Para 3.5.17 — MSO (Audit)

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.

# Submission of Utilization Certificates

What This Means

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

• 1Five distinct procedures for verifying condition compliance depending on circumstances
• 2Direct central or local audit includes complete or test check of condition fulfillment
• 3Local auditors must certify condition compliance or report deviations
• 4Sanctioning authority must furnish formal utilization certificates to the AG
• 5For bodies audited by non-CAG auditors, certificates from those auditors are accepted
• 6Utilization certificates should ideally be based on audited accounts
• 7Test checks extend to examining the adequacy of certification procedures

Practical Example

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.