Restricting Access to Defence Audit Reports and the Need for Greater Public Debate

Restricting access to audit reports hurts the ultimate stakeholder: the public’s access to these audit findings hampers informed debate around issues of extreme importance.

In his outgoing interviews, Rajiv Mehrishi, who recently finished his tenure as the head of India’s apex audit institution, claimed that the decision to not upload the CAG’s report relating to defence audit was his own and was not prompted by the request from the audited entity.

In one remark, Mehrishi told the Indian Express of how when he was in the home ministry, a CAG report on the lack of ammunition in the Indian Army caused controversy.

“When I was in Home (Ministry), there was a lot of tension with Pakistan. Tab ek report aayi thi CAG ki, saying kitna shortage of ammunition hai… Basically, agar shortage hai toh bhi, maan lijiye hai shortage, toh kam se kam dushman ko maloom nahin hona chahiye,” he said. (“When I was in Home (Ministry), there was a lot of tension with Pakistan. At that time, there was a CAG report detailing a shortage of ammunition. Basically, if there is a shortage, then at least the enemy should not know about it.”)

“Parliament ko hum (report) de rahe hain, PAC ko hum de rahe hain (we are giving the report to Parliament, the Public Accounts Committee). It is not really a secret. At least we are not making it available on the tap of a button. Koi Washington me bhi dekh raha hai, Beijing me bhi dekh raha hai aur Islamabad me bhi dekh raha hai. Therefore, we took a decision.”

Such a stance from a former CAG of India should be of concern to the Indian public for three reasons.

Firstly, it doesn’t educate the general public on why amongst the auditing work performed by this constitution institution, defence auditing is of paramount importance and has a long history dating back to 1926.

Secondly, it doesn’t let common citizens know how unresponsive the defence ministry has been to the audit paragraphs, with the numbers of paragraphs that remain unsettled mounting year by year.

For example, the outstanding audit objections that remained to be settled were 9225 in the year 2006, which was up from 7261 in the year 1991. As one chronicler of this constitutional institution, Vijay Kumar, writes in The Comptroller and Auditor General of India: A Thematic History (1990-2007), “ADAI (Defence) had in July 2000 written to Defence Secretary, about the pendency of 8779 statutory audit objection for settlement, mentioning that the oldest of these objections related to the year 1978-79”.

Kumar also added, “Nothing much has come off this going by the pendency of such objections in 2006”.

Lastly, Mehrishi’s emphasis that it was his decision – and not the government’s – in restricting public access to defence audit reports is contested by media reportage within India.

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A news report by Pradeep Thakur published in The Times of India on December 19, 2018, quoted an unnamed CAG officer as saying, “these reports were taken down at the request of the defence ministry, owing to their sensitivity”.

A performance review carried out by Australian National Audit Office last year that scrutinised the media strategy of Australia’s defence Department. As a news article on this audit report in The Sydney Morning Herald pointed out, the audit found “Defence’s media strategy remained in transition and was not fully effective”.

So, while constitutional auditors elsewhere are concerned to scrutinise whether the Defence Department was responding to queries from media persons on time, India’s outgoing CAG showed how his office floundered on its own media strategy.

The outgoing CAG of India could have instead chosen to speak on several vital issues such as what changes has been made in the Regulations on Audit and Accounts – passed under section 23 of the CAG (DPC) Act, 1971 – through a revised document that he put his signature on one day before him leaving the office, i.e. August 5 2020. As these authors know, the draft of proposed revisions was uploaded on the CAG website only in the first week of July. While the draft invited public comments, there was no mention of a deadline till which his office was going to accept the comments.

The Paramount Importance of Defence Audits

Defence audit reports are one of the most important audit reports produced by C&AG of India. In the past, the defence audit reports have stirred up big debates in the country.

As Vijay Kumar, while stressing out the importance of the ‘Defence Audit’ writes in The Comptroller and Auditor General of India: A Thematic History, 1990-2007:

“This branch of audit has often drawn maximum attention of the media and Parliament in the post-1990 era for some of the Audit Reports and paras presented to Parliament. In 1989, it was C&AG’s Report on Bofors that created a furore in press and Parliament. In 2001, it was C&AG’s Report on Kargil War purchases (Operation Vijay). Other Reports that drew widespread attention were: ‘Design and Development of Main Battle Tank Arjun’ (Report No.7 of 1998), Development of Multi Barrel Rocket Launcher System (the Report appeared in 1999), and Aircraft Accidents in Indian Air Force (Report of 1998). The reasons for Defence Audit Reports getting so much wide publicity are not difficult to see. At Rs. 86,000 crore, defence expenditure is the third largest Central Government expenditure, first two being interests and subsidies. Every adult citizen of the country is deeply conscious of defence preparedness and issues involved in this. Any audit observation pointing to failings in this attracts much greater attention than any other report.”

The concerns regarding the sensitivity around defence audits are not new, and over the years, processes and arrangements have developed to safeguard the same. As V.N. Kaul, the tenth C&AG of India, observed “Defence audit has also to deal with the secretive nature of the functioning of defence and yet fulfil its constitutional obligation through probe and scrutiny. Audit has been able to adapt to these problems well.”

Exercising its powers under Section 23 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971, the C&AG made regulations on audit and accounting in 2007. Under the chapter, ‘Conduct of Audit,’ these regulations had a sub-section on the ‘Confidentiality of information acquired during the audit.’

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This sub-section mandated that the documents ‘classified as ‘confidential’, or ‘secret’ or ‘top secret’ made available to Audit shall be dealt with by Audit in accordance with the standing instructions of the Government for handling and custody of such documents.’

