Para 2.6.11 — MSO (Audit)
Original Rule Text
2.6.11 The objectives of audit of accounts of autonomous institutions under Sections 14, 19 and 20 of the Act are two-fold: the first is aimed at watching utilization of the financial assistance provided by Government and the second is concerned with the certification of annual accounts. Though the scope of audit under all these Sections can cover both these objectives depending on the facts of each case, in practice however, the certification of annual accounts is undertaken only under the provisions of Sections 19 and 20, while the audit of utilization of Government assistance can be undertaken under all the Sections. In the case of autonomous bodies which depend on Government to a considerable extent for financial assistance for execution of their schemes or to tide over ways and means difficulties, mere certification that the accounts present a true and fair picture of the body on a particular day cannot be considered adequate for the purpose of audit. It is essential in all such cases to go beyond the requirement of certification of annual accounts and to probe into aspects relating to efficiency, performance, propriety, etc. in relation to the utilization of the resources made available to them by Government. For all practical purposes, no distinction need be drawn between “audit of receipts and expenditure” referred to in Section 14 of the Act and “audit of accounts” referred to in Sections 19 and 20.
What This Means
The audit of autonomous institutions under Sections 14, 19, and 20 of the DPC Act has two main objectives: checking how government financial assistance is being utilized, and certifying the institution's annual accounts. For bodies that depend heavily on government funding, simply certifying that accounts present a true and fair view is not enough -- auditors must also examine efficiency, performance, and propriety in how government resources are used. For practical purposes, no distinction is made between different types of audit under these sections.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Two objectives: utilization audit of government assistance and certification of annual accounts
- 2Account certification is done under Sections 19 and 20; utilization audit under all three sections
- 3For government-dependent bodies, certification alone is inadequate -- efficiency and propriety must be examined
- 4Performance audit and evaluation of achievements are essential components
- 5No practical distinction between 'audit of receipts and expenditure' (Section 14) and 'audit of accounts' (Sections 19/20)
Practical Example
The CAG audits a national research institute that receives Rs 200 crore annually from the government. Beyond certifying that the accounts are correctly prepared, the audit team examines whether the institute has actually achieved its research objectives, whether procurement of laboratory equipment followed economy principles, and whether a Rs 30 crore building project was completed efficiently. They find that 40% of the budget went to administrative overhead instead of research, which is flagged as a performance issue.
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 account certification considered inadequate for government-funded autonomous bodies?▼
What aspects does 'efficiency, performance, and propriety' audit cover?▼
What is the difference between Sections 14, 19, and 20 of the DPC Act?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.