Comptroller and Auditor General of India
Public audit is a vital instrument of ensuring supremacy of Parliament -over executive and enforcing public accountability. Public audit institutions developed over time to help legislatures to implement the power of the purse. This power had two essential elements: the granting of the moneys and .supervision of the expenditure. Public audit is necessary to ensure that money of the people is raised well and spent for the purpose for which the parliament authorised it.
State audit in its present form was introduced first time in Great Britain by a Parliamentary Act as an integral part of parliamentary control over national finance in 1866.The Act required all departments for the first time, to produce annual accounts known as appropriation accounts, (appropriation is legally authorized money being drawn and spent foj a specific purpose) The Act also established the position of Comptroller and Auditor General (C&AG) The results of C&AG's investigations were considered by a dedicated parliamentary committee called the Committee on Public Accounts thus establishing a system of parliamentary financial control.
The system of Government accounting and auditing and the organisational structure of the Indian Audit and Accounts department (1AAD) as it exists today in our country is patterned similarly and is , thus, the legacy of British rule.
Constitutional and Statutory Position of CAG
We have to go back to 15th century to find the origin of the word "comptroller," which means "financial officer."
The Constitution gives special status to Comptroller & Auditor General (C&AG) as laid down in Articles 148 to 151. The Act gives authority to C&AG to audit all expenditure from and receipts into the Consolidated fund of India and the States. It also authorises C&AG to audit the receipts and expenditure of bodies or authorities substantially financed by loans or grants from government. Article 151 of the Constitution prescribes that Audit Reports on the accounts of Union and the States be submitted to President and the Governor of the State respectively who shall cause them to be laid in the Parliament and respective State Legislatures.
The organisations subject to the audit of the Comptroller and Auditor General of India are:
The importance of the Institution of CAG is such that it needs to be ensured independence for effective functioning. There are several provisions enshrined in the Constitution to safeguard his independence
Importance of CAG
Cag helps the parliament/state legislatures hold their respective governments accountable. The GAG is the institution throughr which the accountability of the government and other public authorities — all those who spend public funds — to Parliament and State Legislatures and through them to the people is ensured. Accountability is not the same thing as accounting, though the latter may be a part of the former; the word ‘accountability' means answerability. We are of course talking about financial answerability. The Executive is answerable to Parliament and to the people for all its decisions, but that answerability is enforced through the CAG where it involves finance and accounts.
Parliament votes funds to the Executive and those funds have to be accounted for. Financial accountability is important. However, answerability, is more than th&t: it also means exercising prudence, avoiding waste, not incurring unnecessary expenditure, showing results for moneys spent, and achieving those results at least cost. If the CAG is our prime accountability-ensuring institution, that institution must go into all these matters.
That is is the reason why CAG , according to Dr. B.R. Ambedkar, during the debates in the Constituent Assembly, was described as the most important functionary ,in the Constitution. Also, the oath administered to CAG according to the Constitution ,is identical with that .prescribed for the Chief Justice and Judges of the Supreme Court, including the words “I will uphold the Constitution and the law's” while a Minister of the Union swears or solemnly affirms only that he will act “in accordance with the Constitution”.
The importance of the Institution of CAG is such that it needs to be ensured independence for effective functioning. There are several provisions enshrined in the Constitution to safeguard his independence
The duties, powers and conditions of service of the Comptroller and Auditor General are laid down in the CAG’s (Duties, Powers and Conditions of Service) Act, 1971.
The statutory duties of the CAG include audit of
There is special arrangement for the audit of Government companies i.e. where equity participation is 51 per cent or more. The primary auditors of these companies are Chartered Accountants, appointed by the Union Government on the advice of the CAG. The CAG gives directions to the Chartered Accountants on the manner in which the audit should be conducted. He is also empowered to comment on or supplement the reports of the primary auditors. In addition, he has the right to conduct audit of accounts of such companies and report the results of audit to Parliament and State Legislatures.
