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               AUDIT OF PRIs

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Objective of Auditi) Primary Objective :- (a) To determine and Judge the reliability of the

Financial Statement which will help to report the financial condition of the Organisation. (b) Whether the Accounting System adopted in the Organisation is adequate and appropriate.ii) Secondary Objective:- (a) Detection and Prevention of errors (Clerical

errors & Errors of Principle). (b) Detection and Prevention of frauds (Mis-appropriation of cash/ goods, Manipulation of Accounts.

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LOCAL FUND Audit (Governed by Odisha Local Fund Audit Act-1948 and LFA Rules-1951).

Local Fund :- Any fund, for control and management of which, a local authority is legally entitled and any cess, rate duty or tax which such authority is legally entitled to impose and any penalty vested in such authority

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POWER OF AUDITOR

• By Summons in writing or by letter require the production of any document which he deemed necessary.

• By summons in writing require a whole time paid servant having custody of the documents to appear in person.

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Require any such person to make and sign a declaration with respect to such document or to answer any question or prepare and submit any statement relating thereto.

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PENALTY FOR DIS-OBEYING DIRECTION OF AUDITOR Conviction before a Magistrate

with a fine not exceeding Rs.100 .

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PROCEDURE OF AUDIT Prior notice to Local Authorities at

least before two weeks . Attend the office of the Local

Authority during the regular office hour.

Removal of office record only with written permission of the Head of Office.

Verification of cash balance securities postage stamps, permanent advance, un-disbursed pay and printed receipt forms.

Contd….

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Issue of objection memo. Collection of objection statements

before the closure of audit. Reporting of any loss of money or

stores by embezzlement, theft, fire to the Examiner of Local Accounts and the Local Authority.

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Discussion of the Audit Report with the local authority with a view to explain the irregularity personally and settle at the spot as far as possible.

Preparation of the Audit Report and its submission to Examiner of Local accounts who shall forward a copy to Local Authority.

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Every Payment which appears to be contrary to law.

The amount of any deficiency or loss which have been incurred by negligence or mis-conduct of any person.

The amount of any sum which ought to have been but not brought in to the account.

STATEMENT ATTACHED TO THE AUDIT REPORT

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POWER OF THE EXAMINER TO SURCHARGE OR CHARGE

U/S 9(1) U/S 9(2) U/S 9(2) (b) U/S 9(3)

Payment contrary to law

May allow excess payment or

Issue show cause notice

Considering the case may surcharge the amount and certify for recovery

Amount of deficiency or loss

- - May charge the amount and certify for recovery

Amount ought to have been but not brought into account

- - May charge the amount and certify for recovery

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POWER FOR THE PURPOSE OF SURCHARGE/CHARGES Asst. examiner of local accounts-

All cases up to Rs.50,000/-. Deputy examiner of local accounts

- cases exceeding Rs.50,000/- upto Rs.1,50,000/-.

Examiner of local accounts – Cases exceeding Rs.1,50,000/-.

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APPELATE AUTHORITY

PRIs – Deputy Examiner, Examiner of Local Accounts and Development Commissioner.

ULBs – Minister In-charge of Local Self Government.

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A. G. Audit (Governed by C & A.G’s DPC Act 1971).

Audit of all Money paid into and expended from the Consolidated Fund.

All Transactions relating to Contingency Fund and Public Accounts.

Accounts of Bodies or Authorities substantially finance by Government.

Accounts of any companies, corporation & other bodies at the request of President/Governor.

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Issue of audit memos. Prompt replies to the memos

within the time limit. Maintenance of register of audit

observations to watch over the pendency and compliance.

Responsibility for the compliance upon the Disbursing Officer/Head of Office.

Replies to the memos after approval by the competent authority.

A.G. IRs

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Discussion with Head of Office before finalising the inspection report.

Initiation of action to rectify the irregularities pointed out in the course of audit without waiting for the receipt of IR.

Reply to IR within one month of receipt.

Submission of interim reply. Settlement of IRs and Paras by

convening Triangular Committee Meetings.

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DRAFT AUDIT NOTES & DRAFT AUDIT PARAS

Irregularities likely to find a place in the report of CAG brought to the notice of A.D. / HOD in the form of Draft Audit Notes.

Compliance to the DAN to be submitted to the A.G. within four weeks.

In case of non-submission the DAN converted to DAP. Contd…

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Submission of compliance to DAP within six weeks.

If final reply is not submitted/found inadequate the DAP is incorporated in the report of C & A.G.

Maintenance of register at the level of A.D/ HOD to watch the receipt and disposal of DAN/DAP.

Delay in processing of DAN/DAP to be brought to the notice of Secretary of A.D. by Finance Department.

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REPORT OF THE C & A.G Finance Accounts. Appropriation Accounts. Report of the C & A.G. of India (State

Finances). Report of the C & A.G. of India (General

Sector) Report of the C & A.G. of India (Social

Sector) Report of the C & A.G. of India (Revenue

Sector). Report of the C & A.G. of India (Public

Sector Undertakings).

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EXAMINATION OF THE C & A.G REPORTS BY THE PAC

Laying of report as per provisions of article 151(2) of the constitution of India.

Examination by the PAC.

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FOLLOW UP ACTION ON THE CAG REPORT

After laying of the report sending of adequate no. of copies to the A.D.

Submission of compliance indicating remedial measures taken on the paragraphs contained in the report under the approval of Secretary of the Department to both A.G. & OLA.

Personal appearance of the concerned Secretaries before the PAC to give evidence.

After examining the compliance and the facts PAC submit the report to legislature.

Contd…

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Copies of the PAC recommendations circulated among Deptts for taking action as recommended by PAC.

ATN on PAC recommendations to be sent to AG within six months after presentation of the PAC Report for verification

Required no of copies of ATNs to be submitted to PAC over the signature of PAC

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MONITORING SYSTEM

Departmental Monitoring Committee.

Review Committee comprising of Secretary, Finance, A.G or his representative and AD.

Apex Committee under the chairmanship of Chief Secretary.

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