products, which is obtained by deflating the current values of those taxes by price indices for the products traded. Although the implicit volume index comes fairly close to the volume of products subject to tax, it will change when tax rates are modified or when there is a shift in the number and relative importance of tax-exempt products.

Expenditure approach procedures

Details can be found in Table B, which describes sources and methods for the expenditure approach.

Expenditure components are derived independently, with some exceptions. As noted below, household consumption expenditure is estimated annually by extrapolating the vector estimated for 1999 on the basis ofthat year’s household income and expenditure survey and the 1998 living standards survey. However, the results are reconciled with the household surveys for the years in which the respective databases are available. With respect to the change in inventories, estimates for most of these are available from 2001. Expenditure estimates are compiled using detailed classifications. Gross fixed capital formation is compiled by type of assets (products) but is not classified by activities. Changes in inventories are compiled for the most part by activities and type of inventories, since the 2001 annual surveys. A portion of inventories is estimated as a residual. Expenditure compilation techniques are generally appropriate. An exception is the estimate of government consumption expenditure, which is obtained without excluding incidental sales from cost-measured output.

The reference period for the accounts is 1994. Given the excessive reliance on the fixed coefficients and relationships between variables that are more than five years old, a process has been launched to update the reference period to 2005; for example, the business survey is being used to obtain more up-to-date distribution margins.

Although the quarterly GDP estimate is still in process and its initial results are being reviewed, Tables C and D present details on data sources and methods applied for generating the estimates. To combine annual with quarterly estimates, the Denton technique is used. Because of the quantity of definitive annual data in the series, Excel is used to work out the matrix for this technique. With the inclusion of new annual data in the series, consideration is being given to using the Denton module in the STATA program. The quarterly series are derived from seasonally unadjusted source data, thus providing unadjusted series that are now being revised. The gross data series have not yet been seasonally adjusted.

3.4 Assessment and validation of intermediate data and statistical outputs

Intermediate results and statistical outputs are regularly assessed and validated.

3.4.1 Intermediate results are validated against other information where applicable

The data compiled from the main sources used to compile national accounts statistics are checked against other independent data sources. Thus, for example:

Data from the annual survey of the timber sector are compared with those from the National Forestry Institute; those from the annual survey of the Esso refinery are compared with information on crude oil imports and derivatives from the Customs Directorate, and data from the annual survey of the meat industry are reconciled with data from the Agriculture and Forestry Ministry.

3.4.2 Statistical discrepancies in intermediate data are assessed and investigated

A systematic procedure exists to routinely assess the potential discrepancies in survey-generated data and take steps to eliminate them. There are three different groups that undertake critical review and reconciliation of the information provided by firms at various points in the process, comparing the data with those from other firms in the same industry and with the data provided by each of them in previous years. When problems of consistency (discrepancies) are identified in the data supplied, the source is queried directly and asked to correct them.

3.4.3 Statistical discrepancies and other potential indicators of problems in statistical outputs are investigated

As noted in Section 3.3.1, the SUT is used as a framework to investigate discrepancies and make the statistical outputs consistent: discrepancies between supply and use are eliminated during the consistency analysis process.

Whenever another institution publishes unofficial statistical information on a topic, it is validated against the official data, and an attempt is made to explain any differences.

3.5 Revision studies

Revisions, as a gauge of reliability, are tracked and mined for the information they may provide.

3.5.1 Studies and analyses of revisions are carried out routinely and used internally to inform statistical processes (see also 4.3.3)

Upon adoption of the new base year 1994 for the national accounts, a series for 1994–2000 was published, with preliminary data for 2000. In addition, data covering the period 2001–2003 have been published. Given the short time that has elapsed since publication of the new series, no revision studies have been undertaken.

No documentation has been prepared to analyze the causes of variations in the data published in March of each year, when the revised data are released in July. This will make it difficult to perform proper revision studies in the future, the results of which might be used to improve the first and the preliminary estimate and to refine the data compilation programs for subsequent periods, by examining whether there are systematic biases in the differences generated over time between the preliminary and the revised estimates. If this were the case, adjustments could be made beforehand when doing the first and the preliminary estimates, so that the adjustment to be made in the revised estimate will be lesser.

4. Serviceability

4.1 Periodicity and timeliness

4.1.1 Periodicity follows dissemination standards

GDP estimates are disseminated annually, consistent with the IMF’s General Data Dissemination Standard (GDDS).

4.1.2 Timeliness follows dissemination standards

The GDP estimates are disseminated seven months after the end of reference year, which is consistent with the GDDS.

4.2 Consistency

4.2.1 Statistics are consistent within the dataset

i. The statistical series are internally consistent.

A set of consistent GDP estimates by activity and expenditure components is derived from the supply and use framework at current prices for the previous year, and at constant prices for the base year 1994. By using the SUT tables as a framework for consistency and making the required adjustments to arrive at balanced tables, consistency is assured at current and constant prices for GDP measured by the production and the expenditure approaches. The growth rates obtained from the GDP series by activity and the GDP series by expenditure categories are identical. Aggregate supply of goods and services coincides with the figures on aggregate use, because they are not derived independently. GDP estimates at current prices, volume measures, and (implicit) deflators are consistent within the “value = volume × price” framework.

The quarterly GDP estimates that are now being prepared are based on the same conceptual framework as the annual accounts, and consequently the same concepts, definitions, and classifications are applied to them. A Denton-type method will be used to combine the annual and quarterly data into a single, consistent series.

4.2.2 Statistics are consistent or reconcilable over a reasonable period of time

No attempt has been made to reconstruct a longer time series, because of the particular dovetailing difficulties involved, recognizing that GDP for the new series is roughly 70 percent greater than that in the previous series for the base year 1994, and that the better coverage of the new series has variable effects on GDP components. As well, the Department is giving greater priority to improving the quality of estimates using annual economic surveys, changing the base year to 2005, and implementing the institutional sector accounts in stages.

4.2.3 Statistics are consistent or reconcilable with those obtained through other data sources or statistical frameworks

The national accounts statistics can be reconciled with government finance statistics, balance of payments and other statistical frameworks. With the balance of payments, consistency is assured by the fact that the two statistical frameworks use the same data sources and whenever adjustment is needed the problem is analyzed in common and the solution adopted is applied to both frameworks. However, national accounts have been adjusting data for informal trade in tobacco that is not included in balance of payments. This discrepancies are not explained in balance of payments publications. While there is consistency, however, the gaps in the coverage for transactions with the rest of the world affect both frameworks: for example, neither the balance of payments nor the national accounts include income earned by Nicaraguan residents who work part of the year abroad. In the case of government finance statistics, differences stem from the fact that there is less coverage of public institutions, primarily because of timing problems with the information that those institutions provide for fiscal programming.

4.3 Revision policy and practice

4.3.1 Revisions follow a regular and transparent schedule

The programmed revision cycle includes the release each March of a first set of accounts, referred to as “estimates.” The estimates are revised at mid-year with additional data, primarily on agriculture and on government, on the basis of which new estimates are released in July, and are called the “preliminary” figures. These figures are again revised with data from the annual surveys. The set of accounts thus estimated is published two years after the close of the reference year, as “final” figures. However, in the currently published series, revisions apply only to the “estimates” data, since final data have been published up to 1999. As already noted, revised estimates will be published in March 2005, based on data from the annual surveys for 2001 and 2002: these will still be “preliminary,” as will those for 2003, and the data for 2004 will be “estimates.”

The data from the annual surveys are obtained very late because many firms close their books on a fiscal year basis (which in Nicaragua runs from July of one year to June of the next). This delays the delivery of information from financial statements and responses to the annual survey questionnaires. Roughly 80 percent of businesses, and in particular the bigger ones, keep their books on a fiscal year basis.

No documentation has been prepared on revisions, such as might explain to the public the reasons underlying the revisions, or could be used for future studies of revisions.

4.3.2 Preliminary and/or revised data are clearly identified

At the time of data dissemination, users are informed whether the data are preliminary. In the case of tables, this is indicated by the letter “p,” in a footnote or a heading.

4.3.3 Studies and analyses of revisions are made public (see also 3.5.1)

The data published in March are revised and released in July without any analysis of the differences between them and the reasons underlying those differences. Final revisions have notyetbeen published (see sections 3.5.1 and 4.3.1).

5. Accessibility

5.1 Data accessibility

5.1.1 Statistics are presented in a way that facilitates proper interpretation and meaningful comparisons (layout and clarity of text, tables, and charts)

National accounts data are published in the CBN’s Annual Report in a clear manner, and charts and tables are disseminated with the data to facilitate the analysis. The level of aggregation with which they are published in that report is high. The new series published with base year 1994 contains very detailed data on the national accounts. It has been released in printed form and is also available on the website.

5.1.2 Dissemination media and format are adequate

The estimated data are published in the Bank’s Annual Report in March of each year, and the preliminary data are contained in the publication “Economic Indicators.” Both documents are also posted on the Bank’s website. A 1994–2000 series was included in the System of National Accounts for Nicaragua with base year 1994, which was produced in printed form and is available at the CBN website.

Recent data and longer time series can be consulted free of charge at the website and in printed publications available in the Bank’s library.

5.1.3 Statistics are released on a preannounced schedule

The public is not informed in advance of the dates the statistics are to be released, although there is an internal calendar.

5.1.4 Statistics are made available to all users at the same time

The statistics are made available to all interested users simultaneously via the Internet. Users outside the CBN have no access to the data until they are released to the President of Nicaragua by the President of the Bank in his annual report, or via the Internet.

5.1.5 Statistics not routinely disseminated are made available upon request

In addition to the statistics routinely disseminated, other general statistics are made available upon request, but this possibility has not been publicly announced.

5.2 Metadata accessibility

5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available, and differences from internationally accepted standards, guidelines, or good practices are annotated

With the release of a new series of national accounts, a document entitled National Accounts System of Nicaragua, Base Year 1994 was published in May 2003. It describes the concepts, definitions and classifications for the national accounts, as well as the data sources used and the statistical techniques applied. Metadata have been prepared for inclusion on the IMF website upon Nicaragua’s joining the GDDS.

Although methodological documents have been published with different levels of detail and aimed at users with varying degrees of education, no comprehensive document on sources and methods has been prepared, either for the department’s own purposes or for consultation by Bank staff and specialized users.

The methodologies disclosed cover a portion of the requirements, but those not included could be of particular interest to specialized users.

5.2.2 Levels of detail are adapted to the needs of the intended audience

The methodologies disclosed in publications and on the Internet cover both general and relatively specialized topics, thus meeting the needs of most of the public.

5.3 Assistance to users

5.3.1 Contact points for each subject field are publicized

A contact point for each area is included in the publication “Economic Indicators Methodological Notes 2004.” This is also available at the Bank’s website.

5.3.2 Catalogs of publications, documents, and other services, including information on any charges, are widely available

A list of publications is available at the website and in the Bank’s library. There is no charge for these publications.

Table 1.

Nicaragua: Data Quality Assessment Framework (July 2003): Summary of Results for National Accounts

(Compiling Agency: Central Bank of Nicaragua)

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II. Price Statistics (Consumer Price Index)

0. Prerequisites of quality

0.1 Legal and institutional environment

0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified

The monthly consumer price index (CPI) is compiled by the Central Bank of Nicaragua (CBN) since 2003. The National Institute of Statistics and Censuses (NISC) compiled the CPI up to 2002. This function was transferred to the CBN due to NISC’s budget constraints. At present, operational responsibility for collecting, compiling, and analyzing the CPI lies with the Executive Coordination of National Surveys (ECNS) in the Economic Studies Management (ESM) of the CBN. Analysis of results, methodological improvements, and dissemination lies with the Department of Income and Deflators (DID) of the ESM. No other institution compiles the CPI in Nicaragua.

The CBN Organic Law (No. 317, 03/30/01) does not clearly assign the responsibility for compiling and disseminating the CPI to the CBN. However, Article 60 gives the right to the CBN to collect statistical data for statistical purposes and macroeconomic analysis.

Articles 26 (7) of the CBN Law and 138 (28) of the Political Constitution of Nicaragua (01/18/00) state among the duties of the CBN President to submit to the Board of Directors of the Bank and to the National Assembly an annual report. Article 31 (3) of the CBN Law states, “During the first three months of each year, the Central Bank will submit to the President of the Republic, the Annual Report of the Institution, which will be published, and must include, at minimum, the following points: … (3) Description of the monetary and exchange policy followed by the Bank during the year reported, and a general survey of the economic and financial development of the country.” The CBN has used these articles as legal support for its statistical function.

It should be noted that although the NISC is not currently directly involved in the compilation of the CPI, article 7 of the NISC Law (Decree No. 888, 10/30/81) establishes among the duties of the NISC the centralization of all statistical activities of the governmental entities and other public or mixed entities that produce statistics of national interest. The prospect of the new law of the NISC includes the compilation of the CPI among its functions.

While the legal framework of the CBN and the NISC is being updated to provide a clear mandate to compile and disseminate statistics. Some functions specified for the NISC are rather ambitious and go beyond its current financial capacity, such as the compilation of the CPI. However, the CBN might have a conflict of interest if it continues compiling the CPI and at the same time, implements a policy of inflation targeting. In any case, it would be necessary to provide the NISC with sufficient resources to ensure that the CPI is compiled with adequate quality and timeliness.

0.1.2 Data sharing and coordination among data-producing agencies are adequate

The CBN is self-sufficient in the production of the CPI. All price and source data for weights are collected and tabulated within the CBN. However, the sampling frame (1995 Population Census and cartographic maps of Nicaragua) used to define the household sample of the 1998–1999 National Survey of Household Income and Expenditure (NSHIE) was provided by the NISC to the CBN.

The National Statistical System (NSS) includes the NISC, as a coordinator, all ministries, decentralized public entities, local governments, public enterprises, and other data producing agencies. Article 3 of the NISC Law states that the NSS shall avoid duplicating efforts and ensuring the comparability of statistical information. Article 18 envisages the creation of the Coordination Committee of the NSS and sector committees to ensure proper and efficient coordination of the activities of the NSS. Several sector committees are functioning, such as the committees of external trade, free zones, agriculture, employment, and salary statistics. In addition, the National Strategy of Statistical Development (NSSD) envisages the creation of the National Committee of the NSSD, which includes representatives of the NSS, the civil society, and (nongovernmental organizations, universities, and producers’ committees), international organizations. However, owing to the decentralization of the statistical function among the entities of the NSS, coordination has not been completely effective.

There are no formal data sharing agreements among data producing agencies; therefore, data sharing is based on informal agreements and good relations. There have been efforts to strengthen technical cooperation among data producing agencies in the framework of the revision of the NISC Law, the Coordination Committee of the NSS, the National Committee of the NSSD, and the sector committees.

The National Strategy for Statistical Development (ENDE) is in the works. It includes most of the members of SEN and the civil society. Its purpose is to strengthen and modernize all statistical areas in Nicaragua.

0.1.3 Individual reporters’ data are to be kept confidential and used for statistical purposes only

Article 61 of the CBN Law states, “The directors, officers, and employees of the Central Bank will be obligated to safeguard the confidentiality of the information, documents and operations on which they have knowledge of by virtue of their positions. Any violation of the confidentiality obligation enshrined herein will be sanctioned in accordance with the by-laws of the Bank, without prejudice to any punitive sanctions that may be applicable under criminal law.”

Article 10 of the CBN Personnel Internal Regulations (by-law) states among the causes of contract termination the following: “Proved released of information and reserved or confidential documents, and in general, of any information related with the functions of the Bank, when such employee has not been authorized.” The President of the CBN has the faculty to fire non-complying personnel.

Article 56 of the CBN by-law also establishes the confidentiality of databases: “All digital information supplied by the Bank to the employee for performing his/her duties is confidential and shall not be revealed even after the work relation has concluded.” In addition, Article 77 includes among the obligations and prohibitions of the employee “To keep secrecy/discretion on the information, documents, and operations on which they have knowledge of by virtue of their positions.” Infractions of these standards and sanctions for employees that disregard them are defined in Article 61 of the CBN Law and Article 78 of the CBN by-law.

When conducting the National Survey of Household Income and Expenditure 1998–1999 (NSHIE) for collecting information to update the CPI, respondents were presented with a questionnaire with a section that reads: “According to the Law of Statistics, Decree 102, Article 91 the data provided are strictly confidential and will be only used for statistical purposes.” This survey was conducted jointly by the NISC and the CBN.

Access to confidential data in the CBN is restricted to those employees who require the information in the performance of their duties. CBN personnel compiling the CPI have access to individual source information and are aware of the confidentiality of the data and the penalties imposed by the legal framework. Some institutions have requested the CBN unit records on several retail enterprises, and the CBN has refused to provide these data in accordance with the law. However, when unit records are made available for research purposes, the confidentiality of individual data is protected by making all records anonymous. Special aggregation rules are used to prevent residual disclosure when aggregations of survey or other confidential data are disseminated. The ECNS work procedures for compiling the CPI ensure that data are disseminated only at an aggregated level. Questionnaires, once processed, are archived in the store room of the ECNS. After two years, they are destroyed.

A letter is sent to respondents in order to inform the purpose of the information request and the confidentiality of the data to be provided. Price data are collected by visits to retailers. Respondents are informed on the confidentiality of the information, and that the data will be used for compiling price indices only. Price collectors fill out price surveys with the information obtained from the respondents. Price surveys include the CBN logo, the title “Consumer Price Index.” the name of the supervisor, the name of the collector, and the identification and code of the retailer.

The Information Sub-Management (ISM) of the CBN has implemented a number of security measures to guard against unauthorized access to its statistical databases. Article 66 of the CBN by-law states that “All resources of the internal net have to be protected by passwords or established access lists.” The CBN intranet can only be accessed with an authorized user’s name and password, and different levels of access (user profiles) have been established for the various databases through the Operative System Windows 2003. There are also an external firewall to prohibit access to the CBN intranet and databases, an antispam module, and an antivirus. CPI databases are administered by the ECNS of the CBN.

0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response

Article 60 states that “Offices and units of the Central Government and municipal governments, as well as governmental credit institutions, are obligated to submit to the Central Bank such reports as the latter may request in the discharge of its duties.” Likewise, the banks and any person or enterprise with residence or domicile in Nicaraguan territory, whether a national or foreigner, are obligated to supply the Central Bank with statistical information requested by it in the discharge of the duties conferred upon its by Law. This information must be used solely and exclusively for statistical purposes and macroeconomic analysis. Anyone who fails to comply with the provisions of the preceding paragraph of this article, or who provides false or incomplete information, will be penalized by a fine of one thousand to ten thousand córdobas for each occurrence ($60.61-$606.10 as of January 2005). However, these penalties are low, particularly in the case of large and medium enterprises, and there is no mechanism to preserve its value in real terms.

The enabling legal provisions for requesting information have been rarely invoked and penalties for noncompliance have not been levied. The CBN personnel state that there are not clear regulations to apply the penalties for noncompliance. The authorities prefer to encourage voluntary reporting by explaining in detail to respondents the intended use of the requested information, its confidential nature, and its importance for assessing the economic conditions of the country.

Surveys and censuses are announced through radio, television, and newspapers with explanations of purpose. In general, the CBN assists respondents in completing and submitting the questionnaires through regular visits to enterprises in the sample and by providing a point of contact.

The nonresponse to the NSHIE 1998–1999 was 12 percent in Managua and 18 percent in the rest of the country. It was mainly concentrated in the high-income stratum in Managua and spread in all strata in the rest of the country. With respect to price surveys, the nonresponse is around 1 percent. Retailers that do not provide information are visited by the supervisor or by the coordinator of the ECNS to try to encourage them to provide the requested information. If they refuse to provide the data, they are substituted by other retailers that sell the same items and are located in the same market place. Statistical information is provided to respondents when requested and the CBN annual report is given free of charge in some cases.

Instruments to collect information on price and weights are designed to reduce respondent burden, and an attempt is made to take into account the time constraints of the respondent.

0.2 Resources

0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs

The number of staff assigned to the CPI is broadly adequate (34). However, there is only 1 professional within the DID for analyzing and improving CPI methodology under the coordination of the Department Chief. At the ECNS, there is a CPI unit with 15 field agents, 4 supervisors, 1 field chief, 4 analysts, 2 reviewers, 3 data processors, 1 programming developer, and 1 coordinator assigned to price collection, compilation, and analysis of the CPI. Price collection is made by 5 price collectors in Managua and 8 in the other 7 regions.

While current resources are broadly adequate for the preparation of the current CPI covering 322 varieties and 26,000 price quotations, there will be a shortage of resources (both human and financial) for the conduction of the 2006 NHSIE and the compilation and dissemination of a CPI with a new reference base.