A special feature of the audit of such Government companies and Public Sector Undertakings is the periodic comprehensive appraisal of their working by the Audit Boards constituted by the CAG. Experts in disciplines relevant to the operations of a PSU are appointed as members of these Audit Boards. The Audit Boards undertake comprehensive appraisals in the form of Audit Reviews of a few selected undertakings each year which are incorporated in the CAG’s Commercial Audit Reports. Similar Audit Boards have also been set up in a few States for audit of PSUs of the State Governments.
Audit Reports on Public Sector Undertakings and Autonomous Bodies are sent to the concerned Ministries or Departments for being laid before the Parliament or the State Legislatures.
As laid down in the Constitution of India, the Audit Reports, after approval of the Comptroller and Auditor General of India, are presented to the President of India or Governors of the States for laying before the Parliament or the State Legislatures as the case may be.
CAG audits both the appropriation and financial accounts prepared by the Controller General of Accounts.
The annual accounts of the Government, comprising the Union Government Finance Accounts and the Appropriation Accounts, are prepared by the Controller General of Accounts. These documents are presented before the Parliament after.their statutory audit by the Comptroller and Auditor General of India.
Appropriation Accounts show the expenditure incurred against the expenditure authorized by the parliament in the previous financial year. All the expenditures are duty audited and excesses or savings in the expenditure are explained. The Finance Accounts show the details of receipts and expenditure for all the three funds.
Audit covers both the voted and charged expenditures.
After the Appropriation Accounts and the Finance Accounts and the Audit Reports thereon are •presented in the Parliament, they shall stand referred to the Committee on Public Accounts for examination and report.
Public Accounts Committee (PAG) takes up the Audit Report for examination. The CAG acts as the "friend, philosopher and guide" for the PAC. Based on the Audit Report, the PAC frames its recommendations which are placed before both the Houses of Parliament/Legislatures. The Government sends Action Taken Notes(ATNs) on the recommendations of PAC. PAC prepares the final report taking into account the ATNs.
In India the institution of CAG only audits the accounts after the expenditure is committed. It does not have control over the withdrawal of moneys as in Britain where the name Comptroller isjustified.
CAG and Policy
Should the CAG question policy decisions? The answer is based on the following
In such cases, it is within the CAG's mandate, as the instrument of accountability, to comment on such a policy. Be it underselling government shares in PSEs or not adopting auction process of selling natural resources or adopting tax amnesty schemes with a moral hazard- CAG’s audit on these matters contributes to public policy.
Further, CAG is bound by his (or her) oath of office to uphold the Constitution. He has to comment on policy matters thatprima facie seems unconstitutional. If the government .were to formulate a scheme or policy that selectively confers benefits from public funds on an individual or group to the exclusion of others on no stated grounds, or on grounds which seem questionable, it is CAG's duty to point this out.
CAG has been undertaking many types of audit such as propriety audit, performance evaluations, and so oh, and they are all well within his ambit, as different modalities of ensuring accountability. Moreover, there 'are two other grounds fbr this understanding: century-old traditions, and international consensus.
Even during British rule there was an Auditor General, and traditions of the independence and objectivity of that office were fairly strong. Propriety audit was in vogue then.
Internationally, there are Auditors General, Comptrollers General, Audit Commissions, and other forms of what are known as Supreme Audit Institutions (SAls) not only in democratic countries, but even in authoritarian systems. In India, the CAG is the SAI. There are professional organisations such as the International Association, of Supreme Audit Institutions (INTOSA1) and the Asian counterpart (ASOSAI) in which the Indian SAI plays an important part. CAG performs the audit function like the other SAls.
Nature of Audit
While fulfilling his Constitutional obligations, the Comptroller &. Auditor General examines various aspects of Government expenditure. The audit done by C&A G is broadly classified into the following types:
Regularity Audit (Compliance or Financial)
It is an audit to ascertain whether the moneys spent were authorised for the purpose for which they were spent. Also, it is an audit to see that the expenditure incurred was in conformity with the laws, rules and regulations
The Comptroller and Auditor General of India (CAG) takes up supplementary audits in PSUs even after the commercial audits are done by the auditors appointed by the CAG as it generates much revenue for the Government through detection of leakages etc.
