-: [rti4empowerment] Appointment of the Comptroller and Auditor General of India

Friends,

Article in latest issue of "Governance Now" is reproduced below. Traditionally, appointment of C&AG is shrouded with secrecy and the basis of selecting such important constitutional authority is never in public domain.

The task before C&AG is very complex, in view of failure of the other institutions created by the Constitution of India, to prevent rampant corruption and waste of public money. He takes oath to perform his duties without fear or favour, to the "best of knowledge, ability and judgement." C&AG bears true faith and allegiance yo the Constitution of India. The accounts compiled under the directions of C&AG do not represent the ground reality, if public money is going into private hand, by institutionalized corrupt practices.

In this complex scenario, it is not enough to prepare reports for Parliament and State Legislatures; in a scenario of ineffective of these bodies where the Audit Reports do not serve the intended purpose in complex political environment. C&AG, as a authority created by the Constitution of India, has to use his knowledge and ability for becoming more effective. There is a strong case for "audit activism" for more effective contribution by 45,000 persons working in the Indian Audit and Accounts department, under the directions of C&AG. If the Executive finds is easy to ignore the audit findings instead of acting on them, there is need for serious rethinking about the role performed by the Government auditors.

Audit staff of the Indian Audit and Accounts Department is empowered to access the records of every Government office, by virtue of the position of C&AG in the Constitution of India. RTI Act 2005 also enables every citizen to access these records and thereby every citizen can act as and "auditor." The synergy between audit by citizens enabled by RTI Act and audit by IA&D is an unexplored area and newly appointed C&AG would have to find ways of becoming a "champion" of transparency and public accountability. Transparency in IA&AD , with implementation of section 4 of RTI Act in letter and spirit, is the first step.

New C&AG, after the retirement of Shri Vinod Rai, has complex tasks before him. One has to wait and see whether the selection process results in appointing right person with skills, persistance and zeal, to perform the very complex task of (i) preparing accounts that reflect true and fair picture of the ground reality, (ii) highlighting the waste of public money in the audit report, (iii) Effective follow-up of the findings of Indian Audit and Accounts Department and (iv) Effective decentralization and delegation of powers within IA&AD.

Dhirendra Krishna IA&AS (Retired)

..................................................................................................................................
Who will bell the CAG? How not to select Vinod Rai's successor.

To ensure that the next CAG also keeps a watchful eye on public coffers, we need transparency in selection and a set of eligibility criteria. Both have been missing for a while

As he approaches his superannuation in May, comptroller and auditor general (CAG) Vinod Rai knows it well that he has been the chief tormenter of the UPA government. "I can assure you that the government, if they did make a mistake appointing me as CAG, will make the right choice next time," he told a seminar organised by the Moneylife Foundation in Mumbai in February.

We can be rest assured that the government is currently busy making the right choice. The question is how it is going to select the next auditor in chief. And the answer is, nobody has a clue. The names of the recent occupants of this all-important post were announced one fine day, prompting many to allege arbitrariness.

In 1996, when the then CAG CG Somiah was retiring, there was no announcement of his replacement. The CAG office at Deen Dayal Upadhyaya Marg in Delhi was in the dark for a few days as to who would be their next boss. A week after Somiah demitted office, the Narasimha Rao government approved VK Shunglu's appointment. The orders came in the afternoon and by evening he was administered the oath of office by the president. Seventeen years have passed since Somiah has retired and we have had three CAGs, but the same secrecy has been maintained in the selection even though Dr BR Ambedkar described CAG as the most important functionary under the constitution.

To rectify this, several retired officers of the Indian Audit & Accounts Service (IAAS) recently came together under the aegis of the Forum of Retired Officers of IAAS (FRO-IAAS), and sent a memorandum to the president and the prime minister on March 20 calling for transparency and procedural propriety in the selection of the next CAG.

"A selection committee be constituted for the selection of CAG which should consist of the prime minister, the finance minister, the leader of opposition in the Lok Sabha, the speaker of the lower house, chairman of the public accounts committee and possibly the chief justice of India," it suggested, thus calling for a collegium to appoint the next CAG.

"There is a danger of some `pliable' person becoming the CAG to dilute the constitutional authority. So it is necessary that the PM and the president should be coaxed to bring in a transparent selection process," says S Krishnan, president of FRO-IAAS and former member-finance, government of India.

He says that the formation of such a forum was necessary to remind the government of its duty as even after 65 years of Independence no norms have been laid down for the selection of CAG.

The Forum has been active over the last few years, as an informal body, defending CAG in the wake of reports that had exposed numerous corruption scandals, causing embarrassment to the UPA government. In January, when 50 retired officers were discussing the CAG report on the coal block allocation at the Institute of Public Auditors of India, the idea of forming a formal body was mooted. And one of the main points discussed was the appointment of Rai's successor.

