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COMPTROLLER AND AUDITOR GENERAL OF INDIA (Criticism of CAG (Appointment,…
COMPTROLLER AND AUDITOR GENERAL OF INDIA
Background
Comptroller and Auditor General of India (CAG) constituted under Article 148
controls the entire financial system of the country at both the levels—the Centre and the state
Under Article 149, the Constitution empowers the Parliament to prescribe the duties and powers of the CAG and accordingly the CAG’s (Duties, Powers and Conditions of Service) Act, 1971 was enacted
Role of CAG
financial administration
CAG audits the accounts related to all expenditure from
Consolidated Fund of India, Contingency Fund of India and the Public Account of India
Consolidated fund of each state and Consolidated fund of each union territory having a Legislative
Contingency fund of each state and the public account of each state
audits all trading, manufacturing profit and loss accounts, balance sheets and other subsidiary accounts kept by any department of the Central Government and state governments
CAG audits the receipts and expenditure of
All bodies and authorities substantially financed from the Central or state revenues
Government companies
Other corporations and bodies, when so required by related laws
CAG submits three audit reports to the President
audit report on appropriation accounts
audit report on finance accounts
audit report on public undertakings
CAG acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament
Criticism of CAG
Appointment
Post facto audit
CAG is not a member of the parliament
Exceeding mandate
Promoting risk averse attitude
Conflict of interest
secret service expenditure is a limitation on the auditing role of the CAG
Delay in supply of documents
Way forward
need for complete independence of the CAG, making it a part of the PAC, like in the UK and Australia
A multi-member body to appoint CAG on the lines of CVC
Auditors should be provided access to records on priority basis within limited time
From climate change to PPPs, there are new developments which make auditing complex task. In 2016, CAG came out with a Big Data management policy to meet new challenges. This is a welcome step.
Independence of CAG is ensured by
Security of tenure
Bar on taking up office post-retirement
Salary and other service conditions
Expenses charged upon the Consolidated Fund of India
Administrative powers
Types of Audits conducted by CAG
Compliance Audit
Financial Attest Audit
Performance Audit