Reforming Public Internal Control: Lessons (Not) Learned LEICE MARIA GARCIA AFC/AECI/MDS

1. Reforming Public Internal Control: Lessons (Not) Learned LEICE MARIA GARCIA AFC/AECI/MDS

2. ISSUES FOR REFLEXION 1. Challenges to the reforms of public internal control: absence of a unique prescribed path, political rush, technical insufficiency and administrative traditions. 2. Unlearned lessons: political decision precede the prescription, a modification of the norm is not a reform, precipitated juridical transplant leads to problems in the implementation, planning to guarantee resources; excessive segmentation can result in blindness in relation to systemic problems; internal control must coincide with the PFM system.

3. CONDITIONS TO SUCCESS 1. Top managers must be favourable to and engaged in the reform 2. Change must reach the administrative culture (management responsibility and real delegation) 3. Sufficiency of resources, including leadership over the implementation of the process 4. Integrated approach- PIC is not a technique in itself, but a part of the public Finance Management and the Public Administration 5.Permanent and sustainable formation for all

4. REFORMS IN THE PUBLIC ADMINISTRATION IN BRAZIL Ancient Republic: emergence of some enterprises and autarkies, besides some alterations in the ministerial structure 1967 Administrative reform: patronization of structures and procedures and introduction of instruments of intervention 1889-1930 1930-1937 1967 1990 1822-1889 Empire: evolution of the structure of the colonial administration Reform in the 90’s: management administration First government of Vargas: first deliberated, systemic and continuing effort of administrative modernization 4

5. EMERGENCE OF THE CONCEPT OF INTERNAL CONTROL IN BRAZIL February, 1967: the Decreed 200 does not mention the term “internal control”. It defines ‘control’ as an administrative function. Moreover, it defines the certification of regularity of the acts, before the sending the accounts process to the Tribunal, as a competence of the auditing system January,1967: the Federal Constitution defines that the financial and budgetary control of the Union will be exercised by the National Congress through the external control and the systems of internal control of the Executive Power, established by law 1964 1967 Law n. 4.320: emergence of the concept of internal control, covering the verification of legality of the acts, the functional fidelity and the achievement of goals 5

6. INTERNAL CONTROL REFORMS IN BRAZIL Secretary of Internal Control (Ciset e Secin) Creation of the Federal Secretary of Control Transference of structure from MF’s to the PR 1967 1979 1986 1994 1999 2002 2003 IGF – Financial Administration System, Accounting and Auditing Extinction of the Ciset; the SCI developed into 3 systems: Managing Administration, Accounting and Internal Control; emergence of the position of AECI in the structure of the Ministries Creation of the Controladoria Geral da União, incorporating the SFC in its structure Secretary of the National Treasure. Implementation of the SIAFI. System of Internal Control