“The
Comptroller & Auditor General must be as supreme as the judges of the
Supreme Court, perhaps even more so.”
-
Dr. Pattabhi Sitaramayya
Introduction
Today, the chief
hindrance in the path of economic development in most countries is without a
doubt corruption. In order to combat and even detect the corruption in India,
responsible and efficient working of the Comptroller and Auditor General of
India must be ensured. The CAG is an officer of the Constitution and not an
officer of Parliament, even though he/she exclusively serves Parliament and
State Legislatures[1].
Thus, the Comptroller and Auditor General is a dignitary who occupies a unique
place in Indian democracy.
In order to meet
the challenges of good governance the CAG’s office has been
given a dual role: one as an agency that functions along with the legislature and ensures that the executive obeys with the laws passed by the legislature and enhances the executives accountability to the legislature; another as an agency that ensures obedience by subordinate authorities with respect to the rules and regulations issued by the executive[2]. The CAG must find the black spots and lapses in the governance of any government as well as commercial organization and report to the President of India. The CAG’s office also provides technical guidance and support to some local bodies to boost their answerability.
given a dual role: one as an agency that functions along with the legislature and ensures that the executive obeys with the laws passed by the legislature and enhances the executives accountability to the legislature; another as an agency that ensures obedience by subordinate authorities with respect to the rules and regulations issued by the executive[2]. The CAG must find the black spots and lapses in the governance of any government as well as commercial organization and report to the President of India. The CAG’s office also provides technical guidance and support to some local bodies to boost their answerability.
Position of CAG
Chapter
V of the Constitution of India and The Comptroller and Auditor General's
(Duties, Powers and Conditions of Service) Act, 1971 explains the appointment,
salary duties, powers, etc. of the CAG. The CAG is the one dignitary, who sees
on behalf of the Legislatures that the expenses voted by them are not exceeded
or varied and that the money expended was legally available for and applicable
to the purposes to which it has been applied. Unlike any other civil servant,
he has no chief.
The
Comptroller and Auditor General is the Administrative Head of the Indian Audit
and Accounts Department. His administrative power will be governed by rules
made by the President, in consultation with the former. Nothing can restraint
the CAG's discretion or judgment in any manner on matters which he/she may
bring to the notice of the Legislatures in the discharge of his/ her duties[3].
The oath of office under the Constitution requires him/her to uphold the
Constitution and the laws and to discharge the duties without fear or favour,
affection or ill-will[4]l.
The Constitution assures to the Comptroller and Auditor General constitutional
independence and has also placed him beyond fear or favour of the Executive,
whose transactions he is expected to audit.[5]
Financial
Committees
The inspection
of Annual Accounts and Audit Reports by the Parliament alone would be an
insurmountable task, as it calls for expertise in the subject and it would
command too much burdens on the inadequate time available to the Parliament for
discussion of issues of national importance. Therefore the Parliament and the
State Legislatures have, for this purpose, constituted specialized Committees
like the Public Accounts Committee (PAC) and the Committee on Public
Undertakings (COPU), to which these audit Reports and Annual Accounts
automatically stand referred[6].
The examination of public enterprises by the Committee takes the form of
comprehensive appraisal or evaluation of performance of the undertaking. It
involves a thorough examination, including evaluation of the policies,
programmes and financial working of the undertaking.
The objective of
the Financial Committees, in doing so, is not to focus only on the individual
irregularity, but on the defects in the system which led to such irregularity,
and the need for correction of such systems and procedures.
The Comptroller
& Auditor General of India plays a crucial part in the working of the
financial committees of Parliament and the State Legislatures. The CAG has come
to be acknowledged as a 'friend, philosopher and guide' of these committees[7].
The role of CAG and audit committees should not be mixed up as CAG looks at
audit from an angle of accuracy.
Accounts
Duties
The CAG inter alia plays an essential role in
federal financial relations. Article 149 states of the Constitution states “The Comptroller and Auditor General shall
perform such duties and exercise such powers in relation to the accounts of the
Union and of the States and of any other authority or body as may be prescribed
by or under any law made by Parliament…” By virtue of Article 150, the
design of the accounts of the Union and the State Governments are prescribed by
the President based on the recommendations and advice of the CAG.
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[8].
