Article 149 of the Constitution says that the CAG shall perform such duties and exercise such powers in relation to the accounts of Union and of States and of any other authority as may be prescribed by any law made by Parliament.
So to give effect to provisions of constitution, Parliament enacted a law known as CAG’s (Duties, Powers and Conditions of Service) Act, 1971. The Duties and Powers of CAG are as follows:-
- To audit all expenditure from the Consolidated Fund of India and each state and of each Union Territory having a Legislative assembly;
- To audit all transactions of Unions and 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;
- To audit all receipts of the Union and State and to satisfy himself that that the rules and procedures in that behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue.
- To audit accounts of Government Companies (in pursuance of Companies Act) and all bodies or authorities substantially financed by Central or State govt.
- To audit accounts of corporations as prescribed by law of Parliament or State Legislature.
- To audit account of any other authority or body when requested by President or Governor of State.
- To audit grants in aid, loan, debt, advances, sinking funds, stock accounts and others of Union and state with consent of President or governor as case may be.
Article 150 – States that the accounts of Union and States shall be kept in such form as President may prescribe on advice of CAG.
Article 151 – The CAG shall submit his reports related to accounts to President or Governor who shall cause them to be laid before each house of Parliament. The CAG has power while performing his duties to inspect any office of accounts under control of Union or a State.
Article 279 – He ascertains and certifies that net proceeds of tax or duty and his Certificate is final. Net proceeds means proceeds of a tax minus cost of collection. The CAG act as a guide, friend of Public Accounts Committee of Parliament while scrutinising the audit reports of CAG