Lisbon, April 28, 2026 (Lusa) – A proposed new law for the Court of Auditors (TdC) will allow municipalities and public services to waive prior authorisation for contracts exceeding €10 million, provided they maintain internal control mechanisms, including periodic audits.
The plan is part of a legislative initiative the government submitted to parliament on Tuesday, one week after presenting the reform's general guidelines to political parties.
According to the legislative text, public contracts up to €10 million do not require a prior audit process by the TdC. When contract values exceed this threshold, contracting entities, such as local authorities, the state, public services, and autonomous regions, may choose not to submit them for prior court scrutiny. This option remains available provided they "possess internal decision and control systems, duly accredited by an order from the government member responsible for finance, following an opinion from the Inspectorate-General of Finance (IGF)," according to the legislative proposal.
The accreditation aims to "verify compliance with the reliability requirements of internal control systems" and must cover "essential components" of oversight.
The government outlines five obligations for these internal control systems, including "monitoring and control mechanisms, such as regular system reviews, periodic audits, follow-up on recommendations, and continuous improvement."
Another requirement involves having "effective risk assessment mechanisms through continuous processes of identifying and analysing relevant risks, including fraud and corruption, and defining appropriate mitigation measures."
Public entities must maintain a clear organisational structure "with formal assignment of responsibilities and decision-making levels." Finally, they must ensure "a control environment that promotes a culture of integrity and competence, with clear delegations of authority, procedures for supervising delegated powers, and evaluation and training focused on controlling financial processes."
Another requirement is to ensure "an adequate segregation of duties, namely through independent authorisation, decision, execution, and verification circuits." These apply specifically to formal expenditure authorisations, contract and commitment controls, and payment validations.
Although the legislation excludes various expenses from the TdC prior control, contracts exceeding €950,000.00 remain subject to mandatory communication to the TdC, even if exempt from prior inspection. This allows for monitoring, sample selection, and potential subsequent audits.
Under the current law, public entities must submit public contracts exceeding €750,000 (excluding VAT) for prior inspection by the TdC. This threshold rises to €950,000 if the total value of related acts equals or exceeds that amount.
When the initiative received cabinet approval on 9 April, the Minister for State Reform, Gonçalo Matias, guaranteed that the change would occur "in a responsible and gradual manner." Increasing the exemption limit will eliminate prior inspection for more than 90% of contracts, he said.
PCT/RYOL // ADB.
Lusa
