IMPORTANCE AND INDEPENDENCE OF CAG MUST BE PRESERVED

Ever since Union Telecom Minister Kapil Sibal tried to belittle the CAG Report on the 2G Spectrum Telecom Scam and its criticism that the scam had cost a loss of Rs.1.76 lakh crore to the exchequer,there have been concerted attempts from the ruling party and their cohorts to undermine the institution and importance of the CAG. Sibal had tried to hoodwink the public by talking that the loss was 'only notional' and that the CAG was overstepping its limits. Some of the recent criticisms in the media, on the reports of the Comptroller and Auditor General of India (CAG) to the Parliament seem to be arising out of limited perception of the mandate, responsibilities, and jurisdiction of the supreme audit institution of the country. The institution of the CAG is created by the constitution in order to assist the Parliament in ensuring parliamentary supremacy over the executive. Unlike the financial auditor or a mere book keeper, the constitutional auditor basically deploys three distinct audit frameworks for auditing the entire gamut of receipts and expenditure at the central, state and union territory levels. Domain of audit of the CAG encompasses all ministries, departments, subordinate offices, autonomous bodies, and organizations, societies which receive substantial public funds in grants or loans, departmental undertakings and central and state public enterprises in the country. CAG, the supreme audit institution of India has been conducting three types of audits — Financial Audit, Compliance Audit and Performance Audit — and the CAG meticulously uses the bench-marked best practices prevalent in the international comity of audit professionals to capture the totality of transactions, rather than limiting it to verification of arithmetical accuracy and certifying the accounts. While auditing utilisation of public funds by various agencies, the auditor has no option but to be conscientious about the laid down policy, stated vision, mission along with plan, objectives and targets set by the organization while overseeing planning, implementation, monitoring and reviewing of various schemes, projects, programmes and duly reporting to the parliament as per the constitutional mandate. While certification of accounts, financial audit and compliance or regularity audit are based on applicable regulations, procedures and standards, the way performance audit is conducted deserves special mention, due to the methodology and approach. PERFORMANCE AUDIT Performance audit commences with entry conference, and ends with exit conference with the auditee organization. In the entry conference, the auditor explains his intent, scope, criteria, methodology of audit, and takes into account the concerns of the auditee organization while conducting the audit. In the exit conference, the auditor presents his findings and incorporates the views of the management suitably, and establishes the audit findings while finalizing the audit reports. Performance audit is primarily intended to evaluate the value for money of the output and outcome. The performance auditor uses all available audit techniques, tools and methodology, including statistical sampling and computer-aided audit tools, for evidence gathering, data drilling and analysis. The most important attributes of an auditor are adherence to ethical principles and professional code of conduct which comprise integrity, objectivity, confidentiality, and technical competence. Performance audit is primarily meant to gauge the performance of an entity, project, scheme or programme in achieving its mission critical objectives. It involves evaluation of the programme from the planning stage to completion, evaluating, monitoring, reviewing and following-up action, and providing recommendations coming out of analysis and lessons learnt from the experience. EQUITY AND ETHICS The performance auditor conducts his audit using mutually agreed-upon criteria and evaluates the performance of the organization or programme or project in measurable quantitative parameters, as well as qualitative criteria relating to economy, efficiency, effectiveness, ethics and equity in execution of the project or service delivery. He frequently asks the fundamental audit questions: ‘Are things being done in the right way?' and ‘Are the right things being done?'. The auditor evaluates the performance with reference to the objectives and the means provided for achieving the objectives; assesses the effectiveness of utilization of public funds; compares the impact, outcome and achievements with standards, targets and criteria; analyses the bottlenecks, systemic and procedural deficiencies to suggest improvements. Besides assessing the results on the basis of value for money based on criteria of economy, efficiency and effectiveness, the performance auditor uses equity and ethics in his auditing framework, because ethics in management of public funds becomes indispensable for public accountability, and infringement of standards of equity and ethics impinges on the achievement of results and adversely affects the outcome. Ethical and equity parameters make the performance auditor duty bound to analyse the outcome of the project, modus operandi of implementation and ethical and equity implications in outreaching the beneficiaries intended, in compliance with the laid-down policy framework and applicable laws, regulations and procedures. Though the auditor is not mandated to discuss the merits and demerits of a programme, his systematic analysis of implementation of a project gives enormous insight to the policymakers to review and improve the systems and procedures for better effectiveness by learning valuable lessons from experience. The CAG has done a tremendous job in exposing corruption in the CWG, 2G Spectrum and now the KG Basin case. It is very necessary to preserve and protect the independence and sanctity of such institutions.