The CAG is likely to resume audit of Reliance Industries’ spending on the KG-D6 gas block as issues over scope of the scrutiny are “more or less resolved”, Oil Secretary, Vivek Rae said today.
The Comptroller and Auditor General (CAG), which had at the end of its first sitting with RIL in January suspended the audit of spending on the flagging KG-D6 block following differences with RIL over scope and extent of the scrutiny, is likely to resume it next two weeks.
“Those issues are more or less resolved,” he said on sidelines of an industry event here.
Rae himself had two meetings with CAG Vinod Rai to resolve issues over the audit.
“The audit will happen. We are pretty clear about that,” he said. “We are making all efforts to see that CAG is able to perform its duty.”
RIL had previously stated that CAG cannot contractually perform a performance audit on it and Production Sharing Contract (PSC) only provides for a government appointed auditor to verify reasonableness of all charges and credits.
The CAG too has now stated that it is not planning to a do a performance audit of the company but only wants to examine “propriety” of expenses made.
For doing that CAG wants the discretion for records to be requisitioned to be vested with the government or its auditor (CAG).
“Whatever records are sought will have to be made available,” Rae had said on March 24, adding once the issue of scope of audit is resolved there should be no issues about records being made available.
The CAG had on March 12 written to the Oil Ministry that its audit of KG-D6 “would be financial and propriety audit” and the purpose of such scrutiny was to ensure that “the government’s financial interests have been safeguarded”.
This followed Oil Ministry writing to CAG saying the official auditor was being requested to undertake the audit of KG-D6 for 2008-09 to 2011-12 under Section 20 of the C&AG (DPC) Act, 1971.
Stating that such audit should be a financial scrutiny, the Ministry told CAG that the provisions of PSC provide for a government appointed auditor inspecting and auditing all records and documents supporting costs, expenditures, expenses, receipts and income.
The CAG said it was in agreement with this scope of audit provided the ministry agreed with it on the issue of requisition of records and access.
The auditor said that its six-member audit team was at the premises of RIL in Navi Mumbai from January 9 to January 31 during which they issued 40 requisitions calling for information and records.
However, RIL provided only a few records.