Challenges included:
- Detailed examination of paras in Audit Reports by PAC is very low.
- Action Taken Notes on undiscussed paras are largely formal.
- Huge pendency of Audit Paras in State Legislatures, reducing relevance.
- Thousands of inspection reports unattended, lacking accountability for timely action.
- Untimely reports due to time gap between irregularity and reporting.
- Audit findings based exclusively on documents and files, lacking physical verification.
- External audit reports tend to be unduly negative and fault-finding, not recognizing practical constraints.
- Audit Reports are not always constructive, not identifying systemic problems or giving credit for good performance.
- Relationship between auditor and auditee is not always harmonious, viewed as policing rather than aid to management.
- Poor/inadequate response to external audit from government officials.
- Unsatisfactory functioning of Audit Committees.
- Lack of informed media coverage of CAG’s reports.
- Inadequate synergy/coordination between external and internal audit.
- Rarely any audit of grants and loans to NGOs.