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CAG DPC ACT 1971 Short Notes

April 3, 2021 by Danveer Singh

Comptroller and Auditor General’s (Duties, Powers and Conditions of Service)

Amendment Act, 1971

​ 5​th​ Dec 1971

DPC Act,1971 came into force w.e.f. 1
Includes 4
​ chapters​and 2
​ 6 sections​as follows :-

Chapter-1​Preliminary (Section 1-2)

Chapter-2​Salary and Other Conditions of Service of CAG (Sections 3-9)

Chapter-3​Duties and powers of CAG (sections 10 – 20)

Chapter-4​Miscellaneous (sections 21 – 26)

Section 1 to 9​ensures ​independence of CAG

Section 10 to 12​related to​Accounts​of Union & States
Section 13 to 20 ​related to​Audit

Note:

DPC Act was passed as per ​Article 148(3) a

​ nd​149
DPC Act has been a
​ mended 4 times​.

Chapter-1 Preliminary (Section 1-2)

Section 1​:​​Title
Section 2​: D
​ efinitions Comptroller and Auditor-
General​” appointed under​Article 148 ​of the
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Constitution

Chapter-2​Salary and Other Conditions of

Service of CAG (Sections 3-9)
Section 3​: ​Salary
equal to the salary of the ​Judge of the Supreme Court
charged on C​ onsolidated Fund of India

Section 4​: T
​ erm of office
6 years​or 6
​ 5 years of age​whichever is earlier
He may vacate his post by giving ​resignation​letter t​ o President

Section 5​:​​Leave
granted leave as per rules applicable to members of ​Indian Administrative
Service

President​can grant or refuse leave to CAG

Section 6​:​​Pension
● equal to the pension payable to ​Judge of Supreme Court

Section 7​: Omitted

Section 8: Right to subscribe to GPF
Section 9​: O
​ ther conditions of service
● Entitled to other conditions of service such as travelling allowance, rent-free
residence, conveyance facilities, medical facilities etc.same as that of the​judge of
Supreme Court

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Chapter-3 Duties and powers of

CAG (sections 10 – 20)​
Section 10:​Compilation & keeping of A/c of Union
& States by CA​G
(1) The CAG shall be responsible- (1.) for compiling the accounts of the Union and of
each State (2.) for keeping such accounts

Provided that the President ​may, ​ after consultation with​the ​CAG​ by order relieve
him​from the responsibility for compiling-

the said accounts of the Union (either at once or gradually); or

the accounts of any particular services or departments of the Union

Provided further that the Governor​of a State may with the previous​approval of the
President and after​consultation with the CAG​,​by order, relieve him from the
responsibility for compiling-

the said accounts of the State (either at once or gradually); or

the accounts of any particular services or departments of the State

Provided also that the President​ may, after​consultation with the CAG, by order, relieve
him from the responsibility for keeping the accounts​ of any particular class or
character.​

Section 1​1:​Preparation & Submission of A/c by CA​

G
The CAG shall prepare accounts ​related to annual receipts and disbursements​for the
purpose of the ​Union,​of each S
​ tate​and of each U
​ T having a Legislative Assembly​, and
shall submit those accounts to the ​President​or the ​Governor​or ​Administrator of the UT
having a Legislative Assembly​, as the case may be on or before such dates as he may,
with the concurrence of the Government concerned, determine

Provided that the President​may, after​consultation with the CAG​,​by order, relieve him
from the responsibility for the preparation and submission of the accounts of the Union
or of a UT having a Legislative Assembly
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Provided further that the Governor​of a State may, with the previous approval of the
President and after​consultation with the CAG​,​by order, relieve him from the
responsibility for the preparation and submission of the accounts of State.

Section 12:​CAG will give information and render assistance to the Union and States in
the preparation of their annual financial statements

Section 13:​ It shall be the duty of the CAG

To audit​all expenditure from the Consolidated​ Fund of India/State/UT having a

Legislative Assembly
To audit​ all transactions of the Union and of the States relating to Contingency​
Funds and Public Accounts
to audit​all trading, manufacturing, profit and loss accounts and balance-sheets
and other subsidiary accounts kept in any department of the Union or of a State

Section 14: Audit of receipts and expenditure of bodies or authorities substantially

financed from Union or State Revenues
(1) CAG audit and report on all receipts and expenditure of substantially financed
bodies or authorities
Note: If grant/loan given to a body in a FY from Consolidated Fund of India/State/UT
is >=25 lakhs and not less than 75% of total expenditure of this body then such body is
called as substantially financed
(2) CAG can audit it with previous approval of President/Governor/Administrator if
grant/loan in a FY is not less than 1 Crore.
(3) CAG may audit for further 2 years irrespective of fulfilment of above conditions.

