The overhaul, led by the Comptroller and Auditor General (CAG), is designed to flag tendering lapses, execution delays and potential losses early, allowing course correction while money is still being spent, rather than years later when the damage is done.
Audit findings are currently published long after the completion of schemes or major financial decisions. Several high-profile audits, including those on the 2G spectrum allocation and coal block auctions, were released well after the projects had concluded, limiting the scope for corrective action.
The CAG report on the 2G spectrum allocation was tabled in Parliament in November 2010, two years after the licences were issued in 2008, and estimated a loss of ₹1.76 trillion to the exchequer.
In the coal-block allocation case, the blocks were allotted between 2004 and 2009, and the CAG’s performance audit report was released in August 2012. At least 155 coal blocks were allocated during the United Progressive Alliance regime in this period, and private companies were alleged to have made windfall gains of more than ₹1.86 trillion, according to the CAG report.
Under the new system, the CAG will begin reviewing the performance of projects soon after the rollout of schemes, instead of waiting for their completion. “So, instead of scanning all the files after a project’s end—which is the existing practice—the new mechanism will examine project-execution files in real time,” said the first of the two people mentioned above.
The auditor will look into potential tendering irregularities, including signs of collusion or dummy bidding from identical IP addresses, and assess whether procurement and implementation processes are adhering to prescribed norms from the very start. This will allow the concerned ministries to be alerted while the scheme is still running and enable timely corrective measures.
Digital tools to track project milestones
The approach is expected to save substantial public money, which can then be used for other welfare programmes, the people said. The national auditor is moving towards real-time auditing by adopting digital tools that continuously track every stage of a scheme’s execution.
“The CAG’s new Monitor Performance Audits (PA) and Subject Specific Compliance Audits (SSCA) system captures planned and actual milestones, compares progress in real time, and alerts functional wings and field audit offices through a structured, centralized digital interface, enabling faster corrections during implementation rather than after completion,” said the second person.
Queries sent to the CAG remained unanswered till press time.
“Real-time auditing is a long-overdue reform. Instead of waiting years for irregularities to surface, ministries will now get early warnings while the scheme is still being implemented,” said Dr Amit Singh, associate professor at the Special Centre for National Security Studies, Jawharlal Nehru University, New Delhi. “This shift will not only improve accountability but also help prevent losses before they occur, which is far more valuable than post-facto scrutiny,” he said.
The CAG’s shift to real-time auditing will make it easier to assess the performance of government bodies that already follow concurrent audit practices. The Reserve Bank of India introduced mandatory concurrent audits for banks in 1993, following a review by the Institute of Chartered Accountants of India, to allow real-time scrutiny of transactions.
Similarly, under the National Rural Health Mission, the government put in place concurrent audits at the state and district levels so that expenditures and advances in health programmes are monitored continuously, rather than through periodic retrospective checks.
The CAG audits work of government institutions such as central ministries, state governments, and urban local bodies, among others. It does not audit the Reserve Bank of India; the central bank has auditors appointed by the central government under the provisions of the RBI Act.
According to the CAG’s Annual Report for FY24, 115 audit reports were approved, while audit observations led to the recovery of ₹6,266.68 crore. The report also noted a 94.37% prompt redressal rate for grievances received from pensioners and provident fund subscribers. Of these, 21 were for tabling in Parliament and 94 in state legislatures.
Key Takeaways
- The CAG is moving from retrospective scrutiny to continuous auditing that monitors government schemes and PSU projects while they are still under execution.
- The new system will flag procurement irregularities, signs of collusion, dummy bidding patterns, and execution delays early, enabling corrective action before financial losses occur.
- Real-time monitoring will be powered by digital platforms that capture planned vs. actual progress and send alerts to ministries and audit offices through a centralized interface.
- Past audits—like those of 2G spectrum allocation and coal block allotments—were released years after project completion, limiting the scope for intervention. The reform aims to avoid similar delays.
- The overhaul is expected to reduce wasteful expenditure and improve governance efficiency by preventing losses rather than documenting them years later.
- According to the CAG’s FY24 annual report, 115 audits were completed last year, leading to recoveries worth ₹6,266 crore and a 94% prompt grievance redressal rate.