Fraud to bribes: CAG quietly buries report on corruption and rot within

No official copy is available with the CAG now but a copy,obtained by The Sunday Express,reveals a sweeping range of irregularities detected: from seeking unauthorised favours to fudging of audit records,demanding bribes by staff to fake audits being used as blackmail.

The report has been authored by S B Pillay,who is Deputy Additional CAG in New Delhi,and was assigned the task of analysing the extent of corruption within. The result was his 24-page booklet titled: “The challenge of the coming decade: combating corruption in field offices.”

In the report,Pillay admits that participants at workshops conducted in Shimla “unanimously agreed that corruption exists at all levels including Group A…” and that “the cancer (of corruption) has spread to the good parts as well.” Sources said that such a frank admission in the report — marked for “internal use only” — was perhaps one reason the report was withdrawn after a large number of copies were circulated —- along with a covering letter —- at the CAG’s headquarters in New Delhi.

Contacted,CAG spokesperson B S Chauhan said that the report was withdrawn since it was more of an “introspection” and not based on documentary evidence or specifics. “It was an internal exercise containing impressions and introspection and,subsequently,other steps have been taken by the GAG to tackle the issue of integrity deficit.”

He said that CAG Vinod Rai last month set up a two-member committee — of Additional Deputy CAGs B B Pandit and Rajib Sharma — which will submit guidelines on maintaining “zero tolerance of any integrity deficit.” Rai has also sent a letter to all field units on the same subject.

In the confidential letter dated August 24,obtained by The Sunday Express,Rai admits “there have been reports of audit parties not conducting themselves properly. There have also been reports of certain extraneous considerations while we discharge our duties pertaining to entitlements of officials. They may be isolated. However,even a single incident makes our credibility vulnerable…”

It was precisely this that was first flagged by Pillay. He said that officers of the IAAS (Indian Audit and Accounts Service) have so far maintained an “ostrich-like attitude” to inconvenient issues like corruption. And that the feedback from outstation trainees was telling: “a large number of audit parties were not only corrupt in varying degrees but blatantly corrupt” and that “not all IAAS were corrupt but contrary to our assurances,many IAAS officers and shockingly across levels,were corrupt.”

“No one had seriously sought to influence us because our reports could be more easily sidelined by leaving it to the PAC (Public Accounts Committee of Parliament) or being overlooked by the press,” said the report. “Now with the glare of publicity on our reports,our weakness will be found out…”

Pillay has listed chapters on “types of corruption” in the audit services. For immediate attention,he has highlighted: “financial benefits in the form of hard cash or monetary incentives”. Among the “types of corruption which are internal to the office,” are: auditors submitting false TA/DA claims,false receipts,vouchers and “hard cash paid to programming staff for conducting lucrative audits.”

The report underlines areas of corruption “external to the office” too. These include: boarding and lodging as well as rail tickets being paid by auditees; cash being paid routinely to audit parties by the auditee as a signal of goodwill so that they will not raise serious objections; money paid to settle specific objections raised; money paid as inducements to complete audit in time as well as issue nil comments on audits.

The report also highlights a “recent phenomenon” in the auditing circuit — “the presence of retired persons or rogue parties that visit the auditee and conduct audit in the name of the office,and presumably collect a handout.” Pillay has listed a series of remedial measures that include grounding of a few auditing parties and putting their TA claims under a microscope. Their property returns,moveable and immovable can also be called for and examined minutely. “In short their lives can be made miserable,” says the report.

The CAG Corruption Blotter

The report by Deputy Additional CAG flagged:

* Large number of audit parties blatantly corrupt

* Many officers and,shockingly across levels,were corrupt.

* Auditors submitting false TA/DA claims,false receipts,vouchers

* Hard cash paid to programming staff for conducting lucrative audits

* Boarding and lodging as well as rail tickets being paid by auditees

* Cash being paid routinely to audit parties to avoid serious objections

* Payoffs to settle specific objections raised

* Inducements to complete audit in time as well as issue nil comments on audits

* Retired persons or rogue parties conducting audits in the name of the office and ‘presumably’ collecting handout