Question

Consider the following statements about the Audit Board and historical aspects of the CAG:

i. The Audit Board was established in 1968 based on the recommendation of the Administrative Reforms Committee.

ii. The Audit Board consists of a Chairman and two members appointed by the CAG.

iii. The first CAG of independent India was V. Narahari Rao, appointed in 1948.

iv. The CAG was relieved of maintaining Central Government accounts in 1976 due to the separation of accounts from audit.

v. The Audit Board audits all government and semi-government institutions without requiring technical expertise.

Which of the above statements are correct?

• A. Only (i, ii, and iii)
• B. Only (i, iii, and iv)
• C. Only (ii, iii, and v)
• D. Only (i, ii, and iv)

Answer 1

Answer:

B. Only (i, iii, and iv)

Audit Board and CAG

• Audit Board Establishment: The Audit Board was indeed established in 1968. This was a direct outcome of the recommendations made by the Administrative Reforms Committee (ARC), which aimed to improve the efficiency and effectiveness of government administration.

• Audit Board Composition: The Audit Board is not comprised of a Chairman and two members appointed by the CAG. The actual structure and appointment process differ. This statement is incorrect.

• First CAG of Independent India: V. Narahari Rao holds the distinction of being the first Comptroller and Auditor General (CAG) of independent India. He assumed office in 1948, playing a crucial role in establishing the foundations of India's public audit system post-independence.

• Separation of Accounts from Audit: A significant administrative reform occurred in 1976 when the responsibility of maintaining the accounts of the Central Government was transferred from the CAG to the respective ministries. This 'separation of accounts from audit' allowed the CAG to focus more intensively on audit functions, enhancing its independence and specialization.

• Audit Board's Scope: The statement that the Audit Board audits all government and semi-government institutions without requiring technical expertise is inaccurate. The Audit Board often involves specialists and experts to conduct audits in specialized sectors, ensuring a thorough and technically sound examination. Its mandate is not without the need for technical acumen.

• CAG's Constitutional Mandate: The role and powers of the CAG are enshrined in Article 148 of the Constitution of India. The CAG is an independent constitutional authority responsible for auditing all receipts and expenditures of the Union and State governments, including government-owned corporations and bodies substantially financed by the government.

• Significance of Audit: The CAG's reports are crucial for parliamentary oversight and public accountability. They highlight financial irregularities, inefficiencies, and potential corruption, forming the basis for discussions and actions by legislative bodies like Parliament and State Legislatures.