COMPTROLLER & AUDITOR GENERAL - CAG - HIS REPORTS - what to do - what not to do ? - Government - Opposition - Media - Public

COMPTROLLER & AUDITOR GENERAL

& HIS REPORTS

In recent times, CAG ‘s reports are so much in lime light. CAG’s reports arise from a STATUTORY DUTY imposed by the country, its constitution and its Parliament on the Institution of CAG. CAG is DUTY-BOUND to submit his reports on every Major Activity of the Government, in which he finds serious irregularities. There is no way - that he can AVOID this duty in respect of any Major activity of the Government.

Parliament is the Ultimate Authority to take appropriate action on CAG’s reports. The Public Accounts committee of Parliament debates extensively on these Reports. In fact, Parliamentary committees visit various  part of the country, call the executives connected with the matters in these reports, discusses the Reports in open meetings with them, and strive to arrive at what has gone wrong and where – and indicate to the Executives – the action that expected from them in respect of each Report.

In recent times, CVC is also understood to be taking cognizance of CAG’s reports in investigating Potential frauds. This is very much needed. But again, CVC’s reports on such frauds are fact finding reports, and recommendatory reports. CVC can recommend disciplinary action against the erring officers – but then, he cannot enforce action on his report. It depends on Government to take or not take such action.

The country needs to understand the function of the Principal Auditor – and the context of his REPORTS.  

DUTIES & RESPONSIBILITIES OF CAG

The duties and responsibilities of CAG need to be consolidated, augmented and elucidated in clearer terms – and this matter has been pending from 1947. Many earlier CAGs have brought this to the notice of the Government. The present CAG also is understood to have written several letters on this to the Government.

This is a PRIORITY ITEM and can be done EASILY but has not been done so far. I can only say – It must be done and can be DONE very easily. While doing this – EXPEDITIOUSLY -  this country can also take the opportunity to arm the CAG with greater POWERS – not LESSER POWERS. For instance, the Chartered Accountants auditing Government PSUs are empowered to check the actual cash balance, stores balances as they feel fit and seek expert opinions on other matters in interpreting all or any documents. Reports of these Chartered Accountants have to be further checked by CAG's officers. But, this SUPERVISING AUTHORITY (CAG) has no powers to make physical checks or seek and use expert  Opinions. The lack of such supporting Powers cripples CAG from making more Authentic comments. He has to depend only on DOCUMENTS – and sometimes, even these may not be available.

Therefore, the first priority in respect of CAG is to consolidate, clarify, amplify and expand CAG’s Powers through a consolidated statute under the constitution.

CAG’S ORGANIZATION

CAG has a widespread Organization spread across all states of the Country. He has various levels of Officers in each state – and they are duty bound to visit all offices according to a FIXED PLAN intimated in advance to all offices. Usually, there are NO SURPRISE VISITS. Officials of the offices visited are given ample time to keep all records ready for the Audit Inspection. At the time of Audit Inspection, audit may find irregularities and matters for  clarification - and these are usually discussed with concerned EXECUTIVES. Sometimes, Audit may fail to discuss such matters with the Executives. To some extent, many small objections get sorted out between Audit and LOWER LEVEL EXECUTIVES - some of whom submit their replies to Audit IMMEDIATELY. But, many executives fail to submit replies immediately – and in fact, fail to submit replies for several months. This is the first SERIOUS LAPSE on the part of Government at LOWER LEVELs –which must be viewed seriously by CAG, Government and CVC. All delays can subsequently lead to incorrect and imaginary replies later.

CAG will have to look into and enforce Preliminary discussion between Inspecting Auditors & Government Executives - before their Audit report is submitted to their superiors. The Fact of this discussion should find place in the preliminary report of Inspecting Audit officers. Also - most replies go from Junior most executives or from the Accounts wing, who are not connected with the actual action contained in the Documents. Replies to Inspecting Auditors must go from the Executive who is responsible for the ORIGINAL ACTION found fault with by Audit – and not from others. If only this one aspect is taken care of – many irregularities ( past and future both) can be instantly avoided or the Auditor can be effectively replied to.

