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Menem administration to undermine oversight agencies and defuse ‘veto points’ in economic policy and ‘accountability checks’ in financial administration. For most of his two terms in office (1989-95 and 1995-99), Menem could count both on a working majority in the legislature and a docile judiciary, which allowed him to undercut most checks and balances. In retrospect, most experts agree that changes in the external auditing system would have been preferable to a radical change of external audit model.

The final proposal stripped the AGN of some of the important prerogatives of its predecessor, including its selective ex-ante control of legality, its ability to suspend or annul unlawful administrative acts, its direct sanctioning powers in administrative matters, and its powers to initiate judicial proceedings and act as plaintiff. Internal control mechanisms were strengthened. Selective ex-ante control of major operations (in particular privatization and procurement) was abandoned and substituted by ex-post performance auditing. While this shift followed international best practice, the continued weakness of internal bureaucratic control and the rule of law meant that, in practice, ex-ante compliance control became ineffectual. The most important change to the original proposal, modeled after the US and Canadian AAAs, was the collegiate nature of the AGN and the mode of designation of auditors-general along partisan lines (Guitiérrez 2002).20 These alterations resulted in the politicization of the AGN, which was reinforced by the 1994 reform (Fadel 2002).

In sum, these reforms, although in theory compelling, were unfortunate and inopportune in the Argentine context (Baglini 2001; Despouy 2002). The reforms changed the formal institutions of fiscal control but did not affect the informal institutions and underlying power relationships in which the system of financial scrutiny is embedded. In Argentina, strengthening administrative probity required enhancing ex-ante controls, not undermining them.

Institutional linkages

In Argentina’s model of external auditing, the AGN functions as an auxiliary body to the legislature in the oversight of government finances. There are, nevertheless, important dysfunctions in the institutional linkages between the AGN and the legislature, which hinder the effectiveness of the system of fiscal control and, ultimately, government accountability. These are partly rooted in faulty institutional design, but more fundamentally in the nature and functioning of the political system.

The process of certification of public accounts illustrates these dysfunctions. One of the main instruments for the legislature to exercise political control on government is through the ex-post oversight of the budget. Through the annual review of government accounts, it decides whether or not to discharge government. In theory, the process is coherently organized. However, informal practices and legal controversies have precluded the system of legislative certification and discharge to function as intended, impeding the prompt and timely review of government accounts (Lamberto et al. 2005; Baglini 2005; Barra 2002).

The certification process is riddled with technical, procedural and political problems, which cause significant delays in the review of government public accounts in every stage, which has become a ‘labyrinth’ (Lamberto et al. 2002). For example, the CPMRC posits that the prior opinion of the AGN is required for it to proceed with the review of government accounts. However, the AGN has repeatedly abstained from emitting an audit opinion on the entirety or portions of the government accounts. It has repeatedly argued that government accounts did not provide sufficiently reliable information on the true nature of public accounts and budget execution, thus blaming the executive for the poor quality of the fiscal information it generates (Braceli 2002).


Author interview with a former president of the AGN, Buenos Aires, Argentina, 13 August 2003.


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