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Comptroller and Auditor General of India

The Comptroller and Auditor General of India (CAG) is an independent office established by the Constitution of India to audit all expenditures and receipts of the central and state governments. As the guardian of the public purse, the CAG controls the financial system of India and submits audit reports to the President and state governors. The CAG evolved from auditing functions under the British East India Company and the first CAG was appointed in 1860.

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411 views4 pages

Comptroller and Auditor General of India

The Comptroller and Auditor General of India (CAG) is an independent office established by the Constitution of India to audit all expenditures and receipts of the central and state governments. As the guardian of the public purse, the CAG controls the financial system of India and submits audit reports to the President and state governors. The CAG evolved from auditing functions under the British East India Company and the first CAG was appointed in 1860.

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Bismal sharma
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Comptroller and Auditor General of India (CAG)

The Constitution of India provides for an independent office of the


Comptroller and Auditor General of India (CAG). He is the head of the
Indian audit and accounts department.
He is the guardian of the public purse and controls the financial system of
the country both at the central level and state level.
CAG is one of the strongest walls of the democratic system, as the
Supreme Court, Election Commission of India (ECA), and the Union
Public Service Commission (UPSC).
Background of CAG

The role of CAG evolved in British India with Lord Canning. In 1858 for
the first time, a separate department was set up for auditing and accounting
transactions under the East India Company.

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Sir Edward Drummond, in 1860 took charge as the first Auditor General,
and the term 'Comptroller and Auditor General of India' was used for the
first time in 1884.
Constitutional Provisions Related to CAG

Part V, Chapter V of the Constitution of India, talks about the Comptroller


and Auditor General of India.
Article 148 speaks of the CAG, his appointment, the oath of his service.
Article 149 broadly speaks of the duties and powers of the CAG.
Article 150: The accounts of the Union and States shall be kept in such
form as the President may prescribe on the advice of the CAG.
Article 151: The reports of the CAG relating to the Union shall be
submitted to the President. The reports of the CAG relating to the State
shall be submitted to the Governor.
Functions of CAG

1. He audits all transactions of the Central and State Governments related


to debts, deposits, funds, etc.
2. He audits the accounts of any other authority when requested by the
President or Governor.
For example, local bodies.
3. He advises the President with regard to the prescription of the form as to
how the records of Centre and State shall be kept.
4. He submits his report relating to Centre to the President, who then
places it before both houses of Parliament.
5. He submits his report relating to State to the Governor, who then places
them before State Legislature.
6. He ascertains and certifies the net proceeds of any tax or duty, and his
certificate is final on the matter.
7. He submits three audit reports to the President:
a. Audit report on appropriation accounts.
b. Audit report on financial accounts.

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c. Audit report on public undertakings.

Role of CAG

1. The CAG is an agent of the Parliament and conducts audits of


expenditure on behalf of the Parliament. Therefore he is responsible only
to the Parliament.
2. The CAG has to ascertain whether the money spent was authorised for
the purpose for which they were spent.
3. He focuses on whether expenditure made is in the public interest or not.
4. The role of CAG in the auditing of public corporations is limited.
5. Some corporations are audited directly by the CAG.
For example, ONGC, Air India, and others.
6. Some corporations are audited by private professional auditors who are
appointed by the Central Government in consultation with CAG. If
necessary, there may be a supplementary audit by CAG.
7. The role of the CAG in the auditing of Government Companies is also
limited. They are audited by private auditors who are appointed by the
Central Government on the advice of the CAG.
Audit Board, 1968
In 1968 an Audit Board was established as a part of the office of CAG to
associate with outside specialists and experts to handle technical aspects of
the audit. Board was established on the recommendation of the
Administration Reforms Commission of India.

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Mode of Appointment
The selection process is entirely internal to the Government as to what
criteria are applied and how names are shortlisted. Presently there is a lack
of clarity.
Recent Example
Two PILs have also been filed in Supreme Court against the former
Defence Secretary Shashi Kant Sharma as CAG (2014-17). His
appointment is thus being questioned in the context of conflict of interest
and also that it goes against the code of ethics of auditors.
Recommendation
There is a need to frame a transparent selection procedure based on
definite criteria. A selection committee may be appointed in this regard.
Current CAG
The Current CAG is Rajiv Mehrishi. He was elected as Vice Chairman of
the United Nations Panel of External Auditors at its annual meeting held in
New York. V Narahari Rao was the first Indian Civil Servant who served
as CAG.

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