Thursday, July 7, 2011

Circular 16-2011

Dear Comrades

Please find Circular 16-2011 posted below

With greetings,

Yours fraternally

M.S. Raja
Secretary General
ALL INDIA AUDIT & ACCOUNTS ASSOCIATION
CSV WARRIER BHAWAN
15/1089-90, VASUNDHARA, VASUNDHARA (P.O.), Dt. GHAZIABAD (U.P), PIN-201012
Ph: 0120-2881727/4101593/ 0 – 98681 45667
E-mail: auditflag@gmail.com
Website: www.auditflag.blogspot.com

Reference: AIA/Circular-16/2011
Dated: 7th July 2011

To
Unit Secretaries,
Members & Spl. Invitees – NE &
Members of Women's Committee


Dear Comrades,

The Deloitte & Touche' a transnational giant with its base in US is
engaged in all activities such as Audit, Tax, Consulting and Financial
Advisory Services, as they claim. This firm was engaged by the CAG's
administration to conduct a work study in IA&AD. The report has been
submitted nearly six months back. Till this date the recommendation
(or report?) has not been made public.

The experience in this great country is that any study on anything
that affects the workers/employees and the people at large have always
been against the workers' and people's interest.

We are told that it is not so with this study. Let us believe it, for
the time being.

CAG DEMANDS AMENDMENTS TO DPC ACT

Tthe developments in the recent past have raised certain questions,
rather doubts in our minds. The press report in the Hindu has
definitely compounded it.

The front page news appeared in "The Hindu" - 24th June 2011 - reads:
'Government cold to CAG's quest for new powers'.

The report says that CAG has proposed to the Govt, in 2010, certain
amendments to the DPC Act of 1971 such as a time limit for the
response by the department to the audit observations, mandatory
disclosures of audit reports and mandate to audit new form of govt
economic activity such as Public-Private Partnership (PPP), joint
ventures etc and other newly opened routes of expenditure such as
Panchayati Raj Institutions.

The All India Audit & Accounts Association whole-heartedly welcomes
this. These demands were raised by this Association way back in 1989,
in a convention held in New Delhi on 5th May 1989. This was followed
up thereafter in a memorandum submitted to Prime Minister and Finance
Minister in 1993.

The declaration adopted in the Convention held in 1989 demanded:
1. The audit of accounts of the Public financial Institutions like the
Reserve Bank of India, 19 Nationalised banks, Insurance Corporation,
Unit Trust of India, IDBI, Exim Bank of India, IRBI, NABARD, IFCI and
others be entrusted to CAG forthwith
2. A statutory provision should be enacted to ensure that adequate and
necessary funds determined by the CAG and vetted by the Estimates
Committee are placed at his disposal without any interference by the
Finance Ministry.
3. The scheme of Departmentalisation of Union Accounts should be
reviewed from the angles of economy, efficiency and its effect on
impairing the efficiency of audit. Until the results of this review
are not there, the process of takeover of State Accounts should be
halted.
4. Employees of Indian Audit & Accounts Department should be fully
compensated for the loss of promotion prospects etc caused due to the
takeover of functions by the Executive in several states.
5. The appointment of the next CAG should be made after consulting all
the state governments.
6. The proceedings of the Public Accounts Committee and Committee on
Public Sector Undertakings should be made open to the public in the
same way as debates in the legislatures are held or hearing in the law
Courts take place.
7. Taking cue from the recent changes in the laws governing the
Supreme Audit Institutions and their procedures, a High Powered
Commission/Committee of Parliamentarians and Experts should be
constituted to go into the entire question and suggest changes in the
constitutional and statutory provisions, procedures, purposes relating
the Supreme Audit Institution headed by the Comptroller & Auditor
General of India.

The basic issues raised by this Convention have more relevance today,
though there could be some changes with respect to certain niceties.

But the question that haunts is this: when CAG is proposing amendments
to DPC Act so as to strengthen Public Accountability why, then, there
is an abdication of responsibility within? The Circulars/letters
issued by Commercial Audit wing of CAG office introducing new criteria
for audit of accounts of CPSU in January 2011 and SPSUs in June 2011
run exactly contrary to the statement on Public Accountability.

When CAG is curtailing or drastically reducing the mandate what is the
fun in asking for more power? Instead of issuing fresh criteria for
audit of PSUs where-by MAB/AG is permitted to omit annual audit of
companies on some excuses what should have been done is to go for
massive recruitment in the base cadres of auditors and accountants –
from the local market.

The work already entrusted is not being carried out and it is whittled
down to the extent that it ends up with eroding whatever Parliamentary
control that is hitherto enjoyed. This is nothing but dichotomy.

The 2nd Administrative Reform Commission headed by Shri Veerappa Moily
(present Union Law Minister) had recommended the following:
"8.8.7 Recommendation
a. In order to further strengthen the Parliamentary oversight
mechanism, as many audit paras as possible need to be examined by
Parliamentary Committees. To facilitate this, the PAC and COPU may
decide in the beginning of the year itself, which paras would be
examined by them and which by their sub-committees (to be constituted
for the purpose). They may consider assigning other paras to the
respective departmentally related Standing Committees. The objective
would be to complete the examination of all paras within one year. In
exceptional cases, Chairman, PAC/COPU may authorize keeping a para
alive for more than one year. If still some paras are pending, it is
for the consideration of the PAC and COPU to refer these to the
Departmental Audit Committees (recommended vide paragraph 7.5 of this
Report."

And this fresh criteria for audit of accounts of PSUs has come after
the submission of this report!

PRIME MINISTER QUESTIONS CAG

In a question-answer session with select-editors of print media on
29th June 2011 the Prime Minister stated:
"I have not read the full report. This is a special report which the
ministry themselves had asked for. It is never been in the past
that the CAG has held a press conference – as the present CAG has
done. Never in the past has the CAG decided to comment on a policy
issue. It should limit the office to the role defined in the
constitution."

It is not true that never in the past any government has done things
the way the present government has done and is doing!

The Prime Minister is deliberately hiding the fact that CAG's audit
reports are not on policy issues, it is on how the nation has bled on
implementation of these policies.

It may be the first time in any democracy that the Prime Minister
himself is questioning the role of CAG – if given a chance he may
prefer to undo with the institution of CAG, it seems!

What the government expects of the institution of CAG is it to become
a mouthpiece of the ruling dispensation (and unfortunately there are
some visible symptoms within).

Strengthening the institution of CAG and thus the Public
Accountability is in the interest of the employees and officers of
IA&AD and the people at large. We have to defend it, work for
strengthening it.

The National Executive Committee held at Shimla reiterating the
decision of the CWC held in February has called up on to rally round
the demand of strengthening the institution of CAG for the sake of
this country and its people.

All units may take this message to the membership and educate them.


With regards
Yours fraternally


(M.S.Raja)
Secretary General