The Comptroller and Auditor General (CAG) of India plays a crucial role in ensuring financial accountability and transparency in 
Centrally Sponsored Schemes (CSS) through regular audits and has recently constituted a special committee to address systemic issues within these schemes. 

Role and Mandate

• Constitutional Authority: The CAG is an independent constitutional body (Articles 148-151) responsible for auditing all receipts and expenditures from the Consolidated Fund of India and the states, which includes funds allocated to CSS.
• Audit Types: The CAG conducts financial, compliance, and performance audits of CSS to ascertain whether the funds are legally available, applied to the intended purpose, and used with due regard to economy, efficiency, and effectiveness.
• Accountability: CAG reports help ensure the executive (government) is accountable to Parliament and state legislatures for the utilisation of public funds in implementing these schemes. The reports are examined by the Public Accounts Committee (PAC). 

Key Findings and Observations
CAG audit reports on various CSS have consistently highlighted significant issues over the years, including: 

• Procedural and Financial Irregularities: Audits have exposed serious anomalies in tendering processes, award of works without approved project reports, and overall financial mismanagement.
• Fund Diversion and Misappropriation: Funds meant for specific schemes (e.g., National Social Assistance Programme) have been diverted for publicity of other government programs or other unapproved purposes.
• Ineligible Beneficiaries and Fake Accounts: Reports have found instances of benefits being extended to ineligible individuals, payments made in the names of deceased patients, and multiple beneficiaries linked to single or invalid mobile numbers (e.g., in the Ayushman Bharat scheme).
• Implementation Lapses and Delays: Audits often red-flag significant delays in project implementation, non-creation of durable assets (e.g., in MGNREGA findings from 2013), and failure to achieve the desired goals and outcomes of the schemes.
• Lack of Monitoring and Data Issues: Deficiencies in monitoring mechanisms, unreliable beneficiary data, and poor input controls in IT systems have been repeatedly pointed out. 

Recent Developments

• Formation of a Special Panel: In late 2025, the CAG established a high-level committee to address "problems and issues" in CSS and recommend ways to strengthen their budgeting, accounting, and payment frameworks.
• Focus on Outcome-Based Audits: The CAG is increasingly focusing on outcome-based audits to assess the actual impact and effectiveness of the schemes on the ground, moving beyond just compliance and financial audits.
• Third-Party Evaluation: The Ministry of Finance has mandated third-party evaluations of all CSS and Central Sector Schemes to continue beyond March 2026, aligning with the CAG's push for greater accountability and data-driven approvals.

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