In 2002, the Chilean government began work on a financial management information system that would shift its budgeting practices from controlling expenditures towards promoting effective and efficient resource use. By 2007, this system, called the Sistema de Información para la Gestión Financiera del Estado (SIGFE), had become a major feature of the government’s budget management system. Although it represented a significant advance in Chile’s financial management system, further efforts were pending. The system needed technological updates that ensured scalability, adaptability, and interoperability with other systems, linking of the budget administration system, and mainstreaming the SIGFE team into the government structure. Due to the government’s decentralization efforts, municipalities were taking on more responsibilities for service delivery. Given many municipalities’ weak financial administration and a lack of aggregate municipal financial data, it was necessary to strengthen financial administration and make the mechanisms for collecting information easier to use, more efficient, and accurate.
The Second Public Expenditure Management Project was designed to support the further consolidation and expansion of SIGFE, improvements in budget procedures, and the strengthening of financial administration at the municipal level.
Building upon advances made under the first Public Expenditure Management Project, the activities of this project focused on developing and rolling out an upgraded SIGFE system (SIGFE II), which shifted the management model and the operation of the government’s financial management information system from accounting transactions to administrative/financial transactions. Additional activities included preparatory work for the development of an updated budget administration system (SIAP 2.0), as well as the development and implementation of the municipal financial information system (SIFIM) and a municipal information aggregator.
Project activities supported the increased efficiency of financial management, budget formulation and execution operations, and the transparency of public expenditure management at the central and municipal levels.
- SIGFE II was developed and implemented in 86 (half) of the central government institutions. The new system simplifies processes, reduces the requirement of high accounting skills to operate, and provides better performance management information for decision making.
- With the roll-out of SIGFE II, government agencies have real time, online access to their information. Oversight agencies have access the day after the end of the period, facilitating transparency and accountability.
- SIGFE is now automatically updated with information on each year’s initial budget law from the budget administration system (SIAP), and information entered into SIGFE’s payments module is automatically reflected in budget execution.
- SIFIM, which facilitates medium-term financial planning, was rolled out to 100 municipalities. The system covers budgeting, accounting, recovery orders, treasury, procurement, personnel and remuneration. It ensures timely access to information and the compatibility of the information provided to central government agencies, while also saving participating municipalities from having to enter information in multiple systems.