Regulation 150 — REGULATIONS_AUDIT

(1) The Secretary to Government of the concerned department shall send two copies of the draft self-explanatory action taken note to the Accountant General (Audit) for vetting along with the relevant files and documents based upon which the explanatory note has been formulated, properly referenced and linked. This shall be done within such period of time as may be decided consistent with the requirements of the time-schedule for the submission of the self-explanatory action taken notes prescribed by the Public Accounts Committee/ Committee on Public Undertakings.

(2) The Accountant General (Audit) shall return the self-explanatory action taken note to the Secretary duly vetted as soon as possible but not later than one month. Subject to any requirements that may have been prescribed by the Public Accounts Committee/ Committee on Public Undertakings, the vetting comments of the Accountant General (Audit) may include suggestions for further course of action.

150. Vetting of action taken notes and responses on the recommendations of PAC/COPU by Accountant General (Audit) In the Union, the States and the Union Territories having legislative assembly where legislative committees or the Government desire the Comptroller and Auditor General to vet the action taken notes and the responses of the Government on their commendations of the Public Accounts Committee/Committee on Public Undertakings, the following procedure shall apply:

(3) The Secretary shall send the requisite number of copies of the vetted note, as prescribed by the Public Accounts Committee/Committee on Public Undertakings, to the secretariat of the Public Accounts Committee/Committee on Public Undertakings in accordance with the time schedule prescribed by the latter and also forward a copy each to Ministry of Finance or Finance Department as the case may be, and the Accountant General (Audit).

(4) On receipt of the recommendations of the Public Accounts Committee/ Committee on Public Undertakings, the Secretary shall initiate action to prepare the Government’s response by way of action taken note for submission to the respective Committee within such period and in such form as the Public Accounts Committee/ Committee on Public Undertakings may prescribe.

(5) The Government’s response on the recommendations of the Public Accounts Committee/ Committee on Public Undertakings shall be sent to the Accountant General (Audit) for vetting before its submission to the respective Committee with the relevant files and documents properly referenced and linked. The vetting comments of the Accountant General (Audit) shall be duly reflected in the response that may be sent to the Public Accounts Committee/Committee on Public Undertakings.

151. Duty of Government for systems and procedures to ensure timely response It shall be the duty of the Government to establish and enforce adequate and reliable systems and procedures, clearly defining inter alia the roles and responsibilities at all levels that ensure that

(i) the replies to the draft paragraphs,

(ii) the self-explanatory action taken notes on matters included in the audit reports and

(iii) the action taken notes on the recommendations of the Public Accounts Committee/Committee on Public Undertakings are sent to the appropriate authorities within the time limit prescribed in each case.

152. Reporting of cases of delay to Government The Accountant General (Audit) will report cases of delay to Secretary (Expenditure), Ministry of Finance in the case of the Union Government and to the Chief Secretary in the case of a State Government and to the Administrator in case of a Union Territory having a legislative assembly. Cases of delay may also be appropriately commented upon in the audit report.

Evidence to support audit conclusions required to be obtained Audit shall obtain sufficient and appropriate audit evidence to support the audit opinion or conclusion.

153. Meaning of audit evidence and sharing the same with auditable entity Audit evidence refers to the data, information and documents relied upon to arrive at the audit findings and conclusions. Audit evidence is any information used by the auditor to determine whether the subject matter complies with the applicable criteria. While reporting the results of audit, the Comptroller and Auditor General may include such audit evidence in support of audit findings and conclusions as considered necessary. Audit evidence retained as working papers and not included explicitly in the final audit report, may be shared with the auditable entity at various stages of audit.

