Comptroller and Auditor General of India: Powers and Functions of the CAG!

GS Paper	General Studies Paper II
Topics for UPSC Prelims	Article 148, Article 149, Article 150, Article 151, CAG vs Public Accounts Committee, Union Reports, CAG and Indian Budget.
Topics for UPSC Mains	Audit of Public Sector Undertakings, CAG Reports and Impact on Policy, Challenges Faced by CAG, Role in Budget Implementation and Review, Recommendations for Strengthening CAG, Role in Fiscal Responsibility and Budget Management

CAG is an autonomous institution charged with the auditing of the government's income and expenses. It promotes transparency and accountability of finance in governmental workings. CAG UPSC syllabus has covered its power, functions, and significance in the administration.The current CAG of India is responsible for maintaining checks and balances in public financial management. The role of CAG UPSC is vital for candidates preparing for the Civil Services Examination. The Comptroller and Auditor General of India UPSC topic is significant as it helps understand the financial oversight mechanism in the country.  

The Comptroller and Auditor General of India is a part of the Indian Polity subject in the Mains General Studies Paper-II syllabus. It is also a part of the General Studies Paper-1 of the UPSC Prelims Syllabus.

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It is a constitutional office set up under Article 148 of the Indian Constitution. Its roots are to be found in the Government of India Act, 1935, which for the first time envisioned an independent audit authority. The CAG of India checks that public funds are being used efficiently and lawfully. Mahalekha Parikshak is the auditing function of the institution, reflecting its significance in fiscal scrutiny. Through the years, the Auditor General of India has been very significant in promoting transparency in governance.

Comptroller and Auditor General of India (UPSC Polity) Notes: Download PDF Here!

Who Appoints the CAG of India?

The tenure of six years or up to 65 years of age, whichever comes first, serves as the term of office. The CAG of India may not be appointed once more or given another government position after retirement. This guarantees independence and avoids conflict of interest. The Present CAG operates free from interference by anybody outside, again raising its credibility level.

Present Comptroller and Auditor General of India

The Current CAG of India is the head of the Supreme Audit Institution of India. The Present Auditor General of India audits all receipts and expenditures of the Union and State governments. The Current Comptroller and Auditor General of India submits audit reports to Parliament, ensuring financial discipline. The Present Comptroller and Auditor General holds a constitutional position, ensuring strict adherence to financial laws and regulations.

Also, read the Advocate General of State for UPSC here.

The Current CAG of India is the head of the Supreme Audit Institution of India. The Current Comptroller and Auditor General of India submits audit reports to Parliament, ensuring financial discipline. The Present Comptroller and Auditor General holds a constitutional position, ensuring strict adherence to financial laws and regulations.

Also, read the Advocate General of State for UPSC here.

The Comptroller and Auditor General of India (CAG) is an important constitutional authority in India. Here are some key points about the powers of the CAG:

• The CAG can conduct audit of the accounts of the government. This includes the central government, state governments, and public sector bodies. This fosters transparency and accountability in the public expenditure.
• The CAG has the authority to control the financial aspect of the government. It examines the financial accounts, transactions, and reports of the government departments.
• The CAG submits reports to the Parliament on the audit findings and observations. These reports are an important tool for Parliament to scrutinize the government's financial performance.
• In addition to financial audits, the CAG also conducts performance audits. This involves assessing the effectiveness of government programs to ensure that they are achieving their intended objectives.
• The CAG is an independent body and is not subject to control by the executive branch of the government. This independence allows the CAG to perform its duties without any interference.
• The CAG can make recommendations to the government based on its audit findings.
• The CAG follows up on its audit observations and recommendations to ensure their implementation. It monitors whether the government has taken appropriate action to address the issues identified.

Also, read on the Controller General of Accounts For UPSC!

Also, read on the Public Accounts Committee for UPSC here!

The Role of CAG UPSC is crucial for financial oversight and governance. The Functions of Comptroller and Auditor General of India include auditing government accounts, examining public expenditures, and reporting financial irregularities. The CAG Present Chairman ensures that government finances are managed effectively and legally.

• This office’s mission is to respect the Indian Constitution’s financial administration provisions as well as laws approved by Parliament.
• The Comptroller and Auditor General of India report ensures that the executive (i.e., the council of ministers) is accountable to Parliament in the area of financial administration.
• The office is accountable to and acts as an agent for Parliament, conducting expenditure audits on its behalf.
• The CAG’s job is to “determine whether money reported as having been disbursed in the accounts was legally available for and appropriate to the service or purpose to which they have been applied or charged, and whether the expenditure conforms to the authority that governs it.”
• The office can conduct a proprietary audit, which entails looking at the ‘wisdom, faithfulness, and economy’ of government spending and making comments on waste.
• The propriety audit, on the other hand, is optional, unlike the legal and regulatory audit, which is required of the Comptroller and Auditor General of India.
• The secret service expenditure hampers the CAG’s auditing role.
• In this case, the CAG cannot demand specifics on expenditures made by executive agencies but must accept a certificate from the appropriate administrative authority stating that the expenditures were made under his supervision.

Also, read the Indian Accounting Standards for UPSC here!

