Constructive critique is our role, says CAG
NEW DELHI: The Comptroller and Auditor General of India (CAG), Girish Chandra Murmu, says the government auditor is adopting a policy of “constructive criticism” so that it can help the Centre and states in enhancing the quality of public services and improve management of national assets.
“Purpose of the CAG audit is to point out shortcomings in execution of schemes so that the delivery mechanism could be improved further,” Murmu said. “Our approach is constructive criticism. We also recommend how the system could be improved and made efficient because we are also expected to contribute in national development.”
This is increasingly evident in the audit approach of CAG officials, who are now open to first understanding the technical nuances of specific sectors rather than jumping to conclusions that often create needless controversy, officials aware of the development said on condition of anonymity.
CAG reports in the past have been questioned by critics, for instance its estimate that the 2007-2008 allocation of 2G spectrum had caused a notional loss to the exchequer of ₹1.76 lakh crore, and that the allotment of coal blocks had caused a similar loss of ₹1.86 lakh crore. Allegations of irregularities in the allotment of spectrum and coal blocks hurt the then ruling Congress party in the 2014 general election, in which it was voted out of power and reduced to 44 Lok Sabha seats.
Referring to controversial calculations made by the CAG in the past, the officials cited above said most of the times the figures had been “notional”. Because of a lack of understanding and technical knowledge of a sector, auditors erred by sidestepping practical issues, actual recovery factors and other contingencies, they said. While procedures and calculations were theoretically correct, the actual numbers were exaggerated primarily because the ground realities were different, the officials said.
“CAG reports [in the past] were prepared by taking optimal values, the upside, which were not often realisable or practical. The CAG is now consulting technical experts and we allow ministries and departments to explain their view in the exit interview. All these factors are considered without any fear or favour and then we conclude our reports,” said one of the people cited above, who is aware of the CAG audit exercise.
The CAG has lately been taking help of domain experts from various institutions like the Indian Institutes of Technology (IITs), Indian Institutes of Management (IIMs) as well as ministries on technical matters so that its reports should not only point out errors in the implementation of policies and schemes but also suggest better alternatives, he said.
Even the government departments are increasingly becoming more transparent in providing unhindered access to their data repository to the CAG officials, the second person said. “Thus, the auditor has access to a wealth of data related to social security programmes and tax administration such as Direct Benefit Transfer (DBT), Ayushmaan Bharat, income-tax and Goods and Services Tax (GST),” he said.
CA Vijay Kumar Gupta, former central council Member of the Institute of Chartered Accountants of India (ICAI), said: “The change in CAG’s approach is good as the role of the supreme auditor of the country is not to create controversies, but to provide a correct picture to the Parliament. Independence, objectivity, integrity, reliability, professional excellence, transparency and positive approach are the key values of CAG and it must also have a positive approach to the national development.”
“CAG is an independent constitutional body and it must have a constructive approach,” he added.
The Constitution enables the CAG to undertake an independent and unbiased audit; the auditor then submits its reports to the President in case of the Union government and to the governor in case of a state. The reports are then tabled in Parliament and state assemblies.
Asked about the areas where the CAG is likely to expand its reach, Murmu said the auditor was looking at several areas that are critical for development, but have not been audited properly.
For example, he said, the CAG is working towards auditing even small public sector units (PSUs), particularly state PSUs, that have annual revenue of less than ₹500 crore. Typically, the CAG focuses on the commercial audit of PSUs that have a turnover in the range of ₹500 crore to ₹5,000 crore.
Murmu added that the federal auditor also plans to help improve the accounting and auditing of local bodies in the states so that government schemes are implemented more efficiently.