Ramaswamy R. Iyer in The Hindu
A set of suggestions to ensure the effective functioning of one of the nation’s most important constitutional functionaries.
The institution of Auditor General, established in 1860, became Comptroller and Auditor General of India (CAG) with the commencement of the Constitution. On the occasion of the initiation of year-long celebrations to mark 150 years of the institution, may one, as a former member of the Indian Audit and Accounts Service, put forward a few suggestions (numbered for convenience) aimed at enhancing the effectiveness of the institution?
1. It is a matter of regret that the CAG, regarded by Dr. B.R. Ambedkar as the nation’s most important constitutional functionary, is not as prominent in the public consciousness as the Chief Election Commissioner or the Central Vigilance Commissioner. (At the present moment, the 2G spectrum allocation controversy has brought the CAG into some prominence, but this temporary salience may not last very long.) It seems desirable that the findings of Audit should not only be reported to the President and Parliament as close to the events as possible, but also made known simultaneously to the media and the public, with some explanations to aid understanding. It is for the CAG to decide how best the work of the Indian Audit Department, which the CAG heads, could be made more visible and intelligible. This is not to gain publicity for itself, but as a means to make it more effective. (Timeliness is important in this context. While audit must necessarily take place after the event and cannot be literally concurrent, the closer the reporting is to the event the more effective it is likely to be.)
2. There is now a vast accumulation of Audit Reports submitted over the years both at the Centre and in the States, and not all the matters reported upon have been discussed in Parliament or in the State Legislatures or in the media. It seems desirable to rescue at least some of the important cases from falling into oblivion. How best this can be done must be left to the CAG, but many past errors, deficiencies, irregularities and so on may still deserve attention despite the passage of time. An effort to salvage at least a part of the valuable work done during the last several years seems necessary.
3. The Audit Department is often exhorted to shed its narrow perspective and look at the big picture. That criticism is to some extent echoed even within the Department. While acknowledging the importance of a larger vision and a broader perspective, it must be pointed out that it is basic (or ‘routine’ or ‘pettifogging’) audit that brings to light irregularities, improprieties and fraud. That is the Department’s core function, and the pursuit of higher aims should not be at the expense of the core function. Nor should the auditor feel uncomfortable or apologetic about performing the often deprecated but essential job of ‘fault-finding.’ The present CAG ought to raise the status of the humdrum audit function in the value system of the Department, and persuade the Executive government and Parliament to realise that this is a vital part of the Department’s work.
4. There is of course the opposite criticism of overreach when Audit widens its horizons and attempts to examine efficiency or ‘cost-effectiveness’ or propriety. The criticism is untenable because any meaningful audit must necessarily go into these aspects, and the supreme audit institutions of many countries do so as a matter of course. A further and recurring refrain is that audit has an inhibiting effect on decision-making and paralyses initiative. The answer to such criticisms is not to whittle down the audit function but to ensure that it is performed carefully and well. It needs to be realised that audit is an important, indeed vital, function. It is not a necessary evil that is to be tolerated, but a positive good that is to be welcomed.
5. A forgotten aspect of the audit function is that of discovery or detection. Speaking subject to correction, it is difficult to recall any recent instances of a major scandal having been ferreted out by the audit process. Most of the cases that have figured in public debates have come to light in other ways. The CAG’s reports have come later and have in some cases confirmed and substantiated or modified the general impression of wrongdoing already created by the media. There is a need for the Audit Department to rediscover the role of auditors as financial and accounting detectives.
6. When faced with executive intransigence (denial or delays in the provision of documents or information, evasive replies, and so on), the CAG does not appear to have many weapons in his armoury to compel cooperation. That, at any rate, is the general impression. In this writer’s view, the CAG is not as helpless as this situation seems to indicate. The constitutional provisions and the provisions of the CAG’s Act do hold the potential to make the CAG a forceful authority, and it is for the CAG to make full use of that potential. Remember how T.N. Seshan transformed the Election Commission using the relevant constitutional and statutory provisions, and how N. Vittal left the institution of CVC somewhat stronger than it was earlier. If the present CAG is able to do for the institution what Mr. Seshan and Mr. Vittal did for their respective institutions, he will go down in history as the most effective CAG since the adoption of the Constitution.
7. A limitation arises from the fact that Audit is an examining agency, not an investigating one. The Indian Audit Department scrupulously confines itself to looking at the books, documents and papers submitted to it. The Department refuses to pursue its inquiries beyond these and undertake even limited checking outside the books. While this approach is valid in principle, in practice there is a case to relax it somewhat and do a degree of independent checking or verification of the facts stated in the documents. The supreme audit institutions in some countries do this. It is for the CAG to consider whether there is merit in this suggestion, and if so, how it should be adopted, and with what safeguards.
8. Lastly, corruption, even more than fraud, is the national malaise. Audit is not the prime safeguard against it; other investigating agencies are charged with the responsibility of dealing with it. However, given the wide prevalence of this deadly disease, it seems desirable that the Audit Department should do what it can to counter it. Though corruption is clandestine and takes place outside the books, it is likely to leave tell-tale marks here and there. Even from well-maintained books, a whiff of corruption may rise. Audit can remain alert to such indirect indications and develop a nose for the smell of corruption. The provision of such an orientation to Audit is a matter for the CAG to consider.
These suggestions, aimed to enhance the effectiveness of the CAG, are respectfully offered to that constitutional functionary for consideration.
In conclusion, there is one point that the government, Parliament and the Public Accounts Committee will need to consider. It seems self-evident that the process of selection of such an important constitutional functionary should be open, objective and credible. This is best ensured by a committee procedure of the kind statutorily laid down for the Central Vigilance Commission and the National Human Rights Commission. This suggestion has been made earlier, but there has been a strange lack of interest in the matter. This issue cannot be examined in detail here. (Please refer to the author’s article in the Economic and Political Weekly, issue of December 31, 2005.)
This suggestion is meant for future appointments and implies no reflection on past appointments. This writer holds some of the incumbents of this honoured position in high regard.
- India’s official audit institution celebrates 150 years (topinews.com)
- CAG to submit audit report on Games in 90 days (ibnlive.in.com)
- CVC didn’t cooperate with CAG in 2G scam (ibnlive.in.com)