The next clause within the sub-section stated that:

“If certain privileged or confidential information prohibited from general disclosure by law is obtained in the course of an audit, the auditor should maintain the confidentiality of that information and ensure that the audit notes, the inspection reports or the audit reports do not become a means of compromising such privilege or confidentiality of the information.”

In short, if any sensitive or classified information in a CAG Audit Report needs to be masked, it will be done at draft stages, before sending the report for tabling. The Audit Report, once tabled in the Parliament, turns into a public document.

Thus, an argument that an easy access to an audit report by virtue of it getting uploaded on CAG website doesn’t appear to sit well with the protocols explained above.

CAG’s Media Policy and Defence Audits

During the early decades of independent India, the supreme audit institution of India was considered shy and kept aloof from the media.

However, the role of media coverage of audit reports was well understood even then, and the same was reflected in a statement of A. K. Chanda, the second C&AG of India, (as reported in RK Chandrshekharan’s The Comptroller and Auditor General of India: Analytical History 1947-1989):

“…media attention and coverage of C&AG’s Reports was the healthy trend of the developing parliamentary democracy, which added to the responsibility and need for caution on the part of government auditors”.

Over the years, many conversations took place around the issue of media reporting of CAG audit reports and the audit findings not reaching the large public. A look at the written history of the institution, well documented by R. K. Chnadrashekharan (till 1989) and Vijay Kumar (1990-2007) gives us the account of processes and practices which took years to develop and finally resulted in the Media Policy issued by former CAG Vijayendra N. Kaul on March 16, 2006. However, the system of issuing Press Briefs existed in the C&AG office from very long and ‘came to a formal footing since 1986’ as per Vijay Kumar’s account.

This Media Policy of 2006 especially emphasising the subject of ‘Holding of press conference by the officers of IA&AD,’ superseded all previous instructions on the related subject. Interestingly, the superseded instructions also included a seven months old directive, issued by the same C&AG of India on August 16 2005 as per which it was “decided that there should be no press notes on Defence Audit Reports in view of security concerns”.

The release of Media Policy in 2006 was followed by an External Communication Policy of the IA&AD released in May 2007. The Guiding Principle of this policy laid down the principles such as: “Audit is accessible to the stakeholders and there are effective and lear communication channels for publicising the substance of the Audit Reports” and “up to date information about the Department is available at all times on the website of the Department.”

The spirit of these guidelines found a re-iteration in the ‘CAG’s Auditing Standards 2017’ where a section on the ‘communication of audit results through websites and other means’ stated:

“Once the Audit Reports are tabled in the concerned legislature, SAI India shall communicate audit results through its website and other means and may communicate with the media or other stakeholders on matters included in the reports thereby enhancing transparency and accountability of the audit work. Public and academic interest in important conclusions shall be encouraged. Its reports shall be made understandable to the wide public through various means e.g. summaries, graphics, video presentations and press releases.”

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Thus, audit reports by not being available on the website restricts the ultimate stakeholder i.e. the public’s access to these audit findings. It hampers the possibilities of informed debate in the public sphere around the issues of such extreme importance. Such a step is also an undoing of the processes and practices developed over the decades.

Grave implications

Various experts on defence, including those who have served in senior positions in the concerned ministry, have repeatedly made the argument that research defence planning, programming and budgeting in the country suffers due to a dearth of material in the area.

In the introduction of an edited volume, ‘Core Concerns in India and the Imperatives for Reforms’, published by Institute for Defence Studies and Analyses (IDSA) and Pentagon Press, the editor Vinod Misra, former Secretary (Defence Finance), Ministry of Defence writes:

“With core concerns in defence essentially the domain of the political executive and the civilian and military bureaucracy, there has been a conspicuous absence of informed debate in the public space encompassing the entire range and depth of issues which require richer discerning public awareness and focussed and purposeful debate, which could potentially generate the necessary momentum for ushering in long overdue reforms.”

This sense of not having an informed public debate on the defence matters is visible in the multiple papers included in the book.

For instance, in the paper on Defence Planning by Narendra Sisodia (Former DG, IDSA) and Amit Cowshis (a Distinguished Fellow with IDSA) notes:

“Developed democracies of the world provide voluminous material relating to their defence plans and budgets, without disclosing any sensitive information. This is an example India needs to emulate in its own interest.”

The decision of not making the defence audits available on the website is going to contribute to the current suffering in this matter. It was for this reason that academicians working on the defense and security issues also took note of the ex-CAG’s statement.

Academicians working on the defense and security issues also took note of the ex-CAG’s statement. Walter C. Ladwig III, Senior Lecturer at King’s College, London and a fellow at Centre for the Advanced Study of India at the University of Pennsylvania, termed it a ‘very unfortunate development.’ In his tweet, he said: “CAG reports have been extremely valuable to scholars and researchers seeking to understand the Indian military, not to mention the Indian public.”

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Christopher O. Clary, Assistant Professor of Political Science at the University of Albany and a researcher of Defense and Security issues in South Asia, tweeted on the same and referred to it as ‘a loss for scholars.’ He added: “The CAG reports provided a helpful corrective to the boosterism found in so many other quarters.”

The demise of this healthy and fair practice developed and followed over the time by the Comptroller and Auditor General of India not only leaves the public at a loss, but such undoing also sets a dangerous precedent.

Himanshu Upadhyaya is an assistant professor at Azim Premji University Bangalore. Abhishek Punetha is an independent researcher and former Girish Sant Memorial Fellow.