155. Requirement of and access to data, information and documents The form, type and extent of data, information and documents required for audit tests and evidence shall be determined by Audit. Access to data, information, documents and information systems will be as provided in these Regulations. Data, information and documents would also include those obtained by the auditable entity from a third party and relied upon by it in performance of its functions. If such third party evidence as relied upon by auditable entity is found to be insufficient in Audit, additional information may be requisitioned by Audit from the auditable entity with prior approval of the Accountant General (Audit). On receipt of such requisition, the same shall be obtained by the auditable entity from the third party and provided to Audit. In certain cases, with approval of the Accountant General (Audit), information from third parties, for example bank confirmations etc may be obtained directly by Audit. 156. Types of evidence to be used by Audit

157. Methods and techniques for evidence including technology and data analytics Methods of obtaining audit evidence include physical inspection/joint physical inspection, observation, inquiry, confirmation, recalculation, re-performance, analytical procedures and/or other research techniques. Audit may use IT assisted data analytics and techniques and other IT tools as appropriate for collection and evaluation of evidence. Audit may also use remote sensing, Geographic Information System (GIS), aerial surveys and other technology enabled techniques, as appropriate.

Evidence may take many forms, such as electronic and paper records of transactions, written and electronic communication with outsiders, photographs, videos, results of survey or study, observations by the auditor and oral or written testimony by the audited entity. The auditor may rely upon evidence from internal sources of the auditable entity as well as from external sources.

158. Attestation of data, information and documents forming evidence Where required by Audit, the auditable entity shall attest the data, information and documents kept in physical form/manually, forming the evidence.

159. Conduct of physical verification on request of Audit Where necessary, Audit may require the auditable entity to conduct physical verification of stores/inventory/stocks, assets, capital works including capital works in progress, services and deliverables in any form in the presence of the audit officer. Any such request shall be made with the approval of the Accountant General (Audit).

160. Duties and powers of the Comptroller and Auditor General in regard to accounts The duties and powers of the Comptroller and Auditor General in regard to the accounts of the Union and State Governments are laid down under Articles 149 and 150 of the Constitution of India and Sections 10 to 12 and 23 of the Act.

161. Provisions of the Constitution regarding accounts (1) Under Article 149 of the Constitution, the Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament.

(2) By virtue of the provisions of Article 150 of the Constitution, the accounts of the Union and the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor General, prescribe. The word “form” used in Article 150 has a comprehensive meaning so as to include the prescription not merely of the broad form in which the accounts are to be kept, but also the basis for selecting the appropriate heads under which the transactions are to be classified.

163. General principles of Government accounting (1) For the purpose of Section 23 of the Act, the Government Accounting Rules, 1990 shall be deemed to be the general principles of Government accounting. (2) All Government departments are required to comply with the general principles of Government accounting. It is the duty of auditors to examine during audit whether these principles are being complied with by all Government Departments.

162. Provisions of the Act regarding accounts (1) Under Section 10 read with Section 2

(e) of the Act, the Comptroller and Auditor General shall be responsible for compiling the accounts and for keeping related accounts of the Union and of each State and Union Territory having a legislative assembly from the initial and subsidiary accounts rendered to offices under his control by treasuries, offices or departments responsible for keeping of such accounts. The President in the case of the Union including Union Territories and the Governor with the previous approval of the President in the case of a State, may after consultation with the Comptroller and Auditor General, by order, relieve him from the responsibility of compiling or keeping the accounts of the Union including Union Territory or of the State or of any particular services or departments of the Union including Union Territory or the State. (2) Under Section 11 of the Act, the Comptroller and Auditor General shall submit these accounts, wherever these responsibilities continue with him, to the President or the Governor of a State or Administrator of the Union Territory having a legislative assembly, as the case may be. (3) Under Section 12 of the Act, the Comptroller and Auditor General shall in so far as the accounts, for the compilation or keeping of which he is responsible, enable him so to do, give information and render assistance to the Union Government or the State Government or the Government of Union Territory having a legislative assembly, as they may from time to time require. (4) Section 23 of the Act authorises the Comptroller and Auditor General to lay down general principles of Government accounting.

(2) The format of accounts in respect of autonomous bodies and authorities other than Government establishments and companies is prescribed by the concerned Government in consultation with the Comptroller and Auditor General. In case of autonomous bodies and authorities of Union Government, a common format has been prescribed by the Government with the concurrence of the Comptroller and Auditor General. This common format is applicable to all autonomous bodies and authorities except a few such as Port Trusts for which separate formats are applicable. The State Governments may also adopt the common format applicable to the autonomous bodies of the Union Government, for the autonomous bodies of the States.

