The role of CAG as an anti-corruption body

The role of CAG as an anti-corruption body

When it comes to government expenditure, most people tend to overlook auditing as a tool in containing corruption. But that is not the case with the Comptroller and Auditor General of India (CAG) whose job one of the most important responsibilities of which is "preventing waste, loss and corruption in Government". The Comptroller and Auditor General (CAG) is the highest constitutional authority and statutory auditor for the Union Government. The CAG audits all receipts, expenditures, including revenues, capital, and incurring an expenditure of funds both government and non-governmental. It also audits government companies, corporations, banks, insurance companies, etc.

CAG as anti-corruption institution

Accountability: The CAG is a constitutionally designated institution, which holds the executive accountable for money spent from the public exchequer in the form of audit reports. These reports are placed before Parliament and statements are laid by the ministers concerned. The CAG has held that it is not his prerogative to inquire into the matters brought to light by audit where the facts have been disputed by the executive.

Ensure financial transparency: The CAG as an anti-corruption institution plays a major role in ensuring financial transparency. The institutions and the officials working under them are required to maintain high standards of financial propriety and are liable for misuse of any funds controlled or handled by them. The objectives of the audit are also to ascertain whether the money shown in the accounts as having been disbursed was used for the purpose to which they have been charged. Therefore, it ensures proper use of public money and helps in keeping a check on corruption in different sectors of public life.

Fiscal watch: The CAG reports on losses and gains in all government financial transactions. This is also known as the performance audit of the government departments. The objective of this audit is to determine whether these transactions either resulted in additional revenue or savings through the recovery of overpayments and curtailment of wasteful expenditure.

Effective check: Effectively, the CAG is the custodian of public money. He/she is also an institution meant to serve as a check on the state. With their duty cut out someone needs to be alert and do something about it. The Central Office of the CAG comes with an annual budget for conducting audits across the country so that there will be an effective check on all receipts which are payable into the Consolidated Fund of India.

Financial administration: The CAG plays an important role in the fiscal federalism of India by reporting to the Parliament. The scope of CAG audits includes all receipts and expenditures including those of the Government of India, government companies, government-controlled public sector undertakings, autonomous bodies; banks; development financial institutions; and so on. The CAGs' reports are tabled in the Parliament for discussions.

Expose corruption: CAG is an important institution of the Indian government. Its main role is to detect and deter any fraud/corruption in the Union Government. It is authorized to look into all financial matters of the Union Government, its organizations, and affiliated concerns. It is also authorized to examine all receipts and expenditures relating to the Union Government. CAG played an important role in the exposure of major scams such as the 2G scams and coal scams.

What are the issues facing by CAG?

Government Inaction: The CAG serves as the conscience keeper of the government and its accountability. He audits government accounts and reports to Parliament. But his audit reports often end up in the dustbins of government records or are dumped into the backyards of Parliament.

Periodicity: The period for delivery of response from CAG to the petitioners is not fixed. There is no deadline for production of documents nor any contempt proceedings for denial of documents or replies under the Rule. The time period may vary on various circumstances, reports submitted by CAG, time consumed in considering them etc.

Less independence: The CAG is the auditor of government accounts, and yet, it has no power to determine that its reports are circulated in the public domain. It cannot take up complaints from the public or have due control over the state's accounting manuals.

Post-expenditure Audit: The CAG audits the government's accounts after the expenditure has taken place. The CAG does not audit accounts before any expenditure takes place. At present, auditing of the government's accounts is limited to examining whether an item in a bill approved by the Parliament is properly authorized under the existing law and whether it complies with conditions laid down in the Finance Bill. The CAG reports are sent to the President for placing it before Parliament.

Proprietary Audits: CAG is faced with the issues of compulsory audit and proprietary audits. They cannot escape these two issues, as it is absolutely mandatory to receive both of them. These two issues are very important to CAG as well as its customers and shareholders, because, these are the only ways for maintaining accountability and transparency for any organization or individual.