1. AN OVERVIEW OF SAI, INDIA

2. Vision of SAI, India We strive to be a global leader and initiator Of national and international best practices in public sector auditing and accounting, recognized for independent, credible, balanced and timely reporting on public finance and governance

3. Mission of SAI,India Mandated by the Constitution of India, we promote accountability, transparency and good governance through high quality auditing and accounting and provide independent assurance to our stakeholders, the Legislature, the Executive and the Public, that public funds are being used efficiently and for the intended purposes

4. Constitutional Provisions Article 148 - C&AG appointed by the President; cannot be removed from office except by impeachment Article 149 - C&AG to perform such duties and exercise such powers in relation to the accounts of the Union & of the States as prescribed by or under any law made by Parliament Article 150 - Form of Accounts of the Union & States to be prescribed as per advice of C&AG Article 151- Audit Reports relating to the accounts of the Union/States to be submitted by the C&AG for laying before the Parliament/Legislatures.

5. CAG and IAAD Size of IA&AD 44,750 men in position against sanctioned strength of 70,000 Size of IA&AS 667 Officers 134 field offices of which 94 in audit 28 in accounts, and, 12 training institutes

6. Ready Reckoner - Staff Numbers Span of control ▫667 IA&AS  about 527 in the Department  315 Group Officers ▫44,000 strong Group B and C staff ▫At the level of Group Officer, the Ratio is  1:146 ▫Little likelihood of any improvement in foreseeable future 6

7. INTOSAI - India’s role  Member of the Governing Board since 2007. Term ended in 2013  Chair Goal 3 – Knowledge Sharing and Knowledge Services Committee  Chair the Working Group on IT Audit  Member of INTOSAI-Donor SC  Member of various Committees, Working Groups and Sub-Committees

8. ASOSAI – India’s role  One of the founder members  Chairman from 2012 till 2015  First ASOSAI Assembly held in New Delhi in 1979  6 th Assembly hosted in New Delhi in 1994  12 th Assembly held in Jaipur in Feb-March 2012  Secretary General from 2000 to 2009  Editor of ASOSAI Journal

9. International Audits SAIs are elected/selected the External Auditors of UN and its Agencies and other International Organizations Appointment made after following due process Contractual assignment

10. International Audits – Current portfolio WTO – 2000 onwards WFP – 7/2010 to 6/2016 IOM – 7/2010 to 6/2016 WIPO – 7/2012 to 6/2018 IAEA – 7/2012 to 6/2014

11. DPC Act 1971 (Duties and Powers of CAG) Chapter- I Sections 1 & 2 Introduction Chapter II Sections 3 to 9 CAG Service Conditions Chapter –III Sections 10-20 Duties and Powers Audit of expenditure, revenue, loans, grants, PSUs, Corporations compilation-audit of accounts Chapter IV Sections 21 to 26 Miscellaneous CAG authorized to make regulations –extent & scope of audit, General principles of Government Accounting

12. CAG’s DPC Act, 1971 Audit Mandate Audit of accounts of the Union and of the States Audit of receipts and expenditures from and into the Consolidated Fund of India, Contingency Fund & Public Accounts Audit & report on accounts of government companies, statutory corporations, Autonomous bodies Accounts Mandate responsible for compilation of accounts for State Governments responsible for preparing & submitting monthly/ yearly accounts to the legislature

13. Regulations on Audit and Accounts - 2007 Regulations on Audit and Accounts framed & notified in the Gazette of India in 2007. ▫ explains the scope and extent of audit ▫ types of audit ▫ auditing principles - planning conducting the audits ▫ analysing and reporting the findings ▫ explains the general principle of Government Accounting briefly dealing with Accounting Standards, form of accounts (books of accounts), financial reporting

14. Coverage & output CAG’s Reach ▫Reaches all 3 tiers of Government: Union, State, Local Bodies ▫Covers PSEs, Autonomous Bodies, Major Grantees ▫Over 100 Audit Reports prepared each year

15. what is Public Sector Auditing? Public sector audit is a form of legislative oversight under constitutional arrangement over the executive that ▫seeks to enhance accountability and promote improvement in use of public resources Constitution of India entrusted the responsibility of public sector auditing in India to the C&AG, assisted by IAA&D

16. Audit with an objective to examine ‘ to what extent the entities service delivery operations are efficient and economical’ is performance audit. ‘to what extent entity could safeguard all the resources with which it is entrusted or responsible for - from theft, loss, mismanage, misuse, abuse, waste, by complying with rules compliance audit. (natural resources) ‘to what extent the entity’s financial reporting is reliable’ i.e., to what extent correctly recognised, measured, the figures are classified, captured, reported in the financial statements is financial audit.

