Lok Sabha Question No. 3834 (UNSTARRED), answered on 2017-03-24
Subject: Modernisation of Armed Forces
Ministry: DEFENCE
Asked by: REKHA ARUN VERMA

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK  SABHA

## UNSTARRED QUESTION NO.3834

TO BE ANSWERED ON THE 24 TH  MARCH, 2017

## MODERNISATION OF ARMED FORCES

## 3834.  SHRIMATI REKHA VERMA:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) whether  there  exists  any  mechanism  for  the  audit  of  funds  allocated  for  the modernisation of armed forces;
- (b) if so, the details thereof; and
- (c) the  details  of  defence  procurement  agreements  signed  with  foreign  countries during the last three years and the current year, country-wise?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(DR. SUBHASH BHAMRE)

र  ा रा य मं ी

(डा. सुभाष भामरे)

(a) to (c): A statement is attached.

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## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (c)  OF  LOK SABHA UNSTARRED QUESTION NO. 3834 FOR ANSWER ON 24.3.2017

(a)  &  (b):    Yes,  Madam.    There  exists  mechanism  for  the  audit  of  funds allocated  for  the  modernization  of  armed  forces.  Ministry  of  Defence  is susceptible to following types of audit:- is

- (i) Internal audit:is conducted by the Defence Accounts Department (DAD) while performing functions of payment and accounting of all Defence expenditure.  In certain cases this is a  pre-audit i.e. before release of payment and in others a postaudit  i.e. after payments have been released.  The latter applies mostly  to  payments  released  by  Services  themselves  out  of Imprest accounts and cash assignments meant for payment of pay  &  allowances,  purchase  of  stores,  running  advances  for works etc. in the field.  Local audit of cash and store accounts of  all  defence  units  and  establishments  is  another  facet  of internal  audit.    Internal  audit  focuses  on  regularity,  propriety, compliance and efficiency audit issues to identify instances of deviations from prescribed procedure. Internal audit a  continuous  function  as  it  is  closely  intertwined  with  the payment and accounting functions of the DAD.

The  major  findings  of  internal  audit  are  highlighted  in  six monthly Internal Audit Report issued by the Controller General of Defence Accounts. These  Internal Audit Reports are conveyed  to  the  Service  HQrs  and  settlement  is  based  on responses received from them.  In addition to summation of the internal audit effort of the DAD is reflected in the Annual Audit

Certificate  which  is  included  in  the  Appropriation  Accounts (Defence Services) which is laid before the Parliament.

- (ii) External audit:-   This is the statutory audit by the Comptroller & Auditor General (C&AG) as in the case of other Ministries/Departments.  This is also known as 'test' audit as it is  a  test  check  over  the  internal  audit  conducted  by the  DAD. This  is  periodic  and  conducted  as  per  audit  calendar.    C&AG reports their findings through Annual Report and Performance Audit Report. The response to these reports are monitored by Public Accounts Committee.
- (c) During  the  last  three  years  and  the  current  year,  76  contracts involving ` 1,30,664.29 crore have been signed with foreign vendors for the capital  procurement  of  various  defence  equipment  including  aircraft, rockets, tanks, helicopters, howitzers, missiles, simulators and ammunition. The country wise details are as follows:-

| Country   |   No. of contracts |
|-----------|--------------------|
| Russia    |                 13 |
| Israel    |                 13 |
| USA       |                 18 |
| France    |                  7 |
| Others    |                 25 |

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