The correct answer is option 3: 1, 2, and 3.

Option 1 states that the Committee on Estimates is responsible for reporting any potential economies, improvements in organization, efficiency, or administrative reform that can be achieved. This means that the committee`s role is to identify areas where cost savings can be made or where the efficiency of the organization can be improved.

Option 2 states that the committee suggests alternative policies that can bring about efficiency and economy in administration. This means that the committee is not only responsible for identifying potential improvements, but also for recommending alternative policies that can help achieve these improvements.

Option 3 states that the committee examines whether the money is well laid out within the limits of the policy implied in the estimates. This means that the committee is responsible for reviewing the financial expenditure within the framework of the estimated policies. They ensure that the money is being spent wisely and in accordance with the intended policy goals.

Option 4 is incorrect as it suggests that the committee is responsible for examining reports of the Comptroller and Auditor General only on public undertakings, but the actual role of the committee goes beyond that.

Therefore, the correct answer is option 3: 1, 2, and 3.