What are CAG audit reports and what happens once the reports are published - All you need to know

The Comptroller and Auditor General (CAG) is an authority instituted by the Constitution of India /Part V - Chapter V/Sub-part 7B/Article 148. The prime responsibility of CAG is to audit the government’s receipts and expenditure including the entities that are funded by the government. CAG also has the power to audit the government owned corporations and the firms in which the union government has more than 51 percent stakes. CAG reports are submitted to the Public Accounts Committees (PACs) and Committees on Public Undertakings (COPUs), which are part of the Parliament of India and the legislatures of different states. The CAG is also the supreme head of the Indian Audit and Accounts Department. Notably the affairs of this department is administered by the officers of the Indian Audit and Accounts Service.

CAG Audit Reports

CAG reports in India can be understood under four heads as given under.

CAG Local Bodies Audit Reports

The state Accountant Generals (AGs) in every state of India prepare the CAG Local Bodies Audit reports. Following the approval by the CAG, the Local Bodies Audit reports are grouped under two types namely 'Tabled in the Legislature' and 'Issued to State Government'.

CAG State Audit Reports

The Accountants General audits the transactions done from the Consolidated Fund of the state. The CAG then submits its findings to the state legislature. Generally, the reports are presented during the budget season and present the findings of the audit of transactions done during the previous year. Similar to the case of union government, the audit is done in two streams namely Performance Audit and Regularity Audit. Nevertheless, in most cases, the findings of both these audits are presented together.

CAG Union Audit Reports

The Union Audit Reports prepared by the Comptroller and Auditor General of India show the findings of the transaction audit and performance audit in the areas of Civil Audit, Audit of Autonomous Bodies, Defence Services, Railways, Receipts of the Government and Central Commercial. The CAG Audit is done under two categories namely Performance Audit and Regularity (Compliance) Audit.

CAG audit of the government owned corporations

Yet another power of the CAG is to audit the government owned corporations and conduct the supplementary audit of the government firms in which the Union Government has not less than 51 percent equity shares.

What happens to the CAG reports

The reports of the Comptroller and Auditor-General of India pertaining to the accounts of the Union government will be first submitted to the President, who will arrange for laying them in front of both houses of the parliament.

The reports of the Comptroller and Auditor-General of India connected to the accounts of a State’s governance will be first submitted to the Governor of the State, who will arrange to lay them in front of the state legislature.

The reports of the CAG are crucially important for the Public Accounts Committees (PACs) and Committees on Public Undertakings (COPUs). These are special committees forming part of the Parliament of India and the state legislatures.