Para 3.7.26 — MSO (Audit)
Original Rule Text
3.7.26 The responsibility for auditing freight charges on purchases from abroad will be as follows:
(i) In all cases where the High Commissioner for India in London makes the payments on this account, the Principal Director of Audit, Indian Accounts, London, is responsible for detailed audit of the payments.
(ii) In cases where the High Commissioner for India in London arranges shipment of the stores and payments are made by his Chief Accounting Officer, the Principal Director of Audit in London is responsible for checking the classification of stores, the correctness of the freight and its reasonableness and all other preliminary requirements relating to the payment of freight.
(iii) The checks prescribed at
(ii) above are exercised by the Director of Audit, Indian Accounts, Washington, in cases where shipments are arranged by
the India Supply Mission, Washington, and the payments are made on the basis of the authority of the Mission’s freight forwarders by the Chief Accounting Officer to the High Commissioner for India in London.
(iv) In cases where the shipments are arranged by other Missions abroad and the relevant documents leading to the determination of freight rates are in India, the Audit Officer in India is responsible for the checks specified at
(ii) above; he will also maintain a close liaison with the Audit Officer concerned abroad.
(v) The consignees' Audit Officers are responsible for verifying that the freight payments have been correctly linked in the connected records with the cost of stores.
# C. Other Payments to Suppliers Abroad
What This Means
This paragraph specifies who is responsible for auditing freight charges on stores purchased from abroad, depending on who arranged the shipment and who made the payment. When the High Commissioner in London pays freight, the London audit office audits it. When London arranges shipment and its Chief Accounting Officer pays, the London audit office checks classification, freight correctness, and reasonableness. Similar responsibility lies with the Washington audit office for India Supply Mission shipments. When other Missions arrange shipments and freight documents are in India, the Indian Audit Officer performs these checks. In all cases, the consignee's Audit Officer verifies that freight payments are correctly linked in the records.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Freight audit responsibility follows who arranged the shipment and who made the payment
- 2London audit office handles freight paid by the High Commissioner or arranged through London
- 3Washington audit office handles freight for India Supply Mission shipments
- 4Indian Audit Officer handles freight when documents are in India from other Missions
- 5Consignee's Audit Officer must always verify freight-to-stores cost linkage in records
Practical Example
The India Supply Mission in Washington arranges shipment of medical equipment to India. The freight is paid by the High Commissioner's Chief Accounting Officer in London based on the Washington Mission's freight forwarder's authorization. The Director of Audit in Washington checks the freight classification, correctness, and reasonableness. Meanwhile, the Audit Officer of the hospital in India that received the equipment verifies that the freight payment is properly linked in its stores records to the cost of the medical equipment.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why is freight audit separated from the stores purchase audit?▼
What does 'correctly linked in connected records' mean?▼
What if a non-UK, non-US Mission arranges shipment?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.