Para 3.9.17 — MSO (Audit)
Original Rule Text
3.9.17 Some of the major contracts and agreements entered into by the department and its field units for purchases and supplies may be scrutinised to highlight deficiencies in systems and procedures, irregularities in purchases, instances of purchases being resorted to without adequate justification or even in the absence of actual requirements resulting in unutilised inventories, etc. Adequacy of the arrangements for inventory management and control may also be examined and commented upon.
- Internal control
What This Means
Auditors should scrutinise major contracts and purchase agreements made by the department and its field offices. The focus should be on identifying flaws in procurement systems, irregularities in purchases, and cases where items were bought without genuine need, leading to idle inventory. The adequacy of the department's inventory management and control systems should also be examined and reported.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Scrutinise major contracts and agreements for purchases and supplies
- 2Highlight deficiencies in procurement systems and procedures
- 3Identify irregularities in purchases and unjustified procurement
- 4Check for purchases made without actual requirements leading to idle stock
- 5Assess adequacy of inventory management and control arrangements
Practical Example
An integrated audit of the Health Department examines 25 major medicine procurement contracts. The auditors find that in 8 contracts, competitive bidding norms were bypassed using emergency purchase powers when no emergency existed. One district hospital purchased 50 ventilators at Rs 15 lakh each despite having only 20 ICU beds, resulting in 30 ventilators lying unused in storage for 3 years. The department had no centralised inventory tracking system, with each hospital maintaining its own records in different formats.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What procurement irregularities do auditors typically look for?▼
Why is inventory management audited?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.