Control and audit of Public expenditures

Internal Control Federal Internal Control Secretariat Office of the Comptroller General

June 27, 2013

Ronald da Silva Balbe – Director of Planning - SFC/CGU Rogério Vieira dos Reis – Coordinator of Planning and Evaluation - SFC/CGU

Agenda 1. The Structure and functions of CGU 2. Internal Control: Activity Areas 3. Outcomes

1. The Structure and functions of CGU

Institutional Framework:

CGU is the Internal Audit Unit

and the Anti-Corruption Agency

of the Brazilian Federal Government

As such, the CGU develops the following actions:

• Internal Control

• Forwarding of the results of its audits to the bodies responsible for enforcement of

applicable sanctions

• Disciplinary Actions

• Corruption Prevention

• Ombudsman system

Comptroller General

Executive Secretariat

Federal

Internal

Control Secretariat

Corruption

Prevention and

Strategic

Information

Secretariat

Disciplinary

Board

Office of the

Ombudsman

Simplified Organization Chart – CGU

Regional Units

Brazil: A Country of Continental Proportions

CGU Disciplinary Board

Ministries

Managers

Federal

Court of

Accounts

Office of the

Public Prosecutor

Office of the

Attorney

General

Managerial

Improvements

Administrative

Sanctions

Criminal

Convictions

Civil

Convictions

Judiciary Branch Administrative

Sanctions

Control

Agencies

Outcomes

Senate

Chamber of Deputies

Political

Control

Federal Police

Follow up of the results of the Audits

Main Challenges in the Fight against Corruption

1.Lack of an anticorruption tradition

2.Almost no relevant initiative in terms of transparency

3.High resistance to openness in the Public Administration

4.Absence of a specific agency dedicated to anticorruption

5.Continental dimensions of the country

6.Federative system of government

7.Highly problematic political system

Main Challenges in the Fight against Corruption

8.Need to forge political coalitions to ensure governance

9.Burocratic and slow judicial system, resulting in a sense of

impunity

10.Isolationism of domestic institutions

11.Low degree of citizen participation in monitoring public

expenditure

12.Widespread idea in the private sector that fair play was a

competitive disadvantage

13.Private financing of political parties and campaigns

14.Difficulty to reach subnational governments

Some general data about Brazil

• Fifth largest and fifth more populous country in the world.

• Sixth major producer of motor vehicles (behind China, Japan, USA, Germany and S.Korea).

• Third aircraft manufacturer: Embraer.

• One of the world leaders in agribusiness: beef, poultry, soybeans, sugar, coffee, orange juice, corn, cotton, cocoa.

• Amazon forest: 1.3 sq. miles in Brazil; over half of the planet´s remaining rainforest; largest collection of living plants and animals species in the world (biodiversity).

• Among the largest producers of minerals: Vale (one of the main companies the world).

• World´s second largest producer of ethanol and largest exporter.

• Pioneer in the development of “flex fuel” technology (largest fleet of flex fuel car).

