Para 1.1.7 — MSO (Audit)
Original Rule Text
1.1.7 Expenditure incurred by Governments from their Consolidated Fund often takes the form of grants and loans to various bodies and authorities. Under Section 13 of the Act, it is the responsibility of the Comptroller and Auditor General to audit such expenditure. Audit in this case is, however, restricted to the records available in Government offices and is directed towards:
(i) examining the admissibility of the grant or loan and the adequacy of sanction; and
(ii) verifying the fulfilment of the conditions governing the grants and loans and the utilization for the purposes for which they were intended.
The Act has made provisions in Sections 14 and 15 for the audit of the accounts of authorities and bodies receiving financial assistance in the form of grants or/and loans from the Government of India or a State or Union Territory, subject to certain conditions and criteria specified in those Sections.
Note: ‘Authority’ has been interpreted to mean a person or body exercising power or command. ‘Body’ has been interpreted to mean an aggregate of persons, incorporated or unincorporated.
What This Means
When the government gives grants and loans to various bodies and authorities, the CAG audits this spending too — but only using government records. The audit checks whether the grant or loan was properly sanctioned and whether the recipient fulfilled the conditions and used funds for the intended purpose. Sections 14 and 15 provide additional powers to audit the accounts of bodies receiving substantial government funding.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1CAG audits grants and loans given from Consolidated Fund under Section 13
- 2Audit is restricted to records available in government offices
- 3Two checks: admissibility of sanction and fulfillment of conditions/utilization
- 4Sections 14 and 15 extend audit to the recipient bodies' own accounts under certain conditions
- 5'Authority' means a person or body exercising power; 'Body' means an aggregate of persons
Practical Example
A District Rural Development Agency receives a Rs 5 crore grant for a watershed management project. The CAG audit team would verify in government records whether the grant was properly sanctioned, whether conditions (like matching state contribution) were met, and whether utilization certificates show the money was spent on watershed activities — not diverted elsewhere.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can the CAG directly audit a body that receives a government grant?▼
What does the CAG check when auditing grants and loans?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.