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pyramidal structure and gerontocracy ethos. Institutional insulation has also prevented the CGR from adapting to new trends in public sector management and financial governance, especially performance auditing. The CGR It has largely been left out of the reform movement and has failed to keep apace with the rest of the public sector, rendering it an ‘island of un-reform.’ It is something of an anomaly in the Chilean state, which has otherwise been able to modernize. As a result, it is increasingly exposed to the threat of anachronism, if not irrelevance. Thus, in Chile, the main question it is not whether CGR ought to be reformed, but rather how.

Institutional profile

The CGR is a highly respected state institution with a long historical trajectory. It is embedded in a relatively strong state founded on the respect of the rule of law. It was established in 1927 to oversee public spending. It is an autarkic organization independent from all state powers that acquired constitutional rank in 1943. It follows the monocratic model of AAA, but unlike similar organizations in the US, the UK or Canada, it is not linked to the legislature. Moreover, unlike its counterparts in Argentina and Brazil, it is neither part of the system of legislative oversight of government finances, nor of the judicial system of fiscal control. It is often referred to as the ‘fourth power of the state’ (Aylwin Azócar 2002; Sciolla Avendaño 2002, 2003).

The CGR’s primary task is to preserve and promote the principles of legality and probity in public administration and government finances. As Siavelis (2000:80) notes, ‘both the executive and congress were willing to grant [the CGR] increasing power because of its scrupulous insistence on legality and propriety.’ The CGR is inserted in a robust budgetary system regulated by laws dating to the military regime of Augusto Pinochet (1973-1990).38 The 1975 financial administration law was subsequently incorporated into the 1980 Constitution. The CGR is itself governed by an organic law of 1952, substantially reformed in 1964 and last amended in 2002. The 1980 Constitution provided for the adoption of a new organic law, but controversies surrounding the CGR’s core functions have prevented this from happening.39 Nevertheless, in 2000 the CGR adopted an institutional doctrine clarifying its core mission and values.

As a result of its origins, the scope of CGR’s mandate is very broad, encompassing a smörgåsbord of functions, some of which are unusual for an AAA and conflicting with one


It verifies the legality of the administration’s transactions, inspects fiscal revenues,

public expenditure and government investment, as well as municipal resources. Its core responsibilities include: (i) judicial review functions through the ex-ante control of constitutionality, legality and regularity of administrative actions, (ii) jurisprudential functions through the legal interpretation of financial administration legislation via ‘dictamenes’, contributing to reduce bureaucratic discretion in the interpretation of legal norms; (iii) audit functions through selective ex-post audit and inspections of administrative agencies, systems and processes, including controlling the reliability of internal control mechanisms and the compliance

38 Following the 1973 coup, the military junta undertook an important re-ordering of public administration, drafting legislation regulating the public administration (Ley de Bases de la Administración del Estado, 1974; Ley de Procedimientos Administrativos, 1974), financial management (Ley de Administración Financiera del Estado, LAFE, 1975) and government accounting (1976).

39 40 Two failed attempts were made in 1982 and in 1992. The CGR controls fiscal revenues and public investment and its authority extends to 190 central government agencies, 24 public enterprises, 8 mixed enterprises, 340 municipalities, public universities, and public concessions. Nevertheless, the CGR does not audit the central bank, the state bank, or the national copper company. It also audits the projects financed by international lending institutions.


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