Audit of Science & Technology - Indian Experience

T.N. Thakur

* Principal Director of Commercial Audit and ex-officio Member Audit Board -1, Bombay, India

Introduction

Of the total world expenditure of US $452.6 billion on Research & Development (R&D) in 1990, the share of developing countries was US $ 18.3 billion (4 per cent). R&D expenditure in terms of percentage of GNP was 2.25 per cent for the world as a whole, while that for the developing countries was 0.64 per cent and for the developed countries 2.92 per cent . India is among the *few developing countries spending about one percent of its GNP on R&D.

In India, the "Scientific Policy Resolution, 1958" and the "Technology Policy Statement, 1983" outline the approach of the Government towards attainment of the goal of scientific and technological development and self reliance. With the economic reforms and industrial liberalisation introduced by the Government of India, a new technology policy statement is now on the anvil.

Financial allocation for the Science and Technology (S&T) sector has been increasing, reaching a level of Rs. 83,130 (US$1 = Rs. 31 approximately) million in the Seventh Plan period (1985-90) from Rs. 200 million in the First Plan Period (1951-56) and a significant science and technology infrastructure has been created covering a broad-spectrum of disciplines. Science & Technology (S&T) and Research & Development (R&D) efforts in India depend mainly on government budgetary support, and efforts to supplement it from internally generated finances or extra budgetary resources were either generally not made or have been ineffective. With the problem of the resources crunch, scientific departments and organisations have to necessarily find ways of making S&T/R&D self-sustaining.

There are a number of departments and councils of the Government of India for administering S&T. Notable among these are the Departments of Agricultural Research & Education, Atomic Energy, Bio-Technology, Electronics, Environment & Forests, Non-Conventional Energy Sources, Ocean Development, Science & Technology, Scientific & Industrial Research, Space and the Council of Scientific & Industrial Research, the Indian Council of Agricultural Research and the Indian Council of Medical Research. In addition to the above, the Ministry of Defence has its own R&D organisation. The Department of Science and Technology functions as the nodal agency for implementing and coordinating activities of a multi-disciplinary nature.

Greater Autonomy for Scientific Departments

In view of the fact that scientific departments need a flexible approach in regard to rules and procedures etc., Government had enhanced the administrative and financial powers delegated to these departments. Thus the scientific departments now enjoy greater authority and autonomy than their counterparts in the government, e.g.

Full financial powers without reference to the administrative departments concerned.
Exemption from the purview of the centralised (pool) agencies of the Government of India for procurement and construction works
Relaxation in recruitment procedures and non-application of staffing norms

Greater autonomy in turn implies a need for greater accountability by these departments in terms better performance , achievement of higher goals - and increased efficiency with economy. An important tool of ensuring accountability is audit by the SAI i.e. the Comptroller & Auditor General of India who has a separate unified audit office under him for audit of scientific departments and major scientific organisations of the Government of India.

Role of Audit

Audit of S&T is generally performance audit with emphasis on a holistic and system based approach. For purposes of audit, the S&T efforts can be categorised into pure research and technology development (including applied research). While conducting audit of S&T/R&D efforts, we have to bear in mind the distinction between pure research and technology development as well as the distinction between science and management of science. As far as pure research areas are concerned, the effectiveness and impact cannot be measured easily mainly because of the uncertainties involved - one measure to judge performance would be to see if the work has been published in good journals and reviewed. On the other hand, efforts in the direction of technology development have generally to be need -oriented and relevant and, therefore, it should not be as difficult to measure -their effectiveness and impact. It has also to be understood that there would be some projects aimed at competence building in organisation and other would be requirement-based.

Thrust Areas of Audit

Some of the important areas to be seen in audit of S&T/ R&D programmes include:

Justification for the project and achievement of anticipated aims & objectives
Technical competence of man power available and adequacy of infrastructure facilities
Cost and time frame envisaged vis-a-vis actuals
Cost benefit analysis and spin-off benefits
Infrastructure facilities required / created
Utilization of S&T research resources (man-power, equipment etc.)
Project execution , monitoring and evaluation and follow-up action on monitoring & evaluation reports
Analysis of cost & time overrun and their impact
Short closure/ abandonment of projects and consequent redundancies
Transfer of technology for bulk production
Coordination among various agencies to avoid " reinventing the wheel"
Lack of coordination , bad planning and failure in execution
Idling of funds due to unnecessary and untimely procurement

Performance Evaluation

While it is generally not possible to evaluate the outcome of scientific projects in terms of economic returns, some indicators to evaluate performance of such projects could include the following :

Has the project been completed within the original time frame and evaluated by scientific experts ? If not, what went wrong with the project ?
What is the outcome of the project in terms of benefit accrued/scientific knowledge gained and in what way is this accrual of further knowledge likely to benefit society ?
Has the money expended on the project been used for scientific purposes or frittered away in unnecessary purchases of equipment/furniture etc. not strictly related to the project or when related to the project, acquired either after closure of the project or not properly used for the project because of lack of training of the user scientists/technicians ?
Have ongoing projects been continued for too long outliving their utility? Should not zero-base budgeting be operated to discontinue them forthwith ?
Has any deviation taken place from the original purpose of the project and if so, is such deviation justified and has approval for such deviation been obtained from the competent authority ?
Are the projects being undertaken, running contrary to the aims and objectives of the organisation responsible for funding such projects and if so, is such, deviation justified ?
Are the project personnel competent to handle the tasks undertaken ?
Is the manpower deployed on the project disproportionate to the size and magnitude of the project ? Is there any need to cut extra "fat" ?
Is there any avoidable overlapping of projects/activities undertaken by different agencies ? Is there a lack of co-ordination between different agencies engaged in similar scientific programmes/schemes ?
Are there any developments of scientific processes/products stopped at the laboratory level and not translated/converted into pilot stage production/commercial production or technology not transferred for commercial purposes ? If so, why ? On the other hand, has a technology developed at the laboratory stage itself been transferred to commercial production without studying properly the ramifications of commercialisation leading to avoidable problems at the time of commercialisation?

