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The Hindu

Getting To Know The ABC of CAG

Q. Give on Account of Functioning of CAG.

Answer: For some time now, there has been a stream of criticism aimed at the Comptroller and Auditor General. There has been a series of media ‘reports’ and even editorials questioning the accuracy, motivation and propriety of the CAG’s reports. Many of the criticisms of the CAG are based on ignorance, misperception and elementary error (leaving dubious motivations aside) and it seems necessary to putmatters in the right perspective. The CAG is the institution through which the accountability of the government and other public authorities — all those who spend public funds — to Parliament and State Legislatures and through them to the people is ensured. Accountability is not the same thing as accounting, though the latter may be a part of the former; the word ‘accountability’ really means answerability. We are of course talking about financial answerability. The Executive is answerable to Parliament and to the people for all its decisions, but that answerability is enforced through the CAG where it involves finance and accounts.

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If we understand accountability to mean answerability, much of the confusion disappears. Vouching expenditures and rendering accounts are of course important: Parliament votes funds to the Executive and those funds have to be accounted for. However, answerability is more than that: it also means exercising prudence, avoiding waste, not incurring infructuous expenditure, showing results for moneys spent, and achieving those results at least cost. If the CAG is our prime accountability-ensuring institution, that institution must go into all these matters. If the CAG were ‘merely’ an auditor, why should Dr. B.R. Ambedkar, during the debates in the Constituent Assembly, describe the CAG as the most important functionary in the Constitution, more important than even the judiciary? Again, if the CAG was meant to be merely an auditor, why did the Constitution prescribe for this functionary an oath identical with that prescribed for the Chief Justice and Judges of the Supreme Court, including the words “I will uphold the Constitution and the laws” while a Minister of the Union swears or solemnly affirms only that he will act “in accordance with the Constitution”? Those who try to belittle the importance of the institution and limit its functions must really ask themselves these two crucial questions.

Should the CAG question policy decisions? The answer that immediately suggests itself would be “No”, but consider the following hypothetical cases: (i) the financial implications of a policy were not gone into at all before the decision was made; (ii) the assessment of financial implications was quite clearly wrong; (iii) the numbers were correct but the reasoning behind the decision was specious or fallacious; or (iv) the financial implications in fact turn out to be far higher than the assessment on which the decision was made. In such cases, would it not be within the CAG’s mandate, would it not in fact be the CAG’s duty as the instrument of accountability, to comment on such a policy?

Further, if the CAG is bound by his (or her) oath of office to uphold the Constitution, can he (she) refrain from commenting on something that prima facie seems unconstitutional? If the government were to formulate a scheme or policy that selectively confers benefits from public funds on an individual or group to the exclusion of others on no stated grounds, or on grounds which seem questionable, would it not be the CAG’s duty to point this out? If the above understanding is correct, then the various activities that the CAG has been undertaking, such as propriety audit, performance evaluations, and so on, are clearly well within his ambit, as different modalities of ensuring accountability. Moreover, there are two other grounds for this understanding: century-old traditions, and international consensus. Even during British rule there was an Auditor General, and traditions of the independence and objectivity of that office were fairly strong. Gradations of audit were recognised proceeding from simple vouching and expenditure audit through regularity audit, audit of authorisation, audit of the sanctions themselves, and propriety audit, to what used to be called ‘Higher Audit’. After the constitution, the CAGs have been following that tradition and adding some technical and methodological innovations.

Internationally, there are Auditors General, Comptrollers General, Audit Commissions, and other forms of what are known as Supreme Audit Institutions (SAIs) not only in democratic countries, but even in authoritarian systems. In India, the CAG is the SAI. There are professional organisations such as the International Association of Supreme Audit Institutions (INTOSAI) and the Asian counterpart (ASOSAI) in which the Indian SAI plays an important part, and is held in high esteem. The relevant point in the present context is that the Indian CAG has not stretched the audit function beyond the functions performed by other SAIs.

For instance, the National Audit Office of the U.K. has published, among others, reports on: Information and Communications Technology in Government: Landscape Review; Delivering Regulatory Reform; Assessing the Impact of Proposed New Policies; and so on. Some of the reports of the U.S. Government Accountability Office include those on: The U.S. Postal service (“Mail Trends Highlight Need to Fundamentally Change Business Model”); Aviation Safety (“Status of FAA’s Actions to Oversee the Safety of Composite Airplanes”); Electronic Waste: Strengthening the Role of the Federal Government in Encouraging Recycling and Reuse; and so
on. Having regard to those examples, it can hardly be said that the CAG of India has been guilty of over-reach.

In the CAG’s report on the 2G case, the notional loss figure of Rs. 176000 crore has been much criticised. The report in fact makes it clear that it is difficult to arrive at a firm figure of loss, calculates it in three different ways through different methods, and makes no claim that any of the figures is definitive. However, the media delight in reporting that the CAG’s figures have been questioned by various people, and a CabinetMinister immortalised himself by claiming that there was zero loss. That leads us to the relationship between the CAG and the Public Accounts Committee (PAC) and the Committee on Public Undertakings (COPU). The CAG finalises his reports after taking the government’s and PEs’ responses to his initial queries and observations and his draft reports, signs them, and submits them to the President of India, who causes them to be laid before Parliament. They are then taken up by the PAC and COPU. It is not the Reports that are under examination but the Ministries and other government offices and PEs, on the basis of those Reports. The CAG assists and advises the parliamentary committees in that examination.

Unlike the CAG of the U.K. (an officer of Parliament) or the CG of the U.S. (a part of the Legislative Branch), the Indian CAG is not an officer of Parliament, but an independent constitutional functionary. The reason for this is that the CAG is CAG for the Union as well as the States, which is a unique feature of the Indian quasi-federal system. Finally, we come to the question of publicity. The CAG’s reports have suffered from too little and not too much publicity. One of the major weaknesses of the Indian system is that very few of the CAG’s reports are widely known, and that not all of them get discussed in Parliament. Some years ago, press conferences began to be held after the Audit Reports were placed before Parliament, and that practice continues. This is not a new departure introduced by the present CAG. If the CAG is to becomemore effective as an institution for the enforcement of accountability, it is necessary that Audit Reports be more widely known and discussed. The people have a right to know their contents. If, as a result of the CWG and the 2G controversies, the CAG and his reports are now better known than before, that is a very good development. If the present CAG manages to enhance the effectiveness of this constitutional institution, the country would owe a debt of gratitude to him.

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