Will anyone dare audit the DRDO?

Express Investigation: Delayed Research; Delayed Organisation – Part – Five

Will anyone dare audit the DRDO?

For a full 20 months now, the Defence Ministry has been sitting on two crucial recommendations of a committee on reforming defence procurement chaired by former Economic Advisor to the Finance Minister Vijay Kelkar. Not only have these not been made public, there’s been no action on any. It’s not difficult to understand why.

These two recommendations have to do with what is unspeakable at the Defence Research & Development Organisation: the need for an “independent audit” of its abysmal record of delay and waste in virtually all weapons programmes, as reported in the ongoing series in this newspaper.

Numbered 6.19 and 6.20 in the report, accessed by The Indian Express, the Kelkar panel, including scientists, officials of the three service chiefs and industry organisations, said that the Defence R&D Board, the apex review mechanism headed by the DRDO chief, should also include representatives from the Council of Scientific and Industrial Research (CSIR) and the Indian Space Research Organisation (ISRO).

This, the Committee noted, was “in order to enable the Defence R&D Board to draw the expertise and experience from institutions falling outside the purview of defence.”

Second, the Kelkar Committee recommended that DRDO be periodically reviewed “for its functioning” by an independent high level committee and the first such review should be initiated in 2005. The reason: “DRDO has expanded considerably and tried to create in-house research facilities for all defence requirements. This, perhaps, is not a very cost-effective move…DRDO, as a research body has also not been reviewed by an external and independent group of experts”, a process the Kelkar Committee said would compel DRDO to “reform wherever necessary”.

Not just Kelkar. In 2004, the Late J N Dixit, then National Security Advisor, had strongly argued for a comprehensive audit of DRDO’s dubiously expensive project record.

However, such advice is blasphemy in the DRDO. So on January 2 this year — nine months after the Kelkar Committee report was submitted — when the Parliamentary Standing Committee on Defence asked DRDO what it planned to do about new auditing mechanisms, this is how the DRDO replied: “DRDO has enough audit and reviews of the projects at various stages. It is not considered necessary to introduce additional audit and reviews.”

Limited audits of DRDO were conducted by the Comptroller and Auditor General (CAG) in 1988-89, 1992-93 and in 1997-2001 but these focused on manpower utilization, procurement of systems, all concluding derelict financial management and inexplicable expenditure. These reports were followed up by Parliamentary Public Accounts Committee reports, the last one in August 2005 recording massive wastages in 15 major DRDO establishments.

But the fact remains, there has been no single comprehensive audit of the DRDO or its functioning. Perhaps this is what prompted Comptroller and Auditor General V N Kaul to say today at a seminar in the capital on defence finance…”Defence R&D is an area where accountability often takes shelter under the policy of self reliance, and indigenization becomes a reason for delay…accountability of domestic R&D organizations needs to be re-emphasized to enable better assessment of return from investment. Sensitizing of the defence services to the role of public audit is essential.” But an investigation by The Indian Express into official records and testimonies shows that it will take more than a CAG speech to sensitise DRDO. Consider these:

• Not only has DRDO testified to the Standing Committee in January that it has more than sufficient auditing mechanisms, it wants less interference from the government, and even less accountability. In fact, in what the armed forces call preposterous, DRDO chief M Natarajan told the Standing Committee: “We intend examining the possibility of a structure similar to Space Commission/ Atomic Energy Commission to bring about greater autonomy in our functioning…This may take some time to evolve conceptually, before we could seek government approval for the same.”

• The highest monitoring body for DRDO, the DRDO Research Council (DRC), is in-house and under the control of the DRDO chief, who personally reviews its progress. DRDO has testified to the Standing Committee that it has “no scientific audit of DRDO projects as such”, and justified this by indicating the existence of feasibility studies for projects, decision aid for technology evaluation (DATE), in-house project peer reviews and post-project reviews.

• All DRDO projects costing more than Rs 2 crore are to be compulsorily “peer reviewed” by an expert committee for their viability. The Peer Review Committee (PRC) is necessarily an in-house mechanism.

• There are three-tier monitoring boards for all projects over Rs 100 crore. All these boards are under the aegis of the DRDO.

• This September, Army vice chief Lt Gen S Pattabhiraman reviewed 40 DRDO staff projects for the Army and found just three of them on track. Later, in the same month, DRDO chief Natarajan recommended to the Standing Committee that time extensions and cost increases be jointly endorsed with the services for government approval. In other words, DRDO would have sole control over projects but would rather not be accountable all alone.

• In its latest testimony, DRDO has said that accountability “cannot be fixed for loss of time in projects” and that slippages are due to “technological problems and not negligence”. Yet, on September 22, it officially asked the government for the freedom to recommend additional project authorizations, and that the Department of Defence Production (DDP) should ensure compliance.

• Given that the three services are the ones most visibly complaining about DRDO delays and results, DRDO has recommended that equipment trials be conducted by an independent test and evaluation agency, preferably with Integrated Defence Staff or DG Acquisition. In other words, DRDO doesn’t trust the armed forces but puts itself above all questioning.

Audit Mechanism

India

C&AG audits defence expenditure and individual performance of DRDO programmes but ministry justifies with scientific reasons for shortcomings and delays. No independent or external audits for project performance.

USA

US Department of Defence Inspector-General audit, followed by independent technical and performance audit of all programmes. Government Accountability Office (GAO) reviews financial prudence.

UK

National Audit Office (NAO) reviews financial performance of defence branches, independent performance audit for programmes