8 GOAL 6 IMPROVING HUMAN RESOURCE MANAGEMENT

                               CHAPTER 8 

Goal        6: Improving Human Resource Management

This strategy is about:

6A.         Reviewing office wise existing sanctioned staff strength to ensure that audit resources are optimally deployed across all offices

6B.         Determining right span of control for Group Officers to achieve quality performance

6C.         Recruiting only at Assistant Audit Officerlevel and phasing out recruitment at auditor,  clerk, steno and Group D levels.

6D.         Creating an exclusive IAAS Group B Service

6E.         Creating Zonal Cadres of IAAS‐Group B in the short term and an All India cadre in the  long term

6F.         Modifying Recruitment Rules for IAAS‐Group A to include fast track promotions from  IAAS – Group B

6G.        Creating an IAADRecruitment Board

6H.        Ensuring a constant intake of Professionals into IAAS Group B

6I.          Raise benchmark for promotion by selection to “Very Good”

8.1 Background

Human Resources (HR)constitute the most valued asset of any knowledge based organization – more so in IAAD which is entirely dependent on the output generated by its employees. Human Resources management essentially involves:

·       recruiting competent people;

·       providing rich job contentto keep the workforce satisfied;

·       ensuring decent career progression prospects to keep the workforce motivated;

·       imparting periodical training to hone their skills; and

·       giving them professional pride.

Over the years, we have not been able to improve and optimize our Human Resource Management as our stereotyped recruitment system has affected our Human Resource capabilities. There is, therefore, a need to take a relook at our existing Human Resource systems and overhaul our system.

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8.2 Review of existing staff strength

At present, the office‐wise strength of staff among IAAD offices across the states is not based on adequate scientific analysis and there is wide disparity among them given the nature, volume and complexity of audit work. For instance, the sanctioned staff strength in a smaller state of Kerala is higher than the combined sanctioned strength of Bihar and Jharkhand. Such a skewed distribution leads to sub‐optimal utilization of manpower²². Therefore, we need to evolve a criterion to determine the staff strength required for each office based on scientific work study norms, risk perception etc. The need to move towards ‘quality’ from ‘quantity’ and from ‘individual irregularity’ to ‘system evaluation’ should be kept in mind while determining the strength. With the move away from audit of DDOs, the number of DDOs cannot be considered as a significant factor for determining the staff strength.

8.3 Ensuring optimum span of control

Another issue affecting the performance of officers in IAAD is the span of control. Thecurrent ratio of Group A (Group Officers) to Group B Officers (Senior Audit Officers, AuditOfficers, Assistant Audit Officers)on the audit sideis around 40²³. While span ofcontrol may not beascriticala concern in the A&E Offices, for a knowledge based activity like auditing, a supervisory span of control of 40 (12 to 15 auditparties) is indeed a critical area of concern which needs to be brought down substantially to increase the effectiveness of management control by Group Officers²⁴. This is especially important with the re‐orientation of approaches to all streams of audit (financial, compliance and performance audit).

About 5 to 7 Audit Parties in the audit set‐up could be considered as a more appropriate span of control for a Group Officer. Considering a strength of around 10,000 officers (Senior Audit Officer/Audit Officer/Assistant Audit Officer) on the audit side, this would entail around 3300 parties (party consisting of 3 supervisoryofficers in the rank of Senior Audit Officer/Audit Officer/Assistant Audit Officer) warranting control by around 500 Group Officers (span ofcontrol ofaround 6.6 parties per Group Officer). Currently we have only around 250 Group Officers, and we would require another 250 Group Officers in order to reduce the span of control to this figure.

To fine tune the span of control issue, a committee consisting of all players involved in this process could decide as to what should be the ideal spanof control depending on thenature of assignment of work (specifically keeping in view the varied audit activities like civil audit, works audit, commercial audit, revenue audit, accounts, entitlements etc as well as the mix of financial, performance and theme‐based

 

²² The skewed distribution is largely due to lack of any norms for civil field audit parties, as well as outdated norms for other field audit teams. For example, for field inspection of PW Divisions, a graded system of norms for audit periodicity and duration, linked to works expenditure has been prescribed; however, the highest audit duration for annual audits has been set for PW Divisions with annual works expenditure of Rs. 1 crore and above. It is inconceivable that any PW Division in a normal State (excluding some of the tiny NE States) would have annual works expenditure of less than Rs. 1 crore.

