Overview
- The Comptroller and Auditor General of India (CAG) is a crucial entity in the Indian democratic system.
- Responsible for auditing government expenditure and ensuring financial accountability.
Constitutional Provisions
- Article 148 provides for an independent office of the Comptroller and Auditor General of India (CAG).
- The CAG is the head of the Indian Audit and Accounts Department.
- He is the guardian of the public purse and controls the entire financial system of the country at both the levels – the Centre and the state.
- He is one of the bulwarks of the democratic system of government in India, the others being the Supreme Court, the Election Commission, and the Union Public Service Commission.
- The CAG is appointed by the President of India by a warrant under his hand and seal.
- He holds office for a period of six years or up to the age of 65 years, whichever is earlier.
- He tables his resignation letter to the President.
Duties and Powers
- He audits the accounts related to all expenditure from the Consolidated Fund of India, consolidated fund of each state, and consolidated fund of each union territory 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 of each state and the public account of each state.
- He compiles and maintains the accounts of state governments. In 1976, he was relieved of his responsibilities with regard to the compilation and maintenance of accounts of the Central Government, due to the separation of accounts from audit, that is, departmentalisation of accounts.
- He audits the accounts of any other authority when requested by the President or Governor.
- He advises the President with regard to prescription of the form in which the accounts of the Centre and the States shall be kept (Article 150).
- He submits his audit reports relating to the accounts of the Centre to President, and reports relating to state to Governor.
Audit Reports Submitted by CAG to the President
- The CAG submits three audit reports to the President:
- Audit report on appropriation accounts.
- Audit report on finance accounts.
- Audit report on public undertakings.
- The President lays these reports before both Houses of Parliament.
- The Parliament then examines these reports through the Public Accounts Committee (PAC).
- The CAG acts as a guide, friend, and philosopher of the PAC.
Additional Points from Research:
- Independence of CAG: The Constitution ensures the independence of the CAG in several ways:
- Security of tenure: Cannot be removed except on grounds and in the manner as a Supreme Court judge.
- Not eligible for further office after retirement.
- Salary and service conditions are determined by Parliament and cannot be varied to his disadvantage after appointment.
- The expenses of the office are charged upon the Consolidated Fund of India, not subject to the vote of Parliament.
- Role in Public Finance: The CAG's audit is primarily a financial audit and compliance audit to ensure that government spending is authorized, regular, and proper. Increasingly, it also undertakes performance audits to assess efficiency and effectiveness.
- CAG and Public Accounts Committee (PAC): The CAG's reports form the basis for the examination by the PAC. The PAC scrutinizes the audit reports and the CAG assists the PAC in its deliberations. This forms a critical part of parliamentary financial control over the executive.
- CAG as a 'Watchdog': Often referred to as the 'watchdog of public finance' and the 'custodian of the public purse'.
- No Control over Issuance of Money: Unlike the Comptroller in the UK, the CAG in India does not have the power to control the issue of money from the Consolidated Fund. This power is vested in the executive. The CAG's role comes into play after the money has been spent.
- Scope of Audit: The CAG audits not only central and state government accounts but also the accounts of government companies and corporations where the government has substantial financial interest.