Para 3.23.23 — MSO (Audit)
Original Rule Text
3.23.23 Often, moneys intended as Plan assistance are withdrawn from the Consolidated Fund and paid to an autonomous institution or a local body which does not utilise the funds for the intended purpose. There can also be instances of such withdrawals being paid to a public sector undertaking with the specific direction that the funds should be retained in a personal ledger account to be opened in the treasury so as to ensure that the ways and means position is not affected. Funds withdrawn from the Consolidated Fund are also often retained either in a bank account or in the form of cash or cheques. Though comments on such instances are included in the Audit Reports, it will also be necessary to review such cases in order to ascertain the actual utilisation of the grants sanctioned and allotted not only by the Central Government but also by the State Government themselves in the Plan Sector for implementation of different Plan schemes. Such cases noticed in course of audit should also be reported as a part of the audit certificate as far as possible.
What This Means
A common irregularity is that Plan assistance money is withdrawn from the Consolidated Fund and parked with autonomous bodies, local bodies, or public sector units without being used for the intended purpose. Sometimes funds are kept in personal ledger accounts, bank accounts, or even as cash or cheques instead of being spent on the schemes. Auditors must track the actual utilisation of such funds and report irregularities in both the Audit Report and the audit certificate.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Plan funds are sometimes parked with autonomous bodies or local bodies without actual utilisation
- 2Funds may be deposited in personal ledger accounts to avoid affecting ways and means position
- 3Cash, cheques, or bank deposits may be used to park unspent funds
- 4Auditors must review actual utilisation, not just withdrawal from Consolidated Fund
- 5Such cases must be reported in both the Audit Report and the audit certificate
Practical Example
A state government draws Rs 200 crore for an irrigation scheme from the Consolidated Fund and transfers it to a state-owned corporation. The corporation, instead of starting construction, deposits Rs 150 crore in a fixed deposit in a nationalised bank. The audit team discovers this during inspection and reports that Rs 150 crore of Central assistance was drawn but not actually utilised for the intended purpose, effectively inflating reported expenditure.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why do state governments park funds this way?▼
What is a 'personal ledger account'?▼
How does this affect the ways and means position?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.