More than ninety percent of the staff working on the CPI is contractual personnel. These may be a source of risk for the quality and timeliness of the CPI, especially for data analysis and index calculation. The ECNS has tried to retain the trained contractual personnel as budgetary constraints have permitted it by renewing their contract annually. Most data collectors are professionals (economists, administrators, and public accountants), which ensure that collected data are validated, crossed-checked and analyzed before compiling the index. Average seniority of staff in the CPI is approximately eight years.

The mix of staff involved in the compilation of the CPI is as follows:

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CPI staff members receive on-the-job training as well as formal training through courses and seminars, including a few abroad, such as those conducted by the Economic Commission for Latin America and the Caribbean (ECLAC), the Central American Monetary Council (CAMC), and the Center for the Training of Statisticians from Developing Countries of the National Institute of Statistics of Spain (Cesd-Madrid). However, the training opportunities are not offered regularly.

Salaries at the CBN are competitive compared to those at other ministries and public dependencies (monthly salaries are around $200 for data processors, $300 for analysts, and $450 for professionals).

The DID and the ECNS currently have sufficient processing equipment for the preparation of the CPI according with staff numbers. However, most computers at the ECNS have low capacity to handle large databases and the number of printers (1) and their speed is insufficient. The DID has 2 computers, mainly Pentium 4, 1 server, and 2 printers. However, only 1 computer has Internet access, and only supervisors have their own CBN e-mail account. The ECNS has 12 computers, 1 printer, and 2 servers assigned to CPI data processing and compilation; only 2 computers are Pentium 4. Nevertheless, the CBN is currently in the process of leasing modern computing resources. Distribution of computers within the DID and the ECNS takes into account staff assigned to the different tasks (data collection, processing, and compilation) as well as their work programs. The CBN plans to incorporate more equipment to the ECNS unit.

The CPI is presently being calculated using applications developed in Visual Basic 6.0, configured to perform all calculations in an automated fashion. A SQL Server database is used to store CPI data. A daily back up of CPI data is made. Besides the Intranet of the CBN, each employee has access to computer programs, such as the ones included in Office 2000 (Excel, Word, and Power Point), and to E-Views, ARIMA, Tramo Seats, Crystal Reports, and SPSS to analyze results and prepare presentations and publications. However, software is not regularly updated due to budget constraints.

The CBN building has adequate working facilities (cooling, space, restrooms, and power system to support CBN’s computing system). Office furniture and equipment are adequate to perform tasks. Transportation equipment for CPI data collection (4 vehicles) is broadly adequate. However, these vehicles have to be shared with other work programs as the conduct of other surveys. Nevertheless, priority is given to the CPI compilation.

The 1998–1999 NSHIE was jointly carried out between the CBN and the NSHIE, with funding from the CBN and the Inter-American Development Bank (IDB). The financial resources for compiling the CPI are broadly adequate. Currently, funding for the compilation of the CPI is provided under the budgetary process of the CBN. The budget for the CPI program in 2005 is 2.98 million córdobas ($180,606 as of January 2005). Short and medium-term work programs are taken into account in the budgetary process. Requests for funding for special projects such as conducting the 2006 NSHIE, changing the reference base of the index, expanding its coverage, and conducting studies for improving CPI methodology are included as part of the normal budgetary process.

0.2.2 Measures to ensure efficient use of resources are implemented

The CBN has a four-year (2004–2007) strategic plan that serves to increase the quality and timeliness of the statistical series that are compiled as well as to improve efficiency in the allocation of resources. The four-year strategic plan is further broken down into individual annual work plans. These plans are administered by each organizational unit of the bank in coordination with the Sub-Management of Organization and Planning (SOP). The SOP meets with each organizational unit every quarter to review progress with the four-year plan and the yearly plan. The allocation of both financial and human resources is also discussed during these meetings with the SOP. In addition, each unit formally reviews progress on a monthly basis according with their work plans.

The performance of CBN personnel is annually evaluated through semiannual advances. A follow-up and tests are made for promoting personnel.

Assignation of responsibilities among the DID and ECNS units is clear. The supervisors within the RSM meet regularly in order to measure progress, define the work to be undertaken, and analyze the CPI results.

The budget is quarterly reviewed to ensure that scarce resources are employed efficiently in addressing major data problems or meeting new data priorities.

Regarding data collection, processing, and analysis, daily productivity rates are calculated. In the event of errors and inconsistencies, clarification is sought with respondents and corrections made. Data in databases are subjected to additional consistency checks. An efficient application was developed in Visual Basic 6.0 to elaborate the CPI. An application in SQL Server was introduced to improve data validation processes and keep digital records of data corrections and revisions.

The CBN has an active program to take advantage of new computing technology, including the Internet, for data processing and dissemination. The CBN Internet website is well designed according with the standards of the Bank of International Server, and has become an important part of the data dissemination process for both the bank and index users.

The ISM has introduced innovations and plans to introduce Data Transformation Services to reduce time and cost of statistical collection, coding, editing, validation, and tabulation of source data. The ISM plans to install software for survey designing and implement data collection processes through Palm Pilots avoiding data transcription. These mobile units will be connected directly to the servers for downloading source data. Staff will be trained to use On Line Analytical Processes (OLAP) to analyze data, indicators’ systems, and dynamic tables. Reports will be flexible since compilers will design and prepare them directly without developing costly applications. The process for data dissemination will be decentralized as the new technology will allow data producing units to post statistical products automatically on the CBN website.

In order to reduce costs, the ISM plans to use free software such as the operating system Linux in non-critical areas of the CBN.

The DID and the ECNS have received technical assistance from independent consultants for conducting the 1998–1999 NSHIE, applying sampling techniques, compiling the CPI 1999=100, and systematizing the CPI compilation process.

0.3 Relevance

0.3.1 The relevance and practical utility of existing statistics in meeting users ' needs are monitored

The CBN library and website provide timely information to users on CBN’s statistical products. The Department of Public Service of the Library monitors and keeps records on users’ requests and non-satisfied needs. Nonetheless, the CBN does not have regular meetings with those entities that participate in the NSS, in order to discuss statistical development and establish new data requirements. However, the National Committee of the NSSD and the Coordination Committee of the NSS include key public and private users. In addition, the CBN website provides two e-mail addresses to users (bcn@bcn.gob.ni and webmaster@bcn.gon.ni) to contact CBN personnel and provide comments if users did not find the information they needed on the CBN website. In the English version of the website there is a message that reads “We welcome all comments and suggestions for other information that may be of use to researchers, investors, financial entities, and the general public.”

When a new census or survey is conducted, a users’ committee is created in order to satisfy users’ needs by including their data requests, where relevant, in the questionnaires before implementation. The NISC conducted a survey on statistics demand in 2003.

The CBN staff participates in meetings and seminars on price statistics as budgetary constraints permit it.

0.4 Other quality management

0.4.1 Processes are in place to focus on quality

The CBN strategic plan, as it is administered by the organizational units under the direction of the MOP, possesses the essential characteristics of a total quality management program. It provides the framework for continuous structured review of the allocation of all types of resources as well as the different elements of data quality, including accuracy, methodological soundness, reliability, serviceability, and accessibility. One of the goals of the strategic plan is to improve the quality and timeliness of statistics.

The President and managers of the CBN meet regularly with the media to inform economic developments as well as to report on the bank’s projects for improving the quality of statistics.

Price collectors and analysts are annually trained on type of errors to be avoided: respondent errors, errors when completing questionnaires, transcription errors, and analysis errors. These training courses have been conducted since 2002.

0.4.2 Processes are in place to monitor the quality of the statistical program

Even though responses to surveys were assessed for the NSHIE, response rates to price surveys are not calculated and complete monitoring processes are not in place to inform managers on the quality of ongoing statistical activities (e.g., editing rates, revisions history, and timeliness evaluations).

Compilers have access to expert guidance on the quality of their statistics and on strategies for improving data production when international organizations donate or lend the resources to hire the experts or when the CBN contracts experts albeit its budget constraints.

The CBN has established practices and procedures to ensure the quality of the CPI at all levels of production including data collection, data processing, and index tabulation and dissemination. The monthly price collection phase of the CPI is reviewed at both the regional level and the national level. Any problems that are detected are referred to the supervisors at the section and the unit levels. Data entry and screening are handled at the ECNS. Computer listings are generated that allow for review and validation of the index at each level of compilation. This process permits a consistent review of data from all parts of the country by qualified analysts. Any errors that are detected are corrected after consultation with respondents and the regional staff, when necessary. The index aggregates are also reviewed and analyzed by CBN staff at various administrative levels before the index is published.

The CBN also has instituted a program of monthly visits to oversee price collection in the different regions. These visits also serve as a means for verifying abnormalities detected during the monthly review of data in the ECNS and the DID.

There are defined processes to supervise data collection and apply consistency checks. Information from a sub-sample of questionnaires is verified by the supervisors in their visits. Staff keeps records of usual errors and improvements to be incorporated in the new surveys in order to improve the quality of the compilation process before commencing another survey.

0.4.3 Processes are in place to deal with quality considerations in planning the statistical program

The four-year strategic planning system of the CBN and the form in which it has been implemented is strong evidence of the bank’s commitment to quality assurance and an analysis of the tradeoffs among its different dimensions: resource availability, timeliness, and accuracy/reliability.

The CBN has an ongoing program to identify changes in specifications for CPI market basket items, especially clothing, motor vehicles, and high technology items. The new items specifications are introduced into the index as needed.

Although there are no official mechanisms, such as a users’survey or official advisory groups, for obtaining feedback from users and/or guidance on methodological issues, the CBN convenes, on an ad hoc basis, such groups when changes are being considered for the index. However, these groups tend to concentrate on issues relating to the methodological soundness of the CPI, rather than user needs. Users’ needs are monitored through data requests and users’ comments obtained through the CBN website. Nevertheless, the Coordination Committee of the NSS and the National Committee of the NSSD will play an important role in this regard.

1. Assurances of integrity

1.1 Professionalism

1.1.1 Statistics are produced on an impartial basis

In practice, the CPI is produced and disseminated without any outside influence. However, the CBN regulations do not specifically cover attempts at interference and/or influence on official statistics by parties outside the CBN. The CBN Board of Directors includes the minister of the MFPC, with a risk that a conflict of interest could emerge. However, Article 15 states that:

  • [a] “A Board shall be responsible for the executive management of the Bank. The Board shall include the President of the Bank who, in turn, will preside over the Board, the Minister of Finance and Public Credit, and four members named by the President of the Republic in consultation with the private sector, and ratified by the National Assembly. Of these four members, one must belong to the party or alliance of parties that placed second in the most recent election of the highest authorities of the nation, based on the proposal of said party or alliance … The president of the Bank will serve for a term equal to that of the President of the Republic.…”

Article 62 states the procedures for appointing the four members of the Board:

  • “1. The appointment of the member of the Board representing the party in second place will be done so that the end of his term coincides with the end of the current presidential term of office. 2. Appointments of the remaining three members will be made in such a way that the end of the term coincides with the halfway of the current presidential term.…”

These regulations avoid political influence since Board’s decisions are made by consensus of the majority.

Article 16 of the CBN Law requires the Members of the Board of Directors to be “… of recognized moral integrity, economically solvent, and professionally qualified in matters related to the position that they will fill.” Article 25 of the CBN Law also requires the president of the CBN to “… be of recognized moral integrity and professional competence in the areas that fall over the purview of said position.”

Hiring and promotion of CBN employees are governed by CBN regulations, and are based on professional merit. Articles 7 (d) and (f) of the CBN by-law state that “Every person that wishes to joint the Central Bank of Nicaragua shall fulfill the following requisites: … (b) To have the academic, technical or work experience requisites corresponding to the function of the requested position” and “(f) To satisfactorily approve all aptitude and competence tests established by the Bank according to the requirements of the requested position.” Articles 14 to 17 regulate the promotion of personnel. CBN personnel have priority to fill vacancies according with their merits. These regulations ensure that political affiliation is not taken into account to hire and promote personnel.

Professionalism is promoted through encouraging staff participation in training opportunities, workshops and seminars, to ensure awareness and understanding of statistical standards and good statistical practices. Staff attending training courses and seminars has to make a presentation on their contents to his/her colleagues at the completion of the training. The Department of Human Resource Development (DHRD) under the CBN Human Resources Sub-Management (HRS) is in charge of personnel training. Article 77 (k) of the CBN by-law includes among the obligations of CBN employees “To attend courses and other training activities convened with the administration, as well as to attend national and international seminars or meetings of interest of the institution.”

CBN employees are encouraged to carry out research projects and to participate in conferences, lectures, and professional meetings with other professional groups. Usually research papers are a result of the employees’ own initiative. The methodological studies prepared by CBN professionals are circulated for internal review and, when appropriate, for outside review. Institutional papers submitted for publication must be approved by the administration of the CBN.

1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations

The selection of source data and statistical techniques for the compilation of statistical series is based solely on statistical considerations. The sources and methods for compiling the CPI are fully under the control of the CBN and concepts and practices follow international standards. Appropriate sources and statistical techniques are used, with no outside interference or attempted interference in matters of sources, methods, and dissemination. Decisions in this regard are made internally after careful consideration of methodological recommendations by international organizations. A summary documentation on source data and methodology employed for compiling the CPI has been prepared and is available to the public.

1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics

When necessary, the CBN responds to erroneous interpretations of the CPI through press releases and other means. The CBN follows the press very carefully with regard to references to the CPI. Data are presented to the media at press conferences held each month at the time of release of the monthly CPI. Comments on CPI trends are included in the presentation and in the monthly bulletin that is distributed to the press. This bulletin identifies the main underlying factors behind unusual figures and movements, in order to improve user understanding and reduce the likelihood of misinterpretation. The president and the manager of the CBN are entitled to respond to public criticism of statistics or instances of misuse of statistics, but there have been few instances where response to public criticism has been required.

1.2 Transparency

1.2.1 The terms and conditions under which statistics are collected, processed, and disseminated are available to the public

Article 131 of the Political Constitution of Nicaragua states that “The staff of the four powers of the State, elected directly or indirectly, shall respond on the correct performance of their functions and inform the population on their work and official activities.”

The CBN website includes a summary methodology and the technical conditions under which the CPI is calculated. The CBN has posted its Law on its website, which informs about the CBN’s standards of confidentiality and professionalism of its president and Board of Directors. However, the CBN By-Law or a summary of the articles that deal with professionalism of the staff have not been posted on the CBN website.

The CBN website (http://www.bcn.gob.ni) contains a directory of key personnel and two email addresses to direct additional requests, suggestions, and contact CBN personnel. CBN publications contain information on the CBN website, its PO Box, and the fax number of the ESM.

In addition, the CBN Library has a unit in charge of providing information to the public.

1.2.2 Internal governmental access to statistics prior to their release is publicly identified

The CBN indicates that the approval of published index series is exempt from outside interference. A number of high-level government officials have embargoed access to these series usually 72 hours before they are publicly released. The list of officials receiving privileged access is not published. CBN publications are authorized by the CBN Board of Directors, but there are no specific regulations guiding this approval process. In practice, CPI release and publications are authorized by the manager of Economic Studies.

1.2.3 Products of statistical agencies/units are clearly identified as such

All CBN publications include the Bank’s logo. In the case of joint publications, each entity, whether public or private, is clearly identified with their logos or in the footnotes of all published tables and/or on the title page of the document. The CBN has a policy of releasing publications on the CPI in a standard format (titles, colors, typography, etc.)

1.2.4 Advance notice is given of major changes in methodology, source data, and statistical techniques

Major changes in methodology or data sources are publicized before implementation. The CBN implemented a campaign to publicize the change of base year of the CPI (1999=100) before publishing the new series in January 2001; this campaign was carried out by means of presentations and meetings. Also, a report with a summary table with the main differences between the new CPI and the previous index (1994=100) was published.

The questionnaires of the NSHIE, used to collect information on the new market basket weights for the CPI, were presented ahead of implementation to a group of researchers and specialized users.

1.3 Ethical standards

1.3.1 Guidelines for staff behavior are in place and are well known to the staff

A manual of instructions is issued to field agents and supervisors, which provides guidelines about staff behavior. CBN staff is not authorized to alter or change statistical data received from respondents. The CBN By-Law contains rules of staff conduct in Chapter VIII on Obligations and Prohibitions of the Employee. Article 61 of the CBN Law and 77 of its By-Laws state that CBN employees have to be discrete on the affairs that due to their character are reserved according to the law, regulations or special instructions. Other obligations include:

  • (a) … to provide their service with efficiency, honesty, dedication, responsibility, loyalty, and constant improvement in the performance of their assigned tasks … (f) to observe decorous conduct and maintain respect, consideration, and courtesy at all times in their relations with peers and the public.

Article 77 also states the following prohibitions:

  • (c) To receive from the public any invitation or gift (it does not matter its value or nature) that can be related to expedite paperwork or transactions, or any other circumstance that could induce a special treatment or inappropriate authorization … (i) to use, for own benefit or third parties’ benefit, values or goods of the Institution.…

Article 78 presents the sanctions to apply to the personnel that do not comply with the prohibitions. These sanctions include verbal and written reprehension, work suspension without salary, and dismissal of the employee.

Each new employee is informed of the CBN Law and regulations and is given a personal copy of them.

2. Methodological soundness

2.1 Concepts and definitions

2.1.1 The overall structure in terms of concepts and definitions follows internationally accepted standards, guidelines, or good practices

The concepts and definitions used in the CPI are generally in line with internationally accepted standards as defined by the International Labor Organization, the IMF and others in the Consumer Price Index Manual, 2004. The prices and weights of the CPI broadly follow the national accounts concepts—based on the 1993 SNA/1995 ESA—for all monetary household consumption expenditures.

Level of detail for commodities and services is sufficient for detailed analysis of price movements at the level of divisions, groups, classes, and items of the Nicaraguan Classification of Individual Consumption by Purpose (COICOP).

2.2 Scope

2.2.1 The scope is broadly consistent with internationally accepted standards, guidelines, or good practices

Both the geographic weights and the market basket item weights for the CPI are based on expenditure data from all urban households included in the household sample for the 1998–99 NSHIE. The household sample is representative of all levels of income, types of occupations and household composition. The NSHIE was designed to separate consumption and business expenditures for those households with unincorporated business activity. Expenditure data from households involved in farming and fishing activities that resided in urban geographic areas were included for weights calculations for the CPI. Consumption of illegal market goods and services was not investigated in the NSHIE, and therefore, excluded from the CPI weights.

The consumption of nonmonetary goods such own-produced agriculture products and goods provided by employers as income in kind are included, since they were investigated in the NSHIE. The value of the rent of owner-occupied housing is excluded from the CPI weights, although an imputation was made on the rentals of owner-occupied dwellings in the results of the NSHIE. This latter exclusion is a departure from international standard practices. However, materials used in housing repairs are incorporated in the weights.

The CPI weights only cover the expenditures of all urban resident households in the country. Rural households were not covered in the NSHIE, and therefore, their expenditures are excluded from the CPI weights due to budget constraints for data collection in rural areas.

Up to 2000 the index only covered Managua city. Since then, prices are collected in each major city of the 17 departmental states of Nicaragua. These cities are grouped into 8 regions, and this sample, together with the range of outlets covered in each municipality, is considered representative of the pricing structure throughout the country.

2.3 Classification/sectorization

2.3.1 Classification/sectorization systems used are broadly consistent with internationally accepted standards, guidelines, or good practices

All classification and coding for the 1998–99 NSHIE and the current CPI are based on a Nicaraguan version of the COICOP. However, this version departs from the standard COICOP in the following divisions: Food and non-alcoholic beverages; Alcoholic beverages and Tobacco; Transport; Communication; and Restaurants and Hotels. Alcoholic and non alcoholic beverages are together; tobacco is included in miscellaneous goods and services; transport and communication are grouped in one division; hotels are included in leisure, equipment, and recreation services; and restaurants are included together with food and nonalcoholic beverages. Nonetheless, index data is available at item level (basic expenditure level), which allows users to obtain detailed data and perhaps reclassify them. Expenditure data on goods and services are classified into a seven-digit extended version of the COICOP, which includes items’ varieties. The Central Product Classification (CPC) was not used to classify the items. Nevertheless, the CPI classification is broadly in accordance with the CPC at product level.

2.4 Basis for recording

2.4.1 Marke t prices are used to value flows and stocks

The value of consumption used for determining the weights for the CPI is based on expenditure data from the 1998–99 NSHIE. The prices used to determine expenditures were the market prices (purchaser’s prices) including trade and transportation margins and taxes (value added tax). Subsidies on products were discounted. The only subsidy currently applied by the government is the subsidy on urban transport, which is reflected in the market price of transport services in the CPI.

