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Rule 109 - Re-audit Period | KartavyaDesk

GFR 2017

Original Rule Text

Rule 109 Re-audit. As a convention, a period of three years has been accepted by the Central and State Governments for the re- audit of past transactions involving errors in classification

What This Means

Rule 109 of the General Financial Rules (GFR), 2017, deals with the re-audit of past financial transactions. Essentially, it sets a timeframe for when government departments can go back and review previously audited transactions to correct errors in how those transactions were classified. This is important because proper classification ensures accurate financial reporting and accountability. Think of it as a 'statute of limitations' for fixing classification mistakes discovered during an audit.

The rule states that both the Central and State Governments have generally accepted a three-year period for re-auditing transactions with classification errors. This means that if an error in classification is found in a transaction older than three years, it might not be re-audited under this rule. This rule primarily affects government departments, auditors, and anyone involved in financial record-keeping and reporting within the government. It ensures that there's a reasonable window for correcting errors while also preventing audits from going back indefinitely.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Rule 109 concerns the re-audit of past transactions.
  • •The focus is on correcting errors in the classification of financial transactions.
  • •A convention of three years is accepted for re-auditing by both Central and State Governments.
  • •This rule promotes financial accuracy and accountability.
  • •It provides a time limit for re-auditing classification errors.

Practical Example

The Rural Development Department made a payment of ₹50,000 to a contractor, Mr. Sharma, for road repairs in 2021. The initial classification coded this expense under 'Infrastructure Development.' During an internal audit in 2023, Ms. Verma, the Senior Accounts Officer, discovered that the road repairs were actually part of a drought relief program and should have been classified under 'Disaster Management.' Since the error was discovered within the three-year window, the department can re-audit the transaction and correct the classification. However, if this error was discovered in 2025, it would likely fall outside the scope of Rule 109, making a re-audit under this rule less likely, though other corrective actions might still be possible.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What does 're-audit' mean in the context of Rule 109?▼
Re-audit, in this context, refers to reviewing a previously audited transaction to correct errors specifically related to its classification.
Does the three-year period start from the date of the transaction or the initial audit?▼
The three-year period generally starts from the date of the transaction. It's the time window within which a classification error can be addressed through re-audit under this rule.
What happens if a classification error is discovered after three years?▼
While Rule 109 might not directly apply for re-audit, other mechanisms for correcting financial records might still be available, depending on the specific circumstances and internal departmental procedures. However, a re-audit specifically under Rule 109 would be less likely.
Is the three-year period a strict legal requirement?▼
The rule states that a three-year period has been 'accepted as a convention.' This implies that while it's a generally followed practice, there might be exceptional circumstances where deviations are possible, although not common.
Who is responsible for ensuring compliance with Rule 109?▼
All government employees involved in financial transactions, record-keeping, and auditing are responsible for ensuring compliance with Rule 109. This includes accountants, auditors, and departmental heads.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 109 of the General Financial Rules, 2017, what is the accepted timeframe for the re-audit of past transactions involving errors in classification by the Central Government?

Related Rules

Rule 271General Financial Rules 2017 (amended July 2024) - Rule 271 - Chapter 10Rule 146General Financial Rules 2017 (amended July 2024) - Rule 146 - Chapter 6Rule 169General Financial Rules 2017 (amended July 2024) - Rule 169 - Chapter 6Rule 215General Financial Rules 2017 (amended July 2024) - Rule 215 - Chapter 6Rule 273General Financial Rules 2017 (amended July 2024) - Rule 273 - Chapter 10

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