OFFICE OF THE

ACCOUNTANT GENERAL (GSSA)

KERALA, THIRUVANANTHAPURAM

INTERNAL AUDIT MANUAL

(FOR USE IN IA&AD ONLY)

SECOND EDITION - 2020

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 PREFACE

This is the second edition of the Internal Audit Manual of this office. The first
edition of the Manual was prepared in 2007 by adapting the Model Internal Audit
Manual prescribed by the Comptroller and Auditor General of India. The
restructuring of the department carried out in 2012 has necessitated revision of the
manual. Appropriate changes as per the restructured offices have been
incorporated in this manual wherever necessary.
This Manual is intended to guide the officials of the Internal Audit Section in
inspecting various Sections of this Office.

Thiruvananthapuram S. SUNIL RAJ

Dated: 25 February 2020 ACCOUNTANT GENERAL (G&SSA)

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 Internal Audit Manual

Contents Para No. Page No

1 Introduction 1.01 5
2 Nature and scope of Internal Audit 1.05 5
3 Standards of Internal Audit 2.01 7
4 Organisation and staffing of Internal Audit 3.01 8
5 Arrangements for Internal Audit 3.06 8
6 Independence and Objectivity 3.07 9
7 Organizational Independence 3.08 9
8 Impairments to objectivity and independence 3.09 9
9 Conflict of interest 3.14 10
10 Proficiency 3.19 10
11 Training and Human Resources Development 3.24 11
12 Role of risk in Planning 4.04 13
13 Illustrative Risk Factors 4.08 13
14 Source of evidence 5.03 15
15 Audit Techniques 5.10 16
16 Testing of Internal controls 5.11 17
17 Types of Tests 5.12 17
18 Testing Strategy 5.17 18
19 Techniques of Examination 5.25 20
20 Fundamental principles of sample selection 6.07 24
21 Sampling methods 6.09 25
22 Attribute Sampling 6.10 26
23 Internal Audit -Planning and Procedure 7.01 39
24 Important items of work to be seen personally by supervisory officers 7.08 40
25 Horizontal check 7.11 41
26 List of items of work which may be entrusted to Internal Audit 7.13 41
27 Other items of work 7.14 42
28 Complaints 7.16 43
29 Programme of work 7.18 43
30 Progress Register 7.21 44
31 Preservation of records 7.22 45
32 Internal Audit of Administration Group 8.01 46
33 Staffing 8.02(a) 47
34 Service Books 8.02(b) 52
35 Cash 8.02(c) 54
36 Register of valuables 8.02(d) 57
37 Register of bank drafts 8.02(e) 57
38 Contingent bills 8.02(f) 57
39 Advances 8.02(g) 58
40 Leave Travel Concession 8.02(h) 59
41 Medical Reimbursement 8.02(i) 61
42 Children Education Allowance 8.02(j) 62
43 Travelling Allowance 8.02(k) 63
44 Pensionary benefits 8.02(l) 63
45 Central Government Employees Group Insurance Scheme 8.02(m) 65
46 Procurement of Goods and Services 8.02(n) 65
47 Purchase of Stationery 8.02(o) 68

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48 Staff cars (Government vehicle) 8.02(p) 69
49 Log Books 8.02(q) 69
50 Grant in-aid 8.02( r) 70
51 Stock Registers 8.02(s) 71
52 Old records management 8.02(t) 73
53 System of receipt and issue of letters 8.02(u) 74
54 General maintenance 8.02(v) 74
55 Expenditure 8.02(w) 75
56 Telephones Register 8.02(x) 76
57 Liveries Account and Stamp Account 8.02(y) 76, 77
58 Consumption of electricity 8.02(z) 77
59 Office / Residential Building 8.02(aa) 78, 81
60 IT Support Cell 8.02(ab) 84
61 Audit of FINAT Section 8.03 85
62 Central Audit 8.04 92
63 Audit of APC Cell 8.05 94
64 Returns to be sent to Headquarters 8.06 96
65 Internal Audit of Functional Wings 9.01 100
66 Audit Plan 9.02 100
67 Audit Programming 9.03 101
68 Technical 9.04 101
69 Supervision 9.05 102
70 Working papers and documentation 9.06 103
71 Reporting 9.07 103
72 PDP/DP Register 9.08 104
73 Draft paragraphs and material for Audit reports 9.09 104
74 Important and interesting cases noticed in Audit 9.10 104
75 Audit of Autonomous Bodies 9.11 105
76 Audit Certification of Externally Aided Projects 9.12 105
77 Information Technology Audit 9.13 105
78 General points to be seen 9.14 107
79 Quality of audit output 9.15 107
80 Checks based on Compliance Auditing Guidelines, 2016 9.16 107
81 Checks based on PPG Guidance Note dated 23.08.2017 9.17 109
82 Audit of Panchayati Raj Institutions and Urban Local Bodies 10.01 111
83 Criteria for Assessment of Performance of Local Bodies 10.02 112
84 Checks to be exercised based on Manual of Local Bodies Audit 10.03 112
85 Importance of adequate Documentation 11.02 117
86 Reporting and follow up 12.01 119
87 Quality assurance in Internal Audit 13.01 121
88 Quality programme assessments 13.03 121
89 Continuous improvement 13.07 122
90 Internal Assessments 13.08 122
91 External Assessments 13.16 123
92 Self-Assessment with independent validation 13.22 124
93 Relationship between Internal Audit and DG (Inspection) 14.01 125
94 International standards on Internal Audit 15.01 127
95 Annexure 128
96 Glossary 137
97 Forms 142

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 Chapter 1

Introduction

1.01 Traditionally, Internal Audit was developed as an audit service to the

management to ensure that each unit of the organization follows the
policies, procedures and instructions laid down by the Management and
records are maintained accurately and promptly. Thus Internal Audit was
concerned more with routine checking and review of records.
1.02 According to the modern view, Internal Audit is no longer a routine
checking and review of records. Instead, Internal Audit is an independent
approvable function established within an organization to examine and
evaluate its activities as a service to the organization. The objective of
internal auditing is to assist the members of the organization. To this end,
internal auditing furnishes them with the analysis, appraisals,
recommendations counsel and information concerning the activities
reviewed.
In other words, an internal auditor has to go beyond the books of account
and records and appraise the various functions of the organization.
1.03 There shall function an Internal Audit Wing under each Principal
Accountant General/Accountant General(PAG/AG). The Internal Audit
function will be exercised by an independent section generally termed as
Internal Audit Section and sometimes termed as Quality Assurance Section.
1.04 This Manual seeks to lay down the basic frame work and illustrative
guidance for Internal Audit functions.
1.05 Nature and Scope of Internal Audit
The Internal Audit activity evaluates and contributes to the improvement of
management, control and governance systems in an organization.
1.06 The scope of internal auditing work encompasses a systematic, disciplined
approach to evaluating and improving the adequacy and effectiveness of
risk management, control and governance processes and the quality of
performance in carrying out assigned responsibilities. The purpose is to
provide reasonable assurance that these processes are functioning as
intended and will enable the objectives and goals to be met and also to
provide recommendations for improving the operations of the office in
terms of both efficient and effective performance.
The PAG provide general directions as to the scope of work and the
activities to be audited. The objectives, goals and processes are prescribed
in the Perspective Plan, instructions communicated by Office of the
Comptroller & Auditor General of India (CAG) from time to time, the
provisions in the Manual of Standing Orders (MSO) of the CAG and other
departmental manuals. These are supplemented by local manuals and
instructions issued by PAG from time to time. Broadly, the primary
objectives of the overall management process are to achieve:
o established objectives and goals for operations or programs including
those established by the CAG,
o effective and efficient use of office resources,

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 o relevant, reliable and credible operating information, safe guarding the
office assets,
o compliance with laws, rules, regulations and instructions of
Government and CAG and
o identification of risk exposures and use of effective strategies to
control them.
1.07 Internal auditors evaluate the whole management processes of planning,
organizing, directing and controlling to determine whether reasonable
assurance exists that objectives and goals will be achieved.
1.08 In the aggregate, internal auditing evaluations provide information to
appraise the overall management process. All systems, process in
operations, functions and activities are subject to the internal auditor’s
evaluations. The internal auditing should provide reasonable assurance that
management’s,
 Risk management system is effective.
 System of internal control is effective and efficient.
 Governance process is effective by establishing and presenting values,
setting goals, monitoring activities and performance and defining the
measure of accountability.

