Question

Consider the following statements regarding the duties and powers of the CAG:

i. The CAG audits all expenditure from the Consolidated Fund of India and each state.

ii. The CAG has the authority to audit the accounts of private companies not financed by the government.

iii. The CAG advises the President on the form in which government accounts should be maintained.

iv. The CAG submits audit reports on public undertakings to the Public Accounts Committee directly.

v. The CAG can inspect any office subject to its audit and call for relevant records.

Which of the above statements are correct?

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

Answer 1

Answer:

A. Only (i, iii, and v)

The Comptroller and Auditor General (CAG) of India

• Constitutional Mandate: The CAG is an independent constitutional authority established under Article 148 of the Indian Constitution.

• Audit of Government Funds: The CAG audits all expenditures from the Consolidated Fund of India and of each state, as well as the Contingency Fund of India and the Contingency Fund of each State. This ensures accountability in public finance. (Statement i is correct).

• Scope of Audit: The CAG's audit jurisdiction extends to government companies, public sector undertakings, and grants or loans given by the government to private bodies or institutions. However, the CAG does not have the authority to audit private companies not financed by the government. (Statement ii is incorrect).

• Advisory Role: The CAG advises the President on the form in which the accounts of the Union and of the States should be maintained. This helps in standardization and clarity of financial reporting. (Statement iii is correct).

• Reporting Procedures: The CAG submits audit reports to the President (for Union accounts) and the Governor (for State accounts). These reports are then laid before the Parliament and the State Legislature, respectively. Audit reports on Public Undertakings are submitted to Parliament and then examined by the Public Accounts Committee (PAC). The CAG does not submit these reports directly to the PAC. (Statement iv is incorrect).

• Inspection Powers: The CAG has the power to inspect any office or organization under its audit purview and demand access to all relevant accounts, books, records, and other documents. (Statement v is correct).

• Accountability and Transparency: The CAG plays a crucial role in ensuring financial discipline, transparency, and accountability in the administration of public funds, which is vital for democratic governance.