Section 15 of The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971
Scrutiny of Grants and Loans
Original Text
Provided that the President, the Governor of a State or the Administrator of a Union territory having a Legislative Assembly, as the case may be, may, where he is of opinion that it is necessary so to do in the public interest, by order, relieve the Comptroller and Auditor-General, after consultation with him, from making any such scrutiny in respect of any body or authority receiving such grant or loan.
(2) Except where he is authorised so to do by the President, the Governor of a State or the Administrator of a Union territory having a Legislative Assembly, as the case may be, the Comptroller and Auditor-General shall not have, while exercising the powers conferred on him by sub-section (1), right of access to the books and accounts of any corporation to which any such grant or loan as is referred to in sub-section (1) is given if the law by or under which such corporation has been established provides for the audit of the accounts of such corporation by an agency other than the Comptroller and Auditor-General:
Provided that no such authorisation shall be made except after consultation with the Comptroller and Auditor-General and except after giving the concerned corporation a reasonable opportunity of making representations with regard to the proposal to give to the Comptroller and Auditor-General right of access to its books and accounts.
Visual Summary
Summary
Section 15 empowers the Comptroller and Auditor-General (CAG) to scrutinize the procedures of government authorities when they provide grants or loans for specific purposes to other bodies (such as NGOs or local authorities). The primary goal is to ensure that the conditions attached to these funds are fulfilled. To perform this duty, the CAG is granted the right to access the books and accounts of the recipient body. However, this power has limitations: it does not apply to foreign states or international organizations, and access to statutory corporations with their own auditors requires specific authorization from the President or Governor.
Key Takeaways
- Scope of Scrutiny: The CAG scrutinizes the procedures of the sanctioning authority to ensure grant conditions are met.
- Access Rights: The CAG has the right to access the books of the recipient body after giving reasonable notice.
- Exclusions: Grants to Foreign States or International Organizations are exempt from this section.
- Relief Power: The President or Governor can relieve the CAG of this duty in the public interest.
Key Analysis
- ● Procedural vs. Transactional Audit: Unlike Section 14 which focuses on a comprehensive audit of receipts and expenditures, Section 15 focuses on the procedures of the sanctioning authority. It is a check on the government department giving the money to ensure they are monitoring the end-use.
- ● Protection for Statutory Corporations: Sub-section (2) provides a safeguard for corporations established by law (like LIC or Air India previously) that have their own statutory audit mechanisms. This prevents duplicate auditing unless the government specifically authorizes the CAG to intervene.
- ● Principles of Natural Justice: The proviso to Sub-section (2) mandates that before the CAG is authorized to access the books of a statutory corporation, the corporation must be given a reasonable opportunity to make representations. This ensures fairness.
Key Ingredients
- Source: Consolidated Fund of India, State, or UT.
- Nature: Grant or Loan for a specific purpose.
- Recipient: Any authority or body (excluding Foreign States/Intl Orgs).
- Action: Scrutiny of sanctioning procedures and access to books.
Related Provisions
Practical Illustrations
Process Flowchart
Practice Questions
Q: Under Section 15, the CAG scrutinizes grants and loans given for which of the following?
- A. General administrative expenses
- B. Any purpose decided by the recipient
- C. A specific purpose
- D. Repayment of previous debts only
View Correct Answer
Reasoning: Section 15(1) explicitly states “Where any grant or loan is given for any specific purpose…”.
Q: Who has the authority to relieve the CAG from the responsibility of scrutiny under Section 15?
- A. The Finance Minister
- B. The President, Governor, or Administrator
- C. The Parliament
- D. The Supreme Court
View Correct Answer
Reasoning: The proviso to Section 15(1) empowers these authorities to relieve the CAG in the public interest after consultation.
Q: Can the CAG automatically access the books of a statutory corporation that has its own auditor appointed by law?
- A. Yes, CAG has unlimited power
- B. Yes, but only for loans above 1 Crore
- C. No, unless specifically authorized by the President/Governor
- D. No, CAG can never audit such corporations
View Correct Answer
Reasoning: Section 15(2) restricts access if the law establishing the corporation provides for another auditor, unless authorized.
Frequently Asked Questions
What is the difference between Section 14 and Section 15?
Does Section 15 apply to grants given to the United Nations?
Can the CAG audit a private NGO under this section?
Conclusion
Section 15 acts as a vital accountability mechanism for “specific purpose” funding. By empowering the CAG to scrutinize the procedures of sanctioning authorities and access the books of recipients, it ensures that public funds are utilized strictly for the objectives they were sanctioned for. However, it balances this power by respecting the autonomy of statutory corporations and international bodies, ensuring a fair and structured audit regime.