Para 2.2.37 — MSO (Audit)
Original Rule Text
2.2.37 In the audit of sanctions to expenditure from the point of view of competency of the sanctioning authority, the guiding principles enunciated below should be observed:
(i) If the sanctioning authority is vested with full powers in respect of a certain class of expenditure, a sanction accorded under those powers can be challenged by Audit only on grounds of propriety (see also paragraph 2.2.47).
(ii) If the authority is vested with powers that may be exercised only after paying due regard to certain criteria expressed in a general form, sanctions accorded under those powers can be challenged by Audit:
(a) if the disregard of the criteria is considered to be so serious as to make the sanction perverse; or
(b) if the facts of the case are such as to make the Accountant General confident that one or more of the criteria have been disregarded.
(iii) If the sanctioning authority is vested with powers that are expressed in precise terms, the Accountant General is bound to ascertain that the order defining its powers is obeyed exactly in every instance.
(iv) For the purpose of financial sanction, a group of works which forms a single project shall be considered as one work, and the necessity for obtaining the sanction of a higher authority to a project is not avoided by reason of the fact that the cost of each particular work in the project does not require such sanction.
# Notes:
(i) In respect of irrigation, navigation, embankment or drainage works, the construction estimates of which have been closed, this rule is subject to the special rules prescribed for sanctions to incur capital expenditure.
(ii) A preliminary enquiry, survey or experiment, which must necessarily precede the formulation of any project or scheme, need not to be considered for the purpose of this rule as forming part of that project or scheme.
(v) If any one part or component of a scheme requires the sanction of a higher authority, Audit should hold under objection any expenditure thereon until the necessary sanction is obtained; in determining whether objection should be raised to expenditure on any other part or component of the scheme prior to the receipt of such sanction, it should be seen that the expenditure is not likely to exceed, at a later date, the limit up to which sanction can be accorded by the original sanctioning authority.
What This Means
When auditing sanctions for competency, audit follows different approaches based on the type of powers held by the sanctioning authority. If the authority has full powers for a class of expenditure, the sanction can only be challenged on propriety grounds. If powers are subject to broad criteria, the sanction can be challenged only if criteria were clearly disregarded. If powers are precisely defined, exact compliance must be verified in every case. Importantly, a group of works forming a single project must be treated as one work for sanction purposes -- splitting works to avoid the need for higher-level sanction is not permitted.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Full powers: sanction challenged only on propriety grounds
- 2Discretionary powers with criteria: challenged only if criteria clearly disregarded
- 3Precisely defined powers: exact compliance required in every instance
- 4A project comprising multiple works is treated as one work for sanction purposes
- 5Splitting a project into smaller works to avoid higher-level sanction is impermissible
- 6Preliminary surveys/experiments need not be counted as part of the project
Practical Example
A Public Works Department splits a Rs 2 crore road construction project into four separate estimates of Rs 50 lakh each, so that the Executive Engineer (whose sanction limit is Rs 50 lakh) can approve each one independently. The AG detects this splitting and treats the entire Rs 2 crore as one project, noting that it requires sanction from the Superintending Engineer (whose limit covers Rs 2 crore). The expenditure on all four 'separate' works is held under objection until proper higher-level sanction is obtained.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is work-splitting and why is it a problem?▼
Can audit challenge a sanction issued under full powers?▼
Are preliminary surveys counted as part of a project's cost?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.