By Carolina Caro, Audit and Consulting Partner at CCL Auditores Consultores.
Read the column in Diario Financiero.
In the context of the agreements case that became public in June, the Ministerial Advisory Commission has already submitted its report to President Gabriel Boric, containing 46 recommendations for regulating the relationship between private nonprofit institutions (IPSFL) and the State, based on the principles of integrity, transparency, effectiveness, efficiency, and accountability. Additionally, as part of this report, a set of measures is proposed to strengthen control and internal audits within IPSFLs.
Although in recent weeks we have become aware of possible cases of irregularities associated with transfers of funds to these nonprofit entities, we must not forget that many of them play an important social role, adding value to the economy and society as a whole.
Among the measures reported, it is recommended that all those receiving more than 2,000 UTM annually in State funds: carry out external audits of their financial statements, have a code of ethics, mechanisms for preventing and managing conflicts of interest, or mechanisms for preventing irregularities. Likewise, they should have channels for reporting irregularities and a public body that exercises oversight, ensures transparency in the provision of information, and sanctions corporate governance bodies when they violate the law.
In addition to the above, I consider it important to highlight that private external advisors should play a relevant role in the design, development, and implementation of strengthening internal control systems within IPSFLs, particularly in the elements of good governance that support the pillars of transparency, integrity, legality, sound policies, participation, accountability, responsiveness, as well as in the prevention of criminal conduct and corrupt practices, always adjusted and proportional to the size and capacity of each organization.
For this reason, and in light of the lack of oversight, absence of real sanctions for non-compliance, lack of internal control mechanisms, and deficit of internal audits within organizations and government, it becomes relevant to have a law and greater regulation that will restore market confidence in these organizations, as stated in the report of the Ministerial Advisory Commission.