GOAL 1 : INTEGRATING AUDIT EFFORTS
This strategy is about:
1A. Re‐structuring
the organizational structure for audit of Government of India entities
on the basis of the Ministry/ Department, rather than on
the type of the entity 
(Government
office, PSU, Autonomous Body etc). In this way, a Central Ministry as
well as the PSUs and Autonomous Bodies under it will be
audited together by a single 
office (or
group of offices), and audit of several Ministries/ Departments (grouped
sector‐wise)
will be under a single DAI. The existing boundaries of Civil, Defence, Railway, Commercial and Autonomous Bodies
Audit will be done away with.
Railway, Commercial and Autonomous Bodies
Audit will be done away with.
1B. Regional
ADAIs for State Reports, with arrangements for co‐ordination and ensuring consistency in a country‐wide approach.
3.1 Background
Our audit arrangements in respect of entities
under the Government of India (GoI) are organized primarily based on the nature
of the entity, rather than on a sect oral perspective. For example,
· While Ministries and Departments of Government
of India are audited by the respective Principal Audit Offices (DGACE, PDAESM
and PDASD on the Civil Side; DGADS, PDAFN, PDAOF on the Defense Side, the
Railway Audit Offices etc.), the commercial undertakings under the
administrative control of these Ministries/ Departments are audited by the MABs
reporting to DAI(C).
· Units of Ministries/ Departments located
outside Delhi are audited by the concerned State PAGs/ AGs, except in Mumbai
and Kolkata, where they are audited by DGA(C)/ PDA(C), whose primary reporting
relationship is, however, to DAI(RA).
· The autonomous bodies functioning under these
Ministries/ Departments are audited by the respective Principal Audit Offices
as well as State PAGs/ AGs, but are processed by a separate wing in Hqrs under
ADAI(C&AB).
Problems with Existing Audit Organisation
· Each audit
office, and functional wing in Headquarters, is concerned primarily with audit
of
the units under its audit jurisdiction. There
is lack of overall perspective for the Ministry/ Department as well as the
sector.
9th September,2010 Strategic Plan‐2020 prepared by Group of Officers Page9
· Currently,
integration of audit perspectives across audit offices and functional wings
takes 
place on an ad hoc/ case to case basis, and
effective integration depends to a large extent
on the
persons involved in such an exercise. While there are many successful instances
of 
integrated audit across functional boundaries4, in the absence of an institutional
mechanism for integration, there are often
cases of lack of adequate ownership for an 
integrated audit exercise.
integrated audit exercise. · The current
organizational structure does not facilitate creation of domain knowledge on a
sectoral basis; such knowledge is restricted
to individual pockets in different offices and that too to a limited extent.
This organization of audit offices may be
contrasted with the organization of the auditee entities under GoI, where the
administrative control of PSUs, autonomous bodies, as well as attached/
subordinate offices (located in Delhi and elsewhere) rests with the Ministry/
Department.
3.2 ReOrganising Audit of GoI according to Ministry
In the light of the need for
institutional mechanisms for integrated audit, the audit of entitites under the GoI should be
completely re‐organized on the basis of the Ministry/ Department, 
rather than on the nature of
the auditee entity.
The existing
boundaries/ divisions such as Civil/ Defense/ Railway Audit, Commercial Audit,
Autonomous Bodies Audit should be done away with. This will provide a far
better platform for integration, than the current structure.
Two issues
are likely to be thrown up in the context of such a radical re‐organisation:
· Currently, commercial audit staff form a
separate pool and are deployed for commercial audit of Central and State PSUs
(with ad hoc deployment for certification audit of Central/ State Autonomous
Bodies). Under the proposed re‐organisation, these entities will no longer fall
within a limited set of audit offices. In such a situation, the cadre of
commercial audit staff will be deployed for all Audit Offices which require
their services, particularly for certification audit and also for specialized
sect oral knowledge (e.g. oil and gas); this should not be a major handicap.
· The audit reports of the reorganized audit
offices will be referred either to PAC or COPU (depending on the subject matter
of the report). This is also not a major problem, as the auditee Ministries/
Departments deal with several Committees of Parliament (PAC, COPU as well as
the Departmental Standing Committees) as part of their normal operational
activities. The paragraphs/ chapters dealing with PSUs can be referred to the
COPU (as in
 |
4 E.g. co‐ordination between the Commercial and
RC wings on performance audits of Hydrocarbon Production Sharing Contracts and
NACIL.
9th September,2010 Strategic Plan‐2020 prepared by Group of Officers Page10
the
case of Commercial Chapters in combined State Audit Reports in the North
Eastern States). Further, the proposed Parliamentary Relations Unit will also
handle co‐ordination issues, if any.
3.3 Current Audit
Organisation
Currently, thereare 43 audit offices dealing
with audit of GoI entities, as summarized below:
· 13 Commercial Audit Offices (12 MABs plus DGA P&T);
· 4 Defence Audit Offices;
· 6 Civil/ Central Revenue Audit Offices (DGACE,
PDAESM, PDASD, DGA (C) Mumbai, PDA (C) Kolkata, and DGACR);
· 17 Railway Audit Offices; and
· 3 Overseas Audit Offices.