The term ‘propriety ‘ means the rightness and moral quality of a course of action Propriety audit thus focuses on whether the expenditure made is in public interest Propriety audit focuses on aspects like whether public money is misused for the benefit of a particular person or section of community.
It extends beyond scrutinising the mere formality of expenditure to it wisdom and economy and to bring to light cases of improper expenditure or waste of public money. It is conducted to report whether all the expenditure sanctioned and incurred are need- based and all the revenues due to Government have been realized in time and credited to the government account. It is “Value for Money audit ” .
CAG’s report in 2012 regarding land allotment in Andhra Pradesh brought out the fact that in a large number of cases of land allotment, the State Govemrhent ignored the prescribed procedures and disregarded "canons of financial propriety" leading to loss of precious money that would otherwise have gone into government coffers.
Efficiency audit is a the audit, which ensures that money invested yields optimum'results. The main purposg of efficiency audit is to ensure that
• that investment is properly prioritized and channeled into most profitable lines
• there is most profitable utilization of investment
Performance audit is to see that Government programmes have achieved the desired objectives at lowest cost and given the intended benefits. The Comptroller and Auditor General is asked to carry out performance audit of implementation and expenditure incurred in schemes under the NREGA in 11 states'.Th'e 11 states that would be covered under special performance audit include Uttar Pradesh, Bihar, Assam, Rajasthan, Andhra Pradesh and Orissa.Ministry of Rural Development, GOI asked CAG to take up an audit of the Indira Awas Yojna.
The ministry issued orders to make it compulsory for ail gram panchayat accounts related the rural employment guarantee programme to be certified by chartered accountants. To this end, CAG will create a panel of chartered accountants for each district. There will also be a random check of the gram panchayat accounts by CAG.
The Comptroller and Auditor General of India (CAG) took up auditing bank accounts relating to the Rs71,000-crore farm debt waiver scheme announced by the UPA government CAG examined hpw effectively that scheme was implemented.The report did not look into the merits or demerits of the debt-waiver scheme but the implementation of the scheme by public sector banks.CAG does not audit RBI and banks- the latter being audited by the RBI.
In recent years, environmental audit is gaining momentum. Over the last decade, the office of the CAG of India has increased its focus on audit of Audit of environmental issues, keeping in mind the challenges facing India today with respect to management and conservation of the environment. More than 100 audits on diverse environmental issues like biodiversity, pollution of rivers, waste management etc., have been conducted by the CAG. In 2010, CAG of India undertook an environmental audit on watef pollution in India wherein issues, causes and mitigation methods relating to rivers, lakes and groundwater in India were addressed. The aim of this audit was to identify critical issues and suggest solutions which would help the government to conserve and protect this scarce resource more effectively. CAG has done EA for Mumbai Port Trust, Tiger Parks etc.
CAG and Internal Audit
Internal auditing is an independent, objective evaluation of a body designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve an organization’s effectiveness and efficiency. Many organization engage internal auditors.
In recent years, there has been a debate that the CAG should go in for the internal audit in a rigorous way as it employs many thousands of people and has huhe budget annually.The importance of its work also means that it be effective and efficient.
The government wants the audit CAG’s expenditure. Currently, there is no independent audit.”
CAG needs to be audited, but that doesn’t mean loss of ndependence of the institution is lost. Supreme Court and Parliament are audited by the finance ministry, but they are independent institutions.
Recently, former comptroller and auditor general V.K. Shunglu, who headed the committee that investigated alleged irregularities in the 2010 New Delhi Commonwealth Games, raised the issue of auditing CAG. Shunglu had recommended an external audit of the auditor under the supervision of Parliament’s public accounts committee.
