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‘Supreme’ Audit– ‘Shutting Stable Door After Steed Is Stolen!’ – By Mukesh Jhangiani

                                                                                                  June 23, 2002



Snapshot from Audit Document of Comptroller an...

Snapshot from an Audit Document: Of 1209 paras CAG submitted in 1997-98, PAC discussed only 16 (Photo: Wikipedia)

‘Supreme’ Audit– ‘Shutting Stable Door After Steed Is Stolen!’

 By Mukesh Jhangiani
United News of India

New Delhi (UNI) – India’s Comptroller and Auditor General (CAG) has acknowledged at least two instances in which Parliamentary recommendations arising from its findings have gone unheeded for 25 years, suggesting that the country’s ”supreme” audit system is not as effective as it should be.

   Both instances pertain to the University Grants Commission– its ”inequitable” distribution of grants between Central and State Universities and its failure to produce ”utilisation certificates” for Rs 511.37 crore grants made between 1958-59 and 1988-89.

   The Public Accounts Committee of Parliament had recommended steps to mend each situation, but, according to a CAG report, the steps were not implemented in either case. Here are excerpts of the report:

   ”During 1969-70 to 1975-76 the share of development grant of Central and Deemed Universities was 41 per cent against 59 per cent of State Universities.

   ”(The) PAC in its seventy third report (Sixth Lok Sabha) while disapproving the inequitable distribution of grants had directed (the) UGC to play a positive role in creating conditions to enable the State Universities and Colleges to take advantage of the facilities of development grant.

   ”Despite this inequity in the disbursement of development grant, it increased constantly since then and during 1992-93 to 1999-2000 the share of 15 Central Universities alone stood at 53.43 per cent as against 46.57 per cent of 212 Deemed and State Universities.

   ”Thus, (the) UGC failed to take effective measures to eliminate disproportionate disbursement of grants, despite the recommendations of (the) PAC 25 years ago…

   ”As many as 50,877 utilisation certificates (UCs) involving Rs 511.37 crore pertaining to the period 1958-59 to 1988-89 were outstanding as on 31 March 1999. (The) UGC failed to provide updated information as the details are yet to be compiled.

   ”On the basis of recommendations of (the) PAC in its 73rd Report(Sixth Lok Sabha) it was decided to constitute peripatetic parties for on the spot liquidation of outstanding utilisation. However, no peripatetic party was constituted as of July 2000.”

   The CAG’s report did not name the officials responsible for the failure nor did it explain how or why the situation was allowed to remain unsorted for so many years.

   Dr Bhimrao Ramji Ambedkar, one of the authors of India’s constitution, thought of CAG as ”the one man who is going to see that the expenses voted by Parliament are not exceeded, or varied from what has been laid down by Parliament in what is called appropriation Act.” He held the CAG’s duties to be ”far more important than the duties of the Judiciary”.

   The incumbent CAG, Vijayendra Nath Kaul, is an Indian Administrative Service officer appointed to the post three months ago by President K R Narayanan, to whom he reports. According to official documents, the CAG, as head of the Indian Audits and Accounts Department, is assisted by about 60,000 employees in over 90 offices across the nation. The Department has a Rs 846 crore budget– bulk of it spent on staff pay and allowances.

   The CAG’s reports on the accounts of the Union submitted to the President are laid before each House of Parliament, and those on the States submitted to the respective Governor are laid before the legislature.

   They contain objections and remarks over errors committed by government authorities in spending money– specifying non-spending, under-spending, overspending and misspending of allocated funds.

   In Parliament, they are routed either to the Public Accounts Committee (PAC)– which scrutinises sections on central ministries, departments and offices– or the Committee on Public Undertakings(COPU)– which goes over sections on central public sector undertakings (PSUs).

   Representatives from the ministries and departments appear before the Committees when matters relating to them are taken up to answer questions raised by members on the basis of the report of the CAG, who is present during the hearings.

   The Committees’ conclusions and recommendations are presented to Parliament and the Ministries concerned required to file action taken reports.

