The embeddedness of digital infrastructures for data collection by the Courts of Accounts

Abstract

This study aimed to identify the trajectories for data collection automation in various Courts of Accounts (Tribunais de Contas), the standard features of the systems that have emerged, and the impacts on fiscal and accounting oversight in Brazil. Data collection automation is part of the digital transformation in the field of auditing; however, the literature on public sector auditing in Brazil, on digital transformation, or digital infrastructure, does not analyze how this transformation occurs and how the infrastructures are stabilized and shape the field of auditing. Data collection automation has unexpected implications for the content of public sector audits and the financial management of the public sector auditees. Identifying the trajectories for digital tools of data collection automation enables a discussion on whether currently adopted solutions vary and the effects on the standardization of government audits. The automation of data collection by the Court of Accounts, particularly its scope and frequency, affects how the audited public organizations prioritize the adoption and maintenance of accounting, budgeting, and financial planning policies and processes. The digital infrastructures that emerge from these digital tools shape the entire field of auditing, they become embedded, and they increase the cost of future changes, perpetuating the heterogeneity in the auditing and financial management of governments in the Brazilian federation. The article presents a longitudinal case study (1994 to 2020), with narratives built based on questionnaires and interviews with auditors from 26 Courts of Accounts. The automation of budgetary and accounting data collection by Courts of Accounts has changed the logic of the field of government auditing in Brazil. The digital infrastructures that emerge by connecting Courts and the audited public organizations under their jurisdictions have embedded concepts, definitions, and implicit expectations in a remote auditing logic.

Accountants’ postures under compulsory digital transformation imposed by government oversight authorities

“…Also, the fiscal responsibility law reinforced the Treasury's responsibility to consolidate the whole of public sector accounts (Aquino et al., 2020). Therefore, in the last 25 years, the Brazilian oversight authorities, based on their legal mandate and to cope with the tasks they are required to perform, launched competing digital projects to collect financial and nonfinancial data from governments, leading to initial steps being taken toward digital transformation in the financial reporting of governments (Aquino et al 2021).…”

“…For instance, the more than 30 Courts of Accounts look to automate and expedite their audit process, the National Treasury collects data for preparing the whole of public sector accounts, and the Ministries of Health and Education monitor the performance of national health and education public policies. The data collecting systems of (i) the Health Ministry (launched in 1999; Teixeira & Teixeira, 2003); (ii) the Education Ministry (from 2005; Cabral et al., 2010); (iii) each of the 33 Courts of Accounts (from 1994; Aquino et al, 2021); and (iv) the National Treasury (from 2015) are the most prominent examples currently in place.…”

“…Local governments are pushed toward the mandatory adaptation of their processes and FMIS according to the frequency and parameters defined and updated by the oversight authority (promoter). While oversight authority incurs marginal costs to amplify the set of data to be collected, local governments incur major costs while developing their FMIS or contracting off‐the‐shelf solutions (Aquino et al., 2021; Azevedo et al., 2020).…”

“…For instance, from 2004 to 2012, the Health Ministry had greater coverage and completeness of data when compared to the Treasury (Feliciano et al., 2019). Moreover, the more than 30 Courts of Accounts operates systems with a very distinct frequency for data collection and scope (Aquino et al, 2021). The Treasury's current XML‐based system replaced the previous spreadsheet‐based version (Neves, 2021; Aquino et al., 2020).…”

“…Specifically, we directed our attention to Brazilian local governments’ oversight in the case of the proliferation of digital artifacts for financial and nonfinancial data collection. These digital artifacts were implemented by public audit organizations and ministries at central government level over the last few decades (Aquino, Lino, & Azevedo, 2021). Such a widespread strategy to digitally collect data from local governments required accounting departments to undergo forced adaptation, including frequent adjustments to their financial management information systems (FMIS), as a response to constant imposition by an external oversight authority.…”