Expenditure Audit- Grant-In-Aid

The main aim of audit of grants-in-aid is to ensure that the grants are utilized for the purpose for which these are given and that sound economical financial management practices are duly followed while incurring expenditure out of such grants. Audit has also to bring to light instances of waste, failures, system weaknesses and deficiencies resulting in infructuous expenditure.

Audit of Grants-in-aid is applicable (i) to the original grant itself and (ii) to the expenditure that is subsequently incurred from it by the grantee.

Rule 228 of GFRs, 2017 stipulate that -as a general principle Grants-in-aid can be given to a person or a public body or an institution having a distinct legal entity. Thus Grants-in-aid including scholarships may be sanctioned by an authority competent to do so under the Delegation of Financial Powers Rules to :—

(a) Institutions or Organizations set up as Autonomous Organisations, under a specific statute or as a society registered under the Societies Registration Act, 1860 or Indian Trusts Act, 1882 or other statutes.

(b) Voluntary organizations or Non-Government Organisations carrying out activities which promote the welfare schemes and programmes of the Government should be selected on the basis of well-defined criteria regarding financial and other resources, credibility and type of activities undertaken.

(c) Educational and other institutions by way of scholarships or stipends to the students.

 (d) Urban and Rural local self-government institutions

(e) Co-operative societies.

(f) Societies or clubs set up by Government servants to promote amongst themselves social, cultural and sports activities as recreational avenues.

Rule 236 ibid further provides that the accounts of all Grantee Institutions or Organisations shall be open to inspection by the sanctioning authority and audit, both by the Comptroller and Auditor General of India under the provision of CAG(DPC) Act 1971 and internal audit by the Principal Accounts Office of the Ministry or Department, whenever the Institution or Organisation is called upon to do so and a provision to this effect should invariably be incorporated in all orders sanctioning Grants-in-aid.