Previous Year Question

A major separation of Accounts from Audit in the Union Government was implemented in 1976. Following the departmentalisation of accounts, responsibility for compilation of the accounts of Ministries and Departments began to be transferred from the CAG's organisation to the Government's departmental accounting machinery.

This reform was not implemented in all Ministries on a single date. According to the official history of the CAG, the Departmentalised Accounting System received Cabinet approval in June 1975, but its actual implementation took place in phases during 1976. It was introduced in some departments from 1 June 1976 and in the remaining Ministries from 1 October 1976. Hence, the year asked in the question is 1976, not 1975.

The purpose of the reform was to make accounting an integral part of financial management within Ministries. This enabled expenditure monitoring, allocation of funds and financial control to be more closely connected with departmental administration.

The legal basis is also important. Under the first proviso to Section 10(1) of the CAG's (Duties, Powers and Conditions of Service) Act, 1971, the President may, after consultation with the CAG, relieve the CAG of responsibility for compiling specified government accounts. Under this arrangement, the CAG was relieved in 1976 of responsibility for compiling accounts of various Union Ministries and Departments.

A subtle point should be remembered: the statement in the question primarily concerns the departmentalisation of Union Government accounts. It does not mean that every accounting responsibility of the CAG throughout India disappeared after 1976; certain accounting responsibilities relating to States and other specified accounts continue under the statutory framework.