1.1.22 It is essential that an Accountant General should work in close coordination with the Government concerned in order to enforce propriety and secure regularity in public expenditure. He should render all legitimate assistance to the Finance Ministry/Department in regard to interpretation of financial rules or orders concerning which there may be doubts. The Accountant General is entitled to seek the support of the Finance Ministry/Department in case of disregard to any financial rule or order or failure of any authority to maintain the prescribed accounts. He may seek their assistance where necessary to secure a satisfactory settlement of outstanding audit objections or for the production of any papers or information required for purposes of audit.
- Annexure (Referred to in Paragraph 1.1.4)
Extracts of Sections 2, 13 to 21, 23 and 24 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971
# Definitions
2. In this Act, unless the context otherwise requires,
(a) “accounts”, in relation to commercial undertakings of a Government, includes trading, manufacturing and profit and loss accounts and balance-sheets and other subsidiary accounts;
(b) “appropriation accounts” means accounts which relate to the expenditure brought to account during a financial year, to the several items specified in the law made in accordance with the provisions of the Constitution or of the Government of Union Territories Act, 1963 (20 of 1963) for the appropriation of moneys out of the Consolidated Fund of India or of a State, or of a Union Territory having a Legislative Assembly, as the case may be;
(c) “Comptroller and Auditor General” means the Comptroller and Auditor General of India appointed under article 148 of the Constitution’;
(d) “State” means a State specified in the first Schedule to the Constitution;
(e) “Union” includes a Union Territory, whether having a Legislative Assembly or not.
- General Provisions relating to Audit
13. It shall be the duty of the Comptroller and Auditor General-
(a) to audit all expenditure from the Consolidated Fund of India and of each State and of each Union Territory having a Legislative Assembly and to ascertain whether the moneys shown in the accounts as having been disbursed were legally available for and applicable to the service or purpose to which they have been applied or charged and whether the expenditure conforms to the authority which governs it;
What This Means
The Accountant General must work closely with the State Government, particularly the Finance Department, to enforce financial propriety and regularity in spending. The AG should help the Finance Ministry interpret financial rules, seek Finance Department support when rules are disregarded, and get assistance in settling outstanding audit objections or obtaining documents needed for audit.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
1AG must work in close coordination with the State Government
2AG should assist the Finance Ministry in interpreting financial rules
3AG can seek Finance Department support when financial rules are disregarded
4AG may request help in settling outstanding audit objections
5AG can seek assistance to obtain papers and information required for audit
Practical Example
When a state PWD division repeatedly ignores audit objections about unauthorized expenditure, the Accountant General escalates the matter to the State Finance Department, requesting their intervention. The Finance Department can then direct the PWD to respond to the audit objections and regularize the expenditure.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why does the AG need to coordinate with the Finance Department?▼
Because the Finance Department has administrative authority over other departments' spending. When departments ignore audit objections or violate financial rules, the AG needs the Finance Department's support to enforce compliance.
Can the AG interpret financial rules for government departments?▼
The AG should render 'legitimate assistance' to the Finance Ministry regarding interpretation of financial rules. The AG's expertise in financial rules makes this guidance valuable for departments with doubts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
(b) to audit all transactions of the Union and of the State relating to Contingency Funds and Public Accounts;
(c) to audit all trading, manufacturing, profit and loss accounts and balancesheets and other subsidiary accounts kept in any department of the Union or of a State;
and in each case to report on the expenditure transactions or accounts so audited by him.
Audit of receipts and expenditure of bodies or authorities substantially financed from Union or State Revenues.
14 (1) Where any body or authority is substantially financed by grants or loans from the Consolidated Fund of India or of any State or of any Union Territory having a Legislative Assembly, the Comptroller and Auditor General shall, subject to the provision of any law for the time being in force applicable to the body or authority, as the case may be, audit
all receipts and expenditure of that body or authority and to report of the receipts and expenditure audited by him.
Explanation – Where the grant or loan to a body or authority from the Consolidated Fund of India or of any State or of any Union Territory having a Legislative Assembly in a financial year is not less than rupees twenty-five lakhs and the amount of such grant or loan is not less than seventy five per cent of the total expenditure of that body or authority, such body or authority shall be deemed, for the purposes of this sub-section, to be substantially financed by such grants or loans, as the case may be.
