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ALAM-I (PARA)
Q. Write short notes on: Consignee LAO
Ans. The LAO, AAO/SO (a), ALAO, Local Audit Staff or Station Auditor
auditing the store a/c of the Depot, Unit or Formation receiving the stores.
(Auth: Definitions on Page 3 of ALAM Part I)

Q. What managerial action a Local Audit Officer should undertake before

conducting local audit of stores of a unit?
Ans. Normally accounts of Units are audited once in a quarter or once in
two quarters for smaller units. LAO should formulate a quarterly (half yearly
in case of smaller units) program of audit much before the beginning of a
quarter. It is submitted to CDA for approval by 20th of the second month of
the preceding quarter. The standard time in mandays as approved by CGDA
for each class of unit is taken into account in making out the program. A
separate program for review of store accounts of units is also submitted to
CDA for approval. LAO should inform units/formations of their programs of
audit/review in advance under intimation to their station/formation HQrs.
In order to ensure that no accounts are omitted, a list of auditable
documents is to be prepared by the LAO for each unit and get it approved
from CDA. (Auth: Para 10, 11 of ALAM Part I Vol. I)

Q. How is it ensured that no accounts are omitted in audit?

Ans. To ensure that no accounts are omitted in audit, a list of all accounts
and registers required to be maintained by each unit in his area which he
has to audit will be made out by the LAO and sent to the CDA for approval.
Any additions or alterations to this list will be carried out under the orders
of the CDA.
The list will be kept upto-date by the LAO and will be handed over by
him to his successor. At the time of his visit to a unit/formation, the LAO
will himself examine the list of ledgers, returns or other accounts, to be
audited and see that each has been audited. He will also inspect the list
maintained by his ALAO and see that it is properly maintained.
(Auth: Para 11 of ALAM Part I Vol-I)

Q. Can a Local Audit Officer redraw the list of auditable documents? If so,
whose approval would be required?
Ans. Yes, the Local Audit Officer can redraw the list the approval of the
PCDA/CDA. (Auth: Para 11 of ALAM Part I Vol-I/Para 12 ALAM Part-II)

Q. LAO is supposed to carry out an intelligent review of the consumption

pattern of stores during his review of audit of accounts. What important role
he performs while doing so and what is the scope and extent of his role?
Ans. In this context, the LAO performs the role of providing financial advice
to the administrative authorities on ways and means of effecting economy in
spending public money and consumption of stores.
For this purpose, he should see that the maximum quantities
prescribed in the regulations are not drawn as a matter of course. If he finds
that the issues have been abnormal or that maximum quantities allowed
have been drawn as matter of course, he should enquire personally in the
reasons for the issues and take up the matter with the unit.
The LAO should also ascertain reasons for transfer of large quantities
of stores between depots, units etc. He should satisfy himself that the
transfers were really necessary. Items of financial advice will not be included
in objection statements. (Auth: Paras 12 to 15 of ALAM Part-I)
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Q. Briefly describe the purpose of: Quarterly Financial Advice Report.

Ans. To enable the CDA to bring to the notice of the administrative
authorities unnecessary or avoidable expenditure of public money or stores,
LAO will carry out an intelligent review of the consumption of stores issued
on an as required basis in the units during his periodical review of audit
visits. In the case of stores which are drawn according to fixed scales, the
LAO should see that the maximum quantities prescribed in the regulations
are not drawn as a matter of course. If they find that issues have been
abnormal and maximum quantities are allowed as a matter of course, they
should enquire personally into the reasons for the issues and take up the
matter with the unit authorities suggesting ways and means of affecting
economy. Such items of financial advice will not be included in the objection
statements.
The LAO will discuss such items of financial advice with OC Unit,
Sub-Area Commander, etc. as considered necessary, and report them to the
CDA for such further action on them as maybe deemed fit by CDA.
References made to CDA on this account should be self explanatory and
contain all relevant particulars including the response of the executive
authorities in the matter and the financial effect involved so as to obviate
the necessity for further correspondence with the LAO. A record of items of
financial advice and higher audit rendered to FA Section of the Main Office,
who will compile and submit the same to CGDA quarterly.
(Auth: Paras 12 to 16 of ALAM Part-I Vol.I)
Q. What are the points that an LAO will bring to the personal notice of
Controller immediately by a special report?
Ans. Special Report of LAO to CDA -
(i) The prescribed accounts are non-existent/missing/have not been
produced.
(ii)The accounts maintained by a unit are is an unsatisfactory state and
(iii)The procedure adopted in maintaining accounts is not in conformity with
that authorized in rules/standing orders. (Auth: Para 18 of ALAM Part I)
Q. In a unit, the LAO notices that accounts and registers are missing and
cash accounts are in an unsatisfactory state. What should he do?
Ans. The LAO should bring to the personal attention of the personal
attention of the CDA through a Special Report of all these cases.
(Auth: Para 18 ALAM-I)
Q. Write short notes on: Major Financial and Accounting Irregularities.
Ans. All serious financial and accounting irregularities from the procedural
or propriety audit point of view are reported to the CGDA, Army HQr,
Command HQrs, Unit concerned and the Test Audit Authorities. This is a
quarterly report from the CDA which is based on such reports from all
LAOs. (Auth: Para 19 & 20 of ALAM Part I)
Q. By what mechanism does the LAO keep the CDA informed of MFAI in his
audit area?
Ans. The LAO is required to prepare and submit to the CDA a quarterly
report on the MFAI dealing with matters relating to units and formation in
his audit area, in the manner laid down in Para 523 of Defence Audit Code.
(Auth: Para 20 of ALAM Part I Vol.I)

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Q. What do you understand about losses of stores and cash in the units and
Establishments of Army?
Ans. Losses of stores and cash may arise due to various factors in the units
and establishments. These may be due to theft, fraud and neglect and
without these factors also. There are losses due to other causes viz. fire,
deficiencies in actual balances, deterioration and defective storage. Losses
may arise in transit between depot and consuming units, between one depot
and another, manufacturing units to depots, and casualties in case of
animals. Losses may also occur due to Rain /storm/Flood etc.
Each LAO maintains statistics in respect of losses of stores and losses
in cash coming within the purview of his audit in a register of losses and in
a register in IAF (CDA) 182 respectively.
(Auth: Para 22 of ALAM-I and Para 241 & 244 of SAI)
Q. What are the basic principles of local audit of all store accounts?
Ans. The audit of store accounts is conducted locally by LAO acting under
the orders of the PCDA/CDA. The general/basic principles of local audit of
all store accounts are as under:
(a) That the accounting procedure followed by units and formations does not
differ from that prescribed by the rules or other Government orders issued
from time to time;
(b) That all receipts and issues of stores by units and formations and
transfer of stores between depots and /or consuming units have been duly
accounted for in the store ledgers and returns, etc, of the parties concerned;
(c) That stores issued for consumption or use does not exceed the scales
authorised in Regulations and equipment tables;
(d) That all cases of losses and damages have been dealt with in accordance
with the rules/orders on the subject under the orders of CFA.
(e) That the balance of stores shown in the store ledger etc. does not exceed
the authorised limit and suitable action is taken for the disposal of surplus
or unauthorized stores;
(f) That the stock verification has been carried out at regular intervals and
certified as such on the store ledgers etc.
(g) That no article has been supplied after the necessity for the supply has
lapsed. (Auth: Para 31 of ALAM Part-I)
Q. What do you understand from “Casting” term used in local audit?
Ans. Its means vertical and horizontal totallings which should be checked
by the LAOs on the bills/ledgers to authenticate the totalling/accuracy.
(Auth: Note below Para 32(a) of ALAM-I)
Q. What do you understand from “Audit of final receipts” terms used in local
audit?
Ans. It is to verify the accounts through internal receipt voucher by LAO of
the surplus stores found on stock-taking. (Auth: Para 32 (c) of ALAM-I)
Q. Explain briefly the meaning of linking and pairing in local audit?
Ans. 'Linking' means bringing together an entry in a ledger and supporting
voucher to ensure that the entry in the ledger is strictly in accordance with
the voucher. (Auth: Note below Para 32, ALAM-I)
"Pairing" means bringing together two documents which are supposed
to be facsimile copies, one of the other, to ensure that they are in fact
identical. (Auth: Note 1 below Para 51, ALAM-I)

