9.3. Role played by CAG

The role of CAG is to uphold the Constitution of India and the laws of Parliament in the field of financial administration. The accountability of the Executive (council of ministers) to the Parliament in the sphere of financial administration is secured through audit reports of CAG. CAG is an agent of Parliament and responsible only to it.

In his audit, the CAG has to ascertain that money was legally available and approved for spending by requisite authority and had been spent on the activities for which it was sanctioned. Such a type of audit is called legal and regulatory audit. In addition to legal and regulatory audit, the CAG also conducts performance audit in which he evaluates the value for money of the output and outcome. He can look into wisdom faithfulness and economy of government expenditure and comment on wastefulness and extravagance of such expenditure.

The name of Comptroller and Auditor General is a misnomer as in practice CAG is fulfilling only the role of an Auditor General and not of a Comptroller. In other words, CAG has no control over the issue of money from the Consolidated Fund and his role is only at audit stage. While in Britain, where CAG has powers of both Comptroller as well as Auditor General, executive can draw money from public exchequer only after approval of the CAG.

The CAG has played an important role in ensuring financial accountability of executive to the Parliament. Recent report of CAG on 2Gspectrum sale and allocation of coal blocks has played an important role by highlighting systemic weaknesses and such reports had played a major role to make governments function with more transparency and accountability. Although the reports are not binding upon the Executive, but they offer a mechanism to hold the Executive responsible for any waste of public money.