(2) Notwithstanding anything contained in sub-section (1) the Comptroller and Auditor General may with the previous approval of the President or the Governor of a State or the Administrator of a Union Territory having a Legislative Assembly, as the case may be, audit all receipts and expenditure of any body or of any State or of any Union Territory having Legislative Assembly, as the case may be, in a financial year is not less than rupees one crore.
(3) Where the receipts and expenditure of any body or authority are, by virtue of the fulfillment of the conditions specified in sub-section (1) or sub-section (2), audited by the Comptroller and Auditor General in a financial year, he shall continue to audit the receipts and expenditure of that body or authority for further period of two years notwithstanding that the conditions specified in sub-section (1) or sub-section (2) are not fulfilled during any of the two subsequent years.
# Functions of Comptroller and Auditor General in the case of grants or loans given to the other authorities or bodies.
15 (1) Where any grant or loan is given for any specific purpose from the Consolidated Fund of India or of any State or of any Union Territory having a Legislative Assembly to any authority or body, not being a foreign State or international organization, the Comptroller and Auditor General shall scrutinize the procedures by which the sanctioning authority satisfies itself as to the fulfillment of the conditions subject to which such grants or loans were given and shall for this purpose have right of access, after giving reasonable previous notice, to the books and accounts of that authority or body:
Provided that the President, the Governor of a State or the Administration of a Union Territory having a Legislative Assembly, as the case may be, may, where he is of opinion that it is necessary so to do in the public interest, by order, relieve the Comptroller and Auditor General, after consultation with him, from making any such scrutiny in respect of any body or authority receiving such grant or loan.
(2) Except where he is authorized so to do by the President, the Governor of a State or the Administrator of a Union Territory having a Legislative Assembly, as the case may be, the Comptroller and Auditor General shall not have, while exercising the powers conferred on him by sub-section (1), right of access to the books and accounts of any Corporation to which any such grant or loan as is referred to in sub-section (1) is given if the law by or under which such Corporation has been established provides for the audit of the accounts of such Corporation by an agency other than the Comptroller and Auditor General:
Provided that no such authorization shall be made except after consultation with the Comptroller and Auditor General and except after giving the concerned Corporation a reasonable opportunity of making representations with regard to the proposal to give to the Comptroller and Auditor General right of access to its books and accounts.
- Audit of receipts of Union or of States
16. It shall be the duty of the Comptroller and Auditor General to audit all receipts which are payable into the Consolidated Fund of India and of each State and of each Union Territory having a Legislative Assembly and to satisfy himself that the rules and procedures in that behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue and are being duly observed and to make for this purpose such examination of the accounts as he thinks fit and report thereon.
- Audit of accounts of stores and stock
17. The Comptroller and Auditor General shall have authority to audit and report on the accounts of stores and stock kept in any office or department of the Union or of a State.
- Powers of Comptroller and Auditor General in connection with audit of accounts
18 (1) The Comptroller and Auditor General shall in connection with the performance of his duties under this Act, have authority-
(a) to inspect any office of accounts under the control of the Union or of a State, including treasuries and such offices responsible for keeping of the initial or subsidiary accounts, as submit accounts to him;
(b) to require that any accounts, books, papers and other documents which deal with or form the basis of or are otherwise relevant to the transactions to which his duties in respect of audit extend, shall be sent to such place as he may appoint for his inspection;
(c) to put such questions or make such observations as he may consider necessary, to the person in charge of the office and to call for such information as he may require for the preparation of any account or report which it is his duty to prepare.
(2) The person in charge of any office or department, the accounts of which have to be inspected and audited by the Comptroller and Auditor General, shall afford all facilities for such inspection and comply with requests for information in as complete a form as possible and with all reasonable expedition.
# Audit of Government Companies and Corporations
19 (1) The duties and powers of the Comptroller and Auditor General in relation to the audit of the accounts of Government Companies shall be performed and exercised by him in accordance with the provisions of the Companies Act, 1956 (1 of 1956).
