Context: The Supreme Court decided to examine a plea challenging the sole prerogative of the Centre, acting through the President, to appoint the Comptroller and Auditor General of India.

Background:

• The petitioner, Centre for Public Interest Litigation, referred to recent “deviations” in the CAG’s work, including reports on the “pause” in Maharashtra audits, a steady decline on audits on the Union government, the shelving of the performance audit on ‘debt sustainability’, allegations of corruption in recruitment to several vacancies in the CAG, among others.

Key points

• The Comptroller and Auditor General (CAG) of India is the supreme audit authority of the country.
• CAG acts as the guardian of public finances and ensures transparency in government spending.
• It is an independent constitutional authority, established under Article 148 of the Indian Constitution.
• Appointment & Tenure
  • Appointed by the President of India.
  • Holds office for 6 years or until the age of 65, whichever is earlier.
  • Removal process similar to that of a Supreme Court judge (cannot be removed except on grounds of proven misbehavior or incapacity, requiring a special majority in Parliament).

The CAG performs the following key functions:

• Auditing
  • Audit of Union Government: Examines the accounts of the central government.
  • Audit of State Governments: Audits the accounts of state governments.
  • Audit of Public Sector Undertakings (PSUs): Reviews the finances of government-owned companies.
  • Audit of Autonomous Bodies: Checks the accounts of bodies funded by the government.
• Types of Audits Conducted
  • Financial Audit: Ensures the accuracy of financial statements.
  • Compliance Audit: Verifies whether expenditures comply with laws and regulations.
  • Performance Audit: Assesses the efficiency and effectiveness of government programs.
  • Propriety Audit: Examines the legality and propriety of expenditures.
• Reporting – Submits audit reports to the President of India (for central government) and Governors (for state governments). These reports are then laid before Parliament and State Legislatures for discussion.

Independence of the CAG

• The CAG is an independent constitutional authority and is not subject to control by the executive or legislature.
• The salary and expenses of the CAG are charged to the Consolidated Fund of India, ensuring financial independence.
• The CAG can be removed only through a process of impeachment, similar to a Supreme Court Judge.

Source: The Hindu