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Q. What is the percentage of Audit check to be carried in the following
cases? What is the method of checking?
(a) Issue voucher
Ans. Issue Voucher:- 33 1/3% of ledger entries into transfer voucher.
(Auth: Item 1(B)(1) of Table of Appendix-A referred to in Para 33 of ALAM Part-I Vol.I)
(b) Receipt voucher
Ans. Receipt voucher = 33 1/3% of voucher and all vouchers of Rs.1,000/-
& above. (Item 1(B)(3) of Table of Appendix-A referred to in Para 33 of ALAM Part-I)
Q. The unit pleads that records for the month selected for audit are not
ready and suggests that a particular month’s record be audited. Comment.
Ans. The purpose of random selection of a particular month’s account for
audit is to retain an element of surprise and to ensure that the storekeeper
etc. Cannot in any way forecast or calculate which part/portions are likely
to be selected for audit. No such suggestions for audit of a particular
month’s account should be accepted and any such suggestion should be
viewed with suspicion.
(General Notes in Annx. 2 (Pg/86) to Appendix-A referred to in Para 33, of ALAM-I)
Q. In order to avoid criticism from the CGDA on account of arrears of audit,
the CDA order that only 10% check of casting in the monthly summaries of
diets and extras be carried out. Comment.
Ans. This is not in order. Cent percent check has to be carried out in such
cases. (Annx. 3(c) (Pg/86) to Appendix-A referred to in Para 33 of ALAM-I)

Q. During a recent visit to a unit, LAO has experienced difficulty in

obtaining full and free access to the essential accounts and has thus got
serious doubts on the keeping of the store accounts by the unit reasonably
well. What action the LAO is free to take in performance of duties in this
case?
Ans. If during the recent previous visits or during the current visit, difficulty
has been experienced in obtaining full and free access to the essential
accounts or records, or if during the course of a test check, the LAO feels
that he is seriously "put upon enquiry", he is free to extend the scope of the
audit, using his discretion and judgement as to how this should be done
and to what extent. (Auth: Para 34 of ALAM Part-I Vol.I)
Q. Does the LAO have the discretion to extend the scope of audit beyond the
prescribed percentage?
Ans. Yes, the LAO has the discretion to extend the scope of audit beyond the
prescribed percentage, if difficulty is experienced in obtaining full and free
access to any essential account or record, or in obtaining any important
explanations, etc., or if, during the course of test check, the LAO or the
ALAO in his absence, feels that he is seriously “put upon enquiry” using his
discretion and judgement as to how this should be done and to what extent.
(Auth: Para 34 of ALAM Part-I Vol.I)
Q. How many copies of the issue voucher are prepared in case of transfer of
stores from one Army depot to another, and what is the disposal of the
different copies?
Ans. When stores are transferred from one depot to another depot or to a
unit, the issue voucher is generally prepared in five copies. These are
referred to as the 'A' copy, 'B' copy, 'C' copy, 'D' copy and the 'E' copy (except
ordnance depot where they are referred to as No.1,2,3,4 and 5 copy), and
are disposed of by the issuing depot as under:
The 'A' copy is the issuing depot's office copy. The 'B' copy is the copy
which is sent to the consignee, receipted by him and returned to the
consignor. The 'C' copy is the copy sent to the consignee and retained by
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him. The 'D' and 'E' copies are sent by the consignor to his LAO who pairs
the two retains the 'D' copy and passes on the 'E' copy to the consignee's
LAO. (Auth: Para 40 of ALAM Part I)
Q. What is 'E' copy? What additional information is available on 'E' copy
which is not available on 'D' copy?
Ans. Copy No. 'D' and 'E' are sent by the consignor to his LAO, who pairs
the two copies, retains 'D' copy and passes on the 'E' copy to the consignee's
LAO to facilitate credit verification at the consignee's end. The dispatch
particulars are given only in 'E' copy. (Auth: Para 40 ALAM Part I Vol.I)
Q. Ordnance Depot Kanpur while transferring the stores to Signal Regiment
Jabalpur has prepared 5 copies (as A, B, C, D and E) of the issue voucher. Is
this in order?
Ans. Not in order. Ordnance depot Kanpur should have prepared five copies
of issue vouchers for transferring the stores as 1,2,3,4,&5 and not A-E.
(Auth: Para 40 ALAM Pt.I Vol.I)
Q. ASC supply depot while transferring the stores to an Army Unit has send
‘A’ & ‘B’ copies of the issue vouchers to consignor LAO. Is this in order?
Ans. Not in order. ASC Supply depot while transferring the stores to an
army unit should be sent the D&E copies of issue vouchers to Consignor
LAO. (Auth: Para 40 ALAM Pt.I Vol.I)
Q. What is the significance of pairing in the context of 'D' and 'E' copies?
Ans. The significance of pairing is to ensure that the item and quantity
stock of charge by the consignor unit as verified by LAO (as per D copy) has
been taken on charge by the consignor unit (as per E copy).
(Auth: Para 40 of ALAM-I)
Q. When stores are transferred from one supply depot to another, of the ‘D’
& ‘E’ copies sent by the Consignor Depot to the LAO, the ‘D’ copy, after
pairing with the ‘E’ copy, is retained by the LAO and ‘E’ copy returned to the
consignor. Is this the correct procedure or if not what is?
Ans. The procedure is incorrect. The correct procedure is that after pairing
the D and E copies, the consignor LAO will retain D copy and forward the E
copy to the consignee LAO. (Auth: Para 40 of ALAM-I)
Q. What is Skeleton List? What is the periodicity of sending Skeleton Lists
by supply Depots to the LAO?
Ans. Skeleton list means, the list of with which vouchers are forwarded by
the issuing depots to their LAOs in IAFO 1374 in the case of Ordnance
Depots manuscript form in case of Supply Depots.
These are sent by supply depots once every 10 days (decade).
(Auth: Para 41 & 42 of ALAM-I Vol.I)
Q. Describe action taken by the LAO if the ‘Skeleton List’ is not received by
due date.
Ans. The skeleton list (IAFO-1374) will be sent monthly on the first working
day of each month in the case of Ordnance Depots and store depots
supported with issue vouchers. If certain vouchers are not forwarded with
the skeleton lists, the reasons for the same are supposed to be indicated in
appropriate space provided for in the skeleton lists.
In case the skeleton lists and other documents are not received by the
due date, they will be called for from the depot concerned and cases of
abnormal delay reported to CDA who will take up the matter with
administrative authorities and ensure that lists are rendered on due dates.
(Auth: Para 42, 43 & 46 of ALAM-I)
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Q. The LAO is called upon by the CDA to intimate the reasons for reflecting
large number of copies No. 3 & 4 as outstanding in the AAC. The LAO
replies that the information would be supplied after ascertaining the same
from the Depot authorities. Comment.
Ans. In case of Ordnance and Stores Depots the skeleton lists are required
to contain information as to why certain vouchers are not forwarded
therewith. In case this information is not received by the LAO he should
insist on this information. Therefore, the contention of the LAO that he is
not aware of the reasons for the same reflects on his efficiency.
(Auth: Para 43 of ALAM Pt.I Vol.I)
Q. An ordnance depot has taken the working month for the purpose of
assigning numbers for issue of vouchers from 25th of a month to 24th of the
following month. Is this in order?
Ans. Yes, in order. In ordnance depot, the working month for the purpose of
assigning number of issue vouchers will generally be from 25th of one
month to 24th of the following month. (Auth: Para 45 of ALAM Pt.I Vol.I)
Q. What are the situations in which nominal vouchers are prepared?
Ans. Nominal vouchers are prepared in the following cases:
(i) In respect of stores which are not required to be struck off or
brought on charge by the issuing/receiving units/formations as
also those on which expendable stores are issued to the various
branches/directorates/sections of AHQ for experimental/test
purposes.
(ii) In case of wrong receipt of stores by the store depots.
(iii) To transfer superseded items which have been wrongly received by
Store Depots, when such items are required to be stocked by other
depots or sub-depots. (Auth: Paras 47-49 of ALAM-I Vol.I)
Q. Explain with illustrative instance what is meant by a nominal voucher?
Ans. A nominal voucher is prepared in respect of stores not required to be
struck off or brought on charge by the issuing or receiving unit as the case
may be. Nominal voucher are not scheduled for linking. Illustrative
examples:
(i) To issue stores charged off earlier but not despatched (short despatched);
(ii) To transfer wrong receipt to ultimate consignee;
(iii) To issue expendable stores to branches/directorates/sections in AHQ for
Experimental/test purpose. (Auth: Paras 47-49 ALAM-I)
Q. Stores meant for Army depot X are wrongly received by another Army
depot Y. What procedures and formalities are required to be followed by the
two depots and their LAOs in order to rectify the mistake?
Ans. In this case, the depot Y receiving the stores will first take the stores on
charge by preparing a nominal voucher. It will then redirect the stores to the
appropriate consignee and on receipt of receipted copies for the same release
the office copy of the nominal voucher to the dependent LAO who, in turn,
will schedule it to the LAO of the original consignor. The latter will link it
with the original voucher of the consignor and watch for the revised
vouchers showing the stores consigned to the ultimate consignee.
(Auth: Para 48 of ALAM Part I)

