Para 3.5.9 — MSO (Audit)
Original Rule Text
3.5.9 Audit has to verify that each item of expenditure is covered by the sanction of the authority competent to sanction it. For this purpose, Audit has not only to see that the expenditure is covered by a sanction, either general or special, but also satisfy itself (1) that the authority sanctioning it is competent to do so by virtue of the powers vested in it by the provisions of the Constitution and of the laws, rules or orders made thereunder or
by the rules of delegation of financial authority framed by the competent authority; and (2) that the sanction is definite and thus needs no reference either to the sanctioning authority itself or to any higher authority. Audit has also to see that the expenditure conforms to the provisions of the sanctions.
What This Means
Audit must verify that every grant expenditure is covered by a proper sanction from a competent authority. This means checking not just that a sanction exists, but also that the sanctioning authority had the legal power to issue it (through constitutional provisions, laws, rules, or delegation of financial powers), that the sanction is definite and self-contained (requiring no further approvals), and that actual expenditure conforms to the sanction terms.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Every item of grant expenditure must be covered by a competent sanction
- 2The sanctioning authority must have legal competence through constitutional/legal provisions or delegation
- 3The sanction must be definite — not requiring further reference to any authority
- 4Actual expenditure must conform to the provisions of the sanction
- 5Both general and special sanctions are verified
Practical Example
A Joint Secretary sanctioned a grant of Rs 25 lakh to an NGO for rural development. The auditor checked the delegation of financial powers and found that the Joint Secretary's power was limited to Rs 20 lakh, with amounts above Rs 20 lakh requiring Secretary-level approval. The auditor also noticed the sanction said 'subject to approval of Finance Division' — making it conditional and not definite. Both issues were raised as audit observations.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What makes a sanction 'definite' in audit terms?▼
How does audit verify that the sanctioning authority is competent?▼
What if expenditure exceeds the sanctioned amount?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.