The Second Integrated Financial Management Technical Assistance Project's objectives are to: a) increase the efficiency and transparency of public sector financial management and control; b) improve the delivery of public services through the deconcentration to line agencies of the primary responsibility for management of their financial resources; c) improve the execution of public investment; and d) establish and/or strengthen mechanisms to reduce corruption in public sector spending. The project has five components. 1) Extending integrated financial management reforms will support reforms in budgeting, accounting, cash management, procurement, decentralization, information technology, legal framework, and training. 2) Strengthening the Comptroller General's Office (CGO) will cover external audit system, CGO restructuring, change management, human resource management, audit information technology system, audit out-sourcing, and internal audit units. 3) Strengthening public investment function will create a national system of public investment, strengthen public investment plans, decentralize investment design and execution, and reform contracting process. 4) Strengthening public debt management will be conducted through restructuring debt, fees system, capital markets specialized unit, training, and information technology system. 5) Project coordination will oversee project development, procurement and disbursement.

The objectives of the Second Programmatic Fiscal and Institutional Development Policy Loan Program for Guatemala are: i) maintain fiscal space for priority spending through tax policy and tax administration reforms; ii) improve governance and transparency of public financial management and expenditures; and iii) improve access to finance and deepen financial markets through reforms to the financial legal framework and public debt management. The operation builds on the progress made under the First Fiscal and Institutional Development Policy Loan (DPL) and supports the country's strategic program to strengthen Guatemala's capacity to grow and provide adequate resources to reduce poverty and inequality. Progress on critical reforms is being made, including strengthening tax administration, promoting financial market stability, improving monitoring and evaluation of the country's new conditional cash transfer program, modernizing customs processes, as well as enhancing governance and transparency. The Government has prioritized its development plan on near term steps to mitigate the impact of global crisis, including focusing efforts on expanding its new conditional cash transfer program and creating a task force to monitor the economic situation and take policy actions, as needed, to respond to the crisis. The Government has adjusted its reform program to reflect additional actions and priorities, including reforms to increase access to finance and address financial sector stability, while other actions anticipated by the Government prior to the crisis, particularly implementation of measures to boost tax collections, have been delayed. Guatemala made steady progress on the transparency and financial management in recent years.

The overall goal of the Integrated Financial Management Project is to strengthen the financial management capacity of the Government and to help restore confidence in public sector integrity and competence. The project will have two specific objectives. The first will be to improve the efficiency, accountability, and transparency of the financial management functions of the public sector through implementation of an Integrated Financial Management System (SIAF) centered in the Ministry of Finance and a modernized Government Auditing System (SAG) in the Comptroller General's Office. The second objective will be to improve the delivery of public services by supporting decentralization to line ministries of primary responsibility for management of their financial resources. The project comprises three major components: 1) reform of financial management policies and procedures supported by outside technical assistance; 2) investment in information systems involving the purchase and installation of computer hardware and software systems; and 3) a training component.

The overall outcome of the Integrated Financial Management Project was satisfactory with a likely sustainability. It strengthened public sector financial management as the adoption of coherent fiscal norms and procedures supported by modern information technology led to the integration of budgeting, accounting, and cash management. Lessons were learned in the areas of public sector reform, integrated financial management efforts, and reform -oriented efforts in general.