Over Eighty-Five Percent of São Paulo’s Municipalities Are Financially Compromised

SÃO PAULO, BRAZIL – A study by the State Audit Court (TCE) of São Paulo shows that 559 cities in the state of São Paulo do not have sufficient revenue to meet their primary result targets and/or show evidence of budgetary irregularities.

According to the Court, 86 percent of the 644 municipalities in the state are facing a compromised fiscal and budgetary administration.

The TCE’s inspection covers all cities in São Paulo, except for the capital, which is exclusively audited by the Municipal Audit Court.

The Court’s survey, released on Monday, August 19th, is based on data for the months of May and June.

All mayors of cities that fall under the status of being compromised have been notified to take action according to the provisions of the Fiscal Responsibility Law, stated the TCE.

Over the next thirty days, the municipalities will be required to adjust their budgets, limit commitments, and prioritize the types of expenditure and financial transactions.

According to the Court, 340 municipalities show lower revenue collections than planned, and 449 cities have evidence of budgetary irregularities. Only twenty municipalities (3.1 percent) in the state are on a regular footing with their accounts.

The court also reported that 46 municipalities failed to submit the accounting data corresponding to the third quarter of 2019, thus preventing the examination of revenue and expense data.

In addition to the administrators of the 46 cities, seven City Councils and 24 indirect municipal administration bodies did not submit their balance sheets.

According to the TCE, non-compliance with the instructions may result in a fine, at the discretion of the rapporteur of the annual reporting process.

The Court of Auditors also provides a complete list of the names of the municipalities and their fiscal and budgetary position.