In Peru, regional and municipal governments represent more than 40% of total public spending. However, very little systematic action has been directed so far to support the strengthening and modernization of regional and municipal governments, thus hampering the capacity of subnational governments to deliver key public services in areas such as education, health, water and sanitation, waste management, public transport, and security.

The overall objective of the Program is to improve subnational public finances in order to contribute to a more strategic and effective allocation and execution of available public resources and delivery of essential services. The Phase Two of the Program will reinforce and supplement the progress made during Phase One and further improve budget management and execution, public accountability and prevention of corruption. By improving capital budgeting, procurement and adding effective internal controls, the Program will increase the performance of regional and municipal governements in providing essential services to their citizens in capital-intensive areas.

To improve all phases of capital budgeting and strengthen budget execution-

To improve internal controls, transparency and accountability-

To strengthen revenue collection, management and forecasting-

To strengthen the capacity of judicial authorities to recover misappropriated public assets-

To expand learning, through on-line tools, peer learning, social networks and train-the-trainer initiatives.

Expected results:  

New processes and best practices are implemented for budget planning, execution and control-

New processes and best practices are implemented in the area of accounting and reporting-

The level of transparency of subnational public accounts is increased-

Internal controls that supplement the external controls of the National Governement are introduced-

A strategy for equitable and effective property tax collection is developped.

Results from previous phases:  

An external evaluation of Phase One of the Program rated the relevance, effectiveness, efficiency and sustainability as high or very high in delivery of training and coaching to transfer skills to subnational governements' staff. The same evaluation found that the tools created by Phase One had been adopted and adapted by the National Governement for use nationwide. The "PFM diploma" trained a core of more than 250 staff in the participating entities, most of whom remained employed in the subnational governements and who formed a peer learning network.

Phase 2 01.10.2019 - 30.06.2023   (Active)