El Salvador Fiscal Policy and Expenditure Management Program (FPEMP) Quarterly Report December – February 2013

The program aims to modernize and improve fiscal policy and expenditure management in El Salvador, with a focus on public expenditure management systems, tax policy and administration, and public-private dialogue between the government, the private sector, and civil society. The program has three main components: Component A, which focuses on enhanced public expenditure management; Component B, which focuses on improved revenue mobilization; and Component C, which focuses on strengthened private sector engagement. The program's main counterpart is the Ministry of Finance (MOF) of El Salvador. During the seventh quarter of the program, which spans from December 2012 to February 2013, FPEMP achieved several key milestones. The program obtained agreements with the General Directorate for Government Accounting (DGCG) regarding the adoption of International Public Sector Accounting Standards (IPSAS). FPEMP also supported the development of the accounting conceptual framework for the SAFI II system and completed modifications to the Treasury Single Account (TSA) conceptual model. In addition, FPEMP secured agreements with the Budget General Directorate (DGP) Director regarding the budget modernization project and developed the DGP administrative modernization proposal. The program also completed the Taxpayer Registration System (TRS) and Taxpayer Current Account (TCA) application update, as well as the Case Selection Management System (CSMS) II fiscal compliance module. FPEMP continued to work on various other activities during this quarter, including the IPSAS adoption project, the TSA implementation project, the budget modernization project, and the fiscal transparency project. The program also coordinated with international donors, including the European Union International Cooperation (EU), German International Cooperation (GIZ), Spanish International Cooperation (AECID), Inter-American Development Bank (IDB), World Bank (WB), and the International Monetary Fund (IMF). In Component A, FPEMP continued supporting the IPSAS adoption project and the accounting conceptual framework development. The program also made necessary changes to the TSA conceptual model upon request from the Treasury General Directorate (DGT) and provided follow-up to the TSA implementation recommendations and the DGT reform proposal. In Component B, FPEMP continued to make progress in carrying out tasks under this component. The program's IT staff supported the TRS and TCA upgrades stabilization, and the TRS and TCA cleaning project was officially launched. FPEMP also worked closely with the MOF in addressing long-term issues affecting the TCA reliability. Overall, FPEMP has made significant progress in achieving its program goals, including the adoption of IPSAS, the implementation of the TSA, and the modernization of the budget system. The program continues to work closely with the MOF and international donors to address various challenges and achieve its objectives.