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Q. Are Nominal vouchers also subject to linking by LAOs? If so, indicate the
circumstances when such vouchers are required to be linked.
Ans. Yes, nominal vouchers are subject to linking by LAO in the case of
such vouchers prepared for wrong receipt of stores by the store depots. In
such cases the depots receiving the stores will redirect the stores to the
correct consignee and on receipt of the receipted copies for the same release
the office copy to dependent LAO who, in turn, will schedule it to the LAO of
the original consignor, the latter will link it with the original voucher of the
consignor and watch for the revised vouchers showing the stores consigned
to the ultimate consignee. Besides, nominal vouchers prepared by the stores
depot to transfer the superseded items which have been wrongly received by
them are also dealt with like regular issue vouchers.
(Auth: Para 48 & 49 of ALAM Part I)

Q. In order to avoid criticism from the CGDA on account of arrears of audit,

the CDA order to carry out issue audit with reference to the consignor’s copy
of the Issue Voucher. Comment.
Ans. This is not in order. The audit has to be done with reference to the
copy held by the LAO. (Auth: Para 53 of ALAM Part I Vol.I)

Q. How are objections relating to non-receipt of CRVs from units on Peace

System of Accounting settled by the consignors LAO if the consignor is a
COD?
Ans. In case of issue transactions where the receipted copy of the voucher is
not received by the consignor unit over 3 months, an extra copy of the issue
voucher will be scheduled to the consignee’s LAO, after pairing it with the ‘E’
copy for credit verification. In case the consignee’s LAO confirms verification
of credit of stores in the consignee’s ledger, the consignor LAO will settle the
objection. (Auth: Para 61 of ALAM Part I Vol.I)

Q. When a receipted copy of a Voucher (‘B’ copy) is not available, what

action will be taken by the LAO?
Ans. When a receipted copy of a voucher is not available, an objection will
be raised. The transaction will, however, be linked with the Issue copy of the
voucher meant for local audit staff (‘E’ copy) which will be removed and
placed with the objection statement. Subsequently, when the receipted copy
of the voucher is received by the unit, the E copy of the voucher will be
paired with the former and transmitted to the consignor’s LAO.
(Auth: Para 61 of ALAM Part I Vol.I)

Q. What action will the LAO take if receipted copy of Issue Voucher ('B' copy)
is not received by the consignor for over three months from the date of issue
of stores?
Ans. Where the copy of the issue voucher ('B' copy) is not received by the
consignor unit for over three months from the date of issue of stores, the
consigner's local audit staff will, during their visit to the unit for audit,
collect an extra copy of each of such issue vouchers and schedule them to
the consignee's LAO, under a separate top list after pairing it with the 'E'
copy of the voucher held by him.
Particulars of all such cases in which an extra copy of such vouchers
have been obtained and scheduled to the consignee's LAOs in the above
manner should be brought to the notice of higher administrative authorities
for investigation and necessary action under intimation to the PCDA/CDA.
(Auth: Para 61 ALAM Part I Vol.I)

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Q. Briefly explain the procedures for credit verification in consignee’s ledgers

by the LAO in respect of: (i) Locally purchased stores and (ii) Imported
stores, clearly bringing out the difference in the procedures in respect of (i)
and (ii) above.
Ans. In the case of local purchases, the payment is made by the CDA on the
basis of proof of receipt of the items in the consignee unit viz. the CRV. After
payment, the CDA’s office schedules the CRV to the LAO of the consignee
unit for verification of credit in the consignee’s ledger.
In the case of imported stores the payment is generally made by the
CDA on the basis of proof of despatch of the items by the supplier viz.
Invoice Packing Account, Bill of Landing, Air Waybill etc. The paid invoices
etc. are sent by the paying CDA to the Main Office of the concerned CDA
dealing with local audit work of the consignee unit. On receipt, these paid
invoices are entered in a register for further action. At the consignee end, on
receipt of the items, CRV is prepared on the basis of Packing Account
received along with the consignment. The LAO compares the CRV with the
original Packing Account and then links the CRV in consignee’s ledgers.
Thereafter, the LAO sends a copy of the verified Packing Account to his CDA.
On receipt, the CDA’s Office links the Packing Account with the invoices etc.
received from the paying CDA. In cases where CDA’s Main Office does not
receive verified Packing Account from the LAO, they send the paid invoices
to the LAO quarterly for linking with CRV/Unit’s copy of Packing Account.
The main difference between the above two procedures is that in the
case of locally purchased stores, the LAO verifies credit in the Consignee’s
ledger with reference to CRV received direct from the paying CDA. In the
case of Imported Stores, however, the LAO verifies the credit with reference
to the Packing Account and Unit’s copy of CRV. Thereafter, he sends a copy
of the Packing Account to his CDA, who compares it with the paid invoices
received from the paying CDA. (Auth: Para 67 & 78 of ALAM Part I Vol.I)

Q. In order to avoid criticism from the CGDA on account of arrears of audit,

the CDA order: Only 10% vouchers of Rs. 1,000 or above in value be linked
by SO (A)/AAO. Comment.
Ans. This is not in order. All vouchers of Rs. 1000/- and above should be
linked 100% by SO (A)/AAO. He will also check 25% of the vouchers of Rs.
10000/- or over in value actually linked by his staff.
(Auth: Para 71 of ALAM Part I Vol.I)

Q. Why is it necessary for the paying CDA to schedule to the LAO 90%
vouchers as well as 10% payment vouchers in respect of centrally purchased
stores? What action is taken by the LAO on these vouchers?
Ans. It is necessary for the paying CDA to schedule to the LAO 90%
payment vouchers as well as 10% payment vouchers to avoid delay in credit
verification in the Consignee’s Ledger. The 90% payment is generally made
on the basis of proof of inspection and despatch. On receipt of paid vouchers
of 90% payment, the LAO will obtain the relevant CRV number and a copy of
CRV from the Unit and link the CRV in the Ledgers after comparing it with
the paid vouchers (Inspection Note etc.). Subsequently, on receipt of 10%
payment vouchers, which contain CRV No. And date, the LAO will match
them with the corresponding 90% payment vouchers. In cases where he
could not verify credit earlier with reference to 90% payment vouchers, he
will now verify the credit with the help of CRV details endorsed on 10%
payment vouchers. (Auth: Para 77 of ALAM Part I Vol.I)

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Q. State reasons for which unlinked CRVs of imported stores are not
reflected in the AAC by the LAOs.
Ans. As per the procedure laid down, packing accounts are to be received in
duplicate. The consignor is supposed to check the stores with the relevant
entries and prepare the necessary CRVs in respect of stores received. The
original and duplicate accounts are then forwarded by the consignee,
together with the CRV, to the LAO. The actual procedure on ground is as
under:
The packing accounts are not being received in respect of imported
stores. Boards are held to verify the number of items received with reference
to the details mentioned in the invoice. Thereafter, a CRV number is allotted
for the receipt of such stores and kept as a part of the Board proceedings.
However, no separate CRV is being prepared and sent to the LAO.
Consequently, the LAO are not reflecting such CRVs either in their monthly
report or in the AAC nor are they calling for the same from the Depot
authorities/consignee.
There are no orders to support this practice. (Para 78 of ALAM Pt.I)