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 Chapter 2

Standards of Internal Audit

2.01 Standards provide a frame work for the internal auditing steps and
procedures, with an aim to improve the degree of uniformity of internal
auditing practices. The international standards of Internal Audit are
indicated in this manual for the information of the officers engaged in
internal audit work.
2.02 The Institute of Internal Auditors (IIA), USA has issued international
standards for professional practice of internal auditing. The purpose of the
standard is to
a. Delineate basic principles that represent the practice of internal
auditing as it should be,
b. Provide a frame work for performing and promoting a broad range of
value added internal audit activities,
c. Establish the basis for the evaluation of internal audit performance
and
d. Foster improved organizational process and operations.

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 Chapter 3

Organization and staffing of Internal Audit

3.01 Chapter 24 of Section III of MSO Audit (2nd Edition) deals with Internal
Audit. Accordingly, it is a matter of vital importance to verify whether the
various processes of audit are being followed correctly by different
sections. This responsibility is entrusted to an independent Internal Audit
Section.
3.02 The Internal Audit should be vested with the responsibility to assess and
review the Internal Control System, quality assurances procedures and risk
management procedures. It should help the office to identify and evaluate
significant exposure to risk and improve the risk management system. The
scope of Internal Audit will include but not limited to:
Technical scrutiny of regularity or Compliance nature (like adherence to
procedural rules and regulations, maintenance of registers and records,
submission of returns and generally functioning as efficient units)
3.03 Internal Audit should check the quality of audit and accounting work and
comment specifically so that suitable measures may be initiated to improve
the quality where necessary.
3.04 The Internal Audit should ensure that the guidelines/parameters framed by
Comptroller and Auditor General of India or any other nodal offices, have
been followed with regard to Audit Plan, Contribution to Audit Reports
etc.
3.05 In view of new ranking/grading systems introduced for measuring the
performance of individual field offices, it shall be the responsibility of
Internal Audit Wing to help the Head of Department in ensuring that the
points given are reviewed and remedial action taken for improvement.
3.06 Arrangements for Internal Audit
Internal Audit Section shall consist of carefully handpicked personnel who
by their knowledge and experience, will be competent to scrutinize
intelligently the work done in various sections and can detect not only
defects and irregularities, but also suggest improvements in procedure. The
Internal Audit Section will be under direct charge of PAG. IA Section will
test check the work of other sections. Special problems such as
accumulated arrears of work may be referred to the section. The Internal
Audit Section shall be headed by a Senior Audit Officer (referred to as
Internal Audit Officer, hereafter) The responsibilities of Asst. Audit Officer
and Internal Audit Officer should be divided in such a manner that each of
them may share the original work. The more important items of work may
be taken direct by the Internal Audit Officer (IAO) while the rest of the
work by AAOs/Auditors.

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3.07 Independence and objectivity
Independence denotes freedom from conditions that threaten objectivity.
Objectivity is an unbiased mental attitude that allows internal auditors to
perform engagements in such a manner that they have an honest belief in
their work product and that no significant quality compromises are made.
Threats to objectivity should be managed at the levels of individual auditor,
audit assignment, functional and organizational levels. Audit personnel
should perform their duties in a manner which facilitates impartial and
effective professional judgments and recommendations. But they should
have no executive responsibilities.
Internal auditor’s advice and recommendations should be without prejudice
to the right of Internal Audit to review the relevant policies, procedures
and operations at a later date.
Organizational Independence
3.08 Internal Audit is primarily a service to the Department and should report
directly to PAG/AG. It should be free from interference in determining the
scope of internal auditing, performing work and communicating results.
The IAO should be graded with sufficient status to facilitate the effective
discussion and negotiations of the results with Senior officers in the office.
3.09 Impairments to objectivity and independence
Impairments to individual objectivity and organizational independence
include personal conflicts of interests, scope limitation, restriction on
access to records including electronic records of information, personnel and
properties and resource limitation.
3.10 Internal auditor should report to the Head of Department, in writing, any
situation in which a conflict of interest or bias is present or may reasonably
be inferred. The Head of Department should then reassign such auditors.
Appropriate arrangements may be made for the routine provision and
management of the budget and resources of Internal Audit without
prejudices to the accountability of Internal Audit to the Head of
Department. These arrangements may also involve delegation of these
particular responsibilities to the Group officer in charge of Administration.
3.11 A scope limitation is a restriction placed up on the Internal Audit activity
that precludes the audit activity from accomplishing its objectives and
plans. The scope limitation may restrict the,
1) scope defined in the Manual governing the Internal Audit activity,
2) Internal auditor’s access to records, personnel, and physical properties
3) Approved assignment work schedule.
4) Performance of necessary audit procedures.

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 5) Approved staffing plan and budget.

A scope limitation should be brought to the notice of the Head of

Department in writing. Objectivity is presumed to be impaired when
individual audit personnel review any activity in which they have
previously had functional responsibility or in which they have provided
advice until the expiry of adequate time (at least one year).
3.12 Long term responsibility for the Internal Audit of a particular aspect of an
organization can also affect independence. Assignment of ongoing Internal
Audit responsibilities should be rotated from time to time.
3.13 Internal auditors should not assume operating responsibilities. The internal
auditor’s objectivity is not adversely affected when the auditor
recommends standards of control for systems or reviews procedures before
they are implemented. The auditor’s objectivity is considered to be
impaired if the auditor designs, installs, drafts procedures for, or operates
such systems.
Conflict of Interest
3.14 Conflict of interest may be actual or potential and includes previous
executive or advisory responsibilities and personal relationships with staff
with current executive responsibilities.
3.15 The IAO should plan the allocation of audit work to minimize the risks of
conflicts of interest.
3.16 If independence or objectivity is impaired or likely to be impaired, the
position should be brought to the notice of PAG/AG.
3.17 Internal Audit Section should not function as a substitute for the Branch
officers and Group Officers. Instead, it should function as a tool to rectify
the deficiencies on the spot by providing guidance. It should also try to
down size its reports.
3.18 Internal Audit Section should not be given original items of work and it
should not be entrusted with operating responsibilities. However, special
item of work may be referred to it by the Head of Department for advice.
In such cases, Internal Audit Section will work as consultant and no audit
related conclusion can be drawn. Reference to Internal Audit Section for
advice should be made only with the approval of PAG.
Proficiency
Internal auditor should possess the knowledge, skills and other
competencies needed to perform their individual responsibilities, as
indicated below:
3.19 Internal auditors should possess:
 proficiency in applying internal auditing principles, procedures,
standards and techniques
 proficiency in Government accounting principles and techniques and
related computerization in the field like Voucher Level
Computerization (VLC), General Provident Fund (GPF), Pension

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 etc., and to deal with them without recourse to technical research and
assistance.
 proficiency in manuals and Rules like Manual of Standing Orders
(Audit) (MSO(Audit)), Manual of Standing Orders (Administration)
(MSO (Admn)), General Financial Rules (GFR), Delegation of
financial powers, Account codes, local manuals and other instructions
of Government of India (GOI) and CAG.
 An understanding of management principles to recognize and
evaluate the materiality and significance of deviations from good or
prescribed practices.
 An appreciation of the fundamentals of subjects such as accounting,
auditing, and information technology. Appreciation means the ability
to recognise the existence of problems and to determine the further
research to be undertaken or the assistance to be obtained.
3.20 The internal audit activities collectively possess or obtain the knowledge
skills, and other competencies needed to perform its responsibilities.
3.21 Internal auditors should be skilled in oral and written communication.
3.22 The internal auditor should have sufficient knowledge to identify the
indicators of fraud but is not expected to have the expertise of a person
whose primary responsibility is detecting and investigating fraud.
3.23 Internal auditors should have knowledge of key information technology
risks and controls and available technology based audit techniques.
However, not all internal auditors are expected to have the expertise of the
primary responsibility of IT auditing.
The Head of Department should establish criteria of education and
experience in filling the internal auditor positions giving consideration to
scope of work and level of responsibility and to deal with them without
recourse to technical research and assistance.
The Head of Department should obtain competent advice and assistance if
Internal Audit staff lacks the knowledge, skills and other competencies
needed to perform all or part of the assignment.
3.24 Training and Human Resource Development
The competence of good quality internal auditor is established through
selection process and training and development. The personnel selected to
work in Internal Audit Section should have sufficient experience in
functional wings. The Head of Department may give special attention to
their training and skill development.
3.25 Training for Internal Audit personnel should be included in the annual
training programme requirements. The training programme may be
formulated on the basis of a transparent assessment of the skill and
knowledge generally required for conducting Internal Audits, the existing
level of skill and knowledge and the gap between the two. The areas for
training should include the knowledge and skill

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 explained in the earlier paragraphs of this Chapter. In addition, areas like
use of sampling techniques, Computer Assisted Audit Techniques etc.
(CAATs) should also be covered.
3.26 The objective of training and skill development should be to improve the
Internal Audit acumen, competence and knowledge management. The aim
should be to make sure that the Internal Audit personnel understand the
principles and practices alike and simultaneously understand their own
responsibility and accountability for compliance to them. The course
modules may be continuously improved on the basis of experience gained
during the training and feedback from participants and instructors.

