In this Part 2 on regulating the legislature’s ex post control of public finances we provide reference regulation for oversight of the government’s finances and expenditure. Part 1 covered substantive questions to consider for the ex post control of public financial management (PFM) and the international, multilateral and regional regulatory standards for legislative scrutiny.

Part 1 can be found here.

A. Substantive rights for the legislature’s PFM responsibility

Constitution-based rights

1. In the Commonwealth parliamentary system of Australia, the federal parliament’s authority for PFM is outlined in the Constitution. Sections 81, 82 and 83 provide that all revenue or moneys raised or received by the executive shall form one Consolidated Revenue Fund from which all appropriation for Commonwealth expenditure shall be drawn. No money shall be drawn from the Fund except under appropriation made by law. The power to make laws is the exclusive power of parliament (Section 1). The House of Representatives has the sole power to propose laws appropriating revenue or moneys, or imposing taxation and the Senate may request amendments of such laws (Section 53). Under Section 90 the federal parliament has exclusive power over customs, excise and bounties. The Standing Orders of the House of Representatives provides the powers to either approve, not approve or amend bills generally, and specific procedures for appropriation or supply and taxation proposals (Chapters 12 and 13 refers).

2. Uganda is a presidential republic and Chapter 9 of the 1995 Constitution regulates the public finances. Article 164 concerns parliamentary accountability:

“(1) The Permanent Secretary or the accounting officer in charge of a Ministry or department shall be accountable to Parliament for the funds in that Ministry or department.

(2) Any person holding a political or public office who directs or concurs in the use of public funds contrary to existing instructions shall be accountable for any loss arising from that use and shall be required to make good the loss even if he or she has ceased to hold that office.

(3) Parliament shall monitor all expenditure of public funds.”

3. The Constitution of Singapore contains an interesting regulatory technique that obliges the government to not draw on resources accumulated during previous terms of government [Article 148A.—(1)]. This ‘balanced budget’ technique requires that during a government’s term of five years, deficits must be balanced against surpluses accumulated in earlier years of the current term.¹ Although this right to withhold assent of the ‘not balanced budget’ resides with the President [Article 17.—(2) provides that the President’s principal function is fiscal guardian], the Parliament and the President must agree to allow a government to draw on past reserves (Article 148B).

4. Iraq’s 2005 Constitution provides that (Article 62):

“First: The Council of Ministers shall submit the draft general budget bill and the closing account to the Council of Representatives for approval.

Second: The Council of Representatives may conduct transfers between the sections and chapters of the general budget and reduce the total of its sums, and it may suggest to the Council of Ministers that they increase the total expenses, when necessary.”

Legislative-based rights

5. Portugal’s Regulation of the Assembly of the Republic No. 1/2020 has strong rights of rejection permitting any parliamentary group of the Assembly to reject the government’s programme, however, the high threshold requires an absolute majority of the Deputies (Article 217).

6. Although Article 15 of the 1789 Declaration of the Rights of Man and the Citizen of France provides that “Society has the right to require of every public official an account of his administration”², the legislative authority for parliament’s rights to control the public finances is the Constitutional Bylaw on Budget Acts³ (Loi organique 2001-692 du août 2001 relative aux lois de finances “LOLF”). The LOLF contains a right of amendment for parliament to redeploy appropriations:

Article 12

“[…]

III. – Reallocations and transfers are effected by a decree passed on the basis of a report from the minister in charge of finance, following the notification of the National Assembly and Senate finance committees and the other committees concerned. The use of the reallocated or transferred appropriations gives rise to a special report enclosed with the report drawn up pursuant to paragraph 4) of Article 54.

IV. – No reallocation or transfer may be made to programmes not stipulated by a budget act.”⁴

Article 13

“In the event of an emergency, supplemental appropriation decrees passed on the basis of an opinion from the Conseil d’Etat (French supreme administrative court) and following the notification of the National Assembly and Senate finance committees may make supplementary appropriations without affecting the budget balance defined by the latest budget act. To this end, supplemental appropriation decrees rescind appropriations and establish supplementary revenue. The cumulative sum of appropriations made in this way may not exceed 1% of the appropriations made by the year’s budget act.”⁵

B. Regulatory empowerments for ex post control

1. The following reference regulations for parliamentary ex post control are arranged according to the following objectives:

1. aiming at control;
2. aiming at independence; and
3. aiming at enquiries.

