Context: Days after collapse, PAC directs CAG to conduct audit of National Highway stretches in Kerala

Source: The Hindu

Days after a section of the under-construction six-lane National Highway 66 collapsed at Kooriyad in Malappuram district, Parliament’s Public Accounts Committee, headed by Congress leader K.C.Venugopal, directed the Comptroller and Auditor General to conduct a comprehensive performance audit, scrutinizing the contract terms, and the road design that led to the collapse.

As per sources, officials from both the Ministry of Road and Transport and the National Highways Authority of India admitted at the meeting that the collapse was due to design flaw.

The panel also asked the NHAI Chairman to inspect the affected stretch and review other projects in the State. There had been multiple complaints regarding construction flaws in national highway stretches across seven districts in Kerala. The road had been constructed in an area full of fields and swamps, without a strong foundation or consideration of local conditions.

Members also raised concerns regarding high toll charges at toll plazas, despite poor road conditions and persistent long queues.

Model Question:

Discuss the role of the Public Accounts Committee (PAC) and the Comptroller and Auditor General (CAG) in ensuring financial accountability in India. Examine the challenges faced by these institutions in fulfilling their mandate.

Model Answer:

Financial accountability is a cornerstone of parliamentary democracy. In India, the Public Accounts Committee (PAC) and the Comptroller and Auditor General (CAG) play a critical role in ensuring that public funds are used effectively, efficiently, and in accordance with legislative intent.

Role of the CAG:

1. The CAG of India is a constitutional authority (Article 148–151) who audits all receipts and expenditures of the Union and State governments.
2. The CAG submits audit reports to the President/Governor, which are tabled in Parliament or State Legislature.
3. Key audits include performance audits, compliance audits, and financial audits, covering ministries, PSUs, and autonomous bodies.

Role of the PAC:

1. The PAC is a parliamentary committee (not a constitutional body) formed under Rule 308 of the Lok Sabha Rules.
2. Comprising 22 members (15 from Lok Sabha, 7 from Rajya Sabha), it examines the CAG’s audit reports.
3. It scrutinizes government expenditures, uncovers irregularities, and ensures accountability of the executive to the legislature.
4. PAC reports are tabled in Parliament and have persuasive value in policy and governance reform.

Challenges Faced:

1. Non-binding Recommendations: PAC’s recommendations are advisory, and government departments often delay or dilute their implementation.
2. Delayed Audit Reports: There is often a time lag between the occurrence of financial irregularity and its reporting, reducing efficacy.
3. Overburdened CAG: The CAG audits a vast number of entities with limited staff and resources.
4. Political Interference: Despite being bipartisan, the PAC sometimes becomes a forum for political point-scoring.
5. Lack of Real-Time Auditing: Most audits are post-facto, limiting preventive oversight.

While the CAG and PAC form the backbone of financial oversight in India, strengthening their institutional capacity, ensuring timely reporting, and implementing real-time audit tools are essential to enhance their effectiveness. Legislative reforms to make PAC recommendations more binding and enabling the CAG with advanced audit technologies can bolster accountability in public finance.