Prices include discounts when applied to all purchasers according to international practices.

CPI prices do not reflect price reductions through price bargaining (prices individually negotiated between sellers and purchasers), a general practice in cantonal and informal markets in Nicaragua for food items. International standards recommend that price collectors buy items to determine the relevant price through bargaining. Nonetheless, this practice depends on the price collector’s ability to bargain, which can be very different among price collectors. In addition, only some food items can be bought through bargaining in cantonal and informal markets and they represent less than 10 percent of food items. The rest of the items are not bargained. Therefore, the price collected in the Nicaraguan price survey is the first price asked by the retailer.

Product specifications for pricing items in the market basket include detailed item characteristics and the terms of transactions. Field agents purchase a sample (31) of food articles in order to check product specifications: unit of measurement, presentation, quantity, and weight.

2.4.2 Recording is done on an accrual basis

All prices used for estimating the market basket item weights and for monthly price collection are measured on an accrual basis. The market price of the good or service is recorded for the period in which the item is purchased, in the case of the sample of items purchased by field agents. For the rest of the items, the price is recorded in the period during which the item is offered for sale.

2.4.3 Grossing/netting procedures are broadly consistent with internationally accepted standards, guidelines, or good practices

For the CPI market basket weights, purchases of durable goods, such as automobiles, were not registered as acquisitions less disposal of such goods, only new goods were recorded, even thought the information collected in the 1998–99 NSHIE permits to separate out purchases of new goods from purchases of used goods for consumer durables. Sales of used consumer durables are also identifiable. However, in 2000 the CBN decided to exclude purchases of vehicles from the CPI market basket owing to the small proportion they represent in total expenditure; which is a departure from international practices.

3. Accuracy and reliability

3.1 Source data

3.1.1 Source data are obtained from comprehensive data collection programs that take into account country-specific conditions

The first NSHIE was conducted in 1953, the second NSHIE in 1972, the third in 1984–85, and the fourth was conducted in 1998–99. Thus, these surveys have been conducted every 13 to 19 years historically. According to the authorities of the CBN, there is a long-term plan to conduct a NSHIE every five years. The next NSHIE will be conducted in 2006 and this activity has been included in the CBN’s budget. In addition, the NISC has carried out several surveys of living conditions (under the MECOVI project). The typical survey of living conditions is conducted over a four-month period as in the Nicaraguan case, rather than over an entire year; therefore, the results have the potential of having seasonal biases. However, in some countries the survey of living conditions is modified to accommodate the needs of the CPI. The results of this survey may be useful for assessing CPI bias owing to changes in consumption patterns.

The current CPI basket and weights were derived from 1998–99 NSHIE. The sampling frame for the 1998–99 NSHIE was the 1995 Census of Population and Housing (CPH). The construction of the sampling frame of this survey was based on census maps (for the selection of conglomerates or sectors) and lists of households (for the selection of households within the selected sectors). The NSHIE sampling frame covered the main cities of the 15 departmental states of Nicaragua and its 2 autonomous regions. Therefore, only urban households were investigated.

The NSHIE sampling frame contained 270,090 housing units (142,092 in Managua and 127,998 in the rest of the country). The sampling-frame was divided into two sub-populations, one for Managua and another for the rest of the country, since they presented different characteristics. A two-stage stratified random procedure with replacement was applied for the selection of households and the probability of selecting them was known: 4,848 households (1,848 in Managua and 3,000 in the rest of the country) were selected. The territory of Nicaragua covered the main city of each departmental state: (1) Managua, (2) Ocotal, (3) Somoto, (4) Estelí, (5) León, (6) Chinandega, (7) Masaya, (8) Granada, (9) Jinotepe, (10) Rivas, (11) Boaco, (12) Juigalpa, (13) Matagalpa, (14) Jinotega, (15) San Carlos, (16) Puerto Cabezas, and (17) Bluefields. In the first stage of sampling, specific geographic areas (or conglomerates) were selected, and in the second stage, the households to be surveyed were selected. For each geographic conglomerate, the household sample was distributed over the 12-month period that was to be covered by the survey (December 1998 to November 1999).

The sample was increased in 15 percent in order to substitute households when they refused to respond to the survey. The final number of conglomerates was 466 and the final number of households surveyed was 5,592. The sample size was calculated with an estimation error of 10 percent and a confidence level of 90 percent for each departmental state. The size of the sample in the second stage was 12 households in each conglomerate or area in order to visit one household every month. Households were stratified according to socioeconomic criteria (e.g., dwelling’s characteristics, number of vehicles in the household, and suburb) in high, medium, and low as a proxy variable of income. In order to know the size of the variance, incomes and expenditures reported in the 1993 Survey of Standard of Living were analyzed.

The questionnaires of the NSHIE were constructed according to sound design principles. They were subjected to pilot tests; hence, proposed changes were pre-tested to ensure effectiveness.

Tabulations of the 1998–99 NSHIE data were prepared in sufficient detail to accommodate the selection of the item sample and the estimation of the market basket weights for the CPI. However, the Hurricane Mitch (1998) might have had affected the results of the NSHIE. Purchases of goods and services were valued at purchaser’s prices; own production was valued at market prices; and imputed rent for owner-occupied housing was estimated based on market rents for rental units. However, own production and imputed rent were excluded from the CPI weights. Purchases in informal markets were included in the weights. The results of the NSHIE were grossed-up to reflect the population of the survey-sampling frame.

The CPI market basket includes a sample of 138 products and services and 322 varieties aggregated into 9 chapters (COICOP divisions), 27 divisions (COICOP groups), 60 groups (COICOP classes), and 85 sub-groups. Prices are collected in the 17 major cities (mentioned before) of the eight regions of the country. Price indices are compiled for Managua, the rest of the country and at national level. All expenditure items from the 1998–99 NSHIE with shares of greater than 0.05 percent and reported for at least 60 households were included in the CPI market basket.

A sample of around 6,800 outlets for monthly price collection for the CPI was selected by taking into account the shopping patterns reflected in the 1998–99 NSHIE and the availability of the items selected for price collection. The sampling frame to select the outlet sample was also the cartographic maps of the 1995 Population Census. The sample size was calculated with an estimation error of 5 percent and a confidence level of 95 percent for each departmental state. This sample is divided into four week panels of 7 days each that cover 27 percent of the sample in the first 7 days, 25 percent in the second 7 days, 23 percent in the third 7 days, and 25 percent the fourth week. An effort is made to maintain al least 10 monthly sources for each item. There are 26,000 monthly price observations/quotations included in the CPI. Detailed specifications are used to identify the specific varieties of products and services that are priced for the CPI.

Pricing outlets are selected using purposive sampling based on four main criteria: significant consumer sales, abundant variety of articles for retailing, located in commercial zones with large flow of purchasers, and the availability of a range of goods and services included in the CPI basket. The selected outlets cover the major cities of the regions; therefore, consumer prices in rural areas are not covered by the CPI. Item selection is done based on purchase volume. Within each item group, specific varieties are selected on the basis of stable and significant sales activity.

Field agents monitor items regularly to ensure that product specifications are up-to-date, especially with regard to cloth and technology items. Price behavior for CPI market basket items is monitored and compared with information from the press and other sources (Ministry of Agriculture, Livestock, and Food, Ministry of Energy and Mines, wholesalers, and main producer enterprises).

3.1.2 Source data reasonably approximate the definitions, scope, classifications, valuation, and time of recording required

Expenditure data from the 1998–99 NSHIE and the monthly price surveys are adequate for the need of the CPI. The NSHIE was designed with the CPI in mind, and incorporates the required scope of household coverage, expenditure classification, purchaser price valuations, and recall or diary reporting of expenditure in the month it was actually made. The frequency of the price collection survey (daily) is adequate to support the publication frequency of the index. Source data are consistent with the time of recording and valuation of CPI estimates.

3.1.3 Source data are timely

Only price data from the monthly price survey conducted by the CBN are used in the calculation of the published CPI. Prices are collected between the first and the twenty-eight of each month. These data are consistently obtained in a timely manner. Respondents usually provide information the same day of the interview. Zone supervisors apply follow-up procedures to ensure the timely receipt of source data.

3.2 Assessment of source data

3.2.1 Source data—including censuses, sample surveys and administrative records—are routinely assessed, e.g., for coverage, sample error, response error, andnonsampling error; the results of the assessments are monitored and made available to guide statistical processes

Information about nonresponse to the NSHIE and price surveys is available (12 percent in Managua and 18 percent in the rest of the country for the NSHIE, and around 1 percent for the price survey). In addition, the effect of the Hurricane Mitch (November 1998) in the results of the NSHIE was not evaluated. Information about sampling errors for the price survey is not monitored on a regular basis. Data about nonsampling errors (survey operations, biases, over/under-coverage, misclassification, and processing) are not available. Prices collected for the CPI are scrutinized. Any atypical prices are verified with the respondents before they are used in index calculations. A constant program for review of the price collection process is carried out by the CPI Unit of the CBN. Variations of more than two standard deviations are verified. The proportion of household final consumption expenditure for the economy that is not covered in regular CPI compilation is not assessed and comprises more than 10 percent. It corresponds to household expenditures in rural areas.

3.3 Statistical techniques

3.3.1 Data compilation employs sound statistical techniques to deal with data sources

Compilation procedures minimize processing errors such as coding, editing, and tabulation errors.

Adjustments to individual records are made only when clearly warranted. Unusual values are not replaced or modified unless clearly required and can be identified in datasets. Databases do not include footnotes when data are revised. However, it includes codes to identify some causes of revision.

Price relatives at the item level is calculated using the weighted geometric mean of short-term price relatives at variety level. The weights used are the regional expenditure shares at variety level. Elementary indices at item level are calculated by using the modified Laspeyres index calculation formula. For higher levels of aggregation, the Laspeyres formula is used. Chained indices were introduced in the new series with 1999 as base year.

Temporarily unavailable and seasonally unavailable prices are held constant if prices seem stable. When prices for substitution items/varieties for permanently unavailable items/varieties are available, the price change for the substitution item/variety is imputed to the permanently unavailable item/variety. Although the methodology of holding the temporarily unavailable and seasonally unavailable prices constant is a self-correcting procedure, it has the potential of causing large jumps in the index series when the prices again become available. It would be preferable to impute all missing prices by using the price change of the same item in another area if available, the price change of the rest of the item’s varieties or the price change of the item’s class. A more serious problem arises when items/varieties become permanently unavailable. Sometime it may take several (three) months to determine that an item/variety will not return to the market in the outlet in which it is being priced. If the price of the old variety is held constant until this is determined and if no imputation of price change is made, there exists the potential for a permanent uncorrected bias in the index. Although this bias is likely to be small during periods of stable prices, it could be significant during periods characterized by large changes in prices.

New varieties are introduced into the index when two-month observations are available and outlets are updated when necessary. New products are introduced into the CPI only when a major revision of the index is carried out (change in the weight reference period).

In general, only repackaging quality adjustments (adjustments for the volume, weight, or count) for CPI items/varieties are made.

3.3.2 Other statistical procedures (e.g., data adjustments and transformations, and statistical analysis) employ sound statistical techniques

Monetary household consumption expenditure, as defined in the 1993 SNA, is used to establish weights. Expenditure weights include purchases in all markets for affected goods and services, including informal markets.

The value recorded for goods and services represents the economic cost to the consumer at the time the good or service is purchased regardless of the method for payment.

An unbiased formula (weighted geometric mean of price ratios or relatives) is used to calculate the elementary (item) level indices. A short-term price change from the previous period is used.

The method to aggregate elementary indices to higher levels uses an internationally accepted formula (Laspeyres formula).

The current weights are derived from the monthly average expenditures for the period December 1998 to November 1999, and the price reference period of the index is 1999. The expenditure shares are held constant from the weight reference period. The weight reference period was updated within the past five years (1998–99).

When the new weights were introduced, the new index was linked to the old index using international accepted practices (the splicing method); however, these series are not publicized.

3.4 Assessment and validation of intermediate data and statistical outputs

3.4.1 Intermediate results are validated against other information where applicable

The CPI is compared with comparable estimates from other major price indices such as the agricultural and manufacturing producer price indices. CPI behavior is validated against export and import unit value indices for selected items at detailed level. Detailed price data is compared to information from other sources such as the Ministry of Agriculture and Forestry and the Ministry of Energy.

The detailed CPI is compared to the implicit deflators of private final consumption expenditures in the national accounts. Data from micro surveys of activities suspected to have production that is not covered in regular CPI compilation; data from household and trade surveys; and global estimates based on past benchmarks or judgments are not used to improve coverage of the CPI.

3.4.2 Statistical discrepancies in intermediate data are assessed and investigated

The CBN has established a program for the constant monitoring of price data used in the CPI. Any atypical prices are reviewed with price collectors and respondents before they are included in the index.

3.4.3 Statistical discrepancies and other potential indicators of problems in statistical outputs are investigated

Price data are checked for consistency with prices for similar products in the same geographic area and for the same products in other geographic areas. Investigations are made into the source of any errors that are detected and steps are taken to eliminate the source of these errors.

3.5 Revision studies

3.5.1 Studies and analyses of revisions are carried out routinely and used internally to inform statistical processes (see also 4.3.3)

Extensive studies were carried out on the 1998–99 NSHIE with regard to the level of error and consistency in the expenditure data. Detailed documentation for the survey and these studies are available for use in a special publication of the results of the 1998–99 NSHIE. The CPI is not revised. CPI data is final when released, but new weights are subject to analysis and validation prior to being incorporated in the index. Weights obtained from the 1998–99 NSHIE were compared to the weights used in the previous reference base (1984–85 NSHIE), and analyzed. However, periodic weight revisions are not undertaken to determine the bias of the CPI. Documentation on price data adjustments that include a description of causes of adjustments and the way data are adjusted are not incorporated to the database. Nevertheless, a report on the causes of adjustments is archived and codes are assigned to the causes of missing prices in the database.

4. Serviceability

4.1 Periodicity and timeliness

4.1.1 Periodicity follows dissemination standards

Prices are collected daily. The periodicity for the compilation of the CPI is weekly and monthly, meeting GDDS recommendations and SDDS standards.

4.1.2 Timeliness follows dissemination standards

The monthly CPI is published within 10 to 15 days of the reference month. This exceeds GDDS recommendations and SDDS standards.

4.2 Consistency

4.2.1 Statistics are consistent within the dataset

For the CPI, the all-items index tabulations are consistent regardless of whether the aggregations are made by category of expenditure or by geographical area.

4.2.2 Statistics are consistent or reconcilable over a reasonable period of time

The revised CPI began publication in January 2001 with a price reference period of 1999=100. Continuous historical series for the CPI, with 1999 as reference base, are available for the period January 1999-December 2004. This series were linked to the previous series with 1994 as reference base. However, this information is not published, but it is available upon request.

Detailed methodological notes that identify and explain the main breaks and discontinuities intime series (1956=100, May–October 1972=100, 1980=100, and October–December 1987=100), and their causes are available on the CBN website. No adjustments have been made to maintain consistency over time.

Both the press release and the monthly publication of the CPI on the CBN website include a brief analysis of the index and an explanation of any unusual price behavior.

4.2.3 Statistics are consistent or reconcilable with those obtained through other data sources and/or statistical frameworks

Consistency was verified by comparing the rate of growth of the CPI with those of the PPI and selected import and export price indices. Of course, these indices have different coverage and conceptual frameworks. The CPI is also consistent with the implicit price deflator of private final consumption expenditures in the national accounts.

4.3 Revision policy and practice

4.3.1 Revisions follow a regular and transparent schedule

Monthly CPI data are final. In principle, data may be only revised in case of eventual errors. Although there was a major revision of the CPI in the year 1999, there has not been a historically consistent pattern established for revision of the index. The household income and expenditure surveys needed for updating the CPI market basket have been conducted almost every 13–19 years, which is not adequate. However, the CBN has a plan to carry out NSHIEs every five years. The next NSHIE will be conducted in 2006.

A detailed documentation of the latest CPI revision is available. A detailed publication describing the 1998–99 NSHIE and its results is available to users.

4.3.2 Preliminary and/or revised data are clearly identified

Due to the extensive review process in place for the CPI and the timeliness of source data, the index is published in its final form, and no corrections are published. In the unusual event that errors are discovered after publication, corrections are incorporated into the following month’s index with an explanation.

4.3.3 Studies and analyses of revisions are made public (see also 3.5.1)

A study on the last CPI revision was publicized, and a special publication, Encuesta Nacional de Ingresosy Gastos de los Hogares, 1998–1999, contains a detailed methodology and results of the 1998–99 NSHIE and is available to the public.

5. Accessibility

5.1 Data accessibility

5.1.1 Statistics are presented in a way that facilitates proper interpretation and meaningful comparisons (layout and clarity of text, tables, and charts)

The CBN Monthly Bulletin, Consumer Price Index (Ídices de Precios al Consumidor), presents the monthly national-level CPI for December of the previous year and the months of the current year. Tables are included for Managua, the rest of the country, and at national level with detailed indices, weights, and percentage changes at different levels of COICOP aggregations for December of the previous year and for the previous and current months. An analysis of the important price changes and their causes is included. However, this publication is only available to selected government agencies.

The CBN Quarterly Economic Bulletin (Boletín Económico Trimestral) presents an analysis on cumulative inflation for the current year compared with the last two years, the underlying inflation, administered prices, and market prices. It includes charts and tables. The CBN Annual Report (Informe Anual) also includes an analysis on cumulative inflation for the current year compared to the last two years, underlying inflation, administered prices, tradable and non-tradable goods, and basic basket.

In addition, there is a monthly summary journal, System of Consumer Price Indices (Sistema de Indices de Precios al Consumidor), which is posted on the CBN website and includes monthly price indices and price changes at division level for the current and the previous years, an analysis of current price trends, and the monthly cost of the basic basket of goods and services for Managua, the price of each item in this basket, and the cost of the urban basic basket.

Although the publication formats for the CPI meet standards, time series are insufficient and relevant series (e.g., food items) are not disseminated in a seasonally adjusted form.

5.1.2 Dissemination media and format are adequate

An executive summary is presented to the press by the president of the CBN each month. It contains tables, charts, and an analysis of current trends that facilitate redissemination in the media. More comprehensive and detailed statistics are disseminated in the CPI hard-copy publication. Current statistics and longer time series can be accessed through the CBN website or by requesting them to the DID of CBN. The CBN provides detailed price data by product of the basic basket to the Ministry of Development, Industry, and Commerce in order to be weekly released in the press.

5.1.3 Statistics are released on a preannounced schedule

There is no published schedule for the dissemination of the index. However, the CBN’s practice of giving a press conference on the tenth of each month and releasing CPI statistics punctually has accustomed users to expect the results of the CPI on that date.

5.1.4 Statistics are made available to all users at the same time

The public is informed of the statistics being released, and of the procedures to access them at the CBN website and in the publications. Publications contain information on the CBN website (http://www.bcn.gob.ni), CBN PO box address, and fax number. The CBN website also includes two e-mail addresses (bcn@bcn.gob.ni and webmaster@bcn.gon.ni) to direct requests and contact CBN personnel.

Nevertheless, CPI statistics are not made available to all interested users simultaneously. Some government agencies receive the CPI before releasing it, if requested it. A detailed CPI publication with restrictive access is sent to several government agencies. This publication is not released to the public.

5.1.5 Statistics not routinely disseminated are made available upon request

Historical, unpublished, non-confidential CPI data are available for the national and regional indices at the item level and at higher-level of COICOP aggregations upon request. The availability of additional statistics and the procedures for obtaining them are not made known to the public.

5.2 Metadata accessibility

5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available, and differences from internationally accepted standards, guidelines, or good practices are annotated

A summary methodology on the CPI is available to the public at the CBN website in Monthly Economic Indicators.

A detailed methodology on the CPI was prepared by the NISC, Metodologíapara el Cálculo del IPC de Nicaragua, Sistema de Ídices de Precios al Consumidor. This documentation is available at the Center of Documentation of the NISC and at the CBN website.

Information on 1998–99 NSHIE, such as survey characteristics, response rates, survey monitoring, method, sample frame, sample design and selection, critic, coding, and editing, data processing, and monthly average household income, and expenditure by item, class, group, and division and region were published in the Encuesta Nacional de Ingresos y Gastos de los Hogares 1998–1999 available in hard copy and CD.

