Comptroller and Auditor General of India
                                                                                    Supreme Audit Institution

 

 

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Manual of Audit Management System

 

Proposal for a comprehensive Department-wide Audit Management System including a National Level Database

Executive Summary

1.                The Indian Audit and Accounts Department (IAAD) was among the first Departments of the Government to establish the requisite infrastructure that enabled it to reap the unique benefits of office automation.  Now, nearly two decades later, the Department needs to harness IT power to manage its basic audit related data and use it for better informed and quicker audit planning, monitoring and decision making.  Towards this end, the Department requires a comprehensive Audit Management System (Software).  This proposal has taken on board efforts made during the last four years to identify the requirements for AMS and presents a rollout plan for an AMS appropriate to the Department’s needs.

2.                The proposal envisages the software development in three parts, i.e., stand-alone software for field offices, expert systems to access data from other systems and development of a web portal for access by the headquarters office including the possibility of access and use by external users.

3.                Since the VLC was developed in Oracle, the natural choice for the AMS is Oracle as RDBMS.  After considering various alternatives, it is proposed that partial outsourcing, i.e., hiring programmers and getting the software developed under the supervision of a team of IAAS officers is the best alternative to develop the AMS.  The programming time is estimated to be of the order of 24 man-months and, as such, the AMS can be rolled out within a year. The software development cost is expected to be of the order of Rs 1 crore.

4.                To facilitate smooth implementation and continuity of focus, a Steering Committee consisting of Shi Sunil Verma, ADAI (RS II), Shri Anupam Kulshreshtha, ADAI (RA) and Shri Nagarajan, PD (IS), has been proposed.  This Committee will be assisted by an identified core team and domain experts all of whom are IAAS officers.  A full time project manager is also considered necessary – an IAAS officer has been identified as suitable for this position.  He will be assisted by a Senior Audit Officer of the office of the Principal Accountant General Gujarat who was involved in development of similar software in that office.  The work relating to development of software is not new and such systems with lesser functionality have been implemented with some success in our Himachal Pradesh and Gujarat offices.  Once the AMS is developed, it is proposed to be implemented speedily in all our offices with the help of IT-friendly officers in the field.

Introduction

5.                The advantages of automation vis-ŕ-vis manual systems are well recognised.  It not only leads to speedy data processing to generate meaningful information but also enables work that is almost impossible in a manual set-up.  For instance, it enables us to search for a particular type of Audit Paragraph across the States and give results instantaneously.  Harnessing IT for audit process management has unique benefits for IAAD.

6.                In the present set-up, there are different in-house systems available in different field offices. Some of these are partially automated.  There is no standardisation and hence the data in the present form often cannot be used electronically in each field office as a management information system for improved decision making.  Nor can it be used by Headquarters for its decision making process.

7.                Besides, since the existing systems are not comprehensive, they are unable to harness the potential of IT completely.  With the help of appropriate software, it is possible to manage not only the basic data of auditees, auditors and audit assignment, but also to generate audit plans, increase effectiveness of monitoring and build an electronic interface with auditees for issue of Inspection and Audit Reports as also obtaining their responses.  Such a comprehensive system will definitely provide the following benefits.

a)       Manage basic data much more easily and efficiently than is possible at present;

b)       Enable the preparation of much better informed audit plans and help enable optimal use of scarce audit resources and

c)        Effortlessly integrate the data into a national database for aid in higher level planning, monitoring and follow-up.

