Vanessa Reis, for Estadão: "Financial Responsibility Based on the Principle of Fiscal Transparency and Accountability"

What is the link between financial responsibility, fiscal transparency, and accountability? Vanessa Reis, a partner at Medina Osório Advogados in Rio de Janeiro (RJ), explores this subject in an article published this Wednesday (11/13) on the Estadão portal, in the column of the Instituto Não Aceito Corrupção on Fausto Macedo’s Blog. Read the full article below:

Financial Responsibility Based on the Principle of Fiscal Transparency and Accountability

Vanessa Reis

The idea of severe punishment must not create mechanisms to deter good administrators, nor should it produce an even more harmful effect: the growth of a group of highly skilled individuals trained specifically to circumvent limits under the guise of legality, leaving their successors and future generations burdened with the debt of their decisions. Thus, the goal is to seek ethical administrators with moral values, emphasizing the need to establish limits for holding managers accountable, through the lens of fiscal transparency and a new approach to democratic accountability.

In Brazil, the principle of transparency was not originally included in the 1988 Constitution but was later introduced through various constitutional amendments. Constitutional Amendment No. 103/2019 incorporated it into Article 40, §22, relating to the special social security regime for civil servants. Constitutional Amendment No. 132/2023 added the principle to Article 145, §3, mandating that the National Tax System adhere to the principles of simplicity, transparency, tax justice, cooperation, and environmental protection. Constitutional Amendment No. 108/2020 included transparency in Article 212, item X, letter d, regarding education funds. Finally, Constitutional Amendment No. 71/2012 added the principle to Article 216-A, item IX, in the context of the National System of Culture, promoting the full exercise of cultural rights and the sharing of information.

Fiscal transparency, as a financial law concept, is implicitly embedded in several provisions of the 1988 Constitution, despite not being explicitly stated. Examples include Article 165, §6, which mandates that the budget bill be accompanied by a regionalized demonstration of the effects on revenues and expenditures resulting from exemptions, amnesties, remissions, subsidies, and benefits of a financial, tax, and credit nature. Article 70 addresses accounting, financial, budgetary, operational, and patrimonial oversight of the State. Articles 150, §§5 and 6, provide for clarity regarding taxes levied on goods and services and require specific laws for granting subsidies, exemptions, reductions in the tax base, amnesties, or remissions related to taxes, fees, or contributions. Another constitutional obligation aimed at ensuring transparency in the budgetary process is outlined in Article 165, §3, which requires the publication of a summary report on budget execution within 30 days of the end of each two-month period, in addition to other informational and publication requirements addressed in legislation.

Under infraconstitutional legislation, the principle of fiscal transparency is explicitly enshrined in the Fiscal Responsibility Law (FRL), which governs public finances. Article 1, §1, establishes that responsible fiscal management presupposes planned and transparent action. The FRL devotes an entire chapter to transparency, with its instruments, as specified in Article 48, including plans, budgets, budget guidelines laws, financial statements, preliminary opinions, the Summary Report on Budget Execution, and the Fiscal Management Report, all of which must be widely disseminated via electronic means. Additionally, the article specifies that transparency shall be ensured through: (i) encouragement of public participation and public hearings in the formulation and discussion of plans, budget guidelines, and budgets; (ii) real-time availability of detailed information on budgetary and financial execution on publicly accessible electronic platforms; and (iii) implementation of an integrated financial management and control system with minimum quality standards defined by the Federal Executive Branch.

Aligned with transparency and in light of the new public service paradigm, democratic accountability is not merely a traditional reporting mechanism but fits into a new framework of shared leadership. It serves as an instrument for maintaining democratic legitimacy by governments and, crucially, in collaboration with oversight bodies. To uphold good governance and democratic accountability, preserving democratic and ethical values for full development is essential. This includes not only the manager’s actions but also those of oversight bodies, such as the work of audit courts, in cooperative actions to implement the decisions defined by budgetary laws and to assist in the correct execution of public policies.

The right to development is grounded in the Universal Declaration of Human Rights, which states in Article 28 that everyone is entitled to a social and international order in which their rights are fully realized. To achieve this, objective legal rules are necessary. However, development depends on sustainable financial support. The UN’s 2030 Agenda acknowledges, in paragraphs 253 to 268 of the 2012 United Nations Conference on Sustainable Development, the importance of significant resource mobilization and effective financing to support developing countries in their efforts to promote sustainable development.

The public manager must act globally to promote public finances with transparency and democracy as the foundation. Accountability, rooted in governance among stakeholders, is vital for justifying decisions and fostering growth. Development, supported by fiscal transparency and democratic accountability, is essential to creating fairer societies and passing on the lessons of implemented economic policies to future generations.

Vanessa Reis is a partner at Medina Osório Advogados, holds a Master’s degree in Public Administration Law, is a Ph.D. candidate in Global Financial and Economic Law at the University of Lisbon, a professor of Financial Law, and a State Attorney.

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