Para 17.2 — Internal Audit covers all offices under a Ministry

17.2 SCOPE OF IA: 17.2.1 The IA Wing will work directly under the Chief Audit Executive (CAE), with overall responsibility remaining with the Chief Accounting Authority i.e. Secretary of the Ministry/Department. The Principal Accounts Office, the PAOs as well as the offices of the DDOs in the Ministries/Departments, Indian Missions and other Govt. of India offices abroad, shall be within the jurisdiction of IA. In addition to these offices, IA shall be required to audit the implementing agencies for various schemes and programmes of the Ministry/Department, autonomous bodies and other institutions receiving grants from Government of India.

17.2.2 IA shall also check the initial accounts maintained in the executive offices to ascertain the extent of compliance to the rules and regulations, system and procedures etc. in the accounting and financial matters. The scrutiny would cover checking of all accounting records including those relating to fund accounts, loans and advances, disposal of confiscated stores (in CBEC), review of the installation and operating efficiency of expensive equipment and machinery and examination of records relating to physical verification of stores, equipment, tools and plant. IA will specifically look at the risks in the process, IT systems, payments and delivery of goods and services and suggest remedial measures. The accounts of all grantee Institutions or Organizations shall be open to inspection by the sanctioning authority and audit, both by the Comptroller and Auditor General of India under the provision of CAG (DPC) Act 1971 and IA by the Principal Accounts Office of the Ministry or Department, whenever the Institution or Organization is called upon to do so and a provision to this effect should invariably be incorporated in all orders sanctioning grants in aid. The IA Wing shall also draw up specific risk matrices for each audit task under areas such as compliance risk, financial risk, legal risks etc., as applicable. The schemes of a Ministry / Department would be audited for their effective implementation in terms of the scheme guidelines and various MoF rules and orders issued from time to time.

17.3 DUTIES OF IA The duties of the IA Wing, shall not be limited to, but will include the following:

(i) Prepare annual and quarterly plan to conduct IA

(ii) Facilitate preparation of risk registers and risk matrix of the Departments/ Grantee institutions

(iii) Study of accounting procedures prescribed for the department with a view to ensuring that they are correct, adequate and free from any defects or lacunae;

(iv) Watch over the implementation of the prescribed procedures and the orders issued from time to time;

(v) Scrutiny and check of payments and accounting work of the accounting units;

(vi) Review the system generated reports used for receipts,payments and accounts to test check their authenticity with reference to related copies of supporting documents like vouchers, registers etc, and to suggest improvement in the IT processes;

(vii) Examining the banking system to suggest improvement in the payment processes;

(viii) Examining the fund flow and cash flow mechanisms to suggest better fund management

(ix) Investigation of important areas and gaps in accounting and other connected records;

(x) Coordination with other Ministries and CGA on the IA procedures;

(xi) Coordination with the States and UTs for proper Internal Audit of Centrally Sponsored Schemes

(xii) Periodical review of all accounts records;

(xiii) Pursuance/settlement of objections taken in test audit notes issued by statutory audit offices and other matters relating to statutory audit;

(xiv) Examine and report on points or irregularities brought to its notice by the Principal Accounts Offices/Pay and Accounts Offices; and

(xv) Preparation and submission of ‘Annual Review’ on performance of IA Wing to the CGA.

17.3.2 Duties of Chief Audit Executive as per New Charter: Roles and responsibilities of Head of Accounting Organization i.e. Pr.CCAs/CCAs/CAs(i/c) as the case may be, relating to IA/Risk Based Audit are specified in para 1.3 of this Manual. Para 18.11 of Charter for FAs provides that FA shall vet the annual internal audit plan of the Department prepared by CCAs before submission to Secretary of the Department for approval.

What This Means

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Key Points

• 1IA jurisdiction covers PAOs, DDOs, Indian Missions, scheme implementing agencies, autonomous bodies, and grant recipients
• 2Scope includes compliance audit, risk assessment, IT system review, fund management, and service delivery effectiveness
• 3IA must draw up specific risk matrices for each audit task (compliance risk, financial risk, legal risk)
• 4Grant sanction orders must include a provision for IA inspection by the Principal Accounts Office
• 5Duties include annual/quarterly planning, risk register preparation, accounting procedure study, payment scrutiny, and banking system examination

Practical Example

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Frequently Asked Questions

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