{"id":64281,"date":"2025-09-20T10:52:47","date_gmt":"2025-09-20T05:22:47","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=64281"},"modified":"2025-09-20T11:11:25","modified_gmt":"2025-09-20T05:41:25","slug":"cag-uses-ai-audits-to-detect-fraud-in-state-schemes","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/cag-uses-ai-audits-to-detect-fraud-in-state-schemes\/","title":{"rendered":"CAG Uses AI Audits to Detect Fraud in State Schemes"},"content":{"rendered":"<h2><b>AI Audits Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Comptroller and Auditor General (CAG) of India, K Sanjay Murthy, revealed that <\/span><b>AI and ML-based forensic audits<\/b><span style=\"font-weight: 400;\"> have exposed numerous fraudulent cases in state beneficiary schemes.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Speaking at the second State Finance Secretaries Conference, he said these audits can <\/span><b>prevent misuse of funds<\/b><span style=\"font-weight: 400;\"> and save significant financial resources for state governments.<\/span><\/li>\n<\/ul>\n<h2><b>CAG Pushes AI-Driven Forensic Audits and Digital Governance<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The CAG of India emphasised the growing role of <\/span><b>artificial intelligence (AI) and machine learning (ML)<\/b><span style=\"font-weight: 400;\"> in detecting fraud during audits of state beneficiary schemes.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Digitisation of audit processes is now the CAG\u2019s top priority to enable <\/span><b>remote audits, reduce hassles for executives, ensure timely reporting, and expand coverage<\/b><span style=\"font-weight: 400;\"> \u2014 including 100% checks of GST and Income Tax databases.<\/span><\/li>\n<\/ul>\n<h3><b>Use of AI\/ML in Fraud Detection<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">AI\/ML-based forensic audits have already exposed numerous fraudulent cases across states.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These tools could <\/span><b>save states significant financial resources<\/b><span style=\"font-weight: 400;\"> currently being siphoned off through fraudulent practices.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A key application of remote audits will also include identifying tampering of electronic documents.<\/span><\/li>\n<\/ul>\n<h2><b>Digitisation of Financial Management Systems<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There have been progresses by states in adopting digital tools for public financial management.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Key systems include:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">the <\/span><b>Integrated Financial Management Information System (IFMIS)<\/b><span style=\"font-weight: 400;\">,\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">IFMIS is a digital, web-based platform used by government entities to automate and integrate various financial functions like budgeting, accounting, payments, and reporting.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Works and Accounts Management Information System (WAMIS)<\/b><span style=\"font-weight: 400;\">,\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">WAMIS is a comprehensive digital system for managing construction projects, covering their entire life cycle from inception to completion.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Developed by C-DAC, it tracks and monitors financial transactions, links them to physical progress, etc.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Government e-Procurement Platform (GePNIC)<\/b><span style=\"font-weight: 400;\">,\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">GePNIC is a software system developed by India&#8217;s National Informatics Centre (NIC) for conducting all stages of the government procurement process for goods, services, and works.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>e-voucher systems<\/b><span style=\"font-weight: 400;\">, and\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The <\/span><b>Digital India Land Records Modernisation Programme (DILRMP)<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">DILRMP is a Central Sector Scheme launched by the GoI to computerize, digitize, and modernize all land records and registration processes across the country<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, the maturity level of these applications varies significantly across states, though digitisation has already improved the finalisation of Monthly Civil Accounts.<\/span><\/li>\n<\/ul>\n<h2><b>Remote Audits Across Departments<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The CAG has successfully conducted remote audits in areas such as <\/span><b>GST, stamp and registration, e-procurement, works, and Direct Benefit Transfer (DBT) schemes<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The next goal is to extend remote auditing to all government departments with digitised records.<\/span><\/li>\n<\/ul>\n<h3><b>Auditing Local Governments<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There is need to audit Urban Local Bodies (ULBs) and Panchayati Raj Institutions (PRIs), as nearly 15 cities contribute more than 50% of India\u2019s GDP.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cities like Mumbai, Delhi, Bengaluru, Chennai, and Hyderabad alone account for 30% of GDP and could add 1.5% to annual growth if efficiencies improve.<\/span><\/li>\n<\/ul>\n<h2><b>Conclusion<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Initiatives such as <\/span><b>SNA SPARSH<\/b><span style=\"font-weight: 400;\"> will strengthen cash management, while schemes like <\/span><b>Special Assistance to States for Capital Investment<\/b><span style=\"font-weight: 400;\"> will help states build IT-driven financial infrastructure.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">SNA SPARSH is a cash management system and a Single Nodal Account (SNA) initiative for India&#8217;s Centrally Sponsored Schemes (CSS) that facilitates a &#8220;just-in-time&#8221; release of funds from central and state consolidated funds.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It integrates the Public Financial Management System (PFMS), the State Integrated Financial Management System, and the e-Kuber platform of the RBI to achieve better transparency, efficiency, and accountability in fund flow.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is therefore imperative for states to <\/span><b>continuously adopt and integrate advanced digital tools<\/b><span style=\"font-weight: 400;\">, including artificial intelligence (AI) and machine learning (ML), into their public financial management frameworks.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Such integration will not only enhance <\/span><b>transparency and accountability<\/b><span style=\"font-weight: 400;\"> but also significantly improve <\/span><b>efficiency in governance<\/b><span style=\"font-weight: 400;\">, thereby ensuring more effective utilisation of public resources and long-term fiscal sustainability.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/indianexpress.com\/article\/india\/ai-based-audit-detected-fraudulent-cases-in-states-beneficiary-schemes-says-cag-10260407\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> | <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/cag-push-for-digital-audits-ai-tools-unearth-fraud-cases-in-states-remote-monitoring-to-expand-nationwide\/articleshowprint\/123997394.cms\" target=\"_blank\" rel=\"nofollow noopener\">ToI<\/a> | <a href=\"https:\/\/www.outlookbusiness.com\/news\/cag-for-extensive-use-of-digital-tools-in-forensic-audit-to-check-fraudulent-cases\" target=\"_blank\" rel=\"nofollow noopener\">OB<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>CAG\u2019s AI and ML-based audits expose fraud in state schemes, push digital governance, and stress remote audits to enhance efficiency and transparency.<\/p>\n","protected":false},"author":18,"featured_media":64297,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[2790,60,22,59],"class_list":{"0":"post-64281","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-ai-audits","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/64281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=64281"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/64281\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/64297"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=64281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=64281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=64281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}