CHAPTER 12 – THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

 

THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

(ARTICLE 148 – 151)

 

 

CHAPTER V – THE COMPTROLLER AND AUDITOR GENERAL OF INDIA (ARTICLE 148 – 151)

 

 

ARTICLE 148

 

OFFICE OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA (CAG)

  1. There shall be a Comptroller and Auditor-General of India who shall be appointed by the President and shall only be removed from office in like manner and on the like grounds as a Judge of the Supreme Court.
  2. Every person appointed to be the Comptroller and Auditor-General of India shall, before he enters upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
  3. The salary and other conditions of service of the Comptroller and Auditor-General shall be such as may be determined by Parliament by law and, until they are so determined, shall be as specified in the Second Schedule, provided that neither the salary of a Comptroller and Auditor-General nor his rights in respect of leave of absence, pension or age of retirement shall be varied to his disadvantage after his appointment.
  4. The Comptroller and Auditor-General shall not be eligible for further office either under the Government of India or under the Government of any state after he has ceased to hold his office.
  5. Subject to the provisions of this Constitution and of any law made by Parliament, the conditions of service of persons serving in the Indian Audit and Accounts Department and the administrative powers of the Comptroller and Auditor-General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor-General.
  6. The administrative expenses of the office of the Comptroller and Auditor-General, including all salaries, allowances and pensions, shall be charged upon the Consolidated Fund of India.

 

DESCRIPTION

The Comptroller and Auditor General of India controls the entire financial system of the country at the Union as well as the state level. He is the guardian of the public purse and it is his duty to see that not even a penny is spent out of the Consolidated Fund of India or the state, without the authority of the appropriate legislature. In other words, he shall be the impartial head of the Audit and Accounts system of India.

INDEPENDENCE OF OFFICE

In order to be able to discharge his duties efficiently, it is essential that his office should be independent of any control of the Executive. This is secured by following provisions of the Constitution:

  1. He is appointed by the President, and not the Prime Minister, thus ensuring that political considerations do not come in the way of his appointment.
  2. Although appointed by the President, the Comptroller and Auditor General can be removed only on an address from both the Houses of the Parliament on the grounds of,
    1. proven misbehaviour.
    2. incapacity.
  3. His salary and conditions of services shall be determined by the law of the Parliament but cannot be changed to his disadvantage after appointment.
  4. After retirement, he shall be disqualified to hold any public office under the Union or the states.
  5. The salary and other expenses of the office of Comptroller and Auditor General are charged upon the Consolidated Fund of India. This means that such expenses shall not be votable in the Parliament, and the Government shall be obliged to meet such expenses in any case.

TERMS OF OFFICE

The Comptroller and Auditor General of India holds the office for a term of six years from the date on which he enters upon his office, but,

  1. he shall vacate his office on attaining the age of 65 years.
  2. he may resign from his office at any time by writing to the President.
  3. he may be removed through the process of impeachment similar to that for a Judge of a Supreme Court.
  4. his office may fall vacant by reasons of sudden demise.

 

 

ARTICLE 149

 

DUTIES AND POWERS OF THE COMPTROLLER AND AUDITOR GENERAL

The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the states and of any other authority or body as may be prescribed by or under any law made by Parliament.

 

DESCRIPTION

In exercise of this power, the Parliament has enacted the Comptroller and Auditor General’s Act 1971, which as subsequently amended in 1976, relieves him of his duty to compile the accounts of the Union as well as the states. This work is now done by the Indian Audit and Accounts Department.

The duties and powers of the Comptroller and Auditor General of India are to audit and report on,

  1. the expenditure of the Union from the Consolidated Fund of India.
  2. the expenditure of the states and Union Territories having Legislative Assemblies.
  3. all expenditure from the Contingency Fund of India as well as of the states.
  4. all the trading, expenditure, profit and loss accounts, balance sheets and other accounts maintained by the departments of the Union as well the states.
  5. all the receipts of the Union as well as the states.
  6. all the receipts and expenditures of the local bodies and authorities financed by the Union or the states.
  7. all the receipts and expenditures of all government companies.
  8. all the receipts and expenditures of other corporations or bodies, when required so by the laws relating to such corporations or bodies.

In short, the Comptroller and Auditor General of India prepares three types of audit reports:

  1. Audit reports on Appropriation Accounts.
  2. Audit reports on Finance Accounts.
  3. Audit reports on Public Undertakings.

The Constitution of India envisages the Comptroller and Auditor General of India to be the Comptroller as well as the Auditor General. However, in practice, the Comptroller and Auditor General is acting only as the Auditor and not as the Comptroller. It just audits the accounts of the Union and the state governments but has not control over the issue of money from the Consolidated Fund of India. His role comes into picture only after the expenditures have taken place.

 

TYPES OF AUDITS CONDUCTED BY THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

  1. REGULATORY AUDITIt is the audit to check whether the money spent was legally sanctioned by the Parliament, as well as the appropriate authority. It also checks whether the money was actually spent for the purpose for which it was sanctioned.
  2. PROPRIETY AUDITIt is the audit to check whether the principles of economy have been followed while spending the money. In other words, it is the ‘value for money’ audit. This audit gives discretionary powers to the Comptroller and Auditor General, since it is upto him to determine if the reasons and extent of expenditure were justified or not. 
  3. PERFORMANCE AUDITIt is the audit to measure the impact of expenditures done for various socio-economic purposes.
  4. SYSTEMS AUDIT – It audits the efficiency of various processes and systems that govern the financial transactions of the government.

 

HAS THE COMPTROLLER AND AUDITOR GENERAL BEEN OVERSTEPPING ITS JURISDICTION ?

It is well understood that the Comptroller and Auditor General is not supposed to scrutinize the policy matters of the government, and as such the principles underlying such expenditures needed to implement the policies of the government. However, the Comptroller and Auditor General’s Act doesn’t explicitly prohibits the Comptroller and Auditor General from scrutinizing the policy measures of the government. This power of the Comptroller and Auditor General to perform Propriety as well as Performance Audit has been seen as encroaching upon the Executive as well as the Legislature. For e.g. the Comptroller and Auditor General declared that the manner in which 2G spectrum was allocated to the private sector by the government caused substantial losses to the government. However, the government justified its acts by saying that such an allocation was needed to attract the private sector. Similarly, in 1999, when the Comptroller and Auditor General questioned the purchase of expensive coffins during the Kargil War, it was criticised for overstepping its jurisdiction by questioning the charged expenditure approved by the Parliament.  Similarly, the Comptroller and Auditor General was criticised for making public before tabling it in the Parliament, its report on alleged irregularities by the government in coal mine allocations.

Nevertheless, in an era of good governance, the Comptroller and Auditor General has a responsibility to ensure transparency, jurisprudence, and accountability for taxpayers’ money. Hence, if the Executive or Legislature has worked in the best of their intentions, there must be nothing to worry with such audits and the government must have reasonable justifications for its financial transactions, decisions, and performance.

 

 

ARTICLE 150

 

FORM OF THE ACCOUNTS OF THE UNION AND THE STATES

The accounts of the Union and of the states shall be kept in such form as the President may, on the advice of the Comptroller and Auditor-General of India, prescribe.

 

 

ARTICLE 151

 

AUDIT REPORTS

  1. 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.
  2. The report 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.