Para 3.13.17 — MSO (Audit)
Original Rule Text
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.
- Contingent liabilities on account of guarantees given by Government
What This Means
Audit must monitor the investment of funds that form part of the Public Account. Investments from sinking funds or other government-administered funds must be in categories authorised by the relevant statutes or governing instruments. If no such provisions exist, proper authority must be demanded. The AG (Audit) must promptly report any unauthorised, irregular, or unsound investments to the government, and must also report any ascertained losses or unusual depreciation in market value.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Investments of Public Account funds must be in authorised categories
- 2Statutory provisions or governing instruments specify allowable investment types
- 3If no governing provisions exist, proper authority for investments must be demanded
- 4Unauthorised, irregular, or unsound investments must be promptly reported to government
- 5Losses or unusual depreciation in market value must also be reported
Practical Example
A State Government's sinking fund is invested partly in government securities (authorised) and partly in a private company's bonds (not authorised under the fund's governing rules). The AG (Audit) promptly reports the private bond investment to the government as unauthorised. When market conditions cause unusual depreciation in the value of certain investments, this is also reported with appropriate comments.
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 investments are typically authorised for sinking funds?▼
What must the AG (Audit) do if an investment appears unsound?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.