Amid instances of corruption in MNREGA implementation, government has decided to tighten the audit system, which includes broadening the scope of the Comptroller and Auditor General (CAG) in the scheme.

"The CAG has been giving some recommendations. It is looking at formulating a process that could help it audit the finances and look at other accounting aspects of the scheme for further scrutiny," a senior official of the Rural Development Ministry said.

The move comes days after Prime Minister Manmohan Singh's announcement that measures to strengthen the social audit process by the village council (gram sabha) were being formulated in the Mahatma Gandhi National Rural Job guarantee Act (MNREGA).

As of now, CAG has been auditing the finances of the scheme and social auditors appointed by individual state governments have been keeping track of the various works undertaken at the ground-level.

However, differences between panchayat members and those conducting social audit caused government to rethink about their roles in the whole process.

"The CAG will look into ways to blend in with the functioning of the social auditors," the official said.

The importance of CAG's enhanced role compounds as the ministry's budgetary demand for the scheme is likely to increase to Rs 60,000 crore from its current budget of Rs 40,000 crore.

The official said the CAG was of the view that MNREGA accounts should be audited in every district annually by local fund audit or chartered accountants appointed by state governments, and they should be empowered to give orders on how to audit.

"These recommendations form part of CAG's views on the audit rules the ministry has drafted to create an institutionalised auditing system for the expenditure- intensive job guarantee scheme," the official said.

The official said that as per MNREGA Act, the role of social auditors cannot be done away with and the government was looking at ways to increase their accountability and transparency in the working of the system.

The ministry is looking at social audit-related problems of each state individually as the structure or rules governing gram sabhas and panchayats are a state-subject.