Historically, financial oversight bodies, including Lebanon’s Court of Accounts (CoA), have been associated with the function of auditing the accounts of the state and the other entities subject to them. The CoA Organization Law defines this function in its first article. This article stipulates that the CoA’s function is to watch over public funds by monitoring their use and its conformity with the law and by adjudicating the validity and legality of transactions and accounts.

However, a close examination of the CoA’s work reveals that most of its work is dedicated to its other functions, especially its pre-auditing and its advisory role. Besides the limited amount of effort expended, the CoA’s performance of this function is also marred by a delay that usually divorces the auditing, as well as the resulting observations and recommendations, from the actual context of the audited accounts. This disconnect renders the auditing a formality that cannot have any effect on the audited entities’ performance.

Before describing this situation, we must note that although the topic of the CoA comes up frequently, the discussion usually revolves around the obstacles preventing it from auditing closures of accounts [i.e. final reports on expenditure and revenue] for state budgets. Its role in auditing the accounts of the other entities subject to its auditing, on the other hand, attracts no attention.

Hence, the first part of this article will address the CoA’s auditing of the accounts of entities subject to it in general. The second part will examine the conundrum of its judicial auditing of the closure of accounts for the state budget.

Account Auditing as Documented by the Annual Reports

To assess the CoA’s performance of account auditing, we reviewed its two three-year reports encompassing 2013-2015 and 2010-2012. This review led to three very revealing conclusions.

Firstly, very few judicial decisions on accounts were issued. The 2013-2015 report lists just 12 such decisions, i.e. an average of four per year. In reality, seven of these decisions merely recorded that the accounts were sent back to their source without auditing pursuant to Law no. 715 of 2005, which removes accounts from 1991 and 1992 from the scope of auditing. In other words, the CoA issued just five actual decisions on accounts over three years, i.e. fewer than two per year. The same goes for the report for 2010-2012: only 24 decisions on accounts were issued, i.e. an average of eight per year. This number, too, falls to just 16 when we subtract the eight decisions in which the CoA merely sent the accounts back to their sources without auditing, pursuant to the aforementioned law. Yet the latest work distribution decision mentions more than 102 public bodies subject to CoA auditing (including municipalities, municipality unions, institutions, and other bodies). Many more entities subject to CoA auditing are not explicitly mentioned.

Secondly, there is an extraordinary delay in the completion of this auditing. The decisions included in the 2013-2015 report pertained to accounts from 2003 at the latest and 1991 at the earliest. The average gap between the date of a decision and the year of the accounts was approximately 21 years. The reports do not explain the reasons for the delay and, specifically, whether it occurred because the administrations concerned submitted their mission accounts to the CoA late. The same goes for the 2010-2012 report: while it includes no details about the entities or years concerned by the decisions it encompasses, it does mention – as previously explained – that eight accounts from 1991 and 1992 were sent back to their source. Hence, some of the accounts presented for auditing dated back to the early 1990s, i.e. approximately two decades earlier.

Decree no. 4001 of 2010 regulates how public administrations’ accounts and the related documents and information should be sent to the CoA. Article 7 stipulates that the mission account and its attachments must be submitted to the Directorate of Public Accounting in the Ministry of Finance before April 30 of the year following the year of the account. The director of public accounting must then submit the mission account, approved or accompanied by his or her comments, to the CoA before June 30 of the same year. On the other hand, the law stipulates no deadline for the CoA to finish auditing the accounts. The absence of such a deadline is problematic because it not only disconnects the CoA’s auditing, at least temporally, from the situation of the administration concerned but also prolongs trials in a manner that conflicts with fair trial principles.

Thirdly, only a few of the entities subject CoA auditing actually had their accounts judicially audited, and most of them have limited budgets. Most entities subject to auditing, including ones with high budgets, remained free of this type of auditing. The 2013-2015 report reveals that the actual auditing encompassed just two municipalities, namely Shiyyah (for 1993 and 1995) and Dekwaneh (1993), whereas the accounts of all other municipalities – including much larger ones such as Beirut, Tripoli, and Sidon – did not undergo judicial auditing. Likewise, the auditing encompassed just one public institution, namely the Basil Fuleihan Institute of Finance. No auditing was performed on other public institutions, such as the Council for Development and Reconstruction, the Displaced Persons’ Fund, the South Fund, and the Lebanese University.

Even more remarkably, the account of the Basil Fuleihan Institute of Finance that was audited dates back to 2003, i.e. more than 11 years earlier, even though this institute should be setting an example to follow in this regard because of the functions vested in it.

In the reports, the CoA attributes the delay in auditing accounts to several factors. It mentions the failure of entities subject to its auditing to deliver their accounts before the legal deadlines, their failure to observe legal procedures and accounting rules, the absence of an administrative apparatus capable of preparing accounts properly in some of them, and unresolved inherited accounting problems. It also attributes the delay to its shortage of staff, especially auditors.

The Closure of Accounts Conundrum

When the CoA comes up in public discourse, the discussion usually revolves around its judicial auditing of closures of accounts for state budgets. The CoA is blamed for the delay in adopting these closures of accounts, or the emphasis is placed on the need to strengthen its resources so that it can perform this task. Adopting a closure of accounts is important not only because it is a constitutional obligation under Article 87 of the Constitution but also because of the data that it should include. This data allows Parliament to check how the previous budget was actually implemented and, by extension, the credibility of the projections in the new budget bill.[1] Parliament needs this data to perform its oversight role, as well as its legislative role in adopting a new budget law.

Nevertheless, the most recent closure of accounts was Law no. 408 of 1995. It pertained to the audit of the implementation of the 1993 budget law, and it was adopted in parallel with the state budget law for 1995. Since then, Parliament has adopted state budgets not coupled with closure-of-accounts laws, in direct contravention of Article 87 of the Constitution.

While the CoA generally gets blamed for the delay because of its resource shortage, the delay clearly stems from the failure of successive governments to send closures of accounts since 1993, in contravention of Article 195 of the Public Accounting Law. This article requires the government to send the closure of accounts “before August 15 of the year following the year of the budget” and to “present the mission account before September 1”. This inaction persists even though both Parliament and the Constitutional Council have granted the government one opportunity or exception after another. Parliament has also repeatedly called upon the government to bolster the CoA’s resources, but it has not taken any step to do so.

The latest testament to this approach is that the government sent the 2025 budget to Parliament within the constitutional and legal deadlines without sending a closure of accounts for 2023 to the CoA for audit. Remarkably, the agenda for the Council of Ministers session held on 10 September 2024 included a request by the Ministry of Finance to approve the referral of the closure of accounts for 2020 to Parliament. Under Article 87 of the Constitution and Article 118 of the council’s internal statute, it should have been approving the closure of accounts law for 2023, not 2020.

This inaction is definitive evidence of the intent of successive governments to conceal the reality of the budget’s key aspects. These aspects include not only expenditure but also revenue, as Article 15 of the Public Accounting Law requires it to be calculated based on the revenue of the most recent year for which a closure of accounts was completed. This violation could never have persisted had Parliament and the Constitutional Council not embraced it on the pretext that a budget without a closure of accounts is better than no budget at all.

This article is an edited translation from Arabic.