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Role and functions of CAG - TSI Team - The Sunday Indian
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Tuesday, April 24, 2018

Role and functions of CAG


TSI TEAM | New Delhi, August 16, 2012 11:57
Tags : CAG |

Role and Functions of CAGThe Comptroller and Auditor General (CAG) of India is an authority, established by the Constitution of India.

Under Chapter V of the Indian Constitution, CAG audits all receipts and expenditure of the Government of India and the state governments, including those of bodies and authorities substantially financed by the government. The CAG is also the external auditor of government-owned companies. The reports of the CAG are taken into consideration by the Public Accounts Committees, which are special committees in the Parliament of India and the state legislatures.

The CAG of India is also the head of the Indian Audit and Accounts Department, which has more than 55,000 employees across the country.

The current CAG of India is Vinod Rai, who was appointed on 7 January 2008. He is the 11th CAG of India.

Audit Jurisdiction

The organisations subject to the audit of the Comptroller and Auditor General of India are:-
All the Union and State Government departments and offices including the Indian Railways and Posts and Telecommunications. About 1500 public commercial enterprises controlled by the Union and State governments, i.e. government companies and corporations. Around 400 non-commercial autonomous bodies and authorities owned or controlled by the Union or the States. Over 4,400 authorities and bodies substantially financed from Union or State revenues
Audit of Government Companies (Commercial Audit)

There is a special arrangement for the audit of companies where the equity participation by government is 51 percent or more. The primary auditors of these companies are Chartered Accountants, appointed by the Comptroller and Auditor General of India, who gives the directions to the auditors on the manner in which the audit should be conducted by them. The Comptroller and Auditor General of India is also empowered to comment upon the audit reports of the primary auditors.

Audit Board Setup in Commercial Audit

A unique feature of the audit conducted by the Indian Audit and Accounts Department is the constitution of Audit Boards for conducting comprehensive audit appraisals of the working of Public Sector Enterprises engaged in diverse sectors of the economy.

These Audit Boards associate with them experts in disciplines relevant to the appraisals. They discuss their findings and conclusions with the managements of the enterprises and their controlling ministries and departments of government to ascertain their view points before finalisation. The results of such comprehensive appraisals are incorporated by the Comptroller and Auditor General in his reports

Nature of Audit

While fulfilling his Constitutional obligations, the Comptroller & Auditor General examines various aspects of Government expenditure. The audit done by C&A G is broadly classified into Regularity Audit and Performance Audit.

What is Regularity Audit? It is an audit against provision of funds to ascertain whether the moneys shown as expenditure in the Accounts were authorised for the purpose for which they were spent; against rules and regulation to see that the expenditure incurred was in conformity with the laws, rules and regulations framed to regulate the procedure for expending public money and whether expenditure on  every item was done with the approval of the competent authority in the Government for expending the public money.

What is Propriety Audit? This extends beyond scrutinising the mere formality of expenditure to it wisdom and economy and to bring to light cases of improper expenditure or waste of public money.

While conducting the audit of receipts of the Central and State Governments, the Comptroller & Auditor General satisfies himself that the rules and procedures ensure that assessment, collection and allocation of revenue are done in accordance with the law and there is no leakage of revenue which legally should come to Government.

What is Performance Audit? It focuses on whether Government programmes have achieved the desired objectives at lowest cost and given the intended benefits.

In conclusion the CAG is an official mandated by the Constitution to act as a watchdog on government finances and its functioning. By auditing the accounts of bodies at various levels of government he plays an essential role in making the government more transparent and accountable to the legislature as well as civil society.

 Comptroller and Auditor General of India     
V. Narahari Rao    1948-1954   
A. K. Chanda    1954-1960 
A. K. Roy    1960-1966  
S. Ranganathan   1966-1972  
A. Bakshi    1972-1978  
Gian Prakash    1978-1984
T. N. Chaturvedi    1984-1990   
C. G. Somiah    1990-1996
V. K. Shunglu    1996-2002  
V. N. Kaul    2002-2008 
Vinod Rai    2008    present 


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Issue Dated: Feb 5, 2017