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change.47 Deference to authority and stringent adherence to rules and procedures permeate the internal organization of the CGR, reflecting its pyramidal structure.

The budgetary independence of the CGR is not guaranteed by law, but by practice. The CGR drafts its own budget and submits it to the finance ministry for consideration. Despite this legal limitation, empirical evidence suggests the CGR’s budget has not been used to pressure it. The CGR’s budget has nevertheless decreased over time, from 0.32% of the state budget in 1977 to 0.13% in 2000 (Larraín 1995:68). In 2000 political parties agreed to strengthen the CGR and contract a loan from the Inter-American Development Bank. In 2005, the CGR’s budget increased to 0.20% of the state budget. Larraín (1995) argues that what the CGR needs is not more resources but greater financial independence, returning to the system that existed between 1959 and 1977 when the CGR was assigned a fixed percentage of the state budget (0.32%).

A central controversy surrounding the CGR concerns ex-ante compliance control. Ex-ante control is generally considered to delay administrative action, dilute administrative responsibilities and lessen the legitimacy of ex-post external auditing. The CGR is both judge and party as it controls administrative acts in which it participated by authorizing them. The CGR has relaxed some of its ex-ante controls, increasing the number of exemptions, delegating the authorization to approve small expenditures, and reducing the time for review (from 30 to 15 days in 2002). Nevertheless, its quasi-administrative functions absorb a great deal of its resources, representing over 175,000 processes in 2000 (CGR 2001). They also prevent it to fully exploit its ex-post auditing functions. It is hoped that the consolidation of the internal control system within government will allow the CGR to concentrate on external auditing and progressively abandon ex-ante control. Nevertheless, internal control has traditionally been deficient, partly because it was considered unnecessary and partly because the CGR assumed core internal control functions.

A related controversy centers on the nature of external control. Agreement on this issue is even more elusive than on the timing of external control. The CGR’s control is essentially one of control of legal and financial compliance. Reforming it would entail for the CGR to abandon its traditional formalist and legalistic approach and embrace modern ex-post auditing techniques focusing on performance and results. The CGR’s legalistic culture is also reflected in the confidentiality surrounding audit work, considered as ‘información privilegiada.’ Such a prudent approach to disclosure is partly rooted in the CGR’s understanding of its role and the importance of its privileged relations with the bureaucracy. It is also understandable considering the exposure of external auditors to political threats during successive military regimes. The culture of secrecy nevertheless adversely affects the publicity of audit findings and, ultimately their effectiveness.

The CGR adopted an institutional doctrine in 2000, partly to compensate for the lack of an organic law (CGR 2003). The doctrine, promoted by former comptroller-general Alwyn Azócar, counseled gradually moving away from the strict application of the principle of legality to embrace a form of performance auditing based on the ‘interpretación finalista de la ley’ (Llanos Campos 2003). However, this doctrinal shift was resisted not only within the CGR, but also the executive, especially the finance ministry’s central budget office (which has developed sophisticated systems to evaluate performance in the public sector), and the legislature (which was wary of an expansion of the CGR powers). Performance auditing by the CGR would thus not only require a change of corporate culture, but also a redistribution of budgetary roles within the state.

Another hindering factor concerns the legal standing of audit rulings (Diez Urza 1995). The CGR possesses only limited direct enforcement and sanctioning powers in administrative matters (notion of ‘imperio’). Successive comptrollers-general have requested more enforcement and

47 Longevity and allegiance to the hierarchy determine career advancement. The 75-year age limit does not apply to staff. As a result, managers seldom retire and there is little renovation or rotation of staff.


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