PERFORMANCE AUDITS Fernando Cervantes Flores CPA Brasilia Brazil

PERFORMANCE AUDITS Fernando Cervantes Flores, CPA Brasilia, Brazil | November, 2011 1

Mexico has carried out Performance Audits for over 10 years. In the absence of performance indicators, these were based on various plans and programs such as: § § The National Development Plan (PND) Program of Direct Rural Support (PROCAMPO) National Solidarity Program (PRONASOL) Mexican Food System (SAM) 2

Currently, the Superior Audit Office of Mexico | ASF is reviewing Public Policies. The ASF has been generating Result Reports based on efficiency, efficacy and economy. For this kind of recommendations. audits the ASF generates 3

PERFORMACE INDICATORS 2004 • Mexico determines by Law, the creation of the National Committee for the Evaluation of Social Development Policy | CONEVAL. 2006 • The Federal Public Administration | APF initiates the construction of a Budget Based on Results | Pb. R scheme. 4

2007 PERFORMACE INDICATORS • The CONEVAL is formally constituted as an organism responsible for the evaluation of the Social Development Policy, which included the following performance indicators: i) Results, ii) Management and; iii) Service, in order to measure coverage, quality and impact of the policy. • Before approving the indicators, the CONEVAL submits them to the consideration of the Secretaría de Hacienda y Crédito Público | SHCP (Ministry of Finance and Public Credit) as well as to the consideration of the Congress of Deputies through the ASF so they may provide their recommendations and input. 5

PERFORMACE INDICATORS 2007 – 2008 • The Performance Evaluation System | SED is created and performance indicators are emitted. • We also observe the creation of the legal and regulatory framework for the development and operation of the Budget based on Results, the SED and the Indicators Results Matrix | MIR. • Mechanisms for the evaluations comprised in the Annual Evaluation Program | EAP were generated as well. 6

PERFORMACE INDICATORS 2010 • With the 2009 Public Account, the ASF started reviewing the SED. • The ASF approved the revision of the indicators and carried out a performance audit to the CONEVAL. 7

Using information from the 2009 Accountability Report, the ASF carried out 191 performance audits, which 15 were non-financial performance audit. See the examples below: AUDIT MANAGING BRANCH / FUND-PROGRAM-ESCROW / TITLE NUMBER UNIT 148 256 261 269 1070 1072 1087 1090 1102 DGADGF Conservation of Mangrove Swamp Ecosystems DGAE Merida Initiative DGAE Functions of Teaching, Research, Dissemination of Culture and Institutional Management DGAE Funds for financial support given to the State Public Universities DGAE Merida Initiative DGADGF Conservation of Mangrove Swamp Ecosystems DGAE Merida Initiative TYPE OF AUDIT Performance Special Performance Special Note: These example audits are short of reach on the selected universe or the audit sample. 8

Opinion ASF The Expenditure Budget of the Federation (PEF) and the Volume of General Results of the Accountability Report 2009 included 246 performance indicators; however, to offer a general view, the ASF 1, 739 evaluated the indicators contained in the Consolidation of the SED. Accordingly, the ASF believes insufficient the progress results in the implementation of the SED. This hampers the measurement of the quality of budgets and the institutionalization of Pb. R. 2011 • The review to the SED is associated to performance audits. 9

Report example Audit number: 1072 The Merida Initiative Year in Review: 2009 Background During the meeting between Mexican and United States presidents held may 2007, called “Cumbre de Mérida”, in which also participated Central America presidents; Mexico and United States governments established as an urgent priority, the development of both regional and bilateral cooperation to combat against power and impunity of criminal organizations and drug dealing. In this meeting was issued the “Joint Statement of the Merida Initiative” between Mexican and United States Governments, it was established the commitment to cooperate, coordinate and exchange information, with the purpose of fight jointly against criminal organizations. In this statement, the president of the United States of America would request the Congress $1. 4 billion dollars to support Mexican fight against transnational organized crime. The $1. 4 billion dollars will be transferred through equipment, technology and training donations. According to GAO’s audit report “Found Status of The Merida Initiative”, by December 3 rd 2009, USA Congress had $1. 12 billion dollars agreed for The Merida Initiative, which $400 million dollars would be for 2008 and $720 million dollars for 2009, however $280 million dollars (to reach $1. 4 billion dollars) had not been authorized by USA Congress. 10

Audit number: 1072 Merida Initiative Year in review: 2009 RESULTS • Reception of equipment, technology and training as stated in the Merida Initiative The team validated that the personal protection equipment was received on the programmed date. Nonetheless, the two criminalist research teams were received with a delay of 7 months according to the date established by the Merida Initiative Bilateral Follow Up Group. Recomendation 09 -0 -05100 -06 -1072 -01 -001. - For the Ministry of Foreign Affairs to make the correspondent arrangements, so the transferences made under the Merida Initiative, adjust to the dates agreed by the Bilateral Group. • PGR’s Internal Control The design of the PGR’s internal control system shows some weaknesses, since the training received, did not consider control mechanism for indentifying which courses were finances by the Merida Initiative throughout the 2009 fiscal year. Recomendation 09 -0 -17100 -06 -1072 -01 -001. - For the PGR in order to make the necessary arrangements so they can establish the proper control mechanisms for identifying the number of training courses received under the Merida Initiative. 11

Audit number: 1072 Merida Initiative Year in review: 2009 RESULTS • Indicators for the measurement of the impact in the use of equipment, technology and training received under the Merida Initiative It was validated that the PGR did not build indicators or mechanisms for the evaluation of the impact of result of the use of equipment and technology received under the Merida Initiative, so they do not count with the necessary elements for measuring the results obtained through those transferences. Recomendation 09 -0 -17100 -06 -1072 -01 -002. - For the PGR in order for it to establish indicators or mechanisms for the evaluation of the impact result of the use of technology and equipment, received through the Merida Initiative, as to have the elements to measure the results obtained from those transferences. • Personnel trainning under the Merida Initiative It was validated that the PGR does not know the origin of the training courses received in the USA, so they do not identify, among others, which of them were sponsored through the Merida Initiative. Recomendation 09 -0 -17100 -06 -1072 -01 -003. - For the PGR in order to make the necessary arrangements aimed at identifying the courses held under the Merida Initiative. 12

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