Para 3.7.12 — MSO (Audit)
Original Rule Text
3.7.12 In conducting audit of sanctions to purchases, contracts, etc., the broad principles of financial propriety enunciated under in the chapter on ‘Audit of Expenditure’ should be borne in mind. In cases of doubt regarding the necessity for or the propriety of the expenditure sanctioned, the original records leading to the issue of the sanction should be called for and scrutinised in Central Audit. If the Accountant General (Audit) considers this necessary, the case may also be sent with a brief note to Propriety Audit Section or the local audit party for examination. It should further be seen that all requirements pointed out at the time of any pre-scrutiny of the sanctions have been duly complied with or resolved to the satisfaction of Audit;
# B. Audit of Acceptance of Tender/Contracts/Agreements
What This Means
When auditing sanctions for purchases and contracts, auditors must apply the broad principles of financial propriety from the Expenditure Audit chapter. If there is any doubt about the necessity or propriety of the sanctioned expenditure, the original records leading to the sanction should be called for and examined in Central Audit. If needed, the case may be referred to the Propriety Audit Section or local audit party. Additionally, any requirements flagged during prior pre-scrutiny of sanctions must have been duly complied with.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Financial propriety principles from Expenditure Audit chapter apply to contract sanctions
- 2Doubts about necessity or propriety require examination of original records in Central Audit
- 3Cases may be referred to Propriety Audit Section or local audit party if needed
- 4Requirements raised during pre-scrutiny of sanctions must be verified as complied with
- 5Original records include files, notings, and correspondence leading to the sanction
- 6Both necessity and propriety of expenditure can be questioned
Practical Example
During central audit, the auditor reviewed a sanction for purchasing 500 air purifiers at Rs 50,000 each for government offices. Doubting the necessity of such an expensive model, the auditor called for the original purchase file. The file showed that no market survey was conducted, cheaper alternatives were not considered, and the sanction was rushed through in the last week of the financial year. The case was referred to the Propriety Audit Section for detailed examination as a potential 'rush of expenditure' case.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the Propriety Audit Section?▼
What is pre-scrutiny of sanctions?▼
Can audit question the necessity of expenditure?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.