8.                In particular the proposed system will lead to the following variety of uses.

a)       Enable office-wise as also topic or theme-wise comparison and analysis of output almost on real-time basis;

b)       Create the ability to link and retrieve the contribution of individual AAOs, AOs and Group Officers vis-ŕ-vis each audit output;

c)        Aid in optimum utilisation of human resources – improved risk analysis would lead to avoidance of both over and under exposure to audit

d)       Every audit finding, observation and recommendation can be classified under predetermined categories enabling ease of department-wide retrieval and analysis;

e)       Maintenance and updating of auditee profiles will become more dynamic and real-time, with automatic linking to audit planning as also processing of audit output;

f)          Dynamic linkages to VLC data, Central and State budgets and transfers will lead to timely identification of thrust areas of Government

g)       Enable systematic and substantially automated monitoring and follow-up of inspection reports, statements of facts, audit report paragraphs, management letters, audit reports, proceedings and recommendations of the PAC and COPU

9.                In view of the above, it is clear that the Indian Audit & Accounts Department requires such a comprehensive Audit Management System and will benefit from it greatly.

10.            This proposal has taken on board efforts made during the last four years to identify the requirements for AMS as also attempts to and presents a rollout plan for an AMS appropriate to the Department’s needs.  A National Level Database for the IAAD has to be an integral part of the AMS.  In this context, it is confirmed that this proposal addresses the concern raised in the CAG’s office Order No. 188-Audit (AP)/18-2007 dated 4th June 2009 through which was constituted a Task Force headed by the then DAI in charge of Information Systems.  A copy of this office order as also of the record note of deliberations of this Task Force are enclosed as Annexure 1 and 2.

The proposed system

11.            The work flow that is expected to be achieved is indicated in the following graphic.

12.            As can be seen from the above diagram, the databases necessary to this system includes the audit manpower database, audit scheduling database, the auditee profiles database, the Inspection reports and audit reports database with audit observations arranged category-wise, the follow-up action database and the VLC database.

13.            Other than the follow-up action database, all the other databases required are already available either in full or in part in all audit offices.  The implementation of the computer-based system will require ensuring that all the requisite data is captured and updated regularly.  The necessary hardware is already available in all our offices including small business servers.  As such, no additional cost will need to be incurred. 

14.            The software that will help interweave all the elements can be sub-divided into the following three parts.

(i)        Stand-alone software for the field offices, including a flexible management information system

(ii)      Expert systems for accessing data from the database and other systems including the A&E office data and preparing risk-based audit plans,

(iii)    Development of a web portal for connectivity, ease of data entry and data uploading including the provision of access to departmental and external users

Rollout Plan

15.            The following set of roll-out activities has been identified as essential to the implementation of the project.

Activity

Agency

Sensitizing the field offices

IT friendly Group Officers team

Updating master databases

Each field office

Specifying the requirements

Core team plus domain experts

Selecting the programmers

Core team

Developing the software

Programmers plus core team

Implementing & familiarisation of software in filed offices

Programmers plus IT friendly officers

Developing a more flexible MIS

Programmers plus field offices

Developing risk analysis algorithms

Core team plus domain experts

Developing expert System

Programmers

Developing a web portal

Suitable solution provider

16.            The software development effort can be sub-divided into the following three parts.

(iv)     Stand-alone software for the field offices, including a flexible management information system

(v)       Expert systems for accessing data from the database and other systems including the A&E office data and preparing risk-based audit plans,

(vi)     Development of a web portal for connectivity, ease of data entry and data uploading including the provision of access to departmental and external users

Database platform & software development time

17.            Since the VLC was developed in Oracle, the natural choice would be in favour of ORACLE as the RDBMS.

18.            The programming effort required is estimated to be 24 man-months.  It is, however, felt that it is possible to rollout the software within 30 weeks so that all the field offices could start using it from 1st April 2010.  Each activity and the timeframe associated therewith has been examined closely for a reassurance that all these activities could be completed within 30 weeks.  The estimates of time are enclosed as a Gantt chart (Annexure 1).

