By Subir Roy
The political storm created by the reports of the Comptroller and Auditor General (CAG) on the allocation of spectrum and of coal mines has put the institution also in the eye of a storm — making it fair game for politicians, who have alleged that today we have a CAG with its own agenda. It has changed the way it selects subjects for enquiry, writes reports on them and, most important, brings them into the public domain. How true is this?
In reality, a succession of landmark CAG reports has been at the centre of political storms for a quarter century. The acquisition of Bofors guns, HDW submarines and pistols for the forces – all examined by the CAG – created political waves. More recently, CAG reports have cast a critical eye over the running of the rural employment guarantee programme, the public distribution system and the management of Air India.
That apart, what exactly have CAG reports been looking at, and has this changed lately? Traditionally, audit has looked at two aspects: compliance and performance. Compliance examines if financial statements adhere to accounting standards and if expenditures and write-offs conform to current laws, rules and procedures. Performance audit looks at economy (cost and quality of procurement), efficiency (benefits derived from expenditure) and effectiveness (have you achieved what you set out to do?). All this mostly deals with expenditure.
CAG reports also look at revenue, not just collection of revenue but also design of systems for collection of revenue. It is the latter that impinges on policy. For example, has the system for parting with scarce resources like spectrum and coal blocks been designed to maximise revenue-earning potential? This efficiency-cum-performance audit goes beyond accounting issues and looks at the wisdom underlying action. All this the CAG does under its constitutional mandate.
The CAG has also changed over time. A N Chatterji, a former deputy CAG who spent over three decades in the department, recalls, “in recent years the CAG’s department has become more prompt in taking up issues. This has happened as a result of the initiative taken by the then CAG C G Somiah in the early ’90s to get reports out faster.” Earlier, reports sometimes came out long after the period they related to, and were more for the record, meeting the department’s own internal agenda rather than having current relevance. “Another important change is a performance audit manual being issued for the first time in the early 2000s during the tenure of V N Kaul. This greatly enhanced internal discipline in report writing and became a benchmark for the conduct of audits.” There have also been other innovations like the introduction of post-audit review, quality review and peer review.
The front-line operational exercise of gathering facts by pursuing files in ministries, departments and offices has not changed. But what has changed is the way reports are written up and what is in them. A study design matrix has been adopted. Under it, before an issue is studied, a decision is taken on the critical areas on which to focus and on the sources of information. As a first exercise, a report is written in point form. As a result, CAG reports today are more focused and work to a hypothesis. So there has been change over the last two decades, but along a rational and professional trajectory.
The CAG has also changed its attitude towards the media. Earlier the media would be told: here is this report and it pertains to this. More recently, the media has been guided on what is important and what to look for in a report. A media policy was adopted in 2009 as an internal exercise and a media adviser was appointed in 2010. So we can say the CAG’s department has become more media-savvy. Recently, a lot of media attention has been focused on key issues by leaked draft reports — but that is naturally not a part of the CAG’s media policy.
As you look back, more than the CAG, it is the country that has changed. There is now greater scepticism about government in general, and the respectful attention that journalists paid earlier to what senior civil servants said is gone. In its place have come 24-hour news channels that flog an issue for all it’s worth once they decide to pick it up. The CAG’s department has, in fact, been behaving more like the media — writing accessibly and seeking to be relevant.
Destiny also appears to have a sense of irony. T N Chaturvedi, under whom was written the Bofors report that so damaged Rajiv Gandhi, was appointed by Indira Gandhi. The current CAG, Vinod Rai, has been appointed by Manmohan Singh!