International Centre for Audit of Local Governance (iCAL)

Source: Indian Express
GS II: Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures

Overview

1. News in Brief
2. International Centre for Audit of Local Governance

Why in the News?

International Centre for Audit of Local Governance (iCAL), a pioneering initiative by SAI India, was officially inaugurated in Rajkot,

News in Brief

• The inauguration marks a significant milestone in enhancing the audit capacity and independence of Local Government auditors, promoting improved financial performance assessment, service delivery, and data reporting.

International Centre for Audit of Local Governance

• The institute, is a first in the country as per the CAG office.
• It aims to set global standards for auditing local governance bodies.
• iCAL’s primary objectives are to develop and enhance
  • Standards for Local Government Audits
  • Strengthen data collection and reporting
  • Empower auditors, executives, and elected representatives through comprehensive training programs and leadership development initiatives.

Local bodies audited in India

• Conversely, the CAG conducts audits of all funds (including the state and Central governments).
• Keeping accounts is the responsibility of the concerned local body.
• Many state governments have an Examiner of Local Fund Accounts (ELFA) or Director of Local Fund Accounts (DLFA) for auditing their accounts.
• ELFA audits the utilisation of funds granted by the state government to local bodies.

Need for iCAL

• There are around 2.5 lakh panchayats and 8,000 urban local bodies (ULBs) in India.
• 40 countries have their respective supreme audit institutions (SAIs) conducting audits of local bodies.
• There is a need to promote global good practices.
• A lot of funds are flowing to local bodies now and there is a need for proper auditing of these institutions.
• There have long been concerns about the lack of funding available to local bodies, and its utilisation.
• A 2022 report from the Reserve Bank of India (RBI) found
  • Most municipalities only prepare budgets and review actuals against budgeted plans
  • Do not use their audited financial statements for balance sheet and cash flow management, resulting in significant inefficiencies.

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