Para 3.5.21 — MSO (Audit)
Original Rule Text
3.5.21 Unless it is otherwise ruled by Government, every grant made for a specified object is subject to the following implied conditions:
(i) If the sanctioning authority has not prescribed any time frame for the purpose, the grant will be spent upon the specified object within a reasonable time, which would normally be a period of one year from the date of issue of the sanction.
(ii) Any portion of the grant not ultimately required for expenditure upon the specified object will be surrendered.
Audit scrutiny, when undertaken, should pay special attention to the fulfilment of these conditions.
- Grants to non-government or quasi-government bodies or institutions
What This Means
Every grant given for a specific purpose comes with two implied conditions even if the government does not explicitly state them: first, the money must be spent on the specified object within a reasonable time (normally one year from the sanction date, unless otherwise specified), and second, any portion of the grant not ultimately needed for the specified purpose must be surrendered back to the government. Audit should pay special attention to these conditions during scrutiny.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Two implied conditions apply to all grants for specified objects
- 2Grant must be spent within a reasonable time — normally one year from sanction date
- 3The sanctioning authority may prescribe a different timeframe
- 4Unneeded portions of the grant must be surrendered to the government
- 5These conditions apply even without explicit mention in the sanction order
- 6Audit scrutiny should specifically check compliance with these implied conditions
Practical Example
An NGO receives a Rs. 10 lakh grant for conducting a health camp. The camp costs only Rs. 7 lakh. The NGO must surrender the remaining Rs. 3 lakh to the government. If the grant was sanctioned in April 2025 but the camp has not been conducted by April 2026, audit should flag both the delay beyond the reasonable one-year timeframe and request explanation for non-utilization.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What if the grantee needs more than one year to spend the grant?▼
What happens to the surrendered unspent grant amount?▼
Are these implied conditions legally binding?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.