Q. On receipt of packing accounts in respect of imported stores from the

Embarkation Hqrs, what action is taken by the consignee and the consignee
LAO?
Ans. The consignee receives the packing accounts in duplicate from the
Embarkation Hqrs. The consignee checks the stores with the relevant
entries in the packing accounts and prepares the necessary CRVs and
annotates on both the copies of the packing accounts the numbers and
dates against items concerned of the CRVs as well as any damages and
discrepancies discovered. The original and duplicate packing accounts along
with CRVs are then forwarded to his LAO.
The LAO will: -
(a) Compare the damages and deficiencies noted on the original and
duplicate packing accounts;
(b) Pair the receipt vouchers with the original and duplicate packing
accounts in full;
(c) Link the receipt vouchers into the ledgers, etc., to the extent as
prescribed in Appendix – A (Pg/77)
(d) Return the original packing accounts of the consignee; and
(e) Forward the duplicate copy to the CDA.
(Auth: Para 78-79 of ALAM Pt.I)

Q. What action is taken in the Main Office of the CDA if the duplicate copy
of the packing accounts has not been received from the consignee’s LAO?
Ans. In the Main Office of CDA, an invoice register is maintained. Each
invoice is required to be paired on receipt of duplicate copy of the packing
accounts and relevant entries recorded. At the end of every quarter this
invoice register is reviewed and the invoices which have remained unpaired
for the reasons of non-receipt of duplicate copies of the packing accounts
from the LAO, these invoices are sent to the LAOs by the CDA for linking
with the original copy of the packing accounts held by the units or with the
CRV held by them. The LAOs then take prompt action to carry out credit
verification for the stores shown on the invoices after pairing and linking the
entries as envisaged above and return the invoices duly paired and linked
duly quoted CRV Nos. and discrepancies, if any. (Auth: Para 79 of ALAM-I)

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Q. In the absence of Packing Accounts what action devolves on the LAO and
the S/AT Section?
Ans. In case of non-receipt of packing accounts the Store Audit Section of
the Main Office should send all such unlinked invoices to the LAO for
linking with packing accounts/CRV. On receipt of the invoices from the
Main Office the LAO will enter them in the manuscript register maintained
in his office for his purpose. He will then link the invoice with the CRV, and
after indicating the CRV numbers and discrepancy, if any, on the invoices
return the same to the Main Office, Stores Audit Section. In addition, the
LAO would also render a monthly report to the CDA intimating those
invoices in respect of which the credit of stores could not be verified due to
the reasons as recorded. (Auth: Para 79 of ALAM Pt.I)

Q. What are the documents submitted by the consignee to the LAO in

respect of imported stores?
Ans. The following documents shall be submitted to the LAO:
(i) Original and duplicate copy of the packing accounts duly noting
the damages/deficiencies, if any.
(ii) CRVs on which the stores are taken on charge.
(Auth: Para 79 of ALAM Pt.I)
Q. Explain as to how LAO ensures that imported stores are brought on
charge.
Ans. The LAO will:
(i) Compare damages/deficiencies noted on packing account (PA);
(ii) Pair CRV with Packing Accounts;
(iii) Link CRVs into the ledger; (Auth: Para 79 of ALAM Pt.I)

Q. Who is responsible for stock taking in Ordnance Depots and how is their
independence ensured?
Ans. The responsibility for stock taking rests with the ordnance authorities
themselves. It is carried out by a stock taking team independent of those
responsible for accounting of stores/their physical custody.
(Auth: Para 83 of ALAM Pt.I)

Q. In what cases can the surpluses discovered during stock verification be

set off against deficiencies?
Ans. This can be done in the case of similar items or when the deficiencies
are linked with a corresponding surplus recorded in the Register of
surpluses.
(Para 83(iii), Note 2 under Para 211(E) and 119 of ALAM Pt.I & Para 286 SAI)

Q. What is the role of LAO in physical stock verification in

Units/formations? Can he physically verify the stock?
Ans. The responsibility for carrying out stock verification is that of executive
authorities concerned. The LAO during his periodical visit will verify that
stock taking has been carried out as it falls due and that the staff actually
employed in verifying stock is independent of the staff responsible for the
physical custody of stock. He will also see that
(i) the system of stock taking adopted is adequate and proper
(ii) the results of stock taking are recorded in prescribed documents by a
responsible officer under his dated initials
(iii) all the discrepancies detected are properly investigated, all surpluses
found have been credited to Govt. and the deficiencies have been dealt with
under the orders of appropriate authorities.

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Cases of failure will be brought to the notices of administrative
authorities through CDA concerned.
In cases where, from the state of accounts or otherwise, the LAO has
sufficient grounds to doubt the accuracy of the stock actually in possession
of a unit, he may carry out an actual stock verification after obtaining the
prior concurrence of the CDA concerned. Intimation to that effect will be
sent by the CDA/LAO to the OC unit who will make necessary arrangements
for the verification of stock by LAO. (Auth: Para 83-86 ALAM Part I Vol.I)

Q. The LAO insists on carrying out stock verification of stores in doubtful

cases. Comment.
Ans. The LAO can carry out stock verification only with the prior
concurrence of the CDA where the LAO has sufficient grounds to doubt the
accuracy of the verification. Intimation to this effect will be sent by
CDA/LAO to the CO of the unit/formation who will make suitable
arrangements for verification of the stock by the LAO.
(Auth: Para 84 & 85 ALAM Part I Vol.I)

Q. LAO insists that the unit must carry out stock verification of Petrol
tanks. Comment.
Ans. Verification of stock of petrol in petrol tanks is not necessary.
(Auth: Para 86 (iii) ALAM Part I Vol.I)

Q. How is it ensured by the LAO that proper recovery in respect of payment

issue of ordnance stores to Civil Departments is made?
Ans. Debits for the cost of stores issued on payment to the civil departments
of the GOI (including the formations under their control), State Governments
and Union Territories are raised against their Accounts Officer on the basis
of unreceipted copies of issue vouchers and proof of despatch. The LAO
verifies that the details regarding proof of despatch, such as reference and
date of the relevant Railway Receipt, Postal Acknowledgement or receipt of
local representative are noted by the consignor on the issue vouchers before
transmitting them to the CDA for adjustment.
(Auth: Note below Para 91 (iii) ALAM Part I Vol.I)

Q. In an Ordnance Depot, clothing items have been damaged. Who is

responsible for pricing of the loss statement in this case?
Ans. Executive authorities are responsible for pricing subject to post
scrutiny by the LAO. (Auth: Para 92(ii) (a) ALAM Pt.I Vol.I)

Q. In Armed Forces Medical Stores Depot, Lucknow, Shaktiman Vehicle met

with an accident. Who is responsible for pricing of the loss statement in this
case?
Ans. LAO/CDA/PCDAs are responsible for pricing of MT vehicle met with an
accident. (Auth: Para 92(ii) (b) ALAM Pt.I Vol.I)

Q. In an Army Unit, 10 bags of Sugar had decayed during rainy season. Who
is responsible for pricing of the loss statement in this case?
Ans. Executive authorities are responsible for pricing subject to post
scrutiny by the LAO. (Auth: Para 92(ii) (c) ALAM Pt.I Vol.I)

Q. In a Base Depot, the medical stores were damaged during unloading from
the vehicle. Who is responsible for pricing of the loss statement in this case?
Ans. Executive authorities are responsible for pricing subject to post
scrutiny by the LAO. (Auth: Para 92(ii) (d) ALAM Pt.I Vol.I)
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Q. What criteria should the AAO/SO (A) follow while settling objections
under powers delegated to him?
Ans. While settling objections under powers delegated to him, an AAO/SO
(A) should be personally satisfied that the point of objection has been
suitable answered, audit requirement has been fully completed and there is
no defect or lacuna in the system and procedure. He should record the
reasons for the settlement of an item in the office copy of settlement memo.
However, objections personally raised by the LAOs shall not be settled by
AAOs/SOs (A).
(Auth: Note 1 under Para 7 of Appendix ‘B’ referred to in Para 99 (Pg/87) of ALAM-I)