(3) The format of accounts of Panchayati Raj institutions and urban local bodies recommended by the Comptroller and Auditor General has been accepted by the Union Government and has been adopted by many State Governments.

(2) The Board is chaired by the Deputy Comptroller and Auditor General and comprises of accounting heads of the Government of India, Ministry of Finance, RBI, State Finance Secretaries, ICAI, ICWAI, as members.

164. Form of accounts (1) Detailed rules relating to maintenance and rendition of accounts by treasuries and public works divisions are contained in Accounting Rules for Treasuries and the Account Code, Volume III issued by or with the approval of the Comptroller and Auditor General. Detailed rules and instructions relating to the forms in which the initial and subsidiary accounts shall be kept and rendered by the Department of Posts and other technical departments are laid down in the respective accounts manuals or departmental regulations relating to the department concerned.

165. Role of the Comptroller and Auditor General in accounting standards for Government (1) Government Accounting Standards Advisory Board set up in the office of the Comptroller and Auditor General with the support of the Government of India. The Board is entrusted with the responsibility of formulating and proposing accounting and financial reporting standards in Government departments and organisations.

(3) The Government Accounting Standards Advisory Board is also entrusted with the responsibility of preparing a framework and a roadmap for shift to accrual accounting. (4) The standards proposed by the Board and notified by the Government are under the authority of Article 150 of the Constitution of India. (5) The response to accounting standards approved by GASAB shall be received from the Ministry of Finance within three months of its approval by full board.

166. Timeliness, correctness and completeness of accounting information to be ensured (1) In order to enable the Comptroller and Auditor General to discharge accounting functions effectively, the Government needs to establish and enforce systems including internal controls to ensure that all primary accounting units render necessary information in the time schedule prescribed by the accounts office and that the information rendered is correct and complete. (2) In particular, in the case of IT systems used to generate accounting information, the Government needs to ensure that the integrity, nonrepudiability and reliability of such information is maintained through adequate and effective controls. (3) In keeping with Section 18(1)

(a) of the Act Comptroller and Auditor General is authorised to inspect any Office of accounts of the Union and the State, including Treasuries, to obtain an assurance on the internal controls in place. The objective of such an inspection would be to assess the state of general financial control to see that subsidiary records on which such accounts are based are properly maintained in prescribed forms, are complete in all respects and financial rules and orders are observed in their preparation and maintenance.

168. Regulations not to apply to international assignments These Regulations shall not apply to any international assignment relating to audit or accounts taken up or being taken up by the Comptroller and Auditor General.

169. Powers to issue general or special orders and guidelines The Comptroller and Auditor General may issue any general or special orders and guidelines to carry into effect the provisions of these Regulations.

170. Inter-relationship of various orders In fulfillment of the mandate, the Comptroller and Auditor General issues various types of orders and guidelines. These are classified as standing orders, guidelines and practice notes as defined in Regulation 2. The hierarchy of instructions of the Comptroller and Auditor General shall be Regulations, standing orders/guidelines and practice notes in this order. Standing orders, guidelines and practice notes need to be consistent with these Regulations.

167. Exercise of authority of Accountant General (Audit) or Accountant General (Accounts and Entitlement) by other officers Any authority exercised by the Accountant General (Audit) or Accountant General (Accounts and Entitlement) under these Regulations shall be exercisable by any of his superior officers or any other officer so authorised by the Comptroller and Auditor General.

171. Removal of doubt Where a doubt arises as to the interpretation of any of these Regulations, the decision of the Comptroller and Auditor General shall be final.

172. Powers to modify or relax The whole or part of these Regulations may be modified under the orders of the Comptroller and Auditor General. Any provisions of these Regulations may also be relaxed by a general or special order of the Comptroller and Auditor General.

173. Continuance of existing orders The standing orders, guidelines and practice notes shall in future be issued under these Regulations and be consistent with these Regulations. However, the standing orders, the guidelines and the practice notes already issued by the Comptroller and Auditor General or on his behalf shall continue to apply as immediately before the date of issue of these Regulations till the same are revised, revoked or modified.