Para 3.5.19 — MSO (Audit)
Original Rule Text
3.5.19 State Governments directly incurring expenditure out of Central grants are also not required to furnish utilization certificates. If, however, such expenditure is incurred through local bodies or private institutions, the State Governments concerned should furnish the necessary utilization certificates.
What This Means
State Governments that directly spend Central grant money are also not required to submit utilization certificates, since their expenditure is audited by the CAG. However, if State Governments pass the Central grant money to local bodies or private institutions for spending, then the State Government must submit utilization certificates for those amounts to confirm proper utilization.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1State Governments spending Central grants directly are exempt from utilization certificates
- 2If grants are channeled through local bodies or private institutions, UCs are required
- 3State Government must furnish UCs when intermediary spending occurs
- 4Direct State Government expenditure is already covered by CAG audit
- 5This creates a clear distinction between direct and intermediary spending
Practical Example
A State Government receives Rs. 10 crore from the Centre for a drinking water scheme. It spends Rs. 6 crore through its own PWD (no UC needed) and passes Rs. 4 crore to gram panchayats for local distribution systems. For the Rs. 4 crore, the State Government must submit utilization certificates to confirm the panchayats used the funds properly.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why the distinction between direct and intermediary spending?▼
Who is responsible for collecting UCs from local bodies and forwarding them?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.