It is the duty
of the Comptroller and Auditor General to prepare, from the accounts,
Appropriate Accounts, showing under the respective heads, the annual receipts
and disbursements for the purpose of the Union, of each State and of each Union
Territory having a Legislative Assembly.
The CAG
authorizes the salary and allowances to officers of a few State Governments as
well as the 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
Duties
“Audit
like the judiciary, executive and legislature is one of the important
ingredients of a democracy”
-A. Prem
Chand
The Comptroller
and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971
authorizes 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. He determines and confirms the net proceeds of
taxes levied and collected by the Union but assigned to the States or
distributed between the Union and the States[11].
The CAG duties
are to scrutinize the audit of:
·
All the Union and State Government
departments and offices.
- Subsidiary accounts kept in any Government Department such as those related to trading, manufacturing, profit and loss accounts and balance sheets, etc.
- Public commercial enterprises controlled by the Union and State governments, i.e. government companies and corporations.
- Accounts of bodies and authorities receiving loans and grants from the Government.
- Non-commercial autonomous bodies and authorities owned or controlled by the Union or the States.
Organizations
financed from the Consolidated Funds of the Union and the States.
The auditor of a
govt. company is appointed by the Central Government on the advice of the CAG,
who directs the manner in which the accounts of government companies shall be
audited. The audit report is presented before the CAG, who analysis it, adds
some of his input or modifies it and comments on it. The comments of the CAG
along with the audit report are submitted to the AGM of the company[12].
The audit is
conducted as per the procedure laid down by the CAG. It is desirable that the
audit committees should be formed in Government companies as per the
recommendations of the Blue Ribbon Committee to perform a distinct role[13].
CAG
in Present Time
 |
| Vinod Rai: Comptroller & Auditor General (CAG) of India |
Recently, Dr.
Manmohan Singh has said to ensure transparency in Public-Private Partnership
(PPP) projects the Comptroller and Auditor General of India (CAG) be permitted
to look into the books of these infrastructure schemes. He said, “The reports
of the Comptroller and Auditor General are taken very seriously by the media,
by the public, by the government and by our Parliament. This casts a huge
responsibility on the institution to ensure that its reports are accurate,
balanced and fair”[15]
Mr. Rai has, in
an attempt to wake up the countrymen, that the time has come for the vast
population to come together and fight corruption. Initiating anti-awareness
campaigns would keep the pressure on the government and would truly help in
eradicating corruption from the country. The public should insist on sincerity
from the government and rightly proclaim their important status in the affairs
of the state.
The bureaucratic
activity at that time gave indications that there was quite a bit of pressure
on Mr. Rai to dilute the 2G report but he held fast, merely asking his people
to check for unnecessarily harsh or unfair language. The report ripped apart the
government. The CAG report said the ultimate loss to the exchequer could be as
high as Rs. 1.76 lakh crore[16].
The CAG
indicated that there has been a change in method of governance since the
initial years of independence. The earlier model which involved government for
fighting and cleaning the country’s corruption has failed. But now there has
been a paradigm shift in the manner of governance and it is only the vigilant
and socially active citizens who can clean the country’s corruption.
The civil society
groups need to actively participate and create a revolution in the country
against corruption. The time is changing and it is the Indians who can make it
happen. The civil society needs to be on the forefront and lead the country for
a better future ahead.
“There is a need
to ensure that we don’t allow people in power to hijack government funds to
areas that these are not meant for.” Mr. Rai said, “Public opinion can be
shaped by civil society organizations and projected by the media. Civil society
groups can be instrumental in raising the awareness of citizens and mobilizing
them in promoting public accountability”. The once silent majority, he pointed
out, has indeed started raising its voice, citing the PIL in case of the CVC’s
appointment, pursuit of the spectrum allocation case, relentless pursuit by the
media in cases like the Jessica Lal murder, the unofficer-like behaviour of the
Haryana DGP, etc
Also, President
Patil has emphasized that public financial accountability and probity were
essential for rooting out corruption.
Technical
Guidance and Supervision (TGS) Entrustment
In accordance
with the recommendations of the 11th Finance Commission, CAG has
been entrusted with Technical Guidance & Supervision/Support (TGS) in a
majority of the States. As of 30th April, 2009, entrustment of TGS to CAG has
been received in one Union Territory and 22 states out of the 24 States where
73rd & 74th amendments are applicable [17].
