## Duties of CAG: General Audit and Reporting Duties

The CAG has three distinct audit-and-report duties covering different financial flows:

### Duty 1: Audit of Expenditure from Consolidated Fund

The CAG must audit and report on all expenditure from the Consolidated Fund of India/State. The key questions are:

Was the money legally available for the service or purpose?
Was it applied to the purpose for which it was disbursed?

### Duty 2: Audit of Contingency Fund Transactions

The CAG audits and reports on all transactions relating to the Contingency Fund of India/State.

### Duty 3: Audit of Departmental Commercial Accounts

The CAG audits and reports on all:

Trading Accounts
Profit & Loss Accounts
Balance Sheets

…kept in any Department of the Government.

> These three duties collectively ensure that public money — whether appropriated, contingent, or commercial — is subject to independent scrutiny.

Worked example

### Example 1

The Ministry of Defence spends ₹500 crore from the Consolidated Fund on procurement. The CAG audits whether this expenditure was within the sanctioned grant (legally available) and whether it was actually used for defence procurement (applied to the right purpose).

### Example 2

A government department runs a canteen and maintains a Profit & Loss Account. The CAG is duty-bound to audit this P&L and the associated Balance Sheet under Duty 3, even though it is a departmental commercial activity.

⚠️ Common exam mistakes

Forgetting that the Contingency Fund is audited separately from the Consolidated Fund — they are distinct funds with distinct audit duties.
Assuming the CAG only audits the Union Consolidated Fund. The duty extends to State Consolidated Funds as well.
Overlooking Duty 3 — departmental trading/P&L/Balance Sheet accounts are often neglected in revision but are expressly within the CAG's audit mandate.

Reference: Sections 13–16 — CAG (DPC) Act, 1971

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Duties of CAG — General Audit and Reporting Duties

Worked example

⚠️ Common exam mistakes