These audit offices are currently reporting to
four DAIs – DAI(RC), DAI(C), DAI(LB & A),and DAI(RA), and one ADAI (ADAI
(C&AB)).
3.4 Proposed
Audit Organisation
We now propose that the audit of GoI be
reorganised under 53 audit offices – 43 existing offices plus 10 new offices5, as summarized below:
Function
|
No. of
Audit
|
|||
Offices
|
||||
DAI (Economic and
|
7 DGs/
PDs for
|
·
|
DG/ PD –
Petroleum (Upstream)
|
|
Infrastructural Ministries)
|
Economic
|
·
|
DG/ PD –
Petroleum (Downstream)
|
|
Ministries
|
||||
·
|
DG/ PD –
Steel
|
|||
·
|
DG/ PD –
Coal
|
|||
· DG/PD –
Heavy Industries & Micro, Small and Medium
|
||||
Enterprises
(MSME)
|
||||
· DG/PD –
Commerce, Corporate Affairs, Textiles and
|
||||
Tourism
|
||||
· DG/ PD –
Mines, Chemicals and Fertilisers
|
||||
5 DGs/
PDs for
|
·
|
DG/ PD –
Power (Thermal)
|
||
Infrastructure
|
·
|
DG/ PD –
Power (Hydropower and Power
|
||
5 Or alternatively by diversion of existing DG/
PD level posts in other areas (e.g. PD – RTIs, PDA Railways for some of the
smaller, newly created zones), as deemed appropriate by senior management.
9th September,2010 Strategic Plan‐2020 prepared by Group of Officers Page11
Function
|
No. of
Audit
|
|||
Offices
|
||||
Transmission)
|
||||
· DG/ PD –
Shipping, Road Transport and Highways
|
||||
· DG/ PD –
Civil Aviation, Urban Development, Housing
|
||||
and Urban
Poverty Alleviation
|
||||
·
|
DGA
P&T
|
|||
DAI (Socialand General
|
3 DGs /
PDs for
|
·
|
DG/ PD –
Agriculture, Food Processing Industries, and
|
|
Services Sector)
|
Social Sector
|
Consumer
Affairs and Food & Public Distribution
|
||
· DG/ PD –
Human Resources Development, Panchayati
|
||||
Raj,
Water Resources, Labour & Employment, Social
|
||||
Justice
& Empowerment, Minority Affairs, Tribal
|
||||
Affairs,
and North Eastern Region
|
||||
· DG/PD –
Health and Family Welfare, Women & Child
|
||||
Development,
and Rural Development
|
||||
3 DGs/
PDs for
|
·
|
DG/ PD –
Atomic Energy and Space
|
||
Scientific
|
·
|
DG/PD –
Science and Technology, Agricultural
|
||
Departments
|
||||
Research
and Education, Earth Sciences, Information
|
||||
Technology,
and Medical Research
|
||||
· DG/ PD –
Environment & Forests, and New and
|
||||
Renewable
Energy
|
||||
3
External
|
·
|
PDA
London
|
||
Audit
Offices
|
·
|
PDA
Washington
|
||
·
|
PDA Kuala
Lumpur
|
|||
2 DGs/ PDs
for
|
·
|
DG/PD –
Home Affairs, UT, External Affairs, Overseas
|
||
General
|
Indian
Affairs, Law and Justice,and Parliamentary
|
|||
Services
|
Affairs
|
|||
· DG/ PD –
I&B, Culture, Personnel, Youth Affairs and
|
||||
Sports,
Planning Commission, Statistics and
|
||||
Programme
Implementation
|
||||
DAI (Finance and Revenue
|
4 Revenue
|
·
|
DGACR,
New Delhi
|
|
Audit)
|
Audit
Offices
|
·
|
DGA CR,
Mumbai
|
|
·
|
DGA CR,
Kolkata
|
|||
· DGA CR,
Southern Region (Bengaluru/ Hyderabad/
|
||||
Chennai)
|
||||
9th September,2010 Strategic Plan‐2020 prepared by Group of Officers Page12
Function No. of Audit
Offices
2 Financial
Audit
Offices
DAI (Defence and Railway 7
DGs/ PDs for
Audit) Defence
17 Railway
Audit
Offices
· DG/ PD – Finance (overall responsibility for
certification of GoI accounts, and audit of Ministry of Finance)
·
DG/ PD – Finance & Insurance PSUs
·
DGADS, New Delhi
·
PDA – Northern and Central Commands,
Chandigarh
·
PDA – Southern Command and DRDO, Pune
·
DG/ PD – Air Force
·
DG/ PD – Navy
·
DG/ PD – Ordnance Factories
·
DG/ PD – Defence PSUs
·
Re‐structuring/reduction
of Railway Audit Offices may be considered, after considering the workload
(especially in the newly created Railway Zones) and also in view of the current
and future availability of IAAS Officers at AG level
· Audit of Railway PSUs (KRCL, DMRC, CONCOR,
RITES, IRCON etc.) should be with the Railway Audit Wing
Ideally, a separate post of DAI (Accounts)
would be required, so as to focus full attention on this important function and
also for appropriate direction for standard setting (including GASAB). Till
such time as a separate post is not available, this function can be handled by
one of the DAIs –DAI (Finance and Revenue Audit) or perhaps DAI (Hqrs) or DAI
(Defence and Railway Audit), depending on an assessment of their relative
workload
Details
ofthe proposed re‐organisation of audit offices in respect of GoIare indicated
in Annexe‐ 4.
