JOIN USCAG always under Parliament control
There has been considerable debate on the role of the Comptroller and Auditor General (CAG). Political spokespersons have been quick to criticise the recent reports of the CAG on the Commonwealth Games and the 2G spectrum case as an act of overreach.
The Comptroller and Auditor General of India is an officer created by the Constitution to see that the entire executive acts in regard to all financial matters in accordance with the Constitution and the laws and rules framed there under. He is appointed for a fixed term of six years (or until 65 years of age, whichever is earlier) by the President of India, and can be removed only by a two thirds majority of the Parliament. He is responsible for the Union and State accounts, and in his audit role, he is empowered to requisition all records of the auditee departments/organisations, access the computer systems of the auditees and to download and use electronic data either in site or off site. There are three types of audit performed by him - financial audit, compliance audit and performance audit. In this last role, he is empowered to look at all the processes of decision making, and to comment on their impact on Governmental finances.
In short, he acts as the watchdog of the Constitution to protect public funds from misuse.
The CAG selects specific departments and projects for audit every year, and the report of the CAG is a very careful analysis of the entire executive process as well as financial transactions leading to that subject. The executive is given ample time to respond to CAG comments before the report is finalised. Once the CAG report is submitted to Parliament, it gets referred to the Public Accounts Committee, a body chaired by a representative from the main opposition party and consisting of 22 members of both Houses, consisting of all parties, in proportion to their numbers in Parliament.
An important function of the Committee is to ascertain that money granted by Parliament has been spent by Government “within the scope of the demand.” That is, they fit in with the budgetary ambit of the programmes for which they have been intended. The functions of the Committee extend “beyond the formality of expenditure to its wisdom, faithfulness and economy”. The Committee thus examines cases involving losses, nugatory expenditure and financial irregularities. When any case of proved negligence resulting in loss or extravagance is brought to the notice of the Committee, it calls upon the Ministry/Department concerned to explain what action, disciplinary or otherwise, it had taken to prevent a recurrence. Another important function of the Committee is the discussion on points of financial discipline and principle. The final step is the action taken by Parliament. The Parliament is expected to deliberate on the PAC reports, and place an action taken report within six months of the findings of the PAC.
The above procedure will clearly indicate that there are three distinct steps envisaged by the Constitution - the report of the CAG, the findings of the PAC and the Action Taken Report by the Parliament. It can also be seen that the supremacy of Parliament is being upheld at each step of the process. The type of action to be taken, on the basis of the findings, is to be decided by Parliament.
In particular, the CAG has no authority or even mandate to recommend any particular course of action, whether criminal or otherwise. It follows that, as the CAG report is a report to Parliament, criminal courts cannot take it either as evidence or even as a FIR. The responsibility to take corrective action, whether criminal or administrative, rests with the executive, on the directions of Parliament and the PAC.
PPP audit must
There is thus no question of the CAG overstepping his limits as the controls are always with the Parliament. In the past, whenever the ruling party had an overwhelming majority in the Parliament, action taken on the CAG and PAC reports was poor, and invariably in favour of the executive and the Government. The most famous is the Bofors report, which, but for the media, would have got a quiet burial. The reaction of the UPA is thus conditioned by the past: ‘what is so great about a CAG report’, without perhaps realising that the media and the public are far more educated and aware than they were twenty years ago. There is thus a demand for greater accountability.
Even in the case of PPPs, it is important to note that the ‘public’ as such is not a part of these partnerships; at best, it is some corporates that have access to these public resources that partner with Government departments. It is even more necessary that these transactions, which involve public funds as well as allocation of resources, including natural resources that belong to the nation, are properly utilised.
(The writer is former union finance secretary and senior research fellow, NUS, Singapore.)
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