Comptroller and Auditor General(CAG) of India

Comptroller and Auditor General(CAG) of India

Edited By Ritika Jonwal | Updated on Nov 05, 2024 08:07 PM IST

Who are India's comptroller and auditor general? To answer this question we have to look at the history as the CAG of India was mapped back in 1860 when the colonial government, i.e., Britishers, established the Auditor General office in India. After the independence, it is recognised as the Comptroller Auditor General under the provision of the Constitution of India. Since then, it has been a self-governed entity that has looked after the auditing of the financial accounts of the central and state governments, as well as other bodies and institutions substantially financed by the government. The history of CAG casts back its evaluation as a crucial institution in the Indian governance framework, while its evaluation enhances its outstanding contribution to promoting transparency, accountability, and good governance in public finances.

Hierarchy Of The CAG

  • The Comptroller and Auditor General (CAG) of India is an independent body that examines the coverage cost or finances of the central government, state government, and union territories.

  • Established by Article 148 of the constitution. CAG of India is head of the Audit and Account Department. It reviews the government audits, meaning it officially inspects the accounts set forth by the budget, including government institutions (commercial or non-commercial), autonomous institutions/organizations that the government finances, and companies where the government holds 51% equity.

  • The CAG of India is important for the integrity and transparency of the financial exchanges. It is also considered as one of the bullwork of the democratic system of the government.

Structure of CAG’S Office:

Ranking of the CAG’s office comprises of

  • Deputy CAG

  • Additional Deputy CAG

  • Directors General

  • Principal Directors

  • Director/Deputy Directors

  • CAGs, Deputy CAGs, and Additional Deputy CAGs work in a headquarters office

  • Principal Accountant General or Principal Director works in field offices

  • Accounts Officers, Asst. Audits are the Supervisory Officials.

Office of the CAG

  • The President of India appoints CAG. The president of India also takes the oath of CAG.

  • Tenure of them is either completion of 6 years or coming to the age of 65. And once they retire they cannot be recruited in any other government offices. The comptroller and auditor general of India's salary is similar to that of a Supreme Court judge which is determined by the parliament and cannot be altered to their disadvantage.

  • The procedure for their removal is the same as that of a Supreme Court judge (i.e., misbehaviour or incapacity). Administrative expenses are charged to CFI(Corporate Finance Institute).

Constitutional Provisions
CAG has its provisions under Articles 148-151. The brief explanation is as follows.

  • Article 148: The President appoints the CAG and provides oath ceremonies. It also includes conditions of service.

  • Article 149: This provision deals with the Duties and powers of CAG. It enables the power of CAG. Powers defining contours of CAG, as it does, gives immunity and powers.

  • Article 150: the provision talks about the accounts of the union and the states should be kept in such form as the President may on the advice of CAG prescribed

  • Article 151: Relating to the accounts of the union shall be submitted to the president

  • Article 279: it tells about the calculation of net proceeds is ascertained and certified by the CAG his certificate is final.

Powers of the CAG

  • The Constitution of India granted the Comptroller and Auditor General (CAG) some remarkable powers under Article 149 of the Constitution. Article 149 contains the duties and power of CAG.

  • Ensuring compliance in finances, auditing the accounts from Consolidated Fund of India, turning up irregularities to avoid any inconvenience or corruption, etc. are some of the powers of practice.

  • For example, CAS has the power to scrutinize contracts between government institutions in case they entail fraud to avoid the misuse of funds and corruption and also to maintain transparency.

  • In 1971 under the Comptroller and Auditor General(Duties, Powers, and Conditions of Service) Act, 1971, CAG was used to handle both money management and auditing for the government. But in 1976, the government changed it so that the CAG only focuses on auditing, leaving the money management to others.

Duties of the CAG

  • Their duties include auditing the accounts of the Consolidated Fund of India, State, and Union Territories; auditing the expenditure of contingency funds of each state, and public accounts of each state; audits of all the subsidiary accounts of state and central government; providing advice to the president on some financial matters of state and central government;

  • Submit its Audit Report on Appropriation, Finance, and Public undertaking to the president and governor of state which was further presented in the parliament.

  • However, it does not have any control over the issuing of money from CFI.

List of Comptroller & Auditor General of India

Given below is the list of all CAGs appointed till present. Out of which the First CAG was V. Narhari Rao (1949-1954) and the Current CAG is Girish Chandra Murmu (since 2020). Rest all the CAGs who came in between 1945 - till present are tabulated below along with their tenure.

