MISSING from the Lokpal debates about the legal mechanism to fight corruption in India are concrete examples of any systemic intervention that has been tried out and produced results that could form the basis for replication or expansion. Most of the claims of possible success are speculative, and for a movement that relies so heavily on a new, all-encompassing law as the means that is going to deliver us into a land free of corruption, extraordinarily innocent of experience in the Indian context.

This paper puts forth the experience of social audits from the state of Andhra Pradesh, which has in fact produced extraordinary results. Most important, it draws a lot of its strength from putting people at the centre of monitoring implementation, fighting corruption and redressing grievances. It is based on the premise in a sense, of the first slogan of the right to information movement – ‘Hamara Paisa, Hamara Hisaab’ (our money, our accounts).

The term audit originates from the Latin word ‘audire’, which means ‘to hear’. Audire in ancient Greece referred to the ‘hearing of accounts’, a process in which one official compared his records with those of another official. As many of the parties interested in the audit findings were illiterate, the accounts were presented orally. Presently, audit of public administration has evolved into a highly technical discipline, beyond the understanding of the common person. It is practised by professional auditors who submit their lengthy reports to the executive at all levels. Even though public authorities are accountable to their administrative superiors, there is a decline in direct accountability to the beneficiaries of public expenditure on socio-economic development.

There are structural flaws arising from lack of public involvement in planning, implementation and monitoring. With over 200 centrally sponsored social sector schemes and a similar number of state schemes, as the Planning Commission has often pointed out, a number of these initiatives have floundered because of poor design, insufficient state funding, lack of awareness among the beneficiaries, corruption at various levels and complete lack of transparency or effective public accountability of grassroot public authorities.

In response to these lacunae, a ‘popular’ form of public audit has emerged, mooted by the people and some ‘civil society groups’ called ‘social audit (SA)’. The micro-processes of mammoth welfare programmes meant for the poor are studied at the last point of delivery. Strengths, weaknesses, as well as the gaps and leakages in the programme are brought out in great detail through the SA. When information about budgets, allocation of funds, expenditure details are demystified, placed in the public domain and read out in front of the primary stakeholders/beneficiaries, officials concerned, it results in effective public accountability of authorities at the cutting edge of public administration and service delivery.

Public reading of SA reports results in immediate corrective administrative actions. Participation of more and more citizens in social audit process strengthens programme implementation, apart from leading to effective democratic empowerment. The public nature of the audit increases the awareness of the ordinary citizen regarding rights and entitlements. It also acts as a powerful deterrent to corruption, an effective mechanism for public monitoring and evaluation, as well as a platform to redress grievances.

 

It is common knowledge that around the world, particularly in situations of poverty and vulnerability, people are routinely denied access to basic information that ought to be in the public domain. Government officials regularly deny the poor, illiterate workers their rightful wages and benefits, claiming that ‘according to their records, the people had either not worked or did not deserve the benefit.’ Given this huge veil of secrecy, the poorest of the poor had no access to the most basic services and schemes.

It is in this context that an organization based in Rajasthan, the Mazdoor Kisan Shakti Sangathan (MKSS) – a peasant and workers’ collective in India – first began its demand that government records, particularly panchayat accounts, be made accessible to the public, realizing that the records held a key to legitimizing the genuine demands of the poor. This led to understanding the contention of even illiterate people that making government records accessible to public scrutiny would help establish the truth, and overcome the problem of conflicting versions of ‘the truth’. The MKSS connections with the larger and sustained national campaign for the Right to Information law is now well known. The roots of that struggle are, however, often forgotten.

 

Two landmark national legislations: the Right to Information Act, 2005 and the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 have brought about an overarching change in the lives of the rural poor in a remarkably short period. The fact that there was no means of accountability to the people before the era of the RTI, resulted in gross violations of basic fundamental and human rights of the poor. It became clear that the foundation of all human rights depends on the basic right to know and to demand accountability.

