EXERCISE 2: PUBLIC FINANCES

ANALYSIS MATRIX OF ELEMENTS THAT MAKE UP THE STATE AND THE

WAY ITS ADMINISTRATIVE STRUCTURE IS ARTICULATED

DAYRA ESTEFFANY DIAZ SANABRIA ID 765790

SILVIA JULIANA VEGA FONSECA ID 755755
NESTOR JAVIER CACERES SUAREZ ID 777803
YERLY JOHANA MANTILLA MENDOZA ID 683896

CORPORACIÓN UNIVERSITARIA MINUTO DE DIOS

NRC 44-11787: ACTIVIDAD 2 UNIDAD 2
DIEGO ORLANDO RODRIGUEZ ORTIZ
MAY 2022

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 EXERCISE 2: PUBLIC FINANCES

INTRODUCTION

In this work, the matrix will be developed on the factors that create its state and
administrative structure, it will aim to explain these important functions performed by
many different powers. Regulating the laws and histories in our country, therefore, this
problem is also Based on social functions, all actions carried out by state agencies to
achieve their goals. And just to show a delegation or concession, unity, unity; However, it
should be noted that the public function means that state activities can never be invented,
and also related to the economy and the dictatorship to create financial institutions or other
institutions or other institutions or others.

In this activity we will learn about the administrative and financial structure of
Colombia, and realize the importance of each of the functions that each body that composes
it has, since this affects the country economically and socially to all its inhabitants. We will
know the entities in charge of controlling that everything works properly.

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 EXERCISE 2: PUBLIC FINANCES

ANALYSIS MATRIX OF ELEMENTS THAT MAKE UP THE STATE AND THE

WAY ITS ADMINISTRATIVE STRUCTURE IS ARTICULATED

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BUDGET MANAGEMENT MONITORING CARD PART 1 ADMINISTRATIVE

AND FINANCIAL STRUCTURE OF THE COLOMBIAN STATE

1. THE MAIN REFORMS THAT HAVE ARISEN IN THE PROCESS OF

DECENTRALIZATION OF THE COLOMBIAN STATE.

1.1 Law 60 of 1993

It changed the transfer model from the Value Added Tax to the transfer of a share in
the current income of the nation in order to increase the budget items of
decentralized entities. This new regime of fiscal decentralization contained a direct
addressing of the transferred budgets, restricting the autonomy of the territorial
entities and chaining a direct budget to each one of the responsibilities.

The distribution of budget items was as follows:

● In the case of the municipalities, the distribution of the municipal

participation in the Current Income of the Nation is 30% in education, 25%
in health, 20% in drinking water and sanitation, 20% in free investment and
5% in recreation and culture; Y,
● In the case of the Current Income of the Nation transferred to the
departments and special districts through the fiscal situation, 60% was
destined for education, 20% directed to the health sector and the remaining
20%, could strengthen the sector of education and health depending on the
intervention goal.

Law 60 of 1993, consolidated in the country the internal competition between the
different territorial entities for the resources transferred from the Current Income of the
Nation according to the specific and eventual need in order to generate an efficient and
effective system in the allocation of the resources. On the other hand, but in correlation
with fiscal decentralization, the National Royalties Fund was established in which a
payment was established to the different territorial entities for possible environmental
liabilities due to the exploitation of natural resources and the promotion of this sector in the

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 EXERCISE 2: PUBLIC FINANCES

different territories. Let us remember that this fund has the purpose of harmonizing the
exploitation of natural resources and in particular the mining-energy resources that were
positioned during the decade of the 90s and the first two decades of the 21st century as the
main sector of exploitation and of tax resources in the country.

1.2 Law 100 of 1993.

This reform of the labor regime, and health and social security contemplated:

★ The elimination of the retroactivity of severance payments and the delivery

of these to private financial institutions made possible by the financial
reform Law 45 of 1990;
★ The creation of a public and private pension system that transgressed the
State monopoly;
★ The establishment of fixed-term contracts in order to reduce labor costs and
enable labor flexibility;
★ The creation of the system of health promoting entities and service provider
institutions that configured a system of regulated competition.

