Brazil: The Great Credit Card Audit Trail Massacre of 2008!

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Under construction: The São Paulo state government data warehouse and budget earmark early-warning radar. I wonder who is building it? Source: Fazenda-SP

SIGEO is a difficult system to operate, which practically speaking prevents ordinary citizens from accessing it. It also does not contain entries that might help to itemize the expenditures. In the case of the federal government, there is a Web site that describes credit-card transactions, including commerial establishments, and is freely available on the Internet..

Governo de SP gasta R$108 mi com cartão mas não detalha despesa: “The state government of São Paulo spends $108 million with corporate credit cards, but does not itemize expenses.”

The Estado de S. Paulo runs the wire copy from Reuters Brasil. File under the general heading of “Internet-enabled beancounting.”

The latest “corruption” scandal here is the case of the corporate credit cards. The (previous) government decided to adopt them because they leave a transparent audit trail.

So now the airwaves and column inches are buzzing with cases of public employees apparently and allegedly going hog wild with their credit cards.

The most serious issue, it seems, are the use of corporate credit cards to make cash withdrawals.

All of which, as some folks have been saying quietly, means the system worked.

The credit cards statements arrived on the desks of government beancounters who pointed to expenses they thought looked funky, or at least inadequately documented, under the rules. Presumably, public servants who abuse their privilege are subject to penalties ranging from having to reimburse some expenses to getting sacked.

What is also notable is that there is practically no discussion in the coverage of what is a legitimate expense for a government official and what is not.

The Estado de S. Paulo today “eyebrowed” its coverage “a farra dos cartões.”

A farra is an unbridled, orgiastic celebration. A “bender.” “Painting the town red” is the same thing is going on a farra. I think that counts as editorializing in the news hole. The Estado is a decent paper on the whole, but gets as nasty, brutish and stupid as anyone of them when the boys upstairs decide to pull the trigger on the “a newspaper is like a gun” metaphor.

But if the Minister of Capyvara Preservation rents a car in Frankfurt while representing Brazil at the UN Summit on the Rights of the Capyvara, is this a scandal?

True to form, the Brazilian federal congress wants to install a parliamentary commission of inquiry into the case.

And true to form, the governing party wants it to include the use of the credit card system both under its administration and under the previous administration, now in opposition, while the opposition wants to focus exclusively on this administration.

The government’s calculation being that it will come out looking reasonably good in comparison, while the opposition screams, “Regard not the beam in my eye, but behold the mote in theirs!”

The CPI, more often than not, degenerates into a political witch hunt rather than a basis for identifying the need for amended or new legislation to solve practical problems. This is not unique to Brazil, of course, but the Brazilian political witch hunt does have its own distinctive style and rhetorical flourishes.

In any event, this Reuters piece adds a certain amount of balance to the issue.

SÃO PAULO – Os gastos com cartões de débito do governo do Estado de São Paulo no ano passado somaram mais da metade das despesas totais com cartões corporativos e cheques efetuadas pelo governo federal. Totalizaram 108,3 milhões de reais em São Paulo frente a 177,5 milhões de reais na União.

Spending with São Paulo state government debit cards last years amounted to more than half of the total spending with credit cards and checks by the federal government. The state spent $108.3 million in this way while the federal Union spent R$177.5 million.

Do volume de desembolsos do governo paulista, os saques em dinheiro –os de mais difícil fiscalização– atingiram 48,3 milhões de reais, o que significa 44 por cento das despesas com cartão no Estado.

Of expenditures by the São Paulo state government, cash withdrawals — the most difficult to audit — amounted to R$48.3 million, or 44% of the total credit-card purchasing by the state.

O levantamento sobre as despesas com cartão no primeiro ano do governo José Serra (PSDB) foi realizado pela liderança do PT na Assembléia Legislativa por meio do Sistema de Informações Gerenciais da Execução Orçamentária (Sigeo).

The study of credit-card transactions during the first year of the Serra (PSDB) administration was coducted by the PT leadership in the state legislative assembly using SIEGO, a database of information on budget execution.