These preliminary reports of Inspecting Auditors are later scrutinized by Higher level Audit Officers – who take up the matters with Higher level Executives of Government – and seek their detailed replies, justifications, clarifications and so on. This is a crucial Point of time – at which the Executives must do sufficient INTROSPECTION of their past actions – and submit full Justification for their Actions to Higher level Audit officers. Many Final Audit Reports can be avoided if Executives take sufficient Initiative at this time. But, many do not – and send half hearted, less than full replies to the Audit.

The Higher level Audit – submits all these to CAG HQs office, where again it goes through a series of reviews. Then, CAG office may  bring them to the Notice of Departmental Heads – for their review and reply. So – at all levels, sufficient Opportunity is available for  Government to reply, rebut, justify, clarify and ask CAG organization to withdraw their observations. In many cases, the CAG organization may withdraw their objections or may tone them down.

Only a Few of the final observations on Big, Important cases are finally compiled and submitted to Parliament.

If TOP LEVEL EXECUTIVE DECISIONS are involved, as earlier said, these do go to the Executives concerned before final reports go to Parliament - enabling them to take a re-look into their decisions – and either justify or accept and amend their decisions to the extent found necessary. Some Decisions may involve Ministerial actions – and it is for the TOP Executives to bring them to the notice of the Ministers – and take their directions on the mode of reply.

So, at all points of time, CAG does afford opportunity to the Executive at all levels – to review their Actions and reply to CAG. Where CAG organization is satisfied – they withdraw their reports / objections. The final report therefore contains only those on which –all executives have replied, but their replies are not found satisfactory by the CAG.The report of CAG contains all objections and all replies at all these crucial levels. The CAG and / or his TOP officers attend before the Public Accounts Committee of the Parliament to explain their reports.

Once a report is submitted to the Parliament – It becomes the property of the Parliament – and it is for the Parliament to discuss and take action on it. CAG has no more role on it. It can assist PAC in reviewing the Report and give any other assistance that Parliament may desire of it. This, as far as I know, is the method of functioning of CAG organization - in a nut shell.

Parliamentary Discussions on most reports used to be matter-of-fact, sticking to the routine prescribed – until a few years ago. But, along with times, these things have to change.

We find many brash decisions and strange actions at different levels of Government  – and near neglect of  CAG Audit Paras  by Government. Somehow, the action being taken by various levels of Government on different observations of CAG organization is not resulting in any BETTER FUTURE PERFORMANCE. The same problems tend to recur again, and again, and again.

BIG ACTION – BIG IRREGULARITIES –GOOD REMEDIES:

This discussion reflects the position on BIG Items, of the earlier Era. But,  in recent past – much Bigger Actions of Government have happened – and they, in normal routine, attract the Audit Inspections, Observations, by the same Procedure. We have all seen how COMPULSIONS OF COALITION GOVERNANCE resulted in 2 G scam. This also goes through the same Procedure in CAG Audit. But, we all talk as if one person sitting as CAG has done all the investigation or prepared the whole Report all by himself. This is a wrong Notion. Yes. A Firm CAG can empower his Audit teams and allow them FREER HAND to investigate such matters. But, he doesn't do the Job himself.

In 2 G, we have seen how the actions were glaring. If a Minister does not heed advice of Finance Minister, Prime Minister, TRAI, Secretary DOT  etc – what do you do in Coalition Governance?

In my view – Parliament needs to pass a Law – that Prime Minister’s Advice in every case – is binding on all ministers. 

No Minister can ignore PM’s advice, instruction or order – and must abide by what the PM says. No Government can function without such Authority of the PM.

PM is not only First among Equals, but is the leader of all these Equals. He is the only one actually selected and elected by Parliament. All others are selected by him and must report to him. He can drop any Minister from the cabinet at any time. But, if a Minister is unwilling to carry out his advice or order but manages to continue in Cabinet – the whole executive edifice collapses and Parliamentary authority gets undermined. So, in my view, this is a LAW WHICH IS IMMEDIATELY NEEDED. If this is done, No secretary will dare ignore a PM’s order or advice or suggestion – in carrying out his Minister’s order or in tendering his opinions. 

Also, there shall be no matter of Governance – on which the PM is prevented from giving any such Advice or order. The Minister enjoys his authority – only under the pleaser of the Prime Minister. This needs to be ensured. Coalition Dharma cannot be subordinated to this sacrosanct principle.

MEDIA – OPPOSITION – GOVERNMENT ROLE :

Once CAG submits his report to Parliament, it is the Property of Parliament. Public Accounts Committee must scrutinize it and present it before Parliament. Parliament debates on it and takes any action on it that it deems fit.

