15/1089-90, VASUNDHARA, VASUNDHARA (P.O.), Dt. GHAZIABAD (U.P), PIN-201012
Reference: AIA/ B-1/62/2011
7th October 2011
The Comptroller & Auditor General of India,
9, Deen Dayal Upadhyay Marg,
New Delhi – 110124
Subject: Closure of Resident Audit Parties – Reg.
I am to invite your kind attention to Circular letter 560CA/V/8-2011 dated 8th August 2011 from Director General (Commercial)-II stating there-in that a decision to "phase out" RAPs to "strengthen audit quality and discourage development of vested interests".
We are dismayed at this decision and, more so, on the reasons cited for the closure of RAPs.
The system of RAPs was evolved to create sector wise expertise and optimise the quality of audit and the system has stood the test of time. The volume of business of the PSU, its turnover and the capital invested – all were the criteria applied for the creation and operation of a RAP. There has never been a question mark ever raised on the quality of audit by any of the existing RAPs is something that itself will go against the statement that the present move to move to 'zero RAP' is to improve audit quality. The Local Audit Parties (LAP) which has been destined to replace the RAP cannot have the reach and effectiveness of an RAP.
In brief, the decision conveyed through the circular dated 8th August 2011 by the Director General (Commercial)-II will adversely affect the quality of audit.
Another reason cited as justification for closure of RAPs is 'to discourage the vested interest'.
I am afraid that the statement is not in good taste and cannot be accepted as it is an extension of the conclusions drawn in the document titled "Ethical issues in IA&AD, Service Introspection" a booklet brought out by National Academy of Audit & Accounts, Shimla which has been withdrawn formally.
Further the expenditure aspect on account of TA/DA by changing the system of RAP to LAP would be quite huge. With the money that would be spent on an avoidable expenditure, the department could manage more audit parties elsewhere which will give better results.
It is therefore requested that DG (Commercial)-II may kindly be advised to withdraw the Circular letter mentioned above and permit the RAP system to continue.
This Association is of the considered view that decisions communicated by the DG (Commercial)-II since March 2011 on audit criteria as well as the one on closure of RAPs is not at all in the interest of the Department or the nation, rather it is a dilution of, if not abdication, of the auditorial responsibilities vested with the Department.
Thanking you in anticipation,
(M. S. Raja)