Comptroller and Auditor General of India (CAG)

The Comptroller and Auditor General of India (CAG) has recently gained attention due to the tabling of 14 pending audit reports regarding the previous Aam Aadmi Party (AAP) government in Delhi. Among these is report concerning the erstwhile excise policy, which indicated a loss of ₹2,002 crore to the Delhi government. The CAG, a vital institution for fiscal accountability, has faced challenges in ensuring that its reports are presented in the legislature. This article explores the CAG’s functions, audit processes, and the implications of its findings.

Role and Powers of the CAG

The CAG is established under Articles 148 to 151 of the Constitution of India. It is tasked with auditing the accounts of the central and state governments. The CAG’s powers are further defined by the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971. The CAG also conducts audits under various statutes, including the Fiscal Responsibility and Budget Management Act, 2003, which mandates periodic reviews of compliance.

Types of Audits Conducted

The CAG conducts three primary types of audits

• Compliance Audit – Assesses adherence to laws and regulations.
• Performance Audit – Evaluates the effectiveness of government schemes and programmes.
• Financial Audit – Certifies the accuracy of government accounts and public sector undertakings.

Selection of Audit Subjects

The CAG selects audit subjects through a systematic risk assessment. Factors include project size, media coverage, and historical inspection reports. The CAG also consults guidelines from the International Organization of Supreme Audit Institutions (INTOSAI). An annual audit plan is approved and implemented across field offices, with input from an Audit Advisory Board.

Audit Process

Once a subject is selected, the CAG holds an entry conference with the audited entity. This meeting outlines the audit plan, methodology, and timelines. Following the audit, an exit conference is conducted to discuss findings. A draft report is shared with the audited department, which must respond within six weeks.

Tabling of CAG Reports

According to Article 151, CAG reports must be laid before Parliament or state legislatures, although no specific timeframe is mandated. This lack of urgency has led to delays, as seen with the previous Delhi government, which did not present multiple reports. Reports become public only after being tabled and are examined by the Public Accounts Committee (PAC).

Impact of CAG Reports

CAG reports can influence government policy and procedures. They often highlight financial losses and recommend changes. For example, a notable report on 2G spectrum licensing in 2010 had considerable political repercussions. In the 2022-23 financial year, the CAG approved 172 audit reports, a marked increase from 73 in 2018-19.

Questions for UPSC:

1. Examine the role of the Comptroller and Auditor General of India in promoting transparency and accountability in governance.
2. Discuss the significance of performance audits conducted by the CAG in the context of public sector management.
3. Critically discuss the challenges faced by the CAG in ensuring timely tabling of audit reports in legislative assemblies.
4. Analyse the impact of CAG reports on policy reforms in India with suitable examples.

Answer Hints:

1. Examine the role of the Comptroller and Auditor General of India in promoting transparency and accountability in governance.

1. The CAG audits government accounts, ensuring funds are used appropriately.
2. It conducts compliance, performance, and financial audits to evaluate government effectiveness.
3. Reports are made public only after being tabled in the legislature, enhancing accountability.
4. The CAG’s findings can lead to policy changes and reforms in governance practices.
5. It acts as a watchdog, providing oversight of public spending and government operations.

2. Discuss the significance of performance audits conducted by the CAG in the context of public sector management.

1. Performance audits assess the effectiveness and efficiency of government programs and schemes.
2. They provide vital information about resource utilization and impact on public services.
3. Recommendations from performance audits can lead to improved operational practices.
4. They help identify areas of waste or mismanagement, encouraging better governance.
5. Such audits enhance accountability by evaluating outcomes against stated objectives.

3. Critically discuss the challenges faced by the CAG in ensuring timely tabling of audit reports in legislative assemblies.

1. No specific timeframe is mandated for tabling reports, leading to delays.
2. Political resistance from governments can hinder the presentation of reports.
3. Inadequate legislative support may affect the urgency of tabling audits.
4. Complexity and volume of audits can lead to backlogs in report preparation.
5. Previous governments, like the AAP in Delhi, have delayed tabling reports, impacting transparency.

4. Analyse the impact of CAG reports on policy reforms in India with suitable examples.

1. CAG reports often highlight financial irregularities, prompting government action.
2. The 2G spectrum report led to political fallout and policy changes in telecom regulations.
3. Reports can initiate reforms in procurement processes, as seen in Telangana’s engineering contracts.
4. They influence public discourse, raising awareness about government accountability.
5. Increased number of audits (e.g., 172 in 2022-23) reflects growing importance of CAG findings in policymaking.