COMPTROLLER AND AUDITOR GENERAL (CAG)

The General Purpose Financial Report presents an overall picture of the financial performance of the Central Public Sector Enterprises (CPSEs) which are under the audit jurisdiction of the Comptroller and Auditor General of India (CAG).

Comptroller and Auditor General of India audit the receipts and expenditures of State Governments, Government Companies and Central governments. The audit of local bodies is not done by CAG.

The Audit and Accounts Department was first created during British rule in 1753.

CAG is the head of the Indian Audit and Accounts Department.

Up to the year 1976, the functions of Accounting and Auditing were combined in the office of the CAG.

Since the year 1976 the CAG is relieved from the responsibility of the compilation and maintenance of accounts of the Central government.

Since 1976, the CAG is concerned with auditing only.

NOTE: At the state level these two responsibilities are not separated.

The CAG is the guardian of the Public purse (government money).

The CAG is an agent of the Parliament.

The CAG is the Watchdog of the Indian Public Finances.

There are 4 bulwarks (Security, Fortification) of the democratic system of government in India.

• Supreme Court (SC)
• Election Commission (EC)
• Union Public Service Commission (UPSC)
• Comptroller and Auditor General (CAG)

DR B R  AMBEDKAR:  The CAG is the most important officer under the constitution of India.

APPOINTMENT

The CAG is appointed by the President.

TENURE

The CAG holds the office for a period of 6 years

                                                   OR

Up to the age of 65 years whichever is earlier.

RESIGNATION

The CAG submits the resignation letter to the President.

REMOVAL:

This is mentioned in Articles 148 (1) and 124 (4).

The CAG is removed by the president of India only in accordance with the procedures mentioned in the Constitution.

The CAG is removed by the President of India in the same manner and same grounds as a judge of the Supreme Court.

SALARY:

The Salary and other service conditions of CAG are decided by the Parliament.

AFTER RETIREMENT:

The CAG after retirement is not eligible for further office either under the government of India or the government of a state.

FUNCTIONS OF CAG

ARTICLE 149: This article of the Indian Constitution authorizes the parliament to prescribe the duties and powers of the CAG.

• The CAG audits (verifies) the accounts related to the expenditure incurred by the Central and State governments.
• The CAG compiles and maintains the accounts of the state governments.
• The CAG also audits the accounts of the bodies and authorities financed by the Central and state revenues like corporations and companies.
• The CAG audits the accounts of any authority when requested by the President or Governor.
• The CAG as an agent of the parliament conducts the audit of expenditure on behalf of the Parliament.
• The CAG is responsible only to the Parliament.
• The CAG acts as a friend, philosopher and guide of the Public Accounts Committee (PAC).

Note: PAC is explained in the chapter on Parliamentary Committees.

REPORTS

SUBMISSION OF REPORT BY THE CAG:

CENTRAL GOVERNMENT REPORT:

The CAG submits the report relating to the accounts of the central government to the President of India. The President places the report in the parliament.

STATE GOVERNMENT REPORT:

The CAG submits the report relating to the accounts of the state government to the Governor of the concerned state. The Governor places the report in the State Legislature.

Constitutional Provisions for Office of CAG

• Article 148broadly deals with the CAG appointment, oath and conditions of service.
• Article 149deals with Duties and Powers of the Comptroller and Auditor-General of India.
• Article 150says 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 151says 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

Private sector’s CAG audit in past

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