TCU’S CONTRIBUTION TO GOVERNANCE AND

DEVELOPMPENTBRAZIL INSTITUTE

Wilson Center

Minister João Augusto Ribeiro NardesPresident of TCU

May 6, 2014

SUMMARY

THE STATE AS A PROMOTER OF DEVELOPMENT

GOVERNANCE

TCU GUIDELINES FOR IMPROVEMENT OF GOVERNANCE

GOOD PRACTICES IN GOVERNANCE 2013

MAIN PROJECTS DEVELOPED IN 2013

CONCLUSION

Brazil 2013

GDPR$ 4.8 trillion

Federal BudgetR$ 2.48 trillion (budgeted in 2013)R$ 2.0 trillion (executed in 2013)

How much the

country produced

Government expenditure

and debt rollover

THE STATE IS A STRONG PROMOTOER OF DEVELOPMENT

States (R$ 430 bi) and Municipalities (R$ 350 bi) spent R$ 780 billion (Source: IBGE – data from 2011)

Source: OFSS 2013 and IBGE

48% 52%

Public Expenditure by Government Function

R$ 988 billionSpecial Charges

R$ 1.056 biAll Others Expenses

Executed Budget: 2.0 trillion

Dados provisórios de 2013

Source: OFSS 2013 and IBGE

42%

10%8%

8%

6%

6%

4%2%

13%

Previdência Social Energia SaúdeEducação Trabalho Assistência SocialDefesa Nacional Judiciária Demais

Refinancing: R$ 577 biTransfer: R$ 193 biInterest rates and charges: R$ 142 biOthers: R$ 76 biTOTAL: R$ 988 bi

RATIONALIZATION OF PUBLIC EXPENDITURE

MORE PRODUCTIVITY

MORE NATIONAL

DEVELOPMENTBetter policies in the

areas of health, education, security, urban mobility, etc. at the federal, state and municipal levels

EDUCATION

RESEARCH AND INNOVATION

INFRASTRUCTURE

SOCIAL AND REGIONAL INCLUSION

DEMOCRACY FEDERATIVE COORDINATION

POLITICAL AND TAX REFORM

CHALLENGES FOR DENVELOPMENT

FISCAL RESPONSIBILITIY MONETARY STABILITY

GOVE

RNAN

CE

BUT WHAT IS GOVERNANCE ?

GOVERNANCE – THE AGENCY’S PROBLEM

Agent

Delegates

Executes

Self-interest

Principal

The agency’s (agent) problem(public and private)

Self-interest

Conflict of interest

7

Information asymmetry

THE AGENCY’S PROBLEM

8

The develoment of theories on governance aims at finding better answers to the following question:

How to maximize the likelyhood that the behavior (actions) of the Agent (top managers) is directed to meet the interests of the Principal and not his own interests or those of another?

CONCEPT OF GOVERNANCEPublic governance is the capacity that governments

have of assessing, directing, and monitoring the management of several public policies put in place to meet the needs of the population, by using a set of appropriate instruments and tools.

Achieving good governance requires strong leadership, a safe strategy and effective oversight of the actions of various managers that comprise a particular government.

Fonte: Referencial de Governança - TCU

Institutional Planning (mission, objectives, indicators, targets and allocation of resources)

Strategic committees (Business, HR, IT etc.)

Personnel excellence and decentralization Risk Management, Internal Controls and Internal Audit Publication of plans, portfolios and results Evaluation of individual and institutional performance Government Oversight

Legislative Branch with the help of the courts of accounts Social Control (participation of citizens and organized society)

GOVERNANCE PRACTICES

10

RELATIONSHIP BETWEEN GOVERNANCE AND MANAGEMENT

Fonte: Referencial de Governança - TCU

VIDEO ON GOVERNANCE

12

Now we will watch a video on governance available on the TCU Facebook page and on Youtube.

