Question

Consider the following statements regarding the CAG’s audit powers:

Statement I: The CAG can call for any records or documents from audited entities.

Statement II: The CAG has no authority to question persons in charge of audited offices.

Statement III: The CAG audits all stores and stock in government offices.

Which of the following is correct?

• A. Only I and III are correct.
• B. Only II and III are correct.
• C. I, II, and III are correct.
• D. Only I and II are correct.

Answer 1

Answer:

A. Only I and III are correct.

Comptroller and Auditor General (CAG) of India

Audit Powers and Functions:

• Statement I: The CAG can call for any records or documents from audited entities.
  This statement is correct. The CAG has the authority to access any relevant records, books, accounts, or documents from any person or authority who is responsible for the custody of such materials, as per the CAG's (DPC) Act, 1971.
• Statement II: The CAG has no authority to question persons in charge of audited offices.
  This statement is incorrect. The CAG has the power to conduct a 'test audit' and can also conduct 'propriety audits'. During audits, the CAG or their representatives have the authority to examine and question individuals responsible for the management and accounts of the audited offices to clarify financial transactions and procedures. This power is crucial for a thorough audit.
• Statement III: The CAG audits all stores and stock in government offices.
  This statement is correct. The CAG is mandated to audit all stores and stock belonging to the Union or State governments, including those held by government companies, corporations, and other bodies or authorities substantially financed by the government. This ensures accountability in the management of public assets.

Constitutional and Legal Basis:

• The office of the CAG is established by Article 148 of the Constitution of India.
• The CAG is an independent constitutional authority responsible for auditing all receipts and expenditures of the Government of India and the governments of the states and union territories.
• Key legislation governing the CAG's powers and duties includes the CAG's (DPC) Act, 1971.

Exam-Oriented Facts:

• The CAG submits audit reports to the President (for Union government accounts) or the Governor (for State government accounts).
• These reports are then laid before both Houses of Parliament or the State Legislature, respectively.
• The Public Accounts Committee (PAC) and the Committee on Public Undertakings (COPU) of Parliament scrutinize these reports.
• The CAG is often referred to as the 'watchdog of the public purse'.