AuditOnline: Advancing Transparency And Accountability In Panchayati Raj Institutions

Policy Update
Urvashi Singhal

Introduction

AuditOnline has also facilitated greater transparency and citizen participation. Citizens are able to view audit reports from the public dashboard, enhancing accountability. Few of the states showing high rates of compliance are Karnataka, Odisha, and Maharashtra.

An audit is an official assessment of a person or company’s financial accounts by professional accountants. In India, the Panchayati Raj Institutions are the backbone of decentralized governance, plays an important role in the implementation of different development programmes. There has been a higher demand for transparent and timely audits at the grassroots level.

To address this, the Ministry of Panchayati Raj introduced a web based platform called AuditOnline on April 15,2020 for conducting online audits. It was built under the eGramSwaraj programme and is designed to provide increased transparency, robust internal controls, and prompt audits of Panchayat accounts. It is an extension of India’s broader Digital India vision, encouraging e-governance and evidence-based public administration.

Functioning

AuditOnline is an online application intended to facilitate internal as well as external audits of Panchayats and other local governments. It is interfaced with the eGramSwaraj portal, which automatically captures real-time accounting data, planning, and reporting from Panchayats all over the nation. Some of the major functions of AuditOnline are as follows:

Audit Planning and Scheduling

AuditOnline empowers District-level Audit Officers to plan audits, allocate teams, and determine timelines. It facilitates the development of audit calendars and monitors the progress of audits at various stages.

Digital Record Keeping

AuditOnline accesses financial records from the eGramSwaraj portal directly without requiring physical documentation. This makes auditors capable of performing real-time audits based on evidence in digital form.

Audit Execution

Audit teams may carry out desk and field audits through pre-defined checklists. At the portal one can upload findings, observations, and supporting documents. GPS-tagged photos are also supported for evidence-based auditing.

Generation of Audit Reports

The system generates draft and final audit reports automatically, thus ensuring standardization and minimizing human error. Stakeholders like Panchayat members, Block Development Officers (BDOs), and State authorities can access these reports.

Follow-up and Compliance Tracking

AuditOnline allows tracking of audit paras (observations) and checking if corrective action has been taken. It also allows feedback loops between auditors and auditees, which enable resolution on a timely basis.

Performance

Ever since its nationwide launch in 2020, AuditOnline has been scaled up over states and Union Territories, reaching thousands of Gram Panchayats. According to government statistics (MoPR, 2023), over 2.5 lakh Panchayat accounts have been covered under AuditOnline.

The platform has also minimized the time and effort spent in audits. Audits were not taking place for months because of paper-driven processes and logistical challenges before. The audit completion time has come down from more than 90 days to a mere 30 days in most districts.

No. of Audit Report Generated	1580
Enlisted Auditors	11878
Enlisted Auditees	262014
Audit Plans Prepared	41205

Source: https://auditonline.gov.in/

Impact

AuditOnline has made a multi-faceted contribution to local governance:

Improved Financial Discipline: Through making finances auditable and publicly transparent, Panchayats are now more prudent in the use of funds. Misuse or appropriation of funds has slowed down in districts where AuditOnline is in use.
Capacity Building: The platform has resulted in the upscaling of Panchayat functionaries and auditors who now use electronic tools on a routine basis to maintain records and carry out reviews.
Democratization of Audit: Public availability of audit results helps empower citizens and representatives to challenge fiscal improprieties and call for remedial measures.
Alignment with SDGs: AuditOnline helps achieve Sustainable Development Goal 16—”Peace, Justice and Strong Institutions”—by enhancing transparency, accountability, and good governance at the grass root level.
Policy-Level Insights: The combined audit data provides meaningful insights for policymakers, allowing them to make informed decisions on fund allocations, scheme designs, and compliance interventions.

Emerging Issues

There are several operational and structural issues showcased by AuditOnline:

Gaps in Digital Infrastructure: There is a gap in digital infrastructure due to lack in rural connectivity and device shortages constraining the proper use of the platform.
Resistance to Transparency: In a few instances, local authorities resist being part of digital audits because they fear being exposed, lack accountability, or are guilty of institutional lethargy.
Capacity Constraints in Audit Teams: Few states showcased shortage of skilled auditors which inturn impacted the quality and frequency of audits.
Follow-up and Enforcement Gaps: Although the system monitors compliance, there generally are no follow-up enforcement methods to act on any audit observations.

Way Forward

Following steps can be taken to strengthen the visibility and accessibility of AuditOnline:

Investment in Infrastructure: Improve digital infrastructure at the Gram Panchayat level, for example, high-speed internet connectivity, digital kiosks, and audit equipment for mobile use.
Capacity Building and Training: There needs to be frequent training for Panchayat officials and auditors. Online modules and certification programs could be initiated for harmonizing the skill sets.
Community Engagement: Provide community supervision through training residents and local associations to understand and respond to audit reports.
Legislative Support: Systematize the use of AuditOnline by linking it with mandatory audit requirements under Panchayati Raj Acts and rules by Finance Commissions.
Monitoring and Evaluation: Create an independent agency to evaluate the impact of AuditOnline annually and provide improvement suggestions.

References

Powerpoint Presentation detailing AuditOnline https://auditonline.gov.in/
Ministry of Panchayati Raj. (2023). AuditOnline Dashboard. Government of India. Retrieved from https://auditonline.gov.in
Ministry of Panchayati Raj. (2020). eGramSwaraj: A Digital Platform for Strengthening Panchayati Raj Institutions. Government of India. Retrieved from https://egramswaraj.gov.in
World Bank. (2021). Strengthening Local Governance in India. Retrieved from https://www.worldbank.org
Press Information Bureau. (2020). Government launches e-Gram Swaraj and AuditOnline for Panchayats. Ministry of Panchayati Raj. Retrieved from https://pib.gov.in
World Health Organization. (2021). Peace, justice and strong institutions: Goal 16. United Nations Sustainable Development Goals. https://sdgs.un.org/goals/goal16

About the contributor: Urvashi Singhal is a master’s student at DTU, simultaneously pursuing actuarial science. She is currently working as a research intern on an ICSSR project focused on menstrual leave policy.

Acknowledgment : The author sincerely thanks the IMPRI team for their valuable support.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.