# Duties and Powers of the C&AG of India

## Constitutional Position

The C&AG derives his mandate from the Constitution of India and the C&AG (Duties, Powers and Conditions of Service) Act, 1971. He is India's supreme audit authority.

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## Duties of C&AG

### 1. Compile and Submit Accounts

Responsible for compiling accounts of the Union and each State from initial and subsidiary accounts rendered to audit and accounts offices under his control.

### 2. General Audit Provisions

C&AG must audit and report on:

All expenditure from the Consolidated Fund of India, each State, and each UT with a Legislative Assembly — verifying legal availability and proper application of funds
All transactions relating to Contingency Funds and Public Accounts of Union and States
All trading, manufacturing, P&L accounts, balance sheets, and subsidiary accounts of any Union or State department

### 3. Audit of Substantially Financed Bodies

Where a body/authority is substantially financed by grants or loans from the Consolidated Fund, C&AG shall audit its receipts and expenditure.

> "Substantially Financed" — BOTH conditions must be met simultaneously:

> - Grant/loan from Consolidated Fund ≥ ₹25 lakhs, AND

> - Such grant/loan ≥ 75% of total expenditure of that body/authority

### 4. Audit of Specific Grants or Loans

Where any grant/loan is given for a specific purpose from the Consolidated Fund, C&AG shall:

Scrutinise procedures by which the sanctioning authority verifies fulfillment of conditions
Have right of access to books and accounts (after giving reasonable prior notice)

### 5. Audit of Receipts of Union or States

Audits all receipts payable into the Consolidated Fund and satisfies himself that rules/procedures secure effective checks on assessment, collection, and proper allocation of revenue.

### 6. Audit of Stores and Inventory

Authority to audit and report on accounts of stores and inventory in any Union or State office/department.

### 7. Audit of Government Companies and Corporations

C&AG appoints the auditor under Section 139(5) or 139(7) of the Companies Act, 2013 and directs the manner of audit. The appointed auditor submits a copy of the audit report to C&AG.

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## Powers of C&AG

Power	Description
Inspection	Inspect any office of accounts under Union or State Government control, including offices responsible for initial/subsidiary accounts
Document Requisition	Require accounts, books, papers, and other relevant documents to be sent to specified places
Enquiry	Put questions/observations to the person-in-charge; call for information needed to prepare accounts or reports
Limited Audit	Dispense with any part of detailed audit and apply limited checks as he may determine

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## Key Numbers to Remember

Substantially financed: ₹25 lakhs (minimum grant) + 75% (minimum proportion of total expenditure) — both simultaneously
C&AG appoints auditors under Section 139(5) or 139(7) of the Companies Act, 2013

Worked example

### Example 1

Question: A body receives a grant of ₹30 lakhs from the Consolidated Fund of India. Its total expenditure is ₹38 lakhs. Determine whether C&AG's audit of receipts and expenditure is applicable under the 'substantially financed' criterion.

Solution:

Condition 1: Grant ≥ ₹25 lakhs → ₹30 lakhs ≥ ₹25 lakhs ✓

Condition 2: Grant as % of total expenditure = 30/38 × 100 = 78.9% ≥ 75% ✓

Both conditions met → Body IS substantially financed → C&AG's audit APPLIES.

### Example 2

Question: A statutory authority receives a grant of ₹50 lakhs from the Consolidated Fund. Its total annual expenditure is ₹200 lakhs. Is it substantially financed?

Solution:

Condition 1: Grant ≥ ₹25 lakhs → ₹50 lakhs ≥ ₹25 lakhs ✓

Condition 2: Grant as % of total expenditure = 50/200 × 100 = 25% < 75% ✗

Second condition NOT met → Body is NOT substantially financed → C&AG's mandatory audit under this provision does NOT apply.

Note: C&AG may still audit under other provisions, but this specific trigger is absent.

⚠️ Common exam mistakes

Treating 'substantially financed' as an OR condition — BOTH thresholds (≥ ₹25 lakhs AND ≥ 75%) must be simultaneously satisfied; meeting only one is insufficient.
Assuming C&AG directly audits all government companies himself — he only appoints the auditor and directs the manner of audit; the appointed company auditor does the primary audit.
Confusing C&AG's right of access for specific grants with his general audit powers — the specific-grants audit requires reasonable prior notice before accessing books and accounts.
Stating that C&AG has the final power of interpretation of the Constitution, statutes, and rules — this power does NOT vest with C&AG.

Bare-Act text Definition of 'Substantially Financed' (Section 14) · C&AG (Duties, Powers and Conditions of Service) Act, 1971 · click to expand

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 ₹25 lakhs and the amount of such grant or loan is not less than 75% of the total expenditure of that body or authority, such body or authority shall be deemed, for this purpose to be substantially financed by such grants or loans as the case may be.

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Duties and Powers of the Comptroller and Auditor General (C&AG)

Worked example

⚠️ Common exam mistakes