Development of Software

19.            The following three options have been considered vis-ŕ-vis software development.

a)       Partial outsourcing - hire the services of programmers (and system professionals if need be) and get the software developed under the supervision of a team of IA&AS officers who would, among other things, be responsible for system analysis and design

b)       Total outsourcing – with the help of an IT consultant, draw up a document spelling out the complete requirements and thereafter award the work to an IT solution provider – this would also have to be under supervision of a team of IA&AS officers and

c)        Seek services of Gen Next – the firm that has developed workflow computerisation for our Direct Taxes Wing – to develop the software once again under the supervision of a suitable group of IA&AS officers. 

20.            It is clear that all three options required close supervision of the work by our officers with the requisite set of skills and experience.  It is also considered necessary to take into consideration the experience gained through implementation of a similar solution in the offices of the AG Himachal Pradesh and, more recently and more successfully, the Principal Accountant General Gujarat.  Accordingly, it is proposed that the first of the three options would be the most appropriate as it would

(i)                 provide the flexibility for mid-term course corrections, if any,  in the so-called “User Requirement Specifications”

(ii)               ensure ownership of source code with the IAAD and

(iii)             minimise the cost of development.

Project Manager

21.            A full time, dedicated Project Manager is identified as an essential requirement to ensure quick and successful implantation.  The Project Manager would require the support of at least one IT-savvy Audit Officer – the officer who has written the programme for our Gujarat office is considered to be the most appropriate person for this role.

Steering Committee

22.            It is imperative that there be a core team of officers to supervise and monitor the development and implementation process from start to finish.  Based on extensive consultations, it is proposed that the following steering committee be put in place in the interest of smooth implementation.

Sunil Verma,                                      ADAI (RS-II)  
Anupam Kulshreshtha,                     ADAI (RA)     
N Nagarajan                                      PD (IS)

23.            This steering committee would require the assistance of the following core group.

Shri R M Johri                                    MAB IV Delhi                         Member         
Shri Y N Thakare                               PD (CS)                                 Member
Shri R K Goel                                    Director (Exam)                     Project Manager
Shri G Srinivas                                  Director (GASAB)                 Member

24.            Empowerment of the steering committee including delegation of the requisite financial powers would be desirable.  In case this is not possible, a fast track procedure involving sanction of expenditure by the DAI IS would help.

Domain expertise inputs

25.            In order to ensure optimal specification of requirements, IT friendly officers with the most appropriate combination of skill and experience should also be identified up front so as to ensure speedy and sure implementation of a robust solution.  The following names are recommended for this role.

Name

Audit Area

Shri P K Kataria

Central Ministries, Defence, P & T

Ms. Sriram T Vani

Civil

Ms. Sriram T Vani

Railways

Ms. Atoorva Sinha
Shri Shourjo Chatterjee

Direct Taxes

Shri Jayanti Prasad

Central Excise and Customs

Shri Himanshu Dharmadarshi

State Receipts

Shri Y N Thakare

Commercial Audit

Shri K P Yadaw

Autonomous Bodies

Shri T S Shivappa

Local Bodies

Ms Vidhu Sood

Accounts as input to audit

 

Local facilitation

26.            Speedy and smooth implementation in field offices would require facilitation by IT-friendly officers – one for each set of four or five geographically adjacent offices.  These officers would help with the sensitisation process as also deal with day-to-day problems that may be faced by individual offices in updating their databases as also in familiarising with the application software after its installation.  The Steering Committee mentioned above could identify 15 or so such officers each of whom could look after the offices nearby.

Estimate of cost and time

27.            Since the IAAD is already quite well provided with computer hardware including networking elements in almost all its offices, no significant additional investment is anticipated for this purpose.

28.            The software development effort is expected to involve expenditure of the order of Rs 1 crore.

29.            The travel and other miscellaneous expenditure associated with this initiative will be incurred out of the existing appropriations made for this purpose.

30.            Provided that this proposal is approved within the next four weeks, the new system could be made operational with effect from 1st April 2010 at a total estimated cost of around Rs 2 crore.

(Anupam Kulshreshtha)
ADAI (RA)

 

(Sunil Verma)
ADAI (RS-II)