The Inter-American Development Bank today announced the approval of a $21 million loan to the Dominican Republic for a program to modernize the management of public sector resources.

The modernization program, which will be carried out by the Dominican Finance Ministry (SEF), will increase efficiency and transparency in the use of public resources and the effectiveness of public sector management.

The program will strengthen the SEF’s capacity to perform new functions under legal reforms proposed by the Dominican executive branch to improve governance, bolster fiscal discipline and ensure financial stability.

“The program will make for a more efficient use of public sector resources, generating savings that could be used in priority areas for government action, such as social and poverty reduction programs,” said IDB project team leader Roberto Camblor.

The government’s integrated financial management system (SIGEF), which comprises the budget, public debt, treasury and accounting systems, will be linked to the public investments and public sector human resources information systems and placed on the Internet. The SIGEF’s coverage will expand to include decentralized agencies and social security institutions.

In coordination with the World Bank, the IDB also developed a component of the program focused on increasing the efficiency and transparency in state procurement.

The Office of the Comptroller General, the agency in charge of verifying public sector resources are used efficiently and transparently, will also be strengthened by training its staff and implementing internal oversight and audit systems.

The loan is for 25 years, with a five-year grace period and a variable interest rate. The Dominican government will invest $2.4 million in the modernization program.