Background

When 36 years of armed conflict ended in the late 1990s, Guatemala’s public sector institutions were seriously degraded and needed urgent attention to fulfill even the most basic administrative functions.  Among these was the public expenditure management system, which falls under the Ministry of Public Finance.

In 1996, the World Bank began helping Guatemala to modernize its fiscal management, by financing reforms of the public expenditure and tax administration frameworks.

Guatemala was able to take advantage of the development of integrated financial management systems (IFMS) in the region.  The country deployed its first version, called SIAF, in 1998, with support from the Bank. 

The Guatemala SIAF system is considered one of the best systems in the region.  It incorporates state-of-the-art processes and systems in the areas of budgeting, treasury, accounting, as well as substantial improvements in other areas such as human resources management.  The e-procurement system it supports (Guatecompras) is also considered regional good practice.

The Bank is currently supporting SIAF through the Third Integrated Financial Management Project. 

Project objective

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

Project design

The project includes the following components:

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

Project achievements

Financial Management of the Central Government and Decentralized Institutions:

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

Financial Management for Municipal Governments: 

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