The CGU (Comptroller General of the Union) identified “relevant weaknesses” in Correios’ control mechanisms over legal actions and highlighted an accounting maneuver that reduced the company’s liabilities by a billion reais in 2023 declarations.
In response to auditors, the company denied irregularities, while acknowledging other problems attributed to the management of the company under the government of former President Jair Bolsonaro (PL). Searched by Leafthe company did not respond until publication of this text.
According to the CGU report, the public company reduced the value of a labor debt from R$1.032 billion to R$18, on the grounds that the chances of success of another action brought by the company would generate a gain of practically the same value. The problem persisted until 2024.
The compensation mechanism was, however, deemed inappropriate by auditors, who saw working hours as a way of reducing the transparency of records.
“Different accounting data must be processed in a specific and independent manner, in order to reliably report the impacts on the entity’s equity situation,” the document specifies.
“Therefore, although offsetting may be a possible legal institution, the applicable accounting standards do not allow accounting disclosure to be made on a net basis. (…) Carrying out an offsetting operation between different elements can mask the impact of the different operations, thus reducing the transparency of the file.”
As shown LeafCorreios’ lack of control over legal actions has contributed to worsening the financial situation of the company, which has now entered into a 12 billion reais loan to finance its restructuring plan. Until September this year, the state-owned company accumulated a loss of 6.1 billion reais.
The operation questioned by the CGU involved a social action which demanded the cumulative payment of AADC (referring to distribution and collection activities) and AP (dangerousness for motorcycle activities).
In 2014, with the regulation of risk premium by the Ministry of Labor, beneficiaries saw their AADC suspended by decision of the Post Office, which generated a wave of actions. Shortly after, the public company itself went to the Federal Court to request the annulment of the act of the Ministry of Labor.
In 2021, the TST (Higher Labor Court) recognized the legitimacy of the accumulation of the two additional payments. However, in January 2024, Correios obtained an injunction to suspend the effects of the order that created the hazard pay. It is on the basis of this latest victory that the company reduced the provision on the balance sheet.
The CGU points to at least two problems linked to the behavior of the company’s managers. The first of these is the compensation itself, considered undue. The second precedes this act and is linked to Correios’ delay in changing the classification of the legal risk of union action from “possible” (more remote) to “probable” (with more chances of materializing), in addition to the precariousness of the calculation of values.
According to auditors, in October 2022 there was a decision to maintain the misclassification of the social movement. Furthermore, at the time the liability was recorded at 614 million reais, that is, it was undervalued. It was not until February 2023 that the debt was recognized as a “probable loss”, worth 627 million reais.
The CGU mentions in the document that the internal audit of Correios “identified control weaknesses in the labor, tax and civil litigation process and also indicated that the matter should be transmitted to the State Department of Internal Affairs, for knowledge and evaluation of a possible initiation of disciplinary procedures.”
When contacted, Correios did not respond as to whether or not there was a process within the Internal Affairs Department to investigate the matter.
Regarding compensation, the auditors affirm that the two actions take place in different branches of Justice, in addition to the fact that there remains uncertainty regarding the victory of the company in the process to nullify the order.
Technicians also point out that accounting standards provide for the recognition of probable losses in the liabilities of a company, as a measure of prudence, but that the inclusion of values in the assets of the same company requires a much lower level of uncertainty, that is, the gain must be practically certain.
“In this way, using the compensation mechanism, the unit implicitly recognizes an asset with the characteristics of a contingent asset, since, in the analyzed case, the implementation of compensation is based on future events with a level of uncertainty prohibited by accounting standards,” says the UGT report.
Furthermore, even if the uncertainty about the assets were less, it would be necessary to account for all the amounts, retaining the liability of 1.032 billion reais and including the rest in the company’s assets, which was not done.
The UGT technicians also pointed out weaknesses in the calculations, without employee-by-employee analysis, in addition to a certain discretion. In its internal investigation, the company reached a positive balance of BRL 16.5 million after said compensation. Despite this, the liability was reduced to R$18 (or R$1 per existing share) because the “technical limitations” of the system prevented reduction to zero without the records being completely erased.
As part of the audit, Correios argued that the accounting should reflect the best estimate of the disbursement to be made by the company. “It is precisely the respect of this principle that has supported and continues to support the adjustment of the recorded estimate, since, at the moment, an outflow of resources to settle the obligation is not expected,” he said.
The company also reported the creation of two working groups, one to modernize its legal system and the other to evaluate the modernization of its emergency booklet, providing for reporting and alignment mechanisms “regarding exceptional situations”, as well as “the inclusion of a policy of consequences for the lawyer responsible for the process”. When contacted, the company did not detail the initiatives.
Target of numerous lawsuits, particularly social ones, Correios did not have adequate risk mapping. In the 2024 accounts, the Consult Auditores audit highlighted “weaknesses” and “inconsistencies” in the provisions, which prevented it from accurately measuring the extent to which paying court judgments would affect the company’s cash flow.
In practice, the SOE did not make adequate provisions for losses, leading to skeletons appearing outside of corporate planning. The company even had to republish statements from previous years to incorporate these debts, which stem from lawsuits often initiated more than five years ago.
Improving the monitoring of legal actions was the subject of repeated requests from the board of directors throughout 2025. The board of directors authorized the acquisition of specific software and demanded “measures aimed at improving the performance of the legal department itself, in particular with regard to technical defense in employment disputes”. On September 24, he asked to accelerate the recruitment of a specialized legal consultancy firm.
According to representatives of the public company, the situation of legal responsibilities is at least better understood. In 2026, the bill is expected to rise to 1.3 billion reais.
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