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 Chapter 4

Role of Risk in Internal Audit

4.01 The internal auditors should possess sufficient understanding of the role of
risk.
4.02 Risk is the possibility of an event occurring that will have an impact on the
achievement of objectives. Risk is measured in terms of impact and
likelihood. A process to identify, assess, manage and control potential
events or situations to provide reasonable assurance regarding the
achievement of the organization objectives is called Risk Management.
Residual Risk is the risk remaining after management takes action to
reduce the impact and likelihood of an adverse event, including control
activities in responding to a risk.
4.03 The internal auditor should be alert to the significant risks that might affect
objectives, operations or resources. However assurance procedures alone
even when performed with due professional care do not guarantee that all
significant risks will be identified.
Role of Risk in Planning
4.04 The internal auditor should establish risk based plans to determine the
priorities of the Internal Audit activity, consistent with the goals of the
office. Internal Audit's plan of engagements should be based on a risk
assessment undertaken at least annually. Inputs should be obtained from
Group officers. As and when different risk factors are noticed, the initial
risk assessments should be revised. The perception about risk factors may
be shared across similar offices and their views may be taken into account
for revising initial risk assessment.
4.05 Internal audit activity should assist the office by identifying and evaluating
significant exposures to risk and contributing to the improvement of risk
management and control systems.
4.06 The internal audit activity should monitor, evaluate and report AG, the
effectiveness of the office’s risk management system.
4.07 The internal audit activity should evaluate risk exposures, and assist the
office in maintaining effective controls encompassing the governance, and
information systems in the office. This should include:
 Reliability and integrity of financial and operational information.
 Effectiveness and efficiency of operations.
 Safeguarding of assets.
 Compliance with laws, regulations and contracts.
4.08 Illustrative Risk factors
Some of the factors influencing risk are shown below. The list is only
illustrative and not exhaustive.

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 The characteristics of the function/functional wing(where the
governing conditions, processes and calculations are complex)
 The personnel doing the work.
 History of errors in the function or functional wing.
 Whether there is any motive to manipulate the figures. (presentational
reasons, to avoid showing poor performance etc.)
 Volume and size of transactions or cases handled.
 Previous history of non co-operation in producing records to Internal
Audit.
 The risk of fraud occurring
 Shortage of staff in a functional wing.
 Introduction of computers or new working procedure.
 History of complaints on new working procedure.
 History of complaints received from Head Quarters, MLAs, MPs etc.
 Quantum of arrears of work.
 Absence of proper system of maintenance of records.
 Commitment to public like Citizens Charter.
 Allegation of improper conduct by audit personnel.
 Adverse observations by court of law or tribunals.

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 Chapter 5

Audit Evidence and Techniques

5.01 The concept of evidence is fundamental to auditing. Auditing is considered

as a form of judgment concerned with verification and examination of
quantifiable information. In this process auditors collect and evaluate
evidential matter to establish facts and to draw conclusions and inferences.
5.02 In Internal Audit, evidential matter consists of underlying records and all
corroborating information available to the auditor. The auditor seeks
evidence to verify the adherence to the prescribed policies, procedures,
rules and instruction. He also seeks evidence regarding the economy and
efficiency of the various activities. With the application of various audit
techniques, auditor collects different types of evidence.
5.03 Sources of Evidence
The principal source of evidence will be the records of the office. It is the
primary duty of Internal Audit to ensure that the audit conclusions drawn
about the various sections, activities, transactions etc. are based on
sufficient, competent and relevant evidence. Evidence must be planned,
gathered and analyzed before any conclusion can be reached. Evidence
may be gathered by:
o Physical observation, including joint inspection by the officials of
Internal Audit and functional wings, the resultant observations being
signed by both as confirmation or performance of achievements.
o Re performance of accounting routines.
o Analysis of financial data and interrelationships or comparison
between elements of relevant information
o Vouching i.e. checking of documents in support of transactions.
o Critical scrutiny of documents
o Confirmation and enquiry
o Evaluation of the quality of internal control mechanisms.
o Interview with officers of functional wings and
o Computer assisted audit techniques.
5.04 Evidence may not be obtained by making independent enquiries from
private individuals or members of the general public.
5.05 Although sufficient evidence means primarily not too little evidence, it also
means not too much as audit resources should not be wasted. The quantity
is a matter of judgment guided by generally accepted auditing principles.
During the course of audit, the auditor has to make 100 per cent of all high
value and key items and then be selective by examining a representative
sample of the remaining transactions.

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5.06 Internal Audit function needs to focus on processes of compliance testing
to establish the reliability of internal controls and conduct substantive tests
to the extend found necessary to identify and quantify individual audit
objections or conclusions. The work should be supported by relevant
evidence.
Reliable Evidence
5.07 Reliable audit evidence is the one that is impartial. The reliability depends
upon its nature, source and the methods used to obtain it. Sometimes
alternative forms of evidence sources and methods are available and the
following guide lines may be noted regarding their relative reliability and
the Internal Audit party should ensure that the most reliable sources and
methods are employed within the time and cost constraints imposed up on
the audit.
 Documentary evidence is more reliable than oral evidence.
 Evidence, of which the auditor has more personal knowledge is the
most reliable evidence.
 Independent evidence obtained from external sources is more reliable
than internal evidence if that evidence is truly independent and
complete.
 Visual evidence is highly reliable for confirming the existence of
assets, but not their ownership or value.
 Drawing conclusions through examining relationships between
figures in the account is less reliable evidence.
 Oral evidence must be considered as the least reliable. Whenever
feasible, auditors should attempt to obtain documentary confirmation
of oral evidence (written records of interviews etc.)
 The auditor may gain increased assurance when audit evidence
obtained from different sources is consistent.
Relevant Evidence
5.08 Relevant evidence is information that is pertinent to the audit objectives.
Once the audit objectives have been clearly defined at the planning stage,
the question of relevance in the evidence should lead the auditor to a
consideration of the audit approach to be adopted.
5.09 Reasonable Evidence
Reasonable evidence is information that is economical in that the cost of
gathering it is commensurate with the result that the auditor is trying to
achieve.
5.10 Audit Techniques
Systematic Audit: in which every aspect and stage of the audited subject is
considered. It includes review of both the design and operation of controls.

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 Compliance Audit: Where there is pre-existing confidence that controls are
well designed; but effective operation is a material issue, audit which test
only for effective operation of controls can be appropriate.
Key Control Testing: A variation of compliance audits but clearly focused
on a small number of material or key controls.
Quality Assurance Review: Reviewing the approach and competency of
other reviewers rather than reviewing risks and controls; designed to form
an opinion of the reliance which can be placed on the work of others.
Systems development audit: Phased review of developing plans and
designs for new systems and processes aimed at identifying potential
weaknesses in control if the plans and designs go ahead as they are.
Testing of Internal Controls
5.11 Internal auditors use testing to confirm their understanding of how a system
works and to form or corroborate an opinion about the adequacy or
otherwise of a control. This is done by measuring particular characteristics
of selected transactions or processes and comparing the results with those
expected. Testing may be undertaken at different stages in a system audit.

Types of Tests

5.12 Walk through

Walk through or ‘cradle to grave’ tests are designed to confirm the
auditor’s understanding of how a system operates. This understanding is
likely to be derived from a combination of observations, interviews, and
examination of management’s documentation of the system. In conducting
walk through tests, the auditor looks primarily for the evidence of existing
controls. This may involve examining a number of different transactions at
each stage of the process or following the same transactions from start to
finish. The aim is to follow the system from the input stage through the
processing stage of the resources used to the outputs from the processing,
confirming at each stage the controls in place. The walk through tests
should be conducted during the period under Internal Audit and not later to
provide assurance that the controls were operating during the period.
5.13 Compliance Testing
When an auditor considers that the internal control is adequate, the next
step is to determine whether the control is effectively and consistently
applied. If the effectiveness of the control is likely to vary the auditor
should ensure that the sample selected for testing takes account, as far as
practicable, of such variations. The aim of compliance testing is to obtain
assurance that controls established are operating as intended and are
effective. If deficiencies are observed during compliance test, the auditor
will be interested in them as indicating the possible inadequacy of controls.

