Para 2.4.8 — MSO (Audit)
Original Rule Text
2.4.8 Audit should ascertain whether:
(i) all stores were examined, on receipt and while accepting delivery, to determine their condition and to ensure that they were of the approved quality, make and specifications and the quantities conformed to those agreed upon;
(ii) the stores have been taken on stock and entered in the Goods Received Sheets/Bin Cards;
(iii) the previous stock balances have been correctly worked out, carried forward and authenticated by a responsible officer;
(iv) bin cards have been maintained chronologically based on receipts and issues; and
(v) Price Stores Ledgers containing the value account of stores have been maintained. 2.4.9 Where priced accounts are maintained, Audit will see that:
(i) stores are priced with reasonable accuracy and the rates initially fixed are reviewed periodically, correlated with market prices and revised where necessary;
(ii) the value accounts tally with the accounts of works and departments connected with stores transactions, their total also tallies with the amount outstanding in the general accounts;
(iii) the numerical balances of stock materials are reconciliable with the total of the value balances in the accounts at the rates applicable to different classes of stores; and
(iv) steps have been taken for the adjustment of profit or loss due to revaluation, stock verification or other causes not indicative of any serious disregard of rules.
# Physical verification of stocks
What This Means
Auditors must check that all received stores were examined for quality, quantity, and specifications upon delivery, and that they were properly recorded in Goods Received Sheets and Bin Cards. Stock balances must be correctly carried forward and authenticated by a responsible officer. Where priced accounts are maintained, auditors verify that stores are priced accurately, rates are reviewed periodically against market prices, value accounts tally with general accounts, and any profit or loss from revaluation or stock verification is properly adjusted.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1All stores must be examined on receipt for condition, quality, make, specifications, and quantity
- 2Stores must be entered in Goods Received Sheets and Bin Cards, maintained chronologically
- 3Previous stock balances must be correctly carried forward and authenticated by a responsible officer
- 4Price Stores Ledgers containing value accounts of stores must be maintained
- 5Priced accounts must tally with general accounts and market prices must be periodically reviewed
Practical Example
An auditor inspecting a railway division's stores depot finds that Bin Cards for steel rails have not been updated for six months, and the last three entries show no authentication by any officer. The Price Stores Ledger shows steel priced at Rs 45,000 per tonne, but the current market rate is Rs 62,000, and no revaluation has been done in two years. The auditor raises objections on both the incomplete records and the outdated pricing.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What are Bin Cards and why are they important?▼
What is a Price Stores Ledger?▼
How often should store prices be reviewed?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.