Chapter I Comptroller and Auditor General of India !

Duties and Powers

The Comptroller and Auditor General of India (CAG) is the Head of the Indian Audit and Accounts Department (IA&AD) and derives his constitutional standing as the Auditor of the Union and State Governments from Articles 149 to 151 of the Constitution. The duties, powers and conditions of service of the Comptroller and Auditor General of India are laid down in the CAGs (Duties, Powers and Conditions of Service) Act, 1971. Audit Duties The statutory duties of the CAG include audit of: Receipts and expenditure of the Union and the State Governments accounted for in the respective Consolidated Funds. Transactions relating to the Contingency Funds (created for use in emergency circumstances) and the Public Accounts (used mainly for loans, deposits and remittances). Trading, manufacturing, profit and loss accounts and balance sheets and other subsidiary accounts kept in any Government Department. Accounts of stores and stock kept in Government organisations, Government companies and Government corporations whose statutes provide for audit by the CAG. Authorities and bodies substantially financed from the Consolidated Funds of the Union and the States. Any body or authority even though not substantially financed from the Consolidated Fund at the request of the President or the Governor. Accounts of bodies and authorities receiving loans and grants from the Government for specific purposes.

There is a special arrangement for the audit of Government companies i.e. where equity participation is 51 per cent or more. The primary auditors of these companies are Chartered Accountants, appointed by the Union Government on the advice of the CAG. The CAG gives directions to the Chartered Accountants on the manner in which the audit should be conducted. He is also empowered to comment on or supplement the reports of the primary auditors. In addition, he has the right to conduct audit of accounts of such companies and report the results of audit to Parliament and State Legislatures. A special feature of the audit of such Government companies and Public Sector Undertakings is the periodic comprehensive appraisal of their working by the Audit Boards constituted by the CAG. Experts in disciplines relevant to the operations of a PSU are appointed as members of these Audit Boards. The Audit Boards undertake comprehensive appraisals in the form of Audit Reviews of a few selected undertakings each year. These are incorporated in the CAGs Commercial Audit Reports. Similar Audit Boards have also been set up in a few States for audit of PSUs of the State Governments.

Accounts Duties The Constitution provides for the prescription of the format of the accounts of the Union and the State Governments by the President on the advice of the CAG. The CAGs (DPC) Act, 1971 authorises the CAG to lay down for the guidance of Government departments, the general principles of Government accounting and broad principles applicable to audit of receipts and expenditure. The CAG also plays a fiduciary role in federal financial relations. Under Article 279 of the Constitution he ascertains and certifies the net proceeds of taxes levied and collected by the Union but assigned to the States or distributed between the Union and the States. In addition to his audit responsibilities, the CAG continues to compile the accounts of the State Governments except Goa. The accounts of Union Territories of Chandigarh and Dadra & Nagar Haveli are also compiled by the Department. The CAG authorises the salary and allowances to officers of a few State Governments. He also authorises payment of pension and other retirement benefits to the employees of most of the State Governments and Union Territories and maintains their Provident Fund Accounts. Audit Reports Apart from the certification of Appropriation Accounts and Finance Accounts of the Union and the State Governments and submission of Separate Audit Reports of Statutory Corporations and other Autonomous Bodies for which the CAG is the sole Auditor, the CAG brings out a number of Audit Reports relating to Union Government and the State Governments. The broad categories of Reports being brought out by the CAG are as follows: Union Government Civil Autonomous Bodies Scientific Departments Defence Railways Indirect Taxes Direct Taxes Commercial State Government Civil Receipts Commercial

The CAG communicates his major findings and observations in the above Audit Reports every year. These Reports and certified Finance and Appropriation Accounts are submitted to the President or Governors for being laid before the Parliament or the State Legislatures. Audit Reports on Public Sector Undertakings and Autonomous Bodies are sent to the concerned Ministries or Departments for being laid before the Parliament or the State Legislatures. Significant points in paragraphs / reviews included in various Reports of the CAG for the year ended March 2002 are given in Chapters II and III of this Report.

! Organisational Structure
The CAG discharges his duties and functions through the Indian Audit & Accounts Department. The office of the CAG directs, monitors and controls the activities of various offices of the Department and is responsible for development of organisational objectives and policies, auditing standards and systems, laying down policies for management of manpower and material resources of the Department and final processing and approval of the Audit Reports to be laid before the Parliament and the State Legislatures.

For carrying out these diverse responsibilities, field formations exist for each specific area of auditing and accounting. There are 110 field formations with 90 Branch offices and 430 Resident Audit Offices across the country. The functional structure of the Department is shown schematically in the Chart. The functional distribution of Main Offices, Branch Offices and Resident Audit Offices (RAPs) is indicated below (The details of field offices and branch offices are given in the Annexure): Category Civil Defence P&T Railways Commercial Overseas Sub-total (I) II. Audit offices-States Total Audit Offices (I+II) III. A&E offices-States IV. Training Institutes Grand Total Main 5 3 1 12 12 3 36 37 73 26 11 110 Branch 6 17 16 6 15 60 17 77 13 90 RAP* 22 5 36 150 112 325 105 430 430

* Resident Audit Offices (also includes Divisional Audit Offices, Workshop Audit Offices, Construction Audit Offices, Stores Audit Offices, Traffic Audit Offices etc. in Railway Audit Offices and sub-branch offices in Defence Audit Offices)