17
5.14 Errors found in compliance testing may indicate control weaknesses. They
do not demonstrate that the system is failing to achieve its objectives. For
example, if in an audit of voucher level computerization system there are
failures to comply with an instruction that passwords should be changed at
regular intervals, it does not mean that the system was used by
unauthorized personnel. The auditor should find out why such omissions
occurred and what steps were taken to check compliance with the
instructions. If the system provided for such checks to be undertaken but
this control was not being applied the auditor should report that the controls
appear to be adequate but were not consistently applied. The auditor would
also consider the risks involved and the need for more stringent controls.
The auditor should be more concerned with the reasons for errors or
omissions and the effectiveness of controls rather than the mistakes
themselves.
5.15 Conversely, records of controls, for example, signatures confirming that
‘checks have been exercised’ are not taken as proof. The auditor needs to
re-perform the process to discover any instances found otherwise.
5.16 Substantive Testing
The purpose of substantive testing is to enable a conclusion to be reached
on the completeness, accuracy and validity of information and records. It is
concerned with output rather than adequacy of controls. It is sometimes
used as a means of demonstrating the existence or seriousness of
weaknesses when the auditor is unable to convince the management by any
other means.
Testing Strategy
5.17 Planning
The auditor should decide:
 What to test
 What each test is for and
 How to test.
Each test should be expected to lead to or corroborate an audit opinion. It
should take account of the analysis of risk and materiality undertaken as
part of the evaluation control.
Where the auditor is satisfied that there are weaknesses, there is no point in
testing unless,
 There is no other way in convincing management of the existence or
seriousness of weaknesses without the evidence provided by tests.
 The auditor wishes to test whether significant control weaknesses
have been exploited.

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5.18 Standards
Standards are necessary to compare the results of testing. In the context of
a Government office, the provisions of various codes, manuals, rules,
regulations and instructions provide the yardsticks against which testing
should be carried out and reported.
5.19 Period of testing
Tests should normally be biased towards the current period. If changes in
operating conditions, i.e. performance of particular staff, peak working
period etc., are likely to affect the controls, auditor should take these also
into account in selecting transactions to make audit findings are
representative.
5.20 Level

There can be no hard and fast rules about the amount of testing necessary
except that the auditor should take into account the materiality of possible
failures to meet objectives. The cost of testing large populations is usually
prohibitive unless computer interrogation is possible. Statistical sampling
techniques may be used in Testing such populations by manual methods. In
some cases judgment sampling may be adequate. The auditor should take
into account all relevant factors including:
o The testing objective: Whether the aim is to confirm the auditor’s
understanding of the system (walk through) to test the application and
effectiveness of controls (compliance) or to attempt to quantify the
impact of a weakness (substantive) in walkthrough, compliance or
substantive.
o Risk and materiality: The extent of testing should take into account
the relative risk and materiality of failures to achieve objectives.
o Results of evaluation of control by auditor: This will influence the
need for testing. The outcome of previous audit and changes in
personnel or system could also affect the nature and extent of tests.
o Time available: This tends in practice to be the principal limiting
factor. The Internal Audit team leader should refer to higher levels of
management if there is good reason to devote more time than
planned.
o The variability and volatility of the population to be tested
o The acceptance criteria and confidence levels desired by the auditor.

5.21 Sequence
The order in which tests are performed depends on the audit objectives and
how far controls inter-relate. Output from one test often provides inputs to
another. For eg. in auditing a pay roll system it is important to test that all
new entrants are authorized and correct placement on

19
 the pay scales is checked. The authorization test should provide successful
items from which the auditor might select a sample on which to perform
the pay scale test.
Where controls inter-relate it is important to co-ordinate testing especially
where the work is shared between auditors. Uncoordinated tests can be
wasteful and may not achieve the testing objective.
5.22 Inter related controls
Where a system comprises a set of inter-related sub systems, the auditor
will have to separately analyze and test the controls in each sub system
before forming a judgment on internal control as a whole.
5.23 Appraising the results
During testing, there needs to be a continuing appraisal of the results so that
the auditor can decide whether to change the testing strategy. For example,
when auditors perform compliance tests on a control and find some non-
compliance, they must decide whether to continue to rely on that control
and if not how their earlier evaluation is affected. The following are some
of the questions to be considered.
o How important is the control?
o Are there compensating or complementary controls which reduce its
intrinsic importance?
o How serious are the deviations and why did they occur.
o Is further testing necessary and feasible?
o Is any control failure likely to be isolated or recurring?
o Is any weakness so serious that management needs to be informed
urgently?
The conclusive appraisal takes place when all tests have been completed
and the results summarized and analyzed. The auditor must decide,
o Whether the testing objective have been achieved.
o What conclusions have been drawn
o Whether the findings show serious or minor weaknesses.
o The cause of weakness and what corrective operations are available.
5.24 The auditor is not simply keeping a score of errors found. The purpose is
to form an opinion about the reliability of the controls which requires an
intelligent appraisal of the testing results. An absence of errors does not
necessarily prove that the control was applied in all cases.
5.25 Techniques of examination
Observation, Inquiry/interviewing; Analysis, verification and Re-
performance are the main techniques of examination.

20
Observation:
Observation is important where there is no permanent record of activities.
For example, discrete observation can reveal whether there is improper
access to a restricted computer area despite stringent formal controls.
Interviewing:
Interviewing is useful where evidence is absent or unclear. Care should be
taken because, the behaviour of the auditor could affect the attitude of the
auditee and an insensitive approach could lead to an un-cooperative and
defensive reaction.
Analysis:
Where a transaction or process comprises a set of inter related parts the
auditor may need to analyse and verify each part before a judgment is
formed about the whole. For example in the case of contracts and
agreements where the soundness of the contract itself depends on the nature
and inter relationship of its individual terms and conditions. It should be
ensured that appropriate controls exist over the process of developing the
contract and also conduct compliance tests to confirm that,
o the relevant documentation is free from ambiguity or contradiction
o is comprehensive and
o is in accordance with prescribed policy and instructions.
Verification:
Verification involves the confirmation of the truth, accuracy or validity of
the transactions. The role of audit is to evaluate and test the controls and
not to confirm the validity of data as an end in itself. In using verification
tests, the auditor should ensure that they are related to the operation of
controls. The methods used are,
Comparison: with some ascertainable fact or standard. For example,
those manuals are up to date or passwords of a computer
system have been changed at prescribed intervals.
Confirmation: Checking statements of performance for example, checking
with Pay and Accounts Office (P.A.O) whether previous
papers of retiring employees were sent in a timely manner
as claimed by Administration,
Vouching: Checking a transaction against supporting documentation
for example, payment to a supplier against purchase order
and stock entry.

21
Re-performance:
Re-performance is relevant where calculation or measurements have been
supposedly checked as a control and the auditor wished to check that the
control actually operated. For example, the internal auditor may recalculate
the balance as per Cash Book or reperforms the calculation in a pension
authorization.

22
 Chapter 6

Sampling in Internal Audit

6.01 The internal auditor applies audit procedures like inspection, observation,
enquiry, and confirmation, computation and analysis to various types of
records, transactions and account balances. He can apply such techniques
to an entire data or may choose to draw a sample of items selected from it.
This process is called audit sampling by which testing of less than 100 per
cent of the items within a population to enable to form certain conclusion
about the population.
6.02 The population can be a class of records, transactions, or account balances.
The documents which are needed to be examined for particular tests can be
regarded as populations for example, GPF ledger cards, Pension Payment
Orders, GPOs, salary bills, contingent bills, vouchers, Inspection Reports
etc.
6.03 Sampling is a process of learning about a great deal by looking at a few.
When using sampling, internal auditor should accept the risk that the
sample selected may not fully represent the population ie, the characteristic
projected from the sample may not be the same as those that would be
found if the entire population were examined. Thus sampling is only a
means to an end and not an end in itself. The sample and sample results
should be analysed for materiality, reasons, causes, and actual or potential
effect.
6.04 When deciding how much testing of a population to do, the Internal Audit
has a combination of options available like
i) 100 per cent testing
ii) examining some transaction and items selected on a basis
decided(Selective Testing)
When the auditor applies his tests to a representative sample of transactions
and balances it is called Audit sampling.
6.05 The internal auditor must make a judgment as to whether sampling is an
appropriate way of obtaining some of the audit evidence required.
Amongst the factors that must be considered are,
 the number and relative size of items in the population.
 The materiality and inherent risk of error in the items concerned.
 the relevance and reliability of evidence produced by alternative tests
and procedures and
 the relative time and costs involved in each.
6.06 Hundred per cent testing is normally not required and also not practicable.
However sometimes it may be necessary to carry out 100 per cent testing
of a particular part of population depending upon their value or high risk of
error or in case of unusual or suspicious items or weak areas. Sampling can
be applied to the balance population.