5.2.2 Levels of detail are adapted to the needs of the intended audience

CPI methodologies that give a complete documentation of the concepts, scope, classification system, data sources and statistical techniques are available, in hard copy at the NISC Documentation Center, and on the CBN website. These publications are designed for different types of index users from the typical consumer (methodological notes of the Monthly Economic Indicators) to the economic analyst (detailed methodology).

5.3 Assistance to users

5.3.1 Contact points for each subject field are publicized

Prompt and knowledgeable service and support on the CPI is available to all index users through the Department of Public Service at the CBN Library and key personnel are listed in the CPI methodology. Assistance to users is monitored through data requests, but it is not reviewed periodically.

The NISC has prepared presentations to raise awareness on the use of the CPI for schools, high schools, and universities.

5.3.2 Catalogs of publications, documents, and other services, including information on any changes, are widely available

A list of CBN publications and CDs is available from the CBN Library and on the CBN website. Assistance is provided in placing orders at the Library. CBN publications are free of charge.

Table 2.

Nicaragua: Data Quality Assessment Framework (July 2003): Summary of Results for the Consumer Price Index

(Compiling Agency: Central Bank of Nicaragua)

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III. Price Statistics (Producer Price Index)

0. Prerequisites of quality

0.1 Legal and institutional environment

0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified

The monthly producer price indices (PPIs) for agriculture and manufacturing are compiled by the CBN. The CBN also produces price indices for domestic manufactured inputs and construction materials. In general, this assessment will be focused on the PPI for manufacturing. Operational responsibility for collecting, compiling, and analyzing the PPI lies with the ECNS in the ESM of the CBN. Analysis of results, methodological improvements, and dissemination lies with the DID of the ESM. There is no other institution that compiles PPIs.

The CBN Organic Law (No. 317, 03/30/01) does not clearly assign the responsibility for compiling and disseminating a PPI to the CBN. However, Article 60 gives the right to the CBN to collect statistical data for statistical purposes and macroeconomic analysis.

Articles 26 (7) of the CBN Law and 138 (28) of the Political Constitution of Nicaragua (01/18/00) state among the duties of the CBN president to submit to the Board of Directors of the Bank and to the National Assembly an annual report. Article 31 (3) of the CBN Law states that “During the first three months of each year, the Central Bank will submit to the President of the Republic, the Annual Report of the Institution, which will be published, and must include, at minimum, the following points: … (3) Description of the monetary and exchange policy followed by the Bank during the year reported, and a general survey of the economic and financial development of the country.” The CBN has used these articles as legal support for its statistical function.

It should be noted that although the NISC is not currently directly involved in the compilation of the PPI, Article 7 of the NISC Law (Decree No. 888, 10/30/81) establishes among the duties of the NISC the centralization of all statistical activities of the governmental entities and other public or mixed entities that produce statistics of national interest.

While the legal framework of the CBN and the NISC is being updated to be adequate, some functions specified for the NISC are rather ambitious and go beyond its current financial capacity. In any case, it would be necessary to provide the NISC with sufficient resources to ensure that the PPI is compiled with adequate quality and timeliness.

0.1.2 Data sharing and coordination among data-producing agencies are adequate

The CBN is self-sufficient in the production of the PPI. All price and source data for weights are collected and tabulated within the CBN. However, the sampling frame (economic register) used to define the enterprise sample for the PPI was provided by the NISC to the CBN.

TheNSS includes the NISC, all ministries, decentralized public entities, local governments, public enterprises, and other data producing agencies. Article 3 of the NISC Law states that the NSS shall avoid duplicating efforts and ensuring the comparability of statistical information. Article 18 envisages the creation of the Coordination Committee of the NSS and sector committees to ensure proper and efficient coordination of the activities of the NSS. Several sector committees are functioning, such as the committees of external trade, free zones, agriculture, employment, and salary statistics. In addition, the National Strategy of Statistical Development (NSSD) envisages the creation of the National Committee of the NSSD, which includes representatives of the NSS, the civil society (nongovernmental organizations, universities, and producers’ committees), and international organizations. However, owing to the decentralization of the statistical function among the entities of the NSS, coordination has not been completely effective. For instance, the MFPC has not provided the CBN with income tax records, which content among other useful information, annual sale values of manufacturing products, due to a confidentiality precept, even though the Bank has requested these data aggregated by economic activity and/or product without identifying individual respondents.

There are no formal data sharing agreements among data producing agencies; therefore, data sharing is based on informal agreements and friendship relations. There have been efforts to strengthen technical cooperation among data producing agencies in the framework of the revision of the NISC Law, the Coordination Committee of the NSS, the National Committee of the NSSD, and the sector committees.

0.1.3 Individual reporters ' data are to be kept confidential and used for statistical purposes only

Article 61 of the CBN Law states, “The directors, officers, and employees of the Central Bank will be obligated to safeguard the confidentiality of the information, documents and operations on which they have knowledge of by virtue of their positions. Any violation of the confidentiality obligation enshrined herein will be sanctioned in accordance with the by-laws of the Bank, without prejudice to any punitive sanctions that may be applicable under criminal law.” Article 10 of the CBN by-law states among the causes of contract termination the following: “Proved released of information and reserved or confidential documents, and in general, of any information related with the functions of the Bank, when such employee has not been authorized.” The president of the CBN has the faculty to fire non-complying personnel.

Article 56 of the CBN by-law also establishes the confidentiality of databases: “All digital information supplied by the Bank to the employee for performing his/her duties is confidential and shall not be revealed even after the work relation has concluded.” In addition, Article 77 includes among the obligations and prohibitions of the employee “To keep secrecy/discretion on the information, documents, and operations on which they have knowledge of by virtue of their positions.” Infractions of these standards and sanctions for employees that disregard them are defined in Article 61 of the CBN Law and Article 78 of the CBN by-law.

In the CBN, access to confidential data is restricted to those employees who require the information in the performance of their duties. CBN personnel compiling the PPI have access to individual source information and are aware of the confidentiality of the data and the penalties imposed by the legal framework. Some institutions have requested the CBN individual data on some enterprises, and the CBN has refused to provide these data in accordance with the law. However, when unit records are made available for research purposes, the confidentiality of individual data is protected by making all records anonymous. Special aggregation rules are used to prevent residual disclosure when aggregations of survey or other confidential data are disseminated. The ECNS work procedures for compiling the PPI ensure that data are disseminated only at an aggregated level. Questionnaires, once processed, are archived in the storeroom of the ECNS. After two years, they are destroyed.

A letter is sent to respondents in order to inform the purpose of the information request and the confidentiality of the data to be provided. Price data are collected by interviews to producers. Respondents are informed on the confidentiality of the information, and that the data will be used for compiling price indices only. Price collectors fill out price surveys with the information obtained from the respondents. Price surveys include the CBN logo, the title “Monthly Survey of Price Indices of Industrial Products and Inputs”, the name of the collector, and the identification and code of the enterprise.

The Information Sub-Management (ISM) of the CBN has implemented a number of security measures to guard against unauthorized access to its statistical databases. Article 66 of the CBN by-law states that “All resources of the internal net have to be protected by passwords or established access lists.” The CBN intranet can only be accessed with an authorized user’s name and password, and different levels of access (user profiles) have been established for the various databases through the Operative System Windows 2003. There are also an external firewall to prohibit access to the CBN intranet and databases, an antispam module, and an antivirus. PPI databases are administered by the ECNS of the CBN.

0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response

Article 60 states that “Offices and units of the Central Government and municipal governments, as well as governmental credit institutions, are obligated to submit to the Central Bank such reports as the latter may request in the discharge of its duties.” Likewise, the banks and any physical person or enterprise with residence or domicile in Nicaraguan territory, whether a national or foreigner, are obligated to supply the Central Bank with statistical information requested by it in the discharge of the duties conferred upon its by Law. This information must be used solely and exclusively for statistical purposes and macroeconomic analysis. Anyone who fails to comply with the provisions of the preceding paragraph of this article, or who provides false or incomplete information, will be penalized by a fine of one thousand to ten thousand córdobas for each occurrence ($60.61-$606.10 as of January 2005). However, these penalties are low, particularly in the case of large and medium enterprises, and there is no mechanism to preserve its value in real terms.

The enabling legal provisions for requesting information have been rarely invoked and penalties for noncompliance have not been levied. The CBN personnel state that there are not clear regulations to apply the penalties for noncompliance. The authorities prefer to encourage voluntary reporting by explaining in detail to respondents the intended use of the requested information, its confidential nature, and its importance for assessing the economic conditions of the country.

Surveys and censuses are announced through radio, television, and newspapers with explanations of purpose. In general, the CBN assists respondents in completing and submitting the questionnaires through regular visits to enterprises in the sample and by providing a point of contact.

With respect to price surveys, the nonresponse is around one percent. Enterprises that do not provide information are visited by the supervisor or by the coordinator of the ECNS to try to encourage respondents to provide the requested information. If they refuse to provide the data, they are substituted by other enterprises that produce the same item and are located in the same area. Statistical information is provided to respondents when requested and CBN annual report is given free of charge in some cases.

Instruments to collect information on price and weights are designed to reduce respondent burden, and an attempt is made to take into account the time constraints of the respondent visiting enterprises just once a month.

0.2 Resources

0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs

Although the index only covers manufacturing at the present time, the CBN plans to expand the coverage of the PPI by integrating the indices for agriculture, mining, and construction in 2006 with the introduction of the new base year of the national accounts. The CBN also plans to incorporate prices of imported inputs into the price index of manufactured inputs in 2005 and formally publish the new PPI, which will also serve as an input to the preparation of quarterly national accounts.

While current resources are broadly adequate for the preparation of the current PPI covering 136 products from 420 manufacturing establishments, there will be a shortage of resources (both human and financial) for the compilation and dissemination of an expanded PPI that meets international standards.

There is only 1 professional within the DID assigned to analyze PPI data and work on methodological improvements under the coordination of the Chief of the Department, and there are 8 field agents, 1 supervisor, and 2 data analysts within the ECNS assigned to the collection and compilation of the PPI. Price collection is made by 4 price collectors in Managua and 5 in the other departmental states covered by the index. Therefore, the staff assigned to the analysis of results and methodological improvements of the PPI (1 professional) and to the data processing unit (4 processors) and the validation of PPI data (2 analysts) is insufficient. In addition, data processors also process information from all CBN surveys, except from the CPI survey, which has an independent processing unit.

Nearly ninety-two percent of the staff working on the PPI is contractual personnel. These may be a source of risk for the quality and timeliness of the PPI, especially for data analysis and index calculation. The ECNS has tried to retain the trained contractual personnel as budgetary constraints have permitted it by renewing their contract annually. Most data collectors are professionals (economists, administrators, and public accountants), which ensure that collected data are validated, crossed-checked and analyzed before compiling the index. Average seniority of staff in the PPI is 4 years.

The mix of staff involved in the compilation of the PPI is as follows:

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PPI staff members receive on-the-job training as well as formal training through courses and seminars, including a few abroad, such as those conducted by the Economic Commission for Latin America and the Caribbean (ECLAC), the Central American Monetary Council (CAMC), and the Center for the Training of Statisticians from Developing Countries of the National Institute of Statistics of Spain (Cesd-Madrid). However, the training opportunities are not offered regularly.

Salaries at the CBN are competitive compared to those at other ministries and public dependencies (monthly salaries are around $200 for data processors, $300 for analysts, and $450 for professionals).

The DID and the ECNS currently have sufficient processing equipment for the preparation of the PPI according with staff numbers. However, some computers have low capacity to handle large databases and the number of printers and their speed is insufficient. The DID has 2 computers, mainly Pentium 4, 1 server, and 2 printers. However, only 1 computer has Internet access, and only supervisors have their own CBN e-mail account. The ECNS has 12 computers, 4 printers, 1 net administrator, and 2 servers assigned to PPI data processing and compilation, and also for processing other surveys, except the CPI data; only 7 computers are Pentium 4. Distribution of computers within the DID and the ECNS takes into account staff assigned to the different tasks (data collection, processing, and compilation) as well as their work programs. The CBN plans to incorporate more equipment to the ECNS unit.

The PPI is presently being computed using applications developed in FOXPRO, configured to perform all calculations in an automated fashion. An Access database is used to store PPI data. The CBN plans to develop applications in Visual Basic 6.0 and migrate the PPI database to SQL Server. A daily back up of PPI data is made. Besides the intranet of the CBN, each employee has access to computer programs, such as the ones included in Office 2000 (Excel, Word, and Power Point), and to E-Views, ARIMA, Tramo Seats, and SPSS to analyze results and prepare presentations and publications. However, software is not regularly updated due to budget constraints.

The CBN building has adequate working facilities (cooling, space, restrooms, and power system to support CBN’s computing system). Office furniture and equipment are adequate to perform tasks. Transportation equipment for PPI data collection (1 vehicle) is inadequate. This vehicle has to be shared with other work programs as the conduct of other surveys. Nevertheless, priority is given to PPI compilation.

The financial resources for compiling the PPI are broadly adequate. Funding for the compilation of the PPI and input indices is provided under the budgetary process of the CBN. The budget for the PPI program in 2005 is 1.894 million córdobas ($114, 787.87 as of January 2005). Short and medium-term work programs are taken into account in the budgetary process. Requests for funding for special projects such as changing the reference base of the index, expanding its coverage, and conducting studies for improving PPI methodology are included as part of the normal budgetary process.

0.2.2 Measures to ensure efficient use of resources are implemented

The CBN has a four-year (2004–2007) strategic plan that serves to increase the quality and timeliness of the statistical series that are compiled as well as to improve efficiency in the allocation of resources. The four-year strategic plan is further broken down into individual annual work plans. These plans are administered by each organizational unit of the bank in coordination with the SOP. The SOP meets with each organizational unit every quarter to review progress with the four-year plan and the yearly plan. The allocation of both financial and human resources is also discussed during these meetings with the SOP. In addition, each unit formally reviews progress on a monthly basis according with their work plans.

The performance of CBN personnel is annually evaluated through semiannual advances. A follow-up and tests are made for promoting personnel.

Assignation of responsibilities among the DID and ECNS units is clear. The supervisors within the RSM meet regularly in order to measure progress, define the work to be undertaken, and analyze the PPI results.

The budget is quarterly reviewed to ensure that scarce resources are employed efficiently in addressing major data problems or meeting new data priorities.

Regarding data collection, processing, and analysis, daily productivity rates are calculated. In the event of errors and inconsistencies, clarification is sought with respondents and corrections made. Data in databases are subjected to additional consistency checks. A more efficient application will be developed in Visual Basic 6.0 to elaborate the new PPI. An application in SQL Server will be also introduced to improved data validation processes and keep digital records of data corrections and revisions.

The CBN has an active program to take advantage of new computing technology, including the Internet, for data processing and dissemination. The CBN Internet website is well designed according with the standards of the Bank of International Server, and has become an important part of the data dissemination process for both the bank and index users.

The ISM has introduced innovations and plans to introduce Data Transformation Services to reduce time and cost of statistical collection, coding, editing, validation, and tabulation of source data. The ISM plans to install software for survey designing and implement data collection processes through Palm Pilots avoiding data transcription. These mobile units will be connected directly to the servers for downloading source data. Staff will be trained to use On Line Analytical Processes (OLAP) to analyze data, indicators’ systems, and dynamic tables. Reports will be flexible since compilers will design and prepare them directly without developing costly applications. The process for data dissemination will be decentralized as the new technology will allow data producing units to post statistical products automatically on the CBN website.

In order to reduce costs, the ISM plans to use free software such as the operating system Linux in non-critical areas of the CBN.

The ECNS and the DID have not received technical assistance regarding the PPI compilation process, but has received technical assistance from independent consultants for integrating the different price indices in an expanded PPI.

0.3 Relevance

0.3.1 The relevance and practical utility of existing statistics in meeting users ' needs are monitored

The CBN Library and website provide timely information to users on CBN’s statistical products. The Department of Public Service of the Library monitors and keeps records on users’ requests and non-satisfied needs. Nonetheless, the CBN does not have regular meetings with those entities that participate in the NSS, in order to discuss statistical development and establish new data requirements. However, the National Committee of the NSSD and the Coordination Committee of the NSS include key public and private users. In addition, the CBN website provides two e-mails addresses to users (bcn@bcn.gob.ni and webmaster@bcn.gob.ni) to contact CBN personnel and provide comments if users did not find the information they needed on the CBN website. In the English version of the website there is a message that reads “We welcome all comments and suggestions for other information that may be of use to researchers, investors, financial entities, and the general public.” When a new census or survey is conducted, a users’ committee is created in order to satisfy users’ needs by including their data requests, where relevant, in the questionnaires before implementation. The NISC conducted a survey on statistics demand in 2003.

The CBN staff participates in meetings and seminars on price statistics as budgetary constraints permit it.

0.4 Other quality management

0.4.1 Processes are in place to focus on quality

The CBN strategic plan, as it is administered by the organizational units under the direction of the MOP, possesses the essential characteristics of a total quality management program. It provides the framework for continuous structured review of the allocation of all types of resources as well as the different elements of data quality, including accuracy, methodological soundness, reliability, serviceability, and accessibility. One of the goals of the strategic plan is to improve the quality and timeliness of statistics.

The president and managers of the CBN meet regularly with the media to inform economic developments as well as to report on the bank’s projects for improving the quality of statistics.

Price collectors and analysts are annually trained on type of errors to be avoided: respondent errors, errors when completing questionnaires, transcription errors, and analysis errors. These training courses have been conducted since 2002.

0.4.2 Processes are in place to monitor the quality of the statistical program

Even though responses to surveys are assessed, complete monitoring processes are not in place to inform managers on the quality of ongoing statistical activities (e.g., editing rates, revisions history, and timeliness evaluations).

Compilers have access to expert guidance on the quality of their statistics and on strategies for improving data production when international organizations donate or lend the resources to hire the experts or when the CBN contracts experts albeit its budget constraints.

The CBN has established practices and procedures to ensure the quality of the PPI at all levels of production including data collection, data processing, and index tabulation and dissemination. There are manuals for price collectors. The monthly price collection phase of the PPI is reviewed at both the product and activity level. Any problems that are detected are referred to the supervisors at the section and the unit levels. Data entry and screening are handled at the ECNS. Computer listings are generated that allow for review and validation of the index at each level of compilation. This process permits a consistent review of data by qualified analysts. Any errors that are detected are corrected after consultation with respondents, when necessary. The index aggregates are also reviewed and analyzed by CBN staff at various administrative levels before the index is published.

The CBN also has instituted a program of monthly visits to oversee price collection in the different regions. These visits also serve as a means for verifying abnormalities detected during the monthly review of data in the ECNS and the DID.

There are defined processes to supervise data collection and apply consistency checks. Information from a sub-sample of questionnaires is verified by the supervisors in their visits. Staff keeps records of usual errors and improvements to be incorporated in the new surveys in order to improve the quality of the compilation process before commencing another survey.

0.4.3 Processes are in place to deal with quality considerations in planning the statistical program

The four-year strategic planning system of the CBN and the form in which it has been implemented is strong evidence of the bank’s commitment to quality assurance and an analysis of the tradeoffs among its different dimensions: resource availability, timeliness, and accuracy/reliability.

The CBN has an ongoing program to identify changes in specifications for PPI basket items, especially clothing and metallic products. The new items specifications are introduced into the index as needed.

Although there are no official mechanisms, such as a user survey or official advisory groups, for obtaining feedback from users and/or guidance on methodological issues, the CBN convenes, on an ad hoc basis, such groups when changes are being considered for the index. However, these groups tend to concentrate on issues relating to the methodological soundness of the PPI, rather than users’needs. Users’needs are monitored through data requests and users’ comments obtained through the CBN website. Nevertheless, the Coordination Committee of the NSS and the National Committee of the NSSD will play an important role in this regard.

1. Assurances of integrity

1.1 Professionalism

1.1.1 Statistics are produced on an impartial basis

In practice, the PPI is produced and disseminated without any outside influence. However, the CBN regulations do not specifically cover attempts at interference and/or influence on official statistics by parties outside the CBN. The CBN Board of Directors includes the minister of the MFPC, with a risk that a conflict of interest could emerge. However, Article 15 states that:

  • “A Board shall be responsible for the executive management of the Bank. The Board shall include the President of the Bank who, in turn, will preside over the Board, the Minister of Finance and Public Credit, and four members named by the President of the Republic in consultation with the private sector, and ratified by the National Assembly. Of these four members, one must belong to the party or alliance of parties that placed second in the most recent election of the highest authorities of the nation, based on the proposal of said party or alliance … The president of the Bank will serve for a term equal to that of the President of the Republic….”