CAG currently does not have a dedicated internal wing to audit its functioning. However, it conducts an annual audit by a senior officer and is currently undergoing an external audit by the Australian National Audit Office.GAG had undergone a similar.exercise in 2003^ which was conducted by the UK’s National Audit Office. The findings of these reports are not available in the public domain.
There is a need for a performance audit of CAG, in terms of the internal guidelines, audit mechanism, etc., according to experts.
There are following limitations on the powers of CAG
Articles 243J and 243Z of the Constitution state that the State Legislature "may, by law, make provisions with respect to the maintenance of accounts by the Panchayats/Municipalities, and the auditing of such accounts." However, states have not responded well to this statutory provision. In most of the States, the Examiners (Local Funds Accounts), functioning under the Finance Department, audit the accounts.
The Comptroller and Auditor General of India (CAG) has been empowered to evaluate all nongovernment organisations (NGOs) and other agencies involved in the government’s social sector schemes.Jn 2013, The Planning Commission decided that approvals for all social sector projects undertaken by various NGOs, normally outside the purview of CAG, will come with the rider that they will be subject to audit, if required.
The inclusion of this clause ha3 become necessary as inspection of the account books of private entities that spent government money was not part of CAG’s mandate: The current law empowers it to audit only traditional government departments and public sector companies.
Cag and Mnrega audit 2013
The CAG carried out sample checks in over 3,800 gram panchayats in 182 districts of 28 states for the flagship rural job guarantee scheme MGNREGA . It pointed lout many irregularities like rural household employment declined from 54 days in 2009-10 to 43 days in 2011-12 even as the scheme aims to enhance livelihood security by providing at least 100 days of guaranteed wage employment in a year. UP, Bihar and Maharashtra, Which are home to'nearly 50% of the country's below poverty line (BPL) population, accounted for only 20% of total expenditure under the scheme. The performance in 2012-13 is bel ieved to be even worse.
The CAG report revealed several irregularities in implementation of the scheme like multiple job cards in the name of one person, jobs cards not issued in thousands of cases, diversion of funds etc.The audit also found that plans of social audits were more on paper. The CAG also carried out interviews of 38,000 beneficiaries and more than 75% of them reported that social audit was never conducted in their village.
There were many positives pointed out. One is that the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) resulted in empowerment of women and fostering social equity in the State. The potential benefit of convergence of the MGNREGS with other rural development schemes had not been tapped for creation of sustainable outcomes.
Cag audited the NRHM accounts in UP on the request of the UP government in 2011 and came out with the report in 2012.
Need for more powers to CAG and the Reasons
Since the 1971 Act was passed, many changes have taken place. 73rd and 74th amendments to the Constitution have been adopted, adding a layer of decentralised governance— and hence expenditure management — to the institutions of the state. Liberalisation of Indian economy is another development and has meant public money is increasingly utilised in joint ventures and public-private partnerships. Because of lack of mandate, the CAG feels unable adequately to audit this vast area of public economic activity. Civil society is gaining space and the role of NGOs is increasing.
Comptroller and Auditor General of India (CAG) has written to the Centre seeking to bring nongovernmental organisations (NGOs), public-private partnership (PPP) projects and the District Rural Development Agency (DRDA) under its purview.
Some NGOs get funding from the Government and therefore, they should be open to audit by the CAG.The Government knows nothing about their fund utilisation yet they continue to get money from the government. Plus they get-money from foreign sources, whose identity is unclear. The stalling of Koodanmulam nuclear power plant in Tamil Nadu recently by NGOs brought the question to the fore once again.
The CAG also wants to audit of projects which are being built on the PPP model . In these projects, the Government's equity is less that 49 per cent. But if the value of land provided by the Government for the project is added, then it can shoot up to as high as 80 per cent in some projects. Governments have little insight into the financial details of these projects, as they are implemented by private companies.In many infrastructure projects, private companies increase user charges, but the logic behind the increase is never shared with the Government. The new powers will help in unravelling the reasons behind the hike.
Another significant step is the CAG's move to audit the District Rural Development Agency (DRDA), a State government body present in ail districts.