! Personnel
The Department consists of over fifty eight thousand personnel in Groups A, B, C and D categories spread over 110 field formations throughout the country. Group A Officers Cadre Group A Officers constitute the Executive Cadre of the Department and are responsible for effective management of auditing and accounting functions. Almost all the Group A officers in the Department belong to the Indian Audit and Accounts Service (IAAS). Recruitment to the IAAS is either directly through the Union Public Service Commission or by promotion from amongst the middle level Group B Supervisory officers of the Department. Each major office in the Department has a separate Welfare Officer in Group A. Senior Principal Private Secretaries and Principal Private Secretaries who are attached to Secretary level officers and above are also Group A Officers. Group B Officers Cadre Promotion to the Junior Supervisory Cadre viz. Section Officers Grade (Group B-Non-Gazetted) is through a professional qualifying examination (Section Officers Grade Examination) conducted separately for different branches such as Accounts, Civil Audit, Railway Audit, Defence Audit, Post and Telecommunications Audit and Commercial Audit. Group B officers (Gazetted) consisting of Senior Audit/Audit Officers, Senior Accounts/Accounts Officers, Assistant Audit Officers, and Assistant Accounts Officers in their respective spheres of audit and accounts duties, constitute the middle level supervisory cadre of the department. These posts are filled by promotion from within the department on the basis of seniority-cum-merit.

Private Secretaries (Group B-Gazetted) and Stenographers Grade I (Group BNon-gazetted) provide secretarial assistance. Data Managers, Sr. Data Processor, Data Processors (Group B-Gazetted) and Sr. Console Operators (Group B-Non-gazetted) perform EDP functions.

Group C and D Cadre Group C officials which consist of Sr. Auditors/Auditors, Sr. Accountants/Accountants, Stenographers (Grade II and Grade III) and Clerks constitute an important component of the department and are directly recruited through Staff Selection Commission. Console Operators and Data Entry Operators man the EDP posts. Messengers and Staff for watch and ward and other ancillary functions make up the Group D Cadre of the department. The distribution of personnel in the Department in Group A, B, C and D categories as on 1st March 2003 is given below: Category of Staff Group A B C D Total Number of Personnel as on 1 March 2003 Audit offices A&E offices Total 394 108 502 11592 18923 3048 33957 4273 17812 2019 24212 15865 36735 5067 58169

Category of Staff
18923
20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Audit O ffice A&E O ffice

17812

11592

4273 3048 394 108 2019

Group A

Group B

Group C

Group D

Senior Divisional/Divisional Accounts Officers/Divisional Accountants Cadre The cadre of Senior Divisional/Divisional Accounts Officers and Divisional Accountants is administered in 13 States by the Accountants General (A&E). They work in various divisions of the Public Works Department of the State Governments as Accountants-cum-Financial Assistants-cum-Internal Auditors. As on 1st March 2003, 597 Senior Divisional Accounts Officers, 862 Divisional Accounts Officers-Grade I (Gp.B), 820 Divisional Accounts Officers-Grade II (non-gazetted) and 1097 Divisional Accountants were functioning in the Department. Reserved Categories of Posts In keeping with the National Policy, posts are reserved for various categories of staff belonging to Scheduled Castes (SC), Scheduled Tribes (ST), Physically Handicapped (PH), Ex-Servicemen (ES), Other Backward classes (OBC) etc. Number of such personnel as on 1st March 2003 and recruited during the year 2002-03 is tabulated below: No. of persons as on 1st March 2003
Group A B C D Total SC 103 1909 6853 1602 10467 Category ST PH 34 0 382 103 3109 522 510 111 4035 736

ES 3 43 472 493 1011

OBC 37 138 1088 446 1709

Recruitment during 2002-03

Group A B C D Total SC 2 37 27 31 97 ST 1 28 32 12 73 Category PH 0 1 5 1 7

ES 0 2 4 8 14

OBC 5 75 62 32 174

! Examinations
The Department conducts a number of examinations for screening candidates for career advancement within the organisation. Notable among these is the Section Officers Grade Examination (SOGE) which is the main selection mechanism for promotion to the Junior Supervisory Cadres. Apart from this, during the year 2002-03, Departmental Examination for IAAS probationers was held in two parts in which 32 candidates appeared and 21 candidates passed. Associations After conducting fresh round of verification of membership under the check-off system, in respect of the Associations which completed initial period of two years of recognition under the CCS (RSA) Rules 1993, the Headquarters prior approval for grant of recognition to 221 Associations was conveyed for a period of five years. In addition fresh applications seeking recognition were also processed.
5

! Budget of IA&AD
IA&AD incurred a total expenditure of Rs.945.22 crore during the year 2002-03, the details of which are indicated below : (a) Components of expenditure

57.35 7.19 793.63 74.67 12.38

(Rs in crore)

Salaries and Wages Rent, Rates and Taxes Miscellaneous Expenses

Travel Expenses Office Expenses

(b) Expenditure incurred by various categories of offices

568.88 600 500 342.42 400 300

(Rs in crore)

200 27.57 100 0

1 CAG's Office Audit Offices A&E Offices RTIs NAAA, Shimla

4.24

2.11

! Cost of Audit and Accounts

Expenditure on audit functions during the year accounted for Rs.589.91 crore including administrative and training overheads. Expressed as percentage, the expenditure of the department was 0.0533 per cent of Central and State Governments actuals for the year 2001-02 as indicated in the table below:
(Rs. in crore)

Particulars I Revenue Receipts Tax Revenue Non-Tax Revenue Total - I II.Expenditure Revenue expenditure Capital expenditure Total - II Total (I+II)
* REs 2001-02

Union Government* 142348 70224 212572 304305 60131 364436 577008

State Governments

Total

167034 31805 198839 298996 31895 330891 529730

309382 102029 411411 603301 92026 695327 1106738

The above figures do not include transactions of the Central and State Public Sector Undertakings, Autonomous Bodies, Bodies substantially financed by Government grants and loans, public debt transactions of the Union and State Governments which are also audited by the CAG. Expenditure on accounting functions during the year was Rs.355.31 crore including administrative and training overheads.