The process for preparing, approving, and amending the budgets of State-Owned Social Enterprises (E.S.E.) does not follow the same procedure as that for other entities, for the following reasons:

The budgetary framework for E.S.E.s is defined in paragraph 7 of Article 195 of Law 100 of 1993. In addition, these institutions must comply with the provisions of Decree 115 of 1996 (consolidated in Decree 1068 of 2015) and Law 1966 of 2019, which aims to ensure transparency, oversight, control, and the proper use of the resources of the Social Security Health System. Provisions of Resolution 2794 of 2021 are also taken into account.

Article 16 of Law 1966 of 2019 provides that E.S.E.s that are not at financial risk nor subject to fiscal and financial restructuring plans may prepare and execute their budgets based on their own financial statements (balance sheet, income statement, cash flow statement, and projections).

This means that, unlike local government entities, E.S.E.s have their own budgeting framework, based on the reimbursement system for the provision of services, as established by Law 100 of 1993. Following subsequent reforms and rulings by the Constitutional Court, the budget is now based on the institution’s actual financial situation.

As for citizen participation, this takes place through community representatives and representatives of producer associations, who serve on the boards of directors of second- and third-level E.S.E.s, in accordance with Decree 1876 of 1994. It is important to clarify that if the invitation and participation of these representatives in the formation of the Board of Directors are not guaranteed, any decision made by the Board could be overturned, as the Council of State has indicated.