Para 2.6.25 — MSO (Audit)
Original Rule Text
2.6.25 It should then be examined whether:
(i) the institutions have proper organizational arrangements for the discharge of accounting functions;
(ii) responsibilities for the performance of all duties in relation to the accounting functions are clearly defined and specifically assigned to appropriately qualified staff; and
(iii) the accounting system provides information necessary for:
(a) efficient and economical management of the operations of the body and the resources entrusted to it;
(b) proper monitoring of the activities by Government which has a substantial stake in it; and
(c) a meaningful evaluation of its achievements and shortcomings by external agencies, including Audit.
What This Means
Beyond checking whether systems exist, auditors must also examine whether the institution has the right organizational setup for accounting — meaning qualified staff with clearly defined responsibilities. The accounting system must also produce information useful for three purposes: efficient management of the institution's operations, proper monitoring by the government (which has a financial stake), and meaningful evaluation by external agencies including audit.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Institutions must have proper organizational arrangements for accounting functions
- 2Accounting responsibilities must be clearly defined and assigned to qualified staff
- 3The accounting system must support efficient and economical management
- 4It must enable proper government monitoring of the institution
- 5It must facilitate meaningful external evaluation including by CAG
Practical Example
During an audit of a government-funded hospital trust, the audit team finds that all accounting work is handled by a single clerk with no formal accounting qualifications, with no backup or supervisory check. They also note that the trust's accounts do not show expenditure against individual programs (like immunization vs. maternal health), making it impossible for the Health Ministry to evaluate program-wise fund utilization. Both findings are flagged as systemic deficiencies.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What qualifies as 'appropriately qualified staff' for accounting functions?▼
Why must the accounting system serve external agencies?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.