Section 13 of The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971
General provisions relating to audit
Original Text
(a) to audit all expenditure from the Consolidated Fund of India and of each State and of each Union territory having a Legislative Assembly and to ascertain whether the moneys shown in the accounts as having been disbursed were legally available for and applicable to the service or purpose to which they have been applied or charged and whether the expenditure conforms to the authority which governs it;
(b) to audit all transactions of the Union and of the States relating to Contingency Funds and Public Accounts;
(c) 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;
and in each case to report on the expenditure, transactions or accounts so audited by him.
Visual Summary
Summary
Section 13 establishes the core auditing mandate of the Comptroller and Auditor-General (CAG). It imposes a statutory duty on the CAG to audit all expenditures from the Consolidated Funds of India, the States, and Union Territories with Legislative Assemblies. Beyond just checking the numbers, the CAG must verify that the money was legally available for the specific service and that the expenditure aligns with the governing authority. Additionally, the section mandates the audit of Contingency Funds, Public Accounts, and commercial accounts (like trading and manufacturing accounts) kept by government departments.
Key Takeaways
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Comprehensive Scope: The audit covers the Union, all States, and Union Territories that have a Legislative Assembly. -
Two-Fold Test: For Consolidated Fund expenditure, the CAG checks two things: (1) Was the money legally available? (2) Did the expenditure conform to the authority governing it? -
Departmental Undertakings: The section specifically includes the audit of trading, manufacturing, and profit & loss accounts kept by government departments.
Key Analysis
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Audit of Appropriation: The phrase “legally available for and applicable to the service” implies an audit of appropriation. The CAG ensures that the executive does not spend money on ‘Service A’ if the legislature voted it for ‘Service B’. -
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Audit of Sanctions: The requirement to check if expenditure “conforms to the authority which governs it” empowers the CAG to verify that the official incurring the expense had the proper financial delegation or sanction to do so. -
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Beyond the Consolidated Fund: While the Consolidated Fund is the primary source of spending, this section ensures no financial corner is hidden by explicitly including the Contingency Fund (for unforeseen disasters/emergencies) and Public Accounts (where the government acts as a banker, e.g., Provident Funds).
Key Ingredients
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Existence of expenditure from Consolidated Fund (Union/State/UT). -
Verification of legal availability of funds (Budgetary sanction). -
Verification of governing authority (Administrative sanction). -
Inclusion of Contingency Fund and Public Account transactions. -
Inclusion of departmental trading/manufacturing accounts.
Related Provisions
Practical Illustrations
The Ministry of Defence purchases new trucks. Under Section 13(a), the CAG audits this expenditure to ensure that Parliament had actually allocated funds for “Motor Vehicles” in the budget (legally available) and that the officer signing the contract had the financial power to authorize that amount (authority).
A government department runs a canteen for its employees. This is a commercial-style operation. Under Section 13(c), the CAG is required to audit the Profit and Loss account and Balance Sheet of this canteen to ensure it is being run efficiently and accounts are accurate.
A State Government withdraws money from the Contingency Fund to provide immediate relief for a flood. Under Section 13(b), the CAG audits this transaction to verify the withdrawal was recorded correctly and used for the intended emergency purpose.
Process Flowchart
Practice Questions
Q1: Under Section 13, the Comptroller and Auditor-General is required to ascertain whether expenditure from the Consolidated Fund is:
- A. Economical and efficient only
- B. Legally available and applicable to the service
- C. Approved by the Finance Minister personally
- D. Profitable for the government
View Correct Answer
Reasoning: Section 13(a) explicitly states the duty to ascertain if moneys were “legally available for and applicable to the service or purpose”.
Q2: Which of the following accounts kept in a department are subject to audit under Section 13(c)?
- A. Only personal diaries of officers
- B. Trading, manufacturing, profit and loss accounts
- C. Only accounts of foreign companies
- D. Private accounts of employees
View Correct Answer
Reasoning: Section 13(c) specifically lists trading, manufacturing, profit and loss accounts, and balance-sheets kept in any department.
Q3: Does Section 13 apply to Union Territories?
- A. No, never
- B. Yes, but only if they have a Legislative Assembly
- C. Yes, all Union Territories are covered regardless of assembly
- D. Only Delhi is covered
View Correct Answer
Reasoning: Section 13(a) specifies “each Union territory having a Legislative Assembly”.
Frequently Asked Questions
Does Section 13 cover Government Companies?
What does “legally available” mean in this context?
Is the audit under Section 13 optional for the CAG?