• Article 148 – Provides for an independent office of CAG
• CAG is head of the Indian Audit and Accounts Department
• CAG is “guardian of Public Purse”
• Duty of the CAG is to uphold the constitution of India and laws of Parliament in the field of Finance Administration.
• CAG acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament.
• B.R. Ambedkar said that the CAG shall be the most important Officer under the Constitution of India.
• CAG is one of the bulwarks of the democratic system of government in India – the others being the Supreme Court, the Election Commission and the Union Public Service Commission – Dr. B. R. Ambedkar

APPOINTMENT AND TERMS

• CAG appointed by the PRESIDENT OF INDIA under his warrant and seal.
• Holds office for a period of 6 years or 65 years, whichever is earlier.
• Resigns by giving the resignation letter to the President.
• Removal on similar grounds as the Judge of Supreme Court — he can be removed by the President on the basis of a resolution passed to that effect by both the Houses of Parliament with special majority, either on the ground of proved misbehaviour or incapacity.
• Subscribes before the president an oath or affirmation –
  • to bear true faith and allegiance to the Constitution of India;
  • to uphold the sovereignty and integrity of India;
  • to duly and faithfully and to the best of his ability, knowledge and judgement perform the duties of his office without fear or favour, affection or ill-will; and
  • to uphold the Constitution and the laws. 

INDEPENDENCE

• Security of tenure – Do not hold office till the pleasure of the President though appointed by him.
• Not eligible for further office
• Salary and other conditions determined by the Parliament. Salary equal to judge of SC
• Salary or rights cannot be altered to his disadvantage
• Conditions of service of persons in Indian Audit and Account service prescribed by the President after consultation with CAG
• Administrative expenses charged upon the Consolidated Fund of India. 

DUTIES AND POWER

• Article 149 discusses the duties and powers of CAG.
• The duties are prescribed by the law made by Parliament.
• CAG Act 1971 was amended in 1976 to separate accounts from audit in the Central Government.
• Audits accounts of –

• Consolidated fund of India
• Consolidated fund of each state
• Consolidated fund of each Union Territory

• Audits expenditure of –
• Contingency fund of each state
• Public Account of each state
• Audits all the subsidiary accounts of state and central governments
• Audits receipts and expenditure of state and central government
• Audits receipts and expenditure of –
• Bodies financed by Central and State revenues
• Government companies
• Other corporation and bodies required by laws
• Advises the president to prescription of the form in which accounts of the center and state shall be kept
• Submits audits and reports to the President who shall place them before both houses of parliament.
• Submits audits and reports to state governor
• Ascertains and certifies the net proceeds of any tax or duty.
• He compiles and maintains the accounts of state government
• Submits audit reports –
• Audit report on appropriation
• Audit report on finance
• Audit report on public undertakings 

ROLE OF CAG

• Accountability of the executive in the sphere of financial administration.
• CAG is an agent of Parliament, conducts audits on behalf of Parliament and is responsible only to the Parliament.
• The CAG has more freedom with regard to audit of expenditure than with regard to audit of receipts, stores and stock.
• The CAG has to ascertain the legality of disbursed money.
• Does Proprietary audit (Proprietary audit is discretionary) – wisdom, faithfulness and economy of government expenditure
• The secret service expenditure is a limitation on the auditing role of the CAG.
• CAG has no control over the issue of money from consolidated funds of India.