Expenditure on NREGA, other rural schemes are open to audit by the CAG: Jairam Ramesh

Union Minister for Rural Development and Drinking Water Supply and Sanitation Jairam Ramesh said here that after extensive consultations with the C&AG, it has been agreed that all expenditure on all the schemes of the two Ministries will be open to audit by the Comptroller & Auditor General both in the Centre and the States.

He said, the action plan will enhance accountability in public expenditure in rural development programmes of the Central Government. In 2011/12, the public expenditure incurred by the Central government on different schemes of the two ministries amount to about Rs 100,000 crore, which is next only to the public expenditure on defence in magnitude. The Action Plan also includes the following decisions.

1. The C&AG may conduct not only financial audit and compliance audit but also performance audits with regard to these schemes. To begin with performance audits of MGNREGA in twelve states will be taken up. These states are Assam, Andhra Pradesh, Bihar, Chhattisgarh, West Bengal, Jharkhand, Madhya Pradesh, Rajasthan, Gujarat, Maharashtra, Orissa and Uttar Pradesh

2. The audit of all schemes of the Ministries of Rural Development and Drinking Water Supply and Sanitation will be entrusted to Accountants General in different states so as to ensure that a focused and comprehensive audit is carried out. The AG offices will be so nominated and staffed that they possess the knowledge and expertise to conduct an effective audit and will cover all states on a cluster basis.

3. It has been the endeavour of C&AG that the Internal Control mechanisms in Government are strong. Towards this end, the Ministries of Rural Development and Drinking Water Supply and Sanitation and the Comptroller and Auditor General initiated a joint exercise to prepare checklists to enable the two ministries to put in place an efficient Internal Control system for monitoring the expenditure incurred as also the quality of expenditure. These checklists for the Ministry of Rural Development are ready and are being put on the MORD’s website immediately. The checklists for the Ministry of Drinking Water Supply and Sanitation will be finalised and made public in about three weeks time.

4. The Ministries of Rural Development and Drinking Water Supply and Sanitation have also taken the initiative to prepare a common accounting format for all rural development schemes in consultation with the C&AG which will lend itself not only to internal check and monitoring by the two ministries but also audit by the C&AG and eventually accountability to Parliament. A committee is being set up under the chairmanship of Shri Arvind Mayaram, Additional Secretary and Financial Advisor to both the ministries to

(i) examine modifications needed in already existing accounting procedures of DRDAs;

(ii) suggest principles and policies of accounting at the level of the implementing agency, which in the case of the Ministry of Rural Development are mainly panchayat institutions;

(iii) identify appropriate standards for financial reporting and disclosure, including suggest changes in present format of utilization certificates (UCs); and

(iv) recommend how the accounting and financial statements can be made IT-enabled. The committee will submit its report in four months time.

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