It is a sad reality that audit has failed to deter, check, prevent or reduce gross executive indulgence before its actual occurrence, due to various reasons
What is the ultimate objective of Government auditIJ How far does Government audit help to ensure accountability, transparency, economic, efficient, effective, ethical, equitable and environment sustainable programme execution and delivery of public servicesIJ
It is true that over the years, the responsibility of the national auditor has become delicate, arduous and momentous due to complexity in governance and also due to the increase in citizens’ demand for accountability, transparency and good governance. Many performance audit reports of the Comptroller and Auditor-General have been highlighting various governance deficit at different levels of Government — Union, State/Union Territory and urban local bodies and panchayati raj institutions.
The International Organisation of Supreme Audit Institutions has been constantly updating auditing guidelines. It has been incorporating the benchmarked best practices to keep pace with the changing requirements of governance audit. Taking the best of what is available in the private sector auditing and adapting it to the public sector has helped them in better governance. Are these standards being followed in governance auditIJ
The objective of performance audit is ‘an independent, objective and reliable examination of whether Government undertakings, programmes, systems, activities or organisations are performing in accordance with the principles of economy, efficiency and effectiveness and whether there is room for improvement.'
The performance audit seeks to provide the stakeholders with new inputs, information, knowledge, analytical insights adding value for money and new perspectives for policy formulators, planners and administrators. Performance audit reports invariably address the issues of economy, efficiency and effectiveness demanding knowledge of ground realities by market research and analysis.
We have had enough of audit reports that have evaluated and criticised Government programmes so far. In fact, the Supreme Audit Institution of the country as the national audit office is called in international audit parlance — the office of the Comptroller and Auditor General produces every year with more than 100 audit reports on the functioning or rather malfunctioning of the three-tier Government machinery.
Recently, some audit reports have become quite controversial in terms of its objective, perspective, emphasis and attempt to quantify losses to the exchequer. This has been hampering the judicious progressive administrative action and also the decision-making process.
Examples can be cited like the hypothetical loss estimates of Rs1.76 lakh crore in Comptroller and Auditor-General of India's report on 2G Spectrum allocation, the astronomical Rs10.67 lakh crore loss estimated in the leaked draft Coalgate report, and the subsequent estimate of substantially reduced loss of Rs1.86 lakh crore in the final report.
Some ardent critics of audit, not surprisingly, went to the other extreme to claim that audit reports were responsible for India Inc's downward trend in foreign institutional investment and foreign direct investment, and a sharp decline in gross domestic product growth rate. Audit, as a function, should act as a deterrent, and reduce if not prevent corruption. It should also help minimise wrongdoing by tax payers' resources by the executive, both political and bureaucratic. However, evidences show otherwise.
It is a sad reality that auditing has more or less failed to deter, check, prevent or reduce gross executive indulgence on time, before its actual occurrence, due to various reasons. This is partly because of lack of proper appreciation of each other's role by the audit body and the executive functionaries charged with governance.
It is also partly because of ineffective, inadequate and at times hostile or inappropriate communication between the executive and audit functionaries. It is due to a low level of understanding, lack of experience and insight about ground realities while evaluating execution of innovative Government-related programmes, projects and schemes de novo.
(The writer is former Director General, office of the Comptroller and Auditor-General of India)