WHAT IS THE WORTH OF CAG AND ITS REPORTS?
Tuesday, 15th January, 2008
The Comptroller and Auditor General of India (CAG) submitted 21 Audit Reports for the year ended March 2006 on Union Government Departments to the President, which were laid before the Parliament during the last budget session. Additionally, nearly a dozen Commercial Audit Reports of the CAG on Central Government companies and corporations were also tabled in the Parliament during the same session.
The Audit Reports contain the result of audit appraisals of the programmes, schemes and activities of Government departments and undertakings focusing on the economy and efficiency of their implementation as well as the extent of achievement of their objectives. The Audit Reports also contain transaction audit paragraphs commenting on significant and high value cases of wasteful, extravagant and infructuous expenditure and loss of Government revenue. Nearly 1500 cases feature in the Audit Reports on Government Departments every year. The Commercial Audit Reports generally comment upon about 200 cases.
Under the Rules of Business of the Lok Sabha, the Audit Reports on Government Departments stand automatically remitted to the Parliament’s Committee on Public Accounts for follow up action. The Commercial Audit Reports are remitted to Committee on Public Undertakings. The committees are empowered to call for Government records and summon Government secretaries for their oral submissions.
The committees represent the Parliament in miniature and function on nonparty lines, and their reports are almost always unanimous. Government is required to respond to the recommendations of the committees, generally within a period of six months, and the committees may make further reports in the light of Government replies. The committees’ reports are tabled in the Parliament.
In view of the very large number of Audit Reports that are presented every year and the limited time available for their detailed follow up in the manner aforesaid, the committees have devised a selective approach. The committees undertake detailed follow up action and summon the departmental secretaries for oral evidence in selected cases only.
The action on the remaining Audit Reports and paragraphs rests almost entirely with the action taken notes which the Government Departments are required to furnish suo moto to the committees’ secretariat within four months after the Audi Reports are laid before the Parliament.
The follow up action by the PAC and the COPU with reference to the Audit Reports represent the culmination of legislative oversight over the public purse since it is the legislature that authorizes the incurring of Government expenditure and levy of taxes in the first instance.
The effectiveness of the CAG as an instrument of promoting accountability of the executive and good governance depends entirely on the action taken on audit observations and comments.
While the follow up action through the mechanism of self-explanatory notes without direct and oral examination of the departmental secretaries had started as an exception to the general practice, it now seems to have become the rule. Only a very few cases featured in the Audit Reports are currently taken up for detailed oral evidence of the secretaries and report to the Parliament. For example, the PAC discussed only 25 cases during 2006-2007 as against nearly 1500 cases that had featured in the Audit Reports presented during that year. The COPU followed up only three cases against more than 200 cases featured in the Audit Reports on Government companies and corporations.
The selective approach inevitably creates an anomalous situation that whereas the CAG’s Audit Reports are in the public domain, very little is known about the action taken by Government Departments on the cases that are not taken up for oral examination by the PAC and the COPU and consequently, on which there is no report to the Parliament.
Although the annual reports of the ministries are required to give information on the status of action taken on the Audit Reports, the information provided is generally very sketchy and not very meaningful. It is therefore, time that it is made mandatory that Government Departments shall table action taken reports on Audit reports within four months of their presentation to the parliament.
Since the Audit Reports are based on test check of selected cases only, any such action taken report should also disclose the result of Government’s review of similar other cases besides the corrective action taken to remedy the underlying system deficiencies.
This will have several advantages:
First, it will ensure that the Government Departments take remedial and corrective action based on the Audit Reports.
Second, it would contribute to greater earnestness and rigour in the quality of, departmental response to Audit Reports since the Department’s action taken report would require approval and authentication of the Minister before it is presented to the Parliament.
Third, it opens up the possibility that an alert and interested member of the Parliament may raise the matter on the floor of the House if the action taken on the Audit Report is inadequate or unsatisfactory.
Fourth, the Parliament’s Committee on Papers will chase the Government if the action taken report is not presented in time asking the Government to explain its position.
Fifth, it will impart the much needed transparency to the accountability process and provide assurance to the civil society that Government is alert and responsive to the concerns highlighted in the Audit Reports.
Sixth, an indirect spinoff will be an improvement in the quality of Audit Reports.
The period of four months for presenting an action taken report, as suggested above, is considered sufficient since the CAG’s Audit Reports are prepared in a highly transparent and participatory manner and ample opportunity is provided to Government Departments to present their side of the case at each stage of processing of audit comments.
The above system needs to be implemented in the States as well. Although many of the State PACs/COPUs follows up each and every case included in the Audit Reports by summoning the departmental secretaries, the flip side is the accumulation of arrears. Since the PAC/COPU is in arrears, the Departments do not display any great hurry. Consequently not merely the action in the instant case is unconscionably delayed but also the underlying system and other deficiencies continue to persist.




