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Cablegate: Transparency of Colombian Budget/Military Spending

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BOGOTA 012960

SIPDIS

PLEASE PASS TO TREASURY OASIA/MDM: J. FRANCO AND
EB/IFD/OMA: L. GALLAGHER

E.O. 12958: N/A
TAGS: EAID ECON EFIN CO MOPS
SUBJECT: TRANSPARENCY OF COLOMBIAN BUDGET/MILITARY SPENDING

REF: SECSTATE 239929

1. (U) Per Secstate 239929, post has spoken to appropriate
Colombian government authorities and has responses to
questions posed by Washington.

2. (U) Military Expenditures are audited by the National
Comptroller, which works on an annual cycle to audit each
aspect of military expenditures. There are five types of
auditing modalities. A regular audit is performed for new
entities (first-time audits) or entities that have not
received recent audits. Abbreviated audits are performed on
a yearly basis for most entities. Special audits are
performed on specific processes such as audits on classified
military spending. Account audits are performed for very
small entities. Finally, follow-up audits are performed on
entities that face a critical situation or those that have
already been audited and have committed to special
improvement plans. Assigned auditors submit their auditing
reports to multidisciplinary teams of economists, lawyers,
and generals to evaluate a strategy and the information they
have received. They determine the deficiencies, determine
linkages to problems, analyze causes of deficiencies,
determine the impact of deficiencies, determine if the
problems are sporadic or reoccurring, and evaluate the
evidence. The auditing teams are obliged to inform the
entities that receive the audits about their findings. The
audited entities are also mandated to apply corrective
measures immediately after receiving auditing reports (they
have 3 days to respond to the National Comptroller after
receiving the report).

3. (U) At the regional level, 31 departmental offices
perform audits on military units throughout the country.
Those regional offices consist of groups of auditors
supervised by regional managers who report to the National
Comptroller's Office at the central level. At the central
level, the National Comptroller assigns 5 auditors for the
Army, 5 for the Navy, 5 for the Air Force, 4 for the National
Police, 4 for the DAS (Administrative Security Department),
and 3 for the other entities related to security such as
DISAN (Defense Sanitary Directorate) and the Superintendence
of Private Vigilance. Auditing of classified security
spending is done separately on a total of 11 entities
(including Army, Navy, Air Force, Police, DAS, INPEC, DNE,
Prosecutor General,s Office, and a few others). A total of
7 auditors are assigned to classified defense spending. As
mentioned above, these auditors report to working teams at
the Comptroller,s office who evaluate and measure the impact
of the findings and report to the audited entities, judicial
and legislative authorities for corrective actions and
political control.

4. (U) The audits are reported to the audited entities,
Congress and the President. While the Contraloria is the
only entity that approves the audits, the President usually
meets with the Comptroller to discuss the results. If the
auditing reports conclude that there are grounds for
initiating disciplinary or penal investigations, then the
audits are also reported to the Prosecutor General or the
Attorney General Offices accordingly.

5. (U) Apart from the military authorities, some civilian
entities make up part of the defense and security sector
including the Military Hospital, Military Club, Military
University, Civilian Defense, Indumil (Military Industry),
Satena (Airline), Superintendence of Private Vigilance, DAS
(Administrative Department of Security), INPEC (Penitentiary
Institute), National Police, DNE (National Drugs Directorate)
and others. The National Comptroller audits all of these
civilian entities.

6. (U) There is an existing framework for conducting
annual audits of military expenditures. The Comptroller
performs these audits annually, starting in August and ending
in June. 97 percent of the military budget is audited every
year. The auditing process by the National Comptroller is a
standard procedure that has been certified by ISO 9000. The
auditing is based on past auditing reports and on information
received from the entities receiving the audits. Audits
consist of three phases: planning, execution, and reporting.
The planning is documented in a General Auditing Plan, which
determines specific dates and entities to be audited. During
execution, auditors collect evidence and evaluate the
evidence. The reporting consists of producing a report with
the findings of the audits performed. There is an instituted
policy that requires these audits.

7. (U) One of the main objectives of the auditing process
is to measure efficacy. However, in the defense sector, many
of the objectives are hardly measurable. For example, a
certain amount of military operations were performed to
maintain peace or fight against terrorism, but there is no
certain way of measuring what the situation would have been
in the absence of such operations. Some deficiencies are
also present in the process of collecting information. The
entities that receive the audits sometimes use different
accounting methods and in some cases information is not
submitted on time. There is classified material that can not
be fully audited because of the sensitive nature of the data.
Additionally, there is no legislation that regulates the use
of classified spending or that provides management criteria
for classified budgets. These deficiencies do not appear to
be intentional, and likely are the result of restrictions
related to security concerns or lack of mechanisms to verify
the information received.

8. (U) Colombia's defense budget includes the police,
Ministry of Defense (Armed Forces) and DAS (Dept. of
Administrative Security). The only significant off-budget
military receipts are those for Plan Colombia, which are
audited because the U.S-Colombia cooperation agreement
specifically requires that audits be performed on such funds.
Other off-budget military receipts include the Military
Forces, own resources and other international cooperation
funds, neither of which represent significant amounts.
WOOD

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