Here are the duties and functions of the Comptroller and Auditor General of India (CAG):

• The CAG handles the auditing of accounts of the Government of India and its agencies. This includes auditing the receipts and expenditures of the government. It also looks into the assets and liabilities of the government.
• The CAG prepares the accounts of the Government of India and its agencies. These accounts are submitted to the Parliament and to the state legislatures.
• The CAG has the authority to inquire into any irregularities in the accounts of the government. This may include irregularities in the following:
  • collection of revenue, 
  • expenditure of funds, and 
  • management of assets.
• The CAG has to report on its findings to the Parliament of India and to the state legislatures. The CAG's reports are also made public.
• The CAG is required to advise the government on matters relating to public finance. It can advise the government on how to improve the efficiency and effectiveness of its financial management.

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The Comptroller and Auditor General of India UPSC topic is crucial for understanding democratic accountability. The Now CAG of India ensures that the executive does not misuse public funds. The Functions of the Comptroller and Auditor General of India robustify financial governance mechanisms. The Current Comptroller and Auditor General of India has a vital role in preserving transparency in public finance. Role in Curbing Corruption The CAG UPSC syllabus covers its role in identifying financial irregularities. The Present Comptroller and Auditor General of India ensures that policies are implemented efficiently. The Current CAG of India has exposed major scams, leading to better governance reforms. Strengthening Public Accountability The CAG of India reports ensure that the government is accountable to the legislature. The Present Comptroller and Auditor General helps Parliament assess the effectiveness of government spending. The Current Comptroller and Auditor General of India promotes transparency by making audit reports public.

The following are the important reports submitted by the CAG:

Audit Report on Appropriation Accounts

• This report checks if government departments used the budgeted funds correctly.
• It ensures the money was spent as intended and follows financial rules.
• The report identifies mistakes and suggests improvements.

Audit Reports on Public Sector Undertakings

• These reports assess how well government-owned companies manage finances.
• They look at revenue, costs, and rule compliance.
• The reports provide suggestions for better performance and transparency.

Audit Report on Finance Accounts

• This report verifies the accuracy of the government's financial statements.
• It ensures the statements reflect the actual financial situation.
• The report finds mistakes and offers recommendations.

The Comptroller and Auditor General of India leads the Indian Audit and Accounts Department (IAAD). Five Deputy Comptrollers and Auditors General of India assist him. The chairperson of the Audit Board is one of the Deputies. Four Additional Deputy Comptrollers and Auditors General of India are below the Deputy CAG.

This office’s hierarchy is as follows:

• CAG
• Deputy CAG
• Additional Deputy CAG
• Directors General
• Principal Director
• Directors/Deputy Directors

Click on this link to learn more about the Audit of Financial Statements and Audit Reports for UPSC!

• In 2015, an all-India meeting of PACs of Parliament and State/Union Territories legislatures explored the necessity for the CAG to be completely independent, becoming a member of the PAC, as it is in the UK and Australia.
• It also advocated for previous consultation with the Chairman of the PAC prior to the nomination of the CAG, as well as the necessity to change the CAG Act to reflect this.
• Though the Indian Constitution provides for a six-year tenure for the CAG, the age restriction of 65 has recently reduced the actual durations of consecutive CAGs.
• Because of the lack of continuity in leadership and the loss of competence, shorter tenure functions as a hindrance to the institution’s autonomous and appropriate functioning.
• Internationally, the CAG of the United Kingdom and the Comptroller General of the United States have terms of 10 and 15 years, respectively.
• The recognition of the IA&AD as a statutory entity with delegation of powers to lower functionaries on the pattern of the IT Act would increase audit quality and give credibility to work done by the IA&AD’s officers and personnel, resulting in greater impact and better outcomes.
• To avoid such charges, CAG should adhere to strict criteria that ensure extraneous influences do not compromise audit integrity.
• Some CAG audits have recently received criticism for overstated loss projections or ridiculous amounts.
• CAG of India has found itself in the middle of unparalleled potential and challenge in this scenario.

Also, read about the Constitutional, Statutory, and Quasi-Judicial Bodies for UPSC!

• In India, an institutional system must be put in place to ensure openness and neutrality in the CAG appointment process.
• A list of people with similar qualifications might be created. Following that, a high-level committee may investigate the personalities and suggest to the president a panel of three names, one of which will be selected.
• Auditor access to data should be granted on a priority basis within seven days, and heads of departments should be expected to justify the circumstances that caused the delay.
• Bring all PPPs, Panchayati Raj Institutions, and government-funded organizations under the jurisdiction of the CAG. The CAG Act of 1971 should be modified to reflect changes in governance.

Also, read the Making of the Constitution for UPSC here!

• CAG of India only performed the role of an Auditor General, and not of a Comptroller but in Britain, it has the power of both Comptroller as well as Auditor General.
• In India, the Comptroller and Auditor General of India audit the accounts after the expenditure is committed, i.e. ex post facto.
• In the United Kingdom, no money can be drawn from the public exchequer without the approval of the CAG.
• In India, the Comptroller and Auditor General of India is not a member of the parliament, while in Britain, CAG is a member of the House of Commons.

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• In India, the top public servant is the Comptroller and Auditor General. He is in charge of improving accountability by inspecting and describing the functioning of the government, as stated in articles 148 to 151.

  The Comptroller and Auditor General of India leads the audit and accounting department. Because of their importance in the country’s administration, IAS applicants should be familiar with government entities engaged in regulatory and audit operations.

  Aside from that, numerous questions in the UPSC Mains test were directly related to this issue.

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