A struggle led by poor people for the right to know and the right to live, attracted others who were grappling with problems of implementing participatory and responsible democratic systems. The questions regarding accountability, corruption, arbitrary governance and public ethics that were raised by the people’s movements brought these different groups together. The struggle for an employment guarantee act had not only to give people a chance to control their own allocations, but also answer critics who feared that all the money would be stolen by middlemen. It, therefore, became a platform for people to start asserting their right to know, and their right to audit.

The MGNREGA was the first law to provide for statutory social audit. It sought to answer the challenge of fighting systemic and endemic corruption in a large public works programme by ensuring that people could use the RTI Act to access their rights and fight corruption. The paradigm shift in governance from being arbitrary to accountable has become possible because of the path shown by the impact of the SA, which began to carry the transparency ushered in by the RTI regime into the even more difficult arena of accountability. Institutionalizing it is the challenge facing the current Lokpal debate.

 

While statutory social audit has floundered in most states, the experience in Andhra shows us that if properly followed, there is enormous potential for this mode of public vigilance to overcome many of the centres of abuse of power and authority that give rise to corruption. The social audit is a unique exercise, a new kind of requirement for government to partner with people to monitor and correct itself.

An independent Society for Social Audit, Accountability and Transparency (SSAAT) was set up by the Department of Rural Development of the Government of Andhra Pradesh. To ensure that the society continues to have unhindered financial support and is truly independent from the implementing agency, 0.5% of the total MGNREGS funds have been allocated for social audits and other transparency and accountability initiatives. On average, 130-150 social audits are conducted each month across all 22 districts, with not less than 2000 people engaged in the exercise. The mandal (block) is the administrative unit (with an average of 21 panchayats) in which the social audit exercise is conducted. The SA is conducted in all the panchayats over a ten day period.

The process starts with an intimation letter being sent to the Mandal Parishad Development Officers (MPDO) and the project directors, directing them to keep the records ready for audit purpose and to communicate the dates to them a month in advance. Following this, on the first day of the audit, the state resource persons (SRPs) and district resource persons (DRPs) go into the villages and identify a few literate youth in each habitation drawn from labourer’s families. They are trained as village social auditors. The group of 100 people form 9-10 teams and each team carries out the SA process in two to three gram panchayats.

 

The teams carry out a thorough verification of figures on record with facts on the ground. They check every single muster roll, attempt to meet every worker, go to every single worksite to verify the measurements entered in the records, and mobilize labourers and other vulnerable and marginalized communities through awareness building on rights and entitlements. Corrective measures are taken immediately to ensure that job cards and passbooks that are not in the possession of labourers are returned to them. The verification process culminates with a gram sabha in the presence of an independent observer (not part of the implementing agency), who endorses the witness statements.

On a pre-notified date a social audit public meeting is held which is attended by the public, concerned officials, political representatives and the media. Village-wise SA findings are read out, the public testifies, officials respond and corrective action is taken. The role of the administration prior, during and after the exercise has been clearly outlined – to facilitate access to information and provide copies of office records, and ensure cooperation at field level during a social audit without interfering in the process. Senior officers from state and district are mandated to be present during the social audit public meeting and initiate immediate corrective action on gaps and lapses.

 

So far four rounds of SA have taken place across all 1085 blocks covering 22,000 gram panchayats. These audits have been attended by upwards of a million labourers with tens of thousands of them providing testimonials regarding problems, both financial and non-financial, in the operation of the programme. Acting on findings uncovered in these social audits, the state government has also suspended or removed officials charged with improprieties and recovered several lakhs from them.

Each month there are approximately 7500-8000 financial issues and 4000-5000 non-financial issues (mostly grievances). This is roughly about 11000-13000 issues that the system has to deal with. While most decisions are taken at the public hearing, their follow-up is initiated and completed by an independent vigilance wing. Besides, since not all issues can be dealt in the same manner, they are segregated into at least 70 categories. Each of these issues has to be dealt with differently when follow-up action is initiated, ranging from invoking sections under the CrPC (Criminal Procedure Code) to disciplinary/departmental action and recovery, following principles of natural justice as mandated by the Constitution.

