Brazil’s Federal Accounts Court, a sort of audit tribunal that monitors public spending, on Wednesday unanimously approved the 2022 accounts of the former Jair Bolsonaro administration (2019-2022). However, the members of the court were highly critical of the former president’s management of public funds.
The analysis of the 2022 books was carried out by Jorge Oliveira, appointed to the court in 2020 by Mr. Bolsonaro himself. Mr. Oliveira’s nomination was widely criticized at the time because of his close relationship with the former president’s family and his role in the cabinet.
That said, Mr. Oliveira flagged several “improprieties” with the former government’s books. According to his report, accounting distortions reached BRL 1.3 trillion (USD 264 billion). The Economy Ministry improperly recorded some BRL 330 billion in tax credits, creating a “significant distortion” of the balance sheet.
Errors in filling out individual income tax returns were discovered in July 2022, but were not corrected until February this year. “It was not corrected by the Federal Revenue Service in a timely manner, despite being a gross error. It generated very important numerical distortions,” Mr. Oliveira wrote.
One member of the accounts court likened the issues to the scandal that engulfed Americanas, a floundering retailer that filed for bankruptcy protection earlier this year. In January, the company reported “accounting inconsistencies” of tens of billions of reais — and massive short-term liabilities.
“If Brazil were [a publicly traded company like] Americanas, its CEO would have a similar fate,” said Benjamin Zymler, another court member. Sergio Rial, the former Americanas chief executive, is being investigated by securities regulators.
Mr. Oliveira also criticized tax waivers which, according to him, have burdened public coffers without resolving regional and social disparities. The court estimated the amount of these exemptions at BRL 202.2 billion from 2022 to 2025.
He also praised the fact that the rule that prevents the government from going into debt to pay for current expenses was respected in 2022, but warned that projections indicate that it could be breached from 2026.
The report is still to be analyzed by Congress, but it should have no difficulty being approved by lawmakers.
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