Para 16.6 — MSO (A&E)
Original Rule Text
16.6 In respect of grants to nonGovernment or QuasiGovernment bodies or institutions, the Central Government have decided that where assets are to be acquired wholly or substantially out of Government grants it should be laid down that assets should not, without the prior sanction of the Government be disposed of, or utilised for purposes other than those for which the grants are sanctioned. 16.7 Government of India have decided that Utilisation Certificates need not be furnished in cases where the grants-in-aid are sanctioned subject to the fulfilment of certain pre-requisite conditions and are in the nature of reimbursement of expenditure already incurred. In such cases the sanction letters should clearly specify that the Utilisation Certificates will not be necessary. 16.8 Unless it is otherwise ruled by Government, every grant made for a specified object is subject to the implied conditions-
(i) that if no time limit has been fixed by the sanctioning authority the grant will be spent upon that object within a reasonable time (normally within one year from the date of issue of the letter sanctioning the grant) and
(ii) that any portion of the amount which is not ultimately required for expenditure upon that object will be surrendered. 16.9 In the case of unconditional grants, the Accountant General is in no way concerned with the manner in which the grant is
In cases in which the audit of local authorities and public or quasi public bodies is conducted by an office not subordinate to the Comptroller and Auditor General of India, (for example, Examiner of Local Fund Accounts of a State Government) a certificate regarding the grants having been utilised on the objects for which it was sanctioned and in accordance with the conditions attaching to the grant, based on that Officer’s audit, may be accepted from the administrative government authority concerned.
What This Means
When assets are acquired using Government grants (wholly or substantially), the grantee cannot dispose of or repurpose those assets without prior Government sanction. Government has also decided that utilisation certificates are not needed when grants reimburse expenditure already incurred — but the sanction letter must clearly state this. Unless the Government says otherwise, every specified-purpose grant has implied conditions: it must be spent on the stated purpose within a reasonable time (normally one year), and any unspent amount must be surrendered. The AG is not concerned with unconditional grants, though audit certificates from other offices may be accepted for conditional grants.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Assets acquired with grants cannot be disposed of or repurposed without prior government sanction
- 2UCs not needed for reimbursement-type grants — but sanction letter must explicitly say so
- 3Implied condition: grant spent on stated purpose within one year (unless specified otherwise)
- 4Unspent grant amounts must be surrendered to the government
- 5AG not concerned with how unconditional grants are used
- 6Audit certificates from non-CAG offices (e.g., Examiner of Local Fund Accounts) may be accepted
Practical Example
A voluntary organisation receives a Rs. 20 lakh government grant to purchase computers for a training centre. After three years, the organisation wants to sell the old computers and buy new ones. They must obtain prior government sanction before selling, since the assets were acquired substantially from the grant. If they had not used Rs. 3 lakh of the grant within the specified period, that amount must be surrendered back to the government.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What happens if a grantee disposes of assets without government permission?▼
When are utilisation certificates not required?▼
What counts as a 'reasonable time' for spending a grant?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.