It does not cause surprise that, in the last week to close the first quarter of 2025, the execution of the Departmental Councils of Urban and Rural Development (CODEDES) corresponds to 0.98 % of the voluminous expense roof that the Congress of the Republic and the Ministry of Public Finance (Minfin) agreed for Q12 thousand 269.6 million.
The alerts were made prior to the approval of the State Budget project in November 2024, which in the opinion of the Finance and Currency Commission and in the Plenary Session of the Congress was modified to ensure more resources to the Codedes, based on political negotiations and covered in Decree 27-2024, Law for the extent in the execution of works of the councils.
In this way, the initial amount of Q4 thousand 322 million for the development tips system, including about Q23 million of the National Economic Development Fund (Fonpetrol) and Q4 thousand 299.1 million of the VAT-PAZ allocation, has reached the highest figure since its creation, despite the low execution in works, corruption and politicization in the use of resources.
In August of last year, Congress endorsed an extraordinary extension of Q1 thousand 875 million for the Councils, which had started with more than q4 billion assigned and finished the fiscal year with a budget of Q6 thousand 412 million. According to the Integrated Accounting System (Sicoin), at the end of 2024 the execution was 52 %, leaving more than Q3 billion drag by 2025.
In February of this year, the Minister of Finance, Jonathan Menkos, brought to the Legislative an initiative to expand the budget in Q4 thousand 176 million and leave the decision of the Constitutional Court (CC) to provisionally suspend four articles – among them, a contribution to the CODEDES – after a legal action presented by the Coordinating Committee of Agricultural, Commercial and Financial Associations (Cacif).
The proposal was approved by national emergency by the Plenary one day after receiving it, and among other items, q1 thousand 891 million for the codedes were restored. Until the closing of this note, the allocation is in the expense of obligations in charge of the Treasury and has as its destination multirregional investment of the councils, according to the Sicoin.
Quarter without results
Carlos Gossmann, coordinator of the area of Public Budgets and Human Rights of the Central American Institute for Fiscal Studies (ICEFI), attributed the low execution shown by the Codedes that “were not prepared.”
“In addition to that it is a spurious allocation, made without having the projects or works that were going to be executed, this is a complex issue because a project cannot be prepared in a couple of weeks, but will take them at least one month or up to six months,” he explained.
Gossmann refers that the disbursement and transfers control portal (CODET) mainly reflects the assigned of the ordinary budget (1 percentage point of VAT-PAZ), and the information of extraordinary transfers is not yet complete, because there is no planning or guarantees.
In this portal, in charge of the Ministry of Planning and Programming of the Presidency (Segeplan) and the Ministry of Public Finance (MINFIN), the current amount for the Councils is Q5 thousand 503.9 million, while in Sicoin the figure amounts to Q12 thousand 269 million.
The risk, according to Gossmann, to leave extraordinary assignments without prior planning is the late approval, unlike the projects considered in the ordinary contribution, which already have the guarantees and studies requesting Segeplan to include them in the budget. But with extra funds “they are seeing how it is spent.”
Juan Carlos Zapata, Executive Director of the Foundation for the Development of Guatemala (Fundesa), said: “The execution of the budget through the Codedes is a mechanism that generates many doubts about the little efficiency and transparency in the quality of public spending.”
This type of investment should begin to be carried out through other mechanisms that foster more efficiency, Zapata said, remembering that Segeplan has little capacity to control these resources.
The minfin was consulted about the low level executed by the councils and the new allocations, but replied that it only makes the transfer of resources, so the issue must be directly consulted with those responsible for the execution, that is, the Codedes.
POLITED EXPENSE
In 2024 and 2025, assignments were made by political decision, including Q1 thousand 870 million for the Codedes, in addition to the willingness to keep the balances not executed instead of transferring them to the common fund, as established in the Organic Law of the Budget, said Gossmann.
The council model, in an efficient municipal management scenario – which meets the needs of the population, meets the contracting law, have transparency in spending, and avoid corruption and overpricing – could work well, said the Icefi economist.
But he added that the problem, in many cases, is that the Codedes lend themselves into mechanisms and networks of corruption colluded with political parties, deputies and other actors, which generates distrust in the management of resources and projects.
To date, according to the information on the CodeDes Execution Board, Q119.7 million have been executed, the wastewater, road by road and water supply, the three main destinations. The portal also shows a map by department with amounts of execution and indicates that, until completing the reprogramming of works, there will be information at the municipal level.
Information was requested on the reprogramming and budgetary execution of the CODEDES to the Secretariat of Executive Coordination of the Presidency, but referred to the information published in the Portales already Segeplan. At the close, no response was obtained.
Carlos Barreda, deputy to Parlacen for the will, opportunity and development (VOS) party, questioned the lack of clear destination of the resources for the Codedes: “It is necessary to know what type of work is what is included. They will mostly allocate it to rural roads, because they only carry machinery to compact the earth and throw a ballast layer,” he added.
Other inconveniences that it pointed out are the approval of works below Q1 million to avoid quotes, as well as the allocation of Q400 million to the Ministry of Defense, which will be used for the same purpose, that is, for the improvement of rural roads.