Resolution No. JPRF-G-2022-018 — Does Not Approve the BIESS Budget

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Resolution No. JPRF-G-2022-018 THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That, the Constitution of the Republic of Ecuador, in its article 226, stipulates that public servants and persons acting under state authority shall exercise only the competencies and powers attributed to them in the Constitution and the Law; That, article 280 of the Constitution of the Republic defines the National Development Plan as the instrument to which public policies, programs, and projects, as well as the programming and execution of the State budget, shall be subject; That, the second clause of article 70 ibid., regarding the National System of Public Finances, states: “All entities, institutions, and organizations included in articles 225, 297, and 315 of the Constitution of the Republic shall be subject to the SINFIP, under the terms provided in this code, without prejudice to the autonomous management faculty of administrative, economic, financial, budgetary, and organizational order that the Constitution or laws establish for certain entities”; That, article 109 of the Organic Code of Planning and Public Finances orders that the budgets of the entities and organizations indicated in that legal body shall take effect and be mandatory as of January 1 of each year; That, article 101 supra, provides: “In the formulation of budget drafts for the public sector, including those of public companies, decentralized autonomous governments, public banking, and social security, the technical standards, guidelines, classifiers, and catalogs issued by the governing body of the SINFIP shall be strictly observed”; That, through article 13 of the Organic Monetary and Financial Code, Book 1, the Financial Policy and Regulation Board was created as part of the Executive Function, as a legal entity of public law, with administrative, financial, and operational autonomy, responsible for formulating credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation; and its composition was determined; That, article 14.1, numeral 14, literal a) of the Organic Monetary and Financial Code establishes as a function of the Financial Policy and Regulation Board to annually approve the budget of the public financial sector entities, their reforms, as well as regulate their execution; That, in the Codification of Monetary, Financial, Securities, and Insurance Resolutions, Book I "Monetary and Financial System", Title II "National Financial System", Chapter XXXIII "On the Government and Administration of the Public Financial Sector", Section III "On the Public Financial Sector Capital Budget", Subsection I, the Budget Management Standards for Entities of the Public Financial Sector are found; That, Chapter XXXIII "On the Government and Administration of the Public Financial Sector", Section III "On the Public Financial Sector Capital Budget", Subsection I, was renumbered by article 2 of Resolution of the Monetary and Financial Policy Board No. 647-2021-F, published in Official Registry No. 415 of March 22, 2021; That, on September 27, 2021, the Ministry of Economy and Finance issued the guidelines for the programming and formulation of the General State Budget for the 2022 fiscal year and the 2022-2025 Quadrennial Budget Programming. Within that instrument, subsection 4.2.2. develops the guidelines for public banking budgets;

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That, through Resolution No. JPRF-F-2021-003 of December 10, 2021, the Financial Policy and Regulation Board, based on the guidelines issued by the Governing Body of Public Finances, issued the guidelines for the preparation of the budget draft for Public Financial Entities for the year 2022; That, through Resolution No. JPRF-F-2021-009 of December 30, 2021, the schedule for the submission and approval of budget drafts for the current year was modified, in accordance with the Second and Third Transitional Provisions of Section XI “Guidelines for the preparation of the budget draft for Public Financial Entities for the year 2022”, of Chapter XXXIII "On the Government and Administration of the Public Financial Sector", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions; That, on January 6, 2022, via memorandum No. BIESS-GGEN-2022-0016-MM, the General Manager informed the Board of Directors of the Bank of the Ecuadorian Social Security Institute - BIESS of the budget draft for the year 2022 that is submitted for second debate; which was approved in Ordinary In-Person Session No. 03-2022, held on January 10, 2022; That, on January 10, 2022, via letter No. BIESS-GGEN-2022-0041-OF, the General Manager of the Bank of the Ecuadorian Social Security Institute – BIESS - forwarded to this collegiate body its budget draft for the 2022 economic year; That, on January 11, 2022, via letter No. JPRF-JPRF-2022-0006-O, the Financial Policy and Regulation Board requested the opinion of the Ministry of Economy and Finance within the approval procedure of the budget draft for the Bank of the Ecuadorian Social Security Institute - BIESS for the 2022 economic year; That, through letter No. MEF-VE-2022-0009-O of January 14, 2022, the Deputy Minister of Economy attached report No. MEF-CESFM-2022-005 of January 13, 2022, in which the approval of the budget draft for the Bank of the Ecuadorian Social Security Institute - BIESS corresponding to the 2022 economic year is recommended; That, the Technical Secretary of the Financial Policy and Regulation Board via memorandum No. JPRF-SETEC-2022-0009-M of January 15, 2022, forwarded to the President of the JPRF the technical and legal analyses supporting the pertinence of this resolution, contained in reports No. JPRF-CT-2022-0013 and No. JPRF-CJ-2022-0008 of January 15, 2022, respectively; That, the Financial Policy and Regulation Board, in an extraordinary session held via technological means convened on January 16, 2022, and carried out via video conference on January 17, 2022, reviewed the budget of the Bank of the Ecuadorian Social Security Institute - BIESS for the 2022 economic year; and, In exercise of its functions, RESOLVES: SINGLE ARTICLE.– Does Not Approve the budget of the Bank of the Ecuadorian Social Security Institute - BIESS corresponding to the 2022 economic year, which was forwarded by the General Manager of BIESS to the Financial Policy and Regulation Board via letter No. BIESS-GGEN-2022-0041-OF of January 10, 2022. Without prejudice to the foregoing, this financial institution will prepare a budget draft that observes the guidelines established by the Board via Resolution No. JPRF-F-2021-003; or, failing that, it must provide new elements of judgment, with their respective documentary supports, that sufficiently, competently, and pertinently substantiate the need, as well as the cost-benefit, to not apply or exceed the guidelines established by the Board for the 2022 economic year.

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In the first scenario, should a new budget draft be presented, the Bank of the Ecuadorian Social Security Institute - BIESS - will comply with the procedure provided for in article 8 of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, Book I “Monetary and Financial System”, Title II “National Financial System”, Chapter XXXIII “On the Government and Administration of the Public Financial Sector”, Section III “On the Public Financial Sector Capital Budget”, Subsection I “Budget Management Standards for entities of the public financial sector”. FINAL PROVISION.- This resolution shall take effect as of the date of its issuance, without prejudice to its publication in the Official Registry. Publish this resolution on the website of the Financial Policy and Regulation Board, within a maximum term of two days from its issuance. NOTIFY.- Given in the Metropolitan District of Quito, on January 17, 2022. THE PRESIDENT, Mgs. María Paulina Vela Zambrano The resolution above was processed and signed by Master María Paulina Vela Zambrano, President of the Financial Policy and Regulation Board, in the Metropolitan District of Quito, on January 17, 2022.- I CERTIFY. TECHNICAL SECRETARY Dra. Nelly Arias Zavala