DRAFT PRESS RELEASE:CORRUPTION IN THE SELECTION OF AUDITOR OF IN GOVT. SECTOR

* DRAFT *PRESS
RELEASE

*CORRUPTION IN THE SELECTION OF AUDITOR OF GRAM PANCHAYAT AND PANCHAYAT
SAMITI AND OTHER GOVT. SECTOR: BY CA NITESH MORE*

Mahatma Gandhi's dream of Panchayati Raj is in danger.PM of India has
already accepted that only 15-20% of money reaches in the hands of poor
(targeted) persons. Auditor's are being appointed for Gram Panchayat,
Panchayat Samiti etc and *other Govt. sector, ALL OVER INDIA*. There is no
standard procedure for selection of auditor all over country. Collectors
had vested with the wide power and can appoint any one of His desire who
participated in tender. This has lead to corruption in the process of
selection of Auditor.

*WHAT SHOULD BE APPOINTMENT AND SELECTION PROCESS?*

There should be *uniform standardized procedure and basis *for selection
of auditor for govt sector. Such basis should be framed and disclosed to
the CA community. Power of arbitrary appointment to collector is not good
for the health of Domocracy in the country. *Fees should be predetermined *in
the tender and should be *fixed in consultation with ICAI*. Invitation
(tender)should be only to make a data base of who is interest to
audit. *Principal
of equal distribution of work* should be followed and work should be
distributed among CAs on rational basis, which if implemented will leave
less scope of corruption in the selection of appointment of auditor. Again,
Central Govt. should appoint auditor instead of collector. In many cases,
collector demands EMD and application fees. As for Example, In Angul


*ISSUES IN ANGUL DISTRICT*:

For participation in tender for Panchayat Audit in Angul District (last
date: 29 July, 2013: SEE ATTACHMENT):

· Rs 30000 is being demanded as Earnest Money

· Rs 1050 is being demanded as cost of application form, even if
application form is available for download from web site

· So, If 100 CA participate in tender, than they will make money
of 1 lakh (1000 X 100) from us.



*CONTACT DETAILS:*

CA ARVIND AGARWAL, COLLECTOR, ANBUL DISTRICT: 9437572567



*MY QUESTIONS:*

1) SHOULD APPOINTING AUTHORITY MAKE MONEY FROM CAs?

2) ARE CAs A CONTRACTOR AS DEPOSIT MONEY IS BEING DEMANDED?


*MY APPREHENTIONS:*

1) OTHERS WILL DEMAND IN FUTURE AS ANGUL HAS DEMANDED EARNEST MONEY AND
FEES FOR FORM.

2) QUANTUM of EMD and form fees CAN BE INCREASED IN FUTURE.



*QUESTIONS TO BE ASKED TO CENTRAL GOVT. , STATE GOVT. , PANCHAYATI RAJ
DEPARTMENTS AND COLLECTORS:*

1) Why do you appoint auditor by tender process? Why do not you fix the
fees of auditor and only invite application from CAs to select auditors ?
Why the recommendation of finance commission for a fees of 1500/ month for
audit of gram Panchayat etc is violated?

2) Why some collectors are taking deposit money, however others are not
taking EMD and

2) Why collector of Angul district is charging 1050 as fees of form
while, others are generally charging form fees of Rs 104?

3) So, if 100 CAs participate in tender, than you will make money of 1
lakh (1000 x 100). Should you make money from appointment of auditor?

4) Are CAs a contractor as you are asking for EMD of Rs 30000?

5) Don't you think that asking EMD is not good for independence of
auditors?

6) Even companies act requires that a ca who is indebted to company or
holding securities cannot be appointed as auditor. how can you impose EMD?
Is this not violation of international practice of appointment of auditors?

7) What parameters they use to judge the quality need for the work and
quality which a CA participating in tendering process?

*8) If you do not have parameters, why you do not ask ICAI to help in the
matter? *

*CA.Nitesh Kumar More* | FCA, |

*Mobile: -* +91 9883157484 | +91 9674974186 | *Tel: -* +91 33 32562967 |