Expenditure Audit

Audit of Expenditure

 Audit Mandate

Under the provisions of Section 13 of the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971, it is the duty of the Comptroller and Auditor General to audit all expenditure incurred from the Consolidated Fund of India and of each State and of each Union Territory having a Legislative Assembly.

 Audit Objectives

The primary objectives of audit of expenditure are to check whether: (i) funds have been authorised by the competent authority prescribing the limits within which expenditure can be incurred; (ii) the expenditure conforms to the relevant provisions of the Act and the Constitution and of the laws made thereunder and is also in accordance with the financial rules and regulations framed by the competent authority; (iii) either a special or general sanction of the competent authority authorising the expenditure is available; and (iv) all financial transactions have been correctly recorded in the accounts under examination and have been allocated to the appropriate heads of account.

This provision of the Act implies the condition that the expenditure should be incurred with due regard to the broad and general principles of financial propriety. Any cases involving a breach of these principles and thus resulting in improper expenditure or waste of public money should be treated by Audit in the same manner as cases of irregular or unauthorised expenditure.

 In its wider connotation, irregularity in expenditure should be deemed to include expenditure incurred on an object without achieving the result expected from it, or in other words, expenditure not incurred effectively. "Economy, Efficiency and Effectiveness Audit" of expenditure, with a view to ascertaining whether various programmes and schemes are being implemented economically and efficiently and are actually yielding the results expected of them, has assumed great importance. Besides, every Ministry/Department of Government is mandated to render certain services to the people. Hence, Integrated Audit or Comprehensive Audit of functioning of Ministries/Departments has also assumed utmost importance for the purpose of evaluating the extent to which a particular Government Department is rendering services to the people in terms of its mandate.