“Além do alto volume de despesas pagas com cartão, os saques diretos também são suspeitos. Pagar com o próprio cartão é melhor, o controle é maior”, disse o líder do PT, Simão Pedro. O deputado também critica o número de servidores autorizados a utilizar os cartões: 42 mil.

“Besides the high volume of transactions by credit card, the cash withdrawals are also suspect. Paying with your own credit card is better, if offers better control,” said PT leader Simão Pedro. The state lawmaker also criticized the number of public employees authorized to use the cards: 42,000.

Os cartões corporativos utilizados pelo governo Lula estão no foco de denúncias que apontam uso irregular por ministros e seguranças que atendem familiares do presidente. As acusações derrubaram a ministra da Igualdade Racial, Matilde Ribeiro, na semana passada, e o Planalto anunciou medidas para coibir o mau uso. Agora as denúncias atingem o governo Serra.

Corporate credit cards used by the Lula administration are the focus of charges that cabinet ministers and security personnel who guard family members of the president made irreguar use of the cards. Such accusations led to the resignation of the minister of racial equality, Matilde Ribeiro, last week, and the presidency is announcing measures to curb abuse. Now the same accusations have hit the Serra government.

Serra, who ran for president in 2002, is a possible candidate in 2010.

SAÚDE À FRENTE

Health secretary in the lead

Os dados da liderança petista indicam que a secretaria da Saúde paulista liderou os gastos com cartão no ano passado, atingindo 32 milhões de reais. A secretaria também foi a que mais efetuou saques em dinheiro (17,3 milhões de reais). Na sequência vêm as secretarias da Educação, com gastos totais de 30,4 milhões de reais, e da Segurança Pública, com 24,4 milhões de reais. Nesta secretaria, os saques somaram 14 milhões de reais.

Data developed by PT leadership indicated that the state health secretary led all agencies in credit-card spending, with R$32 million. The agency also led cash withdrawals (R$17.3 million).

A cash-to-charge ratio of 54%, higher than than the average of 44%.

In second place was Education, with total credit-card spending of $30.4 million, and Public Safety, with R$24.4 million. Cash withdrawals at the latter agency totaled $R14 million.

That is, 57 percent.

A própria Assembléia Legislativa gastou 118 mil reais, um dos menores valores da pesquisa. E mesmo em secretarias com gasto baixo, como é o caso da Casa Civil (619 mil reais), grande parte foi realizada por saques (408 mil reais).

The state assembly spent only $118,000 with credit cards, one of the lowest figures among the agencies studied. And even in state agencies with low spending, such as the Casa Civil (R$619,000), a large proportion consisted of cash withdrawals.

De 2006 para 2007, as despesas totais com cartões em São Paulo subiram 5,82 por cento. No ano anterior, o crescimento havia sido de 23 por cento.

From 2006 to 2007, total credit-card spending by the state government rose 5.8%. From 2005 to 2006, the increase had been 23%.

An election year. The city government of São Paulo has spent twice the amount budgeted for government publicity this year, I was reading. Mayor Quimby wants to be reelected.

Simão Pedro disse que agora a liderança está passando um “pente fino” nos números para identificar o detalhamento das despesas, mas apenas um funcionário da liderança tem senha e treinamento para acessar o programa.

Mr. Pedro said that leadership is now “taking a fine-tooth comb” to the numbers to try to itemize the expenditures, but only one staffer of the PT leadership has a password and training on how to use the system.

O Sigeo é de difícil operação, o que praticamente impede o acesso aos cidadãos paulistas. Também não traz especificações que possam dar detalhes das despesas. No caso do governo federal, um site que descreve os gastos com cartões, inclusive estabelecimentos comerciais, tem livre acesso na Internet (www.portaltransparencia.gov.br).

SIGEO is a difficult system to operate, which practically speaking prevents ordinary citizens from accessing it. It also does not contain entries that might help to itemize the expenditures. In the case of the federal government, there is a Web site that describes credit-card transactions, including commerial establishments, and is freely available on the Internet.

I find this to be true of a lot of public information Web sites run by different government agencies here.

