Comptroller and Auditor General

Home » Comptroller and Auditor General

Context:

K Sanjay Murthy has been appointed as the new Comptroller and Auditor General (CAG) of India, succeeding Girish Chandra Murmu.

Relevance:

GS II: Polity and Governance

Dimensions of the Article:

Established under Article 148 of the Constitution, the CAG heads the Indian Audit and Accounts Department and monitors the country’s financial system at both central and state levels.
Recognized as a fundamental pillar of Indian democracy, akin to the Supreme Court, Election Commission, and UPSC.
Functions defined by the Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971, with subsequent amendments.

Appointment: The CAG is appointed by the President of India.
Term: Serves a six-year term or until the age of 65, whichever comes first.
Oath: Sworn to uphold the Constitution and perform duties without bias.
Removal: Similar to a Supreme Court judge, removal requires a special majority in both Houses of Parliament.

Audit Scope: Audits all expenditures from the Consolidated Funds of India and states, along with government corporations and public sector undertakings.
Reporting: Audit reports are submitted to the President and then placed before Parliament for review by the Public Accounts Committee.
Financial Autonomy: CAG’s salary and expenses are charged upon the Consolidated Fund of India and are not subject to Parliamentary vote.
Post-retirement: Prohibited from holding any government position post-tenure.

Safeguarding Public Money: Ensures lawful and efficient use of public funds and checks on unnecessary expenditures.
Propriety Audits: Besides mandatory legal and regulatory audits, the CAG conducts discretionary propriety audits to evaluate the economy and efficiency of government spending.

IAEA Auditor (2022-2027): Serves as the External Auditor for the International Atomic Energy Agency.
FAO Auditor (2020-2025): Audits the Food and Agriculture Organization to ensure financial prudence in global food security efforts.

The CAG plays a crucial role in maintaining government accountability, ensuring that public funds are used efficiently and in accordance with the law, thus upholding the principles of accountability and transparency in a democracy.
The CAG enhances the capacity of Panchayati Raj Institutions and urban local bodies, offering guidance and conducting Annual Technical Inspection Reports to assess and improve local governance.
By integrating citizen feedback into its audit processes, the CAG helps ensure that government programs are implemented in ways that meet the public’s needs, fostering greater civic engagement and accountability.
The CAG’s audits help maintain a check on the executive branch, ensuring that financial decisions align with legislative directives and safeguarding the balance of power within the government.

Declining Oversight: There has been a noticeable decrease in the number of audit reports presented to Parliament, which may diminish the CAG’s role in identifying and correcting fiscal discrepancies.
Post-Facto Auditing: The CAG’s audits are primarily conducted after expenditures are made, which limits its ability to prevent financial mismanagement proactively.
Limited Economic Expertise: Critics suggest that the CAG sometimes lacks the necessary economic expertise to effectively audit complex sectors, which could impact the accuracy and relevance of its findings.
Staffing and Resource Challenges: Reductions in staffing levels over the years may affect the CAG’s ability to perform comprehensive and timely audits, potentially leading to less effective oversight.

Legislative Updates: Amending the CAG Act of 1971 to better align with contemporary governance challenges could enhance the effectiveness of audits and accountability mechanisms.
Improving Appointment Processes: Introducing a collegium system for the CAG’s appointment could ensure more impartiality and transparency in the selection process.
Adapting to New Challenges: The CAG needs to expand its auditing capabilities to include emerging issues like climate change and advanced technologies to provide thorough oversight in these critical areas.
Capacity Building: Strengthening the training and expertise of CAG personnel, particularly in specialized fields, is crucial for enhancing the quality and breadth of audits.
Feedback Mechanisms: Establishing robust mechanisms to incorporate feedback from audited entities can help ensure that the CAG’s findings are constructive and lead to tangible improvements in governance and fiscal management.

-Source: The Hindu