Why budget accountability fails? The elusive links between parliaments and audit agencies in the oversight of the budget

Abstract

Parliaments and audit agencies have critical and complementary roles in the oversight of the budget and the enforcement of government accountability. Yet, the nexus between parliaments and audit agencies is one of the weakest links in the accountability chain, generating an accountability gap in the budget process. This articles analyses the interactions between parliaments and audit agencies in the oversight of government finances during the latter stages of the budget process. Using proxies to evaluate the quality of those linkages, such as the follow-up to audit findings and the discharge of government, it shows important dysfunctions in the interactions between parliaments and audit agencies due to a combination of technical capacity constraints and political economy disincentives. It suggests that the effective functioning of the system of checks and balances in public budgeting critically hinges on the agility of the linkages between accountability institutions. As such, the failure of budget accountability is due to systemic dysfunctions in the systems of accountability, rather than the failure of an individual accountability institution acting in isolation. In addition, the effectiveness of the horizontal accountability architecture depends on the political economy incentives shaping the budget process, which are generated by the interactions between the choice of institutional design and budget rules, with the degree of political competition and electoral rules.

Supreme Audit Institutions and Public Value: Demonstrating Relevance

“…In addition, although Parliament must be technically capable to manage the information for accountability (Reichborn-Kjennerud & Johnsen, 2015;Santiso, 2015), none of the SAIs in this research reported publicly on how they assist Parliamentary bodies to improve their technical capacity in order to carry out their oversight roles. One explanation for this might be because, under the insurance hypothesis for audit (Hay et al, 2016), Parliament may wish the auditor to act as a scapegoat for an entity's management's failures and it suits the Public Accounts Committee not to shoulder the blame for such failures; although the omission might simply be because the SAIs were not asked to provide this service.…”

“…This table also suggests unintended negative impacts could eventuate when entities are attempting to deliver public value (Moore, 2013). (Blume & Voigt, 2011;Norton & Smith, 2008;Pollitt & Summa, 1997;Talbot & Wiggan, 2010); Ensure competency in Parliamentary oversight body (Azuma, 2004;Santiso, 2015).…”

Performance management for success: Public sector organisations in Australia and the Philippines

“…Key findings include the observation that, where either or both institutions are actively and positively engaged in performance monitoring and review, the results are significantly better than in those where little or no interest is shown in efficiency and effectiveness issues. Results are also weaker where the institutions are not well connected in their oversight (Santiso 2015).…”

The (unexerted) competencies of municipal legislative financial committees in Brazil

“…Evidence from Uganda and Cambodia, both presidential developing countries, suggests that ensuring budget regulation is not enough to prevent the budget process from being dominated by the executive branch (Kim, 2015). Moreover, although the legislature performance (including its committees) has arguably improved in general terms through Latin America, the developments have a slow pace (Santiso, 2015). One of the recurring reasons for the committee's failure to act is the lack of available counselors' capabilities to carry out budget oversight.…”

“…The mayors' coalition surpasses the PAC oversight and scrutiny. The literature on coalition governments has shown that legislators may face reduced incentives for opposing to the executive branch (Pereira & Melo, 2012;Praça et al, 2011;Raile et al, 2011;Santiso, 2015;Zorzal & Carlos, 2017). Arguably, although councilors bargain amendments to the budget, once the executive branch accomplishes their demands, they promptly support the coalition agenda.…”