The Comptroller Auditor-General s (Duties, Powers and Conditions of Service) Act, 1971
The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971
1. Introduction
The Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971 (CAG Act, 1971) is a central legislation that lays down the duties, powers, and service conditions of the Comptroller and Auditor-General (CAG) of India.
The CAG is a constitutional authority under Article 148 of the Indian Constitution.
The office is responsible for auditing the accounts of the Union and State governments and public sector organizations.
While the Constitution defines the CAG’s independence and role broadly, this Act provides the statutory framework detailing how the CAG functions.
2. Objectives of the Act
To define and codify the duties and powers of the CAG.
To regulate the terms and conditions of service of the CAG.
To ensure the autonomy and effectiveness of the office in auditing government accounts.
To provide clarity on audit procedures and reporting mechanisms.
3. Key Provisions of the Act
🔹 Duties and Powers of the CAG
The CAG has the power to audit all receipts and expenditures of the Union and State governments.
Audits include government departments, bodies substantially financed by the government, and authorities or corporations owned or controlled by the government.
The CAG can inspect accounts and records, summon documents, and require explanations.
The Act empowers the CAG to determine the manner of audit, including frequency, scope, and methodology.
The CAG has the authority to issue directions to government entities to comply with accounting standards and procedures.
🔹 Conditions of Service
The Act regulates the term of office, remuneration, leave, pension, and other service conditions of the CAG.
The service conditions are meant to ensure the independence of the office by protecting the CAG from arbitrary removal or influence.
The Act also provides for deputation of officers to assist the CAG.
🔹 Reporting
The CAG submits audit reports to the President or the Governor as the case may be.
These reports are laid before the Parliament or the State Legislature.
The reports often highlight financial irregularities, inefficiencies, and instances of corruption.
4. Constitutional Context
Article 148 of the Indian Constitution provides for the appointment and powers of the CAG.
Articles 149-151 deal with audit reports and their laying before Parliament and legislatures.
The CAG Act, 1971, supplements these constitutional provisions by providing the detailed operational framework.
5. Importance of the Act
Provides statutory backing to the CAG’s powers.
Ensures the CAG’s independence from the executive branch.
Enhances accountability and transparency in public finances.
Strengthens financial control mechanisms in the governance system.
6. Relevant Case Law
a. Union of India v. Association for Democratic Reforms (2002) 5 SCC 294
Issue: The independence and powers of constitutional authorities including the CAG.
Held: The Supreme Court emphasized the importance of the independence of constitutional bodies such as the CAG.
The Court reiterated that the CAG plays a vital role in maintaining checks and balances on the executive through auditing.
Significance: The ruling reinforced the need to protect the CAG’s autonomy as mandated by the Act and Constitution.
b. Prashant Bhushan v. Union of India (2011)
Issue: Access to CAG reports and public accountability.
The Supreme Court held that CAG reports should be made available to the public unless they contain sensitive information.
Significance: This case underscored the role of the CAG in promoting transparency and the public's right to information, linking back to the duties outlined in the Act.
c. S.R. Bommai v. Union of India (1994) 3 SCC 1
While primarily about federalism, this case recognized the importance of constitutional authorities like the CAG in checking misuse of power by governments.
The CAG's reports often form part of such federal oversight.
7. Practical Impact
The Act has enabled the CAG to conduct performance audits, compliance audits, and financial audits of government spending.
CAG reports have exposed major scams and irregularities (e.g., the 2G Spectrum Scam, Coal Allocation Scam).
The independence ensured by the Act makes the CAG a key pillar of democracy by holding governments accountable.
8. Conclusion
The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971 is crucial for ensuring that the CAG can function as an independent watchdog over the finances of the Union and State governments. It codifies the powers and duties that enable the CAG to audit government accounts effectively and maintain transparency and accountability in public administration.
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