CAG Inaugurates Two-Day Meet of OECD Task Force

The Institution of the Comptroller and Auditor General of India partners with Government in ensuring accountability and transparency of the entire budgetary process and its implementation. This was stated by Shri Vinod Rai, Comproller & Auditor General of India while inaugurating the two-day meet of the Task Force of the Organization for Economic Co-operation and Development (OECD) here today. Welcoming the delegates, Shri Rai hoped that the meeting would help in experience sharing for better targeting of aid, resource mobilization, sustainable debt management and ensuring desired outcomes of public expenditure. 

The CAG of India said that the Audit Department is an 'ally' of the Government in the conceptualization, design and implementation of the social sector projects including in the fields of primary education, primary health and rural employment. Shri Rai said that the Audit Department is not a mere 'fault finding' agency in the implementation process, but partners Government departments in locating weak links in the delivery channel and recommends measures to strengthen the same and thereby ensures mid course corrections in upgrading governance. Shri Rai said that thus Audit, by its oversight, is on the same side of the table as the implementing department and there is no "we" and "they" relationship between the two. We are resorting to more and more concurrent audits, he added. 

Shri Vinod Rai said that external aid in the form of grants is no longer a major contributor to India's development. Given its resource constraints, India has to rely extensively on borrowing to balance the budget and around 10 per cent of our borrowed funds come from external sources. Multilateral agencies contribute around 16 per cent of our external debt while bi-lateral agencies contribute around 9 per cent, he said. Only a small portion of this debt - around 17 per cent is on concessional terms and the rest is borrowed at market rates. We are, therefore, very concerned that borrowed funds are used optimally and the desired results are achieved in a tangible and timely manner, Shri Rai added. 

Shri Vinod Rai informed the delegates that the Indian Government has brought about significant changes in Public Finance Management in recent years. These include move towards a uniform Goods and Service Tax, forthcoming new Direct Taxes Code, FRBM, guidelines on cash management, preparation of detailed project reports, introduction of Outcome budget and Unique Identification programme. Further, the recent initiative to ensure the formulation of a Results Framework Document is also expected to bring about considerable improvement in performance measurement of individual departments, he added. Other important system setting measures which have a direct bearing on Public Financial Management are the appointment of a Task Force to strengthen internal audit in implementing departments and a phased move towards accrual accounting, Shri Rai said. 

The CAG said that we have an Audit Quality Management Framework in place which ensures high standards of audit through rigorous quality assurance procedures including regular and specialized training of audit staff and independent review of audit operations. We also benefit from the advice of an independent and highly competent Audit Advisory board on strategic matters, Shri Rai added. These internal systems that we have carefully built over the years in response to the dynamic challenges have held us in good stead in the international community and our auditors are considered a valuable global resource, he said. 

About 80 delegates from different parts of the country and representatives of World Bank, ADB, IDA and Ministry of Finance are participating in the Task Force Meeting hosted by the Comptroller and Auditor General of India.

Results Framework Document strengthens departmental performance measurement and audit-led corrective oversight to improve public expenditure outcomes. Results Framework Document and related reforms are framed as mechanisms to strengthen departmental performance measurement and programme delivery. Audit functions are described as collaborative oversight-including increased concurrent audits, an Audit Quality Management Framework, and strengthened internal audit-aimed at identifying delivery weaknesses and recommending corrective measures. Complementary public finance reforms cited include outcome budgeting, cash management guidelines, preparation of detailed project reports, and a phased move toward accrual accounting.