Lack of response leading to continuation of serious financial irregularities CAG paints gloomy picture about response to audit observations, IRs

By Mohinder Verma
JAMMU, Apr 5: Notwithstanding the fact that audit observations/ inspection reports issued by the Accountant General are aimed at ensuring remedial/ rectification action and accountability for the deficiencies and lapses, the Government Departments have been showing lackluster response in complying with the same resulting in continuation of serious financial irregularities and loss to the Government.
This has been pointed out by the Comptroller and Auditor General (CAG) of India in its latest report tabled on the floor of State Legislature on last day of the Budget Session.
The hand book of instructions for speedy settlement of Audit Observations/ Inspection Reports issued by the Finance Department provides for prompt response by the executive to the Inspection Reports (IRs) issued by the Accountant General to ensure remedial/ rectification action in compliance with the prescribed rules and procedures and accountability for the deficiencies and lapses brought out in the IRs.
Moreover, the Heads of offices and next higher authorities are required to comply with the observations contained in the Inspection Reports and rectify the defects promptly and report their compliance to the Accountant General.
According to the CAG report, nine Audit Committee meetings were held during 2010-11 in respect of paragraphs contained in Inspection Reports pertaining to the civil wing wherein 627 transaction audit paragraphs were discussed and 241 settled.
“At the end of March 2011, 5613 Inspection Reports involving 28769 paragraphs pertaining to the period between 1998-2001 were outstanding”, the CAG said while highlighting the intensity of lack of response to audit.
“The lack of response to audit indicates inaction against the defaulting officers and continuation of serious financial irregularities and loss to Government”, report said and suggested that Government should look into this matter seriously and revamp the system to ensure proper response to the audit observations from the departments in a time-bound manner.
Painting gloomy picture about non-submission of suo-moto Action Taken Notes, the CAG said that to ensure accountability of the executives to the issues dealt with in various audit reports, the Finance Department of the State Government had issued instructions in June 1997 to the Administrative Departments to furnish to Public Accounts Committee (PAC) and Committee on Public Undertakings (COPU) suo-moto Action Taken Notes on all the audit paragraphs featuring in the Audit Reports irrespective of the fact that these are taken up for discussion by these Committees or not.
As per the instructions, these Action Taken Notes are required to be submitted to these Committees duly vetted by the Accountant General within a period of three months from the date of presentation of Audit Reports in the State Legislature.
Consequent upon the holding of National Seminar on Legislature Audit Interface on July 5, 2010 at New Delhi regarding strengthening of Legislative Control over the financial activities of the Government and securing greater response of the executive to the report of CAG and recommendations of the PAC and COPU on these reports, the suggestions of CAG were adopted by the Committees.
These Committees skipped over the paragraphs prior to Audit Report 2000-01 and sought Action Taken Notes on all the pending audit paragraphs thereafter 2007-08 from the concerned Secretaries. However, it was noticed that out of 356 paragraphs featuring in the Civil Chapters of Audit Reports from 2000-01 to 2008-09, suo-moto Action Taken Notes in respect of only 167 paragraphs were received during the period between January 2011 and March 2011, the report said.
“The Action Taken Notes duly vetted by the PAG on the observations/ recommendations made by the PAC/COPU in respect of paragraphs discussed by them, are required to be furnished to these Committees within six months from the date of such observations/ recommendations”, the report said, adding “out of 356 paragraphs featuring in the Audit Reports for the years 2000-01 to 2008-09 (excluding Audit Reports presented in State Legislature on March 31, 2011), only 122 paragraphs were discussed by the PAC up to March 2011.
The recommendations in respect of 108 paragraphs were given by the PAC but Action Taken Notes on the recommendations of the Committee was received in respect of only 22 paragraphs despite the PAG taking up the matter with the Chairperson of the Committee and the Chief Secretary.


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