IMF praises Costa Rica’s progress towards fiscal best practice

7 Nov 13
Costa Rica is approaching best practice in fiscal reporting and forecasting but is still too reliant on cash accounting, the International Monetary Fund has said

By Vivienne Russell | 7 November 2013

Costa Rica is approaching best practice in fiscal reporting and forecasting but is still too reliant on cash accounting, the International Monetary Fund has said.

In a Fiscal Transparency Assessment published this week, the IMF identified several weaknesses that were holding Costa Rica back. As well as preparing fiscal and budgetary information on a cash basis, there was insufficient reconciliation and comparability between accounting, budgetary and statistical information and revenue, expenditure and financing forecasts.

Costa Rica’s budgetary system was also criticised as ‘very fragmented’, a reflection of the fact that 41% of the budget is approved by the republic’s legislative assembly and the remaining 59% approved by the Office of the Comptroller General of the Republic. Under Costa Rica’s constitution, the comptroller general is responsible for setting the budgets of a host of institutions, including municipalities, universities and publicly-owned banks and companies.

The Costa Rica government has made plans for improving the timeliness, quality and comprehensiveness of its budgets, statistics and accounts.

An action plan produced in response to the IMF’s recommendations includes objectives for each of the next five years. In 2014, Costa Rica aims to move toward international accounting standards and to start recording expenses in on an accrual basis. By 2018, it aims to record fixed and intangible assets, inventory and cost all physical assets, including infrastructure, and consolidate public sector financial statements.

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