²³ Historically, each Group Officer was supposed to “control” 30 field audit teams, although no documented record of this ratio could be traced easily. While the current profile of posts of Group Officers suggests a lower ratio, even this is highly inadequate, in view of the renewed emphasis on “officer‐driven” audits.

²⁴This may perhaps need to be factored into the ongoing study on work norms being piloted by the Staff Wing of Hqrs. Office through external consultants (Deloitte and Touche).

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compliance audits). However, the fact remains that the current span of control would necessarily need to be reduced from the current span of about 40 Audit Officers to One Group Officer. Even though the extent of reduction may vary, depending on the detailed analysis by the committee, there is no other option but to increase the posts of Group Officers in the near future. We propose certain measures as stated below to address this issue.

8.4 Recruitmentand Promotion

Thepresent system ofdirect recruitment to Group ‘A’ level ofIAAS officers through UPSC (Civil Services Examination) is functioning well and needs no change. Itensures that IAASofficers come from varied academic backgrounds and this augurs well with theneed to audit various sectors of the Government as well asto exercise managerial control over the entire audit process.

The recruitment below Group ‘A’ level is mainly done at two levels – i.e. Group B level (Assistant Audit Officers) and Group C (auditors, clerks, stenos etc.). There are inherent issues of competence which require a change in the present system of recruitment as explained below.

 It may be noted that there are separate provisions for the terms and conditions of service for

officials of the IAAD under Article 148 (5) of the Constitution. While for Group ‘A’ officers we

 may continue with the uniform pattern of GoI, for our Group B staff, we should consider  appropriate deviations from the GoI pattern; this is absolutely essential if we are to be fully  equipped to discharge our Constitutional mandate.

Recruiting only at Assistant Audit Officer level by phasing out recruitment at Auditor level

The job of an auditor entails careful examination of records of auditee and hence warrants the audit staff to be one step ahead of the auditee. The minimum qualification for recruitment at the auditor level has been fixed as a graduation degree. However, over the years, recruitment at the auditor level has not been attracting the right kind of talent due to lower pay scales at the auditors’ level and the perception of better prospects outside the department. This leads to only those candidates staying back as auditors who are not able to make it to other more attractive jobs. Thus,IAAD starts with ‘capacity deficit’ which cannot be made up through subsequent training. The ‘capacity deficit’ is also compounded by the fact that these candidates are selected only on the basis of their dossiers forwarded by the Staff Selection Commission without any other specific selection criteria needed for auditing responsibilities.

Recruitment even at the Assistant Audit Officer level also has only a minimum qualification requirement of a Graduate degree. Further, the change in working of the Government from archaic methods to more modern practices makes the audit process more conducive to audit by Assistant Audit Officers with higher understanding, higher responsibility and higher salaries rather than by Auditors. As the job of an Assistant Audit Officer has better prospectsfor career progression, it attracts a far better range of candidates who look at this job as having better future prospects and hence become a valuable work force for the IAAD. Hence there is a need to move towards a situation where we are able to recruit only

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at the Assistant Audit Officer level. This will ensure that we are able to recruit and nurture better talent within theIAAD for the future.

The recruitment in the A&EOffices could, however, be continued at the Accountant level as the nature ofassignmentsin theseoffices warrants presence of staff at that level.

Phasing outrecruitment at the clerk, steno and Group D level

Recruitment at clerk, steno and Group D levels needs to be phased out. These personnel render support services which can be outsourced at much lower costs with much higher efficiency levels. TheIAAD should focus on core audit areas and outsource the non‐core functions of its offices so that its management remains focused and doesnot have to divert scarce resources for control and supervision of staff in non‐core areas. However, those working in IAAD at present will continue to be governed by thepresent set of rules.

