Fundação Renova

42 – Reimbursement of Extraordinary Public Spending

Objective of the program

Compensate the governmental agencies for extraordinary public spending arising from the collapse of the Fundão dam, duly verified through official documents, among which statements of expenditure and declaration of the competent authority.

Progress of Program

• Completion of 2 (two) reimbursements: for extraordinary public expenses to COPASA and residual expenses to CEMIG.

• The Municipal Office of Aracruz was reimbursed.
• The Municipal Office of Colatina has been notified of the reimbursement proposal.

There were no relevant deliveries this month.

There were no relevant deliveries this month.

There were no relevant deliveries this month.

There were no relevant deliveries this month.

• There were no relevant deliveries this month.

• Reimbursement of the beneficiaries, scheduled to finish in 2019, has not been completed. Cause: The Ministry of Integration did not send the list of equipment to be purchased by the Renova Foundation as reimbursement to the agency. Countermeasure: Send an official letter to the Ministry of Integration with the updated reimbursement amount, requesting an account for depositing the amount or issuance of GRU (Brazilian Federal Revenue Collection Guide).
• The reimbursement of all impacted municipalities, scheduled for 2019, has not been completed. Cause: Four municipal governments have not yet adhered to the reimbursement proposal approved by the CIF in 2018. Countermeasure: No countermeasure is expected of the program’s team, as delivery depends on actions by public agencies.

• Reimbursement of the Municipality of Linhares.

• There were no relevant deliveries this month.

• Reimbursement of the municipalities of Periquito and Sao Pedro dos Ferros (MG).

• Reimbursed the Municipality of Ipatinga.

• There were no relevant deliveries this month.

• On 06/21/2019, the rent allowance of the city of Linhares was paid, in compliance with CIF resolution 180.

• Municipality of Resplendor was reimbursed.

The municipalities of Aimores, Barra Longa, Bom Jesus do Galho, Itueta, Marilandia and Raul Soares were reimbursed.

Completion of the reimbursement to the following municipalities: Baixo Guandu, Galileia, Governador Valadares, Rio Doce, Santa Cruz do Escalvado and Sao Domingos do Prata.
Negotiations were carried out with the pending municipalities to complete the reimbursement of the expenses to these municipalities.

Further negotiations took place with the rest of the municipalities to complete the reimbursement of municipal expenses.

This month, there were no relevant facts to report to the CIF and population.

Extraordinary reimbursement for municipalities continues. In December, payments were made to the municipal governments of Alpercata, Caratinga, Rio Casca and Timoteo.

Reimbursement of extraordinary public expenses for the Military Cabinet MG,
MDA and DNPM.
The program initiated the extraordinary reimbursement for municipal governments. Payments were made to: Belo Oriente, Bugre, Conselheiro Pena, Corrego Novo, Fernandes Tourinho, Iapu, Ipaba, Marileia, Naque, Pingo d’Agua, Santana do Paraiso, Sao Jose do Goiabal and Sem Peixe.

Reimbursement of Extraordinary Public Expenses to Navy/Ministry of Defense.

Reimbursement of Extraordinary Public Expenses for MAPA.

A payment was made to the Military Police related to the Reimbursement of Public Expenses - MG.

There is no information to be reported in this month.

The actions of the program continue in progress.

The equipment has been delivered to the State Department for the Environment.

In Brasilia, equipment related to the reimbursement of public expenses was delivered to IBAMA. The payment to the State Health Secretariat was also made and Semad-MG received the first equipment.

The Foundation has participated in meetings with the Technical Board of Economy and Innovation and representatives of the affected municipalities to construct a compensation methodology capable of reflecting more accurately the nature of the expenses under the terms of TTAC Clause 142.

The hiring of the company that will carry out the purchase of equipment and supplies requested by IBAMA was finalized.

The list of equipment to reimburse the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) was budgeted and approved by the agency.

The Military Police of Minas Gerais (PMMG) sent the documentation for payment regarding the reimbursement of public expenses, as well as the State Health Secretariat (SES), which forwarded the documents for reimbursement, including the State Tax Collection Document (AE).

The Ministry of Defense (MD), the Ministry of Agriculture, Livestock and Water Supply (MAPA) and the National Department of Mineral Production (DNPM) are in the process of submitting documentation for reimbursement of extraordinary public expenses.

In addition to Official Letter No. 77-2017/DP - IEMA, compensation will take place in the form of equipment/materials supply.

The Discharge Statement was sent to the compromised parties: Sanitation Company of Minas Gerais (Copasa), Electricity Company of Minas Gerais, State Department of Labor and Social Development (Sedese), Hospital Foundation of the State of Minas Gerais (Fhemig), the Water Supply and Sanitary Sewage Regulatory Agency of the State of Minas Gerais (Arsae), the State Institute for the Environment and Water Resources of Espirito Santo (IEMA), the State Department for the Environment and Water Resources (SEAMA), Military Police of Espirito Santo (PMES). They already received their payments.

The equipment requested by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) is in the process of being purchased as a way of reimbursing the agency's extraordinary expenses. Negotiations with suppliers and with the institution, aiming to improve the requested scope, were finalized.