   A PAC official said matters reported by the CAG are usually gone into, the process sometimes involving more than one Action Taken reports.

   As to the system countenancing a lapse of 25 years just to find that steps recommended by the PAC were not acted upon, the official appeared surprised by the allusion to the observation made in the CAG’s report.

   But Chhattrapal Singh, a Lok Sabha Member who has been in the PAC four years in a row, said such occurences owed to the non-binding nature of its recommendations. ”That’s the lacuna in the Parliamentary system. It must be remedied by making the recommendations of the PAC mandatory.”

   A Bharatiya Janata Party Member from Uttar Pradesh, Singh said, ”To allow a choice in whether or not to implement recommendations after two eminent bodies– the CAG and the PAC– have gone into a matter raises questions about our earnestness to end corruption and improve administration.”

   Critics say such audit exercises mean little unless those responsible are brought to book– something over which India’s CAG is powerless. Critics say all that constitutional authority and elaborate auditing machinery notwithstanding there are several weaknesses in the system. And the situation is no different in the States.

   In countries such as  Germany, Japan, China, France and New Zealand auditing officers have powers to summon erring officials and make them pay from their own pockets for losses caused by them to the State. In some serious cases the erring official is imprisoned after institution of criminal proceedings in a court of law.

   In India, a group of Government appointed experts recently pointed to the fact that the CAG does not even have the power to summon government officials who commit irregularities to ask them to explain their decisions– let alone make them pay for the loss caused or punish those stealing public funds.

   Stressing that a primary audit function is to see that provisions of law, rules and regulation are properly applied in incurring expenditure or collecting revenue, experts reported that ”while audit notices systematic violation of law, rules and regulations by departmental officers it is unable to take an effective action to prevent them.”

   They cited the Bihar fodder scam. ”Serious financial irregularities and misappropriation of government funds were being committed by senior government functionaries and the Treasury officials all acting together in collusion.

   ”The Accountant General (AG) Bihar could not detect the irregularity in time as Treasury officers suppressed the vouchers through which money was drawn and did not transmit them to AG thus preventing its audit.

   ”(The) CAG has been making mention of excess drawal over voted provision in its Audit Report presented to Bihar Legislature but Public Accounts Committee, it is said, did not even me(e)t to discuss the report leave apart take preventive action.

   ”After the scam became public knowledge, (the) CAG has produced a well documented Audit Report but it is more a case of getting wise after the event– after crores in public money has been looted and shutting the stable door after the steed has been stolen.”

   The experts noted that the PAC’s functions included examining the Government explanation for extra expenditure and presenting a report to the legislature recommending regularisation– a necessity as all government expenditure must have the sanction of the legislature.

   But the group reported that ”In many States, (the) PAC’s have not been able to discharge even the  Constitutional obligation of regularising ‘excess expenditure’ over budgetary grants.”

   It cited how Rs. 94,314 crore excess expenditure was not regularised as of 1999– Rs 22,767 crore in Jammu and Kashmir, 13,618 crore in Uttar Pradesh, Rs 12,569 crore in Assam and Rs 6,059 crore in Bihar.

   ”Thus in almost all the States huge amount of public money has been spent  in violation of budgetary control envisaged in the Constitution and fraught with the risk of misappropriation of public money,” the group noted.

   The situation has arisen because no time limit is set for regularisation, experts said. ”There is no time limit prescribed for placing Appropriation Accounts certified by the CAG in Parliament or State Legislature and the regularisation of excess expenditure over voted grants by the PAC.”

   At the Central level, the Parliamentary PAC and COPU have not been able to examine all audit reports submitted by the CAG.

   In 1997-98, for instance, of 16 reports containing 1209 paras submitted by the CAG, the PAC selected 76 paras for review but was able to discuss only 16 of them.

   The implication: these committees are able to examine only a tiny fraction of the contents of the CAG’s multi-volume reports, ”which defeats the very purpose of parliamentary financial control and the accountability of Executive which Parliament is required to enforce”.