Analyzing this reform, we conclude that Law 100 made a total change in the way in
which resources were financed in the country and additionally in how the social
security system was applied, for which it transferred the responsibility of the State
to provide fundamental rights to the laws of the market. The health system reform
was intended to avoid the state's monopoly on health and allow the right of
competition with the incorporation of health providers; The creation of pension fund
management companies was also authorized, in charge of managing the resources
destined to pay the pensions of members who choose to retire with the individual
savings system, which led to an increase in corruption and lack of protection of the
population by territorialized entities. With reference to the labor regime, the policies
focused on the reduction of labor costs, and the flexibility and lack of protection of
the State.

1.3 Law 617 of 2000.

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EXERCISE 2: PUBLIC FINANCES

It establishes the categorization of the territorial entities taking into account their
capacity for administrative and fiscal management, according to their population
and current income of free destination; with the objective of establishing a fiscal
consolidation in the territorial entities, in which the operating expenses of the
territorial entities must be financed with their current income of free destination, in
such a way that these are sufficient to meet their current obligations, provision the
liabilities benefits, pensions and finance, at least partially, their autonomous public
investment. For this reason, during each fiscal term, the operating expenses of the
districts and municipalities may not exceed as a proportion of their current income
of free destination.

We chose this reform because it leads us to analyze the impact that the entry into
force of the aforementioned law has had on the dynamics of the public finances of
all the municipalities of the Colombian state, since before the issuance of said fiscal
adjustment law, the municipalities were categorized according to fiscal income,
including the resources transferred by the Nation. However, from Law 617, it was
established that the categorization of the municipalities will be carried out according
to the current income of free destination, thus generating, that the territorial entities
of the department are obliged to generate greater resources and comply with the
fixed budget ceilings. for operating expenses, to prevent declines in their categories
and thus avoid lower amounts of resources transferred by the Nation in the
following years.

1.4 With Law 715 of 2001.

The decentralization process of the transfer system was carried out to delegate
autonomy to the country's territorial entities. Parallel to budget decentralization, the
administration of education, as an elementary public service, moved away from the
exclusive management of the Ministry of Education to deliver the educational
policy to the Secretaries of Education of the country's departments. Said
transformation was carried out in line with multiple theories that suggested that
decentralization would be the best way to improve the effectiveness of the State
through rapprochement with the citizen population.

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EXERCISE 2: PUBLIC FINANCES

We chose this law that has given rise to one of the many decentralization processes
of the Colombian state because it proposes a series of important modifications in the
educational sector, tending to the territorial entities responsibly assuming their
functions and making a correct distribution of the resources that the nation to cover
the expenses of the system.

1.5 Law 1430 of 2010, Law 1739 of 2014 and Law 1819 of 2017.

In these reforms, the taxable margin of wealth and income taxes is extended, new
deductions and reductions are generated for large capitals, in particular the mining-
energy sector, the Value Added Tax is increased from 16% to 19% and the Carbon
tax as income generation of the green economy in Colombia. These reforms
continue with the dynamics of transferring tax burdens and the reduction and
deduction of taxes on capital investment.

These policies widen the margin of decentralization towards the market with partial
privatization of neuralgic public entities and sectors, advance in the deepening of a
fiscal system alien to the dynamics of redistribution, and confront fiscal and
administrative decentralization to generate spaces for virtuous accumulation in
which companies receive state, regional and local support in the exploitation of
natural resources.

On the other hand, in terms of fiscal decentralization, in the presidency of Juan

Manuel Santos, Law 1450 of 2011 was issued, in which the autonomy of the
municipal councils was extended to set the property tax rate between 5% and 16%.
Although this is an advance given the low property taxes of the large extensions of
land in the country, the norm did not contemplate the dynamics of capture of the
State and territorial entities by local, regional, national and international interests
that make it impossible to increase these taxes. and they perpetuate the deficit in the
income of the territorial entities, generating in practice a deterioration in the
provision of public services and social rights.

