Para 3.13.1 — MSO (Audit)
Original Rule Text
3.13.1 The primary objective of audit of borrowings of the Government, loans, advances and guarantees given by the Government, operation of the reserves, reserve funds and sinking funds is to ensure that;
(i) the transactions are within such limits, if any prescribed and are in tune with the authority that govern them;
(ii) the transactions are correctly reflected in the detailed accounts;
(iii) the balances relating to these accounts represent amounts which are realisable and there exists a mechanism for periodic confirmation of balances. 3.13.1
(a) The instructions contained in this chapter apply to the following:
(i) Internal and external borrowings of the Union Government including interest payments on such borrowings.
(ii) Open market borrowings and borrowings from the Union Government by the State Governments including interest payments on such borrowings.
(iii) Loans and advances given by the Union and State Governments to quasipublic bodies.
(iv) Contingent liabilities on account of guarantees given by the Government.
(v) Sinking Funds and investments out of such funds.
(vi) Reserves, Reserve Funds and investments out of such funds.
(vii) Suspense Accounts.
# Audit arrangements
What This Means
The audit of government borrowings, loans, advances, guarantees, reserves, reserve funds, and sinking funds has three primary objectives: verifying that transactions are within prescribed limits and authorised; ensuring they are correctly reflected in detailed accounts; and confirming that balances represent realisable amounts with a mechanism for periodic balance confirmation. This chapter covers internal and external Union borrowings, State borrowings, loans to quasi-public bodies, contingent liabilities from guarantees, sinking funds, reserve funds, and suspense accounts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Transactions must be within prescribed limits and properly authorised
- 2All transactions must be correctly reflected in detailed accounts
- 3Balances must represent realisable amounts with periodic confirmation mechanisms
- 4Covers Union and State borrowings, loans, advances, guarantees, and reserve/sinking funds
- 5Suspense accounts are also within scope
Practical Example
An audit team reviews a State Government's borrowings from the Centre and its loans to quasi-public bodies. They verify that each borrowing is within the approved limits, interest payments are correctly recorded, and the loan balances shown in the accounts are confirmed periodically with the borrowers as realisable amounts. They also check that the State's sinking fund investments comply with prescribed norms.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What types of transactions does this chapter cover?▼
Why must balances be confirmed periodically?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.