17. Audit of Central Government Departments is organized in the following lines (about 50 Ministries with about 100 Demands for Grants ) ▫ Economic Services Sector (Oil & Gas, Coal, other Minerals, Industries, Power, Transport-Railways) ▫ General Services Sector (Defence, Administration) ▫ Social Service Sector (Health, Education, Culture, Social Welfare, Food Security, Rural Develop) ▫ Revenue Services Sector (Tax Departments) Audit of Central Government Departments

18. Audit of Economic Services Sector Departments Audit of Railways 18 offices headed by Principal Directors (PDs) 14 cities Assisted by 24 Directors /Dy dedicated cadre of Audit Officers, Asst AOs,Auditors Posts and Communications 1 office in Delhi headed by Director General (DG) 14 Dir/Dy at 12 locations dedicated cadre AO,AAO Audit of all Economic Services Departments (Power, Transport etc) by 13 offices headed by Principal Directors assisted by 34 Dir/Dy – dedicated cadre AO, AAO, Auditors > 400 central PSUs – Financial Audit of Annual Financial Statements- “supplementary audit”- Commercial Audit

19. Audit of General, Social Services Sectors Departments Audit of Defence Ministry - 6 offices headed by DG/PDs Army, Air Force, Navy, Ordinance Fact- dedicated cadre Audit of all other General, Social Service Departments by 11 offices headed by DG/PDs at 9 cities 48 Dir/Dy Dir ( PD Central) Most of the Autonomous Bodies (IIT, IIM, Museums etc about 350) fall under this. Financial Audit of their Annual Accounts- SAR ( Separate Audit Reports ) Above PD Central Offices also carry out Revenue Audit (Income Tax, CE, ST, Customs) – cadre of the State AG

20. Audit of State Governments Audit of State Governments is carried out by Accountants Generals (AGs)/PAGs assisted by about 140 DAGs (Deputy AGs/Senior DAGs) organized into Economic, Social, Revenue Services Departments each State has its own cadre of AOs, AAOs, Auditors etc Compilation of Accounts of the States and Entitlements (Pension, PF of State Govt. Employees) in States is by AGs assisted by DAGs. (in some only DAGs) These office have their own cadre of Accounts Officers, Asst. Accounts Officers, Accountants, Clerks etc.

21. Audit Assignments The entire Audit activity is carried out in the form of Audit Assignments (Audits); i.e., audit of entities, subordinate offices etc of the Department/Ministries carried out by Audit Teams (Audit Parties). It is lead by of 1 Audit Officer having 2 to 4 members -AAO, Auditors Duration of the Audit Assignment or an Audit would vary from 1 week to 2, 4, 6 or 8 weeks depending on the size & type of unit & type of audit. A larger Audit Assignment like Disaster Management would consist of several Audits carried out by a number of Audit Parties- locations

22. An Audit Assignment Each Audit starts by having an Audit Objective 3 broad audit objectives; to what extent service delivery operations of the entity are efficient -Performance Audit to what extent its accounting, book keeping and Financial Reporting is reliable – Financial Audit to what extent entity could safeguard its resources from theft, loss, misuse, abuse, mismanage by complying the related Rules and instructions - Compliance Audit Audit Objectives in turn will have sub-objectives Whether procurement was as per prescribed rules? Audit Criteria (against which measured)- related Rules

23. An Audit Assignment or An Audit After identifying Audit Objective, Sub-Objectives and Audit Criteria; the Audit Party selects the Sample (4 of 15 purchase contracts - 2 years, sample of transactions) Entry Conference : Audit Party explains the above to the Executive to the Head of the Dept./Office. Less formal in smaller audits (1 to 2 weeks). explains period to be covered in audit & duration of audit.

24. Conducting an audit assignment consists of Review of related internal controls – adequate, complied Audit checks- substantive testing, analytical procedures Material significance of deviation- materiality Audit evidence – to prove either way Audit findings – communicating, replies Exit Conference – discussion Final conclusions- Documentation of the entire process and evidence Reports of the Audit Parties- Draft Inspection Reports Vetted by Dir/DAGs formally issued - Inspection Reports Significant audit findings processed through rigorous quality control DG/PD/AG & HQs to feature in the Audit Report

25. Audit Output Very significant & high monetary value audit findings in the Inspection Reports are processed for Audit Report It goes through rigorous quality control process In an year about 40 Audit Reports ( Union Government ) and 120 Audit Reports ( State Reports ) are presented to the Parliament and the Legislatures. Could be Performance Audit, Compliance Audit, Financial, mix.. Discussed by Public Accounts Committees (PAC)-ATN Audit Reports feature about 10% of the audit findings rest remains in IRs - correspondence between the audited entity and the field audit office.

26. Follow up SAI should have independent procedures for follow up to ensure that audited entities properly address their observations and recommendations and corrective actions are taken( ISSAI 10) Secretary to Dept. Concerned shall cause preparation of self explanatory action taken note(s) on audit paragraph(s), for submission to PAC/ COPU ( Regulations on Audit and Accounts 2007) ▫Whether facts & figures in Audit reports are acceptable ▫Circumstances in which the irregularities pointed out in audit observation occurred ▫Action taken to fix responsibility and likely time frame for completion of action ▫Current status of recovery, if any ▫Action taken or proposed to be taken on suggestions and recommendations made by audit