Even after its 2008 report, the CAG castigated the government for its lopsided replies over the issue of late appointment of independent auditors to cross-check the transactions of the concessionaire firm between 2002 and 2008.
Financial irregularities to the tune of `2.16 crore had been observed in the financial records of the project and the software generated reports in March 2009. An MPs panel reviewing the CAG report had observed that though the National Highway Authority of India (NHAI) was not obliged to appoint independent auditors, it was authorised to appoint them anytime. Though auditors were appointed in August 2005, the panel had found the timing to be late.
In response to this, the ministry of road transport and highways tried to hide behind technicalities, rather than admitting its laxity.
“There is no timeframe given in the concession agreement for the appointment of additional auditors. The NHAI exercised its right after about eight months of toll collection which is a reasonable period to audit the concessionaire account of toll revenue and other transaction details,” said the ministry.
In view of the loss to the exchequer due to financial bungling in the records of the concessionaire, the CAG had subsequently observed that the authority had not followed the principles of good governance by not appointing independent auditors. “The reply is not satisfactory. The authority should have exercised its right which would have helped safeguard its own interests,” observed the office of the CAG.
Even as the CAG went on to observe that the agency was silent about the action taken against the concessionaire for the inaccuracy of records, as was desired by the parliamentary committee in 2009, NHAI continued to hide behind a policy. The policy was that the NHAI appoints additional auditors whenever any issue arises in BOT projects and that it may be permitted to continue with this policy of appointing additional auditors as and when any issue arises.
In the light of inaccuracies in the financial records of the concessionaire, the MPs panel had suggested appointment of independent auditors be made mandatory so as to avoid any scope of lopsidedness. “To the utter dismay of the committee, the ministry, in its action taken replies, has once again tried to maintain its earlier position. The committee need hardly emphasise that the present policy of appointing additional or independent auditors only when the need arises is not in the best financial interests of government as had already been borne out by the findings of the independent auditor appointed in case of the project.”