Boostrapping : RWE.01 - Jury System to reduce wasterful expenditure
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Proposed administrative procedure - RWE.01
Jury   System   to   reduce   wasteful   expenditure

Purpose : To reduce nexusproness in supervision of expenses, and thus reduce wasteful expenes, at district level

Pre-requisite reading : Why Jury System is superior than judge system

  1. Existing procedures to cut wasteful expenditures
  2. Why do representatives and auditors fail?
  3. Proposed improvement - RWE.01
  4. Is RWE.01 fair from money reciever's point of view
  5. Advantages of RWE.01
  6. Draft of the act to create procedure RWE.01

Existing procedures in District/City governments to reduce wasteful expenditures

The Corporators of Panchayat Members are supposed to review the expenses on a periodic basis, along with an annual budget. In addition, there are auditors appointed by District Oanchayats (or City Councils) and State Government (Ministry of Urban Affairs). Despite all thise auditors, the wasteful expenses are increasing day by day.

Are Councilors and audiotrs doing a good job in in reducing wasteful expenditures?

No. The Councilors as auditors are NOT doing ANYTHING to reduce wasteful expenditure.

The auditors do not have any powers to block an expense --- they can merely write comments and reports on expense AFTER that expense is done. And such comments are lost in the ocean of comments and reports.

So auditors do NOT have any powers to block wasteful expenses. Then who has powers to block expenses? The powers are in the hands of the
  1. The Mayor (or Sarpanch of the District Panchayat)
  2. The City Council Members
  3. The Ministers of Urban Affairs. Rural Affairs and Revenue
  4. senior officers of Dept of Urban Affairs, Rural Affairs and Revenue.
The Minister and officers of Urban Affairs Dept are too far, and have too many Municipalities and Panchayats under them to be able to spend the time necessary to take decisions. The Mayor and Councilors are the main persons in-charge of reducing wasteful expenditures. Are they doing this job? NO.

Consider an example of wasterful expenditure --- recently (Feb-2004), several officers of Ahmedabad Municipal Corpotartion went on a tour, and vistied several cities in India and abroad to study "how municipalities are run there". A priliminary glance reveals that such exercises are useless and just a way to entertain themselves. These days, there is enough material on internet, and enough can be obtained by phone/video conferences, that students are taking tutorials via internet. And such trainned officers could have done the same --- taken information from internet or via phones rather than organizing such expensive tours.

Nevertheless, not even one City Council member raised any noise on this. No councilor approached the Mayor to cancel such trips. This is NOT the first such wasteful trips were organized, and this is NOT the first time that Councilors ignored it.

Such wastages are tip of iceberg. Another humongous wastage is bloated staff and over-bloated salaries. In Panchayats and Municipalities, the staff is literraly twice than needed. The salary levels are outrageously high. eg a peon in private sector gets Rs 2000/- to Rs 3000/- including all perks, and no pension. While Municipalities pay Rs 5000/- to Rs 8000/- if all perks are included, plus pensions. A clerk in private sector gets Rs 3000/- to Rs 4000/- including all benefits and pensions, while the similar job in Municipalities fetches Rs 6000/- to Rs 8000/-, plus host of benefits and pensions. And despite all this, productivity as seen from citizens' point of view is terribly low. Suffices to say that Mayors and Concilors have done a poor job in reducing wasteful expenses.

Why have Councilors etc failed to reduce wasteful expenditures?

The reasons are usual
  1. The Mayor/Councilors have nexuses with Corporation staff --- the staff will provide several unofficial favors to Councilors and in return the Councilors keep quite.

  2. The Councilors are too busy managing their money/investments, 10s of businesses they own, managing 10s of charitable trusts they run and executing 10s of requests from the officers, contractors, criminals etc they have nexuses with.

In short, Couniclors have NO motivation to reduce expenses, nor they have time to do it. They would rather let the officers do whatever they want, and then do whatever they want.

