What Happens to an Audit Report

In one line

Six stages: the inspection, the draft paragraph, the Ministry's reply, the report to the President, the laying, and the Public Accounts Committee with its action taken loop; and the process stalls wherever a stage depends on somebody who did not want the paragraph written.

In the wording a student can write in an exam: an audit finding begins as an observation in an inspection report issued to the audited office under section 18 of the Act of 1971; if it survives the office's reply it becomes a draft paragraph, which is sent to the Ministry for its comments; if it survives those it is included in the report of the Comptroller and Auditor-General, which under article 151 is submitted to the President or the Governor and laid before each House of Parliament or the State Legislature; the report is then examined by the Public Accounts Committee, or for a public sector body by the Committee on Public Undertakings, which takes evidence from the Secretary as accounting officer and reports to the House; and the Government furnishes an action taken note, on which the Committee reports again, the paragraph remaining open until the Committee is satisfied.

The six stages

Stage one: the inspection report. The audit party examines the office under section 18(1), chapter 1440, and issues an inspection report containing its observations. This is the level at which most audit findings live and die: a great many are settled by the office producing the sanction, the file or the explanation that was missing.

Stage two: the draft paragraph. An observation the office cannot answer, and which is material, is worked up into a draft paragraph for the printed report.

Stage three: the Ministry's reply. The draft paragraph is sent to the Ministry or department concerned for its comments, and the paragraph is settled in the light of them.

Stage three is a real safeguard and should be named as one. It means that a paragraph reaching the House has been put to the Government, and the Government's answer considered, before it was printed. Chapter 1480's objection that the auditor is unaccountable overlooks that his findings are, by process, answered before they are published.

Stage four: the report. The paragraph appears in the report of the Comptroller and Auditor-General, which under article 151(1) is submitted to the President and, for a State, under article 151(2) to the Governor; for a Government company or a section 19 corporation, under section 19A, to the Government concerned, chapter 1430.

Stage five: laying. The President or the Governor shall cause the report to be laid before each House of Parliament or the Legislature of the State; and under section 19A the Government shall cause the report to be laid as soon as may be after it is received.