On 30 July, a performance audit report on implementation of Mahatma Gandhi National Rural Employment Guarantee Act in Karnataka was tabled in the Assembly. The CAG audit test checked the implementation in Bellary, Bijapur, Chikkaballapur, Chamrajnagar, Gadag, Hassan, Raichur and Shimoga districts for the period 2007-08 to 2011-12. Within these eight sampled districts, the audit looked at records in 17 taluks and 157 Gram Panchayats (GPs).

The CAG audit was not limited to verification of accounts and records, but audit teams also carried out physical verification of 1432 works. During physical verification, it was found that execution of 941 works (i.e. 66 per cent) was satisfactory. The remaining 34 per cent works were found to be in poor condition. Audit noted that this could be the result of the state government not spending any amount on maintenance of assets created out of NREGS funds, although Operational Guidelines permitted such expenditure. The state government furnished replies in January 2013 on audit findings only in respect to three districts out of these eight, namely Bijapur, Chamraj Nagar and Hassan.

Performance audit of NREGS for the period February 2006 to March 2007 was conducted during the year 2007-08 and findings were reported in CAG Audit Report on Karnataka (Panchayati Raj Institutions) for the year ending 31 March, 2007. The committee on Panchayati Raj Institutions (PRI) and Urban Local Bodies (ULB) in its report for the year 2010-11 had discussed those audit findings and had recommended the following:

  • Preparation of District Perspective Plans
  • Preparation of realistic labour budget
  • Timely release of funds to the scheme
  • Proper survey to identify the beneficiaries before the issue of job cards
  • Proper maintenance of Employment registers by GPs
  • Timely payment of wages, and
  • Organising Social Audits in Gram Sabhas

The Action Taken Report on the above findings was still awaited on April 2013. It would be worth examining in the recent audit report how many of these recommendations by the Assembly Committee, following upon the audit findings of the previous audit have been complied with.

District Perspective Plans and Participatory Annual Plans

The audit report states that none of the test checked Zilla Panchayats (ZPs) had prepared District Perspective Plans. Replying to this observation, the state government stated in January 2013 that although most of the districts prepared District Perspective Plans, the same were not submitted to the Government for approval. The reply also stated that with a view to maintaining uniformity and preventing inconsistency in the features of Perspective Plans, the state government had entrusted the task of preparation of a model perspective plan for 10 GPs to a private agency at a cost of Rs 4.88 lakh in March 2012. Audit scrutiny found that the plan was yet to be submitted as on January 2013.

On the issue of Gram Panchayat level Annual Plan, audit scrutiny revealed that out of 157 GPs test-checked, only 28 GPs had conducted Gram Sabhas on 2 October to discuss annual plan preparations. In the remaining 128 GPs, there was no evidence of any Gram Sabha having been conducted on any single year over the period 2007-2012. The annual plans prepared by test-checked GPs exhibited only works proposed to be taken up, their estimated costs and estimated benefits. These plans routinely failed to provide information on physical improvement envisaged and benefits to the community envisaged.

In a reply dated January 2013, the state government sought to explain that "the detailed estimate making was a time consuming exercise and could not be completed physically between 2 October and 31 December, hence it was being resolved by computerised template based estimate making". (emphasis added) The reply also claimed that benefit to community, asset quality, asset creation etc. did not suffer on this account as works had been selected in Gram Sabha and community-oriented works were taken up.

The state government's reply to this audit finding shows, how despite the emphasis on the participatory and consultative nature of the annual plan-making exercise in the scheme guidelines, the local bureaucracy and even the state government at the highest level continue to look at the exercise as a template to be filled in, or as mere khaanaa purti. During my years as an activist working with the Narmada Bachao Andolan in the year 2002, I repeatedly heard this phrase voiced by local farmers to articulate their contempt for the bureaucratic culture of reporting compliance, even when non-compliance and violations on the ground were writ large.

Responses of sampled beneficiaries show that job cards had been issued within 1 to 180 days of submitting applications for registration. Operational guidelines however say that job cards are to be issued within 15 days of the application for registration. For a state that boasts of having bagged a UN award for Sakala, such an audit finding must be a matter of shame.

