The year 2012 saw one auditing office giving sleepless nights to both the Government as well as the corporate world – the Comptroller and Auditor General (CAG).

In 2013, Vinod Rai, the man who heads CAG, retires. But his tenure has surely put forth the challenges that a Government auditor faces, and the constant tight-rope walking involved. Ask Rai, and in all probability he would say that “he was just doing his job.”

Though Rai has shied away from giving interviews, those working in CAG are aware of the challenges the Indian Audit and Accounts Department faces.

Today, there is enhanced private sector participation in the form of PPPs (public-private partnerships) and various other mechanisms for project financing. In addition, there is direct devolution of funds for various schemes to the third tier of the Government.

“These arrangements, on the one hand, raise the issues of access by the auditors and on the other, impede to follow the dollar approach,” an official said.

“While the auditors are conscious of the need for adding value to the audited organisation, the challenge before them is to be able to meet the heightened expectations of stakeholders by providing them unbiased, comprehensive, and quality reports on contemporary issues,” the official told Business Line .

Auditing requires continuous engagement with the audited entities at various levels. But, 2012 saw a constant complaint that auditing entities, particularly private corporates, were not co-operating with the Government auditor.

“The limited engagement is reflected in no response, to partial response (in the report). In spite of clear provisions in the DPC Act, 1971, in many cases the information is not made available to audit. This results in limiting the scope,” the official said.

Further, appropriate documentation is a pre-requisite for public financial management. “In many cases, various processes relating to decision-making etc, are not appropriately documented. Poor documentation by the audited entities is one of the major challenges faced by auditors,” the official said.

Experience shows that the quality of accounts maintained by the audited entities leaves much to be desired, the official said, adding that there was ambiguity/ambivalence in accounting process in respect of many audited entities.

Many Government departments are using ICT in a big way and creating huge databases. But, the official said there were inadequacies in databases, including their not being updated properly.

“Access to databases is also a challenge at times. Interestingly, most of such information is available under RTI,” the official added.

The delay in presentation of audit reports can defeat the purpose of auditing, the official said. The audit report is sent to the President/Governor for placing before the Parliament/Legislature. As there is no prescribed timeframe for presentation of the audit report once received from CAG, it is presented to Parliament whenever convenient.

CAG is a knowledge-centric department and human resources is its biggest strength, those associated with it say. Today, the Department is operating with more than 20 per cent staff shortages.

“A strategy to mitigate this challenge needs to be worked out,” the official added.

richa.mishra@thehindu.co.in

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