20211110-IMF-Chile_Fiscal_Transparency_Evaluation_110页_1mb

Fiscal Transparency Evaluation of Chile (IMF Report, 2021)

I. Fiscal Reporting (Pillar I)

• Coverage:

  • Institutional coverage is incomplete (e.g., public universities not fully included, subnational governments not consolidated).
  • Financial assets and liabilities underreported (e.g., copper reserves, pension liabilities, debt at market value).
  • Budget documentation lacks extra-budgetary entity details (e.g., universities' revenues/expenses).

• Timeliness:

  • Annual Financial Statements (IGFE) published within four months.
  • In-year reporting (budget execution) delivered on time and quarterly.

• Quality and Integrity:

  • Accrual-based reporting adopted; high statistical integrity.
  • Internal consistency limited (e.g., missing bank reconciliations, reconciliation of flows and stocks).
  • External audit not standardized; CGR does not issue audit opinions on IGFE.

II. Fiscal Forecasting and Budgeting (Pillar II)

• Comprehensiveness:

  • Budget includes central government only; extra-budgetary entities underrepresented.
  • Macroeconomic forecasts detailed; revenue/expenses projections improved.

• Orderliness:

  • Legal framework clear; legislative powers for amendment limited.
  • Annual budget submitted and approved timely, allowing minor adjustments.

• Policy Orientation:

  • CAB rule implemented; performance information robust.
  • New budget cycle fiscal targets established; citizen engagement limited.

• Credibility:

  • Forecasts generally credible; scenario analysis included.
  • Independent Fiscal Council (CFA) strengthens credibility; supplementary budgets required.

III. Fiscal Risk Analysis and Management (Pillar III)

• Disclosures:

  • Public guarantees and debt reported, with long-term analysis needed.
  • Natural disasters and resource risks underreported.

• Management Practices:

  • Financial sector oversight strengthened by CFA and BCCh.
  • Subnational governments' risk monitoring incomplete.
  • Long-term sustainability not consistently assessed.

Key Recommendations:

• Improve institutional and institutional/investment coverage in fiscal reporting.
• Standardize forecast reconciliations and expand fiscal risk disclosures.
• Strengthen medium-term budgeting and include more risks in fiscal forecasts.