Para 2.2.47 — MSO (Audit)
Original Rule Text
2.2.47 No precise rules can, however, be laid down for regulating the course of audit against propriety. Its objective is to support a reasonably high standard of public financial morality and sound financial administration and devotion to Government’s financial interests. In any case, Audit Officers in the performance of their duties should apply the
following general principles that have long been recognised as standards of financial propriety:
(i) The expenditure should not prima facie be more than what the occasion demands. Every public officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money.
(ii) No authority should exercise its powers of sanctioning expenditure to pass an order that will be, directly or indirectly, to its own advantage.
(iii) Public moneys should not be utilised for the benefit of a particular individual or section of the community unless:
(a) the expenditure involved is insignificant; or
(b) a claim for the amount could be enforced in a court of law; or
(c) the expenditure is in pursuance of a recognised policy or custom.
(iv) the amount of allowances, such as travelling allowances granted to meet expenditure of a particular type, should be so regulated that the allowances are not, on the whole, sources of profit to the recipients.
The proper discharge of duties by an Audit Officer in this field is a very delicate matter and requires much discretion and tact. Audit observations against expenditure should not be expressed as based on "canons of financial propriety" but as transgressing a universally accepted standard of official conduct or financial administration.
# Other Guidelines
What This Means
This para lays down the four fundamental standards of financial propriety that auditors must apply. First, spending should not exceed what the occasion demands, and officers must treat public money with the same care as their own. Second, no authority should sanction expenditure that benefits itself. Third, public money should not benefit a particular individual or group unless the amount is insignificant, legally enforceable, or follows recognized policy. Fourth, allowances like travelling allowance should not become a source of profit. Auditors must apply these principles with discretion and tact.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Expenditure should not exceed what the occasion demands (prudent person test)
- 2No authority should sanction spending that directly or indirectly benefits itself
- 3Public money should not benefit specific individuals except in defined exceptions
- 4Allowances must not become profit sources for recipients
- 5Audit observations should cite universally accepted standards, not 'canons of financial propriety'
- 6Proper discharge of propriety audit requires discretion and tact
Practical Example
A District Collector sanctions Rs 8 lakh for renovating his own official residence, including installing a home theatre system. An audit officer flags this under two propriety standards: the sanctioning authority benefited from its own sanction (standard ii), and the expenditure exceeded what the occasion demanded since a home theatre is not a necessity for official residence (standard i).
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 the 'prudent person test' in financial propriety?▼
When can public money be used for a specific individual's benefit?▼
Why should audit observations avoid citing 'canons of financial propriety'?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.