Issues & Reforms of Comptroller and Auditor-General of India

Issues in CAG

Appointment: Entirely hijacked by IAS officer rather than IAAS Officer and secondly there is opaqueness in appointment.
Scrutiny of Private party- Reliance in KG Basin Case has argued that CAG can’t audit Private companies.
Questioning Policy matter- SC in Pathan Mohammed Suleman Rehmat khan vs State of Gujarat & Ors, held that the Comptroller and Auditor General of India (CAG) cannot question the policy objectives of the state government. The issue is if CAG will not question policy which can result in the wastage of money, then why we have CAG.
In the recent past CAG’s reports on 2G, Coal blocks allocation, Delhi Airport PPP have made the Government very uncomfortable with the audit findings. In order to defend its position, some members of the ruling party have raised questions about CAG’s jurisdiction and observed that he has exceeded his mandate.
- Counter Arguments: The CAG has not formulated his own policy in the above reports and has only gone by policy prescriptions recommended internally at various levels within the government. It is within the mandate of CAG to comment on a policy in cases wherein-
  - The financial implications of a policy were not gone into at all before the decision was made.
  - The assessment of financial implications was quite clearly wrong.

Its report is post-facto i.e., after the expenditure is incurred and has only prospective value in improving systems and procedures. Thus, it is not Comptroller but only Auditor General.
Secret service expenditure is outside the purview of the CAG, and he cannot call for particulars of expenditure incurred by the executive agencies, but has to accept a certificate from the competent administrative authority that the expenditure has been so incurred.

Appointment: Should be done by a Selection committee comprising Prime Minister, Home Minister and Leader of Opposition.
Empowered CAG like in New Zealand: CAG in New Zealand is empowered to ask for liability of the loss from the government and another party.
It is advisable that CAG Act 1971 should be amended to include:
- Pre-Audit of Defence expenditure of more than 3000 crores.
- The State Accountant General should be given the status of judge of the High Court.
Just like the citizen’s right to get the information within a month under RTI Act 2005, auditors should be provided access to records on priority basis within seven days, failing which, heads of departments should be required to explain the circumstances that caused the delay.

An independent and empowered CAG is a prerequisite in the 21st century to achieve the goal of Dr B R Ambedkar.