Likewise, in the case of the royalty regime, Law 1530 of 2012 was issued in which
the nation's royalties were distributed in a more equitable manner between territorial

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EXERCISE 2: PUBLIC FINANCES

entities focused on the extraction of mining-energy resources and those that do not
fundamentally develop these projects. This Law was understood as a loss of
autonomy and decentralization in the country by determining that the royalties
would come to be technically managed from the central level. This process led to
the reduction of budgets of departments and municipalities focused on the
extraction of natural resources, leading to an increase in the dispute over local
autonomy, in which popular consultations were promoted in order to stop or deny
any mining exploitation and/or or energy in their territories.

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 EXERCISE 2: PUBLIC FINANCES

2. THE WAY IN WHICH THE DIFFERENT BRANCHES OF PUBLIC

POWER ARE STRUCTURED AND COMPARE THE INCIDENCE THAT
EACH ONE HAS IN THE BUDGET ALLOCATION.

⮚ Decentralization of the Colombian state

The historical process of decentralization and administrative reforms that the

Colombian state has are variable and extensive and are divided into several categories, in
the constitution of 1886 the first steps were taken to legally constitute administrative
decentralization and in 1991 it was constituted as an organized model of the state.

⮚ administrative decentralization

It consists of the transfer of resources, functions and decision-making capacity from

the central government to the central governments.

⮚ Political Decentralization

It is the capacity that is given to the territorial governments on the election and the
different decision-making on the development of the different policies.

⮚ Territorial decentralization

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 EXERCISE 2: PUBLIC FINANCES

It is when there are transfers, authorizations and powers of administrative functions

to territorial, regional or local entities, which are executed in their own name.

⮚ decentralization to the market

It is a process when there is a transfer of responsibilities for the provision of

services by the state.
Total income of the Nation is $ 350,397,521,760,380.
As a budget example we will take the budget of the national planning administrative
department, which is composed as follows:

CTA SUBC NATIONAL TOTAL

PROG SUBP CONTRIBUTION

A Operating budget 107,651,658,000 107,651,658,000

B Public debt service budget 9,612,165,714 9,612,165,714

C Investment budget 1,692,816,424,373 1,692,816,424,373

0301 Improvement of territorial, 1,660,902,327,807 1,660,902,327,807

sectoral and investment
planning

1000 Government intersubsector 1,656,284,427,807 1,656,284,427,807

public

1003 Planning and statistics 4,617,900,000 4,617,900,000

0399 Strengthening of the 31,914,096,566 31,914,096,566

management and direction
of the planning sector

1000 Intersubsectoral government 31,914,096,566 31,914,096,566

Total budget Entity 1,810,080,248,087 1,810,080,248,087

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 EXERCISE 2: PUBLIC FINANCES

The total budget of the national planning administrative department is $

1.810.248.087, distributed in 3 components like this: Operating budget 6%, Public debt
service budget 0.5% and Investment budget 93.5%

Regarding the general budget of the Nation, it represents 0.52%

3. BRANCHES OF PUBLIC POWER

In Colombia, the three autonomous and independent branches of power were

created in 1945, in addition to the electoral and control bodies. In the 1991 constitution, the
division of the judicial and executive legislative branch was established, and the organisms
were divided into control and electoral.

3.1 LEGISLATIVE BRANCH

LEGISLATIVE
BRANCH

Pronounceme
Legal nt of Comparative
framework congressmen law

Senators
Constitutional Laws
Constitutional Laws

The function of the legislative branch is to formulate laws, exercise control over the
government and reform the political constitution. “It has a bicameral structure (Upper
House represented by the Senate and Lower House represented by the Chamber of the
Republic) that integrates Congress into the Senate and the House of Representatives.

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 EXERCISE 2: PUBLIC FINANCES

Represented by a popularly elected public corporation called the Congress of the Republic.
(Bara,2006).

