CAG – The Present Day Lokpal

Sat, Oct 1, 2011

Social Issues

In a huge democratic setup like ours, where finances for Government’s performance are provided mainly by the general masses in form of taxes, a frequent inspection regarding the correct use of this money becomes a significant process. For these purposes related to all the central and state governments’ monetary transactions, an auditing team is formed headed by a chief auditor known as the Comptroller and Auditor General (CAG) of India. The CAG of India is established and recognized by the Constitution of India and is given a certain degree of independence related to the designing of rules and regulations for the provisions relating to the audit.

The CAG of India is the chief of the Supreme Audit Institution of India (also known as Indian Audit and Accounts). The CAG of India is authorized to audit all the receipts and expenditures from the state, union territory and Indian funds, all the balance sheets and accounts of any Government department, all the government owned companies, all the corporations made under the laws of  parliament in accordance with the application of respective laws, all the loans given by Government to organizations for explicit purpose and also all the Panchayati Raj Institutions. This is known as Financial Auditing. Here, the CAG has got a crucial responsibility in the performance of various money handling teams of the state administration and the parliament. These teams see him more as a companion and someone who can mentor them. The summaries produced by the Comptroller and Auditor General usually shape up the foundation for the work to be done by these teams. Apart from these summaries or reports produced by the CAG, the team can analyse other issues as well which are not present in his report. He inspects and analyses the observations which the Government provides to these teams and also helps these people to verify the accuracy of information in their own self-made reports. These reports are then given to the Government ministers with all useful comments and observations to which the Government has to respond to by course of taking some steps for it. For keen examination of these audit reports, a separate team is chosen from the parliament which is known as Public Accounts Committee. This team makes sure that the information given by the CAG regarding the accuracy of finances of the Government is correct.

Apart from the Financial Auditing, there are a couple of different types of audits that the CAG can perform. These are Regularity Audit and Performance Audit. Regularity Audit is primarily done as the basic observance and agreement process. This includes the audits similar to an inspection against transfer of finances. Here the CAG checks whether all the rules and regulations made up by the Government authorities were followed in a transactional flow.    The CAG assures himself that all the laws are being strictly followed and the net profits are exactly the same that should officially go into the Account of the Government. Performance Audit, on the other hand is more concerned with the completion of the targets which were set  by the Government bodies and by using minimum amount of finances.

The current Comptroller and Auditor General of India is Mr. Vinod Rai, who has been at the post since 2008. He has had to deal with some of the most high profile scams in Indian History. It was he who reported the now famous figure of Rs 1.76 lakh crores as the official loss to the exchequer in 2G scam. He also presented a report on the substandard preparations for the 2010 Commonwealth Games in Delhi – bringing out monetary facts about the event that involved several instances of deceptions to the people of India. The way these reports have helped in applying pressure on the authorities to search for the culprits, shows the sheer importance of the CAG. Today, when the country is facing several jolts of corruption, the role of a CAG becomes even more important mainly due to his power to scrutinize the Government’s accounts independently. With this independence comes the responsibility and pressure to perform accurately under stressful circumstances and these factors are enough to prove that he remains an essential link in keeping a close eye on the deeds of the Government.

Sandeep Sharma

MBA Batch of 2013

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