Institution of government audit

Enforcing accountability can curb corruption

4, Dec-2001.
THE Geneva-based Transparency International rates India at 72 out of 91 countries in its Corruption Perception Index 2001 and that makes it the 20th most corrupt nation today. While there may be quarrels about the methodology, approach and consequential “perception” of Transparency International, the over-all picture of widespread corruption in the nation’s body politic with its assiduously corrosive effect is neither disputed nor diminished thereby.

A variety of institutions and instrumentalities are in place to combat the scourge of corruption with the Central Vigilance Commission (CVC) at the apex level. A number of non-governmental organisations have also pitched in. A recent initiative is the establishment of the Council for Clean India, a loose umbrella-type organisation which, for the present, is a deliberative mechanism for interaction among government institutions and non-government organisations on corruption-related issues. The Central Vigilance Commissioner is quite clear that corruption is too serious a matter to be left to the CVC alone.

An ally in the battle against corruption whose potential has not been fully comprehended and exploited is the institution of government audit. While corruption is quintessentially, to borrow a World Bank definition, the use of public office for private gain, the statutory definition of corruption as per the Prevention of Corruption Act encompasses acts of public servants taking gratification other than legal remuneration in respect of an official act, or obtaining valuable things without consideration from a person concerned with processing or the business transacted by such a public servant, or criminal misconduct on the part of a public servant. The acquisition and ownership of assets disproportionate to the known and legitimate sources of income of a public servant also come within the ambit of corruption.

Statutory definition apart, acts of corruption can be broadly classified as (a) doing what is right but only after securing a consideration; (b) doing something wrong in lieu of a consideration; (c) not doing what is right and lawful for a consideration; and (d) misuse of public assets, funds and facilities for private purposes. Of these, (b), (c) and (d) may directly impact government revenues and expenditure, but the effect of (a) on public funds cannot be denied since there are no free lunches anywhere. There may be other categories of corruption like favouritism and nepotism based on considerations of caste, community, etc, but these are outside the scope of the present article, which confines itself to acts of corruption that have more or less direct impact on government revenues and expenditure.

The Comptroller and Auditor-General of India (CAG) is a high, independent constitutional authority responsible for the audit of the accounts of the Central and state governments as well as government companies, autonomous organisations and aided bodies as prescribed by law made by Parliament. A perceived handicap of the CAG’s audit of its absolute, total and exclusive reliance on documentary evidence is also the source of its immense strength. What is presented by audit is based on the written records of the government departments which thereby ensures its authenticity, integrity and credibility. Each statement in the CAG’s Audit Report is expected to be based on and backed by evidence collected from departmental records, and each comment and conclusion flows from the evidence so sifted and marshalled. The CAG’s internal procedures of indepth checking, examining and scrutiny of the audit comments at several levels of hierarchy provide an in-built quality control mechanism.

Also, before an adverse and critical comment is included in the Audit Report, it is invariably sent to the departmental officers at the highest level in a draft form for confirmation of facts and figures as well as their observations and say in the matter. An audit comment may be modified or even abandoned altogether in the light of the response of the departmental officers. Thus what gets finally included in the CAG’s Audit Report is expected to be based on confirmed and proven facts and figures, backed by departmental records, the result of careful examination at several levels in the CAG’s organisation and after fullest opportunity has been given for the views of the department.

The CAG’s audit brings to light inter alia cases of irregular, excessive, wasteful, nugatory and infructuous expenditure and payments as well as cases of under-assessment or incorrect assessment of taxes and their non-collection. Such cases show that (a) something wrong has been done, or (b) what was right and prescribed has not been done, or (c) there has been misutilisation/misappropriation of public funds, assets and facilities. It is not, however, the province of audit to verify whether an act of malfeasance was committed with a motive and consideration which is sine qua non for attracting the provisions of the Prevention of Corruption Act.

A minister in the British Cabinet stepped down for showing interest in the issue of a citizenship certificate to a private citizen. This was on grounds of propriety as against the legality of corruption, for which there may or may not have been any proof. In the same manner, an essential step in rooting out corruption should be condign punishment for acts of financial malfeasance: it is not necessary to wait for the establishment of motive or consideration which may take years. For this, ample source material is available in the CAG’s Audit Reports, which for reasons already stated may not require any substantial supplementary evidence. Unfortunately, the ineffectiveness of the currently available institutions of follow-up action for the enforcement of accountability has virtually rendered the watchdog CAG’S Audit Reports bark, which may momentarily receive media attention and then get forgotten while the colossal waste of public funds and massive haemorrhage of government revenue continue unabated.

The need of the hour is out-of-box thinking for the establishment of a new and effective apparatus for the enforcement of accountability. Care must, however, be taken to avoid the creation of an atmosphere of witch-hunting and bona fide decision making must not be held hostage to the fear of accountability. Enforcement of accountability should be adequately sensitive to the constraints of executive functioning, and it should rule out even the remotest possibility of action on judgements based on hind-sight wisdom and one-sided mechanical application of regulations. Above all, it should be the outcome of a judicial mind, a balanced approach and consistent with the principles of natural justice.

For this purpose, independent, multi-member accountability tribunals need to be established to institute follow-up action on Audit Reports. Such a tribunal should preferably be a triumvirate comprising of mature and experienced persons drawn one each from public administration, audit and the judiciary, the last being the chairperson. There should be transparency in the selection and appointment of members, based on well-defined norms and qualifications. Broadly, they would be persons of proven probity and competence with wide exposure to public affairs. The terms and conditions of their service should be sufficiently attractive, commensurate with the level of responsibility and expected performance, which enable them to discharge their functions without fear or favour. These should combine the security of a non-renewable tenure with stringent constraints on their eligibility for appointment to any other public office.

The tribunals will have full powers to call for departmental records, summon officials and determine the extent of their involvement in and responsibility for acts of financial malfeasance and award punishment. An appeal against the order of the tribunal shall lie only with the Supreme Court. Enforcement of accountability will not merely ensure better utilisation of scarce national resources and mobilisation of funds but also substantially reduce the tendency towards corruption.

In his memorable address on November 26, 1949, to the Constituent Assembly just prior to the formal adoption and signing of the Constitution, the President, Dr Rajendra Prasad, made several observations whose prescience has stood the test of time. An observation, which is generally not recalled, related to expenditure. “The cost too”, said Dr Prasad “which the Assembly had to incur during its three years’ existence is not too high... I understand that the expenses upto 22nd November (1949) come to Rs 63,96,729.” The almost apologetic reference to expenditure computed down to the last rupee and upto the last working day on this historic occasion betokened the sense of accountability for tax payers’ money at the highest level. Restoration of that sense of accountability with condign punitive action will go a long way in curbing corruption. It will also put an end to carrying out wrong orders ‘from above”, or to presenting such order “from above’ as an alibi for financial malfeasance. The pressure on government audit to enhance its performance will be a valuable spin-off.

By Dharam Vir
The writer is a former Deputy Comptroller and Auditor-General of India.