2007 Public Account Audit Report Key Findings – Federation
Chapter V: Key Findings of the 2007 Public Account Audit Report (Published March 2009)
The results of the 2007 Public Account Audit were communicated to the audited entities in various meetings. Unresolved issues were incorporated into the final report.
Institutions have 45 days to provide supporting documentation to address the comments. Failure to do so may result in further investigation, penalties, or legal action.
Key Aspects of the Audit Report
Following recommendations from the Vigilance Commission and the FSA’s continuous improvement program, the 2007 Public Account Audit Report highlights the following:
- Increased Audit Scope: The number of audits increased by 28%, from 754 in 2006 to 962 in 2007.
- Focus on Performance Audits: Performance audits increased by 118 (164%), while Regularity and Financial Compliance audits increased by 101 (16%).
- More Comprehensive Reporting: The report expanded by 12 volumes compared to the 2006 Public Account.
- Significant Increase in Actions Taken: Observation statements increased by 267% (from 316 to 1,159), and new developments for administrative penalties increased by 194% (from 555 to 1,632).
- Emphasis on States and Municipalities: 84% of observation statements and 64% of administrative penalty promotions pertained to states, municipalities, and the Federal District government.
Financial Implications and Irregularities
The monetary value of the audit findings amounted to 60.7236 billion pesos, with 31% (18.8674 billion pesos) attributed to states, municipalities, and the Federal District. These amounts do not necessarily represent reparations, damages, or penalties.
In accordance with Article 31, Section C of the Supreme Audit Law of the Federation, the audit revealed unregistered, incorrectly recorded, or insufficiently documented transactions in the financial statements of controlled entities or the Federal Public Account.
Horizontal Audits and Resource Recovery
Horizontal audits continued, notably the audit of the National System of Public Security, which covered all 31 states and the Federal District.
Regarding General Ramos 23 and 33 (funds transferred to states and municipalities), 544 audits were conducted, with 394 performed by the ASF and 150 by the Supreme Audit of Local Congresses.
Over the past seven years, the SFA has recovered 33.718 billion pesos, 33 times its annual budget. Of this, 2.028 billion pesos were recovered during the 2007 review, primarily from states and municipalities.
Notable Recoveries
- 10.856 billion pesos from the bank bailout
- 2.458 billion pesos related to the Union’s customs procedures law
- 1.580 billion pesos from PEMEX
- 1.481 billion pesos from the Highway Concession Rescue Trust (FARAC)
- 277 million pesos from the Judiciary of the Federation
- 6.8 billion pesos from states and municipalities
International Peer Review and Transparency
The FSA underwent a successful international peer review conducted by the Comptroller General of the United States of America (GAO), the National Audit Office (NAO), and the Auditor General of Canada (OAGC) and Puerto Rico (OCPR). The review praised the effectiveness of the Quality Management System, compliance standards, and technical rigor of the performance audits.
The FSA also underwent external audits by independent firms to ensure transparency in resource management, tax compliance, and corporate performance.
Areas Requiring Attention
The FSA has identified areas of opacity and risk within the Mexican Federal State that require immediate attention to improve transparency and accountability.
These include budget under-execution at the end of each fiscal year, the management of resources transferred to states and municipalities through General Ramos 23 and 33, discretionary resource management (e.g., oil surpluses, grants, loans, tax incentives), and insufficient regulation and supervision of concessions, permits, contracts, and licenses.