by Camillo Giamundo and Fernanda Leoni
The São Paulo State Court of Accounts (TCESP) issued the , which provides for the determination and calculation of amounts in its administrative proceedings.
The Resolution provides that whenever damage to the public treasury is found as a result of the Court’s audits, and it is materially possible, the technical team must quantify the amount of the loss determined.
The rule applies to proceedings already under way, the amount will be determined as part of the fact-finding phase, and the process will be conducted by the Member in charge of the case.
There will therefore be no specific procedure for determining the damage, as occurs, for example, at the Federal Court of Accounts, which has the Special Accounts Review, governed by Normative Instruction No. 71/2012 and subsequent amendments.
A specific procedure for determining the damage will only be initiated if the TCESP has no pending proceedings on the same general subject, in which case any report of damage will be filed as a Complaint or Representation, depending on whether the requirements of each type, set out in the Court’s Internal Rules, are met.
Another provision introduced by the resolution is that the determination of debts may apply to civil non-prosecution agreements entered into by the State Public Prosecutor’s Office, with documents that may be required to determine the damage and the TCESP judge being responsible for taking any measures and hearings they deem necessary. Although somewhat unclear, the provision seems to comply with the new wording of the Administrative Improbity Law, which requires the Courts of Accounts to be heard on the damage to be reimbursed when such agreements are entered into (article 17-B, §3, of Law 8,429/1992, as worded by Law 14,230/2021).
Although the Resolution does not make clear how the Court will participate in non-prosecution agreements, if the TCESP participates in determining the debt, it may be inferred that it will take part in and consent to the execution of these instruments, since the resolution authorizes the judge to take the measures and hearings they deem necessary, which presupposes an active stance in the negotiations. Consequently, it is understood that the TCESP will be committed to observing the clauses of the non-prosecution agreement in its audits, respecting the limits imposed regarding the cooperating parties, without prejudice to the continuation of the proceedings and decisions affecting third parties not party to the agreement.
Furthermore, it is not uncommon for the TCESP to already indicate, in its proceedings and audit reports on administrative contracts, the amounts it considers unjustified or characterized as damage to the public treasury. The practice and effective application of this resolution will show what will actually change in the Court of Accounts’ existing work.
In this regard, drawing on the Court’s own experience, the rule could already have gone further on criteria related to the actual quantification of the debt, such as specifying precise methods of calculation or estimation, means of updating or adjusting the debt, the application of interest, the effects of early payment and mechanisms for dividing liability between public and private agents.
Although not expressly provided for in the resolution, it is considered essential that the determination of these amounts comply with the principles of adversarial proceedings and full defense of the public officials and companies involved in the proceedings, as is done with any finding of irregularity made by the Court of Accounts’ technical team.
The effects of quantifying damage beyond the TCESP’s sphere also need to be regulated more precisely, considering the constitutional provision that decisions of the Courts of Accounts imposing debts or fines have the force of an enforceable instrument.
With the quantification of damage to the public treasury, TCESP decisions become liquidated and may, once final, be registered as overdue tax liabilities or enforced in court, without the injured entity having to file a cognizance action to discuss the existence of the debt.
There is still some way to go before the resolution is implemented and its effects are seen in practice and in the proceedings. However, we hope that the Court of Accounts’ rules and actions will be carried out in compliance with constitutional guarantees and with the commitment to oversee and promote measures to protect the public treasury, combating mismanagement and irresponsible spending by public managers.
