The Federal Court of Audit in Brazil{tc "The Federal Court of Audit in Brazil"} Institutional Arrangements and its Role in Preventing Fraud and Abuse of Public Resources{tc "Institutional Arrangements and his Role in Preventing Fraud and Abuse of Public Resources"}

FINANCIAL CONTROL IN MODERN POLITICAL SYSTEMS In Brazil, like in other part of the world, recent scandals of corruption and misuse of public funds put in doubt the efficiency of the financial control system. Like any other political system Brazil has a complex set of external and internal control institutions supposed to prevent misuse of public funds and identify responsibilities if bad use occurred. Public opinion criticised these control mechanisms for not being able to prevent major scandals involving corruption and fraud with public money. The so called Collorgate led to the impeachment of President Collor in 1992. A second scandal involving the Budget Commission of the Congress made several Congress members loose their seats in 1994. These are only two major examples in a long array of corruption cases, misuse and waste of public money uncovered in Brazil in the 1990's. Why did the system of internal control fail to detect scandals which badly damaged the image of judiciary, legislative and executive power? Why couldn’t institutions like the Federal Court of Account (Tribunal de Contas da Uniao, further on as TCU) prevent or even alarm the political system from these cases of grand corruption? This paper intends to give some preliminary answers related to the TCU. It is based on an ongoing research on its institutional mechanisms and the analysis of its role in the Brazilian politics. Even if social science paid little attention to the issue of financial control, institutions in this field have a long tradition. In fact all modern political systems made different efforts to control the use of public resources. They developed a more or less sophisticated system of resource control. Many of the superior institutions have a long tradition which began in the XIXth century, not to mention earlier steps in the systematisation of the administration of public funds since ancient times. One of the oldest institutions is probably the General-Rechen-Kammer, introduced in Prussian administration in 1714 by King Wilhelm I. 1 On the other hand institutions like the General Courts representing the Estates in medieval society were concerned about how monarchs used the taxes. As soon as public funds were raised on a regular base the Courts began to link revenues to special expenditures to limit executive power. At the same time they began to set up special commissions to control the Kings compliance with these rules. 2 We do not intend to solve the question whether external or internal control systems came first. But financial control institutions might belong to the traditional organisations in modern political systems. During the XIXth century, most of the Republics as well as the Constitutional Monarchies introduced mechanisms like Comptrollers, Inspectors or Courts of Account to increase the rational use of public funds. The foundation of supreme financial control institutions spread rapidly in Europe,