Article 62 states the procedures for appointing the four members of the Board. It states that:

  • “… 1. The appointment of the member of the Board representing the party in second place will be done so that the end of his term coincides with the end of the current presidential term of office. 2. Appointments of the remaining three members will be made in such a way that the end of the term coincides with the halfway of the current presidential term….”

These regulations avoid political influence since Board’s decisions are made by consensus of the majority.

Article 16 of the CBN Law requires the Members of the Board of Directors to be “… of recognized moral integrity, economically solvent, and professionally qualified in matters related to the position that they will fill.” Article 25 of the CBN Law also requires the president of the CBN to “… be of recognized moral integrity and professional competence in the areas that fall over the purview of said position.”

Hiring and promotion of CBN employees are governed by CBN regulations, and are based on professional merit. Articles 7 (d) and (f) of the CBN by-law state:

  • “Every person that wishes to join the Central Bank of Nicaragua shall fulfill the following requisites: … (b) To have the academic, technical or work experience requisites corresponding to the function of the requested position, … (f) To satisfactorily approve all aptitude and competence tests established by the Bank according to the requirements of the requested position.”

Articles 14 to 17 regulate the promotion of personnel. CBN personnel have priority to fill vacancies according with their merits. These regulations ensure that political affiliation is not taken into account to hire and promote personnel.

Professionalism is promoted through encouraging staff participation in training opportunities, workshops and seminars, to ensure awareness and understanding of statistical standards and good statistical practices. Staff attending training courses and seminars has to make a presentation on their contents to his/her colleagues at the completion of the training. The Department of Human Resource Development (DHRD) under the CBN Human Resources Sub-Management (HRS) is in charge of personnel training. Article 77 (k) of the CBN by-law includes among the obligations of CBN employees “to attend courses and other training activities convened with the administration, as well as to attend national and international seminars or meetings of interest of the institution.”

CBN employees are encouraged to carry out research projects and to participate in conferences, lectures, and professional meetings with other professional groups. Usually research papers are a result of the employees’ own initiative. The methodological studies prepared by CBN professionals are circulated for internal review and, when appropriate, for outside review. Institutional papers submitted for publication must be approved by the administration of the CBN.

1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations

The selection of source data and statistical techniques for the compilation of statistical series is based solely on statistical considerations. The sources and methods for compiling the PPI are fully under the control of the CBN and concepts and practices follow international standards. Sources and statistical techniques are used, with no outside interference or attempted interference in matters of sources, methods, and dissemination. Decisions in this regard are made internally after careful consideration of methodological recommendations by international organizations. A summary documentation on source data and methodology employed for compiling the PPI has been prepared and is available to the public.

1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics

When necessary, the CBN responds to erroneous interpretations of CBN statistics through press releases and other means. The CBN follows the press very carefully with regard to references to the PPI. The president and the manager of the CBN are entitled to respond to public criticism of statistics or instances of misuse of statistics, but there have been few instances where response to public criticism has been required.

1.2 Transparency

1.2.1 The terms and conditions under which statistics are collected, processed, and disseminated are available to the public

Article 131 of the Political Constitution of Nicaragua states, “The staff of the four powers of the State, elected directly or indirectly, shall respond on the correct performance of their functions and inform the population on their work and official activities.” The CBN website includes a summary methodology and the technical conditions under which the PPI is calculated. The CBN has posted its Law on its website, which informs about the CBN’s standards of confidentiality and professionalism of its president and Board of Directors. However, the CBN By-Law or a summary of the articles that deal with professionalism of the staff have not been posted on the CBN website. The CBN website (http://www.bcn.gob.ni) contains a directory of key personnel and two e-mail addresses to direct additional requests, suggestions, and contact CBN personnel. CBN publications contain information on the CBN website, its PO Box, and the fax number of the ESM.

In addition, the CBN Library has a unit in charge of providing information to the public.

1.2.2 Internal governmental access to statistics prior to their release is publicly identified

The CBN indicates that the approval of published index series is exempt from outside interference. CBN publications are authorized by the CBN Board of Directors, but there are no specific regulations guiding this approval process. In practice, PPI release and publications are authorized by the manager of Economic Studies.

1.2.3 Products of statistical agencies/units are clearly identified as such

All CBN publications include the Bank’s logo. In the case of joint publications, each entity, whether public or private, is clearly identified with their logos or in the footnotes of all published tables and/or on the title page of the document. The CBN has a policy of releasing publications on the PPI in a standard format (titles, colors, typography, etc.).

1.2.4 Advance notice is given of major changes in methodology, source data, and statistical techniques

Major changes in methodology or data sources are publicized before implementation. Questionnaires used to collect information on manufacturing were presented ahead of implementation to a group of researchers and specialized users.

1.3 Ethical standards

1.3.1 Guidelines for staff behavior are in place and are well known to the staff

A manual of instructions is issued to field agents and supervisors that provides guidelines about staff behavior. CBN staff is not authorized to alter or change statistical data received from respondents. The CBN By-Laws contains rules of staff conduct in Chapter VIII on Obligations and Prohibitions of the Employee. Article 61 of the CBN Law and 77 of its By-Laws state that CBN employees have to be discrete on the affairs that due to their character are reserved according to the law, regulations or special instructions. Other obligations include:

  • (a) … to provide their service with efficiency, honesty, dedication, responsibility, loyalty, and constant improvement in the performance of their assigned tasks… . (f) to observe decorous conduct and maintain respect, consideration, and courtesy at all times in their relations with peers and the public.

Article 77 also states the following prohibitions:

  • (c) To receive from the public any invitation or gift (it does not matter its value or nature) that can be related to expedite paperwork or transactions, or any other circumstance that could induce a special treatment or inappropriate authorization… . (i) to use, for own benefit or third parties’ benefit, values or goods of the Institution….

Article 78 presents the sanctions to apply to the personnel that do not comply with the prohibitions. These sanctions include verbal and written reprehension, work suspension without salary, and dismissal of the employee.

Each new employee is informed of the CBN Law and regulations and is given a personal copy of them.

2. Methodological soundness

2.1 Concepts and definitions

2.1.1 The overall structure in terms of concepts and definitions follows internationally accepted standards, guidelines, or good practices

In general, the PPIs and input price indices are based on concepts and definitions consistent with the 1993 SNA and the new PPI Manual 2004. However, only sales are included in manufacturing PPI weights. Changes in inventories and own-account production for final use are excluded. The level of detail for commodities and economic activities is sufficient to permit detailed analysis of price movements at division, group, and class of the ISIC Rev. 3, and at 4,5, and 6 digits of the CPC at product level.

2.2 Scope

2.2.1 The scope is broadly consistent with internationally accepted standards, guidelines, or good practices

The current PPIs only cover agriculture (including livestock), fishing, and manufacturing sectors. Core industries such as mineral extraction and water and electricity production are excluded. With the exception of the garment enterprises in the free zone, the manufacturing PPI also excludes goods for processing (maquila) that constitute an important segment of the Nicaraguan economy. The coverage of manufacturing activities is incomplete (50 percent of total sales) as only urban enterprises with more than 30 employees are included in the enterprise sample used to calculate PPI weights. Grossing-up factors were not used to calculate weights. These are deviations from international practices.

The PPI used to cover production sold in the domestic market only. Recently, exports were included. Price indices on domestic manufactured inputs and construction materials are also available.

As part of updating the national accounts to the base year 2005, the CBN plans to compile and publish a new PPI that covers agriculture, fishing, mining, manufacturing, electricity and water production.

2.3 Classification/sectorization

2.3.1 Classification/sectorization systems used are broadly consistent with internationally accepted standards, guidelines, or good practices

The PPI is classified using the Nicaraguan version of the ISIC Rev. 3 and the CPC, with some departures from the standard ISIC regarding some activity classes and industrial services.

2.4 Basis for recording

2.4.1 Market prices are used to value flows and stocks

The weights for the agricultural and manufacturing PPIs are determined using values for production based on farm/factory gate producer prices. These prices exclude taxes, transportation costs and commercial margins. Input price index weights deviate from purchasers’ prices by not including distribution margins and non-deductible VAT.

2.4.2 Recording is done on an accrual basis

Business accounting for annual sales (July (t-1)—June t) of around 80 percent of the enterprise sample differs from calendar years. However, adjustments were made to adjust sales to calendar years. Therefore, for both the estimation of weights and monthly price collection for the PPI, values are determined on an accrual basis. For monthly price collection, the market price of the product at the moment of the transaction, during the time period covered by the survey, is recorded.

2.4.3 Grossing/netting procedures are broadly consistent with internationally accepted standards, guidelines, or good practices

For the manufacturing sector in Nicaragua there is not a significant problem with regard to grossing and netting procedures for the PPI. However, for those enterprises producing significant amounts of dissimilar outputs, such as an enterprise that produces both sugar cane and sugar or cooking oil and soap, the production is separated and treated as if there were two separate establishments producing these products. In these cases, “transactions” between the “establishments” are recorded on a gross basis. In many cases this is facilitated by the accounting practices of the enterprises that have developed separate cost centers for the different types of production.

3. Accuracy and reliability

3.1 Source data

3.1.1 Source data are obtained from comprehensive data collection programs that take into account country-specific conditions

Source data available are broadly adequate. However, its coverage is insufficient. The sampling-frame of the PPI was the 1996 Economic Census. According to this census, 87.5 percent of total manufacturing establishments had 1 to 3 employees, and 10.4 percent had 4 to 9 employees. Similarly, the 2000 economic census showed that 82.5 percent of total manufacturing establishments had 1 to 3 employees and 12.9 percent had 4 to 9 employees. In addition, 87.1 percent of establishments that produce food items, 94 percent of establishments that produce textiles, and 82.6 percent of establishments that produce metallic products had 1 to 3 employees in 2000. On contrast, the 1994 PPI enterprise sample only covered the sales of establishments with more than 30 employees and at least 0.5 percent of total sales of the 1994 enterprise sample. This implies that the index has serious problems with regard to economic coverage (see 2.2 Scope).

Although a new economic census was conducted in 2000, its results have not been used to update the enterprise sample and weights of the PPI. In addition, the business register is not updated regularly and household and small enterprises are not included in the PPI weights. There are no regular meetings with producers’ associations.

The PPI has been available for internal CBN use since 2000. It was released to the public in May 2004. The enterprise sample included in the monthly pricing survey account for only 50 percent of manufacturing sales for 2000 according to the economic census (excluding goods for processing). Moreover, in general only one product is priced in each enterprise. No secondary products are priced.

Weight calculations are consistent in that the enterprises with the largest sale values at activity and product level were selected. No scientific sampling procedures were employed.

The CBN has embarked on a continuous annual economic survey. Data are available for the year 2002 and will be used in updating the base year of the PPI. Data for 2003 and 2004 are presently being collected.

Up to 1999, manufacturing producer prices were obtained by calculating unit values from the monthly manufacturing data on values and volume of sales by product. Since 2000, a price survey has been conducted in order to obtain price quotations directly by visiting the enterprises once a month on the same date each month.

3.1.2 Source data reasonably approximate the definitions, scope, classifications, valuation, and time of recording required

Available source data for PPI weights and prices are consistent with the need of the PPI in terms of time of recording, reference period, and valuation.

3.1.3 Source data are timely

Monthly price collection is handled by the ECNS. Enterprises are visited daily and each enterprise is visited once a month. Source data are timely.

3.2 Assessment of source data

3.2.1 Source data—including censuses, sample surveys and administrative records—are routinely assessed, e.g., for coverage, sample error, response error, and nonsampling error; the results of the assessments are monitored and made available to guide statistical processes

Assessment of source data is routinely conducted. Unusually large movements in prices are traced back to the enterprise, if warranted, for verification. Suspicious data are usually verified by contacting the respondent a second time. Post-enumeration checks are made while low, non-response rates to price surveys are not monitored. Sampling and nonsampling errors are not calculated. The coverage of the sample is not assessed according to the total manufacturing sampling frame (output/value added).

3.3 Statistical techniques

3.3.1 Data compilation employs sound statistical techniques to deal with data sources

PPI weights are outdated (1994=100). Grossing-up factors were not used to calculate weights. However, the use of the geometric mean for price changes and linking is a sound practice.

The PPI is calculated using the current-period-to-previous-period (short-term price change) formulation of the Laspeyres index calculation formula. The reference periods for both the weights (1994=100) and the index (1999=100) are not the same.

Temporarily unavailable and seasonally unavailable prices are held constant if prices seem stable. When prices for substitution items/varieties for permanently unavailable items/varieties are available, the price change for the substitution item/variety is imputed to the permanently unavailable item/variety. Although the methodology of holding the temporarily unavailable and seasonally unavailable prices constant is a self-correcting procedure, it has the potential of causing large jumps in the index series when the prices again become available. It would be preferable to impute all missing prices by using the price change of the same item in another area, if available, the price change of the rest of the item’s varieties or the price change of the item’s class. A more serious problem arises when items/varieties become permanently unavailable. Sometime it may take several (three) months to determine that an item/variety will not return to the market in the outlet in which it is being priced. If the price of the old variety is held constant until this is determined and if no imputation of price change is made, there exists the potential for a permanent uncorrected bias in the index. Although this bias is likely to be small during periods of stable prices, it could be significant during periods characterized by large changes in prices.

New varieties are introduced into the index when two-month observations are available and enterprises are updated when necessary. New products are introduced into the PPI only when a major revision of the index is carried out (change in the weight reference period).

In general, only repackaging quality adjustments (adjustments for the volume, weight, or count) for PPI items/varieties are made.

Current data validation and analysis procedures (manual) do not ensure that coding, editing, and tabulation errors. Automatic validation and cross-checking will be implemented.

3.3.2 Other statistical procedures (e.g., data adjustments and transformations, and statistical analysis) employ sound statistical techniques

Gross sales were used to establish the manufacturing PPI weights. Work in progress (trabajos en curso) is not included in the agricultural PPI weights. An unbiased formula (weighted geometric mean of price ratios or relatives) is used to calculate the elementary (item) level indices when the item has several varieties. A short-term price change from the previous period is used. The method to aggregate elementary indices to higher levels uses an internationally accepted formula (Laspeyres formula).

The current weight reference period (1994=100) and price reference period (1999=100) for the index are not the same. The sales shares are held constant from the weight reference period. The weight reference period was not updated within the past ten years.

When the new weights were introduced, the new index was linked to the old index using international accepted practices (the splicing method); however, these series are not publicized.

3.4 Assessment and validation of intermediate data and statistical outputs

3.4.1 Intermediate results are validated against other information where applicable

Where possible PPI price and index data are compared to corresponding data from the CPI and other price data from government ministries. PPIs are also compared to the implicit price indices in the national accounts.

3.4.2 Statistical discrepancies in intermediate data are assessed and investigated

Unusual price behavior is investigated, and corrections are made. However, no documentation is prepared.

3.4.3 Statistical discrepancies and other potential indicators of problems in statistical outputs are investigated

No formal studies are conducted to investigate errors, omissions, and fluctuations in the data.

3.5 Revision studies

3.5.1 Studies and analyses of revisions are carried out routinely and used internally to inform statistical processes (see also 4.3.3)

Monthly PPI data are final. Weights have not been revised since 1994 and are not periodically assessed for bias. Since the PPI was recently published, there are no revisions of published data. However, the CBN is in the process of updating the base year of the national accounts to the year 2005, and plans to expand the coverage of the PPI and update the weights to the year 2005 at the same time. Notes on price data adjustments are not stored in the database.

4. Serviceability

4.1 Periodicity and timeliness

4.1.1 Periodicity follows dissemination standards

Prices are collected daily. The periodicity for the compilation of the PPI is monthly, meeting GDDS recommendations and SDDS standards.

4.1.2 Timeliness follows dissemination standards

The monthly PPI is published within 15 to 20 days of the reference month. This exceeds GDDS and SDDS standards.

4.2 Consistency

4.2.1 Statistics are consistent within the dataset

The PPI is internally consistent by activity branch and product.

4.2.2 Statistics are consistent or reconcilable over a reasonable period of time

Long-term series, with 1994=100 as a weight reference base, are available up to December 2004. PPIs with 1999=100 were linked to the previous series with 1994=100. Monthly index series are available since 1992 when they were first compiled.

4.2.3 Statistics are consistent or reconcilable with those obtained through other data sources and/or statistical frameworks

The PPI is consistent with other government statistics as well as with national accounts implicit price deflators.

4.3 Revision policy and practice

4.3.1 Revisions follow a regular and transparent schedule

There is no well-established schedule for revising the weights for the PPI. The weights have not been updated since the index was first compiled. However, as part of updating the base year for the national accounts to the year 2005, the PPI will also be expanded and updated.

4.3.2 Preliminary and/or revised data are clearly identified

When data are revised, preliminary and revised data are not identified.

4.3.3 Studies and analyses of revisions are made public (see also 3.5.1)

Since the PPI weights have not been updated, this element cannot be evaluated except to mention that a documentation of the methodology for compiling the index has been prepared and is available on the CBN website. No other analysis of the index or its potential revision has been documented.

5. Accessibility

5.1 Data accessibility

5.1.1 Statistics are presented in a way that facilitates proper interpretation and meaningful comparisons (layout and clarity of text, tables, and charts)

No press release or analysis on current trends is made on PPIs. PPIs are only disseminated on the CBN website; a hard-copy publication on PPIs is not prepared. However, PPIs are published in the Economic Indicators publication. Certain relevant series are not seasonally adjusted. Time series from January 1994 up to December 2004 can be accessed through the CBN website. Detailed indices and price changes at product level are not published.

5.1.2 Dissemination media and format are adequate

PPI data is only published at the CBN website and in Economic Indicators. There is no special publication for the PPI such as the one for the CPI.

5.1.3 Statistics are released on a preannounced schedule

Advance release calendars are not available.

5.1.4 Statistics are made available to all users at the same time

PPIs are made available to all users at the same time through the CBN website. The public is informed of the statistics being released, and of the procedures to access them at the CBN website and in the publications. Publications contain information on the CBN website (www.bcn.gob.ni), CBN PO box address, and fax number. The CBN website also includes two e-mail addresses (bcn@bcn.gob.ni and webmaster@bcn.gon.ni) to direct requests and contact CBN personnel.

5.1.5 Statistics not routinely disseminated are made available upon request

There is difficulty in determining which nonpublished nonconfidential data are available upon request and the procedures to obtain them. Detailed data are not always available upon request.

5.2 Metadata accessibility

5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available, and differences from internationally accepted standards, guidelines, or good practices are annotated

A summary methodological document on the PPI describing the weight estimation process and the index calculation methodology is available on the CBN website. This is the only document that is provided to the public. A more detailed methodology is available at the DID, but it is not published.

5.2.2 Levels of detail are adapted to the needs of the intended audience

No detailed documentation for specialized audience is available.

5.3 Assistance to users

5.3.1 Contact points for each subject field are publicized

Prompt and knowledgeable service and support on the PPI is available to all index users through the Department of Public Service at the CBN Library and key personnel are listed in the PPI methodology. Assistance to users is monitored through data requests, but it is not reviewed periodically.

5.3.2 Catalogs of publications, documents, and other services, including information on any changes, are widely available

A list of CBN publications and CDs is available from the CBN Library and on the CBN website. Assistance is provided in placing orders at the Library. CBN publications are free of charge.

Table 3.

Nicaragua: Data Quality Assessment Framework (July 2003): Summary of Results for the Producer Price Index:

(Compiling Agency: Central Bank of Nicaragua)

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IV. Government Finance Statistics

0. Prerequisites of quality

0.1 Legal and institutional environment

0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified

The Ministry of Finance and Public Credit (MFPC) is responsible of collecting, processing, and disseminating fiscal statistics corresponding to the central government. Several laws establish these functions. In the first place the Political Constitution of the country, chapter 3, Article 112, gives responsibility to the Executive Power in the formulation of the budget and the responsibility of the National Assembly in the process of its approval. Article 113, establishes that, for information of the National Assembly, the Projected Annual Budget Law should contain the budget of autonomous decentralized entities and state enterprises.

In addition to the in the Constitution, the legal environment includes the following attributions to prepare the budget:

Law 290, the Law of Organization, Competence and Procedures of the Executive Power, in its Article 21, letter (a), establishes the management of public finances: that is, to direct, supervise, and control tax policy, formulate and propose the pre-projected Annual Budget Law to the President of the Republic; determine the fiscal balance; coordinate and direct the execution and control of public expenditure; and manage the registry of public investment.

