Regulation 87 — Audit Regulations 2020

Audit Regulations 2020regulations-audit

# 87. Sanctions of grants and loans and forwarding of copies
Government departments and other officers empowered to sanction grants and/or loans to any body or authority shall: (1) endorse a copy of each letter of sanction of grant or loan to the audit office;
Regulations on Audit and Accounts 2020
(2) mention in the sanction, the amount of the budgeted expenditure of the body or authority; and (3) ensure that the assisted body or authority makes available all the relevant records to the audit officer for audit, wherever and whenever necessary, and that a requirement to this effect is incorporated in the letter of sanction to the grant and/or loan.

What This Means

Government departments and officers who sanction grants or loans to any body or authority have three obligations: they must send a copy of each sanction letter to the audit office, mention the body's budgeted expenditure in the sanction, and ensure that the grant/loan letter requires the recipient body to make all relevant records available for audit. This creates a paper trail from the moment funding is sanctioned.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

1Copy of every grant/loan sanction letter must be endorsed to the audit office
2Budgeted expenditure of the recipient body must be mentioned in the sanction
3Sanction letter must include a condition requiring the body to make records available for audit
4These obligations apply to all government departments and officers empowered to sanction grants/loans
5This creates proactive audit awareness from the funding stage itself

Practical Example

The Department of Science and Technology sanctions a Rs 2 crore grant to the Indian Association for the Cultivation of Science (a registered society). The sanction letter must: (1) be copied to the AG (Audit), West Bengal; (2) state that the Association's budgeted expenditure is Rs 3 crore; and (3) include a clause stating that the Association shall make all records available to the AG (Audit) for audit purposes.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

Why must the sanction letter mention budgeted expenditure?▼

The budgeted expenditure helps the audit office determine if the Section 14(1) threshold is met — whether the grant/loan constitutes 75% or more of total expenditure. Without this information, the audit office cannot readily assess auditability.

What if the sanctioning authority fails to endorse the copy to audit?▼

This would be a compliance failure on the part of the sanctioning authority. The audit office may not be aware of the grant, potentially leading to the body escaping audit. This gap is mitigated by Regulation 88, which requires annual consolidated statements.

Does the audit access condition in the sanction letter create a contractual obligation?▼

Yes. By accepting the grant/loan with this condition, the recipient body agrees to make records available for audit. Refusal to provide access could result in the grant conditions being deemed violated, potentially requiring refund of the grant.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Regulation 87 — Audit Regulations 2020

Original Rule Text

What This Means

Key Points

Practical Example

Frequently Asked Questions

Related Rules