Significance of CAG in today’s Scenario

Context

The former Jammu and Kashmir Lt. Governor Girish Chandra Murmu was sworn in as the Comptroller and Auditor General at Rashtrapati Bhavan.

Article 148 of the Constitution provides for a CAG with the legal status of a Supreme Court judge. The CAG is sworn in under Article 148 (3) to uphold the integrity of the nation. He is ineligible, by Article 148(4), for further office under the Government (i.e. rank of a secretary and below) after retiring as CAG. In order to preserve his independence, the CAG’s expenses are charged (without vote) to the Consolidated Fund of India. He can be removed from office only under Article 124(4) (i.e. on the like manner and like grounds as that of a High Court / Supreme Court judge).

Conditions of Service

The CAG’s terms and conditions of service have been determined by the Parliament in terms of Article 149 of the Constitution. The legislation is called the CAG’s (Duties Powers and Conditions of Service) Act, 1971 (DPC Act). Section 16 of the DPC Act states that it shall be the duty of the CAG to audit all receipts which are payable into the Consolidated Fund of India.

Working & Limitations of CAG

• Unlike the Supreme Court, the CAG’s powers are severely circumscribed by Sections 14, 15, 19(3) and 20(1) of the DPC Act. It curtails his overarching power over authorities that are substantially funded by governments (i.e. 51 per cent or more of their annual expenditure).
• Without prior government sanction, the CAG is precluded by rule/ law from auditing all other entities, such as PPP partners, private contractors, regulators, NGOs etc. These agencies receive large government funding or their functioning involves the exploitation of both national and natural resources.
• All that the CAG can fall back upon is Section 18 of the DPC Act that neither provides any deadline for the production of documents and replies nor any contempt proceedings for their denial.

A Role in Curbing Corruption

• The first thing to do is to establish a mechanism for early identification of matters which need prompt further investigation. There should be a unit for this purpose in each State Accountant General’s Office (and the important Principal Audit Offices at the Central level): perhaps a small Special Cell consisting of handpicked experienced persons who could review the results of audit on a monthly basis and pick out those cases which seem to warrant further investigation by the appropriate agencies.

• The role of the Audit Department does not necessarily end with reporting. Its expert assistance may continue to be needed in the course of the investigations, whether by the CVC or the CBI or any other agency. If the evils of corruption, fraud or other grave irregularities are to be effectively dealt with, close collaboration among the various examining and investigative agencies would be necessary.
• Apart from reporting and ‘networking’, the widest possible dissemination of the results of audit is essential for the enforcement of accountability. The present arrangements in this regard leave much to be desired. The CAG reports only to the Government, and it is the Government which lays the reports before Parliament (or the State Legislature); and it is only at that stage that the reports become public. Delays take place at every stage. By the time the reports are submitted, the events and transactions to which they relate would be at least a year old; further delays take place in the processes of consideration by the Parliamentary Committee concerned. In the first place, the audit reports themselves need to be expedited. There’s been considerable improvement in this regard over the years, but there is scope for further improvement.
• These Special Audit reports need not necessarily be ‘thematic’; there could also be regular monthly or quarterly audit reports embodying the results of the audit of particular expenditures or receipts or sanctions or contracts or other decisions having financial implications, as distinguished from the audit of accounts. These monthly or quarterly special audit reports will of course be made to the President / Governor in the same way as the conventional Annual Audit Reports.
• That still leaves the question of dissemination. Should the monthly letters/ reports or quarterly audit reports, etc., suggested above, be forthwith released to the press? There is much to be said about this. Everything should as far as possible be in the public domain. ‘Transparency’ is the best safeguard against corruption, fraud and any other form of wrongdoing. It is understood that in the USA all GAO reports, unless classified for national security reasons, are available to the press and the public immediately upon issue or within a few weeks. It would be desirable to move towards that position.

Conclusion

The CAG has already to some extent achieved what he set out to do, especially when it comes to redefining the role of the office and the public perception of auditors. After all, the government is now asking the CAG to apply its litmus test to national-level programmes with significant outlays. Despite the severest limitations, the CAG still creditably survives in the defence of accountability, a knight in shining armour amidst the overwhelming rot. The office is a unique combination of knowledge, integrity, commitment and fearlessness. Indeed, the Comptroller and Auditor-General is India’s second remaining pillar of democracy.

Connecting the Article

Question for Prelims

Removal of Comptroller and Auditor General of India (CAG) can be done by the procedure of

(a) Presidential Order
(b) Same as to the High Court Judge.
(c) Same as to the Attorney General
(d) None of the above

Question for Mains

Discuss the role of Comptroller and Auditor General of India in curbing the menace of corruption.