See Part 1 (II. Parliamentary empowerments) for a list of minimum empowerments parliamentary would require to carry out this ex post function.

I. Aiming at control

2. The South Korea Act on the Inspection and Investigation of State Administration obliges the executive to act on National Assembly investigations (Article 16):

“(1) The National Assembly shall take follow-up action for the results of the inspections or investigations by a resolution of the plenary session.”

3. The Parliament of Zambia controls implementation of the recommendations arising from its scrutiny of executive expenditure by requiring the Treasury Secretary to implement them. Section 7 of the Public Financial Management Act 2018 on the functions of the Secretary to the Treasury:

“7. (1) The Secretary to the Treasury shall—

[…]

(h) implement the recommendations of the Parliamentary Committee on Public Accounts;

(i) prepare the treasury minute in respect of the implementation of the recommendations of the Public Accounts Committee for submission to the National Assembly;”

4. The Barbados Public Financial Management Act 2019 (PFMA 2019) obliges a report back from the ministry responsible for finance specifying the measures taken by the government to implement the audit recommendations from the previous year.⁶ Additionally, the report must also specify the government’s response to the findings of the committees of parliament with responsibility for examining performance reports and government financial statements.

5. Regulatory deadlines are an important control mechanism and Portugal’s Regulation of the Assembly of the Republic No. 1/2020 (Articles 205 and 206) is a good example of strict deadlines for reporting back on the State General Account to the Assembly.

“Article 205 Presentation and distribution

1 – Law proposals on the major options for plans and the State Budget for each economic year, the General State Account and other public accounts are presented to the Assembly of the Republic within the deadlines established in the Budget Framework Law.

Article 206 Exam

1 – The standing parliamentary committees prepare the respective sectorial opinion and send it to the competent parliamentary committee in the matter within: [a) 8 days … major plan options; b) 8 days … State Budget law;]

c) 15 days, referring to the General State Account.

2 – The relevant parliamentary committee responsible for the matter shall prepare the final opinion, in which annex IV must contain the sectorial opinions issued by the other permanent parliamentary committees, and send it to the President of the Assembly of the Republic within the period of: [a) 10 days … major plan options; b) 10 days … State Budget law;]

c) 20 days, referring to the General State Account.

3 – The services of the Assembly shall carry out a technical analysis of the draft law … the General State Account, broken down by areas of governance, forwarding it to the competent parliamentary committee for the matter within the period of: [a) 10 days … State Budget law;]

b) 90 days, referring to the General State Account.

4 – The terms of this article count from the date of delivery of the bill on … the General State Account and other public accounts, except with regard to the subparagraphs c) of paragraphs 1 and 2, whose deadlines start from the date of delivery of the competent opinion of the Court of Auditors.”

6. The frequency with which expenditure statements are required to be presented to the legislature is an opportunity to scrutinise and control public finances in a way that permits corrective action within the budget year. Zimbabwe’s Public Financial Management Act (PFMA 2009) requires quarterly financial statements to be provided to the relevant parliamentary committee (Section 33). Audited consolidated financial accounts are due 180 days after the end of financial year (Section 35).

7. It is important for parliament to have oversight of the use of virements because funds can easily be misappropriated or used inefficiently. The Barbados Public Financial Management Act 2019 has very clear reporting requirements to parliament about the use of virements:

“32.(1) The Government shall not vire funds between Expenditure Heads without prior authorisation by Parliament through Supplementary Estimates and a Supplementary Appropriation Bill or resolution.

(8) The Minister responsible for Finance shall report twice yearly to Parliament on all virements made under this section and the performance of the Appropriations affected in the Mid-Year Review Report and Financial Statements.”

8. Other regulatory controls could be delegated to institutions or other third parties or regulated committees or office holders that are internal to parliament or independent of parliament and who report their findings to parliament.

