After analyzing the investment account corresponding to 2012, the Auditor General of the City of Buenos Aires (AGCBA, for its acronym in Spanish) found "discrepancies in the information" about the City’s debt.

Chapter 5 is the surrender of that budget, which talks about the financial position; it says the amount owed totaled $12.994 million, while the volume 6, the figure drops to $11,270 million.

And the Watchdog argues in its report adopted this year in the investment it "does not explain the existence of such a difference of $1,723,000, or are its causes are provided."


For their research, the Audit finally took the second number as the cash debt stock until December 31, 2012, i.e. those $11,270 million.

The work of that total, $4,088 million were "no debt", formed by commitments with suppliers and contractors ($ 4.056 million), and pension sphere ($ 32 million).

While the "public debt" amounted to $ 7.182 million, it was divided into titles and Tango bonds ($4.657 million), loans from international lending agencies ($1,213 million), also commitments with suppliers and contractors ($90 million), and the category "other” with over $ 107 million.

With this universe to analyze the AGCBA described a series of "limitations on the scope" of their work, they are related, first, with the area from which emerge the data in question; on the other, with the lack of information about the trials facing the City; and finally, the uncertainty generated by "mutual claims" of debts between the State and the Government of Buenos Aires.

On the first point, the report notes that "the state of public debt does not arise from the Integrated Management System and Financial Management (SIGAF), but records that manufacture the Directorate General of Public Credit." This, for analysis, constitutes an "obstacle" because it "does not allow the control in its" integrity of concepts and items comprising the stock of amounts due.

As for the legal aspect, the audit noted that "investment account does not contain information on debts of character eventually emerging from lawsuits in process until December 31 2012 in which the Government of the City of Buenos Aires was demanded." It is that the data provided by the Buenos Aires Procurement "practice do not allow a reasonable estimate of the amounts omitted" and all that "prevents assessing the economic impact" of possible rulings on local debt.

The report says: "While the Government cannot estimate the likelihood of success in such proceedings, or the amount or term of any payment, any adverse outcome may have an impact on finances, so this why the AGCBA considered necessary its exposure."

In this regard, the agency lists some existing records "Notable litigation cases are triggered by a fire in a private nightclub, which caused a significant number of deaths and injuries; an alleged environmental damage in areas adjacent to the Riachuelo, and in which the City is co-defendant; and alleged negligence in medical procedures carried in local hospitals.”

Good Neighbors

As mentioned, one of the limitations of the research Audit was the "reciprocal claims" of debts between Buenos Aires and the Nation. In fact, in the investment account is a table summarizing the amounts requested by both jurisdictions, updated to December 2012 (see Download the Report).

According to the locals numbers, the original amount it owed the Nation was 5,048 million and almost 922 million dollars in taxes from the Revenue Department, Federal Co, transfer of education and health services, and an action DGI court against no compensation for the "tax loss" AUSA, the company that concessions highways of the city. At year-end 2012, and valuing each dollar 4,918 pesos, these amounts totaled approximately $11,429,000.

While the national state claims for liquidated or liquidated entities, guarantees and government securities dropped almost 978 million pesos and 732 million. In December 2012, and with the same price of the US currency in the Buenos Aires case, the amount climbs to $ 4.952 million.

These data mean that the net in favor of the Federal Capital balance, always until 2012, reached $ 6.476 million.

However, the Watchdog suggests that "the quantification of mutual claims varies according to the sources." It is that regardless of that figure in the investment account, other data reported by the Buenos Aires government own the Ministry of National Economy appears; those numbers say that in December 2004, the balance in favor of the Capital was $ 10,678,000, while the favorable figure for the nation amounted to 59 million dollars and 15 million euros.

And there's more confusion. The Watchdog added that the Directorate of Public Debt Management, which is an entity of the Federal Government, "did not respond" to requests for information that the State of Buenos Aires performed on this issue. Indeed, the latest data provided by the national office mentioned date December 31, 2008 and "overdue debts of the City of Paris Club concept for 3.148 million dollars; and (bonds) BOCONES by 1,030 million, which included $82 million."

Faced with such amount of numbers, the AGCBA concluded that "no explanation has been obtained about the causes of the differences in the amounts recorded."

"Weaknesses in Information"

To complete, the audit report noted "weaknesses in the information, making it difficult to assess the effectiveness of public loans made."

The City took loans for 600 million through two laws, according to the AGCBA, "the destination (of money) had ambiguous goals, such as the 'realization of infrastructure projects under the purview of various Ministries' and' repayment of debt, '"says the report and adds:" Neither the budget law or the investment account determine the programmatic categories that capture these sources of financing, difficult to assess the objectives for which public credit operations contracted."

In conclusion, the Audit of the City of Buenos Aires said that "the investment account -in 2012- presents fairly significant aspects corresponding to the balance sheet (current status of public and non-public debt) information, and budget execution spending” of the City Government.

On the Side

Not only did the AGCBA take over the capital debt. In fact, one of the first resolutions of 2015 of the General Audit Office (AGN, for its acronym in Spanish) analyzed the commitments made by the provinces in general and the impact of their ability to pay on the stability of the national numbers.

One of the conclusions of its work is that for "full financial autonomy", the Capital has a "high level of management in its strategy" to seek financing through, for example, bond issues, and that it does not constitute a risk to the central government.