On 16 September, the Performance Audit report on implementation of MGNREGS in Uttar Pradesh during the period 2007 to 2012 was tabled in the State Assembly. During this period, a sum of Rs. 22,174 crores was spent in the state on MGNREGS. The performance audit was conducted by the Comptroller and Auditor General (CAG) of India from March 2012 to June 2012 through a test check of records in the State Rural Development Department, in 18 sampled districts, 46 blocks and 460 Gram Panchayats.

The audit reviewed a total of 4453 works in these Gram Panchayats, carried out by two line departments in each test checked district. Apart from the test check of records, 4600 beneficiaries (ten in each Gram Panchayat) were also interviewed. The draft performance audit report was forwarded to the Rural Development Department on 28 September 2012 and partial replies on audit findings were received on 4 January 2013. Following this, an exit conference was held with State Government officials on 12 January 2013.

The audit report notes the constraints faced by audit teams, stating that there were delays in furnishing records/responses by the state government. In many cases, the required information was submitted on the concluding day of audit and some information was still awaited.

The state government constituted a 16-member State Employment Guarantee Council in May 2006, but 15 non-official members from Panchayati Raj Institutions were nominated only after a delay of 19 months. The state government also failed to prescribe any frequency for the meetings and required quorum. The SEGC met only once/twice in a year, thereby limiting its role and responsibility in implementing MGNREGS.

Shortages in personnel in all categories of functionaries ranged between 6 and 53 per cent. There was a very high shortfall in critical cadres amounting to 15 per cent of Gram Rozgar Sahayaks (GRS) at the Gram Panchayat level and 32 per cent of Technical Assistants (TA) at the block level. Among the test check districts, Ghaziabad had no GRS or TAs posted against the requirements of 405 and 41 respectively. Similarly, in Bulandhshahr district too, no GRS was posted against the requirement of 889.

Shortfalls in Training

There were huge shortfalls in training targets for MGNREGS personnel, since the Deen Dayal Upadhyaya State Institute of Rural Development, Lucknow could organise only 235 sessions (30 percent) during the year 2011-12 out of the targeted 771. As many as 23,876 officers (i.e. 77 per cent) of the target of 30,863 could not avail the training.

Such shortfalls took place despite the union government having released the funds meant for training (Rs 9.84 crores as first instalment of the sanctioned amount of Rs 19.88 crores) in March 2011 to the state government. Funds worth Rs 7.37 crores were lying unspent at the state government level and Rs 1.33 crore at the Institute level as of March 2012 and the same was not refunded to the Union Rural Development Ministry.

In a severe indictment of the State Employment Guarantee Council, the CAG observed that it had neither taken up evaluation of the scheme nor developed any systems for it.

 •  Fewer takers for NREGS
 •  NREGA workers kept waiting

As this audit finding pointed out, the state government sought to argue (in correspondence dated January 2013) that "the expenditure on training was not incurred due to assembly elections in the state". The CAG of India has termed this argument "not convincing," since assembly elections were held in the state only during February-March 2012, and the state had an entire year from March 2011 onwards to organise the trainings.

Where training was imparted to Gram Panchayat functionaries at the district level, audit findings were even more shocking. Out of 460 test-checked Gram Panchayats, audit came across only nine Gram Panchayats in Sitapur district reporting such training organised by the District Institute of Rural Development. Across all the Gram Panchayats, audit scrutiny revealed delays in preparation of District Development Plans, thereby raising a question mark on the quality of the very few trainings that did take place.

Information, Education and Communication

Audit scrutiny of records revealed that a state level comprehensive plan for IEC activities was either not prepared at all or it was not made available to the auditors. During the initial phase of the scheme, a few pamphlets had been printed which were found to be insufficient for any vigorous information dissemination activity. The issue of ineffective activity under the IEC component was raised in the meeting of SEGC in March 2009 and a budget of Rs 10,000 for each block was approved - for printing of pamphlets, visual and print media and related activity through documentation etc.

In 16 test checked districts Rs 3.06 crores was spent on advertising, wall paintings etc during the period 2007-2012. During audit scrutiny, an incident of irregular expenditure (amounting to Rs. 9 lakhs) and one of inadmissible expenditure (amounting to Rs 44.70 lakh) surfaced.

Monitoring and Evaluation Mechanism

During audit it was found that 57 out of 460 test-checked Gram Panchayats did not have Vigilance and Monitoring Committees (VMCs). In addition to this, in 30 Gram Panchayats out of 403, where VMCs had been constituted, these committees were not informed about works, timeframe, quality parameters etc. District Quality Monitors (DQMs) were not appointed in the state. In its reply dated January 2013, the state government stated that DQMs were not required after engagement of the Technical Audit Cell (TAC).

Initially, the state government nominated directors of six state level institutions and NGOs as State Quality Monitors (SQM) in February 2006, but none of them submitted any report. In December 2008, the state government empanelled 10 SQMs who conducted only 26 inspections in 2009-10, 16 in 2010-11 and only one in 2011-12. The state government had also failed to appraise the appointment and proficiency of the SQMs and their tour programmes were never circulated among the concerned functionaries.

While financial and administrative approvals were given from time to time by the SEGC, it never prepared a list of preferred works. Till 2010, the state government had failed to notify the rules for implementation of the scheme as approved by SEGC. It had also failed to publish any resource material or guidelines for the information of the general public. The annual report on scheme implementation was not prepared for a single year since the inception of the scheme.

In a severe indictment of the SEGC, the CAG observed that it had neither taken up evaluation of the scheme nor developed any systems for it. Auditors also did not come across any records pertaining to physical inspections although guidelines prescribed the same by functionaries at each level.

Social audits

Audit scrutiny of records revealed that social audits had been conducted in only 258 out of 400 test-checked Gram Panchayats. The internal audit cell that could have examined social audit reports was also not constituted in 14 out of 18 test-checked districts.

Grievance Redress

The audit also found the grievance redress mechanism to be very weak; by the end of March, 3451 grievances received through the helpline as well as 1398 grievances received through various other means were outstanding. In its reply (dated January 2013) on this audit observation, the state government had nothing to say about the pendency of complaints.

Reading the CAG's performance audit report on MGNREGS in Uttar Pradesh reminds us of media debates in the year 2008. The debate would have proved worthy if in June 2008, researchers had indeed engaged with the audit findings on a state-wise basis when state specific audit comments on 'employment guarantee' entered the public domain. However, that did not happen. There was instead a strand of arguments indicating that CAG auditors concerned themselves more with scrutinizing deviations from NREGA guidelines; this was held to be merely pedantic since "the guidelines are not binding in nature".

The one lesson that should emerge from the CAG's performance audit report is that poor record maintenance could make the entire exercise of auditing a non-starter a fact that is borne out by UP's example. A look at the replies by the state government to the audit findings also points to how counter-arguments are offered without any substantial documentary evidence. In the end, therefore, it remains a story of huge shortfalls in dedicated personnel, shortfall in training, weak monitoring and inadequate grievance redressal.