The financial dealings of the DRDA have always been outside tile purview of CAG audit, as DRDA is registered as a society under the Indian Societies Registration Act of 1860. Now, the CAG is keen on auditing the books of DRDAs as very large sums of money for rural development are sent to them.
Separation of accounts from audit
Compiling accounts and auditing the same are related but usually the two functions are combined under a single department primarily due toresons like the two functions are releated and also to save money.
From time to time, however, attempts have been made to separate accounting from auditing as in the case of railways, defence etc. In 1971, the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act was passed, which visualised the need for separating accounts from audit.lt empowered the President, after consultation with the CAG to divest the Comptroller and Auditor General of the responsibility of compiling the accounts of any department of the Union Government. A scheme for the separation of accounts from audit was approved by the Government of India in 1975. Parliament amended the Comptroller and Auditor General's (DPC) Act 1971 to relieve the CAG of the responsibility , of compiling accounts of Ministries Departments of Government of India. He, however, still performs the accounts and audit functions in each state.
The justification to combine the two functions of audit and accounts is two fold-accounting and audit functions are interrelated and the economy that it results in. The need to separate the two is to ensure greater efficiency and specialization.
Cag audit and Social audit
Over the last four decades, CAG has been conducting performance audits of socio-economic developmental programmes of the Central and State Governments. This has gained renewed emphasis over the last decade (2013), with the introduction of new performance audit guidelines in line with international best practices. The new performance audit methodology envisages more structured planning to identify governance-centric issues, closer interaction with the Executive at all stages of the audit process (during audit planning, execution and reporting), and use of new methods for gathering audit evidence such as beneficiary/stakeholder sdrveys, physical inspection, audio visual recordings,statistical sampling etc.
During the last ten years, CA& has. conducted performance audits of most of the key socio-economic programmes of the Government pf India e.g. National Rural Employment Guarantee Scheme (NREGS), National Rural Health Mission (NRHM), Sarva Shiksha Abhiyan (SSA), Mid-day Meals Scheme, Accelerated Rural Water Supply Programme (ARWSP), and Pradhan Mantri Gram Sadak Yojana (PMGSY). CAG’s audits have also covered several niche areas of public interest like Waste Management, Police Modernization Scheme etc. CAG’s audit of Government departments, offices, and agencies in the States, dealing with implementation of Government schemes, also touches upon the performance of schemes or their components at various levels of the audit process.
CAG’s audit is an external audit on behalf of the tax payers. The Union and State Legislatures, through their respective legislative committees on public accounts and public undertakings, discuss the matters brought out in CAG’s audit reports and make recommendations to the executive for appropriate management action. In a broad theoretical sense, therefore, CAG’s audit itself is a social audit. Yet, In its commonly perceived sense, CAG audit remains a Government process largely confined to Government officials and Government auditors. Social audit, on the other hand, in its current connotation, seeks to make the audit process more transparent and seeks to take audit findings to a wider public domain of stakeholders, i.e. users of the Government schemes, services and utilities.
The demand for social audit, has grown in recent years due to the steady shift in devolution of Central funds and functions relating to socio-economic schemes to the local tiers of Government Panchayati Raj Institutions (PRls), Urban Local Bodies (ULBs) and other special purpose agencies set up by the Government for implementation of specific schemes.
New Accountability Concerns
The shift in devolution of funds and functions towards PRls and ULBs has been the result of the 73rd and the 74th Amendments to the Constitution and the recommendations of the XI Finance Commission. Further, Central Government has been entrusting the implementation of varioussocio-economic developmental schemes to autonomous agencies/societies. More often than not, Central Government schemes have [ also envisaged direct transfer of funds to PRls, ULBs and such agencies/societies with only facilitatory involvement of the concerned State Governments. Such fiscal allocations have effectively remained .out of the State legislative and administrative accountability loop, as these agencies/societies are outside the traditional State Government administrative structure. In these cases, as indeed at PR1 and ULB levels also, local accountability structures are either non-existent or are very fragile.From the audit point of view, the shift in Government expenditure to PRls, ULBs and other agencies/societies has given rise to a new situation. The CAG’s audit jurisdiction over such entitiesis nebulous, compared to his jurisdiction over traditional Government Departments.
