Delegation of powers flows from the accepted principle of decentralised decision making, a recognised tool for good governance. In keeping with the need to usher in greater efficiency the MoD has revisited the issue of delegation of powers to the Defence Services after almost a decade. The revised delegation, in addition to enhancing financial powers at various levels also strengthens the oversight mechanism as a means of “Reasonable Assurance” to the highest executive: the Raksha Mantri, through an in-built system of internal audit, risk management, assurance and governance processes and the like.
The four part document initiates the discourse by providing the construct and functioning of the Oversight Mechanism. Central to this mechanism is the Audit Advisory Committee (AAC) of MoD that will report to the RM through the Defence Secretary. It has representatives of all stakeholders, including the services. The AAC drafts the Annual Audit Plan by 15th February so as to be effective after RM’s approval by the 1st April of the year.
Risk Management is to be undertaken based on evaluation as per a matrix given in the document. The AAC remains responsible for evaluation of risks and may revisit the profiling every three years.
Risk Management will be undertaken as per CAG manuals. The Controller General of Defence Accounts (CGDA) may constitute Internal Audit teams of the services to undertake adequacy of processes, internal checks and controls. The CsDA and PCsDA will look at micro issues to raise assurance levels.
The DFPDS 2015 accepts the shortcomings in the IFA system, especially in provision od adequate staff at all levels. The instructions attempt a vertical integration of IFAs with MoD (Finance). The other major steps include e-concurrence, institutionalisation of involvement of IFAs at planning and review in provisioning up to the HQ Command level, with the system being extended downwards, in due course. The annual appraisal of the IFAs has been assigned to CFAs concerned, with simultaneous appraisal by the CGDA.
E-Procurement procedures are amply clarified in the 2015 instructions. However, the application of the e-procurement process requires a comprehensive data base of potential bidders, past Sellers, prices, details of items procured, market intelligence, etc to be put by each Service HQ.
A system of Annual Revenue Procurement Plan (ARPP) will be put in practice by each Service HQ for each financial year is the mandate. The emphasis is on Long-Term Planning with preference to indigenisation.
An IT-based Financial and Budgetary management system providing real time information on budget estimation, allocation, expenditure, payment etc., has been recommended.
The document goes on to elucidate in detail the delegated powers and Schedules of Powers. It provides both service HQ and the MoD (Finance) to work on a collaborative platform with the institution of IFAs providing a linkage to assist in enhancing efficiency. The instructions require major shift to IT-based functioning thus allowing market intelligence sharing between Service HQ and other offices.