Foncap S.A., which manages a trust fund, provided by the Ministry of Social Development, spent 194% more of the money it had authorized for that year. A report from the General Audit Office of the Nation (SIGEN) indicates that the firm had $ 983,729 to carry out its work, but finally it received $ 2,891,966.

According to article 9 of the trust contract, Foncap's operating expenses will be "met" by the fiduciary fund on the basis of "austerity criteria", and "only exceptionally, it may exceed 33% of the budgeted annual income". However, the control body affirms that the company registers a "marked departure from the norm" and that these "excesses", far from being exceptions, are "happening year after year."

The money that came from Social Development amounts to $ 40 million, and comes from the profits obtained from the National Lottery State between the accounting periods of 1992 and 1995. According to its website, Foncap Company aims to "contribute to the development of microfinance in Argentina." To this end, it provides assistance to the institutions that work in this field, such as community organizations and financial companies that manage monetary resources and train human resources in the management of loans that are provided to promote microenterprises for production or commercialization.

On the other hand, SIGEN detected in the 2007 balance sheet of Foncap that 38.42% of the loan portfolio corresponded to "uncollectable" and that a large part of these operations were in "judicial or extra judicial management with little possibility of recovery."

One of these credits corresponded to the Argentine Federation of Poultry Cooperatives (FACAP, for its acronym in Spanish), which, at the time of the Audit’s work, was in the process of being bankrupt. The agency adds that, in this case, "it was not possible to verify the credit and also it was verified that no asset exists". The amount claimed is US $3,208,856.

In addition to the work of the SIGEN, there were other reports from the General Audit Office, the consultant Price Waterhouse & Coopers and the supervisory commission on the management of the trust fund and the work of Foncap. All emphasize, as weaknesses of internal control and legality, that the company grants credits for important amounts demanding in return insufficient guarantees; There are no criteria to allocate funds according to the guidelines established in the trust agreement; There is no evidence of the consideration of some contracted services; Decrease in trust capital; Refinancing of loans in cases not allowed by the procedures manual; And lack of monitoring and control of the credits granted.

The audit concluded in its report highlighting the need to review the business management of Foncap S.A. to "safeguard the trust capital," and that the lack of adequate internal control exposes society to "an important degree of vulnerability".