CAG creates separate vertical for auditing of 1,600 State PSUs

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Comptroller and Auditor General of India (CAG) has set up a separate unit for auditing of about 1,600 public sector undertakings (PSUs) run by various State Governments for faster auditing and achieving greater efficiency.

“Very recently a separate vertical has been created. An order has been issued. Once this vertical comes up, one location will have positions for auditing only state PSUs of a particular state,” Deputy CAG K S Subramanian (HR, IR, Coord and Legal) said.

This will help in faster auditing of state PSUs and improving efficiency of public enterprises, he said, adding, this is similar to the Central Public Sector Enterprises which are audited by a separate vertical.

Currently, state PSUs are audited by members of senior management which has to do auditing of 4-5 states rather than one particular region, Subramanian said, adding, it takes time.

A separate vertical would help in consolidation of information of all state PSUs and it will be easy for stakeholders to compare, Deputy CAG A M Bajaj said.

There are about 700 Central Public Sector Enterprises (CPSEs), 1,600 State Public Sector Enterprises (SPSEs), 485 Central Autonomous Bodies (CABs) and over 700 State Autonomous Bodies.

Riding on the back of digital transformation, the office of CAG is working on expanding scope of remote auditing to enhance efficiency, transparency, and collaboration.

The planned integration of Generative AI and OCR in voucher verification reduces errors, boosts accuracy, and generates audit leads, while the Standardised Risk Assessment Model, powered by tools like IDEA and Tableau, ensures data-driven, risk-focused audit planning nationwide, Bajaj said.

“Our initial efforts at remote/hybrid audit of GST, stamp duty and registration and public works have been highly successful and encouraging. This has spurred us to fast-track such hybrid audits across the country by engaging with the executives to ensure that they achieve end-to-end digitisation of their work processes,” he said.

In fact, he said, this would be one of the important agenda items at the upcoming State Finance Secretaries Conference planned in September 2025.

Clarifying the issue of hiring of empanelled CA firms for auditing of central autonomous bodies, he said the move will not undermine the autonomy of apex audit body but strengthen the auditing process.

He said the office of CAG is in the process of hiring CA firms for 30 stations or cities, and the list would be finalised in the next two weeks for co-option with the CAG team for auditing of central autonomous bodies.

“We have been auditing every year (autonomous bodies), but need has been felt to augment our audit effort with expert professionals wherever required,” he said when asked for a reaction on a CPM MP objecting to hiring of CA firms claiming that it would dilute the independence of the CAG.

Madurai MP S Venkatesan (CPM) wrote a letter to President Droupadi Murmu on June 3 objecting to the CAG’s move, claiming that it dilutes the independence of the CAG and principles envisaged by the Constitution.

The co-option of CA firms will strengthen the auditing process, he said, audit responsibilities have gone up manifold and autonomous bodies have become very big.

Published on June 15, 2025