RTI, MUMBAI / CH 81 FOLLOW-UP PROCEDURES DAY 8 SESSION NO. 1 (THEORY) BASED ON CHAPTER 8 PERFORMANCE AUDITING GUIDELINES

RTI, MUMBAI / CH 82 Learning Objectives In the last 7 days we have discussed about the salient features of the Performance Auditing, Auditing standards and mandate, Strategic planning and selection of subjects, Implementation of Performance audit plan, Evidence and documentation and Reporting process. We have also discussed Supervision, review and quality control in Performance Auditing. Today we will be discussing about the Follow-up procedures in Performance Auditing in two theoretical sessions.

RTI, MUMBAI / CH 83 Cont… In the first theoretical session we will discuss:  Follow-up procedures  Parliamentary guidelines  Procedure for recommendations not accepted  Annual follow-up programme  Objective of follow-up programme

RTI, MUMBAI / CH 84 Cont… In the second theoretical session we will discuss:  Inventory of recommendations  Method to deal with significant delay in implementation of the recommendations  Effectiveness of performance audits: assessment  Reporting to SAI Headquarters on audit effectiveness  Quality assurance of the follow-up programmes

RTI, MUMBAI / CH 85 Follow-up procedures The follow-up procedures in the context of performance audit should be established keeping the following features in mind:-  The performance audits which are selected by the committees of the Parliament/state legislature for detailed examination and oral evidence should be pursued in the context of the decisions of the respective committees, if their recommendations have been issued.  Good quality of performance audit being assured with the help of the quality assurance measures adopted by SAI, it would be expected that the recommendations of the committees of the Parliament/state legislature would not only support but also strengthen the recommendations by audit.

RTI, MUMBAI / CH 86 Cont…  Where, however, the examination and issue of recommendations by the committees of the Parliament/ state legislature has not taken place, the Accountants General may continue to pursue the follow-up on recommendations as in the cases where the subject is not selected for detailed examination.  The Accountants General will carry out follow-up procedures to secure implementation of the recommendations, particularly those that are accepted by the entity.

RTI, MUMBAI / CH 87 Parliamentary Guidelines  As per the extant procedure, applicable in case of the reports on the Union Government, the ministries and departments are to forward the ‘action taken note’ against all matters included in the report of the Comptroller and Auditor General to the Parliamentary Committees within the prescribed time  In vetting the ‘action taken notes’ the Accountants General may concentrate on the substantive action on the recommendations, rather than on the form. The action taken reported in the notes of the entity should be generally accepted without verification at that point of time.  However the Accountants General may flag issues, which may be needed to be verified specifically as part of the follow-up programme

RTI, MUMBAI / CH 88 Procedure for recommendations not accepted  Where the performance audit reports include one or more recommendations, which were not accepted by the entity. The Accountants General may persist with further discussions and persuasion to take such recommendation(s) to logical conclusion.  One of the methods could be to take it up with political executive (Prime Minister, Minister, Chief Minister, etc.) as per the extant procedure obtaining within the SAI, if the implications are vital. Another method could be to take all such major issues, where the SAI is of the considered opinion that their implementation is likely to contribute significantly to the improvement in programme management, to the respective committees of the Parliament/state legislature in the form of a generic follow-up report.

RTI, MUMBAI / CH 89 Annual follow-up programme  The Accountants General may prepare annual operational plan for follow-up programme in relation to the performance audits conducted in the past. The annual operational follow-up programme should be incorporated in the annual audit plan prepared by each field office under distinct section.  The annual follow-up programme should be supported by data on major recommendations made in the past, recommendations stated to have been implemented but not tested through follow-up audit and recommendations not implemented by the entity.

RTI, MUMBAI / CH 810 Objective of follow-up programme & methods of dealing with delays in implementation of the recommendations The follow-up programme is oriented towards:  Compliance with the accepted recommendations with emphasis on encouraging the implementation rather than highlighting the lack of action;  Strategy for recommendations that are not accepted/partially accepted;  Follow-up on the accepted recommendation for which compliance reports are awaited;

RTI, MUMBAI / CH 811 Cont…  Testing the quality of implementation of the recommendations and impact thereof; and  Assessment of audit effectiveness and value addition to the entities and programme management through performance audits. The following-up activity can be performed by  Ascertaining the implementation of the recommendations;  Carrying out a desk review, which involves more detailed review of the Implementation of the recommendation, which may involve a series of meetings and presentations, but does not involve extensive fieldwork;

RTI, MUMBAI / CH 812 Cont…  A detailed follow-up review involving comprehensive field work in relation to the recommendations made in the performance audit report, including the quality and effectiveness with the objective of preparing a report to the legislature; and  A generic follow-up audit of similar types of significant recommendations in the same or various entities with a view to analysing the common reasons for underperformance and a report to the legislature.

RTI, MUMBAI / CH 813 Session Summary In this session we discussed:  Follow-up procedures  Parliamentary guidelines  Procedure for recommendations not accepted  Annual follow-up programme  Objective of follow-up programme