9. Article 25.6 of the Constitution of the Kingdom of Bhutan provides for the appointment of a Public Accounts Committee (PAC) “to review and report on the Annual Audit Report to Parliament for its consideration or on any other report presented by the Auditor General”. The Rules of Procedure of the Public Accounts Committee provides:

• greater details of the scope and extent of the review and reporting requirements;
• clarifies the role and responsibilities and powers of the PAC; and
• establishes a system for the notification of recommended actions by the legislature and its implementation by the executive leaving to improved financial management and better stewardship.

The PAC has strong powers to summon witnesses for hearing (Procedure Rule 23), including: persons to give evidence or produce documents, the head of a ministry or department, any other senior officer to represent the ministry/department following a request to the head of the respective ministry/department, and any private company or non-governmental body that the executive has an agreement with or public undertaking. A person subject to such a summons by the PAC shall be guilty of the offence of breach of parliamentary privileges if s/he knowingly gives false evidence on oath and is liable to a maximum fine of five years minimum wage (Procedure Rule 23.ix). If a person subject to a summons fails to appear or to produce the document or information requested in the summons the PAC Chair or Deputy may issue a warrant for the apprehension of the summoned witness (Procedure Rule 24.i). Upon due approval from the court, the person executing the warrant may: apprehend the person, bring that person before the PAC, or detain that person in custody until released by the PAC Chair/Deputy (Procedure Rule 24.iii).

10. The PAC of the fifth Senedd (parliament) of Wales has broad powers outlined in the Standing Orders to scrutinise the economy, efficiency and effectiveness with which public money is used (Standing Order 18.2). The Welsh PAC’s focus is on implementation and not policy (Standing Order 18.4). In practice, this has included the use of public money in implementing legislation. An interesting example of the PAC inquiry power concerns the implementation of the Well-being of Future Generations (Wales) Act 2015, the report of which was debated in the Senedd on 24 March 2021. The Well-being Act regulates the implementation of sustainable development by creating a duty on 44 public bodies to act in a way that seeks to meet the needs of the present without compromising the ability of future generations to meet their own needs.⁷ One of the fourteen recommendations was for the Auditor General for Wales to highlight poor adoption of the sustainable development principle of the Well-being Act.

11. Zambia’s Accountant-General is responsible for preparing a memorandum specifying the measures taken by the executive to implement, in the ensuing financial year, the recommendations of Parliament in respect of the report of the Auditor-General with respect to Zambia Public Finance Management Act 2018 (PFMA), the Public Audit Act 2016 or any other law.⁸ The Accountant-General is also responsible for following up on outstanding issues in respect of the report of recommendations of Parliament on the reports of the Auditor-General and for ensuing financial years (Section 9). Under Zambia’s PFMA the general responsibilities of controlling officers includes not committing Government to expenditures in excess of monies appropriated by Parliament.⁹ The functions of the Controller of Internal Audit inter alia includes providing assurance that monies appropriated by Parliament or raised by the Government are disbursed and applied for the purpose for which they were appropriated or raised and are expended efficiently, effectively and economically.

12. The Federal Court of Accounts (Tribunal de Contas da União, “TCU”) is the supreme audit institution of Brazil, which has broad powers for its constitutionally¹⁰ mandated role to complete audits on the performance and accounts of the federal executive. The Organic Law of the TCU (Lei Nº 8443, de 16 de Julho de 1992) empowers the TCU to audit:

“I – any individual, body or entity referred to in item I of Article 1 of this Law, which uses, collects, saves, manages or manages money, assets and public values or for which the Union is responsible, or which, in its name, assumes obligations of a pecuniary nature;

II – those that cause loss, misplacement or other irregularity that results in damage to the Treasury;

III – the directors or liquidators of the companies taken over or under intervention or that in any way come to integrate, provisionally or permanently, the assets of the Union or other federal public entity;

IV – those responsible for the national accounts of supranational companies in whose share capital the Union participates, directly or indirectly, under the terms of the constitutive treaty.

