Para 3.5.1 — MSO (Audit)
Original Rule Text
3.5.1 The main aim of audit of grants-in-aid is to ensure that the grants are utilized for the purpose for which these are given and that sound economical financial management practices are duly followed while incurring expenditure out of such grants. Audit has also to bring to light instances of waste, failures, system weaknesses and deficiencies resulting in infructuous expenditure.
- Audit approach
What This Means
The main purpose of auditing grants-in-aid is to ensure that the grant money is spent on the intended purpose and that the recipient follows sound financial management practices. Audit must also identify and report cases of waste, failures, system weaknesses, and deficiencies that lead to unproductive or infructuous expenditure from grant funds.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Grants-in-aid must be used only for the purpose they were sanctioned for
- 2Sound and economical financial management must be followed by grantees
- 3Audit must flag waste, failures, and system weaknesses
- 4Infructuous (unproductive) expenditure must be brought to light
- 5Both utilization and financial management quality are audit objectives
Practical Example
A government grants Rs. 50 lakh to a training institute for conducting skill development programs. During audit, it is found that Rs. 15 lakh was spent on renovating the Director's office instead of training activities. The auditor flags this as diversion of grant funds from the sanctioned purpose and identifies it as infructuous expenditure against the grant objectives.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is a grant-in-aid?▼
What does 'infructuous expenditure' mean?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.