Para 7.1.6 — MSO (Audit)
Original Rule Text
7.1.6 The following general principles should be kept in view while communicating audit observations to the departments/Government:
(i) Before formally communicating audit observations, it will be desirable to discuss the major ones with the executive so that proper understanding and trust are developed between Audit and the executive. Audit should essentially view its role as an aid to management.
(ii) All observations and objections must be conveyed in courteous and impersonal terms, and must be clear and intelligible. They should also be based on undisputed facts and amended or revised to the extent considered necessary based on the views held and clarifications furnished by the executive officers, which should be given due consideration.
(iii) It is of the utmost importance that any statement or criticism of an irregularity in an Audit Report should be accurate, fair, moderately worded and dispassionate. Innuendo is forbidden; if a charge cannot be substantiated there should not be even any hint of it.
(iv) Objections and observations in relation to any account or transactions subjected to audit should be communicated to the disbursing and, where necessary, to the controlling authorities at the earliest opportunity. The Treasury Officer should be addressed only when recoveries have to be ordered or in respect of objections for the settlement of which he is directly responsible.
(v) Reports of individual cases of serious financial irregularities should be addressed, in the first instance, to the controlling authority concerned or to such other authority as may be specified by Government, though copies may be sent simultaneously to a higher authority for information in cases
that are regarded to be so grave or serious that they will eventually have to be brought to the notice of that authority.
(vi) Unless otherwise provided in any case, it is important that complete details of objections should be registered in the prescribed records maintained in the Audit Office before these are communicated to the authorities concerned.
(vii) If a particular irregularity or case of fraud is considered serious enough to merit the attention of investigating authorities/agencies, it ought to find mention in the Audit Report.
(ix) Accountants General, Principal Directors of Audit, etc. shall not, on their own, report any case to vigilance or any other investigating authority; nor should they endorse copies of extracts from Inspection Reports to any such agency. If at all it is considered necessary to bring specific cases to the notice of investigating agencies, such as the Central Bureau of Investigation, Central and State Vigilance Commissions, Intelligence Agencies, Lok Ayukta, etc., this should be done only with the specific approval of the Additional Deputy Comptroller and Auditor General.
What This Means
This rule lays down eleven principles for communicating audit findings to departments and Government. Key requirements include: discuss major observations with the executive before formal communication, use courteous and impersonal language, ensure accuracy and fairness in criticism, communicate objections promptly to the right authorities, never send cases to investigating agencies without CAG headquarters approval, and never hold press conferences without prior approval from senior CAG officials.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Major audit observations should be discussed informally with the executive before formal communication
- 2All objections must be conveyed in courteous, impersonal, accurate, and fair language — innuendo is forbidden
- 3Treasury Officers should only be addressed for matters they are directly responsible for
- 4Serious irregularities go first to the controlling authority, with copies to higher authorities only when truly grave
- 5Reporting cases to investigating agencies (CBI, CVC, Lok Ayukta) requires specific approval from Additional Deputy CAG
Practical Example
An Accountant General's team discovers a significant procurement irregularity in a state department. Before issuing the formal inspection report, the AG discusses the findings with the department head to ensure facts are undisputed and give them a chance to provide clarifications. The final report uses measured language stating the factual irregularity without personal accusations or innuendo, even though the auditor suspects intentional misconduct.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can the AG directly report a fraud case to the CBI or Vigilance Commission?▼
Why must audit observations be discussed with the executive before formal communication?▼
Can individual officers' names be mentioned in the Audit Report?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.