Q. Write short notes on: Payment Issue Vouchers.

Ans. Certain stores which are not issued free as per scales can be
purchased on payment basis. In Supply and Stores Depots, all payment
issue vouchers are priced by the respective LAOs in accordance with the
vocabulary rates, stock book rates and other relevant government orders,
etc. Where rates are not available, these will be obtained from the CDA.
(Auth: Para 113 of ALAM Pt.I Vol.I)
Q. In which cases, are pricing of ‘payment issue voucher’, done by the
executives? How is the pricing in such cases audited?
Ans. Pricing of ‘Payment Issue Vouchers’ will be done by the executives in
the following cases:
(i) Vouchers in respect of demands from officers and others located in
station where no officers shop or cash payment issue section exists.
(ii) Payment issues from officers shop/cash payment issue section/stores.
(iii) Payment demands made from retail shops ASC.
(iv) Payment work orders in R.S.S.D. workshops.
Pricing done in such cases are subsequently checked by the LAO.
(Auth: Para 113 of ALAM Part-I Vol.I)
Q. During the scrutiny of a loss statement pertaining to a tinned item of
ASC, the LAO finds that the deterioration in the item has occurred during
the warranty period. What action is the LAO required to take to ensure that
the warranty clause has been invoked?
Ans. When the LAO finds that deterioration of a tinned item has occurred
during the warranty period he should ensure that all loss statements is of
all the consignments of that particular variety held in the depot against the
particular contract are reported to Army HQrs. (Auth: Para 132 (i) ALAM-I)
Q. How is the net value of a loss calculated in respect of ASC stores
deteriorated/degraded? Is the CFA for regularisation of such losses
determined on the basis of gross value or net value of stores?
Ans. In the case of loss of ASC stores due to deterioration or degradation,
the net value of the loss is calculated as the gross value of the stores as held
on charge originally less the total value of stores degraded after
classification. The Net value is shown in the loss statement but for
determining the CFA for regularising the loss, the gross value is the
criterion. (Auth: Para 133 of ALAM Pt.I Vol.I)
Q. What checks are exercised by the LAO to ensure that unauthorised
addition of names is not made in the check rolls?
Ans. To prevent unauthorised addition of names in the check rolls the LAO
compares the names etc. In the check roll with those in the previous
month’s check roll and checks the addition deletions due to first
appointment, transfer in/out, retirement/death with reference to relevant

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Daily Orders Part II. All debit entries are checked 100% from Dos II to check
roll and all credit entries 100% from check roll to Dos II.(Para 141 of ALAM-I)

Q. What use is made by the LAO of the Monthly Man-hour Statistical Return
prepared by EME Workshops?
Ans. The LAO test checks 10% of the Monthly Man-hour Statistical Return
of EME Workshops by verifying the hours booked in selected section’s daily
statements of a particular group with the hours recorded in the summary of
work orders prepared in the compilation group of the workshop.
(Auth: Para 141 (e) of ALAM Pt.I Vol.I)

Q. What checks are exercised by the LAO to ensure that payment is not
made for the period of absence without leave?
Ans. To ensure that payment is not made for the period of absence without
leave, the LAO will link all Dos II relating to sanction of leave (with or
without pay) into the check roll. (Auth: Para 141(iii) of ALAM Pt.I Vol.I)

Q. What checks will the LAO exercise in post audit of check rolls to ensure
that: (i) payment has actually been made to the individuals
(ii) no unauthorised alterations are made in the entries in the check rolls
and (iii) payment for the period of leave is in accordance with the leave
actually sanctioned.
Ans. (i) To ensure that payment has actually been made to the individual,
the LAO will verify during post audit of check rolls that a certificate signed
by a Commissioned or a Gazetted Officer to the effect that payments have
been made in his presence, is endorsed on the last page of the Check Roll.
(ii) To ensure that no unauthorised entries are made in the check roll, the
LAO will verify that all alterations are duly attested by the executive and
that there are no erasures or overwriting.
(iii) To ensure that payment for the period of leave is in accordance with the
leave actually sanctioned, the LAO will link the leave Dos II orders 100%
into the Check Roll. (Auth: Para 141 of ALAM Pt.I Vol.I)

Q. Name the voucher on which samples issued from Supply Depots to the
Composite Food Laboratory are charged off.
Ans. Samples issued from supply depot to the Composite Food Laboratory is
charged off on an Expense Voucher. (Auth: Para 147(h) of ALAM Pt.I Vol.I)

Q. To whom the LAO will send Train Ration Returns - 'E' copy of Issue
Voucher for issue of rations by a Supply Depot, when the units are moving
by train?
Ans. LAO of detraining station for verification of credit in the Train Ration
Returns. (Auth: Para 153(i)(a) ALAM Part I Vol.II)

Q. Up to what number of personnel in a troop moving by rail, the ASC

makes no arrangements and no reserve rations are loaded on train?
Ans. Twenty or less. But units arrange to give the party money allowance in
lieu of rations. (Auth: Para 154 ALAM Part I Vol.II)

Q. Artificial Limb Centre, Pune issues without any charges, artificial limbs
to Major ‘X’, Nb. Sub. ‘Y’ and Havildar ‘Z’ for disability attributable to
military service. Is this admissible?
Ans. Yes, artificial limbs can be issued free of cost to Officers, JCOs and
ORs whose disability is attributable to Military Service.
(Auth: Para 206 (a) ALAM Part I Vol.II)
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Q. Artificial Limb Centre, Pune issues without any charges, artificial limbs
to Mr. ‘P’ a civilian officer in MES. Is this admissible?
Ans. No, artificial limbs can be issued only on payment at full rate to
civilians subject to the supply being sanctioned by DMS.
(Auth: Para 206 (b) (3) ALAM Part I Vol.II)

Q. How will the loss due to change in condition, whether due to fair wear
and tear or ordnance stores issued to local Govt. be treated?
Ans. The loss will be charged against the local Govt.
(Auth: Para 211(L) (viii) (b) ALAM Pt.I)

Q. An ordnance depot has allowed refund to a unit on certain clothing items

returned by them to the Depot. What are the points to be seen by the LAO in
this case?
Ans. It will be seen whether the stores returned have been classified as
serviceable, repairable, unserviceable and part worn, as the case may be,
and items are accordingly taken on charge.
The refund is made on the basis of above classification.
(Auth: Para 211(P) ALAM Pt.I)

Q. Ordnance stores worth Rs. 1,000 have been transferred from one Depot
to another within the jurisdiction of the same command. Is this in order?
Ans. No ordnance stores can be transferred between AOC establishments
except under orders of DOS. (Para 211(P) (iv) of ALAM-I & Para 21(c)(vi) SAI)

Q. What is Returned Stores Sub- Depot and Salvage Sub- Depot? Bring out
the silent points to be seen in the audit of these Depots.
Ans. RSSDs receive, sort out and condition clothing, general and technical
stores. They carry out unskilled repairs to all such stores. They disinfect
and wash/dry clean all clothing. They recondition EME stores. After
conditioning, all serviceable stores are forwarded to stock sub- depots for re-
issue. BER stores are disposed of. Account cards are maintained to show all
transactions.
It should be seen in audit that details of all stores received are posted
in Account Cards. The stores conditioned have been written off charge from
the column 'awaiting condition' and the same quantity brought on charge.
Unserviceable stores of all types and excess repairable stores, after
conditioning have been passed on to the Salvage Section/Deport and
brought on charge by the salvage section. RSSD workshop job cards are to
be scrutinized. It should be seen through audit that no theft, pilferage takes
place and the stores are accounted for at every stage and economy is
achieved. (Auth: Para 212-217 ALAM I Vol. II)

Q. What is the periodicity of stock-taking for vehicles?

Ans. Half yearly viz. on the last days of the months of March and September
of each calendar year. . (Auth: Para 228(i) (a) of ALAM I Vol. II)

Q. EME carries out repairs free of cost to all refrigerators held by the
Officer’s Mess of a Depot. Comment.
Ans. The action of the EME in carrying out repairs free of cost to all
refrigerators held by Officers Mess is irregular as all such repairs are to be
carried out by the MES. (Auth: Para 266 (a) ALAM I
Vol. II)

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Q. How is wastage of man hours detected by the LAO in an EME Workshop?

