The Ministry of Finance has put an end to the situation of a number of public investment operations, which had remained registered within programs and credits despite the completion, cessation, or abandonment of work, by introducing new procedures to close or cancel these operations. New instruction No. 6, issued on August 5th, aims to address this issue by defining precise guidelines for managing these projects. The Ministry of Finance seeks to reorder the public investment map by removing completed projects from budgetary records, settling stalled projects before the judiciary, closing operations that cannot be resumed, and canceling operations that never entered the allocation phase or did not meet continuation conditions.
New Closure Procedures Detailed
Completed public investment projects are now to be closed without awaiting the end of any warranty period, according to the Ministry of Finance. This normal closure procedure applies to operations that have been fully completed both materially and financially. Once the general and final account is finalized, the authorizing officer must deposit the closure file using the model specified in Appendix No. 01, irrespective of the warranty period's duration. The presence of a warranty deduction or performance bond does not necessitate keeping the operation open after provisional acceptance has been granted.
The Ministry of Finance has also outlined a specific procedure for disputed operations, which involve projects completed either wholly or partially in terms of material execution but lacking financial settlement due to ongoing judicial disputes. For operations that are materially completed, the authorizing officer is required to commit and issue a payment order to a special deposit account, holding the expected compensation amount for the contractor, before proceeding to close the operation. This special procedure addresses cases where financial settlement is pending due to legal disputes, allowing for the administrative closure of the project while the financial aspects are resolved.
The new instruction further permits the closure of operations that have been definitively abandoned, whether or not they entered the execution phase. This is applicable when the abandonment stems from objective technical, financial, or administrative reasons, and resuming work is no longer feasible. An abandoned operation is closed based on payments made up to the closure date, with adjustments made to the total expenses incurred at the time work ceased, and the actual financial and material status of the project is determined. This ensures that even projects that are permanently halted are properly accounted for in the public investment records.
Exceptional cases for closure have been established for operations that are materially and/or financially complete, but for which a closure decision cannot be prepared due to unavailable information or the impossibility of completing the required documentation. Examples of such missing documents include accounting records, the general and final account, final approval of work status, or the signing of the provisional acceptance report for works. If it is impossible to provide certain documents and information, the responsible activity manager must initiate closure procedures and prepare an administrative certificate explaining the reasons for their unavailability. The full closure file includes a closure card, a closure declaration, and an administrative certificate, if necessary, justifying the reasons for any unavailable required documents and information. This provision acknowledges the practical challenges that can arise in documenting older or complex projects, offering a structured approach to their closure.
Cancellation Rules and Requirements
Cancellation applies to public investment operations where the tender request was not announced by the end of the fiscal year following their registration. This requirement is in line with Article 34 of Decision No. 03, which was issued on January 11, 2023. The Ministry of Finance specifies that these operations are subject to cancellation if they fail to meet this timeline, ensuring that projects move forward in a timely manner after their initial registration. This measure is designed to prevent projects from remaining indefinitely on the public investment map without concrete steps towards implementation.
Public investment operations are also eligible for cancellation if they have not received an allocation, irrespective of the year they were registered. This type of cancellation can be initiated based on a request from the program manager responsible for the project. The provision allows for the removal of unallocated projects from the public investment map, aiming to streamline budgetary records and focus resources on active or allocated initiatives. This helps to maintain an accurate and current overview of the government's investment portfolio, ensuring that only viable and funded projects are retained.
The formal cancellation of these operations is carried out through a decision issued by the Minister of Finance. This centralized approval process ensures that all cancellations adhere to established regulations and maintain consistency across public investment projects. The Minister's decision serves as the official directive to remove the specified operations from the government's financial and project management systems, providing a clear and authoritative mechanism for project removal.
Documentation and Financial Reporting
The closure process for public investment operations mandates the specification of key identifying details, including the authorizing officer and their unique code, the registration decision and its number, the permanent number, and the notification date. Officials must also record the operation's name and number, its allocation date, location, the actual start date of works, and either its completion or cessation date. This detailed identification ensures that each project is uniquely and accurately tracked throughout its lifecycle, facilitating clear record-keeping and accountability.
Financial reporting within this process requires determining the initial and current commitment authorization, any revaluations made, and the total expenses incurred. A comparison between the final commitment authorization and the actual cost of the operation is also a mandatory part of the documentation. This full financial overview helps to assess the efficiency and accuracy of budget planning and execution for each project.
The procedure further necessitates an inventory of the investment's financial structure. This includes itemizing expenditures across categories such as studies and engineering, construction and civil engineering, public works, machinery and equipment, transport and handling equipment, training, external services, inventory, and tools. This granular breakdown of costs provides a clear picture of how funds were allocated and spent across different components of the investment.
A comparison between the project's initial material structure and any subsequent modifications is also required, alongside documentation of what has been actually delivered. Any discrepancies identified between these stages must be clearly noted. This step ensures that the physical outcomes of the project align with its original design and any approved changes, providing a tangible measure of project success and identifying any deviations.
All information pertaining to the financial and material situation of the operation must be formally signed by the activity manager and the authorizing officer. Additionally, the competent public accountant and the budget controller are required to initial this information, confirming their review. This multi-level approval process adds layers of verification and accountability, ensuring the accuracy and integrity of the closure documentation.
Legal Basis for the Instruction
The new instruction from the Ministry of Finance draws its legal foundation from several key legislative and executive instruments. It is based on Article 223 of the Finance Law for the year 2025. The instruction also references Executive Decree No. 20-403, which was issued on December 29, 2020. The framework for the new procedures includes Decision No. 03, dated January 11, 2023. Instruction No. 002, which was previously issued on March 1, 2010, also serves as a foundational document for the recently implemented guidelines concerning public investment operations. These legal and regulatory underpinnings provide a strong framework for the Ministry of Finance's new approach to managing public investment projects.