Comptroller and Auditor General of India (CAG)

Powers of the Comptroller and Auditor General of India

The CAG of India is an autonomous constitutional authority tasked with auditing the financial accounts of the Government of India and its various agencies. Additionally, the CAG evaluates the government's adherence to the Constitution and other relevant laws.

The authority and responsibilities of the CAG are enshrined in the Constitution of India and further detailed in the Comptroller and Auditor General’s (Duties, Powers, and Conditions of Service) Act of 1971.

A CAG enjoys extensive powers, playing a crucial role in ensuring government accountability to the populace. Historically, the CAG's reports have sparked significant shifts in government policies and practices.

Some key powers of the CAG include:

• Auditing all income and expenses of the Government of India and its agencies
• Inspecting all offices and records of the Government of India and its agencies
• Summoning individuals to appear before the CAG and to produce relevant documents
• Reporting on the government’s compliance with the Constitution and other laws

The President of India receives the CAG’s reports and must present them to Parliament. These reports are also made available to the public. 

List of Comptroller & Auditor General of India

During the drafting of the Indian Constitution, the position of Auditor General of India was redefined as that of the Comptroller and Auditor General of India. V. Narahari Rao, who was the last Auditor General, subsequently became the first CAG of India.

The following table lists the names of CAGs in India of different tenures:

Role of CAG in India

The following highlights the role of the Comptroller and Auditor General of India:

• Auditing Government Accounts

Audits accounts of the Government of India and its agencies, including all departments, public sector enterprises, and autonomous bodies.

• Inspecting Offices and Records

Reviews all government offices and records, including treasuries, files, correspondence, and financial statements.

• Ensuring Legal Compliance

Evaluates whether the government complies with the provisions of the Constitution and laws like the Fiscal Responsibility and Budget Management (FRBM) Act of 2003.

• Recommending Improvements

Provides suggestions to improve government spending and performance, aiming to enhance efficiency and effectiveness.

Functions of the Comptroller and Auditor General of India

The following are the functions of the Comptroller and Auditor General of India:

• It includes auditing all the expenditures from the Consolidated Fund of India, each state's consolidated fund, and the consolidated funds of Union Territories that have a Legislative Assembly.
• Auditing all expenditures from the Public Account of India, the Contingency Fund of India, and the corresponding funds and accounts of the states.
• Auditing the trading, manufacturing, profit and loss accounts, balance sheets, and other subsidiary accounts of any department of the Central and state governments.
• Ensuring that the receipts and expenditures of the Government of India and each state are audited to confirm that the rules and procedures are effective for assessing, collecting, and properly allocating revenue.
• Auditing the receipts and expenditures of all bodies and authorities significantly funded by Central or state revenues, government companies, and other corporations and bodies as required by law.
• Auditing all financial transactions of the Central and state governments related to debt, sinking funds, deposits, advances, suspense accounts, and remittance business. Additionally, with the President’s approval, auditing receipts, stock accounts, and other financial matters when requested by the President.
• Auditing the accounts of any other authority when requested by the President or Governor, such as audits of local bodies.
• Advising the President on the format for the accounts of the Centre and the states (Article 150).
• Submitting audit reports on a State government’s accounts to the Governor, who then presents them to the state legislature (Article 151).
• Submitting audit reports on the Central Government’s accounts to the President, who subsequently presents them to both Houses of Parliament (Article 151).
• Certifying the net proceeds of any tax or duty (Article 279), where the certificate is final. 'Net proceeds' refers to the tax or duty proceeds minus the collection cost.
• Serving as an advisor to the Public Accounts Committee of the Parliament and maintaining the accounts of state governments. In 1976, the CAG was relieved of the responsibility of compiling and maintaining the accounts of the Government of India due to the separation of accounts from audit through departmentalisation.

Reports Submitted by the CAG

A Comptroller and Auditor General of India prepares audit reports based on its findings during the audit process. These reports are submitted to the President or the Governors of the respective states, as required by the Constitution.

A CAG’s reports are categorised as follows:

• Audit Reports on Appropriation Accounts
• Audit Reports on Finance and Revenue Accounts
• Audit Report on Public Undertakings

These reports highlight financial irregularities, rule violations, and inefficiencies in financial management and offer recommendations for improvement. Once submitted, the reports are presented in Parliament or state legislatures, where they are discussed and debated. They play a crucial role in holding the government accountable and prompting corrective actions.

Structure of CAG’s Office

The CAG heads the Indian Audit and Accounts Department (IAAD), supported by five Deputy Comptrollers and Auditors General.

The hierarchy structure of the CAG office is as follows:

• CAG
• Deputy CAG
• Additional Deputy CAG
• Directors General
• Principal Director
• Directors/Deputy Directors

Different Articles Related to the Comptroller and Auditor General of India

The CAG holds the same stature as a Supreme Court judge, ranking ninth in importance. Articles 148 to 151 of the Constitution outline the roles and responsibilities of the CAG.

• Article 148 details the appointment, oath, tenure, and removal of the CAG. The President of India appoints the CAG, whose tenure is six years or until reaching 65 years of age, whichever is earlier. The CAG cannot be re-elected and can be removed by the President on grounds of proven misbehaviour or incapacity, endorsed by both houses of Parliament.
• Article 149 specifies the powers and duties of the CAG, which include auditing the accounts of the Indian government, state governments, and other government-owned entities.
• Article 150 of the constitution pertains to the form in which the Union's accounts shall be maintained, as directed by the President upon the advice of the Comptroller and Auditor General of India. The CAG advises on the maintenance of both Union and state government accounts.
• Article 151 addresses the submission of audit reports by India's Comptroller and Auditor General. 

Reports concerning the Union's accounts are submitted to the President of India, while those related to State accounts are submitted to the respective State Governors. These reports must be presented before their respective legislative bodies.

Removal of the Auditor General of India

The President of India can remove the Comptroller and Auditor General (CAG) under the same conditions as a Supreme Court judge.

This requires a resolution passed by both Houses of Parliament with a special majority, based on proven misbehaviour or incapacity.

The Bottom Line

Overall, the Comptroller and Auditor General of India plays a vital role in ensuring accountability and transparency in financial affairs. As India advances economically and socially, the CAG's role remains essential.

Addressing its challenges will greatly contribute to promoting effective governance in India and sustaining its development trajectory.