(2) The duties and powers of the Comptroller and Auditor General in relation to the audit of the accounts of Corporations (not being Companies) established by or under law made by Parliament shall be performed and exercised by him in accordance with the provisions of the respective Legislations.
(3) The Governor of State or the Administrator of a Union Territory, having a Legislative Assembly may, where he is of opinion that it is necessary in the public interest so to do, request the Comptroller and Auditor General to audit the accounts of a Corporation established by law made by the Legislature of the State or of the Union Territory as the case may be, and where such request has been made, the Comptroller and Auditor General shall audit the accounts of such Corporation and shall have, for the purposes of such audit, right of access to the books and accounts of such Corporation.
Provided that no such request shall be made except after consultation with the Comptroller and Auditor General and except after giving reasonable opportunity to the Corporation to make representation with regard to the proposal for such audit.
Laying of reports in relation to accounts of Government Companies and Corporations
19A(1) The reports of the Comptroller and Auditor General in relation to the accounts of a Government Company or a Corporation referred to in Section 19, shall be submitted to the Government or Governments concerned.
(2) The Central Government shall cause every report received by it under subsection (1) to be laid, as soon as may be after it is received, before each House of Parliament.
(3) The State Government shall cause every report received by it under sub-section (1) to be laid, as soon as may be after it is received, before the Legislature of the State.
Explanation- For the purposes of this section “Government” or “State Government “ in relation to Union territory having a Legislative Assembly, means the Administrator of the Union Territory.
# Audit of accounts of certain authorities or bodies
20 (1) Save as otherwise provided in Section 19, where the audit of the accounts of any body or authority has not been entrusted to the Comptroller and Auditor General by or under any law made by Parliament, he shall, if requested so to do by the President or the Governor of a State or the Administrator of a Union Territory having a Legislative Assembly, as the case may be, undertake the audit of the accounts of such body or authority on such terms and conditions as may be agreed upon between him and the concerned Government and shall have, for the purposes of such audit, right of access to the books and accounts of that body or authority:
Provided that no such request shall be made except after consultation with the Comptroller and Auditor General.
(2) The Comptroller and Auditor General may propose to the President or the Governor of a State or the Administrator of Union Territory having a Legislative Assembly, as the case may be, that he may be authorized to undertake the audit of the accounts of any body or authority, the audit of the accounts of which has not been entrusted to him by law, if he is of opinion that such audit is necessary because a substantial amount has been invested in, or advanced to, such body or authority by the Central or State Government or by the Government of a Union Territory having a Legislative Assembly, and on such request being made, the President or the Governor or
the Administrator, as the case may be, may empower the Comptroller and Auditor General to undertake the audit of the accounts of such body or authority.
(3) The audit referred to in sub-section (1) or sub-section (2) shall not be entrusted to the Comptroller and Auditor General except where the President or the Governor of a State or the Administrator of a Union Territory having a Legislative Assembly, as the case may be, is satisfied that it is expedient so to do in the public interest and except after giving a reasonable opportunity to the concerned body or authority to make representations with regard to the proposal for such audit.
- Delegation of power of Comptroller and Auditor General
21 Any power exercisable by the Comptroller and Auditor General under the provisions of this Act, or any other law may be exercised by such officer of his department as may be authorized by him in this behalf by general or special order.
Provided that except during the absence of the Comptroller and Auditor General on leave or otherwise, no officer shall be authorized to submit on behalf of the Comptroller and Auditor General any report which the Comptroller and Auditor General is required by the Constitution or the Government of Union Territories Act, 1963 (20 of 1963) to submit to the President or the Governor of State or the Administrator of a Union Territory having a Legislative Assembly, as the case may be.
# Power to make regulations
23 The Comptroller and Auditor General is hereby authorized to make regulations for carrying into effect the provisions of this Act is so far as they relate to the scope and extent of audit, including laying down for the guidance of the Government Departments the general principles of Government accounting and the broad principles in regard to audit of receipts and expenditure.
- Power to dispense with detailed audit
24 The Comptroller and Auditor General is hereby authorized to dispense with, when circumstances so warrant, any part of detailed audit of any accounts or class of transactions and to apply such limited check in relation to such accounts or transactions as he may determine.
SECTION–II General Principles and Practices of Audit Chapter–1 General Principles and Practices