Para 3.13.17 — MSO

Contingent liabilities on account of guarantees given by Government

3.13.17 Audit is responsible for keeping a watch over the investment of funds forming part of the Public Account of India or of a State. In doing so, Audit should ensure the following:

(i) The investments made on account of any regularly constituted sinking or other Funds administered by the Union or State Governments are of the category authorised by the relevant statutory provisions or the instruments by which the Funds are governed. When there are no governing statutory provisions or instruments, proper authority for the investment should be demanded. This principle also applies to the investment of cash balances of the Union or any of the State Governments.

(ii) The Accountant General (Audit) should promptly take up with the Government any of the investments which he considers to be unauthorised, irregular or unsound.

(iii) Any ascertained losses connected with the investments or unusual depreciation in their market price should be reported to Government along with such comments as the Accountant General (Audit) may consider appropriate.