Approaches to Maximize Accountability, Minimize Risks, Improve Transparency and Reduce Fraud New Dev

1
Approaches to Maximize Accountability, Minimize
Risks, Improve Transparency and Reduce Fraud-New
Developments in Government Financial Management
2
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.

3
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.

4
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.

5
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 Ministrys
  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.
• .

6
Transparency through timely financial reporting

• Release of monthly details of Governments fiscal
  operations on CGAs 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.

7
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.

8
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.

9
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.

10
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.

11
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
• to examine the feasibility of introducing accrual
  accounting by commissioning pilot studies.
• introducing gender budgeting in the Government of
  India to highlight gender sensitivities of
  budgetary allocation.

12
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.

13
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.

14
Redressal of Citizens 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.

15
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.