Para 3.8.28 — MSO (Audit)
Original Rule Text
3.8.28 Some State Governments spend a large part of the funds on establishment in disregard of the limitations placed in this regard in the schemes. In fact, many State Governments carry a large establishment even when the schemes do not have a significant works component. Establishment expenditure in excess of the norms should be quantified and highlighted. Where the expenditure on establishment is disproportionately high, the excess number of staff should be represented in terms of the ratio to the normative strength. Its implications in financial terms should also be stated. The ratio of the establishment cost to the actual expenditure on the scheme objectives should also be worked out and mentioned appropriately.
# Joint Physical inspection
What This Means
Some state governments divert excessive scheme funds to establishment costs (salaries, office expenses) beyond the limits specified in scheme guidelines. They sometimes maintain large staff establishments even when the scheme has minimal work component. Performance audit should quantify establishment expenditure exceeding norms, express the excess staff as a ratio to the normative strength, state the financial implications, and calculate the ratio of establishment cost to actual scheme expenditure. This analysis reveals how much of the scheme budget actually reaches the intended beneficiaries versus how much is consumed by the bureaucracy.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Some states spend disproportionately on establishment in violation of scheme norms
- 2Large staff establishments may be maintained even without significant work components
- 3Excess establishment expenditure must be quantified against prescribed norms
- 4Excess staff should be expressed as a ratio to normative strength
- 5The ratio of establishment cost to actual scheme expenditure must be calculated
Practical Example
A centrally-sponsored scheme allows 5% of funds for establishment costs. The audit team finds that a state is spending 22% — Rs 44 crores out of Rs 200 crores — on staff salaries and office expenses. The scheme guidelines provide for 500 staff positions, but the state has 1,200 staff — a ratio of 2.4 times the norm. The review calculates that Rs 34 crores in excess establishment expenditure could have funded benefits for 17,000 additional families. The team recommends right-sizing the staff and redirecting funds to scheme objectives.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What are 'establishment costs' in the context of a scheme?▼
Why express excess staff as a ratio?▼
What if the scheme guidelines don't specify establishment norms?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.