Practical Approach to Audit of Government Agencies
Basically, Government Agencies receives Grant in Aid from the Central/State Govt. for their Operations & Day to Day activities, Auditor’s first Role evolves here only Generally the manner & mode of usage is prescribed with the of each & every installment of Fund so received by agencies, thus this constitutes the First part of the work of an Auditor i.e. Proper Utilization of Funds so granted, things that require Special Attention in this regard are enumerated hereunder:-
Things Useful in this regard: – Receipts & Payments A/cs, Utilization Certificates.
Things Useful in this regard: – Bank Statements, Bank Reconciliation Statement.
Things useful in this regard: – A summary sheet of Total Funds disbursed to be verified with the Utilization Certificate available with it.
Things useful in this regard: – Bank Statement & Cash Book.
Second Part
Advance Adjustment
Government Agencies generally receives Advance funds for the Infrastructural Developments like Constructions of Buildings/Offices & any Structure attached to existing one, thus while auditing the same needs special attention , point wise checks are mentioned hereunder:-
a) Details of Funds Disbursed & Work Completion, [for this use the Engineer’s Completion Certificate &Summary of Funds disbursed from the H.O.];
b) The Difference between Funds Disbursed & Work Completion (if Positive i.e. W.C. is less than F.D.) is meant for Recovery from the Constructing Agency (normally Gram Panchayats), the amount of recovery should be appropriately disclosed in the reports;
c) Name, Signature of all concerned officers & Date of Sanction should be mentioned in the UC.
Third Part
Statutory Requirements
It’s the General point at which maximum Govt. Offices fumbles & here the role of an Auditor becomes important to avoid unnecessary Penalties, Interest, and Legal Suits etc. Areas where the Auditor can point some irregularities are:-
a) Registration obtained or not;
b) Final Statements submitted in due time or not;
c) Payment of due Charges/Taxes in stipulated time period.
a) TDS is deducted at proper Rate wherever applicable & the same is deposited before the due dates & TDS return is filed at specified intervals & the certificates in Form 16/16A are delivered to respective deductees within the stipulated time period;
b) Tax is deducted on the whole amount (i.e. inclusive of Service Tax) & not just on the Principal Amount payable [Except in case of Rent (Sec. 194I)], {CBDT circular 4/2008};
a) PF & Insurance deducted is deposited in time period prescribed or not & the Yearly returns thereon are timely & completely filed;
b) VAT Act & its procedures needs to be followed properly;
c) State’s Professional Tax requirements needs to be fulfilled duly.
Fourth Part
Expenditure Audit
Most of the Government Agencies generally have no Income or a meager amount of it, thus the major area that constitute the Audit Plan is the Audit of Expenditure/Payments, Points to ponder while Auditing of Expenditure are as follows:-
ü Vouchers should be passed by Appropriate Authority & the Amount so paid is within his/her delegated powers;
ü Bills should be made “Pakka” & bills on Simple Paper should be reported;
ü Date & Amount of Bill & that of Cash Book;
ü Rate of Quotation passed & the Bill;
ü Payment mode (Generally through A/c Payee Cheques, though Cash Payments are permissible to a certain limit prescribed);
ü Recording & Posting of the Expenses should be done in proper way in the applicable Account Heads only as there are Budgets allotted from which any exceeding expenses shall be reported [if no ratification obtained]
ü Penalty paid (if any) on delayed deposition of Telephone & Electricity Dues should be noted;
ü In Case of Procurement of Services, description of Services provided should be mentioned in the Invoices, as this would help in proper bifurcation of the expenses in the applicable heads.
Any deviation from the above mentioned checks shall form part of the Audit Report.
Fifth Part
Record Keeping
Generally it is seen that Maintenance of Books of Accounts & Other Records (Voucher File, Advance Registers etc.) is very poor or not up to the mark, things that require attention of an Auditor are:-
a) It should be updated daily;
b) Properly balanced at the end of each day;
c) No Overwriting should be there;
d) No Left Blank Pages;
e) Use of Pencils shold not be allowed in writing Books of Accounts;
f) Duly verified & Signed by Responsible Authority.
Hope that you had been informed with the Glimpse of a Government Audit from the above article, as the actual working has dimensions which neither can be written down nor be explained which can be experienced only when you jump into the Actual Arena, wishing you best of luck for the assignment.
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