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Questions on CAG's powers to audit accounts

April, 29th 2010
Mobile operator Bharti Airtel has questioned CAG's authority to audit its accounts, saying the apex auditor's powers are with respect to state-owned firms only. The Department of Telecom (DoT) had earlier asked five telecom companies--Bharti Airtel, Reliance Communications, Tata Teleservices,Vodafone Essar and state-run BSNL-- to provide accounting details of three years from 2006-07 onwards to the Comptroller and Auditor General (CAG). The DoT, which is acting as a mediator between telecom companies and the CAG, had also asked Tata Communications, which is an ISP provider, to make its accounting records for three years from 2006-07 available to CAG. "The various sections of the CAG (Duties, Powers and Conditions of Service) Act 1971, which set out the duties and powers of the CAG are with respect to audit of accounts of government companies/corporations under the Union of State. These powers do not extend to private companies like Bharti Airtel," Bharti Airtel said in a communication to Telecom Secretary P J Thomas. Bharti Airtel officials declined to comment on the issue. The company said the information sought by the CAG is confidential and sensitive from a competition point of view and asserted that such disclosures falls beyond its obligations under the licence agreement. The company also questioned the need for conducting such an audit soon after a Special Audit by the department (DoT) which went on for eight months. "The recent audit required us to spend an enormous number of hours and dedicate a large number of resources to collate the massive data required by DoT. Considering that the audit went on for eight months and has been completed very recently, a fresh audit following immediately after the last is highly unfair on us and will result in major duplication of efforts/cost/time and manpower," said the operator. Earlier Tata Communications had also questioned the need for a CAG audit immediately after the Special Audit by DoT. CAG of India Vinod Rai had earlier said that CAG had still not got access to records of private (telecom ) operators despite a request by the government itself. According to the government, the CAG audit is to ensure the telecom operators have made payments to the government as per licence rules.