ESIC forms three-member panel to strengthen internal audit after CAG report

The statutory social security body will review its audit framework and recommend reforms after the CAG flagged deficiencies in financial controls, audit timelines and record-keeping

The Employees’ State Insurance Corporation (ESIC) will constitute a three-member committee to review its internal audit mechanism and prepare a roadmap for strengthening audit oversight after the Comptroller and Auditor General (CAG) flagged shortcomings in the organisation’s financial controls, according to two people aware of the matter.

 

The decision was taken during the corporation’s 197th meeting in December 2025 while discussing the CAG’s separate audit report (SAR) on ESIC’s annual accounts for 2024-25, according to minutes of the meeting reviewed by Business Standard.

 

The audit report flagged deficiencies in the internal audit system, delays in completing audits and gaps in financial record-keeping. The committee will review the existing audit framework and recommend measures to strengthen audit processes, compliance and financial controls.

 

The minutes are scheduled to be placed before the ESIC Corporation for confirmation at its next meeting on June 30.

 

The SAR also highlighted deficiencies in financial record-keeping, including the non-maintenance of fixed asset registers at two ESIC locations. Members also questioned whether similar gaps existed elsewhere and whether internal audits were being completed within prescribed timelines. Following the discussions, Union Labour and Employment Minister and ESIC Chairperson Mansukh Mandaviya directed that the committee be constituted.

 

ESIC, the statutory body administering the Employees’ State Insurance Scheme (ESIS) , operates 166 hospitals, 17 medical colleges, and 1,600 dispensaries, according to the labour ministry.

 

Emails sent to ESIC and the labour ministry did not elicit a response until press time.

 

The meeting also reviewed staff shortages in the administration and finance wings. Recruitment is under way for Social Security Officers, Upper Division Clerks and Stenographers, with some examination results already declared.

 

Separately, ESIC has also decided to constitute a team to review the functioning of state-run ESIS hospitals and dispensaries after members flagged gaps in infrastructure, availability of medicines and equipment, and monitoring of funds provided to states. The team will recommend measures to improve healthcare delivery under the scheme.