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.
‘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.
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.
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