CAG quietly buries report on corruption

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Fraud to bribes: CAG quietly buries report on corruption and rot within
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Ritu Sarin
Posted: Sep 04, 2011 at 0224 hrs IST

New Delhi Be it the allocation of 2G spectrum or the conduct of the
Commonwealth Games, the Comptroller and Auditor General (CAG) has
rarely lost an opportunity to present itself as a corruption watchdog.
But when it comes to turning the gaze within, it has a lot of
explaining to do.
After the subject was taken up at workshops organised at the CAG’s
academy in Shimla in 2009-2010, an unprecedented analysis of the
“cancer of corruption� in field offices and staff was commissioned,
but when the report was finally circulated four months ago, it was
quietly withdrawn within days.

No official copy is available with the CAG now but a copy, obtained by
The Sunday Express, reveals a sweeping range of irregularities
detected: from seeking unauthorised favours to fudging of audit
records, demanding bribes by staff to fake audits being used as
blackmail.

The report has been authored by S B Pillay, who is Deputy Additional
CAG in New Delhi, and was assigned the task of analysing the extent of
corruption within. The result was his 24-page booklet titled: “The
challenge of the coming decade: combating corruption in field
offices.�

In the report, Pillay admits that participants at workshops conducted
in Shimla “unanimously agreed that corruption exists at all levels
including Group A...� and that “the cancer (of corruption) has spread
to the good parts as well.� Sources said that such a frank admission
in the report — marked for “internal use only� — was perhaps one
reason the report was withdrawn after a large number of copies were
circulated —- along with a covering letter —- at the CAG’s
headquarters in New Delhi.

Contacted, CAG spokesperson B S Chauhan said that the report was
withdrawn since it was more of an “introspection� and not based on
documentary evidence or specifics. “It was an internal exercise
containing impressions and introspection and, subsequently, other
steps have been taken by the GAG to tackle the issue of integrity
deficit.�

He said that CAG Vinod Rai last month set up a two-member committee —
of Additional Deputy CAGs B B Pandit and Rajib Sharma — which will
submit guidelines on maintaining “zero tolerance of any integrity
deficit.� Rai has also sent a letter to all field units on the same
subject.

In the confidential letter dated August 24, obtained by The Sunday
Express, Rai admits “there have been reports of audit parties not
conducting themselves properly. There have also been reports of
certain extraneous considerations while we discharge our duties
pertaining to entitlements of officials. They may be isolated.
However, even a single incident makes our credibility vulnerable...�

It was precisely this that was first flagged by Pillay. He said that
officers of the IAAS (Indian Audit and Accounts Service) have so far
maintained an “ostrich-like attitude� to inconvenient issues like
corruption. And that the feedback from outstation trainees was
telling: “a large number of audit parties were not only corrupt in
varying degrees but blatantly corrupt� and that “not all IAAS were
corrupt but contrary to our assurances, many IAAS officers and
shockingly across levels, were corrupt.�

“No one had seriously sought to influence us because our reports could
be more easily sidelined by leaving it to the PAC (Public Accounts
Committee of Parliament) or being overlooked by the press,� said the
report. “Now with the glare of publicity on our reports, our weakness
will be found out...�

Pillay has listed chapters on “types of corruption� in the audit
services. For immediate attention, he has highlighted: “financial
benefits in the form of hard cash or monetary incentives�. Among the
“types of corruption which are internal to the office,� are: auditors
submitting false TA/DA claims, false receipts, vouchers and “hard cash
paid to programming staff for conducting lucrative audits.�

The report underlines areas of corruption “external to the office�
too. These include: boarding and lodging as well as rail tickets being
paid by auditees; cash being paid routinely to audit parties by the
auditee as a signal of goodwill so that they will not raise serious
objections; money paid to settle specific objections raised; money
paid as inducements to complete audit in time as well as issue nil
comments on audits.

The report also highlights a “recent phenomenon� in the auditing
circuit — “the presence of retired persons or rogue parties that visit
the auditee and conduct audit in the name of the office, and
presumably collect a handout.� Pillay has listed a series of remedial
measures that include grounding of a few auditing parties and putting
their TA claims under a microscope. Their property returns, moveable
and immovable can also be called for and examined minutely. “In short
their lives can be made miserable,� says the report.

The CAG Corruption Blotter

The report by Deputy Additional CAG flagged:

* Large number of audit parties blatantly corrupt

* Many officers and, shockingly across levels, were corrupt.

* Auditors submitting false TA/DA claims, false receipts, vouchers

* Hard cash paid to programming staff for conducting lucrative audits

* Boarding and lodging as well as rail tickets being paid by auditees

* Cash being paid routinely to audit parties to avoid serious objections

* Payoffs to settle specific objections raised

* Inducements to complete audit in time as well as issue nil comments on audits

* Retired persons or rogue parties conducting audits in the name of
the office and ‘presumably’ collecting handout





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CA Ramachandran Mahadevan,M.Com.,F.C.A.,