   But a senior official aiding the PAC said that even the CAG paras that are not ticked for detailed attention or examination are circulated to the departments concerned for their Action Taken Notes. The PAC, taking ”serious note of the prevailing laxity and the formalistic ritual with which the ATNs on the non-selected paras are generally furnished,” has decided to examine all ATNs, the official said.

   He cited the CAG’s unselected para on the purchase of a Rs 1.42 crore house for India’s Consulate General at Frankfurt that came with  a ”heated indoor swimming pool with a sauna bath cabin and a separate shower room”. The problem: Recurring pool maintenance costs. The outcome: The Mission was ”instructed to exercise restraint to meet any unnecessary expenditure on the maintenance of the swimming pool”.

   The experts’ group suggested need to empower Audit Officers to pursue their findings by summoning the officers concerned for evidence on oath and, where default is established, taking steps for recovery of loss or disciplinary action under the Civil Services Conduct Rule or initiation of criminal action under the Penal code in cases involving criminal liability.

   For that matter, experts noted that the CAG itself is dependent upon public funds for functioning and therefore must be held accountable to Parliament for its spending decisions.

   In countries such as Britain and Australia, independent auditors audit CAG accounts and a Parliamentary committee oversees their work.

   But in India, there is no external audit of the accounts of the CAG’s office, proclaimed as India’s ”Supreme Audit Institution”.

The CAG nominates one of the Accountants General under him as an auditor for the CAG’s office. Experts believe that the accounts of the CAG must also be scrutinised independently.

   ”The operations of the office of the CAG itself should be subject to scrutiny by an independent body. To fulfil the canons of accountability, a system of external audit of CAG’s organisation should be adopted for both the Union and the State level organisations,” the expert report said.

   UNI MJ YJ HS1011

EVMs – Good Idea. But Is It Time Yet ? – By Mukesh Jhangiani

December 20, 2010

EVMs – Good Idea. But Is It Time Yet ?*

By Mukesh Jhangiani
United News of India

New Delhi (UNI) – A conference segment scheduled to hear two Western experts’ claims that electronic voting machines used in India are not tamper-proof was called off, sponsors say.