Proposed improvement - RWE.01 : Jury System over Expsnes

I have drafted a procedure for controlling expenses made by officers/Mayors of Municipalities (or Panchayats):

  1. The Mayor will appoint a JA (Jury Administrator) or assign the responsibilities to an existing JA.

  2. The JA may use the existing Grand Jurors or he will randomly select 30 citizens as the Grand Jurors.

  3. If any officer of the Corporation wants to pay for ANY expense except the "Exempted Expenses" listed later, he MUST submit Expense Information Record to teh treasure. The Treasurer will cut the check ATLEAST 3 months AFTER the Expense Information Record is submitted.

  4. The Expense Information Record will have following details - Date on which payment is to be done, Amount, Name of the Recipient, PAN-ID of the Recipient, if the recipient is a company then PAN-IDs directors/owners of the company and date on which goods were supplied or service was provided. The Treasurer will make this information public within 7 days after he recieves it placing it on his web-site.

  5. If an individual has proofs that a perticular project involved corruption or that a perticular expense is wasteful, he can present the complaint before the Grand Jurors. If over 15 Grand Jurors declare that the complain has some truth in it, JA will randomly choose 12 citizens from the city to review the expense.

  6. If over 8 out of 12 Jurors, after listening to the arguments of both sides, declare that the expense was indeed wasteful or it involved corruption/irregularity, they can order the Mayor to cancel the expense. Alternatively, the Jurors may only approve a part of the expense instead of canceling it or approving whole amount.

  7. The Mayor will order the Treasure NOT to pay that expense, or only pay a part as directed by the Jurors.

  8. If over 8 Jurors ask the JA to investigate the officer, then JA will call 12 citizens chosen at random and ask them to investigate the officers' motivations behind the expenses. If over 8 out of 12 Jurors declare that the Jurors is misfit, the Mayor would expel taht officer within 24 hours.
  9. The Mayor will explicitly mention each vendor who is providing a service to the Corporation that the vendor will NOT get any payment if Jurors cancel it. Only the vendors who have faith in Jurors should fill the tenders. All Corporation tenders and contracts should have 3 explicit conditions - "subject to delay, cancellation or reduction by Jurors" , "final arbitration by Jurors ONLY" and "no crying/contest before any judge".

  10. If a judge interferes and asks Mayor to pay the expense that the Jurors have cancelled or reduced, the Mayor will ask the JA to call 12 Jurors to review the judge’s order. If over 8 out 12 Jurors declare that the judgement is unconstitutional, illegal and against the Interest of the Nation, the Mayor will resign or disobey the judge’s order. Otherwise, the Mayor may obey the judge.

  11. Only following expenses will be paid without 3 month delay --- telephone bills, electricity bills and salaries (including allowances) below Rs 5000/mo. Thus if an officer’s salary is above Rs 5000/mo, he will ONLY get Rs 5000 in that month and he will get the remaining salary after 3 months. In between, the Jurors may cancel or reduce the payment of his remaining salary.

Is this procedure fair from money reciever's point of view?

Yes. Becuase the money reciever, such as contractor, employee or any vendor etc was informed before hand the payment will may be cancelled by Jurors. And Jurors has no reason to unfairly hurt the vendor, nor they had nexuses has no nexuses with anyone who would be interested in hurting that vendor. Hence Jurors decision, if against the vendor, is prima facie a fair one. In any case, the vendor has option to appeal before the Jury of the Higher Court.

Advantages of RWE.01

  1. Gives a much much LESS nexusprone procedure to decide if an expense was wasteful or not, and should be blocked or not.

  2. Gives a much faster, yet fairer, procedure to decide if the officer's (who is executing an expense) should be expelled or not.

Draft of the act to create procedure RWE.01

To enact RWE.01, the citizens would need to pass an act in the District Panchayat or City Council. I have written that draft. To look at the draft, please click here.

     It will be wiser for citizens to first enact procedure LM.01, and then use LM.01 to pass this act. To know about procedure LM.02, please click here.

If you have any other question, please mail it to Thousand thanks in advance.

Next - RWE.02 - Redecing wasteful expenses in State Govt