3.2THE EXECUTIVE BRANCH

EXECUTIVE
BRANCH

Republic Vice Local

President Ministers
president authorities

The role of this branch is enshrined in article 115 of the National Constitution. This
organization Organized at the head of the President of the Republic, it is composed of
governors, mayors and ministries, mainly. As its name indicates, it is responsible for
executing in a coordinated manner.

3.3THE JUDICIAL BRANCH

JUDICIAL BRANCH

HIGH CUTS Attorney General

of the Nation
Constitutional
court

Supreme Court
of Justice

Council of state

Supreme Council of
the Judiciary

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 EXERCISE 2: PUBLIC FINANCES

It is in charge of enforcing the rights, obligations, guarantees and freedoms

enshrined in the political constitution and in the laws. She deals with administering justice
in Colombia.

"It is made up of organizations such as the Supreme Court of Justice, the

Constitutional Court, the Council of State, the Superior Council of the Judiciary, the
Special Jurisdictions and the Office of the Attorney General of the Nation, an attached
body.

● ELECTORAL ORGANIZATION: it is a set of entities that are in

charge of organizing, directing and monitoring voting and within these
entities are the national civil status watchdog and the national electoral
council.
● AUTONOMOUS AND INDEPENDENT BODIES:
They are those entities that have a special regime and
their own autonomy provided directly by the political
constitution or the law, given the specialty of their
functions, we find some of them which are:

● Bank of the Republic.

● National Civil Service Commission-CNSC.
● Regional autonomous corporations.
● Autonomous university entities.
● National Television Authority- ANTV.

CONTROL BODIES

These are those bodies to which the political

constitution has chosen the functions related to
disciplinary control, defending the people and
fiscal control. They are not assigned or linked to
the branches of public power.

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 EXERCISE 2: PUBLIC FINANCES

These are:

● Public Ministry: Office of the Attorney General of the Nation, Ombudsman, and
district and municipal ombudsman.
● Comptroller General of the Republic: welfare fund of the Comptroller General of
the Republic.
● Territorial controllers.
● General Audit of the Republic.

FINANCIAL SYSTEM OF THE COLOMBIAN STATE.

Our financial system is made up of credit institutions (EC),

financial services entities (ESF) and other financial entities,
most of which have been grouped together through the figure
of financial conglomerates, making a presence both
internally and externally. on the outside.

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 EXERCISE 2: PUBLIC FINANCES

STATE AGENCIES

The Administrative Department of the Public Function is the technical, strategic and
transversal entity of the National Government that contributes to the well-being of
Colombians through the continuous improvement of the management of public servants
and institutions throughout the national territory, this Administrative Department of the
Public Function Publican issued Decree 952 of 2021, which establishes that 90% of the
experience obtained by law.

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4. CATEGORIES IN WHICH THE COLOMBIAN STATE IS ORGANIZED

In accordance with Law 617 of 2000, the Colombian state categorizes the territorial
structure as follows:

DEPARTMENTS

special First category second third category fourth category

category category

population of population population population population

more than between 700,001 between between equal to or less
2,000,000 and 2,000,000 390,001 and 100,001 and than 100,000
inhabitants and inhabitants, with 700,000 390,000 inhabitants and
current annual annual current inhabitants, inhabitants, whose current
unrestricted income of free with current with annual annual
income of more destination, annual income current income unrestricted
than 600,000 between 170,001 of free of free income is equal
monthly legal and 600,000 destination destination to or less than
minimum wages. monthly legal between between 60,001 60,000 monthly
minimum 122,001 and and 122,000 legal minimum
wages. 170,000 monthly legal wages
monthly legal minimum wages
minimum
wages.

