Directorate for Public Governance and Territorial Development

Brazil: Enhancing audit reporting is key to the integrity of government accounts

 

04/12/2012 - Brazil’s supreme audit institution – the Federal Court of Accounts (TCU) – has began a process to reform its audit of the Accounts of the President of the Republic to enhance transparency and accountability of federal budget execution.

The TCU makes its audit publically available, free of charge on the Internet within five months of the end of the fiscal year, in line with international good practice. To strengthen the impact of the audit on federal government financial reporting, the TCU must now enhance the clarity of its reporting and communications, says the Public Governance Review of Brazil’s Supreme Audit Institution.

“By explaining the significance of its audit results and the benefits of implementing its recommendations, the TCU will better mobilise the Congress and citizens to demand improvements in the integrity of government reporting” said Janos Bertok, Head of Public Sector Integrity Division of the OECD. “Integrity in government reporting is a necessary precondition for enhanced accountability and informed government decision making”. (Read the full speech).

Aligning the audit opinion on the Accounts of the President of the Republic with International Standards of Supreme Audit Institutions, and highlighting the benefits of action – and consequences of inaction – will help the federal executive decide which reforms to target. It will also equip the National Congress and citizens to monitor improvements in the government accounts.

The current link between the TCU audit report and its main findings is relatively low, diverting the audience’s attention from the main findings (Figure 1). To support discussion of government accountability, the TCU should redesign its audit report to focus on the evidence underpinning the main findings and how they were reached.

Figure 1. Link between the TCU audit report and main findings on the Accounts of the President of the Republic
Share of total report content linked to qualifications and recommendations, by audit fiscal year

An explicit communication strategy for this audit will help the TCU to define primary target audiences, identify communication objectives, refine key messages and select an appropriate communications mix for each of these audiences. Attention should focus specifically on the National Congress which only begins  to review the Accounts of the President more than two years after the completion of the TCU audit (Figure 2).

Figure 2. Total time taken for legislative scrutiny of the Accounts of the President of the Republic (CPR) by the National Congress Planning, Budget and Oversight Joint Committee
Years after the end of the audited fiscal year

Notes: CPR = Accounts of the President of the Republic; TCU = Federal Court of Accounts

The Public Governance Review of Brazil’s Supreme Audit Institution has been developed through a year-long dialogue with the TCU and senior officials from SAIs, the executive and legislature in other OECD countries.

To receive a copy of OECD’s Public Governance Review of Brazil’s Supreme Audit Institution journalists should e-mail news.contact@oecd.org or telephone: + 33 1 45 24 97 00. For further information, please contact James.Sheppard@oecd.org in the OECD Public Governance and Territorial Development Directorate.

 

 

 

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