chapter  3
29 Pages

Strategic Failures

WithAlfred H. Saulniers

This chapter analyzes Peru's budgeting system and reviews Peru's control failure by examining four separate subsystems: planning, budgeting, commission or committee coordination, and information monitoring. Beginning in 1970, government authorities used the budgetary process to impose tighter financial control and reporting requirements on the companies. In bureaucratic power terms, central government confusion was the outcome of a struggle between the inp, mef, and cofide who sought to impose strict centralized controls over company production and investment decisions, and the sectoral ministers, backed by the President's Advisory Committee, who pushed for decentralization. The budgetary process is a structural link between public enterprises and central government. It provides government authorities with recurrent opportunities for strategic review of expenditures, programs, and objectives. The three strategy-oriented Multisectoral Commissions received the mission: to evaluate the policy matrix for public enterprises and to recommend improvements. The public accounting directorate prepared a manual for the economic and financial evaluation of public enterprises.