Para 7.1.23 — MSO (Audit)
Original Rule Text
7.1.23 When erroneous payments have been admitted in Audit erroneously for a considerable period of time, owing either to a wrong interpretation of financial rules or to oversight, the following course of action should be adopted:
(i) If wrong interpretation of financial rules is involved, the correct interpretation as clarified by the competent authority should, in the absence of any special instructions to the contrary, take effect only from the date of issue of the relevant orders clarifying the correct position.
(ii) When erroneous payments have been left unchallenged through oversight, the Accountant General should not of his own motion undertake a re-audit of paid bills more than one year old. He should instead report the facts of the case to the Government for orders and a re-audit should not be undertaken unless the Government so desires.
Note: Central Audit has to rely largely upon certificates and it is often possible and desirable to check such certificates by examination of the original documents during local inspection. Such examination is not a re-audit for the purpose of this clause.
- Chapter–2 Detailed Procedure for Registration and Clearance of Objections
- Introduction
What This Means
When Audit has been admitting erroneous payments for a long period — either due to misinterpreting rules or simple oversight — a corrective course of action applies. If the error was a wrong rule interpretation, the correct interpretation takes effect only from the date of clarification, not retroactively. If erroneous payments were missed through oversight, the AG should not unilaterally re-audit bills older than one year; instead, the Government must be consulted before any re-audit.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Corrected interpretations of financial rules apply prospectively from the date of clarification, not retroactively
- 2Erroneous payments missed through oversight require Government orders before re-audit of bills older than one year
- 3The AG cannot unilaterally undertake re-audit of old paid bills
- 4Checking certificates against original documents during local inspection is not considered re-audit
- 5This protects employees from sudden demands for recovery of payments they received in good faith over extended periods
Practical Example
For three years, the Audit Office has been approving a particular type of deputation allowance based on an incorrect reading of the rules. When the correct interpretation is finally clarified by the Finance Ministry, the corrected rate applies only from the date of the clarification order. The AG does not go back to recover the difference for the past three years from the employees who received the allowance.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
If Audit discovers it has been making a mistake for years, can it demand back-recovery from all employees?▼
What is the difference between re-audit and checking certificates during local inspection?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.