Question

Which of the following statements about the CAG’s powers and limitations is/are correct?
i. The CAG can inspect any office or department subject to his/her audit and call for any records or documents.
ii. The CAG has the authority to audit secret service expenditure without requiring a certificate from the competent authority.
iii. The CAG decides the extent and manner of the audit.
iv. The CAG certifies the net proceeds of any tax or duty, and this certificate is final.

• A. i, iii, and iv
• B. i and iii only
• C. ii and iv only
• D. i, ii, and iii

Answer 1

Answer:

A. i, iii, and iv

Comptroller and Auditor General (CAG) of India's Role:

• Powers of Inspection and Audit: The CAG has the broad power to inspect any office or department under his/her purview. This includes the authority to demand and examine any relevant records, books, or documents essential for conducting a thorough audit. This power ensures transparency and accountability in government spending.

• Decision on Audit Scope: The CAG has the discretion to determine the extent and manner of audits to be conducted. This means the CAG decides which aspects of government accounts will be audited and the specific methods or procedures to be followed, ensuring that audits are comprehensive and effective.

• Certification of Net Proceeds: A significant function of the CAG is to certify the net proceeds of any tax or duty levied by the Union or the State. This certification is considered final and binding, playing a crucial role in revenue allocation and financial management between different levels of government.

• Limitations on Secret Service Expenditure: While the CAG audits government accounts, there are specific limitations regarding secret service expenditure. The CAG cannot audit such expenditures independently without a certificate from the competent authority, which specifies the amount spent. This limitation is in place to safeguard national security and sensitive operations.

• Constitutional Mandate: The CAG is an independent constitutional authority established under Article 148 of the Constitution of India. The CAG's reports are laid before Parliament and state legislatures, providing a vital check on the executive's financial propriety.

• Focus on Financial Propriety: The CAG's audit aims to ensure that public funds are spent economically, efficiently, and effectively, in accordance with the law and the relevant rules and regulations.