PSUs must have effective vigilance mechanism in place: CAG

NEW DELHI: Pitching for stringent corporate governance norms, apex auditor CAG today asked public sector companies to ensure that an effective vigilance mechanism is in place to prevent misdoings.

PSEs should consider ways and means to integrate effective preventive vigilance in the structure of the organisations. This is the only way to make vigilance a constructive part of sound internal control system in any organisation, Comptroller & Auditor General (CAG) Shashi Kant Sharma said.

He was speaking after releasing the Standing Conference of Public Enterprises (Scope) journal Kaleidoscope on 'Vigilance Administration in PSEs'.

Besides, he said, preventive vigilance, proactive and risk assessment provide timely warnings to the management about possible risks.

"The vigilance departments in PSEs have been taking proactive actions in developing systems and procedures which have potential to lead to correct practices," he added.

Secretary in the Department of Public Enterprises (DPE) O P Rawat said: "Vigilance administration should facilitate the PSUs to effectively fulfill the vision and mission of the organisation.

He said "Fear of vigilance should not come in the way of decision-making so that the country's development do not suffer."

Sharing similar views, Scope Executive Director U D Choubey said there is a need for greater flexibility in public sector for speedier decision-making.

Besides, Scope Chairman C S Verma said vigilance will remain aloof untill it is brought into the mainstream of the organisation. Also, CVOs should be roped in all management decisions so that he understands business scenario within the organisation fully.

As on March 31, 2012, there were 260 CPSEs compared to 248 in 2010-11.

The total employee strength in CPSEs declined to 13.98 lakh (excluding contractual and casual labours) in 2011-12 compared to 14.40 lakh in 2010-11.