Role of Comptroller and Auditor General of India (CAG)

[UPSC Mains 2018] The Comptroller and Auditor General (CAG) has a very vital role to play. Explain how this is reflected in the method and terms of his appointment as well as the range of powers he can exercise.

Comptroller and Auditor General of India (CAG) is appointed by the President and is responsible for auditing the Central and State governments accounts. CAG acts as the guardian of public purse as it checks if the money of taxpayers has been used properly. CAG conducts audits of expenditure from Consolidated Fund of India, Contingency Fund of India and Public Accounts Of India. Thus, CAG is responsible for the financial accountability of executive to the legislature.

Let's discuss about the office of Comptroller and Auditor General. 

• Who is Comptroller and Auditor General of India (CAG)? [Article 148-151]
• According to Ambedkar, who is the most important officer in the Constitution of India and why?

• Facts to remember about Comptroller And Auditor General of India

1.    CAG as the head of Indian Audit and Accounts Department

2.    Appointment of CAG

3.    Removal of CAG

4.    Term of Service of CAG

5.    Eligibility for further office

6.    Salaries, allowances and emoluments

7.    Administrative expenses

• Functions of CAG

1.    Accounts audited by CAG

2.    Types of Accounts of Central and State government audited by CAG

3.    Three reports submitted by CAG to the President

4.    Reports submitted by CAG to Governor

• CAG as the guide, friend and philosopher of Public Accounts Committee
• Drawback of office of Comptroller and Auditor General of India (CAG)
• Difference between the office of CAG in India and Britain
• Importance of the office of CAG

• Previous years Questions Mains
• Previous years Questions Prelims

Who is Comptroller and Auditor General of India (CAG)? [Article 148-151]

Article 148 of the Indian Constitution provides for the office of Comptroller and Auditor General of India (CAG) who is responsible for financial accountability of the executive to the legislature.

According to Ambedkar, who is the most important officer in the Constitution of India?

Dr. B.R.Ambedkar regarded office of CAG as the most important officer in the Constitution of India because :

1) CAG upholds the constitution of India and laws of Parliament in the field of financial administration.

2) CAG is the guardian of public purse and controls entire financial system of the country - both at the Centre and State level.

3) CAG makes executive accountable to the Parliament on the financial matters

Quoting words of Dr.Bhim Rao Ambedkar on the office of CAG:

"I am of opinion this dignitary or officer is probably the most important officer in the Constitution of India. He is the one man who is going to see that the expenses voted by Parliament are not exceeded, or varied from what has been laid down by Parliament in what is called the Appropriation Act. If this functionary is to carry out the duties and his duties, I submit, are far more important than the duties even of the judiciary....... I personally feel that he ought to have far greater independence than the Judiciary itself......”

Facts to remember about Comptroller And Auditor General of India

1) Who is the head of Indian Audit and Accounts Department?

The office of Comptroller and Auditor General is an independent office and CAG is the head of Indian Audit and Accounts department.

2) How is CAG appointed? 

CAG is appointed by the President of India with warrant under his hand and seal.

3) How can CAG be removed?

The CAG is removed by the President of India on the similar grounds and same manner as of Supreme Court judge i.e incapacity or misbehavior. So the office of Comptroller and Auditor General has the security of tenure and CAG does not hold the office till the pleasure of the President.

4) What is the Term of Service of CAG?

The term of service of CAG is 6 years or 65 years of age, whichever is earlier.

5) Eligibility for further office

CAG is not eligible for further office in the Central or State government.

6) Salaries, allowances and emoluments

Salaries, allowances and emoluments of CAG are determined by Parliament.

7) Administrative expenses

The administrative expenses of the office of Comptroller and Auditor General of India is charged upon the Consolidated Fund of India and is not subject to vote in Parliament.

8) Whom is CAG responsible to?

CAG is an agent of Parliament and conducts audit of expenditure on behalf of the Parliament, hence CAG is responsible to the Parliament.

What are the functions of CAG?

1) Types of accounts audited by CAG

CAG audits accounts related to expenditure from the:

a) Consolidated Fund of India, of each state and of each UT having legislative assembly,

b) Contingency Fund of India and of each state,

c) Public Accounts of India and of each state.

2) Types of accounts of Central and State government audited by CAG

The CAG audits following account of Central and State government:

·       trading

·       manufacturing

·       profit and loss

·       balance sheets

·       other subsidiary accounts

·       receipts and expenditures 

3) What are the three reports submitted by CAG? 

The CAG submits three audit reports to the President, which is laid before Parliament and then examined by Public Accounts Committee, who shares it's finding with the Parliament:

i) Audit report on Appropriation Accounts,

ii)  Audit report on Finance Accounts,

iii) Audit report on Public Undertakings

4) As per Article-151, CAG submits audit reports relating to the accounts of:

a) Centre: 

The reports of Centre are laid by the President before the Parliament

b) State: 

The reports of the State are laid by the Governor before state legislature  

5) Who is regarded as the guide, friend and philosopher of Public Accounts Committee? 

The Comptroller and Auditor General of India is the guide, friend and philosopher of Public Accounts Committee.

6) Drawback of office of Comptroller and Auditor General of India (CAG)

The drawbacks of CAG are:

a) Executive does not require prior permission from CAG to withdraw money from Consolidated Fund of India.

b) CAG has more freedom with respect to audit of expenditures where he can decide the scope of audit and frames his own audit codes and manuals, when compared to audit of receipts, stores and stocks where he need approval of executive government to conduct the audit.

7) What is the difference between the office of CAG in India and Britain?

In India, CAG only fulfills the role of Auditor General and does not act as Comptroller as he has no control over the issue of money from Consolidated Fund and is concerned only at audit stage when expenditure has already taken place.

In Britain, executive can draw money from public exchequer only with the prior approval of CAG.

8) What is the importance of CAG?

The audit reports of CAG has helped to catch various scams that has taken place in India such as: 

a) Coal allocation scam, 

b) Commonwealth Games scam, 

c) Telecom scam etc. 

This makes executive responsible to the legislature and it ensures the money of taxpayers is utilized in a transparent manner for the well being of the countrymen rather than filing up personal pockets.

After reading this article, we can easily answer the previous year questions asked in civil service examinations. 

Previous years Questions Mains:

"The Comptroller and Auditor General (CAG) has a very vital role to play." Explain how this is reflected in the method and terms of his appointment as well as the range of powers he can exercise. [UPSC Mains 2018] 

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