23
 In some cases, sampling may not be necessary or applicable. For example,
when the internal auditor is reviewing the attendance register of a section or
the inward or outward registers about their general maintenance, he may
feel that an overall review of the register for a period may give the desired
result. The internal auditor should apply analytical procedures (like ratios,
comparison, checking for unusual items etc.) on the entire population or a
stratum of population possessing a particular characteristic, instead of using
only a sample. On the other hand, whether the internal auditor checks the
pension cases authorized by the Pension Group, he may find that using a
representative sample would give the desired result.
Fundamental principles of sample selection
6.07 In any sampling procedure, the following fundamental principles should be
applied:
a. Define the audit objective.
b. Know what is being tested i.e. Know the population. This is required
as, audit conclusions are based only on the sample taken from that
population.
c. Establish the sampling unit in terms of audit objectives.
d. Give every item in the population an equal chance of being selected.
Thus the initial questions must be,
1. What are the objectives of present audit?
2. What is the population to be tested? And
3. What are the sampling units required to be examined?
Thus when the population and sampling unit are properly defined, the
whole audit thrust and approach improve. A good practice is to plot the
population on a database or spreadsheet before sampling to identify sub
populations or strata. The principles on which scientific sampling is based
operate only if the sample is selected at random.
Simple Random Sampling
Simple Random sampling is considered as the most likely method to obtain
a representative sample if there are no wide variations in the characteristics
of the items making up the population. The selection method makes use of
random number tables. The tables provide substantially complete
assurances that every item in a population has an equal chance of being
selected.

1. The auditor must use a method of selection which is completely free

from any form of bias. There is no way of being sure that a sample is
representative of the population it is selected from. However, the
caches of it being unrepresentative can be minimized by the way the
sample is selected. If for example, the auditor wants to select a
sample of two from a population of 10, the method of selection must
ensure that each of the 10 units has an

24
 equal chance of being included in the sample. These objectives can be
achieved by using simple random sampling methods.
2. The most common method is to use random number tables
(Annexure 1). Random numbers are numbers which have been
generated at random by computer and then put in tabular form. The
units of the population have to be consecutively numbered and then
the sample is chosen by reading numbers off the table. They are read
in the order they appear on the table because the numbers have been
selected at random.
3. If a sample of five is required from a population of 10,000 the units of
the population would be numbered zero to 9999 and the five numbers
would be read off the table starting in a place also chosen at random.
It should be stressed that the starting point should be different each
time a sample is selected to avoid always choosing same members. A
page in the random number tables can be opened at random and
number of digits required can be selected depending upon the
population size. After deciding the starting point, the number can be
selected sequentially.
Software like IDEA can also be used for generating random samples.
6.08 Stratified Random Sampling
If there are wide variations in the amount or characteristics of the items
making up the population, stratified sampling is generally used. In stratified
sampling, the auditor separates the population into two or more strata and
samples are taken from each stratum. Stratified sampling provides greater
sampling efficiency.
Normally, the auditors set aside the largest or more expensive or most
significant items in a population for detailed examination and then select a
sample from the remainder. This two strata approach has been traditionally
used.
If the population is sub divided into different strata carefully, it can help
reduce the number of items needed to obtain a representative sample of the
population.
For example, assume that the internal auditor was given the task of
examining the quality of Inspection Reports (IRs), issued within an Audit
Office where the office may be comprised of various wings such as Civil
Audit, Works Audit, Forest Audit, Receipt and Commercial Audit. To be
representative of population the IRs should be segregated wing wise and
samples drawn wing wise.
6.09 Sampling Methods
There are basically three methods of sampling viz. attribute sampling,
variable sampling and probability proportional to size sampling. Of these,
attribute sampling is more relevant to internal auditors.

25
6.10 Attribute sampling
Attribute sampling calls for ‘right’ or ‘wrong’, ‘yes’ or ‘no’ type of
answers. It is used for testing systems of internal control. It is concerned
with the estimation of numbers of errors or other characteristics in a
population. A statistical conclusion obtained from statistical sampling that
control had failed six times out of 100 would considerably assist the auditor
in making his assessment of the strength of the control.
6.11 The terms used in calculation of sample size under Attribute Sampling are
given below:
Confidence level
It is the likelihood that the sample range contains the true value;
synonymous with reliability. It is based on the degree of confidence the
auditor wishes to place in the sampling results. Normally a high degree of
confidence is required (90 per cent to 95 per cent).
Precision
It is the range within which the true answer most likely falls. For example
(+) or (-) 5 per cent.
Occurrence Rate
It is the percentage of items in the population having errors, for example,
two per cent of the PPOs having errors in computation of pension amount.
The occurrence rate should be estimated based on testing a pilot sample of
about 30 items, review of past working papers and discussions with
experienced personnel.
Tolerable occurrence rate
It is the maximum rate of error acceptable to the auditor.
Z factor
These factors represent the degree of variability of individual items in the
population. They are calculated for different confidence levels and are
available in standard tables. Confidence levels in percentages converted to
standard deviation units based on normal distribution curve (Table of Z
Factors) are shown below:

Confidence levels % Z factor

99.9 3.2905
99.7 3.0000
99.5 2.8070
99.0 2.5758
98.0 2.3263
95.5 2.0000
95.0 1.9600
90.0 1.6449
85.0 1.4395
80.0 1.2816

26
 75.0 1.1503
70.0 1.0364
68.3 1.0000
60.0 0.8416
50.0 0.6745
40.0 0.5244
30.0 0.3853
20.0 0.2534
10.0 0.1257
The formula has two simple parts. The first is to obtain the sample for an
infinite population. The second adjusts the formula for the population being
considered. The first formula is
n(e)=Z2 (p)(1-p)
A2
Where : n(e) = First estimate of sample size.
Z = Z- factor as per the table based on
confidence level.
P = Occurrence rate
A = Desired precision.
The second formula uses the first estimate of sample size and adjusts it to
fit the population.
n(i) = n(e)
1+(n(e)/N)
Where :
n(i) = Final sample size
n(e) = First estimate of sample size
N = Population
Calculation of sample sizes is explained by the following example.
An internal auditor is to verify the pension cases disposed of in a section in
a year. The desired precision is + 4%, the desired confidence level (Z) is
95% and the estimated error rate(p) is not to exceed 5%
The first estimate of sample n(e)= 1.962x0.05 x(1-0.05) = 114
0.042
Actual Number of Pension cases N = 1500

Final sample size n(i) =

( )

= 106
The second formula represents a finite population correction factor. This
can generally be omitted if the first sample estimate is <5% of the
population size as the second formula can have a very little effect on the
sample size in such cases.

27
If the internal auditor examines a sample size of 106 items and finds that
there is an error rate of five per cent then he can state that he is 95 per cent
confident that the population of 1500 pension cases contains 5 + 4 per cent
i.e. one to nine per cent sampling error. In other words, number of
satisfactory items in the population can be estimated to be anywhere from
1365 to 1485 at a 95% confidence level. If the internal auditor uses the
sample of 106 items and finds that there is an error rate of five per cent,
then he can state that he is 95 per cent confident that 1500 pension cases
contain 1425 error free items ie .+ 4 per cent of 1500 i.e. plus or minus 60
items. Thus the number of satisfactory items in the population can be
estimated to be anywhere from 1365 to 1485 at a 95 per cent confidence
level.
If it turned out that the error rate in the sample is actually somewhat higher
say seven or eight per cent, the internal auditor can re-compute the formula
using the new error rate, and determine how many more items he has to
examine in order to obtain an estimate with required confidence level and
precision. The internal auditor should use his judgment in deciding about
the stratification of population and choose the sampling procedure
judiciously.

