The Hindu Business Line : CAG urged to sharpen skills to evaluate public-private models

New Delhi, Oct. 16 The Prime Minister, Dr Manmohan Singh, on Thursday urged public auditor CAG to sharpen skills so as to evaluate complex arrangements, in an increasingly integrated world, such as the public private partnership (PPP) projects in the core sectors in an effective manner.

“Liberalisation and globalisation have brought forth new issues that public auditors must address.

“To give an example, Public-Private Partnerships (PPPs) are becoming increasingly common... Audit needs new skills to evaluate these complex arrangements.

“I hope that all of you are alive to these new challenges,” Dr Singh said in his valedictory address at the 24th conference of accountants general, organised by the Comptroller and Auditor General of India (CAG).

The PPP model, Dr Singh said, is being used for development of important sectors in key infrastructure areas such as power, transport, urban infrastructure, tourism and railways.

Holistic approach

Stating that traditional auditing has been oriented towards transactions and regularity, Dr Singh observed that this orientation perhaps, needed to be replaced with an integrated and a more holistic approach.

“A public auditor cannot be like the statutory auditor of a company, merely certifying the financial statements of an entity. His or her role should also not be restricted to testing the regularity of transactions against the relevant rules.

“A public auditor’s focus ultimately has to be on good governance and audit processes need to be oriented towards this wider governance perspective,” he said.

Dr Singh said that the effectiveness of audit depends to a considerable extent on co-operation between the audit and the auditee.

Audit Cooperation

“The relationship between audit and executive agencies should not be the familiar adversarial relationship. It should be one of partnerships with a common goal of improvement of systems to enable the Government to deliver better to serve our people better.

“The basic purpose underlying external statutory audit is the need to ensure accountability, transparency and good governance,” he said.

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