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After reading this article you will learn about:- 1. Appointment of Comptroller and Auditor-General 2. Position of Comptroller and Auditor-General 3. Functions 4. Role.
Appointment of Comptroller and Auditor General of India:
The C & A.G. is an independent constitutional authority. The provisions regarding his appointment and conditions of service are laid down in Article 148 of the Constitution. The C & A.G. is appointed by the President of India for a period of six years or up to the age of 65 years whichever is earlier. He can be removed from office in like manner and on like grounds as in the case of a judge of the Supreme Court.
His salary is a part of consolidated fund of India not votable by the Parliament. Professor M.V. Pylee observes, “The framers of the Constitution, realizing the importance of an independent agency for audit under parliamentary democracy, made the Comptroller and Auditor-General fully independent so that he could discharge his functions efficiently and fearlessly”.
This has been done through the following provisions:
(i) The C & A.G. is to be appointed by the President of India just as a judge of the Supreme Court is appointed.
(ii) He cannot be removed from his office except on grounds of proved misbehaviour or incapacity, on an address passed by each of the two Houses of Parliament by two-third majority of those present and voting and a majority of the total membership of each House. This is quite a difficult procedure.
(iii) His salary and conditions of service cannot be changed to his disadvantage during his tenure.
(iv) After retirement or resignation he is not eligible for any office of profit under the Government of India or State Government.
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(v) His salary and office expenses are charged upon the Consolidated Fund of India.
Position of Comptroller and Auditor-General:
The Constitution has installed the Comptroller and Auditor-General as a high independent statutory authority. He is the dignitary who sees on behalf of the legislature that the expenses voted by them are not exceeded or varied and that the money expended was legally available for and applicable to the purpose or purposes to which it has been applied.
Nothing can fetter his discretion or judgment in any manner as to matters which he may bring to the notice of the Legislatures in the discharge of his duties. His oath of office under the Constitution requires him to uphold the Constitution and the laws and to discharge his duties without fear or favour, affection or ill-will.
For the purpose of securing the highest standards of financial integrity of the administration and watching the interest of the tax payer and also for purposes of Legislative control over the entire executive Government and its officers, the Constitution safeguards the independence and freedom of the Comptroller and Auditor-General in a variety of ways.
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Article 148 of the Constitution provides that the Comptroller and Auditor-General shall be appointed by the President under his hand and seal and shall only be removed from office in like manner and on the like ground as a Judge of the Supreme Court. He has thus been provided with permanence and security of tenure during good behaviour.
It also provides that after retirement, he would not be eligible for any other office either under the Government of India or the Government of any State and that the administrative expenses of his office, including all salaries, allowances and pensions payable to or in respect of persons serving in that office, shall be charged upon the Consolidated Fund of India.
Thus all efforts have been made to make his office free from every kind of extraneous influence and pressure.
The Comptroller and Auditor-General is the administrative head of the Indian Audit and Accounts Department. The Constitution states that “The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and until provision in that behalf so made, shall perform such duties and exercise such power in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor-General of India immediately before the commencement of this Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively”.
His powers, administrative as well as financial are detailed in the compilation known as the “Comptroller and Auditor-General’s Manual of Standing Orders (Administrative)”.
Later on, through Comptroller and Auditor-General (duties, powers and conditions of service) Act 1971, such powers of ‘C and AG’ were defined. On March 1976, President of India issued an ordinance relieving him of the responsibility of compiling the accounts of the Union and the States.
The ordinance was replaced by Comptroller and Auditor-General Act, 1976. The Act separated Audit from Accounts both at the Centre and in the States.
Functions of Comptroller and Auditor-General:
A. General Functions:
The C & AG is the administrative head of the Audit and Accounts Department.
His statutory duties include audit of:
(i) Receipts and expenditure of the Union and the State Governments accounted for in the respective Consolidated Fund.
(ii) Transactions relating to the Contingency Funds and the Public Accounts.
(iii) Trading and manufacture, profit and loss accounts and balance sheets and other subsidiary accounts kept in any Government Department.
(iv) Accounts of stores and stock, kept in Government organisations, Government companies and Government corporations when statutes provide for such audit.
(v) Authorities and bodies substantially financed from the Consolidated Funds of India and the State.
(vi) Accounts of bodies and authorities receiving loans and grants from the Government for specific purposes.
Besides the above functions he is authorized to lay down the general principles of Government accounting and broad principles applicable to audit of receipts and expenditure He is responsible to compile the accounts for the State Governments.