The Laws of the General Directorate of the Budget (GDB) contributes to reinforce the authority of the MFPC to direct the public finances as mentioned in its Law 51, named “Law of the Budgetary Regimen” and Law 136 “Reform and Additions to the Budgetary Regimen” that gives powers to the MFPC, in this matter, in articles 9, 10, and 12. The authority of the MFPC is ratified in the articles to the Annual Budget Law and in the law of norms for execution that regulate the budget laws.

There are other legal dispositions related to the collection and dissemination of statistics contained in the organic laws of the directorates of the MFPC, among them General Directorate for Public Credit (GDPC), General Directorate of Government Accounting, and two autonomous directorates linked to the MFPC: General Directorate of Revenue (GDI) and General Directorate of Customs (GDA).

In the legal environment of the GDPC, the Law 290, letter (b) of Article 21, the Directorate is given the responsibility to direct, manage, follow-up, and control the impact of the domestic and foreign debt of the central government and decentralized agencies.

In the legal framework of the General Directorate of Government Accounting, in its Law 290, Law of Organization, Competence and Procedures of the Executive Power, Article 21, letter (h) and Decree 44–98, Article 7, establish the functions of the Directorate. These functions include the management of the Integrated Financial Management and Audit System (SIGFA) sub-system of the central government accounting, to consolidate the government accounting and the budget execution at the end of the budgetary exercise. The GDB, using this document as a source, prepares the Annual Report on the Liquidation of the Budget, each year, to be presented to the President of Nicaragua and to the National Assembly.

In the legal framework of the GDI, the Law 339, Article 5, number (5) establishes that the main function of the GDI is to make operative the laws and dispositions that establish or regulate the revenue in favor of the government, that are under its jurisdiction, so that the revenue is received in a timely manner, with accuracy and justice.

Regarding the DGA, the Law 339 of March 2000 establishes the DGA as a decentralized Directorate linked to the MFPC. The Directorate has juridical independence and administrative autonomy to manage the tax laws that are in favor of the government that apply to international transactions of goods and services. This function is ratified by the Decree 20–2003 that regulates the Law 339.

0.1.2 Data sharing and coordination among data-producing agencies are adequate

The MFPC through the GDB collects the underlying information on government operations supported by SIGFA, which covers the operations performed by the General Treasury of the Republic, DGI, DGA, General Directorate of Government Accounting, and the General Directorate of Public Credit. Among these institutions, there is good level of coordination and sharing of data. There is a committee for MFPC entities, DGI and DGA to reconcile statistics and data sharing on weekly meetings. The committee examines the statistics presented by each institution and follows-up on the Economic Program of the Government with the IMF. Also, there is a coordination committee with the CBN. There are no formal bylaws or ministerial decrees or institutional arrangements for the functioning of these committees. Each institutional representative in the committees could participate in the preparation of the agenda for the next meeting. In addition, there is close coordination with the fiscal sector unit of the Research Department in the CBN that assists in the compilation of data for the foreign sector (external loans, foreign grants, amortization, and interest paid), and the internal flows related to operations of the MFPC and the CBN.

0.1.3 Individual reporters’ data are to be kept confidential and used for statistical purposes only

Data reported by the each government entity are confidential, e.g., data reported by the GDI and GDA. However, after SIGFA processes and consolidates the data for accounting purposes, the aggregated data reported by each entity are no longer confidential.

0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response

The laws discussed in section 0.1.1 above determine the publication of data by the MFPC, in particular, the Law of Budget Procedures, and the Annual Budget Law. These laws rule that all agencies of the central government should report the operations related to the budget. Therefore, only government entities included in the annual budget have a legal mandate to report their operations to the MFPC.

0.2 Resources

0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs

The unit compiling GFS in the MFPC has adequate personnel and material resources, including sufficient computing equipment. However, the statistical compilers (only three staff members) in the GDB do not have a relational database to store chronological time series and to generate analytical tables and make projections. Only few experienced compilers are well trained in the A Manual on Government Finance Statistics, 1986 (GFSM 1986), while none have attended suitable training courses, and they have little familiarity with the Government Financial Statistics Manual 2001 (GFSM 2001).

0.2.2 Measures to ensure efficient use of resources are implemented

There is no system in place to ensure the efficient use of resources or to measure the cost of statistical work. There is no formal system for evaluating the personal performance of the compilers of fiscal data. However, there is an ongoing process of evaluation in the completion of the work program of the compiling unit. It is expected that the application of the Law of Civil Service will correct this situation. The cost of compiling fiscal data is not determined. However, it is possible to calculate the expenditure of the unit that compiles fiscal data.

0.3 Relevance

0.3.1 The relevance and practical utility of existing statistics in meeting users’ needs are monitored

The MFPC is open to feedback from GFS users, but it does not actively seek out comments from the users, nor does it have any mechanism in place to identify new or emerging data requirements. Budgetary statistics are mainly relevant to monitor the execution of the annual budget and to be used as an indicator of government activity. The MFPC does not prepare GFS data for general government and/or the nonfinancial public sector.

The authorities in the MFPC have access in advance to the information generated by SIGFA. In the establishment of the SIGFA project, the needs of official users were evaluated and agreed. The quarterly report is disseminated to the public through Internet. This report contains summarized data and detailed tables in its annexes.

0.4 Other quality management

0.4.1 Processes are in place to focus on quality

The use of data generated by SIGFA gives assurance that data being compiled are based on the best quality information available. The administrative and accounting records are used in the processing of the data.

0.4.2 Processes are in place to monitor the quality of the statistical program

The MFPC is systematically reviewing the classification and coherence of the reports prepared by SIGFA, for budgeting and accounting, to evaluate the quality of the fiscal data. International experts from the Interamerican Development Bank (IDB) and WB have assisted the authorities in developing a system for medium-term projections and to review the classifications being used. However there is no formal quality management program.

0.4.3 Processes are in place to deal with quality considerations in planning the statistical program

The coverage of the SIGFA system is being reviewed to expand it and develop a module to cover the transactions of the municipalities. Future expansion to cover the nonfinancial public corporations data is planned.

1. Assurances of integrity

1.1 Professionalism

1.1.1 Statistics are produced on an impartial basis

Fiscal data compiled by the MFPC are based on the data generated by SIGFA and, therefore, are produced on an impartial basis. The CBN makes efforts to present technical seminars to discuss papers and recent work undertaken, which are prepared by the technical staff to promote professionalism in the CBN.

The culture of professionalism is clearly recognized as essential in ensuring impartiality on the part of civil servants and in the Law of Civil Service. There are no laws or other formal arrangements to support the professional independence of GFS compilers, although under the current government structure, there have been no attempts by authorities to influence statistical output. Professionalism is a key factor in the recruitment and promotion of staff, ensuring stability, long tenure, and a good degree of knowledge and experience with compilation and methodological procedures.

1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations

Data generated by SIGFA are based on sound sources of information, as they are the administrative and accounting records of the budgetary units of the government. In the CBN, the selection of sources for data compilation is in line with the recommendations of GFSM 1986. Decisions to disseminate the data compiled by the CBN are aligned by the autonomous character of the institution and the professional integrity of the staff.

1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics

In the MFPC and CBN only authorized officials can address the public to comment on erroneous interpretation of the data released. Compilers should report to the authorities on the emerging issues and then if the authorities find it pertinent, they release comments to the public but not the compilers.

1.2 Transparency

1.2.1 The terms and conditions under which statistics are collected, processed, and disseminated are available to the public

Public access to the budget legislation and a broad legal framework for the collection and compilation of data is complemented with other means of information, such as press releases and pamphlets on the SIGFA project. However, transparency is affected because the MFPC does not make available to the public the terms and conditions under which GFS are collected, compiled, and disseminated. In particular, users are not made aware that the coverage of central government data is incomplete and that data with a more complete coverage of central government, local governments (including some nonfinancial public enterprises) are disseminated by the CBN.

1.2.2 Internal governmental access to statistics prior to their release is publicly identified

It is publicly known that all monthly data generated by SIGFA and its subsystems are reported to the MFPC and the National Assembly and then after 20 to 30 days to the CBN. After the CBN receives the information, quarterly data are released to the public in general on the Internet.

1.2.3 Products of statistical agencies/units are clearly identified as such

The MFPC’s website clearly identifies the data generated by SIGFA. In addition, issuers could make questions through the MFPC website “Citizen’s Popular Questions” (Consulta Popular Ciudadana) and the MFPC’s regulations require to answer all questions channeled through this website within 48 hours after the original question is received.

1.2.4 Advance notice is given of major changes in methodology, source data, and statistical techniques

The methodology and procedures followed by SIGFA in the generation of data on fiscal operations have been publicly announced from the beginning of the Project.

1.3 Ethical standards

1.3.1 Guidelines for staff behavior are in place and are well known to the staff

The recently approved Law of Civil Service of 2004 governs the behavior of MFPC staff. There is no formal code of conduct for the GFS compilers in the MFPC, except for one general disposition in the By-Laws for Personnel, Part 3, number IX, that establishes that the use of information known to the employee in the course of the work is to be guarded with care and protection (debido sigilo). The laws of agencies under the MFPC contribute to fortify ethical standards. However, any such codes would merely formalize the current practice observed and expected from all staff.

2. Methodological soundness

2.1 Concepts and definitions

2.1.1 The overall structure in terms of concepts and definitions follow s internationally accepted standards, guidelines, or good practices

Concepts and definitions used by the MFPC and CBN are generally consistent with GFSM 1986. However, there is no plan, yet to implement the GFSM 2001. In 2004, the CBN reclassified the fiscal data using data categories as defined in the GFSM 2001. Data is now being disseminated by the CBN in this new presentation. The CBN published in printed form and on the Internet the metadata with a description of the content of each category in the different classifications now used.

2.2 Scope

2.2.1 The scope is broadly consistent with internationally accepted standards, guidelines, or good practices

Fiscal statistics disseminated by the MFPC cover the budgetary operations only. The data compiled by the MFPC through the GDB comprise the following institutions: ministries, decentralized agencies under the direction of the central government, and the extra budgetary agencies. The general budget of the government includes information about the budget of the Nicaraguan Institute of Social Security (NISS), autonomous agencies and nonfinancial corporations producing utility services. However, the MFPC does not receive information on the execution of their budgets.

The CBN compiles data for the “restricted nonfinancial public sector” that comprises the budgetary central government, the NISS, the Municipality of Managua (Alcaldíde Managua), and two nonfinancial public corporations. Coverage is incomplete to determine the consolidated central government (missing are the operations of various autonomous agencies and decentralized entities that do not receive resources from the budget). The coverage of municipalities is incomplete precluding compilation of data for the concept of general government, and the operations of several important nonfinancial public corporations are missing. This is the reason why the data for the nonfinancial public sector are denominated “Restricted nonfinancial public sector.” Domestic debt data include intergovernmental debt to the NISS. There are no fiscal statistics on the operations of consolidated central government or complete local governments and therefore general government data are not compiled.

2.3 Classification/sectorization

2.3.1 Classification/sectorization systems used are broadly consistent with internationally accepted standards, guidelines, or good practices

Fiscal statistics lack the presentation of data for consolidated central government and general government. There are no fiscal statistics on the operations of consolidated central government, complete local governments, and therefore, there is a lack of coverage of data covering the general government. However, CBN fiscal data are classified according to GFSM 2001. Under this presentation the summarized operations of the nonfinancial public sector are classified as follows:

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The MFPC is still using the analytical framework and classifications of the GFSM 1986.

2.4 Basis for recording

2.4.1 Market prices are used to value flows and stocks

Flows are valued at market prices for each transaction. The statistical data are compiled and published in national currency (córdobas). Transactions denominated in dollars or other currencies are converted to national currency (córdobas) at the exchange rate in effect at the time of the transactions. Nominal value is used for debt stocks in accordance with GFSM 1986.

2.4.2 Recording is done on an accrual basis

Budgetary central government expenditure is recorded partly on a cash basis and partly on an accrual basis. Expenditures recorded on an accrual basis are the purchase of goods and services, as well as wages and salaries appropriated for the month of November each year. The CBN’s rest-of-public-sector operations are recorded on a cash basis.

2.4.3 Grossing/netting procedures are broadly consistent with internationally accepted standards, guidelines, or good practices

The MFPC and CBN present the flow data on a gross basis, except for corrective transactions and net data for the operations on financial assets and liabilities in the compilation of financing.

3. Accuracy and reliability

3.1 Source data

3.1.1 Source data are obtained from comprehensive data collection programs that take into account country-specific conditions

The MFPC flow data are generated by SIGFA, for the budgetary central government (BCG) operations, for the GFS aggregates and their corresponding detail. The BCG data are supplemented with flow data for domestic and foreign financing reported by the CBN. The financing data are based on the accounting records of the CBN, regarding its own operations with the BCG, and data reported by the GDPC on domestic and foreign debt operations. In the compilation of the rest of the restricted public sector operations, the CBN collects data on a cash basis from the NISS, ALMA (Managua Municipality), and two relevant nonfinancial public corporations. However, the CBN does not use financial statements and balance sheets of the NISS or nonfinancial public enterprises to compile their flow accounts.

3.1.2 Source data reasonably approximate the definitions, scope, classifications, valuation, and time of recording required.

Classification codes used by SIGFA to provide source data to both the BCG and the CBN, and for the rest of the nonfinancial public sector are in line with GFSM 1986 and, also, the valuation practices are in line with GFSM 1986.

3.1.3 Source data are timely

Compilation by SIGFA of monthly, quarterly, and annual data for the BCG is timely with a lag of less than 30 days. The CBN collects the monthly information for the institutions in the rest of the restricted nonfinancial public sector within 20 days. However, some delays are observed for some institutions, that may delay the compilation and dissemination of the restricted nonfinancial public sector. More generally, the CBN publishes the fiscal data within five weeks after the reference month.

3.2 Assessment of source data

3.2.1 Source data—including censuses, sample surveys and administrative records—are routinely assessed, e.g., for coverage, sample error, response error, and no sampling error; the results of the assessments are monitored and made available to guide statistical processes

Because source data are timely, SIGFA assesses regularly the data compiled by the system and subsystems with the objective of compiling new reports or modifying the old ones. Data for the rest of public sector collected by the CBN are assessed and analyzed by the compilers in the central bank each month. The processes in place ensure appropriate validation and cross checking.

3.3 Statistical techniques

3.3.1 Data compilation employs sound statistical techniques to deal with data sources

SIGFA and CBN procedures are in line with GFSM 1986. The quality of data generated by SIGFA is assured by the procedures followed by the system and subsystems of SIGFA, which are based on the accounting and administrative records of the government units. The CBN validates arithmetic accuracy of the data received for the institutions in the restricted nonfinancial public sector.

3.3.2 Other statistical procedures (e.g., data adjustments and transformations, and statistical analysis) employ sound statistical techniques

SIGFA and the CBN follow recommendations of GFSM 1986 regarding adjustments, in particular for the reclassification of items, and valuation techniques. Domestic debt is valued at nominal value, and external debt flows are valued in national currency at the exchange rate of the date of the transaction and the remaining maturity balance is valued at the end of period exchange rate.

3.4 Assessment and validation of intermediate data and statistical outputs

3.4.1 Intermediate results are validated against other information where applicable

Data compiled by the revenue directorates (GDI and GDA) are used to validate fiscal revenue data generated by SIGFA. The CBN validates data on government transfers received with data reported by SIGFA corresponding to individual institutions in the rest of the nonfinancial public sector. NISS data on interests and amortization are provided by the Treasury and subsequently compared with MFPC data on these categories.

3.4.2 Statistical discrepancies in intermediate data are assessed and investigated

The MFPC validates the data on changes of government debt stocks with financing data in coordination with the CBN. The statistical discrepancies found in crosschecks of preliminary data of paying and receiving institutions are revised in the data sources and then adjusted in the statistics.

3.4.3 Statistical discrepancies and other potential indicators of problems in statistical outputs are investigated

Compiled data are checked horizontally and vertically for internal consistency by both the MFPC and the CBN. In addition, the CBN makes, when possible, crosschecks of foreign loans received and grants with creditors and when possible with a directory of donors.

3.5 Revision studies

3.5.1 Studies and analyses of revisions are carried out routinely and used internally to inform statistical processes (see also 4.3.3)

The MFPC reviews and researches discrepancies and, when errors are detected, data are revised accordingly. However, no revision studies are undertaken in a systematic way in the MFPC. On the other hand, the CBN’s revisions do not follow a regular pattern. The sources of error are examined in order to improve the compilation practices in the CBN.

4. Serviceability

4.1 Periodicity and timeliness

4.1.1 Periodicity follows dissemination standards

Flow data compiled by the MFPC and CBN meet GDDS dissemination recommendations regarding periodicity. Data are compiled on a monthly, quarterly, and annual basis. Debt data (domestic and foreign) are compiled by the MFPC on a monthly basis.

4.1.2 Timeliness follows dissemination standards

Flow data compiled by the MFPC and CBN meet GDDS dissemination recommendations regarding timeliness. The quarterly data are released by the MFPC to the public with a delay of about 20–30 days. The CBN’s timelines is 60 days for monthly data, 90 days for quarterly data, and four to five months for annual data. Quarterly debt data are disseminated to the public with a delay of about three to four months.

4.2 Consistency

4.2.1 Statistics are consistent within the dataset

Statistics are checked arithmetically for consistency, horizontally and vertically, in both MFPC and CBN data. Compilers, in both institutions, obtain annual data as the sum of quarterly data. If any correction is made to the annual figures, an adjustment is made in the last month of the fiscal year for monthly data or in the last quarter of the fiscal year for the quarterly data in order to keep sub annual data consistent with annual data. The aggregates shown in the summary tables are checked with the sum of categories in the detailed tables.

4.2.2 Statistics are consistent or reconcilable over a reasonable period of time

Both the MFPC and CBN disseminate fiscal data that are consistent with chronological time series. In the MFPC, time series for about 10 years are available and in the CBN, from 1987 through 2004.

4.2.3 Statistics are consistent or reconcilable with those obtained through other data sources and/or statistical frameworks

MFPC budgetary data are used as intermediate products in other data sources. Monetary statistics are not consistent with fiscal data due to incomplete coverage of the nonfinancial public sector and differences in recording criteria. Government expenditure is recorded partly on an accrual basis. Monetary statistics cover all nonfinancial public sector units and data are recorded on an accrual basis. However, primary intermediate data sources could be largely reconciled.

4.3 Revision policy and practice

4.3.1 Revisions follow a regular and transparent schedule

Revisions do not follow a regular pattern in the MFPC or CBN. When data are revised in the MFPC, evaluation comments are included if differences are deemed important. Revision takes place in the CBN when annual data are compiled or before publication of final data. If any errors or omissions are found, the compilers review data for earlier years if possible.

4.3.2 Preliminary and/or revised data are clearly identified

The MFPC and CBN identify the status of data through footnotes in the statistical tables.

4.3.3 Studies and analyses of revisions are made public (see also 3.5.1)

Both the MFPC and CBN do not make public studies of the revisions.

5. Accessibility

5.1 Data accessibility

5.1.1 Statistics are presented in a way that facilitates proper interpretation and meaningful comparisons (layout and clarity of text, tables, and charts)

Fiscal data are disseminated by the MFPC to the public in a format that conforms to the components and classifications of GFSM 1986. CBN data are classified according to GFSM 2001 classifications. Both the MFCP and CBN supplement data with detailed tables, graphic presentations, and evaluation comments.

5.1.2 Dissemination media and format are adequate

The MFPC publishes the quarterly reports in hard copy with the same breakdown as the data published in the website of the ministry. Users can find quarterly data from 2000 onwards. The CBN publishes the data through Economic Indicators, quarterly bulletins, annual reports and in the CBN’s website.

5.1.3 Statistics are released on a preannounced schedule

The MFPC disseminates data to the public on a quarterly basis in accordance with the legal mandate in the Budget Law. The CBN does not have a preannounced schedule for publication.

5.1.4 Statistics are made available to all users at the same time

Both the MFPC and the CBN release fiscal data to all users simultaneously.

5.1.5 Statistics not routinely disseminated are made available upon request

In both MFPC and CBN, unpublished data with a longer time series are available to users upon request. In the MFPC the website gives the electronic address to make requests: webmaster@mhcp.gob.ni, although there is no address of the GFS compiler.

5.2 Metadata accessibility

5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available, and differences from internationally accepted standards, guidelines, or good practices are annotated

The MFPC has published procedures manuals for the budget processes and SIGFA procedures. However, these manuals are not user friendly and are intended for reference to the employees of the ministry. The CBN has recently published, in hard print and in the Bank’s website, detailed metadata.

