Auditors are neither adversary nor fault finding experts but those who provide honest and objective feedback to the government without fear or favour, CAG Vinod Rai said on Tuesday.

“Audit is not an adversary. Neither is it merely a fault finding mechanism. We like to see ourselves as providing an objective and balanced feedback to the government without fear or favour,” Mr. Rai said while addressing the Accountants General in New Delhi.

His comments came in the backdrop of criticism of CAG by government on its reports on coal block allocation and 2G spectrum.

“We do not for a moment think that it is our business to tell the government what to do and what not to do. We tell the government, through our audit reports, whether departments were able to achieve what they set out to achieve,” Mr. Rai said.

He said the benchmark against which the auditors examine and assess the performance of the departments are not created by them, but by the government itself.

“If government lays down a policy, we see whether that policy is being implemented. Government lays down the rules, we see whether these rules are being followed,” Mr. Rai said.He said the CAG has been advising Government on the need to bolster internal audit mechanism within the departments.

Mr. Rai said financial statements are expected to provide a true and fair view of the state of affairs of the entity.However, cash-based accounting system followed in India has ceased to reflect a true state of affairs of the governments as neither the assets nor the liabilities get properly reflected under the cash based system.

“Yet we have achieved very little progress towards an accrual based system which will provide a better idea of our assets and liabilities. We reiterate our commitment to continue our efforts towards implementation of accrual based system,” he said.

-The Hindu

‘Govt. to work with CAG to restore trust’

Finance Minister P. Chidambaram on Tuesday said he intends to work with CAG to erase the impression of adversaries in an attempt to restore trust and confidence in all institutions.

Addressing a CAG conference in Delhi, Mr. Chidambaram said the official auditor and the government have been cast as adversaries to each other in the aftermath of recent audit findings.

“Unfortunately, however, some dissonance has crept into the public discourse and for reasons, which are inexplicable, the CAG and the government have been cast as adversarial to each other. Perhaps this in the nature in the functions of the government and CAG,” Mr. Chidambaram said.

“It is my intention and desire as Minister of Finance to work with CAG to erase the impression of adversaries and restore trust and confidence in all institutions of government,” he added.

Mr. Chidambaram said that the CAG has played a key role in addressing issues of good governance and the government is obliged to take necessary actions to address gaps in governance.

He said since policymaking by government is often through trial and error and audit is a post-decision exercise, hence the both come up as adversaries to each other.

“Policymaking is often through trial and error. Decisions are taken often without full info and in an environment of uncertainty. Audit is a post-decision exercise. Perhaps because of the nature of functions, they are cast as adversaries to each other,” he added.

-The Hindu

President’s pat for CAG

For contribution to ensuring that governance systems are transparent, accountable.

President Pranab Mukherjee on Monday said the Comptroller and Auditor General’s office had made a significant contribution to ensuring that governance systems were transparent and accountable.

The President’s comments come at a time when the government has expressed disagreement with some of the CAG’s more recent findings on telecom, coal blocks, airports and the power sector.

Mr. Mukherjee also cautioned that attempts by any organ of the state to overreach itself could lead to “dissonance” in the system. “I am glad that during the past years, CAG’s audit has shifted from routine compliance audit to a more macro perspective. I must, however, stress that while redefining organisational roles and boundaries, all constitutional authorities need to adhere to the fine and calibrated system of checks and balances which forms the bedrock of our governance structures,” Mr. Mukherjee said, speaking at the inauguration of the 26th Conference of Accountants General here.

Referring to the contribution of the audit bodies, he said: “Audit reports are essentially a feedback on the many programmes undertaken by the government. The tone and timeliness of such feedback is, therefore, important. The Central Government releases funds to State Governments and even to the local bodies at district levels. The utilisation of these funds is known to the Central Government only through the mechanism of utilisation certificates. By the time these utilisation certificates are received, the programme has already been implemented. It is thus important that CAG’s reports are presented in time so as to enable mid-course corrections, if required.”

On the Public Accounts Committee and the Committee on Public Undertakings, he said that through these panels Parliament and the State Assemblies exercised the oversight functions expected of them. “These institutions have always functioned in a bipartisan manner and have contributed a great deal to the cause of transparency and good governance.”

Mr. Mukherjee said a major paradigm shift was taking place in the country and that there was realisation that governments alone could not do everything.

-The Hindu