The classification will be prioritized by the level of current annual free destination income

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CATEGORIZATION OF DISTRICTS AND MUNICIPALITIES

special First second third fourth Fifth sixth

category category category category category category category

population population population population populatio population population

greater than between between between n between between equal to or
or equal to 100,001 50,001 and 30,001 and 20,001 10,001 and less than
500,001 and 100,000 50,000 and 20,000 10,000
inhabitants 500,000 inhabitants, inhabitants, 30,000 inhabitants, inhabitants,
and current inhabitants whose whose inhabitant whose with annual
annual , whose current current s, whose current current
income of annual annual free annual current annual income of
free current destination unrestricted annual unrestricted free
destination income is income is income is unrestrict income is destination
greater than between between between ed income between not
400,000 100,001 50,001 and 30,001 and is 15,001 and exceeding
monthly and 100,000 50,000 between 25,000 15,000
legal 400,000 monthly monthly legal 25,001 monthly monthly
minimum monthly legal minimum and legal legal
wages. legal minimum wages 30,000 minimum minimum
minimum wages monthly wages wages
wages legal
minimum
wages

The classification will be prioritized by the level of current annual free destination income

The operating expenses of the departments and municipalities will depend on the
assigned category and can be between 50% and 70% in the departments and between 50%
and 80% for the municipalities.

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 EXERCISE 2: PUBLIC FINANCES

Decentralized entities

They also integrate the executive branch and are responsible for fulfilling functions
that correspond to the state. Due to the decentralization of functions, they have autonomy to
carry out their activities and enjoy the prerogatives granted to them by the law that creates
them.

The most traditional categories are:

Public establishments

Public Establishments are bodies primarily responsible for attending administrative

functions and providing public services in accordance with the rules of Public Law, which
are characterized by:

i) legal personality;

ii) administrative and financial autonomy; and

iii) independent patrimony, constituted with common public goods or funds, the product of
taxes, contractual rents, own income, rates or contributions of special destination, in the
cases authorized by the Constitution and in the pertinent legal provisions (Law 489, 1998,
article 70). They are entities created by law or authorized by it and that perform
administrative functions.

Characteristic

• They are created by Congress, or by the President, after delegation by the legislative
body.

• Its function is the provision of public services.

• They are regulated by the rules of public law.

• They have legal status.

• They have administrative autonomy.

• They have an independent patrimony that can be constituted with public goods or funds or
with the proceeds of taxes or rates intended for their operation.

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 EXERCISE 2: PUBLIC FINANCES

Examples

• Revolving fund of the Ministry of Justice.

• Colombian civil defense.

• National Institute of Radio and Television, INRAVISION.

• National University.

• Colombian Institute for the Promotion of Higher Education, ICFES

Industrial and commercial state enterprises

They are public entities in charge of developing industrial or commercial activities, in

accordance with the rules that govern private law.

Characteristic

● The regulations of private law apply to them, except for the exceptions determined
by law.
● They are headed by a manager or director who is appointed by the President of the
Republic.
● They have legal status.
● They have administrative autonomy.
● Its capital is made up of public funds or by the yield of taxes or fees intended for
that purpose

Examples

● Ecopetrol.
● Carbocol.
● Servicio aéreo a territorios nacionales SATENA.

Mixed economy companies

Like the industrial and commercial companies of the state, they develop this type of
activity, but they differ from these in that the resources for their operation are constituted
by state capital and private capital.

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 EXERCISE 2: PUBLIC FINANCES

Characteristic

• Are created or authorized by law.

• The participation of the state is regulated by the law that creates the entity.

• o they are governed by private law, except for legal exceptions.

Examples:

● Banco Ganadero.
● Banco Central Hipotecario.

These models apply to both the central state and the territorial state.

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CONCLUSIONS

From this document we can conclude the importance of the structure of the State,
the special functions that each state branch fulfills, the territorial organization from the
functional and the budgetary, facts that directly influence the development of society.

In this activity we remembered the administrative and financial structure of

Colombia, and we realized the importance of each one of the functions that each
organization that composes it has, since this affects the country economically and socially
to all its inhabitants. We analyze the entities in charge of checking that everything works
correctly.

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