Ans. The wastage in man-hours can be detected by the LAO by verifying the
hours booked in selected sections and the daily statements of a selected
production group with the hours recorded in the summary of work orders
prepared in the workshop. The total man-hours booked in the daily
statement should agree with the hours shown against it in the monthly hour
statistical return. A month to month comparison should also be made to
detect a progressive trend in man-hours lost so that the units could be
advised suitable in the matter. (Auth: Para 272 (i) & (ii) of ALAM I Vol. II)

Q. How is wastage in meat cutting up accounted for?

Ans. A ‘cutting up’ allowance upto a maximum of 5% is admissible in
respect of fresh meat issued:
(i) free to personnel not dining in Unit Messes and
(ii) on payment to individuals entitled to draw ASC supplies on
payment.
In order to maintain a check on free issue of meat the following procedure
will be followed:
(i) personnel dining in Unit Messes and
(ii) those not dining in Unit Messes would be accounted for separately.
(Auth: Note 2 below Para 283 of ALAM I Vol. II)

Q. Can free ration be drawn by a unit for a soldier on the day of detention in
or discharge from hospital when the detention or discharge takes place after
14:00 hours or before 10:00 hours respectively?
Ans. Yes. Ration can be drawn for the day of detention or discharge if the
detention takes place after 14:00 hours and discharge takes place before
10:00 hours. (Auth: Para 283 (III)(b)(4) of ALAM Pt.I)

Q. An Army establishment has overdrawn the ration in a particular month

and it intends to adjust the same against under drawal of ration in the
previous month. Comment.
Ans. This is not permissible. Underdrawal of rations (including fresh items)
in a month has lapsed to the Government and cannot be made good by
overdrawal in the subsequent month. (Para 283 (VII) (a) of ALAM Part-I)

Q. What is the function of Condemnation Board of Ordnance and Clothing

Stores?
Ans. Condemnation Board is constituted to carry out condemnation in
respect of items of public/personal clothing and ordnance stores on the
charge of the Unit/Formation. The Board will express an opinion on
individual item, indicating whether the change in condition is due to fair
wear and tear or otherwise. The Board proceedings are subject to inspection
by the LAO. (Auth: Para 300 ALAM Pt. I & Para 130 SAI)

Q. The Capt. Adjutant of a unit in the rank of a captain presided over the
Condemnation Board. The unit is commanded by a Colonel. Please
comment.
Ans. The condemnation Board should be presided over by the 2nd in-
Command or other field officer.
Capt. Adjutant is junior to preside. (Auth: Para 300 (a) ALAM Pt. I)

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Q. A Condemnation Board is convened in a unit though similar items
condemned earlier have not been disposed off despite the receipt of
replacements. Is this in order?
Ans. Condemned articles must be disposed off expeditiously and unless
replacements have not materialised, the next Board is not held.
(Auth: Para 300 (j) ALAM Pt. I)

Q. The LAO has observed in a Unit that engine oils are being drawn for the
vehicles on a weekly retail issue voucher. However, used and waste motor
engine oil is not being accounted for. Please comment.
Ans. It is to be seen in audit that used and waste motor engine oil have been
properly accounted for and returned and deposited with the nearest
Supply/POL Depot. (Auth: Para 306 ALAM Pt. I Vol. II)

Q. Considering that the number of vehicles held by the Armed Forces at any
point of time would generally be within the authorized limit, would it be in
order for local audit staff to object to a Unit holding on charge vehicles in
excess of those authorized in P.E./W.E.?
Ans. Yes (Auth: Para 310 (iii) (a) of ALAM Part-I Vol.II)

Q. What points are checked by the LAO while auditing Vehicle Log Book and
‘Car Diaries’?
Ans. Vehicle Log Book is not an auditable document. It will only be referred
to if the need arises for determining KPL etc.
Car Diaries will be checked to see that:
(i) The nature of duty is clearly mentioned.
(ii) That entry is made in English.
(iii) That the officers using the car have signed in the diary.
(iv) That journeys for private purposes have been shown separately.
(Auth: Para 310 (v) & (vii) of ALAM Part-I Vol.II and Para 141-142 of SAI)

Q. During audit of car diary in unit, it is observed that the CO (of Col. Rank)
has extensively used the vehicle at a peace station. However, the car diary in
respect of his usage has been signed by the Adjutant of the unit. The LAO
has asked the CO to countersign the duty. Please comment.
Ans. The action of the LAO is correct. Only in respect of use of car by
officers not below the rank of the Brigadier, the staff officers accompanying
them may sign the car diary. (Para 310(vii)(A)(c) of ALAM Part I Vol.II)

Q. What is the procedure for measuring the quantity of POL in the vehicles
held by a unit at the end of a month?
Ans. Motor spirit is checked on the last day of the month by filling the tank
to the maximum capacity and recording the result in the car diary in red
ink. (Auth: Para 310 (vii)(A)(i) of ALAM Part-I Vol.II and Para 254 of SAI)

Q. A Local Audit Officer advises the Station Commander to ensure that

Carter Patterson system is followed for delivery of letters, claims and bills to
the Area Accounts Office. Comment.
Ans. This is a perfectly valid advice. (Para 310(vii) (B) (1 & 2) of ALAM-I)

Q. In the course of audit of a unit, it has been observed that Jeeps and
motor cycles have been hired for recreational purposes. Is it in order?
Ans. This is not in order. These vehicles are for official use only.
(Auth: Para 310(vii) (G) of ALAM Part I Vol.II)

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Q. In one of the units, civil transport has been used for conveyance of the
touring officers. Comment.
Ans. This is not in order. The touring officers are entitled to TA/DA under
normal rules. They are required to make their arrangements for the
transport. In exceptional cases, where the use of hired transport is
considered essential, prior sanction of the GOI will be obtained.
(Auth: Note below Para 310(vii) (J) of ALAM Part I Vol.II)

Q. 3rd Gorkha Battalion has received orders to move from a Peace Station to
Laddakh (Field Area) at short notice. How will the audit objections against
this unit be pursued?
Ans. Special steps will be taken by personal discussion with OC of the unit
or his representative to settle on the spot as many items of objections as
possible. Those remaining unsettled will be reported to the PCDA/CDA for
necessary action. (Sub Para below Para 312(a) (ii) ALAM Part I Vol. II)

Q. How are the stores held by a unit retuning from the Field on War System
of Accounting brought to account in a Peace Station?
Ans. A Board of survey assembled to take stock of all stores in possession of
unit irrespective of the source from which they were obtained and the stock
will form the opening balances of new store ledgers and returns. The LAO of
the supply depot in the field area will after pairing with the relevant issue
voucher, schedule the copy of the certificate received from supply depot
giving full details of reserve ration and ration issued for journey period to
the LAO of the unit in peace area and obtain his acknowledgement. The LAO
in the Peace station will at the time of audit of first month’s ration return of
the unit after arrival at the Peace station see with reference to the LRC/RRC
that:
(i) there is no excess consumption during journey period; and
(ii) all unconsumed ration have been properly brought to account in the
unit’s ration return. (Auth: Para 312(b) ALAM Part I Vol.II)

Q. What is the purpose of maintaining hospital admission/discharge

register?
Ans. Following are the purpose of maintaining hospital admission/discharge
register:
(i) To indicate the date of admission and discharge of the patient with
the disease.
(ii) To ensure that only entitled persons are admitted.
(iii) That non-entitled persons have been admitted with the prior
sanction of OC Station on payment at the rates laid down in P&A
Register.
(iv) That HSR have been correctly prepared.
(v) That HSR has been sent to appropriate accounting authorities.
(vi) That number of days shown in A/D Register and that shown in
HSR are the same. (Auth: Para 317 ALAM Part I Vol.II)

Q. What do you understand about hospital stoppage rolls? How the hospital
stoppages are recovered in case of civilian patients?
Ans. Hospital stoppage rolls are prepared on IAFA - 55 for admission into
Military hospital of certain category of cases in respect of which the
recoveries are affected by respective accounting authorities. These cases are:
(1) JCOs, Other ranks and enrolled persons when they are treated for
sickness held to be due to their fault,
(2) Officers,
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(3) Civilians who are not entitled for free hospital treatment and
(4) Non- entitled persons.
Hospital stoppages from the civilian patients are recovered as per the
rates fixed by Government of India, Ministry of Defence from time to time.
The recoveries may be affected either their respective accounting authorities
or through deposits in the treasuries. (Auth: Para 317 of ALAM Part -I)

Q. A patient was admitted to the hospital before 14:00 hours on a day and
was discharged on the same day. Is the hospital stoppage recoverable from
him? If so, how it will be levied on him?
Ans. The hospital stoppage is recoverable from him. A fraction of the
authorised rate of hospital stoppage will be levied and the fraction will be
decided by the OC of the hospital concerned. (Para 317 (Note 2) of ALAM-I)

