QUES . “The duty of the Comptroller and Auditor General is not merely to ensure the legality of expenditure but also its propriety.” Comment. UPSC MAINS 2024 GS PAPER 2
HINTS:
The CAG’s primary responsibility is to ensure that government expenditures are legal, i.e., they conform to the laws, rules, and regulations governing public finances. This involves scrutinizing the accounts of the government to ensure that all transactions are authorized, accurate, and genuine.
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However, CAG’s duties extend beyond the technical or legal correctness of government spending to also include evaluating the propriety, or appropriateness, of such spending in terms of efficiency, economy, and overall public interest.
Legality of Expenditure
As per the Constitution of India, the CAG is entrusted with auditing all expenditures from the Consolidated Fund of India, as well as the consolidated funds of the states and union territories. This function primarily includes ensuring the legality of expenditure, meaning the CAG is responsible for verifying that:
1 . Money is spent with legal authority:
Expenditure must be approved by Parliament (or the respective state legislatures) and used for the purposes intended by the budgetary provisions.
2 . Compliance with rules and regulations:
The CAG checks whether the rules governing financial transactions and contracts are adhered to, and whether public money is spent in accordance with statutory requirements.
Ensuring the legality of expenditure is crucial for maintaining the rule of law in public finance. However, this role would be incomplete if it did not also consider whether the expenditure serves the public good efficiently and effectively, which brings us to the question of propriety.
Propriety of Expenditure
The concept of propriety goes beyond legality to address whether the expenditure is appropriate, justifiable, and in line with ethical standards of public spending. The CAG, through propriety audits, seeks to answer questions such as:
Was the expenditure necessary?
Even if the expenditure is legal, the CAG scrutinizes whether it was essential and justified in the context of public policy.
Was public money used efficiently?
The CAG examines whether resources were used with optimal efficiency, or if there was any wasteful or excessive spending that could have been avoided.
Was public interest upheld?
Propriety audits ensure that spending was in the public interest, and that there was no misuse of funds for private gains, personal favoritism, or politically motivated purposes.
Significance of Propriety Audit
Limiting Excessive Expenditure:
If a department spends significantly more on a project than budgeted without valid justification, even though the spending may have legal approval, the CAG can question its propriety. For instance, excessive expenditures on travel or ceremonial events by government officials could be flagged.
Curbing Wasteful Spending:
If public funds are used on projects or programs that do not yield adequate benefits or are redundant, the CAG can audit whether the money was spent prudently. For example, investing in an infrastructure project in a region where another facility already exists might raise questions of propriety.
Controlling Inefficiencies and Delays:
Projects that suffer cost overruns due to delays, mismanagement, or bureaucratic inefficiencies can be scrutinized by the CAG, not only on legal grounds but also on whether public money is being used effectively and without wastage.
Enhancing Public Trust:
A system where public spending is continuously scrutinized for both legality and propriety strengthens public confidence in the government. It assures citizens that public resources are managed efficiently and in their best interests.
Improving Public Financial Management:
By focusing on propriety, the CAG plays a critical role in improving the overall management of public finances. The government is compelled to not just spend money in legally sanctioned ways, but also in ways that maximize public welfare.
Curbing Corruption and Malpractices:
Propriety audit help detect and prevent misuse of public funds for personal gain, reducing corruption and ensuring public money is used for its intended purpose.
Enhanced Government Accountability:
By ensuring both legality and propriety, the CAG holds the government accountable for its spending decisions, ensuring transparency and responsible governance.
Efficient Use of Public Funds:
The propriety audit assesses whether the funds allocated by the government have been spent prudently, delivering maximum benefit to the public.
Check on Misuse of Discretionary Powers:
The CAG checks whether discretionary powers vested in government officers are used responsibly and not arbitrarily to approve unnecessary expenditures.
Challenges in Propriety Audit
While the CAG’s role in auditing propriety is essential, it also faces several challenges:
Subjectivity in Propriety:
Evaluating propriety involves a degree of subjective judgment about what constitutes necessary or excessive spending, and this can sometimes lead to disputes over interpretation.
Resistance from Government Agencies:
Government agencies may resist propriety audits, particularly when such audits expose inefficiencies or improper practices, making it difficult for the CAG to effect real change in some cases.
Follow-up on Recommendations:
The CAG’s findings and recommendations often depend on the political will of the legislature and executive to take corrective action, which may not always happen swiftly or comprehensively.
Conclusion:
By ensuring both the legality and propriety of expenditure, the CAG plays an essential role in preserving the financial health and ethical standards of government operations. The CAG’s responsibility in examining both legality and propriety signifies its expanded role in ensuring accountability in governance. Public expenditure must not only comply with laws and regulations but also serve the broader goals of efficiency, transparency and fairness in government spending.
