Para 3.8.5 — MSO (Audit)
Original Rule Text
3.8.5 Some of the aspects to be looked into in the course of ECPA or VFM Audit are as follows :
(i) Adequacy of investigations, surveys and feasibility studies.
(ii) Schedule of implementation.
(iii) Systems and procedures in force for implementation, monitoring progress, procurement of plant and machinery, special equipment, stores, other supplies, etc.
(iv) Correlation of physical and financial achievements with envisaged targets.
(v) Arrangements for materials management and inventory control.
(vi) Outcome of mid-term appraisals.
(vii) Impact of changes in scope, if any.
(viii) Procedures or norms adopted for identification of eligible beneficiaries in the case of schemes meant to benefit certain specified sections of the population, such as families below the poverty line, tribals, scheduled castes, unemployed youth, women and children, etc.
(ix) Adherence to programme schedules and Time and Cost Overruns, if any.
(x) Realisation of projected/anticipated revenues in the case of projects/schemes intended to generate revenue.
These are, however, only illustrative and not exhaustive.
What This Means
This paragraph lists the key aspects that auditors should examine during a performance audit (ECPA) or Value for Money (VFM) audit. These include checking whether proper feasibility studies were done, whether implementation followed the schedule, how procurement was handled, whether physical achievements matched financial spending, and whether projected revenues were actually realised. The list is illustrative and auditors may examine additional aspects based on the specific scheme.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Check adequacy of investigations, surveys, and feasibility studies
- 2Examine implementation schedules and adherence to timelines
- 3Review procurement systems for plant, machinery, stores, and supplies
- 4Correlate physical achievements with financial spending and targets
- 5Examine materials management, inventory control, and revenue realisation
Practical Example
During a VFM audit of a solar power project, the auditor checks: (1) whether the feasibility study correctly assessed solar irradiance levels; (2) whether solar panels were procured through competitive bidding at market rates; (3) whether the 50 MW generation target was met against the Rs 300 crore spent; (4) whether the projected revenue from power sales to the grid was actually realised; and (5) whether the time overrun of 18 months caused cost escalation.
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 VFM audit?▼
Are these aspects mandatory for every performance audit?▼
What does 'correlation of physical and financial achievements' mean?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.