Finance Minister's diatribe against CAG

With all due respect to the honourable minister, I cannot refrain from lamenting that on the occasion referred to above, he perhaps went too far when he commented that CAG reports have done positive harm to the country in that the reports consisting of insignificant objections (to quote the minister: "consisting of little little amounts") are published in the newspapers which are then captured by Transparency International for identifying Bangladesh as the number one corrupt country in the world and thus damaging the image of the country.

At the outset, one can question when and at what period of time of our history the country possessed a good image in respect of extent of prevalence of corruption.

Leaving aside the question of image of the country for the moment, we may start the discussion by quoting Article 128 of the Constitution which has delineated the functions of the CAG as follows:

(1) The public accounts of the Republic and of all courts of law and all authorities and officers of the Government shall be audited and reported on by the Auditor-General and for that purpose he or any person authorised by him in that behalf shall have access to all records, books, vouchers, documents, cash, stamps, securities, stores or other government property in the possession of any person in the service of the Republic.

(2) Without prejudice to the provisions of clause (1), if it is prescribed by law in the case of any body corporate directly established by law, the accounts of that body corporate shall be audited and reported on by such person as may be so prescribed.

(3) Parliament may by law require the Auditor-General to exercise such functions, in addition to those specified in clause (1), as such law may prescribe, and until provision is made by law under this clause the President may, by order, make such provision.

(4) The Auditor-General, in the exercise of his functions under clause (1), shall not be subject to the direction or control of any other person or authority.

In exercise of his functions as quoted above, the CAG conducts audit of accounts of the republic and prepares reports thereof for submission to the president who causes them to be laid before the parliament. The reports contain instances of financial irregularities known as audit paragraphs. The paragraphs thus appearing in the reports may not all be instances of corruption. In addition to cases of corruption, theft, and pilferage, the reports contain instances of the irregularities of the following kinds:

(a) instances of wastage of public resources,

(b) irregularities in the form of deviation from prescribed norms,

(c) violation of rules and procedures having financial implications,

(d) non-compliance with financial rules, regulations and procedures etc., and

(e) non-compliance with the "Standards of Financial Propriety" as laid down in Clause 10 of the General Financial Rules which is obligatory on all public functionaries to follow meticulously.

The reports containing such irregularities may appear to be insignificant in the eyes of the finance minister, but not in the eyes of the framers of financial rules, regulations, and procedures, and if one cares to go deeper into these paragraphs, one is sure to find the submerged portion of the iceberg. Moreover, one should consider an irregularity as an irregularity irrespective of the amount of money involved unless the governing rules are changed. CAG has, per force, to report all cases of financial irregularities irrespective of the amount involved as mandated by the Constitution, and it should not be left to his discretion to choose only the big ones and ignore the small ones. Obviously allowing such discretion to CAG would be dangerous.

The public servants including the ministers, who are now administrative heads as per the current Rules of Business, are accountable for proper utilisation of every farthing without any lower or upper limit of the amount involved, however big the size of the public expenditure might be. Otherwise questions will be raised as to how to specify what "little little" amount means, what size constitutes a little amount and what a big one, what is the minimum amount to qualify for being reported upon by the CAG.

It may be worthwhile to remember that little drops of water make a mighty ocean. So dismissing anything as "little" is fraught with the danger of ignoring a huge amount when added together and encouraging the perpetrators of small irregularities to commit bigger offences. Moreover is it possible to draw a line of demarcation between small amount and big amount? The answer is obviously no. There is another side of the picture -- in a particular case of financial irregularity, the amount might be small, but the modus operandi could be a dangerous one, having far reaching consequences or for that matter the Standards of Financial Propriety breached was very serious although the amount could be small.

It is, however, not intended to say here that there is no scope or necessity to improve the quality of CAG reports. In fact the CAG reporting obligation leaves much to be desired. He will have to go a long way to improve the quality of his report and to introduce modern concepts of auditing. But there are many constraints his organisation is suffering from and as far as my personal experience goes, the CAG lacks the power and authority to streamline his administration, reorganise his office, develop human resources, and do career planning of his officers -- these are not under his control.

He does not even administer the BCS (Audit and Accounts) Cadre. The cadre is administered by the Finance Division. The CAG can not create even the post of an MLSS not to speak of a post in any higher category nor can he fill up any existing vacant post without obtaining prior permission from the Ministries of Finance and Establishment. He can not reorganise his various Audit Directorates to enhance their efficiency and effectiveness. Due to various reasons, both internal to CAG and external, beyond his control, the auditing work of CAG was in arrears. After much endeavour and launching a crash programme, the backlog has been cleared, but the backlog has been shifted on to the parliament, the size of the backlog being a staggering one, and considering the speed at which the reports are currently being disposed of by the Public Accounts Committee (PAC) it will take decades to clear the backlog. This aspect of the problem is not getting due attention of the authorities concerned. There are many other problems.

For example when a parliament is dissolved and a new one elected, the continuity in the functioning of the PAC is disrupted and the deliberations or decisions of the previous PACs go missing. There is no provision in the Parliamentary Rules of Procedure to follow up the decisions or to maintain continuity. Further, experience shows that a long time is taken to form the PAC. It took fourteen months to form the PAC in the eighth parliament and, as far as I can recollect, seven months in the seventh parliament. In view of this situation, a very good report prepared by the CAG fully conforming to international standards can do little to help establishing transparency and accountability of the administration.

Our honourable ministers are very much obsessed with the image of the country. But when reports of corruption not emanating from CAG reports appear in the news papers how can the image of the country be upheld? It is not only CAG who unearths cases of corruption; there are various other sources wherefrom the incidents of corruption are dished out. Do we have to believe that the prevailing scale of corruption in Bangladesh is not an alarming one and the reports that appear in the newspapers are all exaggerated?

If corruption at a large scale exists and the government does not take any major step to combat the same what is the use blaming the reporters instead of taking corrective measures? How can the image of the country be protected when the whole world knows how corrupt we are? The World Bank has also prepared a report on corruption in Bangladesh not basing upon CAG or on newspaper reports. Are all of them wrong? Should the CAG or the press bear the blame for this situation?

One last question: if the CAG and the press are to blame for the perception of corruption in the country, on what consideration was the government compelled to create the Independent Anti-Corruption Commission by an act of parliament?

M. Hafizuddin Khan is a former Comptroller and Auditor General.