Statutorily, audit of local self government institutions is a States subject and the primary (external) audit of PRls and ULBs is with the State Local Funds Audit Department (LFAD), or with the designated auditors as specified in the State laws, with the exception of few states.
Also, the scheme , guidelines of some of the flagship socio-economic programmes of the Government do not provide adequate clarity with regard to audit of the programmes by the CAG.
Further, despite the joint physical verifications with Departmental authorities, and beneficiary surveys, the primary focus of the CAG’s performance audits remains, in mostcases, processes within Governmental agencies, with the actual verification of outputs and outcomes being only of secondary focus. The prime reason for this is audit methodology and evidence requirements (necessary in order to ensure the rigour and credibility of our audit findings) as wel l as manpower constraints. In other words, Cag cannot accept unauthenticated oral evidence except as supplemental to core audit evidence.
Social audit concepts are becoming increasingly popular and relevant. The vital role of social audit for ensuring the local stakeholder’s role in grass root level implementation of the public sector programmes, verification of deliverables afid ensuring accountability of the implementing agencies, besides a safeguard against'corruption arid frauds has been recognised. It was also felt that with the ever increasing outlays on the social sector programmes and the decentralised implementation, particularly by the rural and urban local self-government institutions, the participation of local stakeholders and civil society in monitoring the implementation of the programmes cannotbe ignored.
Social audit initiatives fall into two categories - social audits carried out by Gram Sabhas/Panchayats or local level Vigilance and Monitoring Committees as stipulated by the Government in the guidelines of various social sector programmes, and those carried out by Civil society groups. In both these types, the social auditors are in a position to obtain direct feedback from beneficiaries on a large scale through Gram Sabha meetings, Jan Sunwais, Sammelans and other oral evidence gathering methods to ascertain the outputs of social sector programmes and pinpoint grassroot level failures.
Considering the significant contribution by various social audit groups in ensuring accountabil ity of the programme managers and implementing agencies, the Government of India has embedded social audit in one form or the other (like village level monitoring committees/vigilance committees) in almost all the flagship social sector programmes like NREGS, ARWSP,NRHM, MDM etc.
Cag studied the social audit practices of Gram Sabhas and.civil society organisations and explored the modalities of assimilating social audit concepts and techniques in to the audit of CAG of India within the framework ofthe existing mandate.
Cag is considering the issue of positioning of social audit within the three basic categorisations of audit viz. financial, compliance and performance audits. The objectives of social audit revolve around empowerment of the beneficiaries and directly affected stakeholders of the public sector programmes in matters of planning, implementation,delivery of services, appraisal, corruption and frauds, impact, etc. The social audit procedures provide a voice to the people to participate and be heard. Above all,social auditprovides close to complete transparency to the entire gamut of programme management and renders the impact sustainable-. It enables the people to view the decision making process and criteria adopted for various elements ofthe programme.
