However, the independence of the auditors-general and that of the entire staff of the AGN is compromised by the partisan origins of their nomination. Muruzabal Lerga (1999) underscores that audit independence (objectivity and neutrality) has three main dimensions: the political independence of its governing authorities, the impartiality of its staff, and the ability to perform its tasks independently. None of the three dimensions of individual independence are fulfilled in Argentina.
Excessive politicization constitutes a major hindrance to the agency’s credibility as an impartial auditor of government finances (Makón 2002 and 1997). The partisanship mode of designation of external auditors leads to a high degree of politicization of the college of auditors, which is compounded by the politicization of the agency itself. The AGN is literally ‘sliced-up’ amongst the two main political parties.16 Furthermore, political parties in the legislature are able to interfere with the auditing process at several stages, from the definition of the agency’s work-plan to the follow-up of audit findings. As a result, as confirmed by several auditors-general, audit findings are often negotiated, rather than evaluated on their own merits. Furthermore, while auditors-general in theory have long tenures, in practice, the constitutional provision according to which the AGN president is to be designated by the opposition effectively means that the college changes every time there is a change in government.
As Ivanega (2004) suggests, while the AGN may be independent from the executive, it nevertheless is not independent from political interference. The controversies surrounding the designation of Rodolfo Barra as president of the AGN between 1999 and 2002 illustrate this point. In 1999, Menem, then in the opposition, nominated Barra, a former justice minister under his government and former Supreme Court judge, as head the AGN. Barra’s designation was interpreted as an attempt to neutralize the AGN and make sure it would not investigate allegations of corruption during the government of Menem (1989-1999) which Barra had integrated (González de Rebella 2001). A Salta Peronist, former Senator Emilio Cantarero, also chaired the legislature’s CPMRC.
Furthermore, the auditing process is riddled with ‘veto gates’ and ‘pressure points’ which undermine its independence and effectiveness. The rule has been for the college of auditors to vote on audit reports by unanimity, a procedure that allows representatives of the ruling party to dilute or veto audit findings. Moreover, once the audit report reaches the legislature, it can be delayed further, as the CPMRC can request complementary information and investigations. Moreover, the CPMRC is able to shape the AGN’s work-plan, either directly or indirectly by requesting special studies and ad-hoc investigations, and therefore restrict is margin of maneuver. It can also influence the AGN’s budget, not necessarily by curbing it but rather by not endowing the AGN with the necessary resources to fulfill its mission.
Capacity constraints, procedural restrictions and institutional flaws further compromise the credibility of audit findings. External audits are sparse, usually not timely and seldom go beyond legal compliance. The timeliness of audit reports is inadequate to allow them to feed back into the policy process. For example, the AGN presented the audit report for the social program for pensioners (PAMI) for the year 1994 in 1999. According to Berensztein et al. (2000), they have not been used as an effective tool by the legislature neither to oversee the budget and improve budget efficiency, nor to prevent corruption and punish those responsible. Social expectations are indeed very low and, until recently, audit reports were neither expected nor considered by the public and the press. The credibility of government auditing is further inhibited by the ex-post nature of external audits and the absence of robust internal ex-ante controls. Furthermore, the focus on legal and financial compliance tends to emphasize lower-level details of administrative
16 Politicization also permeates the AGN itself. Each auditor-general is given a specific area of responsibility and has discretion over the designation of directors and deputy directors of internal directorates.