Trying to look into court cases, for example, or study procurement contracts — I am always interested in government technology Big Digs — is simply not readily doable. You tend to run into a lot of server-side database connectivity errors, to start with.

The PACER system in the U.S. federal courts, while slow and slightly ungainly (and costing you $0.08 a page now), is not bad by comparison, though it is far from the Magic Kingdom of e-democracy, either.

One of the things I was idly up to, for example, was studying IT contracting related to the federal elections system and voting machine — another computerized beancounting story. I find these sorts of stories interesting. Not easy to do.

But there are also success stories. The story of the struggle to achieve New World Lusophone e-government accessibility — including the use of open-source software — might make a very interesting story or two someday, I think. I try to take notes on it. See, for example,

Sobre a chance de uma CPI, o deputado disse que não vê indício de crime ou fraude, e afirmou que há chances mínimas de emplacar uma comissão de investigação em São Paulo uma vez que Serra tem maioria na Assembléia. Setenta dos 94 deputados apóiam o governo estadual, nas contas do líder.

As to whether a state CPI was possible, the state deputy said he sees no indications of crime or fraud and that there are only minimal chances of install a CPI, given that Serra commands a majority in the Assembly. Seventy of the 94 deputies support the governor, according to the PT leader’s calculations.

Enquanto isso, há dois pedidos de CPI para investigação dos cartões federais tramitando no Congresso, um deles apoiado pelo próprio governo e outro de autoria de um deputado tucano.

[tktktktk]

SP EXPLICA SISTEMA, MAS NÃO VALORES

State Goverment Explains System, But Not Expenses

O governo de SP prestou esclarecimentos sobre o mecanismo de utilização dos cartões, mas não deu informações sobre o volume de gastos e nem sobre seu crescimento. Esclareceu em nota que não trabalha com cartões de crédito e sim de débito.

The state government explained the mechanism for using credit cards, but did not provide figures on the volume of expenditures or the growth in card transactions. It issued a press release noting that it uses debit, not credit, cards.

“Os cartões de despesa são na modalidade débito, portanto, atrelados ao limite de despesa fixado pelos órgãos. Cada cartão é emitido para apenas um tipo de despesa. O cartão utilizado para compra de combustíveis, por exemplo, não pode ser usado para envio de correspondência. O sistema não aceita a transação”, afirma o governo paulista.

[tktktktk]

Alerta ainda que secretários não possuem cartões e que os servidores não os utilizam para gastos pessoais.

It says that state secretaries [appointed agency heads] do not have payment cards, and that public employees do not use them for personal expenses.

Informa que o sistema realiza despesas “do dia-a-dia, como compra de combustíveis, peças para automóveis e suprimentos de informática, conforme legislação de 1968 e decreto de 2000”.

It says the system is used for “ordinary” expenses, “such as filling up on fuel, acquiring  auto parts and compuer supplies, in accordance with the 1968 legislation and the 2000 decree.”

Diz ainda que as secretarias com maior gasto (Saúde, Educação e Segurança Pública) são “justamente as que se destacam na prestação de serviços diretos ao cidadão e precisam manter as maiores estruturas”. Em todos os casos é obrigatória a apresentação de notas fiscais.

It also says that the agencies with the highest expenditures (health, education and public safety) are “the very agencies who provide direct services to the citizen and therefore need to maintain a more extensive infrastructure.” In all cases, receipts must be presented.
Brazilian government officials are grossly overpaid. A junior U.S. Congressmember, for example, makes $169,000, or about 17 full-time, $5-a-hour McJobs (very roughly, annualized). The Speaker of the House makes, what did I read, $201, 000 or something?

A Brazilian federal congressional representative makes R$24,500 a month, or about 64 minimum wages. Nearly four times as much, relative to local standards of living.

This seems to lead to some undesirable alignments of freakonomic incentives, and explains why Brazilians can often be counted on to get really mad about stories involving politicians spending public money. And who can blame them, really?

On the other hand, do we begrudge our elected representatives the budget they get to spend on staff and photocopying and stuff like that? Better we pay for their reasonable work-related travel and the like than Jack Abramoff paying for it, right?

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