Para 2.5.8 — MSO (Audit)
Original Rule Text
2.5.8 Under Section 19(3) of the Act, audit of accounts of Corporations established by law made by a State/Union Territory Legislature can be entrusted to the Comptroller and Auditor General by the Governor of the State or the Administrator of the Union Territory after consultation with the Comptroller and Auditor General and after giving a reasonable opportunity to the Corporation to make representation with regard to the proposal for such audit.
- Departmental Undertakings
What This Means
For corporations established by State or Union Territory legislatures, the audit by the CAG is not automatic. Under Section 19(3) of the DPC Act, the Governor of the State or Administrator of the UT must entrust the audit to the CAG after consulting with the CAG and giving the corporation a reasonable opportunity to make representations about the proposed audit. This ensures that the corporation's views are considered before CAG audit is imposed.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Section 19(3) governs audit of state/UT statutory corporations by the CAG
- 2Entrustment requires action by the Governor or UT Administrator
- 3Prior consultation with the CAG is mandatory before entrustment
- 4The corporation must be given reasonable opportunity to make representations
- 5CAG audit of state corporations is not automatic -- it requires a specific entrustment order
Practical Example
The Governor of Maharashtra decides that a state-level industrial development corporation should be audited by the CAG. Before issuing the entrustment order, the Governor consults the CAG to confirm willingness and capacity. The corporation is also given an opportunity to present its views -- it argues that its existing audit arrangements are adequate. After considering all inputs, the Governor proceeds with the entrustment, and the CAG's office takes over the audit from the next financial year.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can a state corporation refuse CAG audit?▼
Why is consultation with the CAG required?▼
Does this apply to Union Territories without legislatures?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.