V – those responsible for entities endowed with legal personality under private law that receive parafiscal contributions and provide services of public or social interest;

VI – all those who are accountable to it or whose acts are subject to its inspection by express provision of Law;

VII – those responsible for the application of any funds transferred by the Union, through an agreement, agreement, adjustment or other similar instruments, to the State, the Federal District or the Municipality;

VIII – the successors of the administrators and persons in charge referred to in this article, up to the limit of the value of the transferred assets, pursuant to item XLV of Article 5 of the Federal Constitution;

IX – the representatives of the Federal Government or the Public Power at the General Meeting of state-owned companies and corporations in whose capital the Union or the Public Power participate, jointly, with the members of the Fiscal and Administration Councils, for the practice of acts of ruinous management or liberality at the expense of the respective companies.”¹¹

The TCU also uses surveys, research and informational sessions with external stakeholders as a means of strengthening audit proceedings. The TCU performs special audit functions on the environment (noting the Amazon Rainforest) and privatisation of public companies and services. On the environment, the TCU examines and evaluates the legal, technical and administrative actions of public institutions directly or indirectly related to the environment. On the privatisation public property and services, the TCU audits each stage of the privatisation process, advising on applicable corrections to be made and requires in privatisation contracts quality of service indicators so that end users may demand equal quality service in the newly privatised body. The TCU is required to receive reports from any citizen, political party association or union about an irregularity or illegality (Article 53). The report is to be investigated confidentially until evidence is gathered suggesting an irregularity/illegality exists, and then the process becomes public so that the accused has an opportunity to make a defence (Article 53 § 3 & § 4). Denunciations may be submitted anonymously via the TCU website.

13. Brazil’s TCU Law is a good example of how to regulate for an independent institution of external audit, covering the appointment of ‘ministers’ to sit on the TCU, its organisation and appointment of auditors. The eligibility requirements for TCU ministers cover:

• age, appointments must be over 35 and under 65 years of age;
• moral integrity and reputation;
• legal, accounting, economic and financial or public administration knowledge; and
• experience of more than 10 years in a function or professional activity in the above listed fields of knowledge.

The President of the Republic, with the approval of the Federal Senate may choose one third of the TCU ministers and the remaining two thirds of TCU ministers are selected by the National Congress (Article 72). The ministers will have the same guarantees, prerogatives, prohibitions, salaries and advantages as the ministers of the Superior Court of Justice (Article 73). To ensure independence the TCU ministers are prohibited from exercising another position or function (eg. in a company, except for being a shareholder without management rights) except teaching, hold a technical or management position in a non-government organisation or foundation, exercise paid or unpaid commission in public bodies, entering proscribed contracts, and political parties (Article 74).

14. It is important that the auditors of the public accounts are themselves audited to ensure confidence in the audit body’s independence, regardless of the audit model used in the jurisdiction, and effectiveness. In the Australian state of Victoria, the Public Accounts and Estimates Committee (PAEC) of parliament is responsible for appointing independent auditors to conduct financial and performance audits of the Auditor-General’s Office [Section 14 (1)(ab) of the Parliamentary Committees Act 2003 and Sections 79 (financial audit) and 82 (performance audit) of the Audit Act 1994]. The Audit Act 1994 provides that the PAEC-appointed independent auditor:

• must not have a conflict of interest [Sections 79(1) and 82(1)];
• is appointed for a period not exceeding 4 years;
• financial audits completed at least annually [Section 79(1)] and performance audits completed at least once every 4 years [Section 82(4)] to determine whether the Auditor-General and the Victorian Auditor-General’s Office are achieving their objectives effectively, economically and efficiently and in compliance with all relevant Acts;
• subject to any directions given by the PAEC, the independent financial auditor [Section 79(1)] and the independent performance auditor [Section 82(5)] may exercise any powers of the Auditor-General under Part 7 to the extent necessary to conduct the independent financial/performance audit as if a reference in that Part to the Auditor-General includes a reference to the independent financial/performance auditor; and
• when making a report of the audit performance of the Auditor-General and the Victorian Auditor-General’s Office, the independent performance auditor may include any information and recommendations the independent performance auditor considers relevant [Section 83(2)(a)], must set out the reasons for opinions expressed in the report [Section 83(2)(b)], provide a copy of the report to the Auditor-General and an opportunity to comment in writing by a specified date and include those comments in the report tabled in parliament [Section 83(3)].