The proposed re‐organisation is a complex one,
involving major restructuring on a scale not
seen in the IAAD since 1984 (when the State AG
Offices were bifurcated into Audit and A&E
Offices). Hence, a gradual and long‐term
approach will be required for its implementation, even in phases.
Further, audit of all central units
(expenditure/ receipts/ ABs) – whether located in New Delhi or elsewhere ‐
would be done only by the Central Audit Offices. State PAGs/ AGs will be
responsible only for conduct of All India Reviews of Central Sector/ Centrally
Sponsored Schemes within their State audit jurisdictions.
9th September,2010 Strategic Plan‐2020 prepared by Group of Officers Page13
While the proposed re‐organisation would
ensure integrated audit for Ministries/
Departments and other units
of GoI in most cases, All India reviews (in particular those in the
social sector) will need active involvement
and co‐operation of the State PAGs/ AGs, without
which effective integrated audit cannot be
achieved. There would, thus, need to be extensive
co‐ordination between DAI (Social and General
Services Sector) and the ADAI (Reports States), primarily in audit of Centrally
Sponsored/ Central Sector Schemes.
3.5 Staff Implications of Reorganisation of GoI Audits
Considering
the sensitivity of such re‐organisation on IAAD staff, we propose that no transfers of
IAAD officials on account of this re‐organisation outside their current station
of posting would be made, without
their consent.
Officials who consent to move to other
locations could be appropriately posted, while officials who do not agree to
move to other locations may either be adjusted in other audit offices at the
same locations with vacancies, or adjusted againstposts personal to them (which
will lapse with their transfer/ retirement).
Such re‐organisation is not expected to be a
major problem in terms of staff implications, since there are not only huge vacancies(especially
on the Central Civil side) but there is need for increasing the sanctioned
staff strength in many areas which have seen a huge increase in expenditure in
the past (without corresponding increase in staff strength). Such increases in staff
strength should be only at the supervisory grades.
3.6 Reorganisation of Audit of States
Recent proposals for re‐organisation of audit
of States have centred around creating posts of Regional ADAIs; this would have
the advantage of a uniform command structure and single reporting relationship
for field PAGs/ AGs. Considering the advantages and disadvantages, we broadly
agree with the approach of creating Regional ADAIs (either four or five,
depending on whether a separate ADAI(North East States) is to be created. In
addition, the Regional ADAI organization would also facilitate co‐ordination
amongst the different State PAGs/ AGs to ensure a commonality of audit
approach, and minimizing chances of important audit areas not being audited
dueto lack of co‐ordination.
With Regional ADAIs, there would also be no
need for the concept of a single PAG, with a co‐ ordinating responsibility in
respect of other AGs in the State. Such an approach of a “co‐ordinating” PAG would add an
additional layer in the organizational hierarchy, without any commensurate
benefits to the organization, since he/ she will not be held accountable for
the Audit Reports produced by the other offices.
9th September,2010 Strategic Plan‐2020 prepared by Group of Officers Page14
However, two key issues with the Regional ADAI
structure need to be addressed:
·
There is a
danger of All India Reviews of Central Schemes being “orphaned”, with one DAI
having to deal with five zonal ADAIs; this could seriously compromise the
objective of “integrating” audit efforts. To minimize this problem, in respect
of Centrally Sponsored Schemes/ Central Sector Schemes involving transfer and
utilization of funds at the State and lower levels, the concerned DAI
(primarily DAI ‐ Social and General Services Sector) will have to be assigned a
formal co‐ordinating role in this regard.
· Even in other areas, the opportunity for a uniform country‐wide
approach (particularly for
Commercial
and State Receipts) should be retained. This could be achieved through
designation of nodal DAIs/ ADAIs for a specific topic6. The responsibilities of the nodal DAIs/ ADAIs would include
providing overall guidance and, as far as possible, uniformity on an All‐ India
basis, and also resource support in cases of shortage of resources with the
requisite competencies. This concept of nodal DAI/ ADAI would also tie in
neatly with the concept of knowledge centres and resource persons proposed in
the next chapter.
6 This need not necessarily be the DAI dealing
with Central Audit. While DAI (Economic and Infrastructural Ministries) could
be the nodal officer for roads and highways, the Regional ADAIs could be the
nodal officers for areas like public works, irrigation projects, power
distribution etc.
9th September,2010 Strategic Plan‐2020 prepared by Group of Officers Page15
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