He also brings out Audit Reports relating to Union Government and State Governments. These Reports are submitted to the President and Governors for being laid before the Parliament or State Legislatures.
In the words of Ashok Chanda, “Audit by the C & AG is not restricted by any limitations. He is free to bring to the notice of Parliament the impropriety of any executive action, even when its legality is not in question. Nor is his continuance in office dependent in the will or convenience of the administration. The special provisions incorporated in the Constitution do not merely underline his position as a servant of the people, they also endow him with appropriate authority in that conception to review the financial administration of the country as a whole”.
An important responsibility of the Comptroller and Auditor-General is to uphold the constitution and the laws in the field of financial administration. He can disallow any expenditure which violates the constitution or infringes the laws.
It is also his responsibility to scrutinize the sanctions accorded by the competent authorities, so as to satisfy himself that these are proper and fulfil the purpose for which the sanctions were accorded or grants obtained. His role is to maintain the dignity, independence, detachment of outlook and fearlessness necessary for a impartial and dispassionate assessment of the actions of the executive in the financial field.
Thus his functions and authority are wider and more comprehensive than those exercised by professional auditors.
B. Accounting Functions:
(i) Maintenance of Accounts:
The duties and powers of the Comptroller and Auditor- General in relation to accounts of the Union and State Governments are laid down in Article 150 of the Constitution, in paragraphs 11, 12, and 15 to 17 of the Audit and Accounts Order, 1936, as adapted, and in the Initial and Subsidiary Accounts Rules issued there-under.
Article 150 of the Constitution empowers the Comptroller and Auditor-General with the approval of the President to prescribe the form in which the accounts of the Union and the States are to be kept. It has been held that the power to prescribe the form includes the power to prescribe classification and to give any directions with regard to the methods or principles in accordance with which any accounts are to be kept.
This provision is designed to secure the maximum degree of uniformity in accounting amidst the immense volume and variety of financial transactions of different Governments of India. The Comptroller and Auditor-General also derives the power to prescribe the form of the initial and subsidiary accounts directed from Article 150 of the Constitution.
Sub-paragraph (1) of paragraph 11 of the Audit and Accounts Order 1936 as adapted makes the Comptroller and Auditor-General statutorily responsible for the keeping of the accounts of the Union and of each State, other than the accounts relating to the Defence and Railways and accounts relating to transactions in the United Kingdom.
The Initial and Subsidiary Accounts Rules which relieve the Comptroller and Auditor-General of the responsibility for keeping initial accounts kept in treasuries and departmental office including accounts of stores and stock, trading, manufacturing and profit and loss accounts that may be required to be kept in any particular office or department, but this does not impair his authority, also specifically empowers him to prescribe the form in which accounts are to be rendered in his office and the forms in which initial records on which such accounts are based are to be kept.
The Comptroller and Auditor-General has thus two alternative methods by which he can prescribe the form of initial and subsidiary accounts and of the accounts rendered to his offices, that is, either under Article 154 of the Constitution with the approval of the President or under the Initial and Subsidiary Accounts Rules or his sole authority.
(ii) Preparing Each Year’s Account:
The Comptroller and Auditor-General has also the duty of preparing each year’s accounts showing the annual receipts and disbursements for the Federation and the states and to submit the same to the respective governments. These accounts are designated the Finance accounts. Besides the accounts, the Comptroller and Auditor-General has also to submit annually to each Government in respect of accounts kept by him.
Appropriation Accounts, that is, accounts relating to expenditure brought into account during a financial year to the several items specified in the Schedule to Appropriation Acts passed in accordance with the provision of Articles 114 and 204 of the Constitution. The form of these accounts is determined by the Comptroller and Auditor General in consultation with the Government concerned.
(iii) Submitting Annual Financial Statement to the President:
Under paragraph 12 of the Audit and Accounts Order, 1936, as adapted, the Comptroller and Auditor-General has to prepare annually in such form as he, with the concurrence of the President, may determine and to submit to the President a General Financial Statement incorporating a summary of the accounts of the Union and of all the States for the preceding financial year and particulars of their balances and outstanding liabilities and containing such other information regarding their financial position as the President may direct to be included in the statement.
This General Statement is known as the combined Finance and Revenue Accounts of the Central and State Governments of India.
(iv) Miscellaneous:
Under the provisions of paragraph 15 of the Audit and Accounts Order, 1936, as adapted, it is the duty of the Comptroller and Auditor-General (so far as the accounts for the compilation of which he is responsible enable him so to do), to give to the Union Government and to the Government of every State such information as they may from time to time require and such assistance in the preparation of their annual financial statements as they may reasonably ask for.
