REDACTIVE PRICING AUDIT

Redaction is the selection or adaption by ‘obscuring or removing sensitive information’ from a document prior to publication. Redactive pricing is nowhere used in SAI audit reports.

It does not seem to have been used in a government audit by any SAI of any country. Redactive pricing in the ‘Performance Audit Report of the Comptroller and Auditor General of India on Capital Acquisition in Indian Air Force (Union Government – Defence Services, Air Force, Report No. 3 of 2019)’ shown the practice of Redactive Audit.

It is for the first time in CAG’s history that it has given redacted pricing to Parliament in the Rafale fighter jet deal.

Parliament, its committees, the media and other stakeholders of the CAG’s reports cannot obtain complete, accurate and reliable information due to redactive pricing. Pricing is an integral part of the procurement decision-making process of any equipment, product, goods or service.

Price integrity and comparative competitiveness are at the heart of any procurement decision. An audit is expected to analyse the facts and comparative pricing charts to highlight the financial propriety and prudence of the procurement decision.

According to former Secretary General of Lok Sabha, P D T Achary, there is no provision for any redaction of a CAG report, nor is there a precedent. There is no such thing under the law, under the Constitution.

Redaction has not happened so far, the word is new to the system. CAG reports are submitted to Parliament & go to the PAC. Finance Minister lays them on the table of the house. PAC is assisted by the CAG; in fact, CAG can be said to be a part of the PAC setup.

A draft CAG Report, which is secret & not for public consumption, is shared with the government and the replies of the govt are accommodated at that stage in the final report.

Whatever is to be masked is done before the report is made public. In case the PAC asks the CAG for portions masked in the report, the CAG shares it with the committee in complete confidence for the committee’s understanding. Which details are sensitive and need to be masked is decided by consultation between the government and the CAG before the draft report.

Some of the questions

1. What is redactive pricing audit?