Myth of Executive Accountability

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CAG is the auditor, not a prosecutor. If the report is treated as final and beyond examination, the governments at the Centre and in all the States will have to royally quit at the end of every financial year.......CAG has no mandate or mechanism to ensure the accountability of the executive. The PAC and the Parliament has to step in for this and others can do precious little if the Parliament/Legislature abdicates its main responsibility.

The atmosphere today is that the government i.e. the executive wing does no good, it’s all evil. The Parliament/Legislature is alienated from its primary functions of law-making and ensuring accountability of the executive to legislature and thereby to the people. Admittedly, this is true to a large extent. A feeling pervades that a handful of civil society activists, the judiciary and constitutional authorities such as the Chief Election Commission (CEC), the Office of the Comptroller and Auditor General of India (CAG) and the proposed Lok Pal are the only vehicles to restore democracy, equity, justice and clean administration. It is this perception that will take us off the track and derail our movement to economic freedom, good governance and people’s empowerment or the second independence as preferred to be christened by some.

Undoubtedly the waters are muddy. Merely by throwing more mud in the courts of executive and legislature, these two Himalayas of Indian democracy cannot be cleaned. I find many authorities going beyond their constitutional mandate ostensibly to appease the civil society. The judiciary does it by going ahead then what judicial activism allows.  With the clouds of corruption all round and faith crisis facing the government, its departments and corporations, the CAG also seems to be no exception.

An auditor, not prosecutor

The CAG is an independent constitutional authority for financial audit of government revenue and expenditure operations. It is also entrusted with the performance audit of developmental programmes/schemes to promote economy, efficiency and effectiveness. The mandate is to audit whether the laws, rules and regulations are complied by the executive in handling the budgeted funds. The audit is also to certify that the financial statements prepared present a fair and correct state of affairs of the government.

CAG is an instrumentality to facilitate control and accountability of executive to Parliament/Legislatures. The report is submitted to the President/Governor which in turn is to be examined by the Public Accounts Committee (PAC). The report in respect of government enterprises is examined by the Committee on Public Undertakings (COPU). These are constituted by Parliament to assist in its working. It is these committees which scrutinise the reports, examine the same in detail, seek the explanation from the ministries/departments and later put their report for discussion in Parliament.

The reports of the CAG are not final. They are not stand alone. The government departments need not agree with all the observations of the CAG. They have a right to explain in case of deficiencies pointed out and suggestions made by CAG in performance audit. In points relating to any financial irregularity or lapses, the government needs to come out with a compliance and action taken report. All these commence along with the examination of the CAG report by the PAC. At this stage, we should also note that not a single report of the CAG in any financial year will be without points and observations for compliance. It is the job of audit to pinpoint deficiencies. Hence, a mere audit report by CAG is not an indictment of an individual. It is for the PAC to take it further and the Parliament/Legislature to take a decision on the matter after perusing the compliance and the action taken on the deficiency, if any. CAG has no mandate or mechanism to ensure the accountability of the executive. The PAC and the Parliament has to step in for this and others can do precious little if the Parliament/Legislature abdicates its main responsibility.

Trial by media

Of late, we see a media trial and demand for resignation of individual ministers merely because an audit report has recorded deficiencies. We hardly understand that the report of the CAG is not a final document and that it needs to be examined by PAC, explanation sought from erring officers/ministries and further decided by the Parliament/Legislature. CAG is the auditor, not a prosecutor. If the report is treated as final and beyond examination, the governments at the Centre and in all the States will have to royally quit at the end of every financial year. Not a single report will be such that flaws are not brought to the notice.

Of late we also see activism by this Auditor General. It is evident in the 2-G Spectrum allocation audit and in respect of the Commonwealth Games. CAG is within its mandate to record procedural lapses, flouting of rules in award of contracts and spending. However, one does not know how CAG arrives at the figures of losses to government by fixing its own benchmarks. CAG has also shown over eagerness to fix blames and making comments on policy issues. Another instance of CAG entering into pure policy issues is cracking on the University Grants Commission for grant of deemed university status to certain institutions. A recent instance is comment on the business decision of Civil Aviation ministry of merger of Air India and Indian Airlines and placement of orders for new fleet of aircrafts. CAG could definitely scrutinise adherence of procedures but should avoid comment on the decision to acquire assets or merger. These are business decisions and hence should be left to the concerned managements/boards.

The critical issue is of the financial control by legislature on the executive. It seems to be non-existent. PAC is the bridge which connects the CAG report to Parliament/Legislature. This flyover is weak. PAC has almost no time to examine the CAG report. The backlog is very high. Further, the duration of sessions are reduced. The legislators are also found wanting in study, discussion and demanding assurances from government on the report of PAC. Hence, this space which rightfully is owned by legislature is usurped by media and civil society.

Reforms could help in improving the accountability of the executive. At present, the life of the PAC is one year. It should be made co-terminus with the life of legislature i.e. five years. PAC should ensure that all CAG reports are examined within a year to avoid backlog. The CAG could be given powers to enforce action and compliance on findings in respect of financial audit. This would give time to PAC to focus on major deficiencies/gaps and to examine the points in the performance audits of CAG.

CAG reports like the fodder scandal in Bihar, defence deals relating to Bofors guns, coffin purchases during the Kargil war, BALCO privatisation, 2-G spectrum, etc. has brought irreversible disrepute to the executive. Hence, government should examine subjecting such projects involving huge costs for a pre-audit scrutiny to avoid controversies. The Home ministry had recently sought the audit of processes of the proposed Rs. 30,000 crore housing project for paramilitary forces before award of contract. For huge projects involving private players and contractors, this could be made a compulsory requirement. This should be with specific time-frame to CAG so as to avoid delay and paralysis of decision-making.