AUDIT CONTROL MECHANISM

&
VARIOUS REPORTS

:Pankaj Pandey, Faculty

RTC Lucknow

1
 Internal Check By DAD
• The DAD conducts the internal check of
the accounts, i.e., ledgers, returns, stock
and due sheets, records connected with
the receipt and issue of stores.
• This internal check is distinct from the
statutory audit of these accounts and
records conducted by the representatives
of the Director of Audit, Defence Services
(DADS).

2
 Review of orders and sanctions
• LAOs examines all orders and sanctions
affecting their work, issued by:
-- Authorities subordinate to the GoI .
-- C.G.D.As letters
-- CDA office orders, etc.
• Hold monthly conferences and records
its results in a review register.
• A certificate of review of orders and
sanctions will be submitted to the IA Cell.

3
 Programme of Local Audit
• A six monthly program of local audit of all
the units under an audit area for each station
or group will be drawn up by the L.A.O.
• Submitted to the C.D.A. for approval by the
20th of the second month of the preceding
six month.
• A separate programme for review of store
accounts and inspection of cash accounts of
units by the L.A.O.

4
 List of Accounts and
Registers to be audited
• 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 and which he has to audit will be made
out by the L.A.O. and sent to the C.D.A. for
approval.
• Any additions or alterations to this list will
be carried out under the orders of the C.D.A.
 
5
 Various Reports
• Financial Advice
• MFAI
• Internal Audit
• AAC
• Appropriation Account
• Draft Para
• Audit completion
• Review Completion
• Review of Orders
6
 Various Reports contd..

• MBR
• Entry-Exit Conference

7
 Financial Advice
• To bring in the notice of the
administrative authorities.
• To avoid unnecessary or avoidable
expenditure.
• Items of financial advice will not be
included in objections statements.

8
 Financial Advice
• Fwd to CDA for approval and record
kept.
• Acceptance of the Administrative
authorities obtained.
• A quarterly report in r/o items included
will be sent to the P.C.D.A./C.D.A.
• It will be compiled and submitted to the
C.G.D.A. quarterly.

9
 MFAI
• Rendered Quarterly to the CDA
• Pt I-Fresh irregularities
• Pt II-Old Irregularities
Also Includes:
• Cash Irregularities
• Store Irregularities

10
 MFAI Contd…

i) Utilisation of plant and machinery for the

purpose other than the purpose it was
purchased.
ii) Identifying slow and non moving items.
iii) Deterioration in the condition of stores
due to unduly long storage.

11
 MFAI contd…

iv) Cases of serious irregularities

which can not be translated in to financial
terms but Controllers feels that it should
be brought to the notice of Army
Commanders.
--- Reported to the GOC-in-C by the
CDA & a copy sent to the CGDA.

12
 Internal Audit Report
• Submitted 06 monthly to the CDA.
• It includes cases of serious irregularities
detected in:
---audit
-- deviation from rules & procedure
-- Loss of Public Money,
-- Misappropriation of funds
-- Cases of theft, fraud, negligence
-- Infructuous expenditure etc.

13
 Internal Audit Report
• CDA’s IAR is submitted to the HQrs
covering the period up to 31st March &
30th Sept. and subsequently to MoD
(Finance).
It covers:
• Regulatory Audit
• Loss of revenue
• Generation of revenue

14
 Internal Audit Report
• Optimal resource management
• Economy suggestions
These will be consolidated and submitted
to FA(DS) and Defence Secretary by the
CGDA.

15
 Annual Audit Certificate
(AAC)
• Every LAO should furnish this report to the
CDA by 10th of July.
• CDA will submit a consolidated report to
CGDA who will submit it to PAC for
inclusion in Appropriation Accounts.
• A follow up report to be submitted at the
end of every quarter.

16
 Appropriation Account :

• To present the audited accounts of

expenditure from the appropriations for
the year with full explanations of all
important variations between the final
appropriations and the actual expenditure.

17
 Appropriation Account :

a) A general review of expenditure

on Defence Services.
b) Changes in form and
classification in the accounts.
c) Miscellaneous observations.

18
 Appropriation Account :
Objective
d) Appropriation Accounts with
explanations for variations between the
final Appropriations and actual
expenditure.
e) Review of MES Expenditure.

19
 Appropriation Account
Every LAO to maintains statics of losses of
stores in a register of losses IAF-CDA-341
for this purpose.
1. A register of losses is maintained by every
unit formation & offices.
2. Surpluses can not be adjusted against
such losses.
3. All cases due to theft, fraud & neglect and
due to other reasons will be noted in the
registers.
20
 Appropriation Account
5. LAO/Staff checks from the register to the
effect that sanction has been accorded by
the Competent Authority and it is in the
possession of unit authorities.
6. Quarterly report will be sent by the LAO to
the C.D.A, who in turn will send to the
CGDA for the preceding quarter by :
15th of August, Nov, Feb & May 31st.

21
 Draft Para
• Submitted on quarterly basis.
• Report of all the draft paras are settled in
QE.
• Draft Paras out standing.

22
 Audit Completion Report
A monthly completion report showing: -
• (i) the name(s) of the unit(s) the accounts
of which have been locally audited during
the period under report ;
• (ii) Dates of commencement and
conclusion of local audit;
• (iii) Month's account locally audited;
• (iv) Dates of the dispatch of the objection
statements; and
• (v) the MFAIs;
 
23
 Monthly Briefing Report
(MBR)
• Items where savings have been
achieved due to audit.
• Special efforts made for settlement of
irregularities o/s in
objs/LTARs/MFAI/AAC etc.
• Exceptional efforts in detecting new
items of MFAI/IAR.

24
 Entry - Exit Conference
• Submitted monthly.
• Every LAO will take up all outstanding
objections and points of a controversial
nature which have been held over for his
scrutiny and orders, and precede with their
settlement in personal consultation with
the OC Unit or other officers concerned.

• LAO ensures Settlement of Objections

more than 3 months old are not delayed by
units. 25
 Entry - Exit Conference
• Where he finds that there are no prospects
of objections being settled, he will report
the matter to the P.C.D.A./C.D.A.

• A report of all such activities mentioning

the unit, name of the OC, issues
discussed/settled & new objections raised
etc is sent to the CDA.

26
THANKS

27