November 8, 2023
While more than 40% of Brazilian municipalities have a difficult or critical fiscal situation, the Firjan Fiscal Management Index (IFGF), which evaluates municipal public accounts according to four indicators – Autonomy, Personnel Expenses, Liquidity and Investments – showed that Vila Velha was highlighted in Brazil, and also in Espírito Santo, according to the results obtained by the study, in the 2023 edition.
Based on official data and after analyzing the situation of 5,240 municipalities in the country, the IFGF classified Vila Velha City Hall as 1st place in the country and in the State, in the Autonomy and Personnel Spending indicators.
And due to the excellent balance and administrative, fiscal and accounting financial performance achieved by the current management, the research – carried out by the Federation of Industries of the State of Rio de Janeiro – also demonstrates the growth in relation to investments in the municipality, following the historical series, the index went from 0.69 in 2020 to 0.80 in 2022.
Reading the results of this research is simple. The score for each indicator varies between 0 and 1 and, the closer to score 1, the better the municipality’s fiscal situation. To establish reference values that facilitate the analysis of municipal accounts, the IFGF agreed on the following concepts and evaluation levels: excellent, good management, management in difficulty and critical management. According to this analysis, the city obtained excellent grades during the current administration, always remaining above the 0.8 score in all evaluated indicators.
For Mayor Arnaldinho Borgo, this is another important indicator that proves the efficiency of the formula applied in city management: decentralization of resources + investments + planning = deliveries in all regions of Vila Velha.
“PMVV has stood out as an example of efficiency and responsibility in fiscal management for Espírito Santo and Brazil. Working with planning, method and austerity, we guarantee the necessary resources to invest in essential areas such as Health, Education, Urban Infrastructure and Social Protection, among others. We are enabling important social and economic advances for the entire Canela Verde population. We are very proud to maintain the best municipal management in the State since 2021, with transparency and effectiveness in the control and application of public resources. And the city’s performance in the Firjan Fiscal Management Index (IFGF 2023) is irrefutable proof of the excellence of our work”, highlighted Mayor Arnaldinho Borgo.
The “Autonomy” indicator verifies whether revenues from the municipality’s economic activities cover the costs of maintaining the administrative structure of the city hall and the City Council. In this criterion, Vila Velha achieved the maximum score (grade 1), providing quality public services in health, education and others, reducing funding expenses, increasing investments and correcting salary distortions for civil servants.
The indicator “Personnel Expenses” represents how much the municipality spends on paying employees, in relation to its total Net Current Revenue. According to the evaluation of this criterion, Vila Velha also achieved the maximum score (grade 1). This is because the municipality commits 37.75% of its Net Current Revenue to personnel, 35.62% to the Executive Branch and 2.13% to the Legislative Branch. It is worth noting that the maximum limit established by the Fiscal Responsibility Law is 54% for expenditure on Executive personnel and 6% for the Legislative.
The “Liquidity” indicator checks whether city halls are postponing expense payments for the following year, without adequate cash coverage. In this criterion, Vila Velha stood out for strictly paying its suppliers on time, obtaining a score of 0.96.
Excellence in management
Vila Velha grew a lot in relation to all IFGF indicators, leaving a “Management with Difficulties” in 2018 and 2019 and evolving to the “Excellent” concept as of 2021. This result was achieved due to the initiatives adopted since the beginning of the current administration, which provided a significant increase in revenue.
Vila Velha went from a budget of R$ 1.23 billion in 2020, to R$ 1.95 billion in 2023, demonstrating that, today, the municipality has full capacity to finance its administrative structure, to maintain its budget balance, to comply its financial obligations and to promote investments.