Comptroller and Auditor General (CAG)

Comptroller and Auditor General is an independent authority under Article 148 of the Indian Constitution.

Comptroller and Auditor General: Constitutional Provisions

1. Appointed by the President for a term of 6years/65 years of age whichever is earlier.
2. Removal of CAG is in same manner as Judge of Supreme court.
3. Oath is administered by president/ any other member appointed by him.
4. CAG is not eligible for office under the Government of India/state after retirement.
5. Salary and office expenses charged on consolidated fund of India and service conditions cannot be varied after appointment, to his disadvantage.

Comptroller and Auditor General: Powers

1. As a guardian of public purse, CAG audits the accounts of [a] expenditure from the Consolidated Fund of India [b] Consolidated Fund of each state and UT’s having a legislative assembly [c] Contingency Fund of India [d] Public Account of India [e] Contingency Fund and Public Account of each state [f] accounts of any central/state departments [g] accounts of any PSU/authority funded by central/state government [h] Audit on appropriation account [i] any other function assigned by president/Governor.
2. Type of audits carried out by CAG include Financial audit [expenditure & revenue]; Propriety audit [whether expenditure is made in public interest] and Performance audit [efficiency in spending].
3. CAG cannot audit Secret service fund and some public corporations [ for e.g. LIC, RBI, SBI].
4. Acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament.

Comptroller and Auditor General: Issues

1. No criterion/procedure in the Constitution for appointment of CAG.
2. Audits are getting complex for reasons like corruption/ maladministration/ denial of records increasing the work load.
3. Accounts are audited after actual expenditure is made, a mere post-facto audit.
4. CAG do not have power to take action on serious observations.
5. CAG revealing sensitive public information to the media.

Comptroller and Auditor General: Reforms

1. CAG should made to act as comptroller like in UK.
2. CAG should be made a multimember body to decrease work load.
3. Government should devise a mechanism to take actions on observations of CAG.
4. Bring all Panchayat Raj Institutions and societies benefitting from government, within the ambit of the CAG.
5. A collegium type mechanism to appoint CAG
6. To amend CAG act 1971 to keep pace with changes in governance as recommended by former CAG Vinod Rai.

Comptroller and Auditor General: Important judgements

• Arvind Gupta Vs Union of India; Petitioner [2013]: CAG has power to conduct performance audit.
• Arun Kumar Aggarwal Vs Union of India [2013]: CAG’s report is always subject to scrutiny/comment by the Parliament and the court cannot consider it final.
• National Dairy Development Boards Vs. CAG of India [2010]: CAG can conduct audit to any corporation when under the respective legislation, annual financial audit is not undertaken by the CAG.