A recent attempt to analyze the social audit reports of three rounds of social audits in the 1st phase districts showed that there are lessons that need to be learnt, and new strategies evolved as one proceeds.

1. The small bribes of Rs 10-20 demanded from the labourers for issuing job cards, account passbooks and cuts on each payment have substantially decreased. While in the 1st round of social audits, this was considered to be the one recurring high priority issue, by the 3rd round of social audits the incidence of this complaint had substantially declined.

 

If one was to look at it carefully, the forms of deviations from the 1st round to the 3rd round are no longer individual based. The implementing agency has realized it is easier to steal from government rather than the labourer. The labourer is more inclined to speak up about his personal loss during a social audit and at the public hearing. In fact, the recoveries made from the functionaries of the implementing agency during the 1st and 2nd round of social audits related most to complaints regarding petty bribes.

2. There has been a shift from the types of irregularities that have been identified. While in the 1st round of SA the type of irregularities were small, by the 2nd and 3rd round, instances of cheating the workers had significantly reduced, even as attempts to cheat the government exchequer continue in more innovative forms of corrupt practice. Inflated measurements, ghost works, benaami muster rolls of non-working labourers and materials have increased.

With more of these issues coming to the fore, and stringent action being initiated against them, it will be interesting to see if these reduce significantly, paving the way for a newer form of containment; the key seems to be to ensuring people’s support and involvement in the audit process as well as in the understanding that all the money is their own, not just their wages.

3. There is a basic need for the government to carry out its mandate. While in the 1st round of social audits accessing records was not difficult, by the time the 2nd round audit took place the system had learned the art of subverting the process by delaying or not handing over records to the social audit team. However, issuing show-cause notices to those who refused to provide records and introducing an assumption clause that non-provision of records would amount to misappropriation by the head of the implementing agency resulted, by the 3rd round of social audits, in far greater compliance with this requirement.

4. The government can improve its overall performance by responding appropriately to the social audit findings. In the 1st and 2nd round of social audits, the quality of work was shown as bad in a majority of the cases; however, by the 3rd round, this was no longer the case. One could attribute this aspect to the quality control wing that has been set-up by the implementing agency in every district to verify the quality of works.

5. In respect of wages, there is a marked rise in the awareness levels of the labourers as far as their payments are concerned. In the 1st round, the number of complaints related to reduced wages was not so high, but it became a high priority concern in the 2nd and 3rd round social audit. This basically indicates that the labourers were aware of how much they were to be paid, and were able to articulate the difference between what they received and what was shown in the records to the audit teams.

6. Based on an analysis of the decisions taken reports (decisions recorded during the social audit public hearing by the presiding officer) across 22 districts, it is interesting to note that almost 80% of the issues raised by the social audit teams were accepted by the presiding officer.

7. By and large issues related to payments were accepted more often than those related to works. This may be because payment related issues are based on individual complaints and the person is willing to testify, whereas issues related to work are identified through measurement short-fall or lack of records, which are challenged by the implementing agency and are therefore often referred back for further enquiry. This is one of the challenges that is being currently addressed.

8. It was also observed that where the deviations were found to be high, the presiding officer often referred it for further enquiry to the quality control team or to the additional programme officer. This insight has led to the government issuing clear guidelines that if the social audit team feels that the decision taken at the public hearing is not appropriate, they can appeal for it to be reversed at the state level by the chief vigilance officer by providing the necessary evidence.

 

Overall, one can safely state from the experience of the social audits in Andhra Pradesh that no official MIS or monitoring and evaluation report captures the gaps, leakages, strengths and weaknesses of a programme like a social audit does. No matter how perfect the design of the programme, unless a formal platform is provided to the primary stakeholders to articulate the issues and problems, the programme will fail to achieve its objectives. Placing information in the public domain and an open discussion by all stakeholders on various aspects cleanses the programme and allows for correction. Verification of official records at the last point of delivery increases awareness levels of the people.

