Para 7.2.11 — MSO (Audit)
Original Rule Text
7.2.11 Only those objections arising out of local audit that can be quantified in terms of their money value need be registered in the Objection Book. As exceptions, the following
types of objections need not be registered in the Objection Book though their monetary value can be quantified:
(i) Trading and pro forma losses of Government concerns/schemes as these are only pro forma in nature and are only meant to apprise the departmental authorities of the manner of their functioning.
(ii) Outstanding dues to Government on account of credit sales and other outstanding dues the accounts in respect of which are kept by the department for the purpose of watching recovery.
Note: Items in respect of which recovery is delayed beyond a reasonable period (to be fixed by the Accountant General) should, however, be segregated and commented upon in the inspection report for being recorded in the Objection Book maintained by the OAD (Headquarters) Section for further pursuance.
(iii) Outstanding loans and advances made by departmental agencies if these are debited to a debt, deposit or advance head of account, as their recovery is watched through other records.
(iv) Cases of differences, discrepancies, etc. in stock other than specific cases of shortages in the departmental stock balances responsibility for which has not been fixed to facilitate action for recovery.
(v) Mere instructions to departmental officers for future guidance need not be registered in the Objection Books maintained in the Audit Office. If the pursuance of an objection indicates the need for prescribing a new procedure for general observance, such procedure should be communicated by a general letter and not by any form or statement intended solely for the communication of objections. Notes:
(i) The provisions of this paragraph do not apply to objections raised by Commercial Audit Wings in the course of audit of autonomous and statutory bodies established under special Acts of Parliament or State Legislatures, and of Government Companies and deemed Government Companies as defined respectively in Sections 617 and 619B of the Companies Act, 1956.
(ii) The procedure for the recording of objections arising out of audit of autonomous and statutory bodies not coming within the purview of Commercial Audit is described in the Manual of Instructions for Audit of Autonomous Bodies.
(iii) The instructions requiring the registration of all objections arising out of audit are subject to the qualification that objections which are trivial or have been waived by Audit Officers under any of the provisions of paragraphs 7.1.16 to 7.1.18 should not be included in Objection Books, though a separate record of objections waived should be maintained for production at the time of inspections of the Comptroller and Auditor General. The requirement of maintenance of a separate record may, however, be dispensed with in the case of objections waived in terms of paragraph 7.1.16 (i).
What This Means
From local audit, only objections that can be expressed in monetary value need to be registered in the Objection Book. Several categories are exempt from registration even though they have a monetary value — such as trading losses of government schemes (which are only informational), outstanding credit sales tracked by the department, loans under debt/deposit heads, stock discrepancies without fixed responsibility, and simple future-guidance instructions. However, separate rules apply to commercial audit of autonomous bodies and government companies.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Only money-quantifiable local audit objections need registration in the Objection Book
- 2Trading/pro forma losses need not be registered as they are informational only
- 3Outstanding dues already tracked by the department through their own records are exempt
- 4Loans under debt/deposit/advance heads with their own recovery tracking are exempt
- 5Stock discrepancies without fixed responsibility are exempt (but delayed recoveries get escalated)
Practical Example
During a local audit of a government dairy scheme, the audit party notes a pro forma loss of Rs 2 lakh in trading operations. Since this is a pro forma loss meant only to inform the department about operational performance (not an actual financial irregularity), the auditor does not register it in the Objection Book. Instead, it is mentioned in the inspection report for the department's information.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
If an objection has monetary value, does it always go into the Objection Book?▼
What happens to waived objections — are they simply forgotten?▼
Do these rules apply to audit of government companies?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.