While social audit has a crucial role in implementation of social sector programmes, its objectives cannot in standalone mode, sustain the complete audit objective of any of the three basic types of auditing. All the objectives and processes adopted for social audit will fit into the audit objectives of one or more of the three fundamental types of audits. Therefore,social audit cannot be a substitute for the public audit by but can be subsumed within one or more of them to enhance the quality of the audits by CAG of India.' Thus, social audit ought to be viewed as a technique or procedure to broaden the depth or spread of audit by Cag rather than a distinct form of audit. Use of social audit techniques or the social audit findings should be viewed as a means to strengthen Cag audit rather than a substitute for CAG’s audits:
Strengths of Social Audit
Focus on outputs in social audit process, the directness of its inquisitions and the instantaneous interface and interlocution it provides among the beneficiaries and stakeholders of social sector programmes, has its unique strengths. Social audit provides an opportunity to plug a long felt gap in the audit process and techniques used by our Department. It provides the strongest and irrefutable direct evidence for inputs, processes, financial and physical reporting, compliance, physical verification, assurance against misuse, fraud and misappropriation, and utilisation of resources and assets. In addition, social audits also provide a forum for strengthening thedemocratic process in governance and grievance redressal. Social audit provides the most important link between oral and documentary evidence and offers a means of Securing accountability of the managers of public sector programmes and renders the monitoring and appraisal mechanism Limitations of Social Audit
While social audits lend a powerful tool for programme audit and monitoring by the beneficiaries and direct stakeholders, its limitations should be recognised in determining its positioning in the public sector audit framework. The scope ofsocial audits is intensive but highly localised and covers only certain selected aspects out of a wide range of audit concerns in the financial, compliance and performance audits. These are also sporadic and ad hoc, except where broad-based monitoring by Gram Sabha has been embedded in the socialsector programmes. Even in these cases, the monitoring is informal and unprocessed. Moreover, the documentation of social audits is not in a form as to provide consistentevidence. The findings of social audit, unless carried out on a representative basis, cannot be either generalised or estimations over the entire population be made.
Partnership between Social Audit and CAG’s Audit
Social audits afford an opportunity to strengthen the micro level scrutiny of the programme planning, implementation and monitoring and should be brought into the mainstream of auditing by the Indian Audit and Accounts Department as an essential process and tool in all the performance audits of social sector programmes. It can also be placed in the mainstream of compliance audits of the social sector programmes to assist verification of compliance to the rules and assurance against frauds, corruption and misappropriation. Further, it can facilitate association of CAG’s auditors with local fund auditors and Gram Sabhas in certification of - accounts of local governments.
Procedures should be established to necessarily build social audits into the scope of audit by way of utilisation of voluntary or commissioned social audits. A protocol may be established for sustainable ongoing partnership with the major social audit organisations within the country and their findings used in developing the findings and conclusions as a standard procedure in all audits of the social sector programmes. In turn, Cag can provide for assistance in capacity building of the social audit groups and encourage social audits in the States where it has not taken off in a significant manner.
World over, there is a growing perception that it is important to partner with civil society to ensure the latter’s participation in policy development,service delivery and public accountability. Auditing for Social Change requires participation of the civil societies in public accountability in partnership with SAls like Cag , whether in a formal or in an informal process, as it has the real potential to enhance accountability and align public services to citizens’ needs in important areas like achievement of Development Goals. Policy makers recognized the wide spectrum of collaboration between civil society groups and audit institutions - from direct participation in audits to focus on demanding follow-up action on audit findings and putting pressure for implementation of audit recommendations , identification of entities that should be the subject of audits and independent audits.
It is said that Cag should take the social audit and social auditors on board for serving the cause ofpublic good. Social auditors are likely to benefit by way of finding a place for their work in a wider and formal/legal forum of the CAGoflndia, ultimately adding value to their work.On the professional developmentlevel,they would also be benefited through their exposure to the techniques and objectives of the audits by the CAG of India. Cag can benefit as of its biggest limitations of not being able to reach the beneficiaries for their perception and verification of delivery of the programmes, including the existence of the community assets and their actual utilisation can be overcome in an effective manner.
Space for social audit has been created both by the Constitutional Amendments which ordained that accounts of a Gram Panchayat be placed before a GramSabha, and by the RT1 Act 2005. State Governments of Rajasthan arid Andhra Pradesh have taken the initiative to incorporate social audit as part of their monitoring systems through Gram Sabhas and in partnership with a consortium ofNGOs. Given these highly acclaimed initiatives, it is possible for CAG auditors to associate themselves with various activitiesin the social audit processin these States. The experience in Rajasthan hasshown that we can gain immensely from the oral evidence tendered at the public hearings which are part of the social audit process. Participation sensitizes the people and helps them realize that accountability is not just a part butthe prime driving force of good governance.