As in Argentina, the certification and discharge processes are marked by greater hurdles in the legislative stage than in the auditing stage, which bring their ultimate usefulness into question. As the same political forces tend to dominate the executive, the legislature and the TCU, incentives for enforcing accountability on government are limited, leading a federal deputy to conclude that the certification process is an ‘acto entre irmaos.’31 The legislature has generally approved the public accounts, with few reservations, concurring with the TCU’s preliminary opinion (Pessanha 2000; Pontes and Pedreiva 2004).
Furthermore, the legislature’s discharge of government has occurred with significant delays, at times reaching almost a decade. For example, the 1959 public accounts, although approved by the TCU on time in 1960, were only certified by the legislature 12 years later, in 1972. Approval of the government’s accounting after the end of the president’s term has not been unusual. On several occasions, to clear the backlog, the legislature approved the public accounts of several years simultaneously, often in the same day, as in 1972 and 2002. The public accounts of 1993 and of 1995 through 2001 were all been approved in December 2002.32 The public accounts of 1990 through 1992 have yet to be reviewed. There have also been important procedural problems. The legislature approved the public accounts of 1995, 2000 and 2001, without the preliminary approval of the CMO, as required by law. Moreover, there have been cases, such as in 1996 and 1997, where the reporting officer failed to complete his review.
The dysfunctions in the certification process reflect systematic failures in legislative oversight, which undercut the effectiveness of the TCU. As in Argentina, the process of certification is hindered by the legislators’ lack of interest and incentives to use it effectively.33 A better interaction between the legislature and the TCU is warranted. ‘In rare occasions, note Pontes and Pedreiva (2004:23), has the analysis of public accounts by the legislature generated substantial debate or positive results, or led the legislature to take corrective action.’ However, as the World Bank (2002:47) remarks,
‘this process […] needs to be seen in its political context. Any debate on approval or disapproval, involving a detailed discussion of the President’s annual report provides an opportunity for opposition parties to attack the fiscal policies and record of the President. Approval or disapproval thus does not relate to the quality of the financial statements. But there also appears to be some lack of interest by Congress in reviewing past events, and a correspondingly greater interest in issues of budget construction. TCU reports generally appear to attract little Congressional or public interest.’
Next stage of reform?
This review demonstrates the potential of gradual reforms and adjustments in the system of external auditing. Improving not only the probity of public management but the efficacy of public spending is a priority for Brazil which must come to grips with a state that is overgrown, but is neither efficient nor effective. The TCU has an important role to play, which would nevertheless require further reforms and in particular clarifying its relations with the legislature and the judiciary.
31 32 Author interview with a federal deputy, Brasilia, Brazil, 2 October 2003. Interestingly, the accounts of Fernando Henrique Cardoso (1995-2002) were approved after the results of the general elections were known (18 and 19 December 2002).
33 The controversies that surrounded the nominations of two auditors-general in 2005 illustrate the legislature’s disinvested attitude. In May 2005, to fill two positions left vacant since 2003, the Chamber of Deputies selected Augusto Nardes (PP/RS) as its preferred candidate. The Senate’s choice, Luiz Otávio, generated controversy, as he was accused of misappropriation of public funds in BNDES.