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Responding to the state government's submission, CAG audit argued that "the reply is not acceptable as no efforts had been made to ascertain the need of the villages by convening Gram Sabhas before including the works in the development plans". Audit also observed that due to non-availability of the dates on which development plans were forwarded by GPs to Programme Officers (PO) and by the latter to the District Programme Coordinator (DPC), it was not possible to verify whether the development plans had been consolidated in a timely manner by POs and DPCs. The test checked Zilla Panchayats had also failed to furnish dates of approval of the development plans. Audit noted that the Register of Works had either not been maintained or only partially maintained in all test-checked GPs, thereby making it impossible to assess if there were delays in according technical sanctions and their impact on implementation of the scheme.

This audit findings leave us wondering why public servants routinely fail to put dates on such crucially important documents that form the very backbone of translating the 'right' to work to 'practice.'

Realistic labour budget not achieved

Audit scrutiny revealed that till the year 2008-09, there was no systematic procedure followed in the preparation and consolidation of labour budgets, and from the district these plans were forwarded to the Ministry of Rural Development (MoRD) as and when received. Even after the year 2008-09, while the state government claims that the creation of State Employment Guarantee Fund in 2009-10 has led to improvements in submission of labour budget to the MoRD, audit scrutiny noticed that during the last three years, labour budget was actually sent to the MoRD in the month of March, instead of being sent on 31 January, as envisaged in the scheme guidelines.

Audit noticed huge variations between the projected and actual labour budgets and notes that this could have affected the Government of India's mid-year review of the State's performance against its own labour budget.

Registration and issue of job cards

Audit also noticed that though there had been substantial days in the issue of job cards post receipt of applications, the dates of issue of job cards were not displayed in the front end, making it difficult to monitor the timeliness of issue of the job cards. Responses of sampled beneficiaries show that job cards had been issued within 1 to 180 days (in Shimoga and Chamrajnagar districts) of submitting applications for registration. Operational guidelines however say that job cards are to be issued within 15 days of the application for registration.

Whatever be the lag, for a state that claims to have legislated the Right to Guarantee of Public Service Act and boasts of having bagged a UN award for Sakala, such an audit finding going on record must be a matter of shame. However, instead of feeling ashamed, the state government in its reply dated January 2013 sought to blame the NIC software for the delay and stated that these issues will have to be resolved by them.

In further anomalies, scrutiny of MIS data revealed that in 567 cases, the job cards found in the Registration Table were missing from the Applicants' Table. The field asking for Applicant's name was either empty or contained a single alphabet field in 726 cases but wages amounting to Rs 5.93 lakh had been paid during 2008-12 in respect of these applicants. As per the MIS, 555 persons aged less than 18 years and 965 persons aged more than or equal to 90 years had been engaged on works in 30 districts and wages of Rs 7.96 lakh and Rs 13.21 lakh respectively had been paid to them.

Monitoring mechanism

The State Employment Guarantee Council (SEGC) had not appointed any expert group for providing technical support and advice to improve the quality of implementation of the Act. While the Operational Guidelines envisaged annual reports on the outcomes to be tabled in the state legislature, audit scrutiny revealed that no such report on the scheme for the years 2006-07 to 2011-12 had been tabled.

Again, while Operational Guidelines specify that works executed under the scheme are to be inspected to the extent of 100 per cent at taluk level, 10 per cent at the district level and 2 per cent at the state level, the scrutiny of available records furnished by the Rural Development and Panchayati Raj Dept (RDPRD) revealed that there were shortfalls at all three levels. There was a shortfall to the extent of 98 per cent at the state level even when year-wide details of inspections had not been furnished for auditing. The shortfalls during the period 2008-2012 ranged between 10 to 79 per cent at the district level and 48 to 85 percent at the taluk level.

In its reply dated January 2013, the state government sought to explain the shortfalls stating that "external monitoring had been done in the form of independent Third Party inspections, 28181 and 23792 works were inspected in 2009-10 and 2010-11 respectively and this was being elaborated and scaled up in 2012-13."

Audit scrutiny also revealed that the state government had not appointed State Quality Monitors and District Quality Monitors as on May 2013. For complaints of serious nature, the Union Ministry of Rural Development deputes National Level Monitors (NLM) to carry out investigation and the reports of these NLMs are shared with the concerned state government for corrective action. Audit scrutiny revealed that out of 30 districts, NLMs had covered 9, 14, 8 and 21 districts during the years 2007-08, 2008-09, 2009-10 and 2010-11 respectively. The state needs to introspect on the reasons that required National Level Monitors to visit more than half of the districts where the scheme is being implemented, in the year 2008-09 and again in the year 2010-'11.