Paragraph 17 of the Order empowers the Comptroller and Auditor-General to inspect any office of accounts which is under the control of the Central Government or of a State, including treasuries and such offices responsible for the keeping of initial or subsidiary accounts as submit accounts to him.
Such a provision is necessary in order to ensure the correctness and accuracy of the initial and subsidiary accounts kept in treasuries and departmental offices.
C. Auditing Functions:
Paragraph 13 of the Audit and Accounts Order, 1936, as adapted, contains the fundamental provisions relating to audit, and runs as follows:
(i) It shall be the Duty of the Auditor-General:
(a) To audit all expenditure from the revenues of the Union and of the States and to ascertain whether moneys shown in the accounts as having been disbursed were legally available and applicable to the service or purpose to which they have been applied or charged and whether the expenditure conforms to the authority which governs it;
(b) To audit all transactions of the Union and of the States relating to debts, deposits, sinking funds, advances, suspense accounts and remittance business;
(c) To audit all trading, manufacturing and profit and loss accounts and balance sheets kept by order of the President or of the Governor of a State in any department of the Union or of the States; and in each case to report on the expenditure, transactions or accounts so audited by him.
(ii) The Auditor-General may with the Approval of, and shall, if so required by, the President or the Governor of any State Audit and Report on:
(a) The receipt of any department of the Union or as the case may be, of the State;
(b) The accounts of stores and stock kept in any office of department of the Union or, as the case may be, of the State.
The President or the Governor of a State may after consultation with the Auditor-General make regulations with respect to the conduct of audits. The Comptroller and Auditor-General has to prepare an annual report for each of the Governments whose accounts are audited.
The audit report contains the comments of Audit authority on the correctness or otherwise of the expenditure and other financial transactions.
The report particularly points out the more important financial irregularities like cases of budgetary grants being exceeded, failure to obtain the necessary sanction for expenditure, non-compliance with rules and regulations, cases of improper and wasteful expenditure and of misappropriation and embezzlement.
He submits this report in the case of the Centre to the President and in case of States to the Governor who are required by the Constitution to cause them to be laid before their respective legislatures. The legislatures refer the report to their Public Accounts Committee for examination and report.
One point more need to be mentioned here. Because of the fact that Parliament has not been able to pass legislation defining the powers and duties of the Comptroller and Auditor- General, the word ‘Comptroller’ has continued to stand just an appendage to his title.
His counterpart in Great Britain exercises what is known as Exchequer control’ in the capacity of an officer of the House of Commons. It is the responsibility of the Comptroller and Auditor- General in Great Britain to ensure that the total issues from the Exchequer do not exceed the amounts prescribed by the Parliament.
The object behind making the Auditor-General as ‘Comptroller’ was that he, too, should exercise the same type of control as his counterpart in Great Britain in regard to the control of expenditure.
As it is very important to fore-lock expenditure to avoid excess of it at the hands of executive agencies, legislation to define the powers and duties of the C. & A. G. so as to enable him to exercise ‘exchequer control’ is urgently called for.
Role of Comptroller and Auditor-General:
The Comptroller and Auditor-General plays a very important role and acts as an ‘extended arm’ of the Parliament in controlling public expenditure. He reports on the faithfulness, wisdom and economy of expenditure. His report is most impartial and based on factual data. This is so because he is free from any kind of pressures.
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In the words of Sitaramayya “The C. & A.G. today has been installed as a Supreme master who has his own judgement to look to and who has no frowns or favours to be guided by from outside”. The role of the Comptroller and Auditor-General has been described in glowing terms by Durell who says, “the C. & A.G. is the agent of the Parliament. He is Parliament. Parliament only works through him”.
This is certainly a flattering view of his role. T.G. Bowles calls him the “acting hand of the Committee” of Public Accounts and Osber Peake as the “guide, philosopher and friend”. At the sittings of the Public Accounts Committee, he is invariably present to advise the Committee and to help it in extracting the right type of replies from the officials who are called to defend audit objections.
However, it will not be out of place to point out that in U.K., the Auditor-General is also the Comptroller General of receipts and issues.
Requisitions for withdrawals from the consolidated funds have to be countersigned by the Controller in token of his acceptance of the withdrawals as being in accordance with the vote of the House before they can be honoured. In this capacity he controls the appropriation.
An Indian scholar is correctly of the view “…this function of the Comptroller General has not been devolved on Auditor-General of India in spite of the designation of Comptroller and Auditor-General of India.”