Multianual plan – 2012 - 2015

PPA 2012 2015

Economic Development

Defesa e

Soberania

Defesa Nacional

Sustentabi- lidade

Ambiental

INFRA STRUCTURE

Agrope-cuária e

Pesca

End of poverty

Human Righs and citzenship

Desenvol- vimento

rural

Proteção Social

Saúde Direito a saúde

Desenvol- vimento urbano

Indústria, Inovação e Comércio Exterior

Educação e

Cultura

Trabalho e

Previdência

Esportes e Grandes Eventos

Esportivos

Energia

Direitos da

Cidadania

Comuni-cações

Logística em

Transportes

Geologia e Recursos Minerais

Infraestrutura Hídrica e

Gestão de Riscos

Educação Básica

Educação Superior

Educação Profissional

e tecnológica

Promoção e acesso à cultura

Mercado De

Trabalho

Regime Geral de

Previdência Social

Igualdade Racial

Reparação e proteção

dos Direitos Humanos

Promoção dos Direitos

Humanos Igualdade De

gênero

JUSTIÇA

Juventude

Esportes e grandes Eventos

Esportivos

Oferta de água

Energia Elétrica

Combustíveis

Inclusão Digital

Infra Estrutura

em comunica

ções

Minerais Estratégi-

cos

Petróleo E

Gás

Transporte Rodoviário

Transporte Aéreo

Transporte Ferroviário

Transporte Hidroviário

Transporte Marítimo

Política Externa

Política Espacial

Política Nuclear

Integração Regional

Sul-americana

Política Agrícola

Agricultura Irrigada

Pesca e Aquicultura

Defesa agropecuária

Comércio Exterior

Política Industrial

Turismo

Desenvolvimento

Tecnológico e inovação

Biodiversi- dade

Gestão de Recursos Hídricos

Mudanças Climáticas

Reforma Agrária

Agricultura Familiar

Bolsa Família

Assistência Social

Segurança alimentar e nutricional

Saneamento

Planejamento Urbano

Habitação

Mobilidade Urbana

Segurança Pública

Resíduos Sólidos

Urbanos

Promoção dos Direitos das Crianças e

adolescentes

Controle do Desmata-

mento

Gestão de riscos e

resposta a desastres

Enfrentamento ao crack e

outras drogas

Proteção e Promoção dos

Direitos dos Povos

Indígenas

Licenciamento

e qualidade Ambiental

Desenvolvimen- To Regional e

Territorial Sustentável

2. Internal Control: Activity Areas

Fostering continuous

improvement of

delivering public services

Mission:

To prevent and to fight corruption and

to improve public management through

strengthening of the internal controls and

increase of transparency, ethics and social

control

Intensifying

investigatory auditing

4 areas:

Evaluation of public programs implementation

(performance audit)

Management evaluation

Investigations

Training and guidance

Evaluation of public programs implementation

(performance audit)

Evaluation of public programs

implementation

Based on performance audits

which are concerned with the audit of

- economy

- efficiency

- effectiveness

and aim at leading to

- improvements in the public policy

Evaluation of public programs

implementation

Phases: Risk assessment

Planning

Execution of the performance audit

Monitoring

Evaluation report published

Evaluation of public programs

implementation

1st Phase:

Risk assessment

• Mapping out the public policies of each Ministry

• Hierarchization of the public policies

• Prioritization of one or more government

actions to evaluation

Evaluation of public programs

implementation

2nd Phase:

Planning • Study of the policy

• Describing what questions will be answered at

the end of the evaluation

Evaluation of public programs

implementation

3rd Phase:

Execution of the performance audit, including:

• Field work and

• Analysis of collected data

Evaluation of public programs

implementation

4th Phase:

Monitoring • Discussion with the manager of the public

program about conclusions and looking to find a

joint solution;

• Delivery of monitoring reports with CGU’s

recommendations;

• Balance meetings to monitor the

implementation of the recommendations.

Evaluation of public programs

implementation

5th Phase:

Evaluation report (RAv) published on the CGU’s

website.

Program Evaluation Reports (performance audits)

Management evaluation

600 agencies subject to annual

rendering of accounts

Investigations

Training and guidance

Integrated actions with Federal Prosecutors and with the

Federal Police Department

130 Integrated actions (2003 – 2013) (25 in 2012 )

Training and guidance

Trainings

Over 33000 public officials trained (2009 – 2012)

Guidance - booklets

• Per-diems and issuing

of tickets

• Public biddings and administrative contracts.

• Price Recording System

• Contracting Consultants in Technical Cooperation Projects

3. Outcomes Management Improvement and financial benefits

Findings

Recommendatio

ns

Benefits (management improvements)

(financial benefits)

Positive realized impacts on

the public management as

result of implementation, by

the managers, of

recommendations derived

from internal control activities,

and therefore, benefit of a

joint work between internal

control and public

management

2012 outcomes:

117 management improvements

R$ 2,33 billion (financial benefits)

Issuing of a corporative card for the Civil Defense, resulting in the

improvement of the control on the public expenses

Management Improvement

Management Improvement

Issuing of a Decree to regulate the money transfers from the Ministries of Health and Education to the States and

Municipalities

17 bidding processes and contracts were subject to auditing in the National

Department for Transport Infrastructure. Due to irregularities found by the auditors,

fines were charged (R$ 3,5 million) and payments were reversed (R$ 46,3 million).

Financial Benefit

CONTROLADORIA-GERAL DA UNIÃO

(Office of the Comptroller General)

SAS Quadra 1 Bloco A

Edifício Darcy Ribeiro

70070-905 Brasilia/DF – Brazil

Phone: +55 61 2020-7241

www.cgu.gov.br cgu@cgu.gov.br

Visit the Transparency Portal:

www.portaldatransparencia.gov.br