The Victorian PAEC fulfils this function by engaging auditors through a competitive tender process. With respect to performance audits the specification for the tender process must be drafted by the PAEC and consulted on with the Auditor-General [Section 83(7)].

II. Aiming at independence

15. Parliament of Canada Act 1985 (PCA) protects the independence of both the House of Commons and the Senate (together the Parliament) by requiring an estimate for the costs of their work, including their members to be funded by Parliament (Senate Section 19.4 and House of Commons Section 52.4). Both houses have the same empowerments that contribute to their respective committees’ independence to scrutinise executive accounts, including:

• exercising the powers and carrying out the functions conferred by the PCA and having the capacity of a natural person, may enter into contracts or other arrangements in the name of the House of Commons/Senate or in the name of the respective committee and do all such things as are necessary or incidental to the exercising of its powers or the carrying out of its functions (Senate Section 19.2 and House of Commons Section 52.2); and

• “an independent and non-partisan Parliamentary Budget Officer to support Parliament by providing analysis, including analysis of macro-economic and fiscal policy, for the purposes of raising the quality of parliamentary debate and promoting greater budget transparency and accountability.” (Section 79.01).

16. In Australia the employees of the parliament are known as the Parliamentary Service and are regulated under the Parliamentary Service Act 1999 (PSA). Employees of the PSA:

“9 Constitution and role of the Australian Parliamentary Service

(1) …

(2) … serves the Parliament by providing professional support, advice and facilities to each House of the Parliament, to parliamentary committees and to Senators and Members of the House of Representatives, independently of the Executive Government of the Commonwealth.

(3) …

10  Parliamentary Service Values

Committed to service

(1)  The Parliamentary Service is professional, objective, innovative and efficient, and works collaboratively to achieve the best results for the Parliament.

Ethical

(2)  The Parliamentary Service demonstrates leadership, is trustworthy, and acts with integrity, in all that it does.

Respectful

(3)  The Parliamentary Service respects the Parliament and all people, including their rights and their heritage.

Accountable

(4)  The Parliamentary Service performs its functions with probity and is openly accountable for its actions to the Parliament and the Australian community.

Impartial

(5)  The Parliamentary Service is non partisan and provides advice that is frank, honest, timely and based on the best available evidence.”

Engagement of parliamentary service employees may be made subject to conditions notified to the employee, such as probation, citizenship, formal qualifications, security and character clearance, and health clearances [Section 22(6)]. Section 22(8) requires that a person that is not an Australian citizen may not be engaged in the parliamentary service unless it is appropriate to do so. The Parliamentary Budget Office is regulated specifically in the PSA and its purpose is to “inform the Parliament by providing, in accordance with this Division, independent and non partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals.” (Section 64B). In order to maintain independence of the Budget Office the PSA has proscribed regulations on the following matters:

• Requests for costing of policies outside and during caretaker period (Section 64H & J);
• Caretaker period policy costing requests—interaction with the Charter of Budget Honesty Act 1998 (Section 64K);
• Caretaker period policy costing requests—information gathering (Section 64KA);
• Caretaker period policy costing requests made before polling day (Section 64L), made on or after polling day (Section 64LA)—public release of requests and costings;
• Requests relating to the budget (other than requests for policy costings) (Section 64M);
• Post election report of election commitments (Section 64MA), requirements (Section 64MAA), information gathering (Section 64MB), and public release (Section 64MC);
• Responsibility for managing Parliamentary Budget Office (Section 64N);
• Restrictions on directions to Parliamentary Budget Officer (Section 64P);
• Annual work plan for Parliamentary Budget Office (Section 64Q);
• Joint Committee of Public Accounts and Audit may request draft estimates (Section 64R) and duties of the Joint Committee (Section 64S);
• Review of operations of Parliamentary Budget Office (Section 64T);
• Public release of policy costings etc (Section 64U); and
• Confidentiality (Section 64V).