The average cost of a SA per gram panchayat is between Rs 5000 to 10,000 (inclusive of establishment costs), based on the Andhra experience. However, the impact of the SA (read as returns) have been many and cannot be measured purely in monetary terms, if the analysis illustrated above is anything to go by. It’s a process that not just identifies social, procedural and financial lapses, but also has a huge deterrent impact and ensures that the programme doesn’t slip into the hands of contractors/middlemen. It is also a tool of empowerment that goes beyond the boundaries of what any traditional financial audit has been able to establish so far.

 

Considering the number of line departments that are converging with MGNREGS, the disciplinary authority for each of these departments is different. Cases related to panchayati raj have to be referred to the Commissioner, Panchayati Raj while issues related to Tribal Welfare have to be referred to Commissioner, Tribal Welfare, and so on. In the last five years, approximately Rs 111 crore has been identified as financial deviation. Rs 22 crore has been recovered from those who have misappropriated funds. The total number of field functionaries identified and against whom action has been initiated is 38,661.

The follow-up action is categorized into suspension, show cause notice issued, hearing stage, final orders, removal, FIR, chargesheet filed, recovery initiated, etc. The status report changes every day as cases are heard and disposed. Yet, even now there are approximately 30,000 cases that need to be concluded and the count increases with every SA conducted. It is in this context that the Government of Andhra Pradesh has recently introduced an ordinance to provide for trial of offences committed by persons indulging in corrupt practices during implementation of government schemes and programmes, including those brought out by social audit and for matters connected therewith and incidental thereto.

 

The ordinance will ensure the setting up of mobile courts in the villages to try and fast track cases of corruption that arise out of social audits. Andhra Pradesh was also the first state to pass social audit rules. Based on these, and in concurrence with the Comptroller and Auditor General of India, central rules for social audit were framed and notified on 30 June 2011. The SA process in Andhra has now been advocated as a role model for other states, though it remains to be seen how much it will be replicated. Unfortunately, those who worked on the current draft of the Jan Lokpal bill have ignored the experience of the a janata based system.

‘All institutions are prone to corruption and to the vices of their members,’ the Australian writer Morris West said. Just like the Right to Information Act gave rise to its share of complaints of misuse by certain people, the social audit too can be misused by people who might become entrenched as social auditors. The challenge is to ensure that the social auditors themselves do not begin to broker deals and become power centres with vested interests. Therefore, village level ‘volunteers’, those actually facilitating and conducting the audit, are selected only for two or three audits. Then new people take their place in the hope that those who have been through the process will become a trained and vigilant resource in and for all programmes in the village without becoming a part of the bureaucracy.

How to avoid creating another body of vested interests that can abuse its power and authority is an even bigger challenge for the drafters of a Lokpal bill that relies on a powerful and large new investigative bureaucracy to solve problems. What role will people have in this new anti-corruption establishment?

 

Transparency and public accountability cannot remain theoretical concepts or terms used in political rhetoric. There is a need for evolving systemic designs for participation. SA provides space, specially for the poor and marginalized, to participate. Despite recent rhetoric of transparency, rarely has any government proactively disseminated information of expenditure in a demystified and simplified manner. Governments have, by and large, concentrated on large-scale issues without really focusing on micro-management aspects, as a result of which targeting, accountability and transparency have remained weak in development programmes. People have certainly not been consulted or asked, or their feedback sought on a continual basis.

A top-down silo culture has ensured that poor beneficiaries neither get a chance to participate and influence the decision-making process nor monitor implementation. In spite of a constitutionally mandated people’s forum (gram sabha), individual beneficiaries rarely have a platform where they could express their views or air grievances. The administration has always been viewed by the people not with distrust, but as an ally, an amorphous body which is far too intimidating for the poor to approach. The SA process of the MGNREGA in Andhra Pradesh has changed some of those equations and, therefore, emerged as a powerful tool in the hands of the citizen.