Creating an exclusive IAAS Group B Service

Assistant Audit Officers, Audit Officers and Senior Audit Officersconstitute gazetted Group B Officers. They are the cutting edge level of officers who carry out actual field audits. These Group B officers constitute the ‘face’ of the Audit Department. However, theseGroup B officers have very little options for futureadvancements and often remain in the same post fornearly20 years of their working careers leading to stagnation and frustration. Considering the important role playedby them in the audit process, there is a strong case to give the Group B Officers a sense of ownership within the IAADand duly recognize their role and services rendered by them by creating an Indian Audit and Accounts Group B Service. The contours of such a Group B Service would broadly be as follows:

·      The Indian Audit and Accounts Group B Service could span the cadres of Assistant Audit Officers, Audit Officers, Senior Audit Officers and Deputy Accountant General‐Group B (in the senior time scale).

·      Thus, Assistant Audit Officers, after initial recruitment, will become members of this Group B Service and will have an opportunity to rise to the level upto Deputy Accountant General instead of upto the level of Senior Audit Officers. Their posting as Deputy Accountant General could be restricted to the station from which they are promoted. However, if posts are not available in the station, they would be considered for posting within a zone.

·      The Deputy Accountant General (Group B) will act as Group Officers, which will supplement the existing pool of Group Officers from the Indian Audit and Accounts Group A Service. These DAGs (Group B) will be entitled to the same perquisites and allowances (e.g. telephone expenses, pooled car for travel etc.) as their DAG – Group A counterparts, and will also have the same audit responsibilities as their Group A counterparts.

·      Besides motivating these officers, this scheme will also take care of the additional requirement of more Group Officers in view of proposed reduction in span of control for

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Group Officers. Further as these officers would possess knowledge of local language, this would aid in supervising and controlling field audits which are more and more becoming dependent on knowledge of the local language.

·      The Indian Audit and Accounts Group B Service Officers would also have an opportunity to get inducted into IAAS – Group A where they will have opportunity to rise to higher levels²⁵ depending on their merit. However, as IAAS – Group A Officers, these elevated officers would also be subject to the same All India transfer liability as other officers of the cadre currently.

Modifying Recruitment Rules for IAAS­Group A to include fast track promotions fromIAAS – Group B cadres

Currently theIAAS ‐ Group A recruitment rules allow for 33.34% quota for promotions from within the IAASon selection basis and 66.66% direct recruitment through the Civil Service Examination conducted by the UPSC. Over the years, it has been observed that most of these officers promoted into theIAAS ‐ Group A cadre get only around 5 years in the IAAS before their retirement. Hence promotion to the IAAS does not really act as an incentive either to the officersor to the organisation as these officers arenot satisfied with theiroutstation postings at the fag end of their career.

In order to ensure a longer tenure for the promoted officers, we should consider a modified schemefor recruitment:

·      60 per cent of the vacancies will be reserved for direct recruitment through UPSC (DR) – as against the current 66.66 per cent;

·      20 per cent will be retained for promotion from the Group B cadre – as against the current 33.34 per cent;

·       20 per cent is kept for induction of IAAS – Group B officers into the IAAS –Group A on a fast

track promotion (FTP) scheme based purely on merit (outstanding past performance, examination and interview)²⁶.

The FTP schemewould ensure that on a yearly basis, we are able to get some smart IAAS – Group B Officers, with relatively longer tenures and the scope and to reach up to theSelection Grade/ Senior Administrative Grade in the future. These officers would be inducted at the level of Group Officers but would be awarded the seniority along with the directly recruited IAAS Group A Officers who were recruited in the same year. Thereafter,their future promotions to higher grades like Junior Administrative Grade would be governed on the same basis as for the directly recruited IAAS ‐Group A Officers (6 years from induction). The Recruitment Rules for theIAAS ‐ Group A would need to be modified accordingly.

 

²⁵ A modified IAAS – Group A recruitment scheme has also been suggested in this document.

²⁶ Broadly on the lines of the procedure for one‐time recruitment of IAAS Officers in 1996.

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 Concerns have been expressed that such a fast track promotion would lead to an imbalance

in the career progression of IAAS officers from other streams, especially at the Selection

 Grade of JAG and the SAG levels, as was experienced in the earlier one‐time recruitment of 49

officers into the IAAS. In order to ensure that balanced career progression of IAAS Officers

 recruited from different streams takes place:

·    Bunching of FTP recruitment should be strictly avoided. The recruitment should take place

annually, and no more than 10 to 15 IAAS officers should be recruited through FTP in a  year.