5.2.2 Levels of detail are adapted to the needs of the intended audience

The MFPC includes detailed information not adapted to the needs of the public. The publications contain more detailed information than the international standards. In addition the MHCP does not alert users regarding the existence of data with better coverage published by the CBN. The CBN’s detailed information is designed to meet the needs of all users.

5.3 Assistance to users

5.3.1 Contact points for each subject field are publicized

Both the MFPC and the CBN give information on names or electronic address to obtain support from the institutions.

5.3.2 Catalogs of publications, documents, and other services, including information on any charges, are widely available

In the MFPC, there is no catalog of publications. However, the websites of the different dependencies of the ministry include the links for direct access to the available documents for the users. The CBN publishes a catalog of publications that is updated frequently.

Table 4.

Nicaragua: Data Quality Assessment Framework (July 2003): Summary of Results for Government Finance Statistics:

(Compiling Agencies: Ministry of Finance and Public Credit for Dimensions 0–1, and Central Bank of Nicaragua for Dimensions 1–4)

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V. Monetary Statistics

0. Prerequisites of quality

0.1 Legal and institutional environment

0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified

The Nicaraguan financial system is governed by the Political Constitution of Nicaragua (Articles 99, 131), the Organic Law of the CBN (Law No. 317), the Law of the Superintendency of Banks and Other Financial Institutions (Law No. 316), the Law of Banks, Nonbank Financial Institutions and Financial Groups (Law No. 314), and other applicable laws, as well as respective regulations. These laws have undergone various amendments and additions.

The CBN was created by the Constitution of 1950 through legislative decree No. 525 on August 28, 1960 and began operations on January 1, 1961 as a state institution with operational autonomy, indefinite duration, independent funding, and legal identity. It is currently governed by Article 99 of the Political Constitution which establishes that “The Central Bank is the state regulator of the monetary system.” The CBN’s legal framework was modernized in 1999 as reflected in its Organic Law (CBN Law).

Traditionally, the CBN has been responsible for the collection, compilation, and dissemination of monetary and financial statistics. The legal basis for these functions derives essentially from the CBN Law, in particular Articles 60 and 61, which set the rights and obligations of the CBN in relation to the production of macroeconomic data. Also, Article 31 of the CBN Law stipulates that, during the first three months of the year, the CBN must submit to the President of the Republic the Annual Report of the institution, which should include a general survey of the economic and financial development of the country.

The Superintendency of Banks and Other Financial Institutions (SBOFI) has its own legal framework (Law No. 316) and the legal authority to collect information from those institutions under its supervision. Financial institutions are also required by law (Law No. 314) to report to the SBOFI or face sanctions. In compliance with the law, financial institutions provide information to the SBOFI on a weekly and monthly basis and the SBOFI forwards the information to the CBN in electronic format.

0.1.2 Data sharing and coordination among data-producing agencies are adequate

In the case of the central bank data, the CBN has adopted provisions to facilitate the flow of source data between the Accounting Department (Accounting) [Subgerencia de Contabilidad y Presupuesto] and the Monetary Programming Department (MPD) through an automated system known as the “Unified Database” (UDB) [Base de datos unificada del BCN]. One computer at the MDP is linked to the UDB and direct access to the database is limited to a few authorized MPD staff, who can view and retrieve data but cannot modify them. The UBD is updated daily with the accounting information of the central bank balance. With respect to Other Depository Corporations (ODCs), the CBN and the SBOFI have arrangements in place to ensure the flow of information from the SBOFI to the CBN although such arrangements are not of a legal or official nature. Financial institutions provide information to the SBOFI on a weekly and monthly basis. The SBOFI in turn provides monthly data to the Economic Studies Department [Subgerencia de Estudios Económicos] of the CBN in electronic format after they have been reviewed and aggregated. Considerable delays in data transmittal are not usually encountered. The CBN maintains open and regular communications with the SBOFI regarding the flow of information and to resolve any data issues that may arise during the data review and validation process. The MPD staff do not contact the individual ODCs directly. Prior to the introduction of the Sectorization Report for ODCs (see item 0.1.4), the CBN and the SBOFI held joint seminars with the ODCs to discuss the report and its implementation.

0.1.3 Individual reporters’ data are to be kept confidential and used for statistical purposes only

The confidentiality of the data that ODCs provide to the SBOFI is established in the CBN Law. Article 60 stipulates that information shall be used solely for statistical purposes and macroeconomic analysis. Also, according to Article 61, all CBN employees are required to keep confidential any information, documents, and transactions that may come to their attention in the course of performing their duties. Moreover, Article 10 (e) of the CBN By-Laws [Reglamento Interno] identifies disclosure of confidential information as a cause to terminate employment, Article 56 stipulates the confidentiality of all electronic information available to the staff, and Article 77 (j) and (i) establishes that any violation of bank secrecy or confidentiality is punished without prejudice to any punitive sanctions that may apply under ordinary criminal law.

There are no computer programs especially designed to prevent the dissemination of confidential data. Aggregate data are reviewed and validated prior to dissemination to avoid indirect disclosure of individual data. The confidentiality of the data depends, to a large extent, on the professional ethics of CBN employees. To safeguard the confidentiality of the data, access to individual data and to installations and electronic databases in the CBN’s server is restricted to authorized personnel.

0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response

The legal provisions underpinning the obligation of financial institutions to report data needed to compile statistics are contained in the legislation cited above (item 0.1.1). Article 60 of the CBN Law stipulates that government and municipal offices and agencies, as well as State credit institutions, be required to submit to the CBN any reports it may request to carry out its functions. In addition, banks and any other individual or legal entity resident or domiciled in Nicaragua, whether national or foreign, are required to provide the CBN with any statistical data it may request in exercise of the authority conferred on it by law. Article 61 contemplates generic sanctions for noncompliance with the law, regulations and resolutions issued by the CBN or by providing incomplete or false information (i.e., a fine of 1,000 to 10,000 córdobas for each instance, which shall be credited to the tax authority, the General Revenue Directorate, at the request of the Central Bank). In practice, the CBN does not levy fines for nonreporting.

Article 25 of the SBOFI Law and article 144 of the Law of Banks, Nonbank Financial Institutions and Financial Groups also stipulate the sanctions in case of noncompliance. Also, in 2002, the SBOFI issued an official mandate requiring all deposit-taking institutions to prepare and submit to the SBOFI a weekly and monthly Sectorization Report which would provide better source data for compiling monetary statistics. This regulation became effective in September 2002 and includes provisions for sanctions. The CBN prepared instructions to facilitate the preparation of the Sectorization Report, classification of institutional units and the forms for recording data at monthly and weekly intervals.

0.2 Resources

0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs

Monetary statistics are prepared by the MPD of the CBN, which has 11 staff, six of whom spend a considerable part of their time on the preparation of daily, weekly, and monthly monetary statistics. All of the staff have university degrees in economics and several staff have participated in specialized courses in monetary and financial statistics. It is estimated that an average of six months experience is required to acquire good knowledge of concepts and established practices. There is minimum staff turnover in the MPD as 60 percent have been in their positions for more than 10 years. Staff resources for compiling monetary statistics are broadly adequate to carry out its current work program.

Regarding training in methodologies and compilation techniques, the CBN supports the participation of its employees in courses offered by international organizations, such as the IMF (especially the Monetary and Financial Statistics course), and seminars offered by regional institutions, such as the Central American Monetary Council (CAMC) and the Center for Economic and Monetary Studies for Latin America (CEMLA). There is no training program offered by the CBN to help staff improve their technical qualifications in economics, monetary and financial matters, including statistical compilation.

On technical resources, improvements have been made since 2003 and all staff currently have personal computers and a standard software, which is connected to the CBN network. The staff uses Excel, Word, PowerPoint in a Windows environment. All staff have access to the CBN Intranet but only two have access to the Internet. Access to more modern equipment (e.g., computers with larger memory) and more sophisticated software (e.g., econometric packages) would help to enhance the contributions made by the staff.

The compilation of monetary statistics for the central bank is performed using an electronic system developed in a Windows environment in late 2000. This tool is comprised of different modules (one for the CBN and one for the ODCs), allows interactions with users to expedite the updating and verification of data and the production of predetermined output tables. Nevertheless, access to the system is limited to a few key staff members, each of whom perform very specific functions.

The physical facilities (workspace, office facilities, furniture, equipment, etc.) are less than adequate to facilitate the efficient compilation of monetary statistics; however, a remodeling project that is currently being carried out will result in significant improvements.

Financial resources are broadly adequate to support the current programs for monetary statistics. The budget for monetary and financial statistics is reviewed each year within the context of the overall CBN budget and the required appropriations are usually granted. MPD monitors the use of its financial resources based on a report provided by the Accounting Department and may adjust its program as needed. Requests for additional resources must be submitted for management’s consideration and approval within the context of existing priorities.

As of 2004, a Plan Estratégico del Banco Central de Nicaragua has been prepared in a manner consistent with the approved budget for each organizational unit. A strategic plan for 2005 has been recently drafted and also provides for adequate financing to undertake all objectives identified for the period, including the adoption of internationally accepted practices and methodologies in the compilation of financial and economic data.

0.2.2 Measures to ensure efficient use of resources are implemented

In general, all programs in the CBN are subject to budget considerations and regular performance assessments. Annual work programs are designed by the individual departments and submitted for approval by CBN management. In the case of monetary statistics, staff performance evaluations are conducted every year and the work program is monitored and reviewed periodically. There is no specific process to measure the resources used to compile monetary and financial statistics vis-à-vis those employed for other macroeconomic data. Moreover, internal work practices and procedures are not reviewed regularly to improve efficiency; however, the CBN seeks technical assistance from international organizations (e.g., the IMF, CEMLA, CAMC) to evaluate and improve statistical methodologies.

0.3 Relevance

0.3.1 The relevance and practical utility of existing statistics in meeting users’ needs are monitored

The CBN does not have a proactive policy of regularly consulting users to obtain feedback on the quality and relevance of monetary statistics, and therefore, input from the general public is very limited. In general, feedback on the relevance of the statistics is obtained in the course of responding to specific data requests. Users seeking data that is not published on the CBN’s website or in its publications contact the CBN for assistance. Occasionally, the CBN conducts conferences to inform the public about changes and innovations in monetary statistics.

Nonetheless, CBN participation in seminars and conferences on monetary statistics organized by international and regional organizations (e.g., the IMF, CAMC, and CEMLA) provides a forum to identify new and emerging data requirements and to help in assessing the relevance of the CBN’s monetary statistics. The CBN is actively pursuing the goal of adopting internationally accepted standards for monetary statistics, as demonstrated by their efforts to adopt the Monetary and Financial Statistics Manual’s (MFSM) methodology and their decision to participate in the IMF’s General Data Dissemination System (GDDS).3 4

0.4 Other quality management

0.4.1 Processes are in place to focus on quality

The CBN recognizes that the quality of the statistics is essential for accurate analysis of the monetary situation and for formulating and implementing monetary policy. This awareness is embodied in the CBN Law and its By-Laws and the organizational structure of the CBN. In practice, (1) the quality of monetary statistics is assessed by CBN employees who compile them and prepare periodic reports; (2) participation in training programs abroad that stress methodology, compilation procedures, and their relevance to data quality; (3) the Internal Auditor of the CBN, under Article 29 of the CBN Law, is responsible for inspecting and monitoring the CBN’s operations and accounts and reports to the Board of Directors of the CBN. Every year, the CBN also undergoes an external audit.

Moreover, the CBN is sensitive to the importance of data quality and its dimensions, as evidenced by the recent decision to participate in the GDDS.

0.4.2 Processes are in place to monitor the quality of the statistical program

The MPD has in place some procedures for quality control of monetary and financial statistics, including routine checks of the raw data inputted into the electronic system; however, these procedures are not reviewed regularly with a view to improve them. Concerning the statistical program, the CBN has retained the services of international consultants and experts to improve the quality of monetary and financial statistics and develop strategies to enhance data compilation.5 Notwithstanding these efforts, the MPD does not verify that data-reporting practices followed by the banks are consistent with prescribed guidelines, in particular those established for the preparation of the Sectorization Report. The SBOFI includes in its quarterly report [Informe] the financial statements of the financial institutions under its supervision.

0.4.3 Processes are in place to deal with quality considerations in planning the statistical program

There is wide recognition in the CBN of the trade-offs between data accuracy, periodicity, and timeliness and these factors are evaluated regularly against constraints and priorities posed by the overall CBN budget. There are procedures in place to deal with quality issues in planning the statistical program. The strategic plan [Plan Estratégico del Banco Central de Nicaragua] is linked to the CBN budget facilitating the efficient allocation of resources. A strategic plan for the CBN for 2005 has been recently drafted and, in the case of monetary statistics, calls for continuing work on the adoption of the MFSM.

1. Assurances of integrity

1.1 Professionalism

1.1.1 Statistics are produced on an impartial basis

There is no law that specifically stipulates that the terms and conditions under which the statistics are produced should be in accordance with the principles of professional independence. However, the conditions and provisions governing the CBN as stipulated in Law 317 (Articles 1, 60) are deemed adequate to ensure its technical independence and the autonomy of its staff. The CBN’s Board of Directors and management clearly recognize that professionalism and independence in compiling the data, including monetary statistics, are crucial to the credibility of the statistical outputs of the institution.

The CBN clearly promotes professionalism of its staff. Professional and academic skills, as well as performance on placing tests, are prerequisites for hiring personnel. Chapter 2 of the CBN By-Laws stipulate the requirements for employment in detail. Considerations for advancement depend not only on productivity and efficiency but also on professionalism. The CBN also promotes professionalism by encouraging staff to conduct research projects and to participate in international seminars and courses on monetary statistics, post-graduate studies, and in meetings with other central banks and international organization. In the near future, a research unit will be set up within the Gerencia de Estudios Económicos.

1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations

The sources, methods and statistical techniques used for compiling monetary statistics are based on statistical considerations (e.g., coverage, timeliness, and reliability of the source data). The source data used for compiling monetary statistics (i.e., balance sheets of the CBN and ODCs reports) meet, to a large extent, the statistical requirements for decision-making purposes and for publication. The definitions and statistical techniques are based on methodological considerations (e.g., the MFSM). Although the current methodology used to compile monetary statistics for the ODCs is not entirely consistent with MFSM recommendations (e.g., coverage and sectorization), plans for improvement have been formulated within the context of the GDDS.

1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics

Generally there is no erroneous interpretation or misuse of monetary statistics by data users. When there are significant errors in interpretation in the media, the CBN issues an official response with the relevant clarifications. The methodological notes available on the CBN’s website help to avoid misinterpretations about the data published in Indicadores Económicos. Also, in the past, the CBN has organized seminars with the media to discuss the appropriate interpretation and use of some economic and financial indicators prepared and disseminated by the CBN.

1.2 Transparency

1.2.1 The terms and conditions under which statistics are collected, processed, and disseminated are available to the public

The CBN Law (No. 317), the Law of the Superintendence of Banks and Other Financial Institutions (Law No. 316), the Law of Banks, Nonbank Financial Institutions and Financial Groups (Law No. 314) can be found on the CBN’s website (http://gtto://www.bcn.gob.ni). This legislation provides the broad terms and conditions under which statistics are collected, compiled, but contains reference to data dissemination.

The CBN By-Laws and other internal documents (e.g., strategy plan) that cover aspects related to statistical compilation, such as safeguards for confidentiality of data, professionalism in compiling information, are for internal use only. The CBN By-Laws are available on the CBN’s Intranet site.

1.2.2 Internal governmental access to statistics prior to their release is publicly identified

No government officials outside the CBN have access to monetary statistics before their release to the public. Once compilation of the statistical output is complete and before it is disseminated on the CBN’s website, it is made available to the Gerente de Estudios Económicos of the CBN. An official representative of a government agency may have prerelease access to the data, subject to the submission of a formal request to the Gerente de Estudios Económicos. At present, the public is not informed of this practice.

1.2.3 Products of statistical agencies/units are clearly identified as such

Publications clearly indicates that the CBN is responsible for its statistical products and the department that prepares the information (i.e., Gerencia de Estudios Económicos). Moreover, all statistical products have the CBN logo. In cases where statistics are reproduced in other documents or newspapers, the CBN is generally identified as the source of the data.

1.2.4 Advance notice is given of major changes in methodology, source data, and statistical techniques

In general, there is no advance notice of changes in methodology, source data, and statistical techniques used to prepare monetary statistics. Changes are announced and explained at the time the new data are disseminated on the CBN’s website (http://www.bcn.gob.ni). However, now that the CBN’s website contains methodological notes on monetary statistics, the CBN intends to update them regularly.

1.3 Ethical standards

1.3.1 Guidelines for staff behavior are in place and are well known to the staff

The CBN Law (Article 19) provides for its Board of Directors to issue its own internal By-Laws. Hence, the CBN’s By-Laws (chapter 8) provide guidelines for the staff that requires them, among others, to carry out their responsibilities with due diligence and loyalty, dedicating to the tasks their best moral, intellectual, and physical efforts. The By-Laws also establish regulations and sanctions for employees who misuse the information to which they have access. The By-Laws are made known to all new CBN employees and are available on the CBN’s Intranet (for internal use only). Employees are routinely reminded to observe the rules and regulations.

2. Methodological soundness

2.1 Concepts and definitions

2.1.1 The overall structure in terms of concepts and definitions follows internationally accepted standards, guidelines, or good practices

The overall structure in terms of concepts and definitions of the monetary statistics generally follows internationally accepted standards, guidelines, and good practices. In recent years, the CBN has made great efforts to adopt the methodology of the IMF’s MFSM. An improved presentation for monetary statistics, with monthly data since December 2001, was disseminated via the Internet in May 2004 in the CBN’s Economic Indicators [Indicadores Económicos], along with a separate compendium of detailed methodological notes.

The analytical framework used to compile and present the Central Bank Survey (CBS) and the Depository Corporations Survey (DCS) follows in general the MFSM methodology. The DCS seeks to explain the factors affecting the creation of money by means of institutional sectorization and classification of accounts. The DCS (called Monetary Survey of the National Financial System) is a consolidation of the sectoral balances of the CBN and ODCs, which include commercial banks and finance companies, and the sectoral balance of the Financiera Nicaragüde Inversiones (Nicaraguan Investment Fund (FNI)).6 The surveys and underlying sectoral balance sheets reflect the residency criterion, the sectorization of institutional units, and the classification of financial instruments on a gross basis as recommended in the MFSM.

The main aggregates identified in the DCS include net foreign assets (claims on nonresidents less liabilities to nonresidents), net domestic credit (to general government, nonfinancial public enterprises, private sector, other sectors and other items net), and monetary liabilities (currency outside banks, transferable deposits, other liabilities with the private sector, and securities issued by the CBN and held by residents). The CBN also publishes several measures of broad money (M1, M2 and M3) as a series of broader monetary aggregates (M1a, M2a, and M3a). The MFSM does not prescribe a uniform definition for this indicator since definitions vary from one country to another.

Notwithstanding the improvements introduced in 2004, the current presentation does not conform fully to the MFSM, mainly due to incomplete institutional coverage, the partial sectorization of institutional units in the accounts of the ODCs which poses difficulties in identifying holders and issuers of financial assets/liabilities, and partial application of accrual-based recording as noted below.

2.2 Scope

2.2.1 The scope is broadly consistent with internationally accepted standards, guidelines, or good practices

The financial system of Nicaragua consists of a variety of financial intermediaries that operate under different legal, regulatory, and institutional schemes. The financial sector includes (1) the Central Bank (CBN), (2) Other Depository Corporations (ODCs) comprising six commercial banks.7 three finance companies,8 and a large number of credit and savings cooperatives; and (3) Other Financial Corporations comprising the FNI, insurance companies, pension funds, and various financial auxiliaries.

The scope of the data is broadly consistent with the guidelines of the MFSM. At present, the CBN presents four surveys in Indicadores Económicos, each with a different institutional coverage: (1) the Central Bank (Central Bank of Nicaragua) Survey, (2) ODCs comprising commercial banks and finance companies; (3) the Nicaraguan Investment Fund (FNI),9 and (4) the Monetary Survey of the National Financial System (MSNFS), which is a (partial) Financial Corporations Survey. The MSNFS is a consolidation of the sectoral balances of the CBN, the ODCs, and the FNI but will be considered as a DCS for purposes of this exercise.