”The talk was cancelled since they did not come,” a spokesman for the sponsor, Dhirubhai Ambani Institute of Information and Communication Technology, Gandhinagar said in a telephone interview.
The speakers listed: J Alex Halderman, Assistant professor of electrical engineering and computer science at Michigan University, and Rop Gonggrijp, a Dutch hacker and WikiLeaks contributor from Amsterdam.
Halderman and Gonggrijp arrived separately in New Delhi last week but were detained at Indira Gandhi Airport for almost 12 hours over a ”technical” violation, an airport official said.
The two had allegedly visited India before on tourist visas and went on to deliver lectures or participate in conferences.
Officials said Indian missions were under instructions not to issue them visas, but lapses occurred in each instance.
Officials did not say whether or what action was taken for the lapses, besides detaining the visa recipients.
Halderman and Gonggrijp were eventually allowed to enter India provided they do not violate the terms of their tourist visas.
According to Gonggrijp’s blog,”this may all be a consequence of the Election Commission of India having us investigated for some made-up conspiracy to destabilise India for daring to prove that the Electronic Voting Machines used here can be quite easily manipulated.”
But any such involvement of the ECI was denied by a senior official. ”Let them lecture all they want,” the official said.
At the same time, officials point out that visitors must honour the terms of their entry as tourists.
Before they were intercepted, both men appeared headed for Gandhinagar to attend the Sixth International Conference on Information Systems Security scheduled December 15-19.
Neither researcher was available for comment, having apparently not reported at the DAIICT event.
The two reportedly co-authored– alongwith six others– a paper titled: Security Analysis of India’s Electronic Voting Machines presented at Chicago, Illinois in October 2010.
An Abstract of the study available through the sponsor website notes that elections in India ”are conducted almost exclusively” using EVMs ”developed over the past two decades by a pair of government-owned companies.”
The EVMs are manufactured by Bharat Electronics Limited, Bangalore and Electronics Corporation of India Limited, Hyderabad, with a ‘programme code’ which controls their functioning written onto the chips in the United States by foreign private companies.
The study says the EVMs ”have been praised for their simple design, ease of use, and reliability, but recently they have also been criticised following widespread reports of election irregularities.”
But it says that despite ”criticism, many details of the machines’ design have never been publicly disclosed, and they have not been subjected to a rigorous, independent security evaluation.”
The authors ”present a security analysis of a real Indian EVM obtained from an anonymous source.”
”We describe the machine’s design and operation in detail, and we evaluate its security in light of relevant election procedures.
”We conclude that in spite of the machines’ simplicity and minimal software trusted computing base, they are vulnerable to serious attacks that can alter election results and violate the secrecy of the ballot.
”We demonstrate two attacks, implemented using custom hardware, which could be carried out by dishonest election insiders or other criminals with only brief physical access to the machines.
”This case study carries important lessons for Indian elections and for electronic voting security more generally.”
The study does not say how the researchers got hold of the EVM.
One co-author, Hari K Prasad, was reportedly arrested by a Maharashtra police team on August 21, 2010 from his home in Hyderabad ”on the flimsy charge of ‘theft of EVM’ used for vulnerability demonstration.”
The other five: Scott Wolchok, Eric Wustrow, Arun Kankipati, Sai Krishna Sakhamuri and Vasavya Yagati.
The study concludes that ”despite elaborate safeguards, India’s EVMs are vulnerable to serious attacks. Dishonest insiders or other criminals with physical access to the machines can insert malicious hardware that can steal votes for the lifetime of the machines.
”Attackers with physical access between voting and counting can arbitrarily change vote totals and can learn which candidate each voter selected.
”The design of India’s EVMs relies entirely on the physical security of the machines and the integrity of election insiders.
”India’s EVMs do not provide transparency, so voters and election officials have no reason to be confident that the machines are behaving honestly.
”India should carefully reconsider how to achieve a secure and transparent voting system that is suitable to its national values and requirements.”
It suggests three options:
— A voter-verifiable paper audit trail which combines an electronic record stored in direct-recording electronic voting machines with a paper vote record that can be audited by hand.
— Precinct-count optical scan voting where voters fill out paper ballots that are scanned by a voting machine at polling stations before being placed in a ballot box.
— Simple paper ballots.
”Despite all of their known weaknesses, simple paper ballots provide a high degree of transparency, so fraud that does occur will be more likely to be detected.
”Using EVMs in India may have seemed like a good idea when the machines were introduced in the 1980s, but science’s understanding of electronic voting security– and of attacks against it– has progressed dramatically since then, and other technologically advanced countries have adopted and then abandoned EVM-style voting.
”Now that we better understand what technology can and cannot do, any new solutions to the very real problems election officials face must address the problems, not merely hide them from sight.”
Reservations about the EVMs have been voiced by many.
As early as March 18, 2004, the CEC was petitioned by a group of Supreme Court lawyers to ”modify and upgrade” EVMs to generate a verifiable paper record that permits a proper recount should need arise.
A month later, on April 21, the lawyers reported they were assured by then Deputy Commissioner A N Jha that the EC is ”seriously considering” attaching small printers to EVMs to produce an auditable paper trail that allows recount.
Indian politicians have even cited the experience of some Western nations– Germany, the Netherlands and others– which tried electronic vote but went back to good old paper ballots.
Answering a member in the Rajya Sabha last month, Law and Justice Minister M Veerappa Moily acknowledged it all but held that Indian EVMs ”are different.”
Dr Moily said the ECI ”uses strict administrative safeguards in this regard for greater transparency… All of these ECI-EVMs are fully tamper proof.”
He said the ECI EVMs ”are different” in three respects.
— Are stand alone machines– not networked;
— Use a masked One-time Password microcontroller chip;
— Do not use an operating system.
He cited a consensus among Indian political parties achieved in an All Party Meeting on October 4, 2010 to continue using EVMs.
”The only request by the political parties was to consider the possibility of a verifiable paper trail,” Moily said, adding that the ECI has ”already referred that matter to its technical expert committee for examination.”
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