Para 3.5.3 — MSO (Audit)
Original Rule Text
3.5.3 Audit in the case of Grants-in-aid can be applied
(i) to the original grant itself and
(ii) to the expenditure that is subsequently incurred from it by the grantee.
What This Means
Audit of grants-in-aid operates at two levels. First, auditors can examine the original grant itself — whether it was properly sanctioned, for the right amount, to the right recipient. Second, auditors can examine how the grantee subsequently spent the grant money, checking whether expenditure was in line with the grant's purpose and conditions.
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 audit has two distinct components
- 2First component: audit of the original grant sanction and disbursement
- 3Second component: audit of the expenditure incurred by the grantee from the grant
- 4Both levels of audit ensure accountability for public funds
- 5This dual approach provides end-to-end oversight of grant utilization
Practical Example
The Health Department sanctioned a grant of Rs 2 crore to a charitable hospital for purchasing medical equipment. Audit first verified the grant sanction itself — checking the competent authority, budget provision, and compliance with grant rules. Then audit examined the hospital's records to verify that the Rs 2 crore was actually spent on medical equipment as specified and not diverted to other purposes.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can audit examine the grantee's expenditure in all cases?▼
What aspects of the original grant does audit examine?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.