The Petroleum and Natural Gas Ministry is trying to impress upon the Comptroller and Auditor General (CAG) to carry out a financial audit of Reliance Industries’ (RIL) KG-D6 block instead of a performance audit which is being opposed by the company. The CAG had suspended the audit for KG-D6 in January following differences with RIL over the audit scope and extent and had clearly stated that it was not carrying out a performance audit of the company. The CAG had undertaken the audit only after RIL had got an assurance from the Petroleum Ministry on the nature and scope of the audit. Accordingly, the CAG was also informed and it sat down with RIL officials on January 9 to work out the details. However, due to sharp differences on giving access to various records, financial statements and SAP system between CAG and RIL officials, the CAG refused to carry on with the audit.

The Petroleum Ministry has already referred the matter to the Law and Justice Ministry seeking its opinion on the issue and its final report is still awaited. RIL had also shot off a letter to the Petroleum and Natural Gas Ministry seeking its intervention in the matter.

During the meeting with RIL officials, CAG had clearly stated that this audit would not be a ‘performance audit’ on the contractor (RIL). It, however, pointed out that there is a difference between a performance and a proprietary audit as a proprietary audit was a duty of the auditor. CAG said it understood Section 1.9.3 to involve contracts relating to procurement and the procurement procedures and clarified that it would not be requesting for any decision taken in the technical realm but would be concerned only with the financial parts of such contracts.

Law and Justice Ministry’s report on the issue is still awaited