TCU STRATEGY TO IMPROVE PUBLIC

GOVERNANCE

TCU STRATEGIC PLAN2011-2015

MISSIONOversee Public

Administration in order to contribute to its

improvement in the benefit of society.

VISIONTo be known as an

institution of excellence in oversight and in the improvement of Public

Administration.

MAIN GUIDELINES FOR PERFORMANCE

Greater specialization of the Court by function of

government (health, education, environment, etc.);

Improvement of management and public corporate

governance, without leaving aside evaluation of legality

and compliance of the administrative acts;

Performance of coordinated audits;

Closer ties with international organizations.

SPECIALIZATION

EVOLUTION OF TCU STRUCTURE(COORDINATION AND SPECIALIZATION)

TOPICSSERVICES THAT ARE ESSENTIAL TO THE STATE

National Defense

and Pulbic Safety

State Administra

tion

Personnel Information

Technology

Logistic Procureme

nt

Audit Departments in the States: Midwest and South Regions

TOPICS – SOCIAL AREA

Education, culture and

sports

Social security,

Labor and Social

Assistance

Health

Audit Departments in the States: Northeast Region

TOPICS - NATIONAL DEVELOPMENT

Economic Develop-

ment

Audit Departments in the States: North Region

TOPICS – INFRASTRUCTURE

Airport and cons-truction works

Road works

Energyand sani-

tation works

Ports, water and rail

road works

Denationalization and transport regulatio

n

Denational

ization and

Energyand

Commu-nications regulatio

n

Indirect Adminis-tration in

Rio de Janeiro

Audit Departments in the States: Southeast Region

Coestado(11)

Cosocial(12)

Codesenvolvimento(11)

Coinfra(11)

GENERAL COORDINATION OFFICES

GOVERNANCE ACTIONS

PERFORMED IN TCU IN 2013

BASIC GUIDE ON GOVERNANCE

Document that gathers and organizes good practices in public governance

Applicable to Public Administration Institutions and Entities.

If observed, the practices contained in the Reference Guide can enhance the quality and effectiveness of public policies and services delivered to citizens.

ASSESSPrior Assessment – scenarios and environments in the Strategic PlanContinuing assessment – Public Dialogues and Meetings with Congressmen, Government authorities, Business community, Press and members of Organized Society.

Main related Governance Reference Guide practices To establish and disseminate communication channels and consulta-

tion with stakeholders; To assess the level of satisfaction with the strategies and actions of

the organization and assess the Court’s public image and trustworthiness;

To establish an objective and professional relationship with the media and other institutions;

To ensure that our strategies and actions cater to the stakeholders in a balanced way.

DIRECTSpecialization and Creation of Coordination Offices

Choice of leaders for our administrationGovernment Oversight Plan and Audit Plan alligned with

Strategic Plan guidelines ,Getting closer to international institutions and to the

INTOSAI Congress (INCOSAI)Main related Governance practices

To establish and formalize the organization’s strategy. To establish coherent objectives that are alligned with all

organizations involved in the implementation of the strategy so that the expected results may be achieved.

To establish a management [and structure] model that favors the allignment of operations with the strategy and that enables verification of the achievement of benefits, results, objectives, and targets.

MONITORMeeting of Top Managers (national and regional), Meetings

of the Presidency with Audit Departments and internal Meetings of the General Secretariats

Main related Governance practices To monitor the administration of the organization, especially the

achievement of institutional goals and behavior of top management members.

To be responsible for establishing policies and guidelines to manage the organization and for achieving expected results vis-a-vis the internal governance structures.

To monitor and assess execution of the strategy, the main operational indicators and the outcomes of the organization.

• In order to increase its productivity and consolidate itself as one of the world leaders in terms of development, Brazil has to establish a great pact to strengthen public governance.

• Government Oversight plays an essential role, at the federal, state and municipal levels, as a promoter of public governace in favor of development, without forgeting oversight of legality and compliance and the fight against corruption.

CONCLUSION

THANK YOU!