Section 10 of The Comptroller and Auditor-Generals Duties Powers and Conditions of Service Act 1971

Section 10 of The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971
Compilation of Accounts of Union and States

Original Text

10. Comptroller and Auditor-General to compile accounts of Union and States.—(1) The Comptroller and Auditor-General shall be responsible—

(a) for compiling the accounts of the Union and of each State from the initial and subsidiary accounts rendered to the audit and accounts offices under his control by treasuries, offices or departments responsible for the keeping of such accounts; and

(b) for keeping such accounts in relation to any of the matters specified in clause (a) as may be necessary:
Provided that the President may, after consultation with the Comptroller and Auditor-General, by order, relieve him from the responsibility for compiling—

(i) the said accounts of the Union (either at once or gradually by the issue of several orders); or

(ii) 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 Comptroller and Auditor-General, by order, relieve him from the responsibility for compiling—

(i) the said accounts of the State (either at once or gradually by the issue of several orders); or

(ii) the accounts of any particular services or departments of the State:
Provided also that the President may, after consultation with the Comptroller and Auditor-General, by order, relieve him from the responsibility for keeping the accounts of any particular class or character.
(2) Where, under any arrangement, a person other than the Comptroller and Auditor-General has, before the commencement of this Act, been responsible—

(i) for compiling the accounts of any particular service or department of the Union or of a State, or

(ii) for keeping the accounts of any particular class or character,

such arrangement shall, notwithstanding anything contained in sub-section (1), continue to be in force unless, after consultation with the Comptroller and Auditor-General, it is revoked in the case referred to in clause (i), by an order of the President or the Governor of the State, as the case may be, and in the case referred to in clause (ii), by an order of the President.

Visual Summary

Primary Duty

Compiling the accounts of the Union and States from treasury data.

Maintenance

Keeping accounts related to the compiled data as necessary.

Relief Power

President or Governor can relieve CAG of these duties after consultation.

Legacy Rules

Pre-1971 arrangements for accounting continue unless explicitly revoked.

Summary

Section 10 establishes the fundamental accounting role of the Comptroller and Auditor-General (CAG). It mandates the CAG to compile the accounts of both the Union Government and State Governments based on data submitted by treasuries and departments. However, this section is flexible; it empowers the President (for the Union) and the Governor (for a State, with Presidential approval) to relieve the CAG of these accounting responsibilities, effectively allowing for the separation of accounts from audit. It also ensures that any accounting arrangements existing before this Act remain in force until specifically changed.

Key Takeaways

Core Responsibility: The CAG is responsible for compiling and keeping the accounts of the Union and the States.
Source of Data: Accounts are compiled from initial and subsidiary accounts rendered by treasuries and departments.
Relief Mechanism: The President (Union) or Governor (State) can relieve the CAG of accounting duties, facilitating departmentalization of accounts.
Consultation Mandatory: Any order to relieve the CAG of these duties requires prior consultation with the CAG.

Key Analysis

Separation of Audit and Accounts: This section is the legal enabler for the “Departmentalization of Accounts.” While the CAG traditionally handled both, the provisos here allow the government to take over accounting, leaving the CAG to focus solely on audit.
Federal Distinction: For Union accounts, the President decides. For State accounts, the Governor decides, but must have the President’s approval. This maintains a centralized check on the accounting standards of States.
Continuity: Sub-section (2) ensures that if a department was already compiling its own accounts before 1971 (e.g., Railways or Defence), that system doesn’t break; it continues until formally revoked.

Key Ingredients

Duty to compile accounts of Union and States.
Receipt of initial accounts from treasuries/offices.
Presidential power to relieve CAG (Union accounts).
Gubernatorial power to relieve CAG (State accounts) with President’s approval.
Mandatory consultation with CAG before relief.

Related Provisions

Practical Illustrations

Example 1: Standard ProcedureA District Treasury Officer in Uttar Pradesh sends monthly accounts of receipts and payments to the Accountant General (a representative of the CAG). The CAG’s office compiles these into the Monthly Civil Accounts and eventually the Annual Finance Accounts of the State.

Example 2: Relief from Duty (Union)The President of India, desiring to separate accounts from audit in the Ministry of Defence, issues an order after consulting the CAG. This order relieves the CAG from compiling Defence accounts. Consequently, the Controller General of Defence Accounts (under the Ministry) takes over the compilation duties.

Example 3: Relief from Duty (State)The Governor of Goa wishes to relieve the CAG from compiling the accounts of the Public Works Department (PWD). The Governor must first obtain approval from the President of India and then consult the CAG before issuing the order.

Process Flowchart

Practice Questions

Q: Who has the authority to relieve the CAG from the responsibility of compiling the accounts of a State?

A. The Governor of the State unilaterally.
B. The President of India unilaterally.
C. The Governor of the State, with previous approval of the President and after consultation with the CAG.
D. The State Legislature.

View Correct Answer

Correct Answer: C. The Governor of the State, with previous approval of the President and after consultation with the CAG.
Reasoning: The second proviso to Section 10(1) explicitly states that the Governor requires the President’s previous approval and must consult the CAG.

Q: Under Section 10, from where does the CAG primarily receive the data to compile accounts?

A. Directly from the Reserve Bank of India.
B. From initial and subsidiary accounts rendered by treasuries, offices, or departments.
C. From the Finance Minister’s annual budget speech.
D. From the Public Accounts Committee.

View Correct Answer

Correct Answer: B. From initial and subsidiary accounts rendered by treasuries, offices, or departments.
Reasoning: Section 10(1)(a) specifies that accounts are compiled from initial and subsidiary accounts rendered to audit and accounts offices.

Q: What happens to accounting arrangements managed by persons other than the CAG that existed before the commencement of this Act?

A. They are immediately declared void.
B. They automatically transfer to the CAG.
C. They continue to be in force unless revoked by an order of the President or Governor.
D. They are transferred to the State Bank of India.

View Correct Answer

Correct Answer: C. They continue to be in force unless revoked by an order of the President or Governor.
Reasoning: Section 10(2) provides a savings clause for existing arrangements to continue until specifically revoked.

Frequently Asked Questions

Does the CAG compile accounts for every single government department?

Not necessarily. While Section 10(1) makes the CAG responsible by default, the President or Governor can issue orders to relieve the CAG of this duty for specific departments. For example, departments like Defence and Railways compile their own accounts.

Can a State Government independently decide to stop the CAG from compiling its accounts?

No. A State Governor cannot do this unilaterally. They must obtain the previous approval of the President of India and must also consult with the CAG before issuing such an order.

What is the difference between ‘compiling’ and ‘keeping’ accounts?

‘Compiling’ involves aggregating the data received from various treasuries and offices into a consolidated statement. ‘Keeping’ implies the maintenance and custody of these records and books of accounts. Section 10 mandates the CAG to do both unless relieved.

Conclusion

Section 10 is the cornerstone of the CAG’s accounting functions, distinguishing them from his auditing duties. It provides a structured legal framework for the compilation of national and state accounts while offering the necessary flexibility for the executive to assume these responsibilities as administrative capabilities evolve. This section ensures that the transition from centralized accounting by the CAG to departmentalized accounting is regulated, consultative, and federally monitored.