Shunglu panel suggests changes in CAG, CVC

Amidst a debate on controversies surrounding some of the Comptroller and Auditor General reports, the high level committee that went into the Commonwealth Games related projects, has suggested changes in the functioning and structure of top audit and vigilance bodies like the Comptroller and Auditor General making it a three-member body.

Besides, it found certain flaws in the working of Controller General of Accounts (CGA), Government of National Capital Territory of Delhi and stressed for the appointment of an ombudsman under the Ministry of Urban Development to regulate Delhi Development Authority.

In a confidential letter by the Chairman of the High Level Committee V K Shunglu, a former CAG, to Prime Minister Manmohan Singh, several measures were suggested for an effective over-sight mechanism to secure greater accountability and transparency of the government bodies.

The panel has also recommended greater autonomy for the Chief Technical Examination wing of the Central Vigilance Commission.

Holding "monocracy" the cause of inefficiency in its working, the committee suggested structural changes in CAG through making it a three-member body.

"A three-member body would obtain greater transparency in its operation. One member should possess professional accounting qualifications, Chartered Accountant or its equivalent," it said.

"This should not seem to exclude an Indian Audits and Accounts Service officer from the triumvirate, who has wide exposure to Finance, Audit and Accounts and best international practices in these areas," the letter written by Shunglu said.

The High Level Committee suggested that CAG accounts should be audited by a professional auditor appointed by the Public Accounts Committee and the auditors reports be provided to Departmental Standing Committees in order to have adequate opportunity to discuss issues primarily the concern of the Department.

Shunglu said that autonomy of the Chief Technical Examination wing under the CVC needs to be increased and recommended outsourcing of professional hands to assist in its probe.

The committee, which was formed by the Prime Minister to examine wrong doings in carrying out several projects by different government agencies for the Commonwealth Games held here between October 3-14 last year here, noted that "CTE (which conducts inquiry into any complaints of corruption and managerial lapses) had the opportunity to discover much more than it did".

"Degree of autonomy of CTE is insufficient; it needs to be increased. CTE should outsource certain specific issues to specialist consultants, for example design, testing, etc, and may have a panel of consultants. CTE's inspection should afford an opportunity for rectifying error rather than being restricted to postmortem fault finding," it said in a letter.

The six-page letter was written by Shunglu on March 29, 2011 and accessed through exercising the Right to Information by the PTI.

The letter sent was in addition to six reports submitted by the HLC to the Prime Minister citing financial and managerial wrong doings by various government departments.

"HLC reports do not address the over-sight mechanism because doing so would have immediately placed the matter in public domain, generated a debate with more fervour than foresight and tended to compromise the standing of these institutions envisaged by the Constitution/Parliament," Shunglu said.

The Committee said the accounting principles were grossly violated by the Delhi government's accounting department in classifying the expenditure for the Commonwealth Games.

"The problem encountered in GNCTD were more acute than in Government of India. GNCTD has set up its own Accounts Cadre under a Controller of Accounts, who is subordinate to the Department of Finance, hence has no autonomy," it said.

The HLC said it was essential that the current practice is reviewed in the interest of obtaining greater transparency and accountability.

Shunglu recommended curtailment of Lt Governor's powers, who is an ex-officio chairman of DDA, to ensure better coordination with the Delhi government and Delhi Police.  

"Ministry of Urban Development should install a system of ombudsman who should have adequate powers to summon senior executives, including members of the Authority. A retired High Court/Supreme Court Judge with in-built terms of service conditions to protect his independence may be inducted," he said.

While evaluating the role of Controller General of Accounts (CGA), the Committee noted that "accounting codes were violated" in making accounting principles in relation  to the Games.

"We believe that the time for introduction of internal audit for Central government expenditure has come and such audit ought to be undertaken by professionally qualified internal auditors. CGA cannot discharge the functions of accounting and audit; in particular internal audit ought not to be combined with accounting," Shunglu said.