To ensure medical coverage for the most vulnerable sectors, the Federal Government wrote in 1989 Law 23,661, the Solidarity Redistribution Fund (FSR, for its acronym in Spanish), which is a fund made up of contributions from health care companies and the Superintendence of Health Services. While this law provided that at least 70% of the money gathered should be automatically transferred to the agents of the health system, a report by the Audit General’s Office (AGN) detected in 2009 and 2010 that the distributions did not even reach 15%.

The watchdog said that up to 2009 the FSR had resources amounting to $2,839,304,435.61, and that "they had not met the parameters" of distribution of the funds as stated by law. That year, the "automatic distribution represented only 14% of the proceeds ($387,318,249) and for 2010 it was even lower: 11% ($429,212,499), " as was pointed out by the audit. These amounts went to what is called the Automatic Nominating Grant (SANE, for its acronym in Spanish).

Also, the nearly $3 billion available to the Fund in 2009 and, not taking into account the funds transferred to SANO, the rest of the money is divided between the Special Programs Administration (APE, which received $ 945,867,126) and the Ministry of Health ($ 20,355,000). And about $ 41.764.545.79 for payment of salaries and social securities were also transferred, because the other goal of the FSR –other than matching the benefits offered by the health system- is to cover the costs of the Superintendence.

With these numbers, the audit highlights the existence of a "$ 1,443,999,514.18 balance, that represents 51% of the money earned in 2009," and adds that "the method of distribution of the surplus was not carried out" on schedule as is expected by the law. The law states that "the distribution of the remaining must be made each year; however this is not done every year."

Three's a Crowd

The AGN explains that, at first, the management of the contributions received by the Solidarity Redistribution Fund was a responsibility of the Superintendent of Health Services. But in 1995 and by the 292 ruling, the Federal Administration of Public Revenue (AFIP, for its acronym in Spanish) was designated to collect and examine the resources.

Always according to the report, approved this year, after this decree an account was opened in the National Bank of Argentina (BNA) where the AFIP deposited money to the FSR. Then the latter would report to the Bank as well as the Superintendence what amounts had to go to what health care companies.

At the end of the AGN’s investigation "funds are concentrated in two bank accounts." The first one is Checking Account 4693/36 which is managed by the National Bank; in this account the money raised by the AFIP from healthcare contributions is deposited. The other bank account is account 2713/69, which is administered by the Superintendent.

The report explains that, "since the decree 292/95 the decentralization of the collection of funds, distribution, and administration of the Solidarity Fund in three different organisms (AFIP, the National Bank, and the SSS) begins. And, on the coexistence of these entities, the report explains: "In effect, they raise and oversee the AFIP and the SSS, while the automatic distribution is performed by the National Bank for and on behalf of the Superintendent, but this one (in turn) is not responsible for the administration and registration of movements for account number 4693/36, this is responsibility of the National Bank.”

To complete the picture, the researchers added that "the Superintendent does not receive any information collected by the AFIP enabling it to verify the integrity and correctness of the amounts collected and transferred" to the agents of the health system.

Based on this data, the report of the Auditor General's Office recommended "the relevant agencies to conduct a regulatory system in order to establish a clear and precise scope of its jurisdiction" in the operation of the Solidarity Fund. And, incidentally, also suggested that the AFIP report to the Superintendent how much they raise for the FSR.

Bonus Track

By the end of 2010 the Solidarity Redistribution Fund accumulated $ 6,144,977,207.69 in Account number 4693/36 (which is administered by the National Bank), and $ 56,691,972.67 in Account Number 2713/69 (corresponding to the Superintendence of Health Services).

Returning to the first item on the agenda, AGN states that in 2011 another decree was signed 77 - which provides for partial distribution of surplus of $ 250 million. "However, to allocate those funds different criteria other than those specified in the regulations were used," says the report accompanying that, "in fact, in the total revenue for contributions, only 30% of the sum was assigned "to the agents of the health system.

The watchdog noted that this movement of money was made despite that fact that "there has not been an amendment to the law that abolished the criterion of timely regulated distribution and therefore justifies a change" in the distribution of funds.