28
 Annexure – 1
RANDOM SAMPLING NUMBERS- (Para reference 6.07(2))
1 2 3 4 5 6 7 8 9 10 11
3893 9728 1764 2503 7539 6871 2346 8397 7043 0702 9285
7030 6938 0022 9601 1320 5896 1105 1171 4248 3623 4638
2952 9313 3534 4968 5488 6311 4523 8484 8232 2424 0102
2154 6443 2276 9558 8697 0630 5075 3377 1111 1158 3648
8713 4618 9542 6108 3234 0638 3703 4545 3840 2438 1855
4209 7757 7736 5042 1528 6535 1257 2740 6776 1620 1800
4129 9974 3151 6524 4864 0418 7137 7283 3510 7677 2082
0805 8519 0607 1138 8609 1128 7283 1516 3690 7086 5997
8325 9683 4169 4001 9091 0318 1778 9932 4153 2979 2827
8409 8106 0365 6957 0641 8658 8646 7150 2203 4399 1221
3912 3256 6001 1107 7044 8020 4924 7149 9351 7766 6230
0338 5370 5405 9712 9624 6253 6000 3604 3817 2593 1074
5751 0047 1750 3112 5874 1052 1913 9600 9916 1589 7151
5222 5383 5165 2473 4449 1893 9960 9199 5807 6665 7420
3135 4359 5683 5902 9871 9705 8155 2206 2682 1114 0864
0371 0030 6826 8269 5668 2349 1896 8336 3560 5509 8490
1656 1312 0994 5702 0862 6948 1734 9863 3590 7162 3787
8756 3806 1289 8011 8539 5848 3374 9505 1459 4203 8068
3369 2389 5108 9040 7066 3710 1331 6511 7759 1285 6074
3347 4596 2769 4014 3988 1945 8040 7714 5351 4666 7143
8878 5573 8990 3534 1770 5983 2463 2795 1858 4550 6754
9504 9977 0423 0519 1233 8725 9306 5073 2659 6847 9969
6244 0522 4636 7230 0734 6425 0580 1323 5536 2662 2247
1326 4308 1894 2516 9617 5277 7880 6115 8452 5471 3593
7916 6494 8799 2674 6322 2083 4214 7113 0181 0053 0001
3567 1682 4741 3365 5050 1379 0728 4278 6559 1944 0527
6555 9605 0797 0799 4191 0171 8104 0145 5375 4244 4979
8325 5814 2169 9048 3565 0276 7315 0950 8948 7899 2996
4067 8578 1115 5459 3582 4746 3122 7701 7144 6215 9624
7718 9877 2278 4849 4972 6408 2913 6684 9793 5662 9860
3737 0280 5337 9558 3672 2753 9364 8515 8614 5321 0333
6243 4169 0729 6745 5464 8374 5494 5329 2469 8913 8603
7923 8748 2695 7979 3760 0476 3181 6536 7355 8185 9024
8733 6831 0849 9722 1559 0089 8771 0697 4294 0681 1176
9894 1557 7785 0438 9303 2090 4241 6162 4431 7019 6640
0516 3391 2087 8715 8414 7125 7331 9084 1817 1338 5027
2710 5067 7724 4547 0299 7130 9466 2325 6562 4539 8634
3523 2885 8624 6882 5690 2982 8541 1048 8609 5303 0588
4508 4769 7880 3123 6591 4350 2526 9908 7309 9940 9357
8105 5346 3323 7527 4693 8679 9184 2984 2976 2894 5935
3406 9802 8851 6314 4553 9254 0646 2601 8368 9446 4453
4332 5248 0937 9685 3868 3323 4454 1129 7336 6694 0215
0083 0155 3944 7074 5153 4293 2081 7784 1192 4518 5413
1214 0023 6522 8483 7061 2377 9477 9201 9730 0354 5810
5107 5453 1869 7946 9211 9553 7077 2559 1918 8676 9771
8619 6507 8927 0912 1910 3340 1885 9509 4544 9965 4602
0114 7369 9793 8257 2131 6102 3403 2359 6764 0111 0900
2939 0607 2478 4015 6483 4460 6895 5338 6170 4167 3141
7450 1925 0723 5933 5563 4144 6348 7787 9628 6690 3059
8104 2447 2848 5520 4846 9754 9604 7072 6567 0500 9776

29
 RANDOM SAMPLING NUMBERS-Contd
12 13 14 15 16 17 18 19 20 21 22
4652 9747 3617 3440 4003 4003 2602 2472 9833 2972 9572
9031 1501 7128 6638 8185 7563 6398 1943 2900 0630 6821
2030 6041 9000 6633 8999 3096 9690 9179 1172 8239 9861
0641 8966 6006 4660 5866 6219 9559 0422 4681 7646 5000
8479 8741 6344 7968 8780 4660 2801 4996 5469 7329 9497
9917 4104 4980 1954 0243 1674 7133 0971 7724 4501 4838
6376 3319 8427 6144 7428 7995 5309 0146 4169 4322 3568
7287 7868 8416 8788 4606 8910 8559 8001 5666 9428 1650
0592 1998 9884 8584 9504 7334 2703 2519 8123 2261 4317
6499 1732 0563 3431 5566 2900 9956 1425 6094 5292 2108
0769 1187 2759 4943 2975 8514 1515 1876 7959 7220 0822
8678 9438 6389 9762 5239 9815 5474 5026 7374 8715 7969
0178 4273 8208 2258 4738 2587 1588 1649 0784 5082 1700
3392 0038 1443 9452 4589 0664 05557 2592 2703 8909 7221
0264 1196 3755 4125 3570 0884 2089 8597 6986 2384 5149
4089 4448 2863 8495 5267 7149 5285 1292 1960 4448 7734
9376 1897 9292 4982 6128 6918 0285 3411 6879 4613 4578
3039 3406 8324 1720 9771 4326 8006 1604 3329 0246 8133
8971 1429 0618 5389 2989 4078 4195 2649 8569 5983 1222
0373 8153 2482 6416 7500 5263 2100 6627 2375 7007 1631
9092 9668 6105 4102 6273 0722 2126 2292 9386 5549 2992
2464 9943 2934 4708 3882 8857 4852 2029 6280 5240 2290
3027 8238 1527 3914 4161 5453 8144 3660 9621 0991 5646
5754 5383 8923 0538 4512 6850 8793 5274 7476 5589 7847
4358 1067 7406 9906 3646 2927 6435 5763 1612 5578 7506
7178 3221 9904 5788 3187 8941 8573 4864 7356 3675 3209
5035 8194 1587 3424 9227 0869 7333 7249 9625 1940 9784
3318 6675 0064 4532 1231 5122 7381 8664 3524 3252 5324
9058 7793 4044 3420 7658 1886 6903 8286 0158 8641 6594
7886 8896 8946 5176 0048 0768 0212 3306 0824 3192 7734
3354 4572 4483 4527 6027 2617 3242 6565 0285 1025 4780
3415 6046 8919 5795 7254 8613 1171 9449 6892 2362 1155
3918 7844 1108 4047 1272 2842 1158 1898 1695 0648 9893
6138 2536 9033 0196 5493 8054 1684 0917 7299 4556 2971
3825 9502 9459 8228 7963 2898 7113 7329 9616 2677 5113
1349 8037 1167 3825 5382 1048 8702 0769 7986 8398 4172
4234 3408 9101 0211 3412 9131 4471 4044 5176 9156 5759
6880 7934 1315 0594 0659 9393 0359 0374 2475 4334 0977
0714 7620 0324 3490 8183 2350 7268 1608 5663 4023 2375
3448 7582 0474 6303 6171 0095 1853 0662 9691 9082 4485
5711 3100 9790 4302 3008 6270 1353 5335 3988 6910 7714
2588 9557 6490 7696 2681 4337 5859 2580 1865 6492 4669
8581 5603 1212 1649 9697 3417 5412 3431 8666 6929 7938
8475 4815 3674 9517 1333 6360 7667 1133 9658 7282 0521
0272 7100 8046 0474 3180 1061 8206 2799 8250 4502 0322
7383 3085 5464 3816 1926 4185 8536 6993 3388 6917 7472
5126 6053 6011 0832 6044 6662 3281 4445 7505 4650 8999
2064 3040 0494 2317 2054 0976 0173 3432 1774 6927 5515
9315 7270 7682 5208 9683 0885 3649 6491 6876 6472 2190
6814 5574 0716 8560 0879 9460 2377 3895 6045 7279 7597

