audit objections handout

7/28/2019 Audit Objections Handout

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AUDIT OBJECTIONSROLE OF AUDIT:AUDIT means Official examination of records/accounts to see that they are in order -

Examination of accounts officially

INSPECTION means Examine carefully/visit officially to see that rules are

obeyed/that work is done properly

AUDIT BY GOVERNMENT AGENCIESSTATE AUDIT : for all local bodies Municipalities, Temples, Universities, PR bodies, etc

COMPTROLLER & AUDITOR GENERAL OF INDIAall Government departments - public sector undertakings - major institutions like Zilla Parishads, etc.

AUDIT

TYPES1. INTERNAL AUDIT 2. PRE-AUDIT 3. POST AUDIT 4. CONCURRENT AUDIT

5. SPECIAL AUDIT 6. EXTERNAL AUDIT 7. RESIDENT AUDIT

OTHER TYPES:SOCIAL AUDIT, ENERGY AUDIT, QUALITY AUDIT, MANAGERIAL

STYLE AUDIT, SECRETARIAL AUDIT, HUMAN RESOURCES AUDIT,

ENVIRONMENTAL AUDIT, MARKETING AUDIT, ETC

CATEGORIES OF AUDIT OBJECTIONS01. VARIATION IN ACCOUNT FIGURES02. FUNDS DIVERSTION/DIVERSION OF GRANTS03. NON-COLLECTION OF DUES04. NON-UTILISATION OF ALLOCATED AMOUNTS

05. MIS-UTILISATION

06. MISAPPROPRIATIONS07. ADVANCES PENDING ADJUSTMENT08. UN-UTILISATION / UNDER-UTILISATION (i.e. unspent amounts)

09. EXCESS UTILISATION10. IRREGULAR & WASTEFUL EXPENDITURE

11. OFFICE MANAGEMENT RESULTING IN SHORT REALISATION

12. EXCESS & INADMISSIBLE PAYMENTS

13. INSTANCES OF CASES UN-ACCOUNTED FOR (shortage of stores/cash)14. PURCHASES NON-OBSERVANCE OF RULES

15. FAILURE TO DISCHARGE CERTAIN OBLIGATIONS UNDER THE RULES

16. PROMOTION / APPOINTMENTS CONTRARY TO RULES AND WITHOUT OBSERVINGQUALIFICATION NORMS

17. PROCEEDURAL LAPSES18. RECORDS -- non-maintenance /non-production19. OTHERS viz., i) NO.OF POSTS -- sanctioned / utilised / variation


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CLASSIFICATIONof categories of audit objections1. DIVERSION OF FUNDS /GRANTS : diversion of any specific purpose grant for

purposes other than the purpose for which it is meant for

2. UTILISATION OF AMOUNTSi) Non-utilisation of allocated amounts in full ii) Mis-utilisation of funds

iii) Excess utilisation of funds iv) Short utilisation of funds

3. MISAPPROPRIATIONS or EMBEZZLEMENTSa) Cash on receipts and expenditure sides b) stores not accounted for

4. IRREGULAR EXPENDITURE

a) IRREGULAR AND WASTEFUL EXPENDITUREb) EXCESS AND INADMISSIBLE PAYMENTS

5. AMOUNTS COLLECTED (not remitted to respective heads of accounts)I. FEES / FINES / RENTS RATES & TAXES

II. PAY BILL RECOVERIES:1. Subscriptions / loans like G.P.F, APGLI, LIC , PLI 2. G.I.S. 3. Profession Tax

4. Income Tax 5. Other recoveries viz., bank loans, etc.

III. WORKS BILLS : 1. Income Tax 2. Seigniorage charges 3. Sales Tax 4. Other recoveriesIV. CONTINGENT BILLS: 1. Income Tax 2. Sales Tax 3. Other recoveries

6. ADVANCES pending adjustment1. Festival advances / Special Festival Advances 2. Educational Advances

3. Marriage Advances 4. Computer Advance

5. Conveyance Advances motor car/motor cycle/moped/bi-cycle

6. House Building Advances purchase/construction/repair

7. TA/TTA/LTC advances 8.Advance of pay 9.Advances for supply of materials, etc.

7. VIOLATION OF RULES1) Failure to discharge certain obligations under the rules2) Promotion / appointments made contrary to rules and without observing

qualifications / norms

3) Purchases non-observance of tender / quotation procedures / rules

8. NON-COLLECTION OF DUESFees, rents, etc.:

9. ACCOUNTING MATTERS1. Variation in account figures

2. Reconciliation of balances between cash book and pass book not done

10. RECORDS NOT PRODUCED

1. Bank Pass Book / remittance challans / cheque counterfoils 2. Service Books3. Tender/quotation files 4. Stock registers/stores ledgers 5. Advances registers

6. Other registers / files ..

RECORDS FOR AUDIT1. CASH BOOK + RECORDS 2. ANNUAL ACCOUNT + REGISTERS

3. BANK PASS BOOK/STATEMENTS 4. BANK RECONCILIATION STATEMENT


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I. RECEIPTS SIDE1. BILL BOOKS/RECEIPT BOOKS + REGISTER 2. DAILY COLLECTION REGISTER

3. BANK REMITTANCE CHALLANS 4. GRANT FILES

5. CHEQUES/DDs, etc. received + REGISTER 6. DEMAND REGISTERS, etc

II. EXPENDITURE SIDE1. PAY BILLS + SALARY ADVANCES 2. TA/TTA/LTC BILLS + ADVANCES

3. CONTINGENT BILLS + STOCK REGISTERS / QUOTATION FILES

4. WORKS BILLS + M.BOOKS / STOCK REGISTERS / TENDER FILES /CONTRACTORS LEDGER

5. ACQUITTANCE REGISTERS 6. ADVANCES REGISTERS7. PERMANENT ADVANCE REGISTER 8. CHEQUES ISSUED + REGISTER

9. OTHER REGISTERS, if anyAUDIT - PROCEDURE

1. VERIFICATION OF ANNUAL ACCOUNT + CLASSIFICATION REGISTERS2. CASH BOOK + BANK PASS BOOK / challans / cheques + grant files /

receipt books / all records of moneys received / paid3. SALARY BILLS + advances registers 4. TA / LTC / TTA BILLS + advances register5, CONTINGENT BILLS + STOCK REGISTERS (telephones/stationery/equipment, etc.

6. WORKS BILLS + M.books / estimates / tender files, etc

TYPES OF OBJECTIONS1. RECOVERY NATURE 2. RECTIFICATION3. ACTION ORIENTED 4. NON-PRODUCTION

5. SERIOUS IRREGULARITIES -- misappropriation, etc

6. UTILISATION OF FUNDS - excess/under/non/mis7. NON-FURNISHING OF accounts / reconciliation statements u.cs / bank statements / challans /

cheques 8. OTHERS

FEW STEPSfor speedy settlement of audit objections1. GROUPING 2. INITIATION OF ACTION 3. RECOVERY

4. MAINTAINING RECORDS 5. PRODUCTION OF FILES, etc6. RENDERING accounts / remittance challans /cheques / bank reconciliation statement / bankstatements /u.cs / acquittances, etc. 7. FURNISHING OF REPLIES EXPEDITIOUSLY

ADJUSTMENT OF ADVANCES1. LOANS & ADVANCES staff2. CONTINGENT ADVANCES a) WORKS b) OTHER THAN WORKS excluding

advances paid to LIBRARY for JOURNALS c) LIBRARY JOURNALS

3. TA/TTA/LTC/ADVANCE OF PAY@@@

audit objections handout

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