III. Aiming at enquiries

17. In France the legislature has strong supervisory and investigative powers over expenditure (Article 57):

“The National Assembly and Senate finance committees monitor the execution of Budget Acts and evaluate any public finance issue. This task is assigned to their respective chairmen, general rapporteurs and special rapporteurs in their assigned fields. To this end, they conduct all documentary and on-the-spot investigations and all hearings they deem useful.

All the financial and administrative information and documents they request, including any reports drawn up by the bodies and agencies responsible for the supervision of the administration, save subjects of a secret nature concerning national defence and the State’s internal and external security and observance of investigative and medical secrecy, must be provided to them.

Persons whose hearing is deemed necessary by the chairman and general rapporteur of each assembly’s finance committee are bound to comply. They are released from the obligation of professional secrecy save where provided for in the paragraph above.”¹²

18. An interesting regulatory technique in South Korea’s Act on the Inspection and Investigation of State Administration requires a low threshold for parliamentary committees to request the presentation of documents related to an inspection or investigation (Article 10, paragraph 1). As parliamentary committees are made up of members from the ruling party, independent members and other political parties, South Korea’s Act enables one third of the committee to request whatever document it needs for their inspection/ investigation. The benefit of this low threshold is that where the ruling party dominates a parliamentary committee the minority members only need one third of the committee to agree to such a request for presentation of documents. A person or related agency is required to comply and cooperate in a timely manner. The penalty (Article 12 of the Act on Testimony, Appraisal, etc. before the National Assembly) for non-compliance with a request from a parliamentary committee is imprisonment of not more than 3 years or a fine of not more than 30 million won (~USD25,000).

19. Barbados improved the management of public finance through its Public Financial Management Act 2019, by strengthening the requirement for making information publicly available. Section 6 of the PFMA 2019 provides that:

“(8) The Director of Finance shall publish

(a) the Fiscal Framework on an official website of the Government on the day the Fiscal Framework is laid in Parliament and shall make the Fiscal Framework available to the public in printed form as soon as practicable; and

(b) the recommendations of Parliament on the Fiscal Framework and the response of the Government on an official website of the Government no later than 3 weeks after the day the document containing the response of the Government is laid in Parliament.

(c) any changes made to the Fiscal Framework in response to the recommendations of Parliament on an official website of the Government no later than 3 weeks after the changes are agreed to by the Cabinet.”

20. Although the purpose of this interesting technique used by United Kingdom public bodies is unrelated to information requirements of parliamentary ex post control, all UK public bodies are to publish one month in arrears all expenditure above £25,000. Publishing of such amounts electronically enables both the public and members of parliamentary committees to receive information about government expenditure in a timely manner. Such timeliness can be useful for detecting irregularities sooner than the end of financial year or enable a parliamentary committee member to enquire about such expenditure. The Zambian Public Financial Management Act 2018 already provides for regulation to cover electronic filing of information.¹³

C. Enforcement

1. Brazil’s Tribunal de Contas da União (TCU) has interesting techniques for enforcing the recommendations of its compliance audits. Compliance audits of federal public works are carried out so that Congress can be apprised of their status. This allows members of Congress to form an opinion as to the appropriateness or not, of disbursing budgetary funds for continuing such works. Audits finding serious irregularities in public works, will result in Congress suspending the disbursement of funds until such irregularities are remedied. As a result, an appendix is added to the annual Budget Supply Law listing the works in serious violation so that the transfer of funds is blocked until they are brought into compliance. Another enforcement tool of the TCU is where its reports to the legislature makes a ruling that an executive account is “irregular”, if approved by the legislature, renders office-holders temporarily ineligible. Although the TCU’s audit reports are non-binding for parliamentary decision, they may be used to assist investigations or legal cases brought by prosecutors, or serve as a foundation for impeachment proceedings. Brazil’s Public Bidding Law provides that participants of public tenders (either a natural or legal person) may bring to the TCU a petition regarding irregularities in the application of the law by public bodies.