 ·      The FTP recruitment would be from within a pool of Group B Officers (at all levels) with an

age of 42 to 48 years, with at least 12/ 14 years of post‐SOGE experience in the Group B cadre, and outstanding performance records.

Creating Zonal Cadres of IAAS­Group B in the short term and an All India cadre in the long term

At present there are numerous cadres within the IAAD for managing Group B officers at the state level. The existence of different cadres has led numerous inconsistencies in promotional avenues across the country. In some states, officers at Assistant Audit Officer level get promoted as Audit Officers within 5 years and in some states they take 20 years. This problem cannot be addressed in a systemic manner, without moving towards unified cadres.²⁷

One way to address this problem is to consider having an All India Cadre for the IAAS ‐ Group B officers. However,a task of integrating nearly 30 to 40 small cadres in no easy task and would lead tonumerous amalgamation and integration anomalies. Keeping in view these constraints, we could consider Zonal cadres, which could be more manageable and would also take care of issues of need for local language for our auditing staff²⁸. There could be four or five zonalcadres (North, South, East West and North East) with respective ADAIs acting as cadre controlling authorities. In addition, there would be a single All‐ India cadre for Central Government Audit, which would encompass all wings.

Currently, at the level of offices of Government of India or central PSUs, the knowledge of local language is not essential as most of the records are maintained in English; hence, such audit is conducive to an All‐ India cadre. However, audit of State Government records requires knowledge of local language and very often our field audit staff, though capable,facesa language constraint; hence, a zonal cadre is more desirable.

 

²⁷  Headquarters has, from, time to time, sanctioned additional posts of AOs to Offices suffering from acute promotional problems. However, this does not, and cannot, address the issue of other offices with promotions in 5‐6 years.

²⁸The language constraint could be addressed by ensuring that every recruit passes a language paper (for any of the languages in the zone) at the time of recruitment.

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Amalgamation of the existing office‐wise cadres²⁹ into zonal cadres for audit of State Governments, and an All‐India cadre for audit of the Central Government will be an arduous and complex task. The following factors merit consideration in this regard:

·       All future recruitment (from AAO onwards) could be only to the Zonal/ All India cadres

·      As regards existing staff, amalgamation is difficult, especially at the AO/ SAO level, since promotions in some offices to AO take place in just 5‐6 years (from the date of passing SOGE), while in some other offices, this can take as long as 15‐20 years. One via media is to specify a cutoff date (say SOGE 1998) and upgrade adequate number of AAO posts to AO level to accommodate all AAOs, who have been waiting for 12 years or more for promotion). The upgradation of posts per se will not impact work substantially, as the SAO/ AO is also currently required to directly undertake audits of critical areas (in addition to his supervisory responsibilities).

·      Any amalgamation exercise will result in the time from promotion from AAO to AO approaching an average figure (somewhere between 10 to 12 years). This will inevitably benefit those AAOs who have been waiting for long periods of time, while offices where promotions take place very quickly would be at a disadvantage. There would, thus, be both gainers and losers in any such exercise; this cannot be avoided. The consequential implications of the “losers” taking recourse to judicial remedies etc. will have to be managed.

Once the Zonal Cadres stabilize, in the long run we could consider an integrated All India Cadre for all IAAS ‐ Group B Officers.

Creating an IAADRecruitment Board

Auditing is an in‐depth knowledge intensive exercise which warrants auditors having varied exposure and knowledge of subjects. This requires the recruitment process to be flexible so that shifting domain knowledge requirements like in areas of economics, environmental sciences, information technology, science, engineering etc, are met promptly through the recruitment process. In this context, agencies like the Staff Selection Commission (SSC) have not been able to cater to these shifting requirements effectively and promptly. While the reasons for non delivery of effective recruitment services by the SSC may not all be attributable to them, the fact remains that the IAAD, being an organisation serving a constitutional authority needs the flexibility to recruit the right kindof officers it needs.

