28 December 2010

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PAC - Understand functions, powers and constitution of PAC - Public Accounts Committee

PAC - Understand functions, powers and constitution of PAC
- Public Accounts Committee

The full form of PAC is Public Accounts Committee.

Indian parliament has limited time.

To check and scrutinize Annual Accounts and the Audit Reports specialized knowledge is required.

Therefore the Parliament and the State Legislatures have, for this purpose, constituted specialized Committees like the Public Accounts Committee (PAC)
and the Committee on Public Undertakings (COPU), to which these audit Reports and Annual Accounts automatically stand referred.


The Public Accounts Committee satisfies itself:-

1.That the moneys (shown in the accounts) were disbursed legally on the service or purpose to which they were applied.

2.That the expenditure was authorized

3.That re-appropriation (i.e. distribution of funds as between sub-objectives) were made in accordance with rules.

It is also the duty of the PAC to examine the statement of accounts of autonomous and semi-autonomous bodies, the audit of which is conducted by the Comptroller & Auditor General either under the directions of the President or by a Statute of Parliament.

The Committee on Public Undertakings exercises the same financial control on the public sector undertakings as the Public Accounts Committee exercises over the functioning of the Government Departments.

The functions of the PAC Committee are:-

1.To examine the reports and accounts of public undertakings.

2.To examine the reports of the Comptroller & Auditor General on public undertakings.

3.To examine the efficiency of public undertakings and to see whether they are being managed in accordance with sound business principles and prudent commercial practices.

The examination of public enterprises by the Committee takes the form of comprehensive appraisal or evaluation of performance of the undertaking.

It involves a thorough examination, including evaluation of the policies, programmes and financial working of the undertaking.

The Committees do not generally question the stated policies of the Government as they usually would have the approval of Parliament (in which the Government would be enjoying a majority).

But they can and often do comment on the implementation of the policies, e.g. losses, wasteful expenditure and financial irregularities.

When these are the result of negligence, the Committee calls upon the Ministry / Department concerned to detail the action, disciplinary or otherwise, it had taken to prevent its recurrence.

In such cases the Committee also records its opinion either disapproving the action of Government of passing strictures against the extravagance or lack of proper control by the concerned Ministry / Department.

The objective of the Financial Committees, in doing so, is not to focus only on the individual irregularity, but on the defects in the system which led to such irregularity, but on the defects in the system which led to such irregularities and the need for correction of such systems and procedures.

The Comptroller & Auditor General of India plays a key role in the functioning of the financial committees of Parliament and the State Legislatures.

He has come to be recognized as a 'friend, philosopher and guide' of the Committee. His Reports generally form the basis of the Committees' working, although they are not precluded from examining issues not brought out in his Reports.

He assists the Committees by furnishing Memorandum of Important Points (MIP) on the cases selected for detailed examination, which helps in the framing of questionnaires for oral evidence of witnesses summoned by the Committees.

During examination of witnesses, he helps the Committees in ascertaining the correct facts and provides additional information relevant to the examination.

At times, he intervenes on behalf of the Committees to clarify and elucidate evidence taken from the witnesses.

He scrutinizes the notes which the Ministries submit to the Committees and helps the Committees to check the correctness submit to the Committees and helps the Committees to check the correctness of facts and figures in their draft reports.

The Financial Committees present their Report to the Parliament/ State Legislature with their observations and recommendations.

The various Ministries / Department of the Government are required to inform the Committees of the action taken by them on the recommendations of the Committees (which are generally accepted) and the Committees present Action Taken Reports to Parliament / Legislature.

In respect of those cases in Audit Reports, which could not be discussed in detail by the Committees, written answers are obtained from the Department / Ministry concerned and are sometimes incorporated in the Reports presented to the Parliament / State Legislature. This ensures that the audit Reports are not taken lightly by the Government, even if the entire report is not deliberated upon by the Committee.

Till 1981, there was no practice of ascertaining the action taken by the Ministries/Departments on the Audit paragraphs not selected by the Committee for detailed examination.