The Operational Guidelines also mention constitution of local Vigilance and Monitoring Committees, comprising nine members of the locality where the work is undertaken whereas audit scrutiny in test checked GPs showed that neither was any information available on the constitution of such Committees nor were any monitoring reports attached with the completion reports.

Social audit

The State government framed the MGNREGS Implementation of Social Audit Rules, 2011 which came into force with effect from 10 January 2012. The rules envisaged constitution of an independent society and as per bye laws of this society, the social audit directorate (headed by a director) was to be put in place. Audit scrutiny of records however showed that the Director of Social Audit was appointed only on 9 January 2013.

In eight test-checked districts, audit found that as against the requirement of 1416 social audit forums, only 232 forums were conducted in 87 GPs during the period 2007-12. In the remaining 70 test checked GPs, audit teams did not come across any evidence of social audits during the last five years. Further, even during the survey of beneficiaries, it was found that only 15 per cent among the beneficiaries were aware of social audits and 78 per cent of beneficiaries expressed their ignorance about such a provision.

As per the information furnished by the Rural Development and Panchayati Raj Dept, cases of irregularity had surfaced in social audits conducted during the period 2008-2012, but no such were reported in the year 2007-08. Criminal cases had been booked following social audits in six districts involving an amount of Rs 54.25 lakh, whereas 213 civil cases involving money value of Rs 2.19 crore had been booked in 17 districts as a follow-up on these social audits.

To this audit observation, the state government responded in January 2013, saying "social audit had picked up from 2008-09 onwards and 18,592 social audits had been conducted during 2007-12". The CAG however found this reply unacceptable as the number of social audits conducted in the test-checked GPs was meagre.

Grievance Redressal

The state government had framed the Karnataka National Rural Employment Guarantee (Grievance Redressal) Rules, 2009 which came into effect from 13 March 2009. As per information furnished by Rural Development and Panchayati Raj Dept, during the last five years 1953 complaints were received of which 1620 were disposed of, while 233 complaints remained pending as of March 2012. Though Rules mandate that complaints be disposed of within seven days, audit scrutiny revealed several delays in disposal of complaints; in some cases complaints had not been addressed for one to five years. It could of course be argued that the stipulation in the Rules mandating disposal of complaints within seven days itself was very ambitious. There was also a need to examine whether appointing the same official who had a role to play in the implementation of the scheme (for example Secretary at GP level and Programme Officer at taluk level, or District Programme Coordinator at district level) as grievance redressal officer wouldn't lead to a potential conflict of interest.

Perhaps it was in order to avoid such potential conflict of interest that the Government of India directed the states in September 2009 to set up a district Ombudsman as an independent grievance enquiry authority, empowered to direct the state government to redress and penalise as well as file First Information Report against defaulters. Audit reports that as of June 2012, ombudsmen were appointed in only 15 out of 30 districts implementing the NREGS.

Audit scrutiny in test-checked GPs revealed that the Register of Complaints had either not been maintained (in 118 GPs), or even in instances where they were maintained, there were no entries in the registers (39 GPs). During a survey of beneficiaries, audit teams came across 191 beneficiaries out of the sampled 1533, voicing grievances about the way they had been treated under the Scheme, but only 34 of them had lodged complaints and only 21 of those found their complaints redressed. Thus, awareness was considerably low of both social audit forums and grievance redressal.

Impact Assessment

According to the Operational Guidelines of the scheme, regular evaluations and sample surveys were to be conducted to assess whether the outlays for the scheme were getting translated into outcomes. The broad guidelines for evaluation studies were to be framed by State Employment Guarantee Council (SEGC). The CAG found that the Karnataka state government had not commissioned any study to assess its performance in the implementation of NREGS and its impacts on workers' lives.

However, during the audit, CAG auditors also carried out a survey based on a questionnaire to evaluate the perception of beneficiaries about the impact of scheme on their lives. This survey pointed out that 63 per cent of workers surveyed reported improvement in family income, 60 per cent said that it helped them avoid going hungry and 57 per cent reported that it helped them to avoid migration to other places for work. During this survey, 51 per cent also reported that it had spared their children from domestic and other works and enabled them to send their children to schools. 42 per cent workers reported that in the absence of this employment guarantee scheme, they would have to continue demeaning and hazardous work that they were forced to take up before the start of the programme. The scheme had also helped 35 per cent of workers repay their debts and 37 per cent workers meet medical expenses during illness in the family.