‘It is not worth CAG’s while to look at Rs 100 telephone bills or Rs 200 staff car bills’

This is a case in which the government invited the auditors to do the study. Under normal circumstances we would have done this at a later stage. The government took a positive view saying that it would like to do mid-course corrections if corrections are required. Now, it is not that the government or those managing the schemes have only made mistakes. There are a large number of good points that have emerged. A large number of success stories have unfortunately been ignored, only the inadequacies have been discussed.

• So why the difference of opinion?

The only difference is that the government is not the executor all the way down. The central government allots the money, state government agencies implement the scheme. When the central government looks at it, it looks at it piecemeal. So do state governments. When audit did it, it did so holistically. And found the lacunae. And we’re not saying this is all malafide.

• In any large scheme, there are an equally large number of vested interests. How does the CAG protect its auditors?

We have guidelines when we do a study. We create a model, a methodology. The methodology gets prepared here, in the headquarters. A lot of study, sifting goes in the preparation of that methodology at various levels — lowest, intermediary and the highest. At every level there is a sifting out of external factors to ensure that no subjective elements enter. Audit has had no role in formulation or implementation of policy.

• Since it goes into such details, shouldn’t the CAG get into a prescriptive role?

Only when called for. When we shut the door in somebody’s face, we open a window. We say this is the procedure you followed. Possibly this procedure would have been better. It is not prescriptive but it is recommendatory. Then the executive has to take a decision on whether that’s the correct policy or not. So, when called upon we will help in formulating a policy.

• PSU heads say the CAG is a nuisance. How do you expect us to compete with one hand being held by the CAG and the other by the CVC? The CAG is also notorious for looking at Rs 50 vouchers, Rs 20 food bills and so on…

I’m in total agreement with you. It is not worth the CAG officers’ time to look at Rs 100 telephone bills or Rs 200 staff car bills. I’m taking a new line. I’m saying forget micro issues, we are cut out for macro issues. Our job is to improve governance or administration. We have to recommend how we can improve efficiency of administration. For instance, if Rs 100 leaves the government’s coffers, how do we ensure it reaches beneficiaries?

• Specifically, what is it you plan to do?

We have to prioritise. If we do that, our job would be to look at a holistic picture, the macro elements of that picture and to ensure that valuable time is spent on that larger picture rather than getting into micro issues.

• How do you define the holistic picture? How is it a step away from what the CAG has been doing so far?

I’m not saying that what the CAG has been doing is not right. No, I’m only saying, prioritise. Government budgets are expanding by leaps and bounds. Which means government expenditures will increase. But the CAG staff is not expanding. We have limited staff and we have to do the audit in this limited staff. Hence the need to prioritise. We have to ensure that we get to those issues which have a larger impact on society. Maybe NRHM, NREGS. It is not worth our while going and sitting on a PSU, the sales turnover of which is Rs 400-500 crore.

Also, if audit comes up with some findings, it doesn’t mean the findings are malafide. It only means that somewhere some omissions have occurred, it’s not necessarily commissions all the time.

The PSU banks don’t have the CAG breathing down their neck but they do have the CVC. For all the noise they made, I (in my previous job) would openly tell them ‘look it’s a bogey’ and you raise that noise only for non-performance. How come the performers are doing well? Tell me, in the last 10 years, how many bank chairmen have been prosecuted for acts of omission?

• None.

Absolutely, nobody. But I agree there is scope for harassment…

• Like the Punjab and Sind bank fiasco, where the independent directors were not quite independent.

Yes. But the CVC or audit had nothing to do with it. That’s a weakness of the system.

• On banks, I believe that listing and the quarterly results discipline has enforced a greater efficiency seeking aspiration within these banks rather than the conventional system of the CVC or RBI and soon.

Absolutely. Once the competitive spirit gets into you, once you find that your peers are overtaking you, everything else falls in line. Then performance is the only thing.

In NREGS we have any number of best practices to report, which in due course we will be pointing out. It is to the credit of the government that it has taken the findings and realised that there are some lacunae and we need to pluck them out. And that’s exactly what they had wanted from Day 1. They are working with our officers to find out what some of the mid-course corrections should be.

• What do you mean when you say you will prioritise? Would it mean you would exclude PSU X and look at PSU Y?

No, maybe I don’t look at PSU X every year. We may do only concurrent audit, or we do only statutory audit which comes once every two years. Or it can be done by the internal audit team. Somewhere we do only a 10 per cent sample. Some issue we may pick up for an in-depth audit. So, here’s a Rs 40,000 crore government scheme, and I must do an in-depth audit because a lot of money is being spent here. Or it could be based on some comments being thrown up by the media and then I pick it up and go for an in-depth audit.