Regulation 86 — Audit Regulations 2020
Original Rule Text
86. Audit of bodies and authorities under Section 14 of the Act
(1) Section 14(1) of the Act authorises the Comptroller and Auditor General to audit the receipts and expenditure of a body or authority if
(a) the amount of Government grant or loan paid to it in a financial year is not less than rupees twenty five lakh and also
(b) the amount of such grant or loan is not less than seventy-five per cent of its total expenditure during the year. Audit under this Section is subject to the provisions of any law applicable to the body or authority. (2) Section 14(2) of the Act provides that the Comptroller and Auditor General may, with the previous approval of the President or the Governor of a State or the Administrator of a Union Territory having a legislative assembly, as the case may be, audit all receipts and expenditure of a body or authority where the amount of Government grants or loans to the body or authority in a financial year is not less than rupees one crore. (3) Where the receipts and expenditure of a body or authority are audited by the Comptroller and Auditor General under sub-section (1) or (2) of Section 14 for a particular year, the Comptroller and Auditor General is authorised under Section 14(3) of the Act to continue to audit its receipts and expenditure for a further period of two years even if the conditions stated in sub-section (1) or (2) are not satisfied during any of the two subsequent years.
What This Means
Section 14 of the DPC Act gives CAG authority to audit bodies and authorities that receive substantial government financial assistance. The audit is triggered when: (a) the government grant or loan is at least Rs 25 lakh AND constitutes at least 75% of total expenditure, OR (b) with presidential/gubernatorial approval, when the grant/loan is at least Rs 1 crore (regardless of percentage). Once triggered, the CAG can continue auditing for two more years even if the conditions are no longer met.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Section 14(1): Audit triggered when grant/loan >= Rs 25 lakh AND >= 75% of total expenditure
- 2Section 14(2): With President/Governor approval, audit when grant/loan >= Rs 1 crore (no percentage threshold)
- 3Audit is subject to provisions of any law applicable to the body
- 4Section 14(3): Once triggered, CAG can continue audit for 2 more years even if conditions are no longer met
- 5Both receipts and expenditure are covered in the audit scope
Practical Example
A cultural academy receives a Rs 80 lakh grant from the Ministry of Culture and its total annual expenditure is Rs 1 crore. Since Rs 80 lakh is both above Rs 25 lakh and above 75% of Rs 1 crore, the CAG can audit under Section 14(1). Next year, the academy raises private sponsorship and its government grant drops to 60% of expenditure. Under Section 14(3), the CAG can still audit for two more years despite the condition no longer being met.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the difference between Section 14(1) and 14(2)?▼
Why does CAG get two extra years of audit even after conditions cease?▼
Are government grants and loans counted together?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.