There appears to be a serious flaw in the appointment of CAG. India must emulate best international practices and make it more independent
The Constitution of India and the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971, made thereunder, ensures independence of the Comptroller and Auditor General of India (CAG) by providing that he shall only be removed from office in like manner and on like grounds as Supreme Court Judge, his salary or pension or age of retirement shall not be varied to his disadvantage after his appointment, he shall be ineligible for further office under the Central or State Governments after his retirement, and that the expenses incurred on his office shall be charged on the consolidated fund of India. Further, the CAG is appointed for a term of six years, subject to a maximum of 65 years of age.
However, no criterion or procedure was prescribed either in the Constitution or the Act thereunder for his appointment, which has given the sole power to the executive to appoint a person of their choice as the CAG. There appears to be a serious flaw in the system and this goes against the international best practices prevalent across the world.
International practice, as regards to the appointment of the CAG: In the UK, the CAG is appointed by Her Majesty on the recommendations of the Prime Minister with the concurrence of the Chairperson of the Public Accounts Committee (PAC), as per the National Audit Act 1983/2011, who is generally a senior member from the opposition party.
In the US, the CAG is appointed by the President, with advice and consent of the Senate. When a vacancy occurs in the office of the CAG, the Congress establishes a commission to recommend individuals to the President. The commission consists of the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the majority and minority leaders of the House of Representatives and the Senate, the Chairman and Ranking Member of the Senate Committee on Homeland Security and Governmental Affairs and the Chairman and Ranking Member of the House Committee on Oversight and Government Reform. The commission must recommend at least three individuals to the President, and the President may request that the commission recommend additional individuals. The President then selects an individual from those recommended to nominate as the new CAG. The President's nomination must be confirmed by the Senate.
The Auditor-General for Australia is an independent officer of the Parliament, appointed by the Governor-General on the recommendation of the Joint Committee of Public Accounts and Audit and the Prime Minister. In South Africa, the Auditor-General is appointed by the President on the recommendation of the National Assembly with approval of at least 60 per cent of the members of the Assembly.
Right to access records/documents: The CAG has the authority to inspect any Government office, to call for any accounts, books, papers and other documents at a place of his choosing, and also to put such questions or make such observations as he may consider necessary. However, in practice, the supply of records/files/documents is often denied, usually inordinately delayed and more often than not, crucial documents are supplied to the auditors at the fag end of the audit programme with the sole objective of obstructing meaningful audit of those crucial documents/records. Under the Right to Information Act, 2005, a citizen has the right to get the information/records/documents within a month. It is, therefore, of utmost importance that auditors should be provided access to records/documents on priority basis within seven days, failing which, heads of departments should be required to explain the circumstances that caused the delay.
All India PAC conference: In 2015, an all-India conference of PACs of Parliament and State/Union Territories legislatures discussed the need for complete independence of the CAG, making it a part of the PAC, like in the UK and Australia. It called for prior consultation with the Chairman, PAC, before appointment of the CAG and consequential need to amend the CAG Act to this effect. The need for the legislature to recognise that the CAG works on their behalf; the need to protect it whenever it comes under attack; the tendency of the State Government officials to refuse and delay records and files to audit and the tendency of Government to keep audit out of Government spending, example being funding of NGOs, public-private model of development were also issues that were deliberated upon.
A committee later recommended modification of the CAG Act to incorporate these issues. However, the matter has been put to rest since then. There is, therefore, an urgent need to broad-base the process of the appointment of the CAG. There must be a time-bound provision of supply of requisitioned information/documents to enhance its independence in accordance with the international best practices.
Shorter tenure of the Indian CAG: Though the Indian Constitution provides for a six-year term to the CAG, the cap of 65 years of age has been reducing the actual terms of successive CAGs in the recent times. Former CAG, Vinod Rai had a five year and five months tenure, SK Sharma got a stint of four years and four months only. The new CAG Rajiv Mehrishi will have less than three years term. Shorter tenure works as an impediment to the independent and proper functioning of the institution due to lack of continuity of the leadership and loss of expertise.
Internationally, the CAG of the UK has a 10-year tenure under the National Audit Act 2011, whereas the Comptroller General of the US has 15 years of term. Australian Auditor General has 10 years of term as per Auditor-General Act 1997, whereas the present Auditor General of South Africa has seven years of term.
long tenure is a basic pre-requisite for continuity and proper functioning of the CAG. It is, therefore, necessary that the CAG (DPC) ACT 1971, is revisited at the earliest so that at least the cap of 65 years can be removed to enable each CAG to have a tenure of six years, which will also bring the CAG on par with the best international practices.
No statutory powers to Indian Audit and Accounts Department: The CAG is the sole authority prescribed in the Constitution, which is entrusted with the responsibility of audit of accounts of the Union and States. It is the duty of the CAG to audit receipts and expenditure of the Union and each State and the Union Territory Governments. The audit reports of the CAG are placed before the Parliament or the legislature of the State or the Union Territory, as the case may be.
The CAG heads the Indian Audit and Accounts Department. The work of audit of accounts of the Union and of the States is actually done by the officers and staff of the IA&AD. However, no statutory recognition has been given to the work of IA&AD in India as against National Audit Office of the UK, Government Accountability office of the US, Australian National audit Office of Australia. The recognition of the IA&AD as a statutory body with delegation of powers to lower functionaries on the pattern of IT Act will improve the quality of audit and give credibility to the work done by the officers and staff of the IA&AD, thereby leading to greater impact and better outcome. As a result, there is an urgent requirement for providing the officers and staff of the IA&AD, a statutory protection on par with the best international practices.
(To be concluded. The writer is former Director-General, Audit, CAG)