The bottom-line for the courts is that the TCU is a tribunal, not a court, and therefore its decisions can be appealed in the courts including in administrative matters (Zanella di Pietro 1996). Furthermore, the courts usually do not accept audit findings as evidence. Hence, while final and binding, TCU decision are not directly enforceable. As a result of thorny appeals processes, the actual collection rate of fines and other administrative penalties is extremely low, less than 1% (Speck 1999). For example, there is controversy concerning the judiciary’s right to try a politician whose accounts have been cleared by the TCU. Public administrators accused of corruption cite the approval of their accounts by the TCU as evidence of their innocence. However, the judiciary reserves the right to try such cases and review the TCU’s rulings.
Similarly, the TCU’s relations with the legislature are also dysfunctional, which undermine its ability to hold government to account. However, as in Argentina, the major dysfunctions occur in the legislative stage, rather than the auditing stage. As mentioned previously, the TCU provides technical assistance to the legislature in the oversight of government public accounts; but it is the legislature that is ultimately responsible for enforcing accountability on government. Detailed legislative scrutiny of the budget takes place in the Joint Committee on Plans, Public Budgets and Auditing of the bicameral parliament (Comissão Mista de Planos, Orçamentos Públicos e Fiscalização, CMO).
The annual review and judgment of the president’s accounts constitute the main instrument through which the legislature holds government to account (Gonçalves 1984).29 Since 1934, Brazilian Presidents are required to render accounts to the legislature every year, through the CMO (Machado et al. 1996). The TCU prepares a report on the public accounts of the federation within 60 days of receipt from the legislature. It issues a ‘preliminary opinion’ or ‘prior judgment’ (‘parecer prévio às contas’) to guide the discussions in the legislature on whether to approve the government’s statements or not. Based on the TCU’s opinion, the CMO emits its own recommendation to the legislature by unanimity vote. The process then follows normal legislative procedures, being examined and voted on by both chamber successively. However, the TCU’s preliminary opinion is not a formal audit ruling and seldom includes any reference to corrective measures or a follow-up of the irregularities detected in previous years.
While the legislature ‘makes the final judgment on the discharge of government, the analysis of the TCU is conclusive and carries its own weight’ (Speck 1999:3). The formal judgment of the public accounts generally takes place during an extraordinary session of the TCU and receives significant media coverage, as it often includes criticism of specific government programs. Nevertheless, the TCU has usually recommended approval, though it typically includes reservations, recommendations and warnings. Between 1946 and 2002, the preliminary opinion of the TCU was always positive, recommending the legislature to approve government accounts, except in three occasions when it was inconclusive (1946, 1950, 1953) (Pessanha 2003).30 Only in 1992 did the TCU give a negative opinion on the accounts of President Collor de Mello for 1991. The impact of this verdict was minor, however, compared to the process of parliamentary inquiry that resulted in Collor’s impeachment. Alston et al. (2005:48) therefore argue that:
‘these reports are to a large extent innocuous as the politicized nature of the decision-making process acts as a barrier that filters decisions that may be troublesome for congress and for the president.’
29 Since 1993, the TCU also devotes a chapter of its annual report to the analysis of policy issues, such as administrative reform, privatization, social security, poverty reduction, or debt management.
30 In fact, between 1952 and 1989, the president whose financial statements were being evaluated had traditionally appointed the TCU’s reporting minister selected by the TCU President (Pessanha 2000). Procedural reforms in 1993 corrected this deficiency and, since then, the TCU reporting minister is chosen randomly among the auditors-general.