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Some $ 1,226 million of ‘savings’ from IESS administrators would be in a kind of limbo, according to a private report

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Despite the financial hardships that the Ecuadorian Social Security Institute (IESS) due to lack of resources, some $1,226.7 million would be in a kind of limbo, or “parked”, within the funds managed by the Biess and that could very well be used by the IESS. These resources would correspond to a sub-execution in the administrative units of the General Directorate, Health, Peasant Social Security, Pensions and Occupational Risks which has reached, in eight years, a cumulative $1,328 million.

These administrative units are in charge, as their name indicates, of the operational and administrative management and support the administrative units in charge of benefits such as health services, medical care, retirement, among others.

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This is one of the findings that appear in a report carried out, based on data published on the web pages of the IESS and Biess, by the Social Security expert Francisco Bolaños, who was also director of Investment Banking Control (Biess) and national intendant of Control of the Social Security System in the Superintendence of Banks. The study deals with issues such as the situation of insurance and funds, as well as accounts receivable, delinquency, budget execution, among other key issues of the largest Social Security entities in the country (Biess and IESS).

This finding becomes key at a time when the IESS is supporting protests for non-payment by private providers and when it has had to deal with the claims of Solca and the users of the Social Security service.

But where do those resources come from that would be “parked” and unused?

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The report explains that the budgetary information of the IESS is divided into two large groups of accounts: the first is that of the units in charge of delivering managed insurance benefits and the second corresponds precisely to the units that carry out operational activities and administration of those aforementioned units.

From what can be seen in the public information of the IESS, the income of the units in charge of providing the benefits at the level of income for the analyzed period have a growing trend. The total income of these units went from $5,703.5 million in 2015 to $9,108.3 million in 2021, while the budget for 2022 reaches $9,823.5 million.

In turn, to cover benefits, the funds disbursed a total of $5,841.7 million in 2015 and $7,383.7 million in 2021. Meanwhile, for the year 2022, a total of expenses of $10,169.6 million has been budgeted, of which $9,823.5 correspond to expenses to cover benefits. When there are gaps between lower income and higher expenses, what typically happens is that the Biess must divest and deliver those resources to cover the expenses. In this field. the budget execution does not register problems.

In all the years, this execution exceeds 86% for all the administrative units and even, on average, exceeds the 100% in the years 2017, 2018, 2019 and 2021.

However, an underrun is recorded when spending those resources. On average, the annual expense budgets of these units for the 2015-2021 period was $324.8 million, but in no year did execution exceed 51%.

UNEXECUTED BUDGET BALANCES
BY THE IESS ADMINISTRATIVE UNITS
ANNUAL SAVINGS IN MILLIONS OF DOLLARS ACCUMULATED SAVINGS IN MILLIONS OF DOLLARS
2015 154 154
2016 102.1 256.1
2017 153.7 409.8
2018 173.7 583.5
2019 241.6 825.1
2020 178.1 1,003.2
2021 204.3 1212.5
JUNE 2022 115.8 1,388.3
SOURCE: IESS, BIESS
PREPARED: FRANCISCO BOLAÑOS

This is where the “savings” appear, which apparently can be found in the funds administered by the IESS under the name of Administrators.

This panorama of high revenue execution and very low spending execution is worrying, says Bolaños.

FUNDS MANAGED BY THE BIESS AS OF JUNE 2022 (IN MILLIONS OF DOLLARS)
Disability, old age and death 6,897.8
severance fund 10,820
Reserve fund 1,537.1
job hazard 1,525
peasant social insurance 1,306
Individual and family health 383.8
Balances 297.2
Complementary 222.4
DISENCUMBRANCE 56.1
Minor voluntary savings 3.2
Administrators 1,226.7
Unemployment 1,428.4
CONSOLIDATED 25,698.2

According to the study, the law mandates that in the case of surplus resources, after the budget liquidation, these must enter the corresponding insurance, increasing the respective capitalized fund. In this sense, Bolaños wonders whether or not the IESS is complying with its legal responsibility to evaluate the annual budgets, their execution, since the Institute’s website does not contain the analysis that supports the annual budget executions.

It considers that in the face of the problems generated by the lack of medicines, a poor appointment scheduling system, delays with providers, among others, could possibly have contributed to mitigating, if these resources were used.

Bolaños indicates in his report that he does not understand the reason for maintaining this practice in budget management, despite what is determined by the Law and the resolutions of the Board of Directors.

This newspaper has asked the IESS for an interview to deal with this and other issues of citizen interest, however, this week the IESS responded that these days there will be a general discussion to be able to clear up the many existing doubts. (YO)

Source: Eluniverso

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