A purchase requisition was opened for the materials requested by the State Secretariat of Environment and Sustainable Development (Semad) and those requested by IEMA are in the quotation phase.

An indemnity agreement model was sent to the compromised bodies, which received the amount related to reimbursement of expenses, to be completed, signed and sent back to the Renova Foundation.

So far, payments have been made to the Water Supply and Sanitary Sewage Regulatory Agency (Arsae), the State Secretariat for Social Development (Sedese), Electricity Company of Minas Gerais (Cemig), Sanitation Company of Minas Gerais (Copasa ), the Minas Gerais Hospital Foundation (FHEMIG), the Espirito Santo State Institute for the Environment and Water Resources (IEMA), the Espirito Santo State Secretariat of Environment and Water Resources (Seama) and the Military Police of Espirito Santo. The total amount of payments corresponds to R$ 7,342,575.49.

The team of this program continued with the technical specifications of the equipment requested for acquisition by Ibama (letter 217/2017/GABIN-Ibama), after sending the technical proposals approved by the Foundation for evaluation by the institution.

In November, after analyzing the letters with banking details forwarded by the respective organs, payment was made to Arsae, Sedese, Cemig, Copasa, Fhemig, IEMA, Seama and Military Police of Espirito Santo. To date, the total amount of payments corresponds to R$ 7,342,575.49.

IBAMA adjusted the technical specifications of the equipment requested for acquisition (official letter 217/2017/GABIN-IBAMA) and technical proposals approved by the Renova Foundation were submitted for evaluation of the body so that Renova can proceed with the purchase of the equipment.

The program received documents demonstrating evidence from Fhemig, Sedese, ARSAE, the Fire Department, Copasa and Cemig to move forward with reimbursement. In addition, a payment of R$ 7,752,168.77 was made in respect of the reimbursement of CBMMG, made on October 30.

Ibama adjusted the technical specifications necessary for the equipment requested by the Renova Foundation. Based on this information, the purchase process will be continued, taking into account the supply criteria presented in letter no. 217/2017/GABIN-Ibama, sent to Renova.

Also completed was the pilot project carried out by Ernest & Young together with the municipalities. The recommendations for changes have already been made in the base document of Criteria and Procedures for Reimbursement and forwarded to the Technical Board of Economy and Innovation and the Inter-Federative Committee (CIF).

After approval of the amendments to the Basic Guidelines for Reimbursement of Extraordinary Public Expenditures by the Inter-Federative Committee (CIF), the construction of the public expenditure reimbursement process was continued, through the definition of the methodology for transferring resources to the compromising bodies and local governments, as well as information to the Prosecution Service.

New official letters were sent to the local governments and relevant bodies, informing the revised criteria and procedures, as well as the forms for presenting expenses and registering a legal entity.

In turn, Ernest & Young initiated the process of auditing and prior analysis of the documentation presented. All reports and forms should be sent per email to: gastospublicos@fundacaorenova.org.

The program carried out the restructuring of the annexes of the documents, which are expense and reimbursement forms and local supplier forms, and a clarification of the tasks forwarded to the municipalities.

New tasks were prepared for the municipalities of the pilot project and they were informed about the changes made in the document "Reimbursement of Public Expenditure Guidelines".

In order to compensate for the extraordinary public expenses resulting from the collapse of the Fundão dam, the independent auditing process of Ernst & Young has begun. It will raise duly proven expenses in the municipalities of Mariana, Barra Longa, Rio Doce, Governador Valadares, in Minas Gerais, and Colatina, in Espirito Santo.

The definition that allows the visualization of the physical and financial planning of the program, and its guidelines, have been completed and sent to the Technical Board for evaluation.

Definition of the five "Pilot Town Halls”, together with Ernst & Young, for the first accounting audits. The first five selected for sending their extraordinary expenses to Renova were Mariana, Barra Longa, Rio Doce, Governador Valadares, in Minas Gerais, and Colatina, in Espirito Santo.

Audits by Ernst & Young, for subsequent scheduling of payment to the contractors of the expenditure reports recorded in Annex to Clause 141 of the Transaction and Conduct Adjustment Term (TTAC) were sent to Renova.

The Basic Guidelines document for Reimbursement is under review, after new observations by the Technical Board of Economy and Innovation (CTEI).

Start of the revision of the Basic Guidelines for Reimbursement, as requested by the Technical Board of Economy and Innovation (CTEI).

Awaiting the submission of the receipts of 39 impacted municipalities, of expenses related to the collapse of the Fundão dam. Upon receiving the receipts, the Renova Foundation, through the consulting firm Ernest & Young, will audit the data.

The criteria and procedures for reimbursement of extraordinary public spending were prepared and approved by the Inter-Federative Committee (CIF).

In February 2017, the script of criteria and procedures for the reimbursement of public spending was completed.

A schedule was prepared for the reimbursement of public spending and the development of criteria and procedures for handling the reimbursements was initiated, which involve the challenge of adjusting claims, flexibility regarding documentation of evidence, and meeting compliance criteria.

Ernst & Young will contact the municipalities to survey public spending, after the criteria are set.

The requests of the municipalities are being analyzed.


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