The Telegraph
Monday , March 25 , 2013
Since 1st March, 1999
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RIL gas audit

New Delhi, March 24 (PTI): The CAG is likely to restart the audit of Reliance Industries’ spending on the KG-D6 gas block early next month after issues over the scope of scrutiny are resolved, oil secretary Vivek Rae today said.

“I have myself had two meeting with the Comptroller and Auditor General (Vinod Rai) to resolve issues over the audit. The CAG has to audit (KG-D6 spendings) and we will ensure that they get all the support for that,” Rae said.

The Comptroller & Auditor General of India (CAG) last month suspended the audit 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 the CAG will be able to resume audit either this month or early next month,” Rae said.

RIL had previously stated that the CAG couldn’t contractually perform a performance audit on it and the production sharing contract (PSC) only provided for a government appointed auditor to verify reasonableness of all charges and credits.

Rae said the CAG, too, had stated that it was not planning to do a performance audit of the company but only wanted 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 March 12 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 the PSC provided 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 its six-member audit team was at the premises of RIL in Navi Mumbai from January 9 to January 31 during which they issued 40 requisitions calling for information and records. But RIL provided only a few records.