Transcript Approaches to Maximize Accountability, Minimize Risks

Approaches to Maximize
Accountability, Minimize Risks,
Improve Transparency and Reduce
Fraud
-New Developments in Government
Financial Management
Accountability Framework in India
• Parliamentary control over Government is
ensured through various committees:
– Public Accounts Committee (PAC)
– Estimates Committee
– Departmental Standing Committees
• The C & AG is a constitutional authority,
scrutinizes Governments accounts and
corrective actions taken.
Relationship between Accountability
and Transparency
• Accountability - exercise of powers and discharge of
duties with responsibility, consistent with obligations to
society.
• Transparency - implies an open government, making
available information about factors influencing
decisions that have a bearing on public interest.
• Transparency and Accountability in Governance are
mutually reinforcing.
Measures taken to introduce
transparency
• A culture of secrecy develops predominantly due to:
– Bureaucratic tendency to centralize power and authority.
– restrictive provisions in laws not permitting disclosure of
Government operations.
• Public Campaign by Social activists and NGOs for
greater transparency in government.
• Enactment of Freedom of Information Act in 2002
- citizen has the right to obtain information from any
public authority.
Transparency through e-governance
• Major benefits and objectives of e-governance:
– Extensive use of IT has resulted in ushering transparency through
wider and instantaneous dissemination of information.
– strengthening efficiency and service delivery of Governmental
operations (like tax administration, land and property records
management, procurement of goods and services etc.)
• Major initiatives taken by the Government of India
and many State Governments:
– Reserving a certain percentage of each Ministry’s
budget for investment in IT systems.
– Placing greater information of governmental operations on the
public domain through the Internet.
– Citizen friendly public service delivery in an e-enabled
environment.
Transparency through timely
financial reporting
• Release of monthly details of Government’s fiscal operations
on CGA’s web site (www.cgaindia.org)
– Aggregate budgetary outruns of the Central Government in terms of
revenues, expenditures and fiscal deficit.
– Attracts considerable attention in both print and electronic media.
– Helps analysts, academicians, parliamentarians and the decision makers in
Government.
• Assessment by IMF in its Report on the Observance of
Standards and Codes (ROSC), February 2001:
– India has a reasonably high level of fiscal transparency as regards the
amount of fiscal information made available to the public.
– Passing of fiscal policy legislation is a step further in this direction.
– Notes that reporting on government finances should include information
on contingent liabilities and quasi-fiscal activities.
Fiscal Consolidation and Discipline
• Fiscal Responsibility and Budget Management Act, 2003 :
– requires the Central government to conduct its fiscal operations within
a medium-term fiscal and macro-economic framework.
– a medium-term fiscal policy statement, a fiscal policy strategy
statement, and a macro-economic framework statement to accompany
the annual budget.
– availability of interim reports about fiscal developments to enhance
transparency and enable corrective actions for deviations.
• Such fiscal responsibility legislations enacted both by the
Central Government and some State Governments will
contribute to sound fiscal management and discipline and thus
accountability.
Strengthening of Public Financial
Accountability (PFA) Framework of State
Governmental agencies
• Several State Governments in India have taken the
initiative to strengthen the PFA framework :
– by providing for greater transparency on the functioning of
Statutory Boards and Authorities and Urban Local Bodies,
including disclosure of, and access by the public, to financial
information.
– Modernizing accounting and budgetary systems, financial
and performance reporting, auditing, legislative scrutiny and
disclosure of financial information.
– Introduction of accrual accounting principles in several
Urban Local Bodies.
Formulating Government Accounting
Standards in India
• A Government Accounting Standards
Advisory Board (GASAB) has been set up :
– to formulate and recommend Indian
Government Accounting Standards (IGASs).
– with the objective of enhancing the quality of
decision-making and public accountability.
– GASAB has finalized four exposure drafts on
different aspects so far.
Greater Delegation of Powers to
Ministries in managing fiscal matters
• Reform aimed at providing greater delegation of
powers to administrative Ministries in managing their
financial transactions.
• Updated version of the ‘General Financial Rules’ will
shortly come into force.
• To improve the quality of implementation of major
programmes of the Government.
Recent Government financial
management initiatives
•
two recent initiatives taken by the
Government of India to enhance the quality of
accounting, increase transparency, and
identify the direction of expenditure :
1. to examine the feasibility of introducing accrual
accounting by commissioning pilot studies.
2. introducing gender budgeting in the Government
of India to highlight gender sensitivities of
budgetary allocation.
Strengthening the Governmental
Vigilance System
• Central Vigilance Commission (CVC) has issued
directions to all governmental agencies:
– to introduce e-payments particularly to check on frauds and
corruption at the cutting-edge level.
– to publicize tenders on the web sites of the concerned
agencies.
– to ensure that accounts are duly reconciled between the
Government accounting system and the banking system.
• Efforts are to move from a complaint-driven mode to a
system-driven mode in order to check on frauds.
Promoting Government-Citizen
interface in financial administration
• Citizens’ interface with governmental agencies has
been made easier in some State Governments:
– formation of the Public Record of Operations and Finance
(PROOF) in Karnataka state to campaign for financial
accountability as a vital mechanism for civic governance.
– improving the transparency of financial operations of the
Bangalore City Corporation through the Bangalore Agenda
Task Force (BATF)
• These initiatives, though modest in scope, represent a
concerted effort to promote citizens’ interest in public
financial accountability.
Redressal of Citizen’s grievances
• A separate Department called as Department of
Administrative Reforms and Public Grievances has
been created.
– to simplify the procedures to quicken the pace of public
service delivery
– to provide seamless services to the citizens
• The Reserve Bank of India (Central Bank) has set up a
Banking Ombudsman Scheme.
– to provide for an expeditious redressal grievance mechanism
to bank customers
• Such Ombudsmen have also been instituted for tax
administration, and in some states like Karnataka.
Summing up
• Measures taken in India to enhance
transparency and maximize accountability :
–
–
–
–
Legislative action
Leveraging Information Technology
Developing and strengthening systems
Monitoring through constitutional and
legislative watchdogs
– Enabling easier citizen-Government interface
etc.