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relative terms over the past decade, representing 0.05% of the federal budget in 2005, down from 0.10% in 1995. The TCU’s budget is set in the same way as any other federal entity, as part of the government’s budget proposal approved by the legislature.

Although less pronounced than in Argentina, the politicization of the TCU’s decision-making structure represents an important hindrance to the agency’s effectiveness. Alston et al. (2005:46) argue that, though the TCU ‘is endowed with resources and instruments to affect public policy, its lack of independence from other political actors limits its actual impact.’ The 1988 Constitution changed the mode of designation of auditor-general in significant ways, taming the influence of the executive and increasing that of the legislature. Until then, the federal president designated all the auditors-general, with Senate approval. However, partisan influence has remained. The designation of auditors-general follows partisan lines, with final choices subject to political negotiations among political parties within each chamber. For Alston et al. (2005:49):

‘the process of nomination of the nine ministers assures that the majority coalition in Congress will generally have control over the decision-making process in the TCU. Furthermore, the relationship between the President and Congress […] implies that the majority coalition will generally not have an interest in having the TCU create problems for the President.’

Unlike in Chile, few auditors-general devote most of their professional careers to the TCU (Passanha 2000). Auditors-general enter the TCU at a later stage in their political career and stay less time in office.25 Not surprisingly, the TCU is often compared to either a ‘golden parachute’ for political allies in their crepuscule (with sumptuous pension benefits) or a ‘reserve bank’ after which auditors-general pursue other careers in the public or private sectors. Nevertheless, in a context of frequent changes in political power and fragmented government coalitions, the composition of the TCU could have been much more heterogeneous than it actually is. As certain political parties have remained in power for decades, the composition of the TCU has been relatively stable in political terms (Speck 1999:6). Pessanha (2000) shows that auditors-general come predominantly from the Minas Gerais, Rio de Janeiro and Rio Grando do Sul.

The TCU’s decision-making process, which follows court proceedings, is prone to political capture. Decisions can be voted, but are generally taken by consensus (Rocha 2003), a practice that endows each auditor-general with a virtual veto power. As a result, as Figueiredo (2003:185) remarks: ‘The improvements in the TCU’s technical expertise and capacity for auditing government accounts have outpaced its capacity to impose policy changes and sanctions against the misuse of public resources. The recommendations contained in the reports prepared by the TCU’s technical personnel are usually not followed by its board of ministers for political reasons.’ For example, a Senate inquiry commission recently revealed a corruption scandal in the building of the labor courts in São Paulo. The chief justice of the labor tribunal had embezzled more than US$50 million. The TCU was notified of the case in 1992, after irregularities had been detected. However, only in 1998 did the TCU decide to include that construction in a list of illicit public works.

Nevertheless, the politicization of the college of auditors-general is partly counter-balanced by a stable, professional and cohesive staff. TCU has approximately 2,000 staff and a decentralized structure. Advantageous pay conditions, attractive career prospects and status provide staff with important incentives. They contribute to creating an ‘esprit de corps’ within the agency, instilling professionalism and providing a sense of purpose to its staff. Since 1988, staff is selected through open competitive recruitment and receives continuous technical training. Many within the agency

25 Life-tenure has not precluded high turnover (about 1.2 rotations a year), a shorter tenures (from about 10 years to about 5 years since 1988) and an increase in the average age of auditors-general (from an average of 50 to an average of 60 at entry) (Speck 2000:202; Brown 2002b:76).

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