Government Strips Audit Court of Pre-Approval Power Over 90 Per Cent of Public Contracts — Critics Warn of Corruption Risk

Contracts Below EUR 10 Million No Longer Need Prior Approval From the Tribunal de Contas

Portugal's Council of Ministers approved on 9 April the most sweeping reform of the Tribunal de Contas (TdC) in decades, eliminating the mandatory prior approval — known as the visto prévio — for all public contracts valued below EUR 10 million. The government says the change will cut red tape and speed up public investment. The court's own president says it could weaken the state and open the door to misuse of public money.

The reform, formally titled the new Law on the Organisation and Process of the Tribunal de Contas, shifts Portugal's public-spending oversight model from preventive to concurrent and retrospective auditing — a system the government argues is standard practice across the European Union.

What Changes

Under the previous regime, public contracts above a relatively low threshold required the TdC to review and approve them before money could be spent. The new law raises that threshold to EUR 10 million, which the government estimates will exempt more than 90 per cent of all public contracts from prior judicial oversight.

For contracts above the EUR 10 million mark, the visto prévio becomes optional. Public entities can choose between submitting the contract to the TdC or adopting reinforced internal controls certified by the Inspector General of Finance (IGF). The IGF will develop a manual of internal control standards that public bodies must follow.

The reform also limits the TdC's jurisdiction to questions of legality. The court can no longer evaluate the convenience, opportunity, or merit of administrative decisions — only whether they comply with the law.

Government: End of "Administrative Paralysis"

State Reform Minister Gonçalo Matias framed the change as long overdue. "Portugal is today an isolated case in Europe regarding prior oversight," he said, noting that only Greece, Italy, and Belgium maintain comparable systems. The minister described the reform as "responsible and gradual" and insisted that controls would remain rigorous through concurrent auditing and strengthened internal compliance mechanisms.

Legal experts who advise public-sector clients welcomed the move. José Luís Moreira da Silva of SRS Legal said the prior regime had created "interpretive overreach" by the TdC, generating excessive liability fears among public managers and contributing to what he called a culture of "administrative paralysis" — where officials delayed or avoided decisions rather than risk a negative ruling from the court.

TdC President: This Could Weaken the State

The Tribunal de Contas itself pushed back sharply. TdC President Filipa Urbano Calvão warned that removing preventive oversight could "weaken the state and its external credibility," particularly for high-value contracts and long-term commitments such as public-private partnerships that bind future governments.

Calvão had argued for maintaining the visto prévio for contracts above EUR 5 million — half the threshold the government chose — especially for agreements with multi-generational financial implications.

Ricardo Maia Magalhães, a partner at Cerejeira Namora law firm, offered a more nuanced caution: retrospective oversight cannot undo damage that has already been done. "Post-facto auditing cannot repair irreversible financial harm already incurred," he said, questioning whether marginal efficiency gains justified the risks involved in high-value procurement.

PRR and EU Funds in the Background

The reform arrives at a moment when Portugal is racing to deploy billions of euros from the EU's Recovery and Resilience Plan (PRR). The TdC itself has acknowledged that since the end of the visto prévio for PRR-funded projects — an exemption already in place — it has blocked only one project out of all those submitted. Supporters of the reform argue this proves that prior oversight was adding bureaucracy without catching meaningful problems.

The proposal now goes to parliament for debate and a vote. If approved, it will represent a fundamental change in how Portugal monitors public spending — one that could accelerate investment or, as critics fear, remove the last guardrail before taxpayer money is committed.