Audit Findings of SAI-lndia

Some of the important findings of the SAI featured in the Audit Reports on Scientific Departments, are listed below :-

Many projects did not yield the desired results and were either terminated/short-closed after spending substantial sums of money or were treated as completed though the objectives had not been met. In some cases, the objectives of the projects were not clear even after considerable expenditure and lapse of time.
The mechanism for monitoring and evaluation of scientific projects and follow- up action on the monitoring and evaluation report was weak.
Research identification and planning were done in many cases without any interaction with the candidate/users/beneficiaries/other organisations doing research in similar areas.
Arrangements for transfer of technology and monitoring its utility for user groups was generally inadequate and benefits from such research could not be derived.
Blocking of funds due to excessive purchase of stores/equipment and their non- utilisation over decades; untimely procurement.
Gross under-utilisation of installed capacity, due to incorrect estimation of requirement of output.
A Heavy Water Project ran into problems leading to a cost overrun of Rs. 5618 million and a time overrun of three and half years because of excessive reliance on in-house manpower who did not have adequate expertise and experience.
The Central Pollution Control Board was not found to be adequately empowered to discharge its functions effectively. The Board had not evolved mandatory standards in regard to water and air pollution and even where it had evolved some standards, it had no means to enforce them. Water quality monitoring stations on a river were not functioning because of improper selection of site and incompatibility of the equipment procured for this purpose. Some projects were closed after spending substantial amounts of money and without achieving any results. Some of the air quality monitoring stations did not perform well due to software problems and non-availability of trained personnel.
Foreign credit of Rs. 207 million was obtained and a total expenditure of Rs. 247 million incurred for a R&D project using an imported garbage incineration plant without detailed reliable analysis of the quality of garbage which was to be the raw material for the plant. The raw material was subsequently found unfit for the plant resulting in closure of the project and rendering the entire expenditure infructuous.

Impact of audit of S&T in India

Public accountability of S&T has been accepted and competence of the SAI to evaluate the performance of S&T has been recognised.
Scientists have by and large realised that Audit has a constructive role to play
There is a growing feeling that Auditors must understand science and scientists must respond to Audit in a positive way. Need for greater understanding between the two has been felt and recognised, resulting in frequent and deeper interaction.
Financial discipline is being increasingly being given importance by scientists.
SAI was invited to make a presentation on 'Accountability of Science & Technology at the Indian National Science Congress held in 1994.

Problems and Prospects

The problems and difficulties generally encountered in the course of audit of S&T include:

Auditability - Absence of or poor maintenance of records and system weaknesses in the scientific organisations make it difficult for the auditors to conduct audit. Scientists generally do not have much idea about the systems, procedures and methods of working of a public organisation and often express difficulties in conforming to audit requirements.
Performance indicators are not clear in case of S&T/R&D programmes and projects
Non-quantifiable considerations like reputation/stature of firms, people etc. based on one's own perception and experience play an important role while assigning projects, granting funds or placing orders for supplies. Such considerations are not easily accepted by auditors
The reporting style used in audit is often not liked by scientists. There have also been suggestions from the scientists that audit reports, while reporting about inadequacies and weaknesses, should also mention the positive aspects, so as to give a balanced picture.
Lack of adequate expertise for this kind of audit in the SAI is an important constraint. Auditors have not only to understand the peculiar ways of functioning of S&T departments and organisations but also develop an insight into R&D efforts being pursued by these organisations. Efforts like occasional workshops and seminars and some talks by Scientists/Science Administrators have proved to be useful in this connection.

For exposing the auditors to scientists/scientific organisations, specialised training programmes for staff engaged in audit of S&T are being organised and every month one scientist /science administrator is invited to interact with the auditors of S&T for sharing not only their experiences but also their views on audit of S&T.

There has been a feeling that scientists could also be associated actively in this audit by getting them on deputation. On an experimental basis, a scientist from the Nuclear Power Corporation of India Ltd. has been taken on secondment into the SAI. Further, there has also been a suggestion for having an Audit Advisory Committee (with representation of scientists from related fields) for:

selection of areas for performance audits,
planning and methodology of audit
collection of data/information from outside sources,
discussion on audit findings and
reporting.

without jeopardising the independence of the SAI.

Conclusion

Notwithstanding the problems and difficulties there are good prospects for audit in scientific departments/organisations in view of the fact that:

Effectiveness of audit in science and technology can be seen and felt immediately. Scientists are sensitive to criticism but amenable to reason and logic and are often ready to take corrective measures. They are generally responsive to constructive observations from audit.
There is good scope for improvement in economy, efficiency and effectiveness in the field of science and technology.