Retired Comptroller and Auditor General of India (CAG) Rajiv Mehrishi on Friday said the introduction of partial IT systems had made the situation worse when it came to auditing public expenditure.
“What partial IT systems have done is that they have put a human interface in the machine. All the data entry operators are employed on temporary basis. There is no real checking on what they do…So you have a very strange situation where you actually discover an error or inconsistency, you can’t even find out how and where it has happened. By the time you discover the error, the data entry operator has moved on to a better job and you cannot trace him,” Mr. Mehrishi said, while addressing a conference on the digitisation of public expenditure organised by the George Washington University and the Bill and Melinda Gates Foundation here.
He said the CAG, the supreme audit institution of the country, did not even meet the standards of chartered accountants of private companies when it came to assurances. Mr. Mehrishi said the CAG officials see only the accounts that government departments want them to see.
“If you see the audit reports of CAG, we do not come up even to the insufficient standards of chartered accountants of private companies in the matter of assurance. We don’t use the word assurance in our reports,” Mr. Mehrishi said.
He said the CAG officials were faced with a strange situation where they were under pressure of time and the officers concerned say the “file is lost”.
“That entire process is not auditable, so you get what the department wants to give...The way the accounts are, they are not properly auditable.”
He added that the larger issue was that of the fundamental principle of Parliamentary democracy that every rupee earned or spent has to be accounted for by the legislature. “Now, with the kind of data we have, Parliament can draw no assurances that every rupee is earned or spent is consistent with what they have approved,” Mr. Mehrishi said.
He said the solution to the problem was not just digitisation, but “business process re-engineering”. For example, he said, about 25% of the expenditure of several state governments was labeled as “other” expenditure. The data available was “obscure” and “error-ridden”, he said.
Earlier in the conference, Indira Iyer, a research professor at George Washington University, highlighted the problem of misallocation and misclassification of funds, fund flow tracking issues and delays in payment, among others. Ms. Iyer said out of the total spending of the Centre and state governments every year – about Rs.65 lakh crore – Rs.38 lakh crore was spent on developmental expenditure, about one-third of GDP.
