CAG seeks powers to audit performance of Sebi, Trai and Irda

The Comptroller and Auditor General of India (CAG) is seeking to widen the scope of its powers to audit the performance of regulators such as the Securities and Exchange Board of india (Sebi), Telecom Regulatory Authority of India (Trai) and Insurance Regulatory and Development Authority (Irda) as part of the new legislation that will replace the CAG Act, 1971.

The proposed CAG Bill, now under consideration of the finance ministry, is likely to be tabled in Parliament in the next session.

“CAG is looking into the books of regulators such as Trai, Sebi and Irda, and wants to audit their performance also,” official sources said.

The government auditor has already submitted a draft Bill to the finance ministry for replacing the CAG Act.

The new law is aimed at significantly expanding the scope of the CAG’s audit responsibilities.

“We are looking at auditing the regulators. We have asked in the draft Bill to replace the CAG Act of 1971 to allow audit of the financial (statements) and performance of regulators and PPPs. We are hoping the Bill would be tabled in the Winter Session,” the official said.

The draft is likely to have provisions for punitive action against companies which delay submission of details sought by the auditor.

“We do not have powers to ensure that records are presented to us as and when we ask for it. We don’t have punitive powers and our resources are limited,” he said.

Once the Bill is approved, public-private partnership (PPP) projects and regulators like the Pension Fund Regulatory and Development Authority might also come under the CAG scanner.

Under the Companies Act, 1956, the CAG can audit the books of only those companies in which the government owns more than 50 per cent.