May 27, 2026
Observer Research Foundation
By Dhaval Desai
Addressing the recent BRICS Supreme Audit Institutions (SAI) Summit in Bengaluru, the Comptroller and Auditor General (CAG) of India emphasised that accountability must be at the heart of India’s urban transformation. The CAG’s perspective highlights a reform agenda that goes well beyond bureaucratic reform. It recognises a newer understanding that cities in the Global South require governance approaches that assess whether public expenditure actually improves citizens’ lives rather than focusing solely on whether funds were spent in compliance with the regulations and legal norms.
This distinction is significant for the BRICS, which together represent nearly half the world’s population and some of the world’s fastest-expanding urban regions. While their cities drive economic growth, they also confront congestion, housing shortages and informal settlements, flooding and extreme heat, poor mobility, pollution, environmental degradation, and inadequate public services—issues which impact both economic productivity and social cohesion.
The Limitations of Compliance Audits
Public-sector audits in most developing countries remain confined to a procedural silo, prioritising compliance to curb malpractices and irregularities rather than emphasising outcome-based evaluation of public programmes. For example, a metro rail project may comply with procurement norms and still fail to reduce a city’s travel times. A smart city dashboard may be technically operational but grossly underutilised. Investments in sanitation programmes may not resolve waste disposal challenges and poor access to sanitation. Although critical, such oversight, therefore, may not be sufficient for developing economies, where cities are at the forefront of economic growth and climate action. The question thus is no longer whether funds were spent correctly but whether expenditure improved citizens’ daily lives.
The International Organization of Supreme Audit Institutions’ (INTOSAI) International Standards of Supreme Audit Institutions (ISSAI) clearly distinguish compliance audits from performance audits focused on effectiveness and public value. This is precisely where the CAG’s emphasis on “ease of living” and outcome-oriented auditing becomes pertinent. India is conducting an audit of 101 cities from the citizens’ perspective, examining quality of life, sustainability, and access. This perception audit, the CAG said, attempts to place citizens, rather than files, at the centre of accountability.
A Reality Check for India’s Audits
Such a transition is an urgent imperative for India, where performance audits of urban missions, while exposing procedural irregularities, also signify that governments consider infrastructure creation as an end in itself. For example, the audit of the Smart Cities Mission in Dehradun revealed several “irregularities” in the implementation of expensive “smart solutions.” But more than procedural and financial irregularities, such audits also reveal a disconnect between spending on mega infrastructure and actual urban outcomes. Similarly, a CAG audit of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) in Kerala has pointed to weaknesses in planning, monitoring, and evaluation. Several cities reported project delays, underutilised assets, and inadequate assessment of service improvements.
In this scenario, outcome-based auditing can fundamentally transform public policy. If audits begin measuring reductions in commute times rather than only expenditure on road length added and metro lines installed, or improvements in water availability rather than kilometres of pipelines laid, governments can implement policies that are citizen-centric rather than contractor- or department-focused.
Such an approach would alter the incentives of urban bureaucracies. Today, municipal and state agencies are mainly rewarded for financial discipline and project completion, rather than being rigorously assessed on long-term operational sustainability or measured on outcomes that improve the quality of life. Outcome-oriented audits can thus become crucial instruments of governance reform rather than merely post-facto investigations.
Global Lessons in Outcome-Oriented Public Auditing
International experience demonstrates the value of such transitions. For example, the United Kingdom’s National Audit Office’s 2025-30 strategy, “Trust-Value-Impact,” moves beyond the traditional accounting compliance and reporting to an outcomes-based approach, evaluating public programmes based on value-for-money outcomes and service effectiveness. Similarly, Brazil’s Tribunal de Contas da União (TCU) has pioneered an innovative public expenditure assessment tool by using the multidimensional poverty index, integrating social outcomes into public policies, and measuring the impact of these policies on the living conditions of vulnerable and low-income groups. China, too, has also increasingly tied local administrative evaluation to measurable urban indicators such as pollution reduction, urban transport efficiency, and public service delivery.
For BRICS, this convergence around outcome-oriented auditing presents an opportunity for a broader urban governance compact. Mumbai, São Paulo, Johannesburg, Shanghai, Cairo, and Jakarta face similar challenges. Informal housing, environmental degradation, transport congestion, climate vulnerability, and infrastructure financing deficits cut across national boundaries.
Such shared challenges create space for a more ambitious city-to-city cooperation within BRICS, which goes beyond ceremonial exchanges. For example, the 2014 Mumbai-Shanghai Sister City Agreementsought to create a framework for cooperation between two of Asia’s biggest financial and port cities, including dialogues on urban development, transportation, fintech, and enhanced economic exchanges. Durban and Rio de Janeiro have engaged through global climate and coastal governance forums of the United Nations Framework Convention on Climate Change (UNFCCC), the Rio+20 process, and several other urban climate networks. Johannesburg and Indian metropolitan agencies have similarly discussed sustainable urban mobility, climate adaptation, and metropolitan governance at multilateral city networks, such as ICLEI and C40 Cities. Yet most of these arrangements remain episodic.
Most sister-city agreements, too, have limited policy relevance. They facilitate cultural festivals, travel for delegations, and ceremonial signing of memoranda. However, these symbolic exchanges fail to foster meaningful cooperation. In this scenario, BRICS cities must create operational partnerships tied to measurable urban outcomes. For example, a coastal resilience partnership between Mumbai and Rio de Janeiro, both port cities, could examine flood adaptation, hillside settlement management, and climate vulnerabilities. Bengaluru and Shenzhen could likewise collaborate on urban digital governance and the integration of municipal technologies. Delhi and São Paulo could jointly study bus electrification and multimodal public transport integration, while Johannesburg and Ahmedabad could exchange heat mitigation strategies.
A BRICS Urban Accountability Framework
Such partnerships can become far more meaningful if linked to audit-backed accountability frameworks. Establishing a BRICS Urban Audit Platform can lay the foundation for participating cities to periodically benchmark their outcomes in climate adaptation and public service delivery. Instead of competing through conceptual rankings, cities could learn from each other’s evidence-based experiences. SAIs of BRICS countries could then evolve into facilitators of urban policy learning rather than merely auditors of financial accounts and procedural compliance.
Visible improvements in daily life justify policy decisions. For citizens, it is not about the legitimacy of projects; rather, it is about buses arriving on time, the efficacy of stormwater drains during monsoons, affordable housing, and accessible healthcare. While the objectives of traditional auditing systems to curb corruption and ensure procedural integrity are vital, urban governance today requires an additional layer of accountability: accountability for outcomes.
From Auditing to Urban Reform
The recent BRICS SAI Summit recognises this vacuum. If institutionalised and implemented with intent, outcome-oriented auditing could help not just the BRICS grouping but all developing economies of the Global South instil accountability for public capital expenditure and also improve urban liveability.
For India, this transition is especially critical. Indian cities already contribute over 60 percent of the country’s GDP and will become even more critical to national growth as India strives to fulfil its Viksit Bharat 2047 agenda. Yet the legacy urban governance architecture of fragmented decision-making, weak municipal capacity, inadequate data systems, and poor inter-agency coordination continues to undermine urban outcomes. While citizen-centric auditing alone cannot solve these structural weaknesses, it can fundamentally change what governments prioritise from “How much was spent?” to “What changed for citizens?”. More than an accounting reform, this is a democratic mandate.
About the author: Dhaval Desai is a Senior Fellow and Vice President at the Observer Research Foundation.
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