Regulation 25 — Audit Regulations 2020
Original Rule Text
25. Examination of systems and procedures and certain checks to be applied in audit of expenditure
Audit of expenditure examines and verifies whether adequate, proper and sound systems and procedures are in place and are being complied with, both in letter and spirit, for spending public money. Audit inter alia checks the expenditure for:
What This Means
Audit of government expenditure verifies that proper systems and procedures are in place for spending public money. Key checks include: availability of budget (appropriation), legality of re-appropriation and surrender orders, compliance with rules for disbursement, proper vouchers and acknowledgements, and monitoring/reporting as prescribed. Importantly, audit must report not only rule violations but also any expenditure that appears unnecessarily excessive, wasteful, or extravagant — even if rules were technically followed — as well as expenditure that failed to achieve intended outputs or outcomes.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Audit verifies budget availability (appropriation) including supplementary grants and re-appropriations
- 2Checks that expenditure is within the scope and intent of the grant and not a 'new service'
- 3Requires proper documentation — vouchers, payees' acknowledgements, and cross-verification with treasury/bank records
- 4Must report significant excess or shortfall in expenditure beyond prescribed limits
- 5Reports wasteful or extravagant spending even when rules are technically followed (propriety audit)
- 6Flags expenditure that failed to deliver intended outputs or outcomes
Practical Example
The AG (Audit) reviews expenditure under a State government's road construction grant. The audit finds that while all tender procedures were technically followed, the department procured premium-grade asphalt for village roads where standard grade would have sufficed — costing 40% more. Under Regulation 25(3), this is reportable as extravagant expenditure despite rule compliance, because it represents wasteful use of public money.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can audit flag expenditure as wasteful even if all procurement rules were followed?▼
What is meant by 'new service or new instrument of service' in this regulation?▼
What is the difference between appropriation audit and financial propriety audit?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.