Section 15: Function of CAG in the case of grants/loans given to other authorities or
bodies
(1) When grant/loan is given for specific purpose from Consolidated Fund ,not being a
foreign state or International Org, CAG will scrutinise the procedures of granting this
loan and shall have right to access(after giving notice) to the books & accounts of
authority or body President/Governor/Administrator can relieve him from this duty after
consulting CAG itself (in public interest)
(2) The right to access the books/accounts of any corporation where the law
establishing it provides for audit by an agency other than CAG, is available to CAG only
with the authority of the President/Governor/Administrator otherwise not.
(3) Such authorisation is made after consultation of CAG and after giving the concerned
corporation a reasonable opportunity of making representations with regard to the
proposal to give the CAG right of access to its books and accounts.

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Section 16: Audit of Receipts of Union or of State s

● CAG should audit all the receipts which are payable to Consolidated Fund of
India/State/UT
● Also satisfies himself that rules and procedures are designed to secure an effective
check on the Assessment, Collection, and Proper Allocation of Revenue

Section 17: Audit of accounts of stores and stoc k

CAG audit and report on the accounts of stores and stock kept in any office or
department of the Union or of a State

Section 18: Power of CAG related to Audit of accounts

(1) CAG has ● Authority /right to inspect any office of Union/State
● Right to access any book of accounts at any place
● Right to summon or inquire
(2) Person-in-charge of office shall afford all facilities & comply with requests for
information

Section 19: Audit of Government companies and corporation s

(1) CAG will audit Government Companies according to Companies Act
(2) CAG has power to audit accounts of Corporations established by or under law made
by Parliament and shall exercise such power according to provisions of respective
legislation
(3) Where the Governor/Administrator requests CAG (in public interest) to audit
Corporations established by law of the State legislature or UT legislature, CAG shall do
that. Such request can only be made after consultation with CAG
Section 19A: Laying of reports in relation to accounts of Government companies and
corporation
● The CAG report of audit of Govt Co. or Corp. is submitted to the Government
concerned
● The Government shall cause to laid these reports before the Parliament/ State
Legislature/ UT legislature concerned

Section 20: Audit of accounts of certain authorities or bodie s

(1) President/Governor/Administrator after consultation with CAG can authorise CAG to
audit accounts of any authority or body which is not entrusted to him by or under any
law made by parliament
(2) CAG can submit a proposal to the President/Governor/Administrator for
authorisation to undertake the audit of accounts of any body or authority whose audit
has not been entrusted to him by law, if CAG is of the opinion that substantial amount
has been invested in or advanced to such body or authority

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Chapter-4​Miscellaneous (sections 21 –
26)
Section 21: Delegation of Power of Comptroller and Auditor-General
● Authorises CAG to delegate any power exercisable by him under this Act, to any
officer of his department,by general or special order
● Provided that except during absence of CAG on leave or otherwise, no officer can
submit Audit Report on behalf of CAG

Section 22: Power to make Rules

(1) Central Govt,may after consultation with CAG , by notification in the official
Gazette,make rules for maintenance of Accounts
(2) Such rules may provide for –
● Manner in which initial/subsidiary accounts shall be kept by treasuries,offices
● Manner in which accounts of Union/State are to be compiled or kept
● Manner of accounts of stock & stores
● Any other matter
(3) Every rule made by central govt (as above) shall be laid before both the houses of
Parliament,while it is in session, for a total period of 30 days

Section 23: Power to make regulations

CAG is authorised to make regulations for carrying into effect the provisions of this Act
and as per this section, CAG has made
● Regulations on Audit & Accounts,2007 to determine scope and extent of the audit.
● General Principles of Government accounting
● Manual of standing orders(Audit)

Section 24: Power to dispense with detailed audit CAG has power to dispense with
detailed audit of any account/class of transactions
Section 25: Repealed CAG’s(Condition of Service) Act, 1953 is repealed
Section 26: Removal of Doubts
For removal of doubts, it is hereby declared that on the commencement of this Act the
Government of India (Audit and Accounts) Order, 1936, as adapted by the India
(Provisional Constitution) Order, 1947, shall cease to be in force

Uncategorized

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