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International Centre for Audit of Local Governance
Context:
Comptroller and Auditor General (CAG) of India Girish Chandra Murmu inaugurated the International Centre for Audit of Local Governance (iCAL), a first in the country in Rajkot.
About iCAL:
- iCAL will be a collaborative platform for policymakers, administrators and auditors linked with local governments.
- Primary aim is to empower auditors, executives, and elected representatives of local governments to effectively fulfil their roles through training and leadership development initiatives.
- It will enhance the local government auditors’ independence to ensure improved financial performance assessment, service delivery, and data reporting.
- iCAL will also act as a knowledge centre and thinktank for addressing governance issues at grassroot levels across nations through interactive workshops, knowledge sharing sessions, peer exchanges.
Need for iCAL:
- Aligned with Global practices as 40 countries have their respective Supreme Audit Institutions (SAI).
- There must be institutionalised collaboration among SAIs and with international audit organisations to share best practices, exchange knowledge and experiences of glocal auditors.
- To enhance collaboration among 2.5 lakh panchayats and 8,000 Urban Local Bodies (ULBs), and exchange knowledge, promote best practices etc.
- Addressing Inefficiencies and Fund utilisation : Concerns have been raised about inefficiencies in local body financial management and reporting, as highlighted by the Reserve Bank of India’s 2022 report.
- iCAL aims to address these inefficiencies through better auditing practices and capacity building.
- To navigate local government auditing complexities, there is a need to enhance auditors’ and local employees’ understanding of financial management and controls.
- Establishing open communication with local officials will streamline the audit process, improve data access, and boost cooperation on audit findings.
Auditing of local bodies in India at present :
- State governments have an Examiner of Local Fund Accounts (ELFA) or Director of Local Fund Accounts (DLFA) for auditing local bodies accounts.
- In Gujarat, for instance, the ELFA is an autonomous office functioning under the aegis of the finance department.
- CAG also exercises control and supervision over the proper maintenance of accounts and auditing for all three levels of PRIs/ULBs.
- Under its technical guidance and support initiative, CAG also advises and supports ELFA or DLFA and thereby supplements the latter’s work.
Constitutional Provision
The 73rd and 74th Constitutional Amendment Act, 1992, added Parts IX (Eleventh Schedule) and IX-A (Twelfth Schedule) which contained provisions on Local Governance.
- It is a State subject in List II of Seventh Schedule
- Article 243J states that the Legislature of a State may, by law, make provisions with respect to maintenance of accounts by Panchayats and auditing of such accounts.