However, with a view to ensuring enforcement of accountability of the executive in respect of all the issues dealt with in various Audit Reports, the Committee on Public Accounts decided in 1982 that the Audit Reports for the year 1980-81 be referred to the Ministries/Departments concerned for furnishing notes, duly vetted by Audit, showing remedial/corrective Action Taken on all the paragraphs contained therein.

The system has further been streamlined to review the remedial/corrective action taken notes furnished by Government on the non-selected Audit Paragraphs.

At their sitting held on 8.8.2000, the Committee decided that the remedial/correction Action Taken Notes received from Government are sent to Office of C&AG for categorization like

(a) Accepted

(b) Partially accepted

(c) Not accepted

And then circulated these to the Members of the Committee.
Based on the categorization, the Committee may select Audit Paragraphs for detailed examination.

The Committee on Public Accounts was first set up in 1921 in the wake of the Montague-Chelmsford Reforms.

The Finance Member of the Executive Council used to be the Chairman of the Committee.
The Secretariat assistance to the Committee was rendered by the then Finance Department (now the Ministry of Finance).

This position continued right up to 1949. During the days of the Interim Government, the then Finance Minister acted as the Chairman of the Committee, and later on, after the attainment of Independence in August, 1947, the Finance Minister became the Chairman.

This naturally restricted the free expression of views and criticism of the Executive.

The Committee on Public Accounts underwent a radical change with the coming into force of the Constitution of India on 26 January, 1950, when the Committee became a Parliamentary Committee functioning under the control of the Speaker with a non-official Chairman appointed by the Speaker from among the Members of Lok Sabha elected to the Committee.

The Minister of Finance ceased to be a Member of the Committee vide Rule 309(i) of the Rules of Procedure and Conduct of Business in Lok Sabha.

The Public Accounts Committee is now constituted every year under Rule 308 of the Rules of Procedure and Conduct of Business in Lok Sabha.

The Public Accounts Committee consists of not more than 22 members comprising of 15 members elected by Lok Sabha every year from amongst its members according to the principle of proportional representation by means of single transferable vote and not more than 7 members of Rajya Sabha elected by that House in like manner.

Prior to the year 1954-55, the Committee consisted of 15 members who were elected by Lok Sabha from amongst its Members.

But with effect from the year 1954-55, 7 members from the Rajya Sabha are also being associated with the Committee.
Till 1966-67, a senior member of the ruling party used to be appointed by the Speaker as Chairman of the Committee.

In 1967, however, for the first time, a member from the Opposition in Lok Sabha was appointed as the Chairman of the Committee by the Speaker.

This practice continues till date. The term of office of members of the Committee does not exceed one year at a time.

A Minister is not elected a member of the Committee, and if a member, after his election to the Committee is appointed a Minister, he ceases to be a member of the Committee from the date of such appointment.

The Chairman of the Committee is appointed by the Speaker from amongst the members of the Committee from Lok Sabha.

Who was the first chairman of the Public Accounts Committee?
The first chairman was Mr. W. M. Hailey, year was 1921.

Currently BJP leader Murli Manohar Joshi is the chairman of PAC that is public accounts committee.


Since the Committee became a Parliamentary Committee under the control of the Speaker from January, 1950, it has presented 1337 Reports till 30th April, 2006.

Reality views by sm –
Tuesday, December 28, 2010

8 comments:

Irfanuddin December 28, 2010  

took little time going thru all this... tested my patience too.... in the end a very knowledge boosting post... thnx for sharing....

BTW... thnx for ur views on... "Ab..SAB DiKHTAA HAi"

Renu December 28, 2010  

we have so many committees and still so much of corruption,I would love to see you compile a list of people who got punished for their financial crime:)..it would be really enlightening.

bchowla December 28, 2010  

JPC or PAC, both are political tools to embarrass those alleged to be guilty.Did we get any result out of JPC on Bofors?But, I still am in favour of LPC for 2G

sm,  December 28, 2010  

IRFANUDDIN,,
thanks.

sm,  December 28, 2010  

Renu,,
thanks.
i think we can count them on fingers.

sm,  December 28, 2010  

bchowla,,
thanks.

Tanvi December 29, 2010  

A very enlightening post... Its been long since i read something like this.. A perfect and interesting civics read!

Cheers,