Q. Hospital stoppages for an NCO were not charged for the days he was
admitted to and discharged from a Military Hospital. Is this procedure
correct or if not what is?
Ans. The procedure is partly correct. Hospital stoppages will start from the
day following the date of admission. But hospital stoppages will be charged
for the day of discharge from the hospital. (Auth: Para 317 (d) of ALAM-I)

Q. An N.C.O. was admitted to an Army Hospital on 25.12.2006 and

discharged on 31.12.2006. Hospital stoppages were charged from
25.12.2006 to 30.12.2006, both days inclusive. Comment.
Ans. Hospital Stoppages should be charged from 26.12.2006 to 31.12.2006,
both the dates inclusive. (Auth: Note-2 below Para 317(d) of the ALAM-I)

Q. What are the documents maintained in a hospital to account for the

patient diets?
Ans. The following documents are maintained in the hospitals for the
accounting of patient’s diet which will be included in the ration return
(IAFS-1519A) along with the rations of the hospital staff:
(i) Ward Diet Sheet (IAFM-1282) which shows the total diets and extra
diets prescribed and the total quantities issued as per scales.
(ii) Daily Requisition for Diets and Extras (IAFM-1266). This record the
number of diets and extra diets which should match with the
number of patients on that day admitted in the hospital.
(iii) Storekeepers Diet Record (IAFM-1267). This is summary of the diet
and extras requisitioned on Daily Requisition for Diet and Extras.
(iv) Monthly Summary of Diets and Extras (IAFM-1267) is done in this
document. (Para 318 of ALAM-I Vol.II and Para 166 of SAI)

Q. Is it in order to provide food (‘O’ diet) in M.H. for attendants of sick who
stay in hospital under the orders of C.O. Military Hospital?
Ans. Yes, this is in order. (Note 3 below Para 318 ALAM Part I Vol.II)

Q. "Extras" in a military hospital have been provided to the patients on

"Ordinary diet" by the medical officer in charge. Is this in order? Explain the
powers of medical officer in charge to this regard.
Ans. This is in order. "Extras" are not permissible to patients on "ordinary
diet" but will be issued when the medical officer in charge considers it
essential for patients on other prescribed classes of diets, and also for those
on "No diet". (Auth: Para 318 (Note 4) of ALAM Part-I)

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Q. A Medical Officer has recommended 'extras' to the Patient substituting no
diet. Comment.
Ans. This is in order. 'Extras' may be provided to patients on 'No diet' when
M.O. in charge considers essential. (Note 4 Para 318 ALAM Part I Vol.II)

Q. The LAO has objected to the issue of ‘extra’ diet to patient admitted in
MH. The Medical Officer argues that he is empowered to issue ‘extra’ diet to
patients as per his discretion. Comment.
Ans. So long as ‘extra’ carry the authority of the medical officer as required
under the Rule and do not violate the restrictions laid down, the issues
should not be objected to in audit irrespective of whether they are drawn as
separate items or as an ingredient for making a particular article of diet. It
is; however, open to audit to raise the objection of any lavish issues of extras
or of an abuse of the powers of the medical officer from the financial advice
aspect. (Auth: Para 318 (Note 5) of ALAM Part-I)

Q. Hospital diets have been issued to patients under observation. Comments

Ans. Patients in hospitals for observation are to be subsisted on extras
alone. No diet is issuable. (Auth: Para 318(b) ALAM Pt.I)

Q. A Medical Office has authorised Extras for a patient on 'O' Diet.

Comments
Ans. Extras are not prescribed for patients on 'O' Diet. Hence not in order.
(Auth: Para 318(2), ALAM Pt.I)

Q. Tea rations have been drawn for Nursing Orderlies while detailed on day
duty. Comments
Ans. Tea rations can be drawn only for Nursing orderlies detailed for night
duties. (Auth: Para 318(3), ALAM Pt.I)

Q. While Auditing Expense Book, what guidelines LAO will adhere to?
Ans. Following are the guidelines for LAO while auditing expense book:
_ Drugs, dressing and other consumable medical stores held in the hospital
are accounted in this book.
_ In auditing it should be seen that expense vouchers duly signed by MO
hospital are furnished in support of issues made to dispensary.
_ deteriorated drugs are disposed of in accordance with provisions of Para
598 RTI SAF. (Auth: Para 320 ALAM Part-I Vol.II)

Q. Artificial dentures have been supplied by a military dental centre to other

ranks and Non- combatant (E) at Govt. expense as a matter of routine. This
has been objected to by the LAO in internal audit. Is this correct?
Ans. This is not authorised and thus not correct. Dentures can be supplied
on government expense subject to the following conditions:
(i) Artificial dentures are essential for efficient performance of the duties and
to prevent a soldier invalidment out of service;
(ii) The solders have to serve for a minimum period of two years on more;
(iii) The dental condition has not been brought about through the soldier's
own fault. (Auth: Para 334 (B) (b) of ALAM Part-I Vol.II)

Q. Free issue of spectacles was made to a Major in the Army on the ground
that his sight is defective and interferes with his efficiency. Comment.
Ans. Wrong procedure followed. Free spectacles can be given on these
grounds to any JCO and ORs and to Officers, members of the MNS.
(Auth: Para 335 of ALAM Part-I Vol.II)
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Q. What documents will you look for to ensure that the accounts maintained
in Military Farms are not omitted from the scope of audit?
Ans. AHQRs Letter No. A/19649/q/MF-3 dated 14.02.1966 as amended
from time to time and Annexure A referred to in Para 336 of ALAM Pt. I, Vol.
II, giving a list of accounts commonly maintained by Military Farm will be
looked for to ensure that the accounts maintained in MF are not omitted
from the scope of audit. (Auth: Para 336 of ALAM Part-I Vol.II)

Q. What is the periodicity of audit of the accounts of Cantonment Boards?

Ans. The quarterly/half yearly audit of the accounts of MF will be taken up
only after the close of the quarter/half year.
(Auth: Para 337 of ALAM Part-I Vol.II)

Q. In a Military Farm, it is found that after refund, the surrendered coupons

were re-issued to another officer of the entitled category. Comment.
Ans. The surrendered coupons are to be destroyed.
(Auth: Para 346(16) (d) of ALAM Part-I Vol.II)

Q. In a Military Farm, it is found that two cows were recorded as lost. What
should be the response by LAO?
Ans. It will be checked to ensure that the animals are not struck off charge
before six months from the date of reported loss.
The loss statements are prepared thereafter.
That animals, if recovered thereafter, are brought on charge.
When responsibility for the loss is fixed, recoveries are made suitably.
(Auth: Para 347(s) of ALAM Part-I Vol.II)

Q. In a Military Farm, it is found that fines collected from farms personnel

under Wages Act were deposited in a savings bank account opened in the
favour of the Manager. What should be the response by LAO?
Ans. The procedure followed is correct. (Para 348(i)(ii) of ALAM Part-I)

Q. Blood bottles have been issued free to an officer receiving treatment from
a civil hospital. Comments
Ans. Free issue of blood bottles is not authorised and the officer will be
charged appropriately. (Auth: Para 359(c)(6) ALAM Pt.I & Para 312, SAI)

Q. A Cantonment Board detects decrease in its income due to possible

leakage of revenue by fraud. The Board passes a resolution for instituting a
special investigation and solicits the assistance of the LAO. Comment.
Ans. Local Audit Officer can be associated with such an investigation but
this has to be authorized by the CDA. (Auth: Para 361(c) of ALAM-I Vol.III)

Q. Please indicate briefly the basis of assessment of fees for audit of

accounts of Cantonment Boards.
Ans. Fees for audit of accounts of Cantonment Boards in various states of
DAD will be charged at the rates prescribed by the GOI from time to time. It
will be assessed on the sanctioned strength of the audit party and the
number of days sanctioned for completions of audit. Saturday will be taken
as full working day so far as recovery of audit fee is concerned. The amount
of audit fee will be calculated on the basis of the rates existing at the time of
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the accounts are audited and not on the basis of rates pertaining to the
period of accounts audited. (Auth: Para 364 of ALAM-I Vol.III)

Q. While carrying out audit of a Cantonment Board, the Local Audit Officer
finds that a tender for supply of certain stores was accepted at rates higher
than the lowest quoted on the basis of a resolution of the Board, which did
not specify any reason for accepting the tender. Should he object to this in
audit?
Ans. Yes, The Board's resolution accepting the higher tender must contain a
statement of the reasons which led the Board to accept the rates other than
the lowest quoted. (Auth. Para 396 of ALAM Part I Vol.III)

