Tuesday, May 06, 2014

Communal Waste

Money for the people, Venezuela style:
The unsupervised spending in El Chaparral is symptomatic of a vast community aid effort with lax financial controls. A network of more than 70,000 community groups has received the equivalent of at least $7.9 billion since 2006 from the federal agency that provides much of the financing for the program, Reuters calculates, based on official government reports.

The money is part of a broad government effort called the "communal state" that steers funds to communities, primarily through an outfit called the Autonomous National Fund for Community Councils, or Safonacc. But exactly how much money passes through this system, who gets it and how it's used are largely a mystery.
....

The comptroller's office said it does not keep a tally of total transfers to community groups; it only tracks the finances of the councils it audits. In spite of the irregularities it identified at Safonacc, the office said in an email, the complaints "do not allow objections with respect to the relevance of the existence of these social and community groups. On the contrary, (the complaints) illustrate the need to cooperate in the development and consolidation" of the community councils.

Political rivals say the government is using the system to finance its base while bypassing opposition mayors. They note that the Interterritorial Compensation Fund, which uses federal funds to help poor regions close the gap with wealthier ones, has for three years given more to the community groups than to the country's 337 municipal governments. The ICF funds Safonacc and also directly finances community groups. It has set aside $1.38 billion under the 2014 budget for community groups and $1.29 billion for municipalities.

"The communal state lacks the fiscal controls that would apply to state and municipal governments, meaning there is no way to guarantee the appropriate use of resources," said Jose Vicente Haro, a professor of constitutional law at the Universidad Catolica Andres Bello in Caracas. "At the same time, there is a clear tendency toward using these groups to reduce the resources available to opposition politicians, which violates constitutional principles."
"Free money" for the right price...

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