30
 RANDOM SAMPLING NUMBERS-Contd
23 24 25 26 27 28 29 30 31 32 33
0198 8742 5411 2150 3839 2399 8527 7616 9066 8081 1150
7481 2299 1697 4129 3340 2450 0917 0441 0415 2220 0713
2322 1474 7107 6007 2244 6399 9051 3394 6903 1677 5868
2943 3662 2535 0385 6588 6742 2387 8958 5093 8337 7940
4445 8694 4339 6322 1909 2373 2230 7711 9519 2552 0290
4950 9678 3325 2577 4228 0998 2092 5168 3984 6752 8804
6732 7009 0020 5117 9912 7797 1703 0593 9746 5794 1343
1620 2675 2418 3252 2534 8133 4074 6635 4542 0638 8394
5125 5791 6158 8773 5042 9047 3397 0227 1845 1904 3564
3501 9051 3958 8838 5736 5901 7503 9679 0720 5115 8791
1640 3725 6924 4528 9195 5696 3777 3600 4401 0319 5724
7814 1525 0883 1835 2993 6965 3537 0520 8818 3955 3977
3815 3374 9768 7364 8453 2823 5564 4312 1211 4962 8009
2702 3127 9118 5762 4034 4071 2914 4891 6648 4696 7336
4488 6030 7742 5873 5254 8883 1329 1694 0096 8682 2667
4750 6832 4428 2798 5395 0496 4209 7858 2680 5546 3287
9438 5336 8395 1937 2279 1472 0641 6426 9687 1575 4670
0347 0510 7148 7641 6822 9402 1128 9672 6699 0230 1735
2390 0784 4346 5285 9445 5604 6092 1388 0563 9742 6333
3400 4610 7035 5765 7269 0552 3086 8488 2678 7421 0110
9229 9211 2679 7000 0823 5961 4836 1714 6176 0576 1177
3770 9213 6119 3569 3697 6687 1091 4752 6592 4328 9012
9234 7972 1037 5856 0109 3442 5317 4379 7462 2681 5495
2105 3855 7633 3283 4677 8541 6294 0999 0555 8971 3041
4509 1805 9900 8502 7405 9208 8652 6009 0530 4245 3201
3404 6718 1383 7365 9428 4408 6025 9544 0277 9262 3391
3567 4709 4378 2160 4881 0296 0254 1796 6024 3032 0293
8688 0932 9351 9887 5106 5732 5697 3685 0327 4573 7846
2277 2748 2805 6822 0195 8558 7496 4868 2206 2897 0236
3747 6859 1761 0305 7304 9326 7021 0566 9092 6675 1099
7543 5423 6492 1333 4902 2358 7985 4468 3739 7304 8333
6032 5703 9799 7100 6927 3419 4749 0722 6075 6903 4394
8575 9675 1266 6125 8466 7966 8507 0159 9822 3946 1370
3106 7659 6007 8843 6183 7342 9080 4089 4308 8049 3846
8400 7514 2443 4677 5001 3438 0040 0134 6492 0242 3176
9176 4974 6175 9787 0085 6790 6650 8488 3894 9571 9787
0216 1619 5453 6504 5639 5895 0851 5393 6676 5184 4278
4802 4751 9408 3657 2896 6429 1562 6093 5024 9558 5376
0444 6510 2918 1134 2342 3643 6683 6378 5234 1785 0020
8321 3753 2893 3583 8570 1812 5224 4494 5820 3909 1724
6653 3038 6968 3684 7174 9145 0028 3026 6910 8457 0529
6842 5328 8959 2427 9410 2430 8821 6850 0101 5006 8593
4294 5405 0237 5264 6499 6489 8700 7847 1283 9079 2961
4582 9192 9475 9675 6137 4618 1466 6226 0092 6467 3527
1400 5390 5976 5552 0612 0495 7546 2631 4518 1717 8531
2050 3798 3001 2652 7101 6516 9055 4410 5552 6323 7217
3738 7694 5495 0945 5856 2487 5075 8582 7217 9977 4982
4509 1868 9239 7319 8576 2555 8335 5325 068 1840 4134
3552 0932 5631 6294 4046 2589 2105 0679 5339 5351 6562
9136 4329 0022 6001 2645 0803 4145 4733 5748 1899 0352

31
 RANDOM SAMPLING NUMBERS-Contd
34 35 36 37 38 39 40 41 42 43 44
4032 7816 4624 6134 4140 8121 9132 7696 3881 0166 4993
9432 3204 6299 8200 5170 4185 3348 3851 9905 3598 5203
7330 2976 7800 4241 4373 7423 4454 4091 0798 3723 5762
9635 8303 8137 2410 3716 9153 0736 4453 3716 4378 1413
8330 5556 1079 8231 9808 1617 8576 3125 8572 3763 1152
2505 2635 1672 9160 4543 8112 7782 3435 5096 8487 6459
0627 3211 4343 4916 8058 8393 7602 3612 3129 9590 5053
7495 2748 3769 4148 2788 8516 9142 2551 8772 2001 9417
8557 7477 5312 2404 0969 3658 4950 7238 3216 0467 8273
1868 5379 2854 2927 5829 8553 6308 1720 6254 8973 8137
9355 9264 3990 3920 5634 6760 3738 7557 8817 4343 2509
5312 5858 8136 0500 8052 1517 5764 1347 1241 6734 5205
4174 2889 2734 8231 3289 1638 2232 7367 9470 9195 0297
8435 5131 5325 4521 9508 1678 5612 1602 0436 5912 3486
6610 9055 2370 3267 1835 1971 5177 4898 5343 0348 7424
3840 7900 0978 8813 6893 3992 1877 7365 2455 0787 0859
5677 3693 0009 7369 1841 5575 7895 2296 2898 8347 2432
3601 0380 3666 4560 6157 9816 5695 5726 3148 6124 4489
5691 0246 5304 8136 7625 2279 9627 4776 9214 9047 2639
2336 7266 8147 2851 5128 0854 8380 3180 3395 8600 1450
6096 9312 4716 8918 5100 2640 6019 9155 7338 5637 2472
6487 6111 5340 7352 1088 2064 6979 8370 6656 8787 5999
8336 2310 7298 0679 2736 3057 1391 2835 8535 0395 4194
4087 9826 2665 6642 6501 8396 1201 8691 4955 9920 1925
8953 6703 8591 6962 0671 6759 1570 2486 2654 8004 8232
9172 1110 0286 3954 5842 1917 7725 9021 4462 6788 0300
9937 9651 5991 0357 5481 6141 8553 1897 4368 6405 4273
6068 8350 9094 0824 8500 5071 0724 9582 3125 2483 1417
8963 6982 5980 3383 4945 1727 7225 4781 1956 5496 8325
0399 6490 3336 8361 8708 4884 9361 2550 2490 6738 0711
0186 8570 9185 4355 9833 1209 8950 3309 7193 9135 6829
4896 9169 5131 6122 7345 5740 3684 8782 7061 2936 8752
9962 2127 0784 4969 0120 4379 7437 5241 9245 3797 4242
2633 8090 9584 0263 1989 0751 6046 3560 1760 2997 6548
5976 2959 8118 4346 4338 7181 6120 1439 5431 2260 7575
2906 0603 7034 6954 9117 2444 2184 9870 4778 1617 5026
1435 0769 2956 6526 4957 3608 8662 9831 0572 8474 7181
3508 7237 2660 4330 5422 8128 4073 1795 3225 4457 0329
4634 1670 5932 0694 8554 3385 7609 3316 0205 8300 7428
6581 3450 8172 4732 8210 0575 5521 5621 7651 6108 0407
1947 2360 9783 7376 5101 4031 2058 6594 0334 8554 9897
8306 1665 6058 1855 1118 2347 8812 1920 8083 1636 3789
3716 1136 4947 1416 3595 7878 2845 1117 9197 8379 6881
1162 5496 9423 4901 2455 9671 6794 1373 0493 8403 3748
4945 1554 3642 4941 5844 2417 5497 5801 5388 0454 9052
5104 8732 7921 5589 9943 6947 2352 3173 2205 7611 1526
4072 9029 5644 7802 4189 1781 3555 9640 6939 5020 4902
0018 4252 2839 8796 2617 0466 9847 2964 6982 0630 0415
8251 1835 9237 4830 4257 8368 8901 4599 0078 5660 0063
8203 2375 5199 7606 3216 4817 9092 0829 2603 3384

