Previous Year Question

A major function of the Public Accounts Committee is to ensure financial accountability for money authorised by Parliament. It examines the Appropriation Accounts, Annual Finance Accounts of the Government and the related CAG reports.

The Committee examines whether expenditure shown in government accounts was made out of legally available funds, whether the money was spent on the service or purpose for which Parliament had authorised it, and whether the expenditure conformed to the relevant financial authority and rules.

After audit by the CAG and presentation of Audit Reports before Parliament, the PAC may select important Audit Paragraphs for detailed examination. Explanations and Action Taken Notes are obtained from the concerned Ministries and Departments, and evidence from officials may also be taken where required. Thus, CAG audit and parliamentary scrutiny by the PAC are closely connected.

The distinction between the Estimates Committee and PAC is important. The Estimates Committee primarily examines how economy, efficiency and improvements in organisation may be achieved in government expenditure, whereas the PAC primarily conducts post-expenditure scrutiny of accounts and expenditure already incurred.

An important exception should also be remembered. CAG reports specifically relating to Public Undertakings are also examined by the Committee on Public Undertakings. Therefore, it would not be completely accurate to say that every CAG report is examined only by the PAC. However, in the general institutional context of this question, the expected answer is the Public Accounts Committee.

For examination purposes, the simple relationship is—the CAG conducts the audit; on behalf of Parliament, the PAC undertakes detailed scrutiny of government accounts and related audit findings.