- Expenditure audits are conducted by CAG (Section 13) to ensure that funds are provided by a competent authority, authorizing the limits within which expenditure can be incurred. It includes:
- Compliance/Regularity Audit: It ensures that the expenditure incurred conforms to the relevant provisions of the statutory enactment and in accordance with the Financial Rules and Regulations framed by the competent authority.
- Audit of sanctions: Ensure that all government expenditures were approved by the appropriate authority.
- Audit against the provision of funds: It ascertains whether the expenditure was incurred for authorised purposes.
- Propriety Audit: It goes beyond legality and assesses whether the expenditure was necessary and in the interest of the public & questions unnecessary or extravagant spending even if it is legally correct.
- Efficiency-cum-Performance Audit: It ascertains that various programs are being run economically and are yielding expected results. It covers Efficiency, Economy, and Effectiveness Audit.
In India, the function of government audit is discharged by the independent statutory authority of the Comptroller and Auditor General (Art 148) through the agency of the Indian Audit and Accounts Department.
Role played by CAG:
- Different types of audit
- Expenditure Audit under Section 13 of DPC act, 1971
- Scope: Audits all expenditures from the Consolidated Fund of India, each State, and Union Territory with a legislative assembly.
- Responsibilities: Ensures legality, applicability, and conformity of expenditures to governing authorities.
- Components: Includes audits against rules and orders, sanctions, provisions, propriety, and performance audits.
- Audit of Other Funds: expenditure from contingency fund and public accounts.
- Audit of Bodies Substantially Financed: under Section 14 of the DPC Act
- Audit of Receipts: Section 16 empowers CAG to audit the receipts of the Union and State governments.
- Audit of Government Companies and Corporations under section 19
- Expenditure Audit under Section 13 of DPC act, 1971
- Ensuring Financial Accountability: CAG ensures accountability of the executive in terms of public revenue and expenditures to Parliament and state legislatures. The audit reports(A-151) are presented before Parliament or the respective legislature.
- CAG is referred to as the “Chief Guardian of Public Purse.”
- Role with Public Accounts Committee (PAC): CAG acts as a guide, friend, and philosopher of the Public Accounts Committee of Parliament.
Thus, through comprehensive audits, the CAG plays a pivotal role in upholding transparency and integrity in the management of public funds.
CAG ensures accountability of the executive in terms of public revenue and expenditures to Parliament and state legislatures.
Standards of Expenditure audit under section 13 of DPC act, 1971
- Legal and Regulatory audit
- Audit against rules and orders: Ensuring expenditure conforms to relevant provisions of statutory law, financial rules, and regulations.
- Audit of sanctions: Verifying if expenditures were sanctioned by a competent authority.
- Audit against provisions: Ensuring expenditures do not exceed the appropriations made.
- Proprietary Audit: can look into the ‘wisdom, faithfulness and economy’ of government expenditure and comment on the wastefulness of such expenditure. However, the propriety audit is discretionary.
- Performance audit : examination of the extent to which an organization, Programme or scheme operates economically, efficiently and effectively.
