BBMP has spent over 100 crores on fixing, remodelling, and maintaining drains in just one ward – HSR Layout. Their Stormwater Drain Department does not maintain records like work registers or the progress reports of works. BBMP has been indicted for ineffective and inefficient collection of waste, non-compliance with waste management rules, and lack of scientific processing facilities at landfill sites.

These are just three instances of impropriety and poor performance in local government bodies.
All these are issues that citizens should demand accountability from their elected reps and officials. One easy way to be aware of such issues is to track the audit reports from agencies like the Comptroller and Auditor General of India (CAG). Speaking at the first Audit Diwas, Prime Minister Narendra Modi pointed out, “We will find the solutions only when we recognise the problems.”

This article is the first of a series by experts from Indian Accounts and Audit Service. Here we learn why audit reports matter and how it can help citizens.

An informed citizenry is the hallmark of a mature democracy. Hence institutions or mechanisms that empower citizens by providing feedback on the working of government is an essential pillar of democracy. Of the many such institutions, the most highly consumed by the public is mass media – print, TV, and now social media. Others include civil society and the judiciary which empower the public through various actions and interventions. One other institution that is constitutionally mandated to provide feedback on governance is the Indian Audit & Accounts Department (IA&AD) headed by the Comptroller and Auditor General of India.

What is an audit?

Audit is the examination of records of an organisation from the perspectives of:

• Correctness
• Propriety
• Performance
• Providing assurance to stakeholders on various aspects related to its functioning.

It can be classified broadly into Public Sector Audit and Private Sector Audit depending on the nature of the entity audited. It is generally observed that stakeholders of private sector audit are more actively engaged with audit reports than their public sector counterparts. Investors, shareholders, government regulators, tax agencies, industry leaders, donors, etc. look forward to audit reports to understand and make evidence-based decisions about the organisation.

However, when it comes to public sector audit products, similar zeal is not found from one of the most important stakeholders – the citizenry. There could be a multitude of reasons – lack of access and awareness, complexity in understanding, or simple lack of interest.

This begs the question – why should citizens even read audit reports? It may be useful to look at this issue i.e the dichotomy in accountability expectations of citizens from the public and private sector providers of goods and services.

Read more: Who really audits BBMP?

Why is it important for citizens to read audit reports?

As consumers, we pay for private-sector goods and services be it a food parcel on Swiggy, book on Amazon, flight booking on Makemytrip, etc. In every such case, we keep track of what we paid for, wait for the good to reach us and complain in case it does not fit the bill. We expect certain standards of service delivery and demand accountability from the provider.

We need to understand that Public sector goods and services that form a large part of consumption are paid for and consumed both individually and collectively. Further, these payments are both tangible (taxes, bills, tolls, etc) and intangible (allegiance to the country, honouring the law of land, respect for culture and harmony amongst fellow citizens, etc.) These goods and services are provided in return for the above payments as part of our social contract with the government.

While the poor quality of most of the goods and services offered by private providers create irritation or inconvenience to consumers, most of the goods/services offered by the government affect our very existence – air we breathe, the water we drink, the safety of our children and women, justice for the downtrodden, fair opportunities for the marginalised, etc.

Further, the Government is very often in a monopolistic position as a provider of these life-enabling goods and services. One possible reason why it may not be possible for citizens to demand accountability from the government as a matter of right could be the lack of reliable information. Audit Reports of the CAG of India are one of the solutions to this conundrum.

Read more: 50% stormwater drains lost: Bengaluru’s flooding is no surprise

Functioning of the CAG

The CAG is the chief guardian of the public purse mandated to examine the contents of the proverbial Black Box of government functioning.

There is no other institution that has such an all-encompassing and exclusive role. Reading audit reports would definitely help citizens understand the shortcomings in governance in a more nuanced manner. Further, Audit reports could greatly supplement various other mechanisms of holding the government accountable mentioned earlier.

Almost all branches of Government at all levels are audited by the IA&AD. The IA&AD, which is a 160-year-old organisation has a staff strength of approximately 44000 distributed over 134 offices all over the country and abroad. Its mandate in terms of the nature of audit is comprehensive and includes – Financial Audit i.e to express an opinion on the financial statements, Compliance Audit i.e. to assess whether due process is honoured by appropriate authorities and report deviations and violations thereof and Performance Audit i.e to constructively promote economical, effective and efficient governance.

Planning and Implementation of Audit are carried out in an extremely methodical and rigorous manner with a view to ensuring the quality of audit reports. It is pertinent to note that, during the planning of the audit, significant weightage and importance is given to public interest subjects such as Health, Education, Welfare of the Underprivileged, Provision of basic services, etc. Hence it is imperative that citizens read audit reports.

During the year 2019-20, 95 audit reports were presented to state legislatures and Parliament. The Constitution of India envisaged that these Reports would be presented to the Parliament/State Legislatures and discussed by committees of Parliament/State Legislature in order to ensure accountability of the Executive to the Legislature which is a sine qua non of Democracy.

Once the Reports are presented to Legislature, they are made public and can easily be accessed by citizens from the websites of the Comptroller & Auditor General of India or other offices of the IA&AD. The Reports pertaining to the Government of India are available in English and Hindi whereas the ones pertaining to State Governments are available in English and the local language.

In a democracy, there are no “over-informed citizens”. Any information related to the quality of governance has to be read, discussed, and used in decision making. We hope to publish a series of articles that aim to demystify audit reports on specific issues/domains for the interested and involved citizens. It is hoped that this effort will enable the readers of “Citizen Matters” to participate in Governance in a more informed manner. As Robert Jackson, an eminent American Judge pointed out, “It is not the function of the Government to prevent the citizen from falling into error: it is the function of the citizen to keep the Government from falling into error.”

The authors are from the Indian Audit & Accounts Service. Views expressed are personal.

Also read:

• Murky Metro: CAG auditors point out irregularities in the way Jaipur Metro was launched
• No tenders advertised for work worth Rs 662 crore on Gomti river front project: CAG audit