Para 2.6.20 — MSO (Audit)
Original Rule Text
2.6.20 In order that there may not be any difficulty in taking up the audit, the Government should be persuaded to include in the conditions sanctioning grants, loans or investments, an enabling clause to the effect that the books and accounts of the recipient institutions should be made available to the Comptroller and Auditor General for his scrutiny or audit, wherever and whenever necessary.
What This Means
When the government gives grants, loans, or makes investments in any institution, it should include a condition requiring that institution to open its books and accounts for scrutiny by the CAG. This 'enabling clause' ensures the CAG can audit how public money was used, without the institution later refusing access on technicality grounds.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Government sanctions for grants/loans/investments should include an audit access clause
- 2The clause gives CAG the right to scrutinize books and accounts of recipient institutions
- 3Access must be available wherever and whenever the CAG deems necessary
- 4This prevents institutions from blocking audit on grounds of no explicit audit mandate
Practical Example
A Central Ministry is sanctioning a Rs 5 crore grant to an autonomous research institute. While drafting the sanction order, the Finance Division includes a clause stating: 'The books and accounts of the institute shall be open to scrutiny by the Comptroller and Auditor General of India.' This ensures that when an audit party visits the institute two years later, the institute cannot refuse to share its financial records.
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 an enabling clause necessary if CAG already has statutory audit powers?▼
What happens if the government fails to include such a clause?▼
Does this clause override the institution's own audit arrangements?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.