Institutions under Cooperation Department draw criticism for impeding CAG audit

In an extraordinary turn of events, institutions under the Department of Cooperation have come in for sharp criticism from the Comptroller and Auditor General of India (CAG) for alleged non-cooperation with a Subject Specific Compliance Audit (SSCA).

In a report for the period ended March 2024 tabled in the Assembly earlier this week, the CAG noted that “all through the course of the SSCA, audit encountered persistent non-production of essential records/critical information by the audited institutions at all levels.”

Conducted from July 2024 to February 2025, the SSCA covered the period from 2019-20 to 2023-24. The SSCA evaluated the regulation of 16,393 cooperative societies under the Kerala Co-operative Societies Act and Rules. Apart from the Cooperation department’s office at the Secretariat, the audit team had paid visits to the offices of the Registrar of Cooperative Societies (RCS), those of the directors of Coir and Dairy Development as well as the district and taluk-level cooperative institutions in Thiruvananthapuram, Alappuzha, Thrissur, and Kannur districts.

The CAG report says that the audit team was “denied access” to the dump database of the Integrated Cooperative Database Management System (ICDMS), the online platform developed as part of the department’s modernisation.

Underscoring the importance of data in audit, the CAG observed that the “persistent reluctance of auditee in providing sufficient and appropriate evidence in support of compliance to the provisions in the Act/Rules and in furnishing response to audit observations on deviations noticed, raises concerns on the department’s transparency and accountability mechanisms, besides carrying the risk of suppression of material facts by auditee.”

For instance, of the 345 audit requisitions and enquiries made to offices under RCS, only 104 drew responses. In fact, the denial of access and the department’s failure in furnishing records resulted in “limitation of scope” with regard to the verification of audit findings, the report said.

These issues were also taken up with the Special Secretary and the Chief Secretary in two separate letters in December 2024 and January 2025 and also in an ‘exit conference’ conducted as part of the audit in July 2025.

The audit found, among other things, delays in the registration of cooperative societies, Plan fund utilisation dropping to 12.47% in 2023-24 and unrecovered loans in numerous cases. The CAG has recommended that the Cooperation department establish a “centralised and inclusive” online platform that provides citizens with access to details of all registered cooperative societies “in the interest of improving public trust, accountability and accessibility.”