Para 3.5.17 — MSO

3.5.17 Where conditions are attached to the grant, these generally relate to the particular objects on which the grant may be utilized or the timeframe within which the money must be spent. Whatever be the nature of the conditions, Audit has to verify that these have been fulfilled. The following procedure should be observed in such cases:

(i) If, in any case, the Accountant General (Audit) audits the expenditure incurred from the grant either centrally or in the course of local inspection, the audit scrutiny should include a complete or test check of the extent to which the prescribed conditions have been fulfilled.

(ii) Where the expenditure from a grant is audited locally, the auditor should either include in his report a certificate that the conditions attached to the grant have been or are being fulfilled, or furnish details of the deviations from or breaches of these conditions.

(iii) The sanctioning authority is required to furnish to the Accountant General (A&E) a formal certificate confirming the proper utilization of the grant from the administrative, technical and financial points of view. Audit should watch the compliance of this requirement.

(iv) In cases wherein the audit of local authorities and public or quasi-public bodies is conducted by an officer not subordinate to the Comptroller and Auditor General, a certificate, based on that officer’s audit, to the effect that the grants have been utilized on the objects for which they were sanctioned and in accordance with the conditions attached to them, may be accepted from the administrative authority concerned.

(v) In cases not falling under any of the above, the utilization certificates furnished by the authorities of the administrative Government to the Accountant General (A&E) may be accepted in audit. However, a test check should be applied, where possible, this being extended even to an examination of the adequacy of the procedures followed for obtaining the assurance upon which the certificates are based. Normally, the certificates should be based on audited statements of accounts and reports regarding the performance or achievements of the grantee in relation to the objects and conditions of the grants.