The DCS produced is the consolidation of accounts of resident financial corporations and quasi corporations that are mainly engaged in financial intermediation and issue liabilities included in the national definitions of broad money. Data cover the activities of the head offices and all domestic branches. At present, incomplete institutional coverage is a problem as some deposit-taking corporations, namely credit and savings cooperatives10 and offshore banks11 are excluded from the statistics of the ODC subsector. Moreover, data on other financial corporations—insurance companies, pension funds,12 and various financial auxiliaries (warehouses deposits, stockbrokers, exchange houses, etc.) need to be compiled to produce a broader Financial Corporations Survey.

Work is being undertaken by the CBN to establish data reporting by credit and savings cooperatives with a view to producing a broader DCS and from insurance companies, pension funds, and the stock exchange to produce a Financial Corporations Survey. It should be noted that credit and savings cooperatives are not regulated by the SBOFI; nonetheless, Article 60 of the CBN Law empowers the CBN to request information from any sources for statistical purposes. The SBOFI receives monthly information from insurance companies.

2.3 Classification/sectorization

2.3.1 Classification/sectorization systems used are broadly consistent with internationally accepted standards, guidelines, or good practices

The sectoral classification adopted in the MFSM is based on the System of National Accounts 1993 ( 1993 SNA) that distinguishes first between residents and nonresidents and classifies the resident units according to their functions as: (1) financial corporations; (2) nonfinancial corporations; (3) general government; (4) households; and (5) nonprofit institutions serving households.

The CBN is implementing a new system of monetary accounts largely based on the sectorization of institutional units and classification of financial instruments recommended in the MFSM. The CBN has prepared a listing of institutions operating in the economy and their sectorization into four mutually exclusive sectors: (1) general government, (2) nonfinancial public enterprises, (3) financial corporations, and (4) households. This document is used by the MPD and has been distributed to ODCs as a guide in preparing sectorization reports for the SBOFI.

For the central bank and ODCs, assets and liabilities are classified according to the institutional sector of the counterparts. Thus, assets are classified by debtor sectors and liabilities by creditor sector. The sectoral balance sheets of the CBN and the ODCs clearly reflect the residency criterion and the application of this concept has greatly improved the quality of monetary statistics. Nonetheless, the lack of proper sectorization due to insufficient detail in the source data of ODCs mainly for claims and deposits of the nonfinancial public sector (NFPS)—i.e., central government, nonfinancial public enterprises, and local governments—detract from the usefulness of monetary statistics to assess the net credit to central government and the rest of the NFPS. Also, the complexity of the CBN chart of accounts makes it difficult to derive a classification of instruments and sectors. However, the DPM is improving its database with the help of a computerized system that links accounting balances to the pertinent classification group of the CBN sectoral balance.

The classification of financial instruments in the sectoral balance sheets and in the surveys (CBS and DCS) is broadly consistent with international recommendations, as it is based on the liquidity of the instrument and the legal characteristics defining the basic relationship between creditors and debtors. Recent improvements in the classification of instruments resulted in the calculation of more accurate and meaningful monetary and credit aggregates.

For example, foreign currency reserve deposits were reclassified under “monetary reserves”; thereby improving the calculation of foreign assets and hence of international reserves and the monetary base. The CBN does not hold monetary gold nor does it conduct swap operations or repurchase agreements (repos).

2.4 Basis for recording

2.4.1 Marke t prices are used to value flows and stocks

The general recommendation of the MFSM is that the valuation of financial assets and liabilities should be based on market prices or market-price equivalents (fair values). The valuation of loans is an exception to this principle and loan values should be based on creditors’ outstanding claims without adjustment for expected loan losses. This amount comprises the outstanding principal plus any accrued interest and is referred to as the book value of a loan. The 1993 SNA and the MFSM also recommend that financial instruments denominated in foreign currency should be converted to national currency values at the market exchange rate prevailing at the time they are recorded (i.e., on the balance sheet date). Holding gains and losses arising from changes in market values (or fair values) of financial assets of outstanding liabilities should be recorded separately in a revaluation account.

The CBN accounts are compiled broadly in accordance with the valuation principles recommended by the MFSM. Financial transactions are recorded at the time they occur (that is, the date on which ownership is registered), and at market prices. The stocks of financial assets and liabilities are valued at market prices, if possible, otherwise, at the purchasing price—as in the case of CBN securities. Foreign currency transactions are converted to national currency at the exchange rate prevailing on the transaction date; outstanding stocks of foreign-currency-denominated assets and liabilities are adjusted for exchange rate valuation changes based on end-of-period exchange rates with valuation gains/losses included in the profit/loss accounts. Assets and liabilities denominated in U.S. dollars are converted into domestic currency using exchange rates published by the CBN on a daily basis while assets and liabilities denominated in other currencies are converted to domestic currency using rates published in REUTERS. Beginning with data for December 2001 when sectoral balances started being generated, valuation adjustments (including holding gains and losses for instruments) are presented in the sectoral balance sheets.

The foreign currency denominated positions of commercial banks are valued at end-of-period exchange rates according to formal instructions issued by the SBOFI. The foreign-currency-denominated positions of the FNI are also valued at end-of-month exchange rates.

2.4.2 Recording is done on an accrual basis

The accrual accounting principles recommended by the MFSM specify that interest accruing (i.e., interest due but not paid) on financial instruments be incorporated into the outstanding amount of the financial asset/liability, instead of being treated as part of other accounts receivable/payable. In other words, the interest accruing in each period prior to maturity should be recorded as a financial transaction that represents a further acquisition of the financial asset by the creditor (i.e., bond holder) and an equal incurrence of a liability by the debtor (i.e., the CBN). In addition, revenues and expenditures should be recorded in the period in which they fall due (accrual basis), regardless of when the corresponding cash flow actually takes place (cash basis).

The principle of accrual accounting is not fully applied in the compilation of monetary statistics. Contrary to MFSM recommendations, the securities issued by the CBN are recorded under liabilities at face value, without deducting the discount. The amount of interest is recorded under liabilities in a single event even though the period of time for accrual has not elapsed; but, it is adjusted to accrual basis at the end of the month. A record for accrued interest is kept through the open market operations system (OMAS) which has made provision for the regular calculation of accrued interest only since September 2003. Daily and weekly data are not adjusted to accrual basis. However, in the case of monthly data, the CBN’s Notas Metodológicas (page 24) available at http://www.bcn.gob.ni, notes that the outstanding amount recorded for securities issued by the CBN reflects the purchase price plus accrued interest, adjusted for exchange rate valuation changes.

2.4.3 Grossing/netting procedures are broadly consistent with internationally accepted standards, guidelines, or good practices

The general principle of the MFSM and 1993 SNA that data be collected and compiled on a gross basis is broadly applied to the compilation of monetary statistics. Assets and liabilities of the CBN accounts are compiled on a gross basis and aggregated into a statement of assets and liabilities without consolidating interbank positions. In the case of ODCs, data are reported on a gross basis in their monthly returns, but netted out and presented in consolidated form in their surveys. In the consolidation process, stocks and flows that occur between institutional units within a subsector are eliminated. The DCS is obtained by canceling out all outstanding claims and liabilities between the central bank and the ODCs, while preserving the presentation of data on all other outstanding claims and liabilities. It should be noted, however, that in the surveys (e.g., DCS), “Net credit to central government” is not separately identified as recommended in the MFSM.

3. Accuracy and reliability

3.1 Source data

3.1.1 Source data are obtained from comprehensive data collection programs that take into account country-specific conditions

Source data are obtained from comprehensive data collection programs that take into account the specific conditions for Nicaragua. The main sources of information for compiling monetary financial statistics are (1) the CBN’s daily balance sheet prepared by the CBN′s Accounting Department; and (2) the monthly balance (Balance General) and sectorization matrix of commercial banks and finance companies that the SBOFI sends to the CBN’s Finance Department on a monthly basis. The monthly data are contained in an electronic file with account validations; the data are considered final.13

The CBN balance sheet is derived from the accounting records which are processed according to political and accounting rules and regulations through a general plan of accounts. The existing structure of the CBN chart of accounts includes many individualized levels of transactors and a plethora of records that impact on the preparation of the CBN sectoral balance. Nonetheless, considerable progress has been made recently with the development and implementation of a database (Base Unica de Datos) that facilitates the classification and sectorization of instruments on the CBN balance sheet based on a predetermined codification of accounts.

As regard the ODCs, each commercial bank and finance company send their accounting reports (Balance General) to the SBOFI through electronic means. The SBOFI reviews the information and forwards it to the CBN also electronically. Since early 2002, and as part of a project to adopt the methodology of the MFMS, the ODCs have also been supplying to the SBOFI a Sectorization Matrix with monthly information on investments, credit and deposits disaggregated in terms of instruments and sectors. These data facilitate the derivation of the sectoral balance for the ODCs which is consistent with that of the central bank.

3.1.2 Source data reasonably approximate the definitions, scope, classifications, valuation, and time of recording required

The source data reasonably approximate the definitions, scope, time of recording, and valuation required. The residency criterion, the classification of instruments, and the identification of institutional sectors are in broad compliance with MFSM recommendations. Notwithstanding the complexity of the CBN balance sheet, its structure and degree of detail allow to follow, to a large extent, the sectorization standards of the MFSM.

The ODCs follow the same chart of accounts known as Manual Unico Contable (MUC) authorized by the SBOFI. The MUC has been in place since 1995 and it has been revised several times. The MUC is generally consistent with international accounting criteria and practices. The data sources of the ODCs (i.e., accounts balance and sectorization matrix) provide key information on definition, scope, and classification, but lack sufficient detail to permit more accurate classification and sectorization of accounts in line with the MFSM. In some cases, shortcomings in sectorization are evident.

3.1.3 Source data are timely

Delays in the source data are unusual. The Accounting Department of the CBN prepares accounting data for the central bank on a daily basis, and these are available to the DMP the same day. The ODCs are required by law to send their reports to the SIBOF on a daily, weekly, and monthly basis. The SBOFI aggregates these data and sends them to the CBN electronically. The monthly balance is received with a 20–25 day lag and the matrix two to three days later (the matrix is provided on a monthly basis only).

3.2 Assessment of source data

3.2.1 Source data—including censuses, sample surveys and administrative records—are routinely assessed, e.g., for coverage, sample error, response error, andnonsampling error; the results of the assessments are monitored and made available to guide statistical processes

The central bank accounts are validated with electronic built-in checks in the BUD to ensure the accuracy of the internal accounts of the institution. There is also communication between the Accounting Department and the DPM regarding proper classification of new accounts.

The accuracy of the data from commercial banks and finance companies is routinely reviewed for internal consistency as well as for consistency between the aggregates in the general balance and the sectorization report. Inconsistencies and out-of-value trends are discussed with the SBOFI. There is ongoing contact between the CBN and the SBOFI to resolve any data queries but direct contact with the reporting institution is limited. The database is reviewed every quarter to ensure its capability to continue to generate high-quality and timely data. Source data are reviewed in the context of revisions such as on the occasion of the introduction of revised monetary statistics in May 2004.

3.3 Statistical techniques

3.3.1 Data compilation employs sound statistical techniques to deal with data sources

The sectoral balances for the CBN and the ODCs are produced in separate data modules but follow similar concepts and definitions. The data from each module are then linked electronically to produce the DCS.

To deal with data sources, the CBN uses statistical techniques that are largely automated. The CBN balance sheet is prepared daily and the data are captured on an automated platform (i.e., Base Unica de Datos) based on a predetermined codification of accounts. The BUD is used to generate monetary statistics for the CBN in the form of a sectoral balance sheet and central bank survey. The BUD is also used to compile the short-term indicators.

Regarding the ODCs, the CBN filters the information from the general balance using a computerized system which validates the information for each reporting ODC. However, the monthly data in the sectorization matrix are captured manually on an Excel spreadsheet and compared with the totals reported in the general balance. After processing and as separate events, data from the general balance and from the sectorization matrix are subsequently posted (cut and paste) to another database, where they are used as input to generate the sectoral balance sheet for the ODCs and eventually the DCS. The use of manual techniques could lead to statistical errors.

3.3.2 Other statistical procedures (e.g., data adjustments and transformations, and statistical analysis) employ sound statistical techniques

Given the accounting basis of the source data, it is unusual to make statistical adjustments or estimates for the central bank balance sheet and the monetary aggregates. The sectoral balance sheet of commercial banks and finance companies encompasses all intermediaries and is based on their accounting records. Source data are presented in national currency and include transactions based on conversion of foreign exchange into local currency using the official end-of-month exchange rate published by the CBN.

Currently there are no banks undergoing liquidation.

3.4 Assessment and validation of intermediate data and statistical outputs

3.4.1 Intermediate results are validated against other information where applicable

As recommended in the MFMS, production of monetary statistics comprises two levels of data compilation and presentation: (1) the first level aggregates data on balances reported by individual units in sectoral balance sheets. (2) the second level consolidates the data from the sectoral balance sheets into surveys. In general, intermediate results (i.e., sectoral balance sheets) are not validated against other sources of information.

3.4.2 Statistical discrepancies in intermediate data are assessed and investigated

The databases used to generate intermediate data (i.e., sectoral balance sheets) have built-in checks that calculate discrepancies in the data for the relevant period. There are no automatic checks to help monitor trends in the time series.

3.4.3 Statistical discrepancies and other potential indicators of problems in statistical outputs are investigated

Regarding statistical outputs, large discrepancies and other potential problems are routinely investigated. The MPD checks all its statistical products and explains any unusually large fluctuations. Data from ODCs are checked to prevent any statistical discrepancy due to errors in classification or omissions. This process may involve checking the balance sheets for data entry error or cross-checking financial flows with changes in the outstanding stocks of the related variable. When unexplainable variations are noted, the MDP contacts the SBOFI to clarify the reasons for the fluctuations.

3.5 Revision studies

3.5.1 Studies and analyses of revisions are carried out routinely and used internally to inform statistical processes (see also 4.3.3)

There is no mechanism in place for conducting a routine analysis of revisions to the data; thus, no formal studies on this matter are available. However, periodic investigations are conducted on an ad-hoc basis to evaluate the sources of problems (e.g., erroneous sectorization of institutional units). Once the sources of the problems are identified, procedures are put in place to ensure that they do not reoccur. Daily and weekly data are preliminary and monthly data are considered final—revisions are unusual.

4. Serviceability

4.1 Periodicity and timeliness

4.1.1 Periodicity follows dissemination standards

The periodicity of monetary statistics meets GDDS recommendations of “monthly.” In addition, preliminary data for “central bank aggregates” are published daily and weekly.

4.1.2 Timeliness follows dissemination standards

The timeliness of monthly monetary statistics is consistent with GDDS recommendations which is “two to three months.” The CBN publishes the DCS (“Balance Monetario del Sistema Financiero”) two months after the end of the reference month. Preliminary daily and weekly central bank aggregates are disseminated with a lag of one to two days and two to three weeks, respectively.

4.2 Consistency

4.2.1 Statistics are consistent within the dataset

In general, the accounting of assets and liabilities between the CNB and the ODCs is consistent. Recording differences may arise mainly due to operations in transit, but they are usually reconcilable.

4.2.2 Statistics are consistent or reconcilable over a reasonable period of time

The monthly monetary data currently disseminated to the public start in December 2001 and are reconcilable since they follow the same methodology (MFMS) and institutional coverage. Compilation of the former series (which followed a different methodology ) was discontinued after December 2003.

4.2.3 Statistics are consistent or reconcilable with those obtained through other data sources and/or statistical frameworks

Monetary statistics are not always easily reconcilable with those obtained through other data sources, but some intersectoral cross-checks are performed. It is possible to reconcile monetary statistics (e.g., net foreign assets) with balance of payments since the residency criteria is followed. The international investment position is not compiled at this time. However, it is difficult to reconcile monetary statistics with fiscal data (e.g., net credit to government) for various reasons including: (1) different institutional coverage in the fiscal and monetary accounts; (2) different criteria used to sectorize the economy for purposes of compiling monetary data and fiscal; and (3) accrual recording largely used in monetary statistics vis-à-vis cash basis in fiscal data for revenues and partial accrual for expenditure. Moreover, institutional coverage in monetary data lacks operations of credit and savings cooperatives and other financial institutions (e.g., insurance companies, pension funds, etc.).

4.3 Revision policy and practice

4.3.1 Revisions follow a regular and transparent schedule

There is no predetermined, well-established, and transparent revision policy for monetary accounts. Comparative analyses of preliminary and final data are neither prepared nor published. Revisions occur occasionally, when errors are detected; however, no adequate documentation of revisions is included in monetary publications.

4.3.2 Preliminary and/or revised data are clearly identified

Preliminary daily and weekly data are identified as such. However, there is no indication that monthly data are final when first published. Any revisions to these data are not identified in the publications.

4.3.3 Studies and analyses of revisions are made public (see also 3.5.1)

There is no predetermined, well-established, and transparent revision cycle for monetary statistics. Revisions to monthly data occur occasionally, when errors are detected. However, adequate documentation on revisions is not made publicly available. The current series covers from December 2001 onwards and the former series from 1990s to December 2003. No studies or analysis of both series have been conducted.

5. Accessibility

5.1 Data accessibility

5.1.1 Statistics are presented in a way that facilitates proper interpretation and meaningful comparisons (layout and clarity of text, tables, and charts)

The statistical tables in Indicadores Económicos, which are also published in the CBN website, present the information of the CBN, ODCs, and DCS in a way that facilitates interpretations, although they do not follow strictly the presentation recommended in the MFMS. The main aggregates identified in the DCS include net foreign assets, net domestic credit, and monetary liabilities. Thus, all MFSM- recommended categories of financial assets are not separately identified, such as claims on other sectors14 and net credit to central government. The presentation of claims to central government on a net basis facilitates the analysis of depository corporations’ financing of central government operations. Also, some tables in Indicadores Económicos contain erroneous captions (e.g., table titles and column headings) which detract from the usefulness of the information.

5.1.2 Dissemination media and format are adequate

The media and formats used in the dissemination of data are adequate, particularly for users who have access to Internet, as both recent and historical data can be consulted on the CBN Internet website (http://www.bcn.gob.ni). The statistical information is accompanied by charts. However, there are no footnotes on the tables linking to the methodological notes which are presented on a separate volume. Moreover, the section in English is very outdated as compilation of those series has been discontinued and users are not informed about this practice.

5.1.3 Statistics are released on a preannounced schedule

There is no preannounced advance release calendar to the general public. However, the MPD follows an internal production and publication schedule.

5.1.4 Statistics are made available to all users at the same time

Daily, weekly and monthly monetary statistics data are disseminated simultaneously to the public on the CBN website: http://www.bcn.gob.ni. Monthly data are also published in the monthly report Indicadores Económicos, which is released with a lag of two months. Daily and weekly data are published at http://www.bcn.gob.ni/estadisticas.

5.1.5 Statistics not routinely disseminated are made available upon request

Nonpublished (but nonconfidential) data are made available upon request from the MPD, with the approval of the senior staff of the Economic Studies Department or management. All information requested by users is free of charge. The CBN’s website has a facility for users to send questions or queries to the CBN.

5.2 Metadata accessibility

5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available, and differences from internationally accepted standards, guidelines, or good practices are annotated

The CBN has prepared and published methodological notes on the monthly monetary statistics introduced in Indicadores Económicos in May 2004 with data from December 2001. The methodology is contained in Notas Metodológicas which is available on the CBN’s website and on hard copy. This document explains the main concepts and definitions used in data compilation, deviations from the key concepts and definitions of the MFSM, and the main differences between the current and the former datasets.

5.2.2 Levels of detail are adapted to the needs of the intended audience

Notwithstanding the level of detail provided in Notas Metodológicas, they do not satisfy fully the needs of specialized users. Moreover, supporting working papers on methodology are not published.

5.3 Assistance to users

5.3.1 Contact points for each subject field are publicized

The internal users of monetary statistics at the CBN get support from the compilers at the MPD. External users may send their queries through the CBN website (webmaster@bcn.gob.ni) or contact the CBN directly. CBN publications clearly identify the Economic Studies Department (Gerencia de Estudios Económicos) as the compiling department and some publications (i.e., Indicadores Económicos) also provide a fax number, Internet address, and postal address. Moreover, Notas Metodológicas provides the name of a contact person for monetary statistics. In future, when Nicaragua starts participating in the GDDS, the public will be able to send their questions directly to the contact person identified in the metadata.

5.3.2 Catalogs of publications, documents, and other services, including information on any charges, are widely available

The main vehicle for informing the public about monetary statistics is the CBN’s website, which contains daily, weekly, and monthly monetary accounts. A complete list of publications and other documents is available on the website and at the CBN Library.

Table 5.

Nicaragua: Data Quality Assessment Framework (July 2003): Summary of Results for Monetary Statistics:

(Compiling Agency: Central Bank of Nicaragua)

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