Section 17 of The Comptroller and Auditor-Generals Duties Powers and Conditions of Service Act 1971

Section 17 of The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971
Audit of accounts of stores and stock

Original Text

17. Audit of accounts of stores and stock.—The Comptroller and Auditor-General shall have authority to audit and report on the accounts of stores and stock kept in any office or department of the Union or of a State.

Visual Summary

Authority

Vested in the Comptroller and Auditor-General (CAG).

Subject Matter

Accounts of stores, inventory, and stock.

Scope

Applies to any office of the Union or State Governments.

Summary

Section 17 explicitly empowers the Comptroller and Auditor-General (CAG) to audit the inventory records of the government. While financial audits focus on cash flow, this section ensures that physical assets—such as equipment, raw materials, and consumables—purchased with public money are properly accounted for. It grants the CAG the authority to examine these records in any department of the Central or State governments and report findings, ensuring transparency in asset management.

Key Takeaways

Asset Accountability: The audit extends beyond money to physical goods (stores and stock).
Universal Jurisdiction: The power covers any office or department of both the Union and State governments.
Reporting Duty: The CAG is not just an observer; they have the specific authority to report on these findings to the legislature.

Key Analysis

➤ Prevention of Wastage: By auditing stores, the CAG checks for obsolescence, surplus stock, and unserviceable items, preventing capital from being locked up in useless inventory.
➤ Check on Pilferage: Regular audits of stock accounts act as a deterrent against theft and misappropriation of government property.
➤ Operational Efficiency: This section ensures that departments maintain proper records of consumption, which is vital for the efficient functioning of operational departments like Railways, PWD, and Defence.

Key Ingredients

Authority: The Comptroller and Auditor-General.
Target: Accounts of stores and stock.
Location: Any office or department of the Union or State.
Action: Audit and Report.

Related Provisions

Practical Illustrations

Example 1: Public Works Department (PWD)The PWD maintains large stocks of cement, steel, and bitumen. Under Section 17, the CAG audits the stock registers to ensure that the materials purchased match the physical stock and the usage recorded in construction projects, identifying any potential diversion of materials.

Example 2: Government HospitalsA State Government hospital purchases medicines worth crores. The CAG audits the ‘stores’ accounts to verify if medicines are being issued to patients correctly, if expired medicines are being written off properly, or if there is a discrepancy between the ledger balance and actual stock.

Process Flowchart

Practice Questions

Q: Under Section 17, the Comptroller and Auditor-General has the authority to audit the accounts of:

A. Only the Consolidated Fund of India
B. Stores and stock kept in any office or department of the Union or State
C. Only private companies substantially financed by the government
D. Personal assets of government employees

View Correct Answer

Correct Answer: B. Stores and stock kept in any office or department of the Union or State
Reasoning: Section 17 specifically mentions “accounts of stores and stock kept in any office or department of the Union or of a State.”

Q: Does Section 17 apply to State Government departments?

A. No, only Union departments
B. Yes, it applies to both Union and State departments
C. Only if the State Governor requests it
D. Only for Union Territories

View Correct Answer

Correct Answer: B. Yes, it applies to both Union and State departments
Reasoning: The text explicitly states “…department of the Union or of a State.”

Q: Besides auditing, what other function does Section 17 mandate regarding stores and stock?

A. To confiscate the stock
B. To sell the stock
C. To report on the accounts
D. To purchase new stock

View Correct Answer

Correct Answer: C. To report on the accounts
Reasoning: The section states the CAG shall have authority to “audit and report on” the accounts.

Frequently Asked Questions

Does Section 17 cover the audit of cash?

No, Section 17 is specifically dedicated to “stores and stock” (physical assets and inventory). The audit of cash receipts and expenditures is covered under other sections like Section 13 and Section 16.

Can the CAG physically verify the stock?

The section empowers the CAG to audit the “accounts” of stores. However, in practice, auditing these accounts often involves verifying physical verification reports generated by the department or conducting test checks to ensure the accounts match reality.

Why is this section important for the public?

It ensures that tax money spent on physical goods (like medicines in hospitals, food grains in distribution centers, or construction materials) is not wasted, stolen, or allowed to rot, ensuring accountability in public administration.

Conclusion

Section 17 of the Act serves as a critical safeguard for public assets, extending the CAG’s oversight beyond mere financial transactions to the physical management of government resources. By mandating the audit of stores and stock, it enforces a culture of responsibility and efficiency in handling material goods across both Union and State departments.