The use of technology is productive when the outcome is futuristic, transparent and precise. One such use of the modern day technology is seen in the use of Audit Monitoring System or just “AMS.” This monitoring system facilitates speedy settlement of audit observations, inspections reports, speedy disposal of Audit Paragraph and timely action on matters pertaining to Public accounts Committee and Committee on Public Undertakings. Audit the of the Receipts and Expenditure for around 23,000 offices in Karnataka is conducted by the Accountant General of the State on behalf of the Comptroller and Auditor General of India. The aim and purpose of this audit is to bring to the notice of Legislature, items of expenditure which are beyond the scope of the authorization made by the Legislature, cases of irregular expenditure, loss of public money caused by default, lack of supervision or other causes, as well as excess or short collection of taxes, erroneous assessments of taxes etc. Such audit observations which have to be brought to the notice of the Legislature are included in the Annual Reports of the Comptroller and Auditor General of India on the Accounts of the State Government. Separate reports are prepared in respect of Public Undertakings. The Reports of the Comptroller and Auditor General of India are submitted to the Governor who will cause them to be laid before the Legislature of the State. The Legislature, in turn refers the Comptroller and Auditor General Report (Civil) along with the Appropriation and Finance Accounts to the Committee on Public Accounts. All the activities in various sectors of Government and Public Undertakings like development works, implementing schemes comes under the scanner of Audit process. ¡ Need for an apt Monitoring System Finance Department of Karnataka is assigned an important role in monitoring Government response to audit. Response of the Departments of Government to the various Audit Reports and Audit Paras had been very poor. Indicative of this poor response was the pendency in the submission of the Departmental Notes to the Audit Paras/Reviews in the CAG's Audit Report to the Legislature, which dated back to 1992-93. Response by the subordinate Offices to the Paras in the Inspection Reports had been even poorer. The arrears in some Departments dated back to 1983-84 and the volume of arrears was huge. The main reason for the poor response was the absence of a monitoring system and lack of focus on this aspect of overall accountability both at the administrative level of the Department concerned and the Finance Department. Hence there was an urgent need for a suitable monitoring system to overcome the obstacles related to a transparent auditing. ¡ Web based Audit Monitoring System To track and improve the response of the departments of government to the various Audit Reports, a web based Audit Monitoring System was developed. The objective was to use state-of-art technology for the entire audit follow-up process, monitor on-line the response of the Departments to audit, give the controlling officers at various levels in the Departments, access to timely audit information to ensure accountability and highlight systemic issues arising from audit observations. The workflow system captures details related to inspection reports, draft paras, CAG paras, action taken notes and excess appropriations including their clearance by the respective Departments. The system facilitates generation of various reports and queries like department wise abstract of pending IRs, department wise abstract of replies sent/pending to draft Paras, category wise departmental notes to CAG paras pending/cleared report, department wise notes to CAG paras pending, departmentwise pending ATNs, summary of excess appropriation reports, etc. The entire audit follow-up process is monitored by the office of the Controller (Accounts Management), Finance Department. ¡ Impact The response of the departments to the draft paras proposed for inclusion in the CAG Audit Report for the year 2004-05 was tracked through the system and the response was 89.69%. As many as 14 Departments recorded 100% response. The departmental notes pending to paras/reviews in CAG Audit Reports for the years up to 2001 was reduced from 456 in 2002 to 32 in 2007. Pendency of ATNs to paras in PAC Reports was reduced from 606 to 473 in 2007. The web based system has been a very significant factor in tracking and making the departments respond to audit. With the system in place, the greatest achievement is that the Departments of Government have started increasingly using the system without much follow-up. As the Audit follow-up process is similar in all the other States, this system will be of immense use to other States also. ¡ The Future Incorporating Digital Signature Digital Signature provide a greater degree of security in transacting electronic documents through authenticity of the transaction, confidentiality of data, data integrity and non repudiation. The recipient of a digitally signed document can verify that the document is originated from the person whose signature is attached and also that the document has not been altered since it was signed. Furthermore, one who signs a document cannot repudiate or disown the authenticity of the document. Incorporation of Digital Signature while posting Inspection Reports, Draft Paras, CAG Audit Paras, Departmental Notes, Action Taken Notes, etc into the Audit Monitoring System will provide enhanced security, thereby leading to a responsive automated system.