Thus, IAAD needs flexibility to fix the eligibility requirements for candidates appearing for Assistant Audit Officers recruitment. It would, therefore, be desirable thatIAADundertakes its own recruitment for its Group cadre just like the Railway Board does for itself for its Group C Cadre. Such an organisation could also cater promptly to the requirements of the deficit staff in certain domain areas like

 

²⁹ Some offices (e.g. DGA P&T) have separate cadres even for each branch office.

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information technology, environment etc and certain geographical pockets like the North Eastern states in India.

Ensure a constant intake of Professionals

Many supreme audit institutions recruit only qualified accountants (equivalent of Chartered Accountants). This not only helps in financialattest audit but also in conduct of performance audit, as these accountants are well trained in auditing techniques. In India, the examination for Chartered Accountants course is very tough and hence an average Chartered Accountant would have higher ability and competence than an average Assistant Audit Officers (with a graduate qualification) recruited through SSC/UPSC. The 6^th Pay Commission has changed the paradigm for pay by making the Assistant Audit Officers salary (Rs. 30,000 plus) attractive even for Chartered Accountants. In view ofinherent advantages that the Chartered Accountants (and for that matter cost accountants and company secretaries) bring to the job; we could consider that 20 per centrecruitment into theIAAS ‐ Group B to be reserved only for Chartered Accountants, Cost Accountants and Company Secretaries.

Raise Benchmark for Promotion by Selection to “Very Good”

Currently, the benchmark for promotion to and within Group B cadres, as well as from Group B to Group A follows a mix of “seniority‐cum‐fitness” as well as selection, but based on “Good” CR ranking as the benchmark for promotion. The use of “good” as the benchmark for promotion has not had desirable effects on the quality of promoted staff, as well as acting as a disincentive for staff of Very Good/ Outstanding rating, who are now clubbed with other officials.

In order to ensure that we have the right pool of quality officers and staff for discharging our onerous duties, it is essential that the benchmark for promotions which are based on selection (viz. AAO to AO, and Sr. AO to DAG – either Group B or Group A) is raised to Very Good. The current procedure of “seniority‐cum‐fitness” will continue for other non‐selection promotions (e.g. Sr. Auditor to AAO, AO to Sr. AO). This will balance the interests of career progression for staff with the interests of the organization.

 Without ensuring “Very Good” as the benchmark for promotion on selection basis, creation

of a Group “B” IAAS Service or other measures to increase the career prospects for

 supervisory staff will be counterproductive, as it is likely to flood the Department with  officers and staff of less than the desired quality.

8.5 Ensure stability of tenure

Quick rotation is normally followed for assignments which have direct public dealing and also involve sensitive financial matters. In such assignments, rotation of Officers helps to ensure that no vested interests are developed and the integrity of the system is maintained.

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On the other hand, auditing involves indepth assimilation of knowledge and experience about the sector or organisation being audited. Stability in tenure always aids in increasing the quality of audit. The stability of tenure enhances accountability and also the quality of output. There is no stability of tenure in the present system. Therefore, it would be desirable to post AGs/ PDs with a minimum tenure of 3 to 5 years.

8.6 Develop leadership qualities in young IAAS Officers by giving higher responsibility

Young IAAS officers rarely get to work independently,as they report to DG/PAG/AG/PD sitting in the same station/building. This situation is notconducive to developing leadership qualities in such officers. They need to be given independent charges (or at least charge of separate branch offices)and responsibility,so that they get opportunity to become leaders. This can be donein several ways:

·      As a result of integration of auditefforts as suggested in this document, there would a need to establish several offices for the various sectors of audit of the Central Government, each of which would have distinct branch offices. Giving responsibility for these distinct branch offices to young IAAS officers would provide opportunities for developing their leadership qualities for the future

·      Consideration could be given to Sr. DAGs holding independent charge for commercial and receipt audit in the smaller states (e.g. the North Eastern States) and directly reporting to the zonal ADAIs.

Reference has already been made in paragraph 3.6 that with the concept of Regional ADAIs, there would be no need for a PAG in each State with a “co‐ordinating” role. In addition to the other issues with such a co‐ordination mechanism mentioned earlier, this would also not be conducive to developing leadership qualities in young IAAS Officers by adding an additional “co‐ordination” layer.

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