translated from Spanish: Administration of Kiko Vega debt BC with bank credits

The Government of Baja California, under the administration of Francisco “Kiko” Vega, applied for 4000 215,860,000 pesos in short-and long-term loans. It is not known what a portion of the resources was used for, and another was intended for purposes other than those agreed upon in its recruitment, a report of the Federation’s Superior audit revealed.
In addition, the auditors found “deficiencies” in the administration of four trusts for 419 million of pesos and payments in excess of banks for 14 million pesos, thus adding a total of 4,649,950,000 pesos in possible recoveries.
In a review of the 2017 public account it was found that the government of Baja California was one of those that had a greater amount of resources without checking with the ASF.
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The political Animal sought Bladimiro Hernández Díaz, head of the Ministry of Planning and Finance of the State, for being the unit in charge of hiring the loans, but there was no response.
However, Miguel Ángel López, undersecretary of planning and finance, said in an interview that the authorities were given a check for the use and destination of 4,826,000 pesos and that the results will be published in September.
“We have already checked, and in the various meetings we have had with the auditors in the ASF headquarters, we have been told that the information delivered by the moment complies with all expectations and conditions and that most likely these are solved” Said.
The auditors warned that the entity faces high levels of debt, restricted calpacidad of payment, liquidity and financial sufficiency, while the Calificacodaras Moodys of Mexico and Fitch ratings assigned the ratings with perspectives Negative.
This, they noted, makes it difficult to obtain favorable results at the end of the administration-which ends next October-and it is necessary to implement “effective and extraordinary financial measures”.
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The irregularities
-The Government of the State requested the banks ‘ interactions and HSBC – without the authorization of Congress – eight short-term credits for 4.535 billion pesos to cover insufficient liquidity. Of that total, the destination of 2,507,835,000 pesos was not verified.
The Government submitted information on transfers, invoices, cheques and payment relationships but not contracts for the provision of goods and services, bidding or awarding methods and accounting policies.
With regard to the short-term loan application, the undersecretary of finance stated that the resources were used to meet liquidity needs and that the local executive could hire them without the authorization of the State Congress.
-Despite obtaining more resources from banks, the balance of credits – which would be paid with those resources – only decreased 117.1 million pesos to go from 2000 645.8 million to 2000 528.7 million pesos for 2017.
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-The current pan government of the entity asked for another 15 long-term credits with interactions, Banamex and Scotiabank in the long term for an amount of 1.708 billion pesos. The resources would be used for productive public investment, such as programs and acquisitions, equipment and public works or actions that benefit society.
However, most of these resources were scattered in different accounts and used to solve current expenditure, reports the official ASF document.
“These resources are destined for productive public investment, so they were sent in the verification of the observed amount,” commented Miguel Ángel López.
-The auditors also found “deficiencies” in the administration of the four trusts established for the payment of the public debt contracted through 23 long-term loans in force in 2017.
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The ASF noted that there is probable damage to the Treasury for 419 million pesos. In the review of the remnants returned to the state Government by the Trustees NAFIN and Scotiabank, it was noted that they did not return 102.9 million and 316.1 million pesos, respectively, in 2017.
According to the undersecretary of finance, these observations do not come because the balance as of December 31 is integrated by the reserve constituted according to the contract and by the amounts of the receivables maturing in the first ten days of the month of January.
-According to the audit, in reviewing interest payments to banks in 2017, payments were made in excess of 14.6 million pesos to financial institutions in 2017, the long-term credits obtained with Santander, BBVA Bancomer, Scotiabank and Banamex, “It did not verify the determination of interest in accordance with the provisions of the financing contracts”.
Here, the ASF “did not consider changing the credit rating, which caused an increase in rates,” said the official.
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Original source in Spanish