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    STATUTORY AUDIT

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    saurabh kumar

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    STATUTORY AUDIT

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    STATUTORY AUDIT

    Uploaded by

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    © All Rights Reserved
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    STATUTORY AUDIT

    STATUTORY AUDIT

    Comptroller and Auditor General of India (C & AG) is the final audit authority in
    India. As per article no. 149 to 151 of the Indian constitution, he is responsible for
    the audit of the Accounts of the Indian Railways. The main duties of the C & AG
    are as under: -

    a) To audit all expenditures from Consolidated fund of India with a view to


    ascertain whether the money shown in the Accounts as having been
    disbursed were legally available for and applicable to the service or purpose
    for which those have been applied and whether the expenditure confirms to
    the authority governing the same.
    b) To audit all the transactions relating to Contingency fund and Public accounts.

    c) To audit all trading, P & L A/Cs and manufacturing A/Cs and balance sheet
    together with the subsidiary accounts maintained by the department
    concerned and in each case, to report on the expenditures, transactions of all
    accounts so audited by him. The C & AG in connection with the performance
    of his duties has authority –

    i) To inspect any office of the Accounts including Treasuries and such


    offices responsible for keeping the records.
    ii) To call for any accounts, books, papers and other documents which
    deal with the basis of accounts and are relevant to the transactions to
    which his duties in respect of audit is extended. He shall appoint his
    authorized representatives for inspection of the documents.
    iii) To put such questions or to make such observations as he may
    consider necessary to the person in-charge of the office or to call for
    such information, which he may require for preparation of accounts of
    the report.

    Railway Audit

    The responsibility of the C & AG in respect of audit of the Railway Accounts is


    discharged through Additional C & AG (Railway wing) and Director of Audit, who
    conducts the audit on behalf of and the direction of C & AG. For this purpose at
    each Zonal Railways HQr, have been attached with the Director of Audit for
    discharging the duties for Auditing of a particular Railway Accounts.

    ZONAL RAILWAY TRAINING INSTITUTE, BHUSAWAL


    ACCOUNTS FACULTY
    203
    STATUTORY AUDIT

    Divisional Audit Officers/Asstt.Audit Officers further assist the Directors of Audit


    at Divisional level. The main responsibilities of the Audit department are as
    under:-

    1. To audit sanctions having financial effects and those pertaining to an


    individual Railway or Railway Accounts offices.
    2. To audit sanctions regarding financial rules and general orders issued by the
    President which are exclusively applicable to the Railway Department.
    3. To audit tenders invited and accepted by the Railway for purchase of
    materials.
    4. Audit the accounts maintained in the Railway Board’s office.
    5. To ensure that the system of Accounts used by the internal check authority is
    correct.
    6. To see that the method of check applied at every stage of the Accounts is
    sufficient.
    7. To see that the Accounts are maintained properly and arrangements exists in
    the accounts office to ensure attention to the financial interest of the Railway
    on the part of all accounts.

    The Director of Audit of a Railway is also responsible for detailed auditing of the
    accounts of the Railway and for conducting inspection of records of various
    offices of that Railway. Thus his responsibility further extends to audit all
    expenditure and receipt of Railway whether under construction or open line
    including traffic accounts, accounts of stores and manufacturing stock etc.

    The cost of Railway audit is borne by the Railway Revenue and is debited to
    minor head “Statutory Audit” including pensionary charges which is operated
    under the major head’345’-Indian Railways- Policy formulation, Director
    Research and Miscellaneous Organization.

    Communication from Audit: -

    Ordinarily the results of Statutory Audit are communicated to Accounts


    department through: -

    1. Specific reports of more important and serious irregularities discovered during


    the course of Audit of Accounts department, Departmental Offices and station
    records.
    2. Audit Notes detailing minor irregularities noticed during the course of Audit of
    Accounts Office records.

    3. Inspection reports showing the results of Audit of initial records of the


    Executive offices and stations.

    ZONAL RAILWAY TRAINING INSTITUTE, BHUSAWAL


    ACCOUNTS FACULTY
    204
    STATUTORY AUDIT

    Disposal of Audit objections: -

    The Accounts Officer should promptly attend to all audit objections and notes.
    Audit objections may either relate to matters, which can be disposed off by the
    Accounts Officer himself without referring to the Executive concerned, or the
    matters, which can be well explained by the executives concerned only. The
    matters where the executives are not to be consulted, the objections should be
    made out directly by the Accounts officer and reply will be given to the Audit
    department. In the other cases, the executives should be referred to for obtaining
    necessary information in order to give a suitable reply to the Audit department.
    An Accounts officer is expected to take generally the same action on the defects
    and irregularities brought out to his notice by the Audit department as he could
    have taken if he would have detected the same.

