Tuesday, September 4, 2012

Index of Fiscal Management

    This post is a summary of a report published at Estadao.com.br at March,18,2012. This index was made by FIRJAN (Federation of Industries of the Rio de Janeiro State/ FIRJAN.org .br), and this index combines five factors: own income, personnel expenses, investments, cost of debt, and liquidity of the brazilians municipalities. The index is based on data from the official statistics released by the Office of National Treasure. Data are for the fiscal year 2010.

    Concept A = Management excellence = index greater than 0.8
    Concept B = Management good = index between 0.6 - 0.8
    Concept C = Management in difficulties = index between 0.4 - 0.6
    Concept D = Management critical = index less than 0.4

    63.6% of the municipalities have a index below 0.6, due the high spending on staff, own income reduced, and scarce investment. 36.4% of the municipalities are between 0.6 - 0.8 and only 1.8%  are above 0.8 with a management excellence, were classified as having excellent fiscal status.

    MG Municipalities                            Other brazilians municipalities
    Muriaé - 0.84                                             S.J. do Rio Preto - 0.87
  Uberlândia - 0.80                                         Vitória - 0.84
   Ubá - 0.72                                                   São Paulo - 0.78
   Lima Duarte - 0.70                                       Curitiba - 0.77
   Belo Horiz. - 0.69                                         Campo Grande - 0.76
   Juiz de Fora - 0.68                                        Londrina - 0.75
   Caxambu - 0.67                                            Ribeirão Preto - 0.69
  Varginha - 0.66                                             Angra dos Reis - 0.68
   S. J.del Rey - 0.65                                        Rio de Janeiro - 0.67
   Viçosa - 0.64                                                Duque de Caxias - 0.62
   Gover. Valad. - 0.64                                     São Gonçalo - 0.61
   S.J Nepom. - 0.61                                        Salvador - 0.48
   Contagem - 0.60                                           Natal - 0.45 
   Santos Dumont - 0.58                                    Macapá - 0.44
   Betim - 0.58                                                  Petrópolis - 0.43
   Cataguases - 0.38                                          Três Rios - 0.40
   Barbacena - 0.32                                           Cuiabá - 0.37

  Cost of Debt - ratio between interest and amortization expenses and the total revenue.
  Fiscal - relating to the income received by a government, raised through taxes.
  Liquidity - availability of liquid assets.
  Critical - at a point of danger or crisis.