Para 3.7.7 — MSO (Audit)
Original Rule Text
3.7.7 The procedure for dealing with the contracts relating to the Public Works Department is contained in Section IV relating to Public Works Audit. In respect of civil departments, copies of contracts and agreements relating to purchases of the value of Rs 5 lakhs and above should invariably be obtained and examined in Central Audit. All rates and running contracts, as well as all important and unusual contracts, should be scrutinised irrespective of the amount of contract. Other contracts should be examined in local audit to a suitable extent determined with reference to local conditions. For this purpose, the departmental officers should be required to send monthly lists of all contracts entered into by them, besides copies of all contracts and agreements for purchases of the value of Rs 5 lakhs and above, all rate and running contracts, and of all important and unusual contracts included in the monthly lists for scrutiny.
What This Means
Contracts of civil departments are audited at two levels: central audit and local audit. For central audit, copies of all contracts worth Rs 5 lakhs and above, all rate/running contracts, and all important or unusual contracts must be obtained and examined. Other contracts are examined during local audit. Departments must send monthly lists of all contracts they have entered into, along with copies of the higher-value and significant contracts. PWD contracts follow separate procedures described in Section IV.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Contracts worth Rs 5 lakhs and above must be examined in central audit
- 2All rate contracts and running contracts require central audit regardless of value
- 3Important and unusual contracts also require central audit irrespective of amount
- 4Other contracts are examined during local audit based on local conditions
- 5Departments must send monthly lists of all contracts entered into
Practical Example
A government department enters into 15 contracts in a month — three are above Rs 5 lakhs, two are rate contracts, and ten are smaller one-time purchases. The department sends a monthly list of all 15 contracts to the Audit Office, along with copies of the five contracts that require central audit (three above Rs 5 lakhs plus two rate contracts). The remaining ten contracts will be examined when the audit party visits the department for local audit.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What qualifies as an 'important and unusual' contract?▼
Why is the Rs 5 lakh threshold used?▼
Are PWD contracts handled differently?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.