The Comptroller and Auditor General of India (CAG) is the administrative head of the Indian Audit and Accounts Department and is the final audit authority in India. The Principal Director of Audit, N.E. Railway is responsible to the CAG of India in respect of administrative matters directly and in respect of audit through the Additional Deputy Comptroller and Auditor General of India (Railways).
Till 1950 the present Office of the Principal Director of Audit, N.E. Railway had had been under the control of one circle Chief Auditor both for O.T. Railway and E.P. Railway with Headquarters at New Delhi. This Office at Gorakhpur was headed by a Deputy Chief Auditor. A Chief Auditor was independently posted in this office in 1952. The designation was changed from Chief Auditor to Director of Audit w.e.f. 01.04.1979 and Principal Director of Audit w.e.f. 01.03.1990.
As a result of re-organisation in January, 1958 the North Eastern Zonal Railway System was bifurcated into two viz. North Eastern Railway and North East Frontier Railway with Headquarters at Gorakhpur and Pandu (Guwahati) respectively. "Divisional System" was introduced on this Railway in May, 1968 resulting in the creation of three Divisional Audit Offices at Izzatnagar, Lucknow and Varanasi in August, 1969. In addition to the above, there are two Workshops and Stores at Izzatnagar and Gorakhpur and a Broad Guage Construction Audit Office at Gorakhpur.