Comptroller and Auditor General (CAG)

About:

• Comptroller and Auditor General (CAG) is an independent authority under the Constitution of India.
• He is the Head of the Indian Audit & Account Department and Chief Guardian of the 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.
• Article 148 of the Indian Constitution provided for the establishment of a Comptroller and Auditor General to be appointed by the President of India.
• CAG jurisdiction was extended to Jammu and Kashmir in 1958.

 Constitutional Provisions regarding the CAG

• Article 148 broadly deals with the CAG appointment, oath, and conditions of service.
• Article 149 deals with the Duties and Powers of the Comptroller and Auditor-General of India.
• Article 150 says that the accounts of the Union and 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.
  • The reports of the Comptroller and Auditor-General of India relating to the accounts of a State shall be submitted to the Governor of the State, who shall cause them to be laid before the Legislature of the State.
• Article 279 – The calculation of “net proceeds” is ascertained and certified by the Comptroller and Auditor-General of India, whose certificate is final.
• Sixth Schedule – According to this schedule, the District Council or Regional Council should be kept in such form as the CAG prescribes with the approval of the President. In addition, these bodies’ accounts 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.

Powers of the Comptroller and Auditor General of India

Article 148 of the Constitution of India establishes the authority of this office. It states the following points in relation to the establishment and powers of CAG:

• The Comptroller and Auditor General is appointed by the President of India and can be removed from office only in the manner and on the grounds that a Judge of the Supreme Court is removed.
• The person appointed to this office should take an oath of office before the President or any other person appointed by the office of the President.
• The salary, service conditions, leaves of absence, pension, and age of retirement are determined by the Parliament of India and specified in the Second Schedule such that the service conditions and salary will not be modified to the disadvantage of the incumbent during their tenure.
• The CAG is not eligible for any further office after the end of their tenure either in the Government of India or any State Government.
• The powers and functions of the CAG are subject to the provisions of the Indian Constitution and any Acts of Parliament, along with the service conditions for the Indian Audits and Accounts Department. The rules governing these would be prescribed by the President in consultation with the incumbent.
• The expenses on the administration of this office including all allowances, salaries, and pensions would be charged to the Consolidated Fund of India.
• The incumbent is appointed for a period of 6 years or until attaining the age of 65 years whichever is earlier

Role of CAG in the Public Accounts Committee (PAC)?

The CAG submits three audit reports to the President– on appropriation accounts, on finance accounts, and on public undertakings.

• PAC examines the reports of CAG: The President lays these reports before both houses of Parliament. The PAC examines these reports and submits its findings to the Parliament.
• Ensuring checks and balances: CAG helps PAC to ensure a check on the government, especially with respect to its expenditure bill.
• Ensuring accountability: The CAG assists the PAC in examining these reports. Thus, there is a close working relationship between CAG and PAC to secure the accountability of the executive in the field of financial administration and fiscal federalism.
• CAG as a guide to PAC: CAG acts as a guide, friend, and philosopher of the Public Accounts Committee of the Parliament.
• Corrective action: CAG ensures that the corrective action suggested by him has been taken. In cases where it has not been taken, CAG reports the matter to the PAC, which will take up the matter.
• Interpreter and translator: CAG acts as interpreter and translator, explaining the officials’ views to the politicians and vice-versa.
• Listing the urgent matters: CAG prepares a list of the most urgent matters which deserve the attention of the PAC.

What is PAC?

• PAC is one of the parliamentary committees that examine the annual audit reports of CAG, which the President lays before the Parliament of India. Those three reports submitted by CAG are:
• Audit report on appropriation accounts
• Audit report on finance accounts
• Audit report on public undertakings
• The Public Accounts Committee examines public expenditure. Public expenditure is not only examined from a legal and formal point of view to discover technical irregularities but also from the point of view of the economy, prudence, wisdom, and propriety. The sole purpose of doing this is to bring out cases of waste, loss, corruption, extravagance, inefficiency, and nugatory expenses.

Challenges with CAG

• Centrally sponsored schemes– It accounts for more than 1/10th of the budget but most of them have not been audited by the CAG beyond 2018.
• MGNREGA – In 2013, CAG found that the scheme has neither alleviated rural poverty nor created any durable assets but it has been left out of audit for over a decade.
• Political interference– The established convention is that CAG does not take part in public debates on the contents of his reports, they are self-explanatory and compete with all evidence.
• But recently Union ministry has contradicted CAG’s observations on government accounts and gave point wise replies to each observation.
• Lack of transparency- There are no proper selection criteria for CAG appointments.
• The involvement of the executive in the CAG’s appointment is hugely problematic as he/she is supposed to audit the executive.
• Overburdened- It is very impractical for one individual to handle the audit mechanism of both the State and Central government as well as Public Service Units.
• Mismanagement- The office is allegedly holding up or delaying completed reports, alteration of approved audit plans, and suspending filed audits midway which is done only in unusual situations like the pandemic.
• Poor administration- Transferring officers who have reportedly been involved in auditing sensitive government schemes impedes the public trust and confidence in the office.
• Decline in reports- The number of reports submitted by the CAG to Parliament has steeply declined over the years, thus questioning the political neutrality of the office.

Related Links:

Attorney General of India	Model Code Of Conduct
Sixth Schedule of Indian Constitution	Most Important Supreme Court Judgements