Para 2.4.5 — MSO (Audit)
Original Rule Text
2.4.5 As regards custody and issue of stores, it has to be seen in audit whether:
(i) a particular official has been responsible for the custody of stores for prolonged periods and, if so, whether the stores have been physically verified regularly to guard against any loss, pilferage, etc.;
(ii) discrepancies, if any, between the book balances and the ground balances have been reconciled promptly;
(iii) appropriate and effective follow-up action has been taken on reports of physical verification of stores for making good any losses, shortages, etc. and to fix responsibility therefor;
(iv) adequate precautionary measures have been taken to prevent misuse of materials issued to contractors for use in works;
(v) adequate storage facilities are available and precautionary measures have been taken to protect stores from damage and undue deterioration;
(vi) efforts have been made to transfer surplus stores to other works, divisions or departments where these could be utilised;
(vii) a report on surplus stores that could not be so transferred as well as on obsolete and unserviceable stores, specifying the reasons for so declaring them, has been promptly sent to the competent authority for facilitating their disposal; (viii)all issues of stores are supported by proper indents and have been approved by the competent authority and acknowledged by the intended recipients; and
(ix) officers entrusted with custody of stores or holding charge of stores have furnished the security prescribed in terms of the instructions issued from time to time by the competent authority.
Note: Only such materials as are provided in the agreement should have been issued to contractors in a phased manner based on its use within a reasonable period. Where Government or any other authority has prescribed a scale for issue of stores of any particular kind, the scale should not have been exceeded.
# Audit of write-off/disposal of stores
What This Means
Auditors must verify that stores in government custody are properly safeguarded, physically verified regularly, and that any discrepancies between book and actual balances are promptly reconciled. They check whether surplus stores are transferred to other departments, unserviceable stores are reported for disposal, all issues are backed by proper indents and approvals, and officers handling stores have furnished the required security deposits.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Custody of stores by a single official for prolonged periods must be flagged, with regular physical verification required
- 2Discrepancies between book balances and ground balances must be reconciled promptly
- 3Surplus stores should be transferred to other works/divisions/departments where they can be used
- 4All store issues must be supported by proper indents, approved by competent authority, and acknowledged by recipients
- 5Materials issued to contractors must only be as per agreement terms, in phased manner based on actual use
Practical Example
During audit of an irrigation division, auditors find that the same storekeeper has been in charge for eight years without transfer, and the last physical verification was done three years ago. They also discover that 500 MT of cement was issued to a contractor in one lot (for a project requiring only 100 MT per quarter), with no acknowledgment from the contractor on record. The audit team flags both the custody risk and the irregular bulk issuance.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why is it a concern if one official handles stores custody for a long time?▼
What should happen to surplus stores that a department cannot use?▼
Can materials be issued to contractors without any limit?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.