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CAG wants to examine propriety of RIL spending on KG-D6

By Religare

After suspending audit of RIL's spending on the flagging KG-D6 block due to differences over the scope of scrutiny, the Comptroller & Auditor General of India (CAG) has expressed interest to resume the audit.

However, CAG specified that it wants to examine merely "propriety" of expenses made, and not the performance audit of the company to ensure that the government's financial interests have been safeguarded.

"While a performance audit is not envisaged, it is important that the audit of Block KG-DWN-98/3 (KG-D6) covers examination of all records and documents supporting costs, expenditures, expenses, receipts and income as mentioned in the PSC, including propriety of these expenditure, expenses, receipts and income," CAG wrote to Oil Ministry.


Subsequently, Oil Ministry responded to CAG, stating that the official auditor was being requested to undertake the audit of KG-D6 for 2008-09 to 2011-12 under Section 20 of the C&AG (DPC) Act, 1971.

While maintaining that such audit should be of a financial nature, the ministry told CAG that the scope, extend and manner of the audit will be as spelt out in Article 25.5 and 25.6, read with Appendix C of the Production Sharing Contract (PSC) RIL had signed with the government for exploring and producing oil and gas from KG-D6 block.

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