In 2002 the task
force of Comptroller & Accountant General prepared a report in which it
made some very significant recommendations such as (i) uniform formats for
financial statements and budget (ii) formats for determining the cost of
important utilities and services like water supply etc. and showing this
information by way of disclosure to the accounts (iii) significant accounting
policies to be followed by ULBs as per model accounting policies need to be
disclosed in a separate schedule forming part of the accounts and (iv) initiate
steps for smooth switch over to the double entry accrual system of accounting.
By 2007 the
CAG’s office simplified the accounts and budget formats for PRIs. A
sub-committee was formed to further simplify these formats. The simplified
accounting formats along with list of Codes, Functions, Programmes and Activities
for PRIs recommended by them had been accepted by the Technical Committee in
January 2009.
Conclusion
The Comptroller
and Auditor General of India plays a unique role in Indian democracy, by
upholding the Constitution and the laws in the field of financial
administration. The CAG acts as a watchdog to see that the various authorities
under the Constitution function in regard to financial matters, in accordance
with the Constitution and the laws of Parliament and appropriate Legislatures
and Rules and Orders issued thereunder. She/he is neither an officer of
Parliament nor a functionary of Government. The CAG’s office is one of the four
pillars of a democratic constitution[18]
having equal, if not more, importance to the other 3 pillars, i.e. executive, legislature,
and judiciary.
For the purpose of securing top standards of
financial integrity of the administration and watching the interest of the
tax-payer and also for purposes of Legislative control, the CAG office is kept
as independent as is required to function smoothly and without bias. The role
of the Comptroller and Auditor General of India is so important, that she/he
might be the only Government office that can maintain financial stabilization
and prevent major financial crises, and by doing so, lead the country towards
the path of economic as well as social progress.
Keywords:
Comptroller and Auditor General, duties, powers, cag india, vinod rai, economic development, good governance, transparency, audit, Public Accounts Committee, scams india, Prime Minister Manmohan Singh,
[1] Siuli Sarkar, Public
Administration In India, (PHI Learning Pvt. Ltd., New Delhi, 2010) 271
[2] R.K. Bagga, Kenneth Keniston, Rohit Raj Mathur, The state, IT and development (2005) 78
[3] Ainapure & Ainapure, Auditing And Assurance,
(Second Edition PHI Learning Pvt. Ltd., New Delhi, 2009) 949
[4]R. K. Chandrasekhaṙan, The Comptroller and Auditor General of India: analytical history,
1947-1989, Volume 1 (Ashish Pub. House for and on behalf of International
Training Centre, Office of the Comptroller & Auditor General of India,
1990)
[5] http://www.egyankosh.ac.in/bitstream/123456789/25435/1/Unit-23.pdf
[6] G.S. Batra, Leading
Issues In Public Enterprises (1993) 118
[7] K. K. (Kanwal Kishore) Bhardwaj, Public accounting and auditing: Office of the Comptroller and Auditor
General of India, (Mittal Publications, First Edition, 2002) 40
[8] Abbas Hoveyda, Indian
Government And Politics (Dorling Kingsley Pvt. Ltd 2010) 126
[9] Ramayyar A.S., Indian Audit and Accounts Department
(New Delhi, The Indian Institute of Public Administration, 1967)
[10] http://www.intosaiitaudit.org/mandates/writeups/india.htm
[11] By and under Article 279 of the Constitution
[12] 1. R. K.
Chandrasekhaṙan, The Comptroller and Auditor General of India: analytical
history, 1947-1989, Volume 1 (Ashish Pub. House for and on behalf of
International Training Centre, Office of the Comptroller & Auditor General
of India, 1990)
[13] Louis Braiotta, Jr., Trent Gazzaway, Robert Colson The Audit
Committee Handbook (2010) 37
[14] P. Vaidyanathan Iyer, ‘CAG weighs in: Civil society must fight corruption, govt won’t’,
Indian Express (New Delhi, Sat Apr 09 2011 )
[15] One India News , ‘Manmohan
Singh on role of Comptroller and Auditor General organization’ Wednesday,
November 17, 2010
[16] http://en.wikipedia.org/wiki/Vinod_Rai
[18] Ramayyar A.S., Indian Audit and Accounts Department
(New Delhi, The Indian Institute of Public Administration, 1967) p.1
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