No response yet

The FRO-IAAS says that nobody from the government has responded to its memorandum. "Only a phone call came from BJP parliamentary party chairman LK Advani's office," says Krishnan.

Their suggestion of a collegium is not new. Last year, Advani in a letter to the PM had raised the issue of introducing a broad-based collegium system to appoint CAG. Gurudas Dasgupta, the CPI MP, also wrote to the PM in November 2012 suggesting a three-member collegium, comprising PM, the leader of the opposition in the Lok Sabha and the chief justice of India. However, the Forum says Manmohan Singh replied to him saying there was no ``urgent need'' to consider changes in the process of appointment of CAG.

Moreover, a similar system, of a high-level broad-based committee, is followed to select candidates for the statutory posts like the chief vigilance commissioner (CVC) and the chairman of the national human rights commission (NHRC).

The Forum questions the PM's response. The FRO-IAAS members have already met the public accounts committee chairman, Murli Manohar Joshi, in this regard and submitted the memorandum. They have also written to Lok Sabha speaker Meira Kumar and leader of opposition Sushma Swaraj.

"At this juncture, when the CAG office has come under serious attack, we want a person of impeccable integrity and professional competence (in the office). There is serious danger that a person (holding the post) can toe the government line," says BP Mathur, a former deputy CAG and a member of FRO-IAAS.

Selection criteria

The 1971 Audit Act sets the parameters for CAG appointment, talking about a person possessing sound knowledge of auditing and accounting, but it does not specify the background, competence, qualification to the post.

Even as many countries have moved towards ratification of their respective chief auditor's appointment by parliament, India still chooses to go a hush-hush in the appointment of CAG. "It is totally arbitrary and directly selected by the PM. Nobody knows how it is selected. Technically, the FM is to moot a proposal but for the last three or four appointments, there was arbitrary selection," says Mathur.

"The constitutional office should attract the best talent available," says Kamal Kant Jaswal, director of the NGO, Common Cause, and former secretary to the government of India.

Cadre questions

Since 1978, only retiring IAS secretaries or those who are on the verge of retiring have become CAG. The CAG office now has five deputies, all of them in the secretary level, who are from the IAAS cadre; but they are not promoted to the top post of the organisation.

"Earlier as the deputy CAGs were not in the secretary level, they did not fit into the government's unwritten convention of CAG coming from the secretaries. Now that the deputy CAGs are also equivalent to a secretary, why should not they be tried for the post?" says R Parmeshwar, a former deputy CAG. He says the current practice makes CAG the only department where the cadre (IAAS) cannot aim for the top post.

The Forum also maintains that an IAS officer corners the post without any training or formal experience of dealing with high standards of auditing government transactions, whereas a deputy CAG with the wealth of experience is denied the top post. "It is an unfortunate fact that the IAS has cornered this post for itself over several decades, like it has cornered all other non-cadre posts for IAS. That should be corrected," says Amitabh Mukhopadhyay, a former director general in the CAG office.

However, former CEC SY Quraishi says that the system of CAG coming from bureaucracy has worked very well. "Why do you want to tinker the system," he asks, even as he favours more transparency in the selection of top constitutional posts including CAG.

Former deputy CAG Mathur counters Quraishi's logic. He says that the fundamental reforms in the office have not taken place in CAG for a long time and an IAAS officer is needed for that. "Since 1978 when an IAS officer was appointed to the post, there has not been internal churning in terms of reforms. People like Vinod Rai and TN Chaturvedi have put in great efforts in exposing the government and taken a lot of interest in the work, but on the internal front there is not much to cheer (in terms of reforms) as it is a technical department," says Mathur.

The first three IAAS officers who held the post of CAG were heavily involved in improving the office of CAG. The first CAG of the independent India, Narhari Rao oversaw reforms and integration of finances of the princely states that merged into India. Ashok Chanda helped induct financial advisers in different departments and during AK Roy's time, there was improvement in the tax collection.

"However, the same zeal of improving the CAG is not seen in the last three decades," says Krishnan. The Forum memorandum said, "A more credible explanation is that there is a tacit preference for the IAS. For more than 30 years now, the Indian Audit Department has been continuously under CAGs coming from the IAS. From the point of view of the IAAS this looks like a systematic exclusion of their service and now virtual absorption of the post of CAG in the IAS cadre. Whether that feeling is right or wrong, it exists; and it has had a demoralising effect on the IAAS."

Demand for transparency: a short history

The FRO-IAAS move is not the first to seek transparency in CAG appointment. Before Somiah retired in 1996, the Common Cause under the direction of late HD Shourie filed a writ petition in the supreme court for transparency in CAG appointment. "Unfortunately the court in a cryptic judgment said it had heard the counsel and the petition was dismissed," says Jaswal.

