November 10, 2011
Recent change in the rural job scheme has opened doors for better scrutiny of works done

At last, the work done under the ambitious Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) can be independently monitored and public money accounted for. The recent striking down of Section 13 (b) of the Act, which barred outsiders from being a part of the social audits of projects carried out by gram sabhas, will ensure the basic principle of auditing that implementers can’t be auditors.

The fight for this corrective step started in 2009 when contention of several sarpanches of Rajasthan was accepted by the state’s High Court and independent auditing of their work was stopped.

Let's start From the start

MNREGA had problems since its start. There was no proper structure or planning done even when the government was supposed to be implementing the most ambitious project for social security. The only good thing about MNREGA was that the funding was huge and the whole cost was to be borne by the Centre. This is why unlike other welfare intiatives job guarantee scheme was implemented even if not backed by proper management.

Rajasthan already had a similar structure in place because the state government was providing jobs in rural areas during the period of famine in 2001. The concept was quite similar to MNREGA with development works undertaken at village level and muster rolls prepared by panchayats. It’s another matter that under this scheme, government just doled out money because there was hardly much work done in absence of any proper assessment. Due to this pre-existing structure, there was no initial confusion related to implementation of MNREGA. In fact, the scheme helped remove some of the anomalies in the earlier programme. From limited number of families which were provided work in the previous programme, MNREGA ensured work to every family which gets registered. The minimum wage was ensured and there was also a system in place to analysis the work done.

However, as money started flowing in, both sarpanches and bureaucrats went into an overdrive. The panchayats which were not even getting Rs 10 lakh per year, started getting around Rs 1 crore annually.  As seen in any department with maximum amount of funds, MNREGA also turned into a big money churner.

The panchayats which were not even getting Rs 10 lakh per year, started getting around Rs 1 crore annually.  As seen in any department with maximum amount of funds, MNREGA also turned into a big money churner

Since the allocation of funds was demand driven, they started sending frequent proposals for work and also devised mechanisms to siphon off public money. The operational guidelines of the Act called for social audit of work done by gram sabhas every six months. The guidelines mentioned that the forums would not be presided by the sarpanch, ward panch or anyone to do with the panchayat or any implementing agency. Secretary was to be an official from outside the panchayat..

This provision helped Mazdoor Kisan Shakti Sangathan (MKSS) to conduct mass social audits with help of volunteers. The first audit of the scheme was done in villages of Dungarpur district in 2006 which caught the attention of public. The first discrepancy noticed was related to fake muster rolls of labourers. The intiative was followed by social audits in villages of Jhalawar, Baswara and Udaipur districts in 2007-08. People started accepting that social audit can be the only way to ensure transparency in the system.

Misappropriation by panchayats

In 2009, a mass level social audit was done in Bhilwara which had a great impact. As many as 1,500 volunteers were trained to conduct simultaneous audit of 383 panchayats. Of these, in-depth audit of 11 panchayats was done and a scam of Rs 3-4 crore was unearthed. Discrepancies were found in muster rolls and procurement of construction material including cement, sand and gravel. In many cases, orders were found to be placed with fake firms opened in the name of family members of sarpanches or a person belonging to below poverty line. A case involving fake bills worth Rs 40 lakh issued in the name of a cycle puncture mechanic made headlines. These revelations sent a shock wave among sarpanches who staged a dharna against any social audit. Since we had trained 1,500 volunteers including members of Nehru Yuva Mandals and other civil society groups, the state government was asked to send them as social auditors, facilitators or investigators to all the villages Rajasthan. With such a move, the resistance grew further and many of the auditors were threatened and beaten up.

A mass level social audit done in Bhilwara found a scam of Rs 3-4 crore. Discrepancies were found in muster rolls and procurement of construction material including cement, sand and gravel.

Around 5,000 sarpanches out of total 9,177 demanded that gram panchayats should choose the auditors by themselves and no outsider should be allowed. A writ petition was filed in the Rajasthan High Court and an amendment surreptitiously made by the Union government to Section 13(b) of MNREGA in 2008 helped support their cause. The amendment stated that “the social audit process shall be open to public participation. Any outside individual person apart from the Gram Sabha shall be allowed to attend the social audit as observers without intervening in the proceedings of the Social Audit.” Though this provision goes against the principle of auditing that implementing and auditing agencies should be separate, the entire social audit process had to be dropped. We realised it was time to devise a different approach.

“NREGA Samwaad”, a consultation between stakeholders including the officials and the public, threw up an option for special investigations. The idea was to select a panchayat allocated maximum funds under MNREGA in every district and investigate the expenditure. This helped circumvent the contentious issue of social audit since only select panchayats were investigated. During these investigations, scams ranging from Rs 10 lakh to Rs 60 lakh were found. Since December 2009, irregularities to the tune of Rs 6.2 crore were found and investigations are still on. However, the punitive actions have not been that strong. Around 4-5 cases have been registered but not even one sarpanch found to be involved in corruption has been dismissed. Around 7-8 officials have been suspended but most of those arrested are junior level engineers or secretaries. Only in one case, action has been taken against a block development officer. Compare this with independent audit system of Andhra Pradesh which has helped uncover irregularities amounting to Rs 88 crore with the work of over 4,500 officials found to be irregular.

The Rajasthan government also needs to ensure similar action. And since Section 13(b) barring outsiders stands abolished now, the social audits should be enforced with greater vigour not considering the political compulsions.

Kamal Tak is associated with Mazdoor Kisan Shakti Sangathan (MKSS)