    Audit Notes and Inspection reports: -

    An Inspection report consists of 2 parts, Part I dealing with more important


    matters and Part II dealing with the rest of the items containing minor routine
    matters of objections. Audit Notes detailing the results of monthly test Audit
    similarly consist of 2 parts and should be promptly attended to by the Department
    Concerned or the Accounts Office without any delay.

    The final disposal of Part II of the Audit notes and Inspection reports, whether on
    accounts or executive officers rests with the Accounts Officer and no final reply to
    the Audit department is necessary. Disposal of such Audit notes and Inspection
    reports should, however being made available to the Audit department.

    Replies to Part I Inspection reports and Audit notes including specific reports on
    the more important irregularities should be sent to the Audit officer as soon as
    possible showing clearly the action taken thereon.

    A record of specific reports, Audit Notes Part I & II, Inspection reports Part I & II
    etc. received from the Audit department should be kept and reviewed periodically
    to ensure prompt disposal of all outstanding paras. The collected records on
    which objections have been raised should not be destroyed till such time the
    objections have been settled.

    Replies to Inspection Reports: -

    Replies to inspection reports of Executive officers should be sent by those


    officers through the Accounts Officer concerned. In scrutinizing them the
    Accounts Officer should call for additional information if required and consult the
    ZONAL RAILWAY TRAINING INSTITUTE, BHUSAWAL
    ACCOUNTS FACULTY
    205
    STATUTORY AUDIT

    Head of the Department concerned wherever desirable before giving a reply to


    the Audit officer. The Accounts officer while giving replies to the Audit
    Department should act in close collaboration with the Administrative authorities
    concerned, so that the information given to Audit may be an authority to
    statements of facts on behalf of Railway Administration and there may be no
    possibility of any dispute at a later stage.

    Audit report on Railways: -

    Additional Dy.C&AG of India (Rlys.) and the Director of Audit are responsible for
    preparation of a report of the C & AG (Rlys.) which also includes the comments
    on the appropriation accounts of the Railways compiled by the Ministry of
    Railways.

    All important cases coming to the notice of the Audit department during the
    course of Inspection or regular audit which in the opinion of the Director of Audit
    must be included in the reports of the C & AG are ordinarily brought to the notice
    of the Railway Administration /Executive concerned through special letters. The
    Railway Administration and Executives are expected to promptly scrutinize the
    facts brought out therein and sent the replies to the Audit department within the
    time prescribed for the purpose. Since, the special letters and relevant
    documents etc. forms the basis of the material for the Audit report, the
    Executives should deal with them at sufficiently high level and bring out their
    point of view in a convincing manner so that the Director of Audit may have full
    presentation of the Railways case before he proceeds to prepare a draft para for
    incorporation in the Audit report.

    The Director of Audit prepares a draft para and sent to the G.M endorsing copies
    to the FA & CAO and the head of the department concerned. On receipt of the
    Draft para in the Accounts office, it is the responsibility of the Accounts
    department to fully examine the objections brought out therein with relevant
    records/documents etc. already available with him. If required additional
    information should be obtained from the Executives concerned so that a
    convincing reply can be prepared and submitted to the Audit department. The
    time limit for submission of replies to the Audit department in respect of draft para
    is of 8 weeks from the date of receipts in the Accounts office.

    To enable the Railway Board to approve the draft reply prepared by the Railway
    Administration, the following additional information should also be sent.

    1. The history of case with copies of the relevant correspondence.


    2. Sentence-wise comments on the Draft para.
    3. A chronological summary of the case where there has been unusual delay in
    the case.
    4. Remedial action proposed to be taken to avoid recurrence in future.
    ZONAL RAILWAY TRAINING INSTITUTE, BHUSAWAL
    ACCOUNTS FACULTY
    206
    STATUTORY AUDIT

    5. Disciplinary aspects where individual lapses have been brought out.

    The report of C & AG (Rlys.) including the Draft para is presented to the
    Parliament generally in the Budget session where it is taken up for consideration
    by the PAC which is a Parliamentary committee itself. The committee examines
    this report very critically and the views / recommendations are communicated to
    the Railway Ministry. Based on the recommendations, the Railway has to initiate
    action on certain points wherever acceptable.

    ZONAL RAILWAY TRAINING INSTITUTE, BHUSAWAL


    ACCOUNTS FACULTY
    207

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