The Comptroller and Auditor General- Duties

I know I don't have to tell you the basics again, do I? Just so you know, we have discussed who a CAG is and how he fits in the legal framework of the country in the earlier article. But don’t worry, you won’t have to search for that article just for the synopsis.

C&AG is appointed by the President of India. This, along with the fact that he can only be removed on the ground of proven misbehavior or incapacity ensures that he is completely independent in his actions.

In short, the constitution recognizes C&AG as a judge of Supreme Court, he draws the same amount of salary. Further, he can be removed only when each House of Parliament decides to do so by a majority of not less than 2/3rd of the members of the House present and voting

Now with that being said, lets jump to our first topic, Duties of the C&AG:

Compile and submit Accounts of Union and States

The first and foremost duty of an auditor is to give an opinion on the true and fairness of the financial statements of any entity.

But before giving an opinion, CAG has the additional responsibility to compile the accounts of the Union and of each state. He acquires these from the initial and subsidiary accounts rendered to the audit and accounts offices under his control by treasuries, offices or departments which are responsible for the keeping of such account.

After compiling the accounts, The CAG shall prepare, in each accounts, showing under the respective heads, the annual receipts and disbursements for the purpose of the Union, of each state and union Territory. Then he shall submit these accounts to the President or the Governor of a State or a Administrator of the Union Territory having a Legislative Assembly on or before the date prescribed to him by such authority.

Apart from these, he also provides information and advice to the Union and state governments to assist them in the preparation of annual financial statements if they ask for it.

General Provisions Relating to Audit -

Let's talk about the general provisions relating to audit by the CAG:

1. CAG needs to audit and report on all expenditures from the Consolidated Fund of India including each states and UTs having a legislative assembly. Then, he ascertains whether the sums of money shown in the accounts, which were consecutively disbursed,  were legally available for and applicable to the serviec or purpose to which they have been applied or charged.
2. Finally, he checks whether the expenditures confirms to the authority that governs it or not.
3. CAG has to audit and report all transactions of the Union and of the States relating to Contingency Funds and Public Accounts;
4. CAG also needs to audit and report on all trading, manufacturing and profit and loss accounts and balance sheets and other subsidiary accounts kept in any department of the Union or of a State.

Audit of Receipts and Expenditure

In case of bodies or authorities which are substantially financed by grants or loans from the aconsolidated funds of India or states and UTs, the CAG should audit all receipts and expenditure of that body or authority. After that, he has to report on the receipts and expenditure audited by him.

And in case, the grant or loan above is less than Rs. 25 lakhs, and if the amount of grant is more than 75% of the total expenditure of that authority, they will also be called as substantially financed by such grant or loan, and the CAG shall treat them the same.

Audit of Grants or Loans

In case any body or authority has received a loan or grant for any specific purposes from the consolidated fund or similar, the CAG shall scrutinize whether the loan or grant is being used for the purpose it was granted. For this purpose, he shall have access to the books of account of that authority or body, but for that, he should previously give a reasonable notice to those authorities.

Audit of Receipts of Union or States

It is the duty of the CAG to audit all the receipts which are payable into the consolidated fund of India, states or UTs. If he is satisfied that the rules and procedures in this behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue. He has to duly observe such revenue, and make a examination of the accounts before reporting thereon

Audit of Accounts of Stores and Inventory

The Comptroller and Auditor General shall have authority to audit and report on the accounts of stores and inventory kept in any office or department of the Union or of a State.

Audit of Government Companies and Corporations

The procedure of audit of government companies and public enterprises are pretty similar to that of other companies as the same provisions of the Companies Act, 2013 are followed, with the slight twist that the auditor shall be appointed by the CAG.

He will direct such auditor about the manner in which the accounts of that company should be audited. After his audit, he will submit a copy of his audit report to the CAG regarding the findings and the actions taken by that auditor

Well this article is getting too long. Let’s discuss the powers of the CAG in the next article.

So, that's all on the duties of CAG. If you have any doubts or concerns, feel free to raise a query

Thank You!