The then PAC chairman, Ram Naik, in 1996 took up the matter before the president and the PM. He suggested, "In the context of Indian conditions, I feel that recommendation for the appointment of CAG to the president of India is made by the prime minister acting with the agreement of the leader of the opposition in Lok Sabha. While making the recommendations, guidelines and criteria for appointment of CAG may also be laid down so that a healthy precedent is set for future appointment to this office."

In 2000, the Vajpayee government set up the national commission to review the working of the constitution under chairmanship of former chief Justice MN Venkatachaliah. In one of its papers, the panel laid down certain procedure of appointment to the CAG. The commission favoured the appointment of CAG on recommendation of a high-level independent committee, which should include the Lok Sabha speaker and the leader of the opposition, besides the PM. When contacted, justice Venkatachaliah said, "The CAG is a constitutional post and a very important institution. There must be some objectivity to it, assessment of eligibility and integrity to the post." His commission apparently wanted only a person with extensive experience of government finances, public audit and accounts system to be eligible to hold the office.

In 2008, another civil society organisation, Public Cause Research Foundation (PCRF) led by Arvind Kejriwal, filed a petition in the apex court — when VN Kaul was retiring as CAG, and Vinod Rai about to be appointed. The Common Cause provided assistance to the PCRF in the matter. But the bench of chief justice KG Balakrishnan and justice P Sathasivam which heard the petition said, "We will not give any direction for the laying down of guidelines for the appointment of CAG. You have to find the guidelines in the constitution." The petition was dismissed like the earlier one in 1996.

The Common Cause has not given up. On September 4, 2012, it wrote to the PAC. "There is no response from the PAC office," Jaswal adds. But they are in no mood to leave the field as FRO-IAAS and Public Interest Foundation are also creating pressure on this issue.

"We succeeded in challenging the appointment of PJ Thomas as the central vigilance commissioner in 2011, for which he had to resign," says Jaswal. "While setting aside the impugned appointment as a nullity, the supreme court enunciated a new jurisprudence of institutional integrity and held that, at the helm of the country's highest integrity institution, the appointment of a person against whom a charge of corruption was pending, undermined the effectiveness and integrity of the institution," he says.

The Common Cause and FRO-IAAS will extrapolate from that judgment if the government doesn't learn a lesson from the Thomas affair and opts for anybody less than the best candidate in the appointment of CAG.

CAGs since independence

1948-54 V Narhari Rao, IAAS

1954-60 AK Chanda, IAAS

1960-66 AK Roy, IAAS

1966- 72 S Ranganathan, ICS

1972-78 A Baksi, IAAS

1978-84 Gian Prakash, IAS

1984-90 TN Chaturvedi, IAS

1990-96 CG Somiah, IAS

1996-02 VK Shunglu, IAS

2002-08 VN Kaul, IAS

2008-13 Vinod Rai, IAS

What they say

I think the high offices should not be a political gift from the power... One of the review commissions examined lateral entry and promotional avenue for deputy CAGs. That is a policy issue. That must also be considered. Selection must be made on a person's integrity, competence and independent thinking."

MN Venkatachaliah
Former chief justice of India

For all constitutional posts, there is a suggestion that if the appointment is done through a collegium, it carries more credibility. Sometimes a constitutional authority is targeted wrongly for being an appointee of the government of the day. However, that person has no role in his own appointment, and allegations of being partial compromises his independence."

SY Quraishi
Former chief election commissioner

At this juncture, when the CAG office has come under serious attacks, we want a person of impeccable integrity and professional competence. There is a deep danger that a person can toe government's line... Unless you go for a transparent process, how will you have the public confidence in the post? Everybody has a stake in the institution."

BP Mathur
Former deputy CAG and member of FRO-IAAS

If you appoint an officer who was a defence, petroleum or telecom secretary and make him CAG, he will have to review his own actions. How would you ensure objectivity when executive decisions taken during his own term are to be considered by him?"

Kamal Kant Jaswal
President, Common Cause, and former secretary, government of India

The Public Interest Foundation has already moved a proposal that there should be a collegium which should prepare a panel of candidates for formal consideration for the appointment of the CAG."

Nripendra Misra
Former chairman, TRAI

There should be a transparent policy for selecting CAG. In this kind of appointment, the leader of opposition should be included to make the matter more transparent."

DP Tripathi, spokesperson, NCP

How can the PM say that the existing arrangement for the appointment of CAG is working smoothly? What is the arrangement? In my opinion, there is no arrangement. There should be a selection process so that the best gets selected."

S Krishnan
Former member-finance and president of FRO-IAAS