Q. What are the important points to be seen in the audit of Embarkation

Headquarters (EHQ)?
Ans. The main function of Embarkation Headquarters is the handling of all
Defence stores imported/exported. They have a fleet of vehicles and
therefore audit of accounts of M.T. Vehicles is an important area. EHQ has
to maintain a separate file in respect of cash vessel discharging or loading
Defence stores. It should be seen in audit that all the relevant documents
are kept in it.
In addition, EHQ will maintain:
(a) Import Transit Ledger,
(b) Progress Register of Claims,
(c) Labour Register and
(d) Register of Packing Account
In Audit, it should be seen that 1/6th of the receipts in terms of packages
are checked with reference with the shipping advice and delivery note for
each ship and to ensure that there is no excess loading. Similarly, stores
shown as short landed agree with the survey board proceedings.
In the audit of (b) above, it should be seen that claims for short landed
stores is preferred with the shipping agents. Amounts recovered from the
shipping company should be promptly credited into the treasury and TR
sent to the CDA.
From the Labour Register it should be seen that the labour is generally
economically employed.
From the Register of Packing Account, it should be seen that all the packing
accounts entered in the register have been despatched to the ultimate
consignee units promptly. (Auth: Para 411-416 of ALAM Part I Vol III )

Q. How is it checked that a cancelled Railway warrant has not been mis-
used?
Ans. It is seen that the relevant warrants (foils) have been effectively
cancelled and pasted to the respective counterfoils.(Para 447 (c) of ALAM-I)

Q. Who is competent authority to order regularization of the loss of blank

form of Railway Warrants?
Ans. Government of India. (Auth: Para 447 (p) of ALAM Part I Vol III)

Q. How is it ensured that credit notes are used for transportation of

bonafide Government stores only?
Ans. The numbers and dates of issue vouchers forwarding stores are quoted
on the counterfoils of credit notes. (Auth: Para 452 (d) of ALAM Part I)

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Q. What action is a Local Audit Officer required to take when he notices
discrepancies while pairing the “foils” and “counterfoils” of credit notes and
is unable to settle the discrepancies locally?
Ans. The matter has to be reported to the Principle Controller of Accounts
(Fys). (Auth: Para 456 of ALAM Part I Vol.I)

Q. Is there any category of civilians whose service books must be included in

the selection by the Local Audit Officer while selecting the service books of
the civilian establishment working with the units and formations for test
check?
Ans. He should ensure that service books of all individuals due to retire
within three years following the date of audit are included in the selection
for test check within the prescribed percentage. (Para 464 of ALAM-I Vol III)

Q. During Local Audit of an R&D Establishment Project expenditure showed

that: Liabilities on account of Work Order/Supply Order were booked as
Expenditure. Comment.
Ans. The action taken is not correct. The liabilities are not booked as
Expenditure. (Auth: Para 476(iv) ALAM Part I Vol.III)

Q. During Local Audit of an R&D Establishment Project expenditure showed

that: Cost of Stores returned at the time of completion of the Project was
credited to project. Comment.
Ans. Action taken is correct. (Auth: Para 476(ix) ALAM Part I Vol.III)

Q. Write short notes on: Auditable Documents.

Ans. Appendix ‘G’ of the ALAM Part-I Vol-I gives a list of accounts,
subsidiary documents and ancillary records maintained by unit /formations
which are to be audited or seen in course of audit. The unit authorities have
to produce these documents to the Audit party, otherwise that itself
becomes a serious objection which finds a place in the ‘Appropriation
Accounts’ – a document that is presented to the Parliament.
(Auth: Appendix ‘G’ of ALAM Pt.-I Vol.-I)

Q. When is it not necessary to prepare a loss statement for the loss of

medicines in a Medical Store Depot?
Ans. It is not necessary to prepare a loss statement for the loss of medicines
in a Medical Store Depot when the loss is not due to faulty storage.
(Auth: ALAM)

Q. Is a loss statement required for the loss of ammunition found

unserviceable on testing before the expiry of shelf life?
Ans. Yes. A loss statement is required if ammunition is found unserviceable
on testing before the expiry of shelf life. (Auth: ALAM)

Q. What use is made by the LAO of the Monthly Man hour Statistical Return
prepared by EME Workshops?
Ans. LAO test checks 10% of the Monthly Man hour Statistical Returns of
EME Workshops by verifying the hours booked in selected sections daily
statements of a particular group with the hours recorded in the summary of
work orders prepared in the compilation group of the workshop.
(Auth: ALAM Part -I)

Q. What checks will the LAO exercise in post audit of Check Rolls to ensure
that: (i) Payment have actually been made to the individuals;
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(ii) No unauthorized alterations are made in the entries in the Check Rolls,
and (iii) payment for the period of leave is in accordance with the leave
actually sanctioned.
Ans. (i) To ensure payment has actually been made to the individual, the
LAO will verify during post audit of check rolls that a certificate signed by a
Commissioned or a Gazetted Officer to the effect that payments have been
made in his presence, is endorsed on the last page of the Check Roll.
(ii) To ensure that no unauthorized entries are made in the Check Roll, the
LAO will verify that all alterations are duly attested by the executive and
that there are no erasers to overwriting.
(iii) To ensure that payment for the period of leave is in accordance with the
leave actually sanctioned, the LAO will link the leave DO II orders 100% with
the Check Rolls. (Auth: ALAM Part -I)

Q. The LAO does not maintain a record of his selection orders for audit.
Comment.
Ans. Non-maintenance of a record of the selection order for local audit
makes it impossible for any independent authority line Inspection Team
from the Main Office or the Test audit to identify and review items selected
by the LAO for Audit. (Auth: ALAM Part -I)

Q. The LAO selects for audit the same month every quarter. Comment.
Ans. The element of surprise is lost. Therefore, the possibility of quality of
audit being compromised cannot be ruled out. (Auth: ALAM Part -I)

Q. While pricing payment issue voucher, relating to Ordnance Mechanical

Transport, the LAO finds that one particular item is not traceable in the
priced vocabulary. What action should he take?
Ans. He should insist on the Depot concerned to obtain the payment issue
rate of that item from Army HQrs. (Auth: Para 40 of ALAM-I)

Q. What is an expense voucher? How is different from a loss statement?

Ans. An expense voucher is prepared to charge off stores which are
consumed for the purpose authorised in the Rules and Regulations i.e.
Medical stores expended in a hospital during a month. It is signed by the OC
unit. Loss statement on the other hand is a document to support the charge
off of the stores lost etc. Here the sanction of CFA is necessary to regularise
the loss or deficiency of stores.
Expense voucher is prepared periodically but not priced; Loss
statement is prepared occasionally and priced. (Paras 47-49 of ALAM-I)

Q. In case of free issue of bread, the rates for the same are finalised at the
end of the year closed. In case any loss of the bread is to be regularised
during the year, at what rates such bread may be priced?
Ans. As the free issue rates will not be available until the accounts of the
year are closed, the latest available rate of the previous year will be adopted
for the purposes of pricing the loss statement etc. (Para 228 of ALAM I Vol. II)

Q. When bread is obtained from the contractor, what are the factors taken
into account for fixing the (i) Free Issue Rates and (ii) Payment Issue Rates?
Ans. Bread obtained through contractor by issuing flour and other
ingredients from the ASC source (free of cost) in government transport for
the supply of a specified quantity of bread, in return on payment of certain
baking charges, the free and recovery rates of bread will be calculated taking
into account the following items of expenditure:
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Free Issue Rate:-
(i) Cost of flour and other ingredients consumed at free issue rates.
(ii) Baking charges paid to the contractor.
(iii) Transportation charges incurred for the conveyance of flour and
other ingredients from supply depot to contractors bakery and
again of bread from the bakery to supply depot.
Payment Issue Rate:-
(i) Cost of flour and other ingredients consumed at payment issue
rates.
(ii) Baking charges paid to the contractor.
(iii) Transportation charges incurred for the conveyance of flour and
other ingredients from supply depot to contractor’s bakery and
again bread from the bakery to the supply depot.
(iv) Transportation charges from supply depots to consuming units
ration stands at a rate to be fixed by Government from time to
time.
(v) Overhead charges to cover labour, audit and supervision etc.,
charges. (Auth: Para 229 of ALAM I Vol. II)

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