2. The National Assembly of South Korea enforces corrective action on the executive (Article 16 of the Act on the Inspection and Investigation of State Administration):

“(2) Where any unlawful or unreasonable matters are found as a result of the inspections or investigations, the National Assembly shall, depending on the severity thereof, demand that the Government or relevant agencies take corrective measures, such as awarding compensation, taking disciplinary action, making improvements to the system, and adjusting budgets; and any matters deemed reasonable to be dealt with by the Government or relevant agencies shall be transferred to the Government or such agencies.

(3) The Government or relevant agencies shall deal with matters without delay which are subject to corrective measures or transferred under paragraph (2), and report the results thereof to the National Assembly.

(4) The National Assembly may take appropriate measures with respect to the report on the results referred to in paragraph (3).”

3. Zambia’s Public Financial Management Act 2018 provides rights to enforce temporary or definitive bans of controlling officers who fall short of their PFM responsibilities. The Secretary to the Treasury may act on non-performing controlling officers or a member of a controlling body [Section 12(4)] by:

• suspension from performing their functions;
• referring the matter to the relevant law enforcement agency; and
• recommending dismissal to the appropriate authority responsible for the controlling officer or controlling body member.

The offences outlined in Section 82(1) is a fairly conclusive list of 16 actions that offends the Act where a person wilfully and without lawful authority engages, such as opening any bank account for official use, borrowing money/ lending money or assets/ issuing guarantees on behalf of a public body, failure to provide information to the Secretary to the Treasury/ Auditor-General/ Accountant General/ Controller of Internal Audit, failure to keep proper records, alters or divulges data in electronic or other form and failure to comply with any requirement of the Act. The penalty for these 16 offences is a fine not exceeding five hundred thousand penalty points or a term of imprisonment not exceeding five years or both. Stealing of public funds or property is an offence [Section 82 (2)]. Section 82(5) provides for broad enforcement powers:

“(5) Nothing in this Act prejudices, limits or restricts—

(a) the operation of any other law which provides for the forfeiture of property or the imposition of penalties or fines;

(b) the remedies available to the State apart from this Act, for the enforcement of its rights and the protection of its interests; or

(c) any power of search or any power to seize or to detain property which is exercisable by a police officer apart from this Act.”

4. In Suriname the Minister of Finance is to be put in prison when expenditure exceeds the debt ceiling of 60% of GDP Article 43 of the Accountability Act 2019.¹⁴

D. Conclusion

Ex post control of public finances by the legislature is a necessary tool for democratic governance. Several reference PFM regulation from many jurisdictions were analysed to determine those that enhanced parliamentary oversight. Examples were arranged according to regulations aiming at control, independence and enquiries. This trinity is essential for the legislature to check that the executive uses public finances in a responsible way and for the purposes outlined by law. In researching this article no examples could be found about parliamentary use of artificial intelligence (AI) in any scrutiny functions. This stands in contrast to several examples of the executive’s use of AI in detecting any fraud or irregularities in tax filings and welfare-related payments. Certainly parliamentary use of AI in its oversight role merits further examination, exploring whether exisiting AI systems used by public bodies to detect irregularities could be adapted for irregularity detection in executive expenditure by the legislature.

Further resources

• Pros and cons of different Supreme Audit Institutions: Characteristics of different externalaudit systemsbetween Westminster mode, Judicial model and Board model.
• Ed. Cangiano, M. et al, Public Financial Management and Its Emerging Architecture, IMF Publication, 2013.
• National Democratic Institute for International Affairs, Strengthening Legislative Capacity in Legislative-Executive Relations, 2000.
• Pelizzo, R. and Stapenhurst, R., Tools for Legislative Oversight: An Empirical Investigation, World Bank Policy Research Working Paper, 2004.
• Montoya, D. and Rummery, A., “The use of artificial intelligence by government: parliamentary and legal issues”, NSW Parliamentary Research Service, September 2020.

This article was written by Valerie Thomas, on behalf of the Regulatory Institute, Brussels and Lisbon.