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CAG: Watchdog or nitpicker?

The Comptroller & Auditor General needs to abandon trivial issues and learn more about the business process in order to remain relevant.

twitter-logoManu Kaushik | Print Edition: August 23, 2009

E. Sreedharan, Managing Director for the Delhi Metro Project, is an embattled man. A spate of mishaps at construction sites has tarnished the image of his ambitious metro project—causing the Comptroller & Auditor General (CAG) to indict Sreedharan for scaling down crucial testing requirements, and making wrong estimations in acquiring land, among other things.

Instead of whipping up public sentiment against Sreedharan, however, the CAG’s report on the DMRC raised questions about the organisation’s functioning and purpose. Experts say that CAG has diluted its role as a watchdog and instead simply functions as a toothless nag, focussing on inconsequential, expenserelated issues. “The CAG is making the entire process of decision-making more difficult and time-taking,” says Rajeev Ratan Shah, former member, Planning Commission of India. “It just picks holes in the work of others after everything is done,” he adds. On other occasions, CAG has nitpicked over trivial matters such as over-breeding animals in city zoos and the unethical hiring of employees at overseas embassies—cases that are hardly of serious import to the country.

Golf cart or ambulance?
CAG found instances where top Army commanders purchased golf carts, passing them of as vehicles for transporting aged and handicapped patients in military hospitals. The five electric multiutility vehicles (EMVs)—costing Rs 15.6 lakh—were bought from special funds which are meant to meet urgent operational requirements, the report pointed out. (Excerpts from latest CAG reports)
X-Ray headaches
CAG flays Airports Authority of India (AAI) for purchasing X-Ray baggage inspection systems that screen the luggage of passengers at airports in Delhi and Mumbai despite the government’s efforts to privatise these airports. According to the auditor, this has resulted in a loss of Rs 65.58 lakh to the exchequer.
No room? No problem
A CAG report says that 145 prisoners escaped between 2002 and 2006 from Punjab’s jails which were overcrowded and short-staffed, resulting in a weak monitoring system. Of the number who escaped, only five prisoners were re-arrested. FIRs were filed in only three cases and inquiries finalised in just two, says the report.
Animal love
CAG raps Central Zoo Authority (CZA) for failing to arrest the count of prolifically-breeding species such as tiger, leopard, panther, black-buck, sambar, spotted deer and nilgai in zoos across the country. Necessary steps must be taken to control the count of the species, said the report, or transfer the excess animals to other zoos so that problems like infighting and death arising from lack of space can be prevented.
Railway's policeman
Indian Railways was hauled up for losing Rs 48 crore in 2007-08 because its trains were not running on time. Due to these delays, expenses shot up on account of extra fuel requirements, the CAG report said.

This is far removed from the role that the CAG should be playing in India today. Broadly speaking, the mandate of the organisation is to audit the mountain of public expenditures incurred at the centre as well as the state level. Naturally, this is a role that comes with grave responsibility considering the widespread siphoning of public funds that is a hallmark of the political and administrative apparatus of the country.

Those responsibilities are simply not being met, says TSR Subramanian, former Cabinet Secretary to the Government of India. Instead, Subramanian says that “the institution is finding it increasingly convenient to maintain its role as a fault finding outfit.” Moreover, “its reports are not taken too seriously. In the last 40 years, I don’t recall a single report which has led to any punishment to any wrongdoer in the government,” he adds.

How could such a venerable institution become an abject failure? Some believe that the increase in fraud and wasteful expenditure in government, of which everyone complains, is a direct result of lack of understanding of businesses among bureaucracy. “Bureaucracy has been trained to look after law and order and general administration. It is hard for bureaucrats to understand business risks,” says Subir Raha, former Chairman of ONGC. Junior level auditors, he points out, are small minded and don’t understand how business works, often getting bogged down by small things while failing to look at the big picture. How does one fix this? “In order to make CAG more effective, the auditors should be trained to become business-oriented,” says Raha.

Other problems, however, abound. “CAG has no uniform standards,” says Pradip Baijal, former Chairman of TRAI. “At times, the CAG reports are found out to be subjective. Even in the DMRC case, the timing of the report demonstrates the populist side of CAG. If CAG has to improve, it has to start taking themselves seriously,” he adds. Addressing CAG’s accusations that Sreedharan purchased excess land for the project, Shah underscores yet another failure within CAG’s process. “What would have been Sreedharan’s interest in acquiring more land? He must have obviously visualised something bigger based upon the future needs, which CAG can’t see now,” he adds.

One way for CAG to fix its image and ramp up efficiency, say experts, is for it to treat legitimate people like Sreedharan with more restraint. “In every government project, the assumptions are always made on the basis of highest standards possible. The assessment of CAG should instead take into account various aspects—speed at which decisions are taken, success and failure rates,” says Shah. “There should be higher tolerance levels towards people or institutions with higher success rates. At the same time, all acts of omission should be brought under the book,” he adds.

CAG’s position as a watchdog is a vital role for civil society. Yet, for it to still be useful to us, it needs to turn its lens onto itself and re-articulate a cogent game plan for reform that might just prevent it from fading away into irrelevancy.

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