32
 RANDOM SAMPLING NUMBERS-Contd
45 46 47 48 49 50 51 52 53 54 55
4377 3819 5964 2259 4115 3826 1355 8765 4433 2352 1089
6659 7617 1496 1726 8091 5766 2929 9570 9193 7148 9385
8412 2327 8878 6772 7310 2407 5780 8218 4246 9410 6984
4280 1489 4991 2548 3598 8438 5403 6666 6974 8488 0052
0007 6062 3819 5204 5011 2489 7187 5023 5673 9439 5736
4298 3490 3407 2937 5278 8352 4809 0290 7370 4348 1501
5032 9899 5224 3099 8109 7923 3860 3825 6934 1336 5372
2262 0983 7629 8112 7269 8977 4196 4416 1592 0277 4677
2391 4912 3504 8974 9320 3895 3107 0587 4683 5146 7856
2978 9118 3679 4252 1870 6136 5898 0385 4206 0691 4936
5691 1109 6387 0604 0032 0124 8882 0567 5885 8772 7315
9508 4873 6132 667 9311 7467 9739 6412 2584 0954 5098
2971 7794 6965 4320 4097 8126 2899 3200 1275 4094 0741
3405 0963 8423 4637 8535 2197 6521 6600 6801 0322 7357
1951 6009 8793 0126 6759 5329 6310 9239 6853 5926 1310
3654 7732 2044 1052 1392 2073 8979 6289 3210 1984 8726
5519 7365 3654 0104 8374 9582 5379 8163 1684 2251 0599
6749 3780 7223 3555 1415 0541 4308 0266 2391 4030 3442
7813 8653 9123 6076 6617 1759 8866 2438 2543 5631 0793
3994 4773 3711 7533 5088 7451 3250 5355 8118 7800 7278
1559 1038 6361 3916 8727 2041 0252 8894 4970 7155 4658
0956 6215 5875 8608 5792 8931 5660 0174 4496 9543 4898
0210 9247 7940 9853 8508 9295 0877 7300 9022 1865 6954
2876 3716 6249 3835 9508 1576 1493 8933 4816 1573 5911
4626 8324 6429 1527 7936 6661 5619 0307 8897 4577 3272
8883 5939 7866 1027 9696 2491 9432 9815 4234 6700 5512
6715 0220 0158 2755 8805 4962 2058 8824 6933 4608 7360
8077 1735 2673 5153 4190 2522 1480 4141 0502 6622 7691
9348 5182 8760 3476 7313 8487 8666 3739 6440 4903 8197
8106 8454 2570 1467 5313 4974 3068 3359 1248 5345 2179
8897 7671 2399 9327 7207 5525 4777 6371 3110 1790 4335
9675 5872 3488 0539 1097 4635 5211 9805 8822 2268 2996
5524 9045 2557 7909 9650 2378 0183 1718 8680 6533 7390
0360 1704 7946 9799 9176 9882 0730 1255 5327 4637 3146
0213 0417 9613 6823 1400 5128 0879 8729 3798 1284 1143
6546 0248 6474 8093 6103 5353 0827 7420 2688 2754 6867
8119 3201 4199 5691 4526 9949 5914 2041 8552 5263 0423
6833 5008 6877 0278 6272 4563 0344 6355 8713 5342 1220
0564 6421 4669 2019 4189 5132 0193 3451 2104 1260 0602
9236 7343 7215 0248 5800 4343 7099 3349 6503 9397 8348
5319 3301 6211 9964 7561 2340 9939 6028 0085 3598 0656
7274 4253 3111 6815 4544 3439 1184 9931 3822 5411 9165
0598 6322 2219 1548 4960 4200 3594 0201 2193 6533 4051
0492 5624 1546 7587 5559 3286 4613 2412 5392 7469 4391
3647 7795 6949 4921 8369 0254 0967 4573 4635 4456 4281
8498 2089 9030 5213 9025 9965 1483 6793 0495 3901 7970
3475 3760 0530 7917 9078 4709 8268 7996 3296 5939 6745
7235 8185 1284 9564 4305 1309 7020 7214 1348 7072 2525
2144 8752 1532 0268 7348 1934 2765 4457 3132 3302 1895

33
 RANDOM SAMPLING NUMBERS-Contd.
56 57 58 59 60 61 62 63 64 65 66
4025 9931 3648 6841 1514 6210 0043 1370 3994 8617 7735
8935 2039 9877 6952 5640 1329 4890 2699 9984 8544 5956
4389 4091 9547 1918 9372 7477 2722 7253 6157 1425 6706
0284 7232 4445 0005 5835 9964 7206 2208 0818 8980 1396
3547 4381 2536 8720 0274 7414 1322 2161 4297 6672 8349
4538 7753 1548 5662 2790 4164 2580 4738 4351 5782 7494
3817 8777 3539 8212 0324 8846 0680 9668 1304 4361 4269
2463 6917 7173 4767 3904 5238 6058 4592 3308 5952 8953
6498 0591 7063 0592 3227 9038 3931 7885 7812 6932 1438
4960 9453 9297 7052 3140 1107 7768 5199 8568 7989 5377
6556 5413 3472 8963 6826 0191 2113 6762 8535 2360 3524
3837 9034 9305 2162 9385 9586 2967 0308 0442 5440 8197
6856 4802 9749 6370 7070 9696 2284 4510 2988 3376 7702
3568 7934 2642 1297 7405 3344 3452 6248 9061 7772 7173
1895 8621 8815 6252 1877 8377 9051 5950 3944 3860 1797
5091 0379 7835 6603 8340 9415 0041 7263 2064 8792 0032
9403 5932 8313 9671 4711 0844 6737 4628 5079 0169 9300
6670 5735 5645 0242 6267 3508 2517 2103 0137 4388 9948
0975 6696 6875 9279 5735 5307 6696 8482 3392 0275 4921
8269 5859 2173 0743 9325 2021 3100 7568 3176 6672 2230
3325 1398 3303 7356 1130 8554 2933 4277 9447 1175 8170
6260 0428 9419 8721 8669 1641 2538 6355 9945 4550 0659
4831 0681 7703 7201 8034 5745 0255 5429 9893 2981 1653
4660 4409 5258 4175 2437 6781 5471 4297 0542 1768 6647
6227 3344 1340 1103 9529 9983 5046 5230 1180 3581 5504
0120 0780 9594 4972 7814 1010 0629 8617 2197 4364 0755
2588 6693 7878 3113 8241 9459 1738 3417 2340 6903 2575
9615 2408 1937 1091 4512 84006 2185 2383 6156 4449 6787
5544 3431 0172 6800 5742 2703 8901 6442 8912 6882 6491
7480 3283 1580 0386 4486 7554 8088 2801 1411 7899 4706
6154 5047 5825 8400 3516 5910 3159 7227 2280 4869 8827
7167 6303 4074 9440 2309 0115 6285 6896 2097 6823 4569
8730 3246 0034 8050 2418 3664 0755 4927 2363 0003 3164
0325 2211 9701 5092 1536 6148 6673 8191 1208 5772 6798
2587 0044 7946 4754 1336 4955 3156 7011 2364 8448 2198
5244 1611 7313 4137 3488 4744 8422 7660 4716 3896 6092
1165 5324 8103 5475 2450 7002 0842 3204 5203 2303 5279
1350 5079 3879 0621 8345 0345 7563 2804 2636 6920 2341
7022 0807 3013 0490 1353 4065 5179 8723 9685 1729 2742
3960 8955 2909 8777 4935 2170 7257 1641 1819 2564 7370
8003 6416 3975 0940 6973 1349 4031 0113 3939 6529 4326
4174 4620 8133 1643 7991 1426 7017 0466 7387 0266 0778
3022 4089 1290 6605 0015 0681 3092 6372 027 0349 9092
9973 7066 3132 4583 0214 8177 8776 0581 9195 0494 9676
2143 2124 0232 1082 2741 4358 2822 1880 5731 8687 1276
4558 5815 2478 3956 8146 5288 2950 2264 5279 6683 6886
9721 8224 5840 9473 0788 6291 7117 5248 3328 3006 3874
0662 3172 6085 0726 4598 5452 2030 5885 8607 7318 9965
7077 9959 3389 8678 9631 7202 4012 8704 1845 6943 1709
1438 1820 5945 3172 7867 1622 7371 8596 8592 5692 7949

34
 RANDOM SAMPLING NUMBERS-Contd
67 68 69 70 71 72 73 74 75 76 77
8309 8431 5629 3250 2025 4369 3332 0003