CAG to deploy AI, machine learning for faster, accurate audits

Mint

15-06-2025

New Delhi: India's apex auditor will integrate generative AI, machine learning and optical character recognition into its processes to fast-track work and reduce manual burden, according to two deputy heads of the federal auditing body.
The Comptroller and Auditor General (CAG) will use these tools for voucher verification and risk detection and will expand remote and hybrid audits in complex revenue areas such as goods and services tax, stamp duty and public works, deputy CAGs A.M. Bajaj and K.S. Subramanian said in an interview.
These technologies are expected to significantly reduce manual workload, enhance anomaly detection, and enable predictive identification of high-risk areas, making audits more focused and data-driven, they said.
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CAG is reshaping audit practices to match the complexity of India's growing economy and sprawling governance structure. With over 700 central public sector units, 1,600 state enterprises, 485 central autonomous bodies and thousands of panchayats and urban local bodies now under its jurisdiction, the federal auditor is adapting to not just the size, but also the changing nature of public service delivery, they said.
The CAG is conducting multi-state audits on key welfare and infrastructure areas, including solid-waste management in urban bodies, welfare of construction workers, management of District Mineral Funds, implementation of rural jobs guarantee programme, functioning of regional transport offices and the Jal Jeevan Mission.
All-India audits covering the Green India Mission, Smart Cities, MSME support and skill development are also underway and are expected to be completed by mid-2025. These audits aim to assess how effectively these national initiatives are delivering measurable benefits to citizens and improving their lives.
For the first time, the CAG has institutionalized stakeholder consultations at all stages of the audit cycle from planning to reporting, said Bajaj.
'We've made it mandatory to consult the Secretary, senior officials, academia, and civil society while finalising the Annual Audit Plan and audit reports. This inclusive process helps ensure our audits are grounded in real issues and deliver meaningful value to both institutions and citizens," Subramanian added.
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Dattesh Parulekar, assistant professor of International Relations at Goa University, said, 'The CAG's digital-first and stakeholder-led approach signals a decisive shift from traditional compliance checks to dynamic, technology-enabled, performance-linked audits. If sustained, this could mark a new era in public accountability—where audit reports not only flag inefficiencies but help shape more responsive governance."
Focus on training
Training remains central to this revamp. The CAG has signed eight memoranda of understanding with institutions such as the Indian Institute of Technology Madras, the Indian Institution of Management Ahmedabad, Bhaskaracharya National Institute for Space Applications and Geo-informatics and the National Institute of Urban Affairs to co-develop specialised curricula.
'For capacity building, we are training audit staff in AI, data analytics, cybersecurity, and public policy at top institutes, including a nationwide boot camp on AI and machine learning for audit at IIT Delhi," said Bajaj.
A nine-month AI and cybersecurity diploma programme is already underway at IIT-Madras for CAG officers, with modules on environmental audit, ESG reporting, procurement, and non-cognitive skills running in parallel across various centres, said Subramanian.
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The CAG submits audit reports to the President or governors, which are then tabled in Parliament or state legislatures. These reports have historically played a key role in ensuring financial accountability and transparency in governance, uncovering issues from expenditure irregularities and poor scheme implementation to systemic inefficiencies. These audits have led to policy reforms, public debates, and accountability at the highest levels.