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"If corrective action is not done in real time, the missile will reach far away from the target leading to its failure.
Similarly, if the auditors audit after the event is over or the mission is completed, they will see many deviations but they are too late to correct," the scientist- turned President told a conference of accountant generals.
Unveiling a 7-point agenda to make auditing effective, Kalam said, "The aim of audit should be to detect deviation in near real time when the project is in progress and provide constructive solutions so that the objective of the project is met within time."
Asking the Comptroller and Auditor General to become a partner in the country's agriculture mission to double food grain production to 400 million tonnes by 2020, he said CAG should make effective contribution to ensure that funds reached the targeted people.
Kalam said CAG's experience in Jawahar Rozgar Yojana should be shared with rural development ministry to enable it to take proactive corrective action while implementing the National Rural Employment Guarantee Scheme.
"This will ensure that minimum of 90 per cent of the funds reach the intended beneficiaries," he said. Stressing on the need to adopt e-governance in the country, Kalam said such a system was being developed in Rashtrapati Bhavan with active cooperation of the finance and audit departments.
"E-governance provides an avenue for making governmental transactions be it government-to-government or government to citizen completely transparent," he said.
This exercise to completely automate the transactions of the Rashtrapati Bhavan both G2G and G2C to introduce e-governance was undertaken two years ago. "Today I am very happy to inform that we have fully functional and automated system for information and workflow of varying levels at Rashtrapati Bhavan," he said.
Kalam said the software was currently undergoing field trial. "We would be launching fully tested and validated user-friendly e-governance software shortly."
"I visualise interactions and communication between the various organs of the government with president's office through this e-governance grid," he said suggesting CAG to set up a secure e-governance grid through broadband network with centre and state governments and PSUs.
In an IT-enabled environment, a near paperless accounting system which hinges on electronic cash and credit card transactions including authenticated and secure digital signature will have to become part and parcel of business of CAG, he said.
Paper trail was still being maintained for fear of mistrust and untested authentication mechanism, Kalam said "this has to be changed in such a way that transactions are born digital and automatically captured; we should spend more time on thinking rather than on data entry."
Kalam asked CAG to consider creation and maintenance of a centralised national asset register. He also pitched for online audit of high value projects like highway, power and rural infrastructure.
Minister of State for Finance S S Palanimanickam said the government has decided to bring fundamental change in the accounting system by switching over from cash-based to accrual based accounting system to improve overall quality of accounting.
The ministry has requested CAG and government accounting standards advisory boards, which include representative of states, to suggest a transition.
CAG V N Kaul, said his organisation has finalised comprehensive guidelines on performance audit to significantly improve the methodologies and make it a useful mechanism for correction and reconstruction of various government programmes.
"We have already introduced 'streaming' to encourage further specialisation in performance audit to focus more precisely on outcome of programmes," he said. Regarding financial audit, he said CAG was in the process of issuing new guidelines shortly.