Rural schemes to come under CAG ambit

Amid the furore over misappropriation of funds meant for development, the Comptroller and Auditor General (CAG) has proposed bringing all rural development programmes worth about Rs 90,000 crore under the ambit of the government auditor.

Rural Development Minister Jairam Ramesh welcomed the proposition after he met CAG today to discuss the social audit of the government's flagship National Rural Employment Guarantee Scheme (NREGS) in all states.

The minister said the matter would be finalised after a second meeting with the CAG next week. Yesterday, he had warned of tough actions to ensure that programmes run by central government reached the beneficiaries.

Once it was finalised and an agreement signed, then the CAG would appoint a special AG for rural programmes in selected seven or eight states, the minister said. The process was expected to be in motion by September, ministry officials said. The CAG already has a panel of chartered accountants in every district and could easily carry out financial audit of all schemes. About 25 samples would be verified by the government auditor, officials said.

The CAG has prepared an audit system for the panchayati raj ministry. Now the same system could take care of rural development programmes as well, sources said. The auditor is to have a meeting with ministry officials on Monday, followed by a second meeting with the minister. This is expected to be followed by signing a memorandum of understanding for rural audit. The audit would be confined to seven or eight states where the majority of rural funds are spent, officials said. These could include states like Maharashtra, Andhra Pradesh, Uttar Pradesh, Bihar and Orissa.

Initially, annual audits by the CAG would be on finances. But these will be followed by performance audits. Simultaneously, social audits at the panchayat, block and district levels would continue for NREGS. States are likely to welcome this move, and in any case every state has an auditor general's office covering all its departments, Ramesh said after his meeting with the CAG.

The ministry is also working on improving access to banks and post-offices to enable quick release of wages to NREGS beneficiaries. It has approached banks to activate business correspondents. Banks were charging Rs 80 per account for deploying banker’s cheques, officials said.