Should Parliamentarians go before Press – either from Government side or from  Opposition side – to support, oppose or criticize CAG’s report – before Parliament has debated it? My feeling is – they must not. They talk of Parliamentary Privileges. Their Privilege is – also their responsibility. I feel - they must not debate it outside Parliament – in the media - before they have debated on it – inside Parliament. After that, Yes, they can discuss anywhere. If this is not Parliamentary Privilege, at least it looks like the MOST APPROPRIATE THING to do.

The point is – in a democracy – media gets scent of everything that is happening – and starts discussing on them. Let media discuss. There is nothing wrong in it. Let Public also discuss on it. I find no issue on it. Media can enrich later Parliamentary discussion on the reports. But then, Media also need not be sensationalizing the reports - by frequently using SENSATIONAL WORDS -  which are not there in the report- in their discussions.

All these said - I do feel, Parliamentarians can preferably wait – till they have discussed issues of CAG’s report inside Parliament - for discussion them outside. The Huge sensationalization  that is happening today – will come down a lot – if only Parliamentarians adopt some such practice. Is not Judiciary permanently waiting? Is not CAG himself always keeping quiet about his own reports? Parliamentarians are part of such a set-up themselves. They are not like Media and General Public. I do hope – these views will find favour with Parliamentarians of ALL PARTIES.

WORRYING POINTS :

The worrying Points in the effective AUDIT of Public expenditure are many. They also depend on -  who is worrying!

1.    No real remedy is implemented even for frequently recurring irregularities – in many departments at various levels – small and Big. Only the irregularities actually pointed out are usually looked into – but not preventive measures against future recurrence.

2.    No disciplinary action is taken against grossly erring officials - in most cases.

3.    No Policy Measures are introduced to ensure greater Transparency ab-initio.

4.    Answers to Audit are  not by the person responsible for the ORIGINAL ACTION – against which objections are raised by the Audit. This, at times, results in ridiculous replies being furnished to Audit by a lower official or official of a non-concerned wing – far away from the actualities.

5.    Audit must have authority to inspect, cash, stores, sites etc – and take assistance of Responsible, Recognized Experts on the subjects – which will enable them to comment with greater insights.

6.    There should be Greater Transparency in the functioning of all Public organizations coming under the scanner of CAG. Every Major project / Decision of say- over Rs.50 Crores – must be available on Internet – from planning – start- to –finish. Every major event must find place in it, which must be visible to the concerned executive, to a nominated audit officer and to the CVC. Transparency itself ensures fewer irregularities and faster execution. Delays, and their reasons or non-reasons, will come out glaringly if Transparency exists. Today, no one questions delays, when they are happening. And, there is no point in questioning LATER.

WHAT CAG MUST NOT DO?

This is very difficult to define. Should he not question Government Policy, if it results in Huge losses to Exchequer? Is he responsible to the Government or to the Parliament? In my view, these are settled Questions. He must not question Parliamentary Authority. That much seems to me to be obvious. Does every thing that a Minister does come under GOVERNMENT POLICY?  It is difficult to segregate - this is Policy; this is execution - in such cases.

As we have seen, a Minister may ignore everybody’s advice. Is he laying down a New Policy of sorts? It is difficult to say. When, everything is Transparent – things get set right quickly. If not, the country reaps the fruits of the actions of errant Ministers as well.

We must remember – CAG only reports. He does not take ACTIONS. It is for Parliament, the PAC and finally the Government – to take actions on the CAG report. In the process, the Opposition gets its point of view across. The Media does its Job. The Public do their Job. The Parliament and Government do their Job. 

So, why blame CAG – who has to remain quiet and defenseless - that too, from Day One of submission of his Report? At least, Courts have the power of CONTEMPT OF COURT. CAG has no such powers – except reporting to Parliament. If Government and Parliamentarians also want to talk ill of CAG before Public and Media from Day One – they must also allow CAG the same right! 

Obviously – that is not taking us anywhere. Therefore, the best course, in my view is – Parliamentarians may first discuss CAG Reports within Parliament – and after that only – in Public. If CAG is to be criticized, Allow him the same Privilege. 

Now – my views are just my views. There could be Better solutions.

The effort of India – must be to find the Best solutions.

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