Name

Tenure

V. Narahari Rao

1949 – 1954

A. K. Chanda

1954 – 1960

A. K. Roy

1960 – 1966

S. Ranganathan

1966 – 1972

A. Bakshi

1972 – 1978

Gian Prakash

1978 – 1984

T. N. Chaturvedi

1984 – 1990

C. G. Somiah

1990 – 1996

V. K. Shunglu

1996 – 2002

VN Kaul

2002 – 2008

Vinod Rai

2008 – 2013

Shashi Kant Sharma

2013 – 2017

Rajiv Mehrishi

2017 - 2020

Girish Chandra Murmu

(Present CAG of India)

2020 - present

Role of CAG in India

  • The Comptroller and Auditor General of India play important roles in ensuring accountability and transparency in managing financial affairs. Article 148-151 states the responsibilities and roles of CAG. CAG’s function is to check the financial facade the government is facing in its work, like imagine a toddler(the government) playing in the crib(public funds), his mother(CAG) is keeping an eye on him and making sure he is not falling apart(financial complication).

  • It acts as a Guardian of the Public Purse, ensuring if the government spends money legally and checks whether the allocations are efficiently used just like a responsible head of the house who keeps an eye on the family budget.

  • It is an independent body that ensures proper working in both central and state government. Honestly and regularly reporting the financial performance of the government to a parliament.

  • Promotes good governance by constantly improving in the areas where it needs improvement. The CAG’s audits are made public, allowing citizens to see how their money is being spent and holding the government accountable for its actions.

Functions of the CAG of India

  • The functions of the Comptroller and Auditor General of India are to analyze and review governments' financial affairs with three different aspects.

    • In Financial Audit CAG substantiates whether the money spent on the respective program or works matches the allocations given. Essentially, it makes sure that the government’s financial report is valid and full of integrity.

    • In a Performance Audit CAG evaluates the performance of the government doing its job with no further expenditure required, and checks if government programs and policies are achieving their intended objective.

    • In Compliance Audit CAG ensures that the government is following all rules and regulations. This audit makes sure that the government institutions/ agencies comply with legal requirements in the financial operation.

  • In short, it ensures that the government carries on public funds responsibly and effectively.

CAG Reports

The CAG Reports are the description of the cases involved in financial fraud and losses. CAG scrutinizes the information about the cases and develops a healthy criticism of the public expenditure of the department.

When an Audit takes place, it undergoes various inspections to prepare a report which is then sent forward to ask for alteration of the action and make it correct. The most significant objectives are mentioned in the Annual Audit Reports.

Audit Areas of CAG

  • The job of CAG is to audit all expenditures that arise from the taxes of the state and central government. It examines whether the essential conditions are satisfied to make it successful.

  • The CAG undertakes an audit to ensure the government institution is using its resources wisely and effectively. After the discussion on the budget, an appropriation bill is passed.

  • It is also the 6th phase of conducting a budget where the certainty of government receipt received, allocations given to ministries are discussed, etc. Therefore, CAG audited this appropriation bill.

Audit of Expenditure

  • The job of CAG is to audit all expenditures that arise from the taxes of the state and central government. It examines whether the essential conditions are satisfied to make it successful.

  • It's especially concerned with a financial audit, not an administrative audit because it consists of examining personnel, technical, and organisational processes in the administrative framework whereas the current audit does not fall under this division. hence the focus is more on financial audit.

  • However, if the government decides due to some financial trouble, CAG checks if that decision followed the rules and if it leads to any fraud.

Audit of Government Undertakings

  • The CAG undertakes an audit to ensure the government institution is using its resources wisely and effectively.

  • The commercial undertaking comes in three forms. Firstly, parliament created specific laws for statutory corporations and they are controlled by the government. Secondly, there is a department undertaking which runs per the pattern of their department. Lastly, the Indian Companies Act, 1956, set up Government companies (in the form of private and public limited companies).

Audit of Appropriation

  • The main purpose of the audit of appropriation is to ensure that the financial report provided by businesses should exactly reflect their financial condition.

  • Since public money is involved they need to know of it.

  • CAG monitors this process and makes sure to maintain transparency and accountability, especially for government departments where the CAG is the main auditor.

Difference Between Indian CAG and British CAG?

Indian CAG

British CAG

  • Indian CAG cannot be a Member of Parliament

  • British CAG can be a Member of the House of Common

  • Indian CAG has the power of Auditor General

  • British CAG has the power of both Comptroller and Auditor General

  • Audits happen after the money has been spent

  • CAG’s approval is needed before any funds can be accessed

Frequently Asked Questions (FAQs)

1. What is CAG?

It is an independent authority responsible for auditing the receipts and expenditures of GOI and state government. 

2. Who appoints CAG?

CAG is appointed by the president of India

3. What are the main duties of CAG?
  • To Audit the accounts of central and state governments.

  • To prepare the audit reports highlighting the irregularities or inefficiencies of government spending. 

  • To submit these reports to the president who puts them in front of parliament for scrutiny.

4. How do the CAG reports promote the accountability of the governments?

Highlights the areas of concern in government spending and CAG puts pressure on the government to give efficient and responsible ideas about the public funds and public of these reports and lead to public pressure for reform on the central government and the state governments.

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