RIL had previously stated that the CAG cannot contractually perform a performance audit on it as the Production Sharing Contract only provides for a government appointed auditor to verify reasonableness of all charges and credits
The Comptroller and Auditor General of India (CAG) is likely to re-start audit of Reliance Industries ' (RIL) spending on the KG-D6 gas block early next month after issues over the scope of the scrutiny are resolved to everyone’s satisfaction, Oil Secretary said today.
"I have myself had two meeting with Comptroller and Auditor General (Vinod Rai) to resolve issues over the audit. CAG has to audit (KG-D6 spending) and we will ensure that they get all support for that,” oil secretary Vivek Rae said.
The CAG last month suspended audit of spending on the flagging KG-D6 block following differences with RIL over the scope and extent of the scrutiny.
“We are making all efforts to see that the CAG is able to do its duty... There have been some differences but they are being resolved and I am hopeful that the CAG will be able to resume audit by either month or early next month,” Rae said.
RIL had previously stated that the CAG cannot contractually perform a performance audit on it as the Production Sharing Contract (PSC) only provides for a government appointed auditor to verify reasonableness of all charges and credits.
Rae said the CAG too has stated that it is not planning to a do a performance audit of the company but only wants to examine ‘propriety’ of expenses made.
For doing that the CAG wants the discretion for records to be requisitioned to be vested with the government or its auditor (CAG).
“Whatever records are sought will have to be made available,” he said, adding once the issue of the scope of audit is resolved there should be no issues about records being made available.
The CAG had on 12th March written to the oil ministry that its audit of KG-D6 “would be financial and propriety audit” and the purpose of such scrutiny was to ensure that “the government’s financial interests have been safeguarded”.
This followed the oil ministry writing to the CAG saying the official auditor was being requested to undertake the audit of KG-D6 for 2008-09 to 2011-12 under Section 20 of the C&AG (DPC) Act, 1971.
Stating that such audit should be a financial scrutiny, the ministry told the CAG that the provisions of PSC provide for a government appointed auditor inspecting and auditing all records and documents supporting costs, expenditures, expenses, receipts and income.
The CAG said it was in agreement with this scope of audit provided the ministry agreed with it on the issue of requisition of records and access.
The auditor said that its six-member audit team was at premises of RIL in Navi Mumbai from 9the January to 31st January during which they issued 40 requisitions calling for information and records. But RIL provided only a few records.