ROLE OF CAG

Subject: Polity

The latest India-specific data on COVID-19 infections is alarming. With the nation spending substantial resources to manage the pandemic, the role of CAG as a supreme audit institution has gained greater importance.

About

CAG is an independent authority under the Constitution of India.

He is the head of the Indian audit & account department and chief Guardian of Public purse.

It is the institution through which the accountability of the government and other public authorities (all those who spend public funds) to Parliament and State Legislatures and through them to the people is ensured.

Comparison with Britain CAG

CAG of India only performed the role of an Auditor General and not of a Comptroller but in Britain it has the power of both Comptroller as well as Auditor General.

In India the CAG audits the accounts after the expenditure is committed i.e. ex post facto. In UK no money can be drawn from the public exchequer without the approval of the CAG.

In India, CAG is not a member of the parliament while in Britain; CAG is a member of house of the Commons.

Constitutional Provisions

Article 148 broadly deals with the CAG appointment, oath and conditions of service.

Article 149 deals with Duties and Powers of the Comptroller and Auditor-General of India.

Article 150 says that the accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the CAG, prescribe.

Article 151 says that the reports of the Comptroller and Auditor-General of India relating to the accounts of the Union shall be submitted to the president, who shall cause them to be laid before each House of Parliament.

Article 279 – Calculation of “net proceeds” is ascertained and certified by the Comptroller and Auditor-General of India, whose certificate is final.

Third Schedule – Section IV of the Third Schedule of the Constitution of India prescribes the form of oath or affirmation to be made by the Judges of the Supreme Court and the Comptroller and Auditor-General of India at the time of assumption of office.

According to Sixth Schedule the accounts of the District Council or Regional Council should be kept in such form as CAG, with the approval of the President, prescribe. In addition these bodies account are audited in such manner as CAG may think fit, and the reports relating to such accounts shall be submitted to the Governor who shall cause them to be laid before the Council.

Independence of CAG

CAG is appointed by the President by warrant under his hand and seal and provided with tenure of 6 years or 65 years of age, whichever is earlier.

CAG can be removed by the President only in accordance with the procedure mentioned in the Constitution that is the manner same as removal of a Supreme Court Judge.

He is ineligible to hold any office, either under the Government of India or of any state, once he retires/ resigns as a CAG.

His salary and other service conditions cannot be varied to his disadvantage after appointment.

His administrative powers and the conditions of service of persons serving in the Indian Audit and Accounts Department are prescribed by the President only after consulting him.

The administrative expenses of the office of CAG, including all salaries, allowances and pensions are charged upon the Consolidated Fund of India that is not subject to vote

Functions and Power of CAG

CAG derives its audit mandate from different sources like–

Constitution (Articles 148 to 151)

The Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971

Important Judgments

Instructions of Government of India

Regulations on Audit & Accounts-2007

CAG audits the accounts related to all expenditure from the Consolidated Fund of India, Consolidated Fund of each state and UT’s having a legislative assembly.

He audits all expenditure from the Contingency Fund of India and the Public Account of India as well as the Contingency Fund and Public Account of each state.

He audits all trading, manufacturing, profit and loss accounts, balance sheets and other subsidiary accounts kept by any department of the Central Government and the state governments.

He audits the receipts and expenditure of all bodies and authorities substantially financed from the Central or State revenues; government companies; other corporations and bodies, when so required by related laws.

He audits the accounts of any other authority when requested by the President or Governor e.g. Local bodies.

He advises the President with regard to prescription of the form in which the accounts of the Centre and States shall be kept.

He submits his audit reports relating to the accounts of the Centre to the President, who shall, in turn, place them before both the houses of Parliament.

He submits his audit reports relating to the accounts of a State to the Governor, who shall, in turn, place them before the state legislature.

CAG also acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament.

CAG and Public Accounts Committee (PAC)

PAC is a Parliamentary Standing Committee created under GOI Act, 1919.

CAG audit reports are handed over to the PACs at the centre and at the state.

Three CAG reports i.e. audit report on appropriation accounts, audit report on finance accounts and audit report on public sector undertakings are examined by PAC.

At the central level, these reports are submitted by CAG to president, who makes them to be laid in parliament.

CAG also assists the committee in its deliberations by preparing a list of the most urgent matters which deserve the attention of the PAC.

He also helps in making the actions of the committee clear to the witnesses and in making the action of the government clear to the committee.

CAG position is sometimes one of interpreter and translator, explaining the officials’ views to the politicians and vice-versa.

The responsibility of the CAG does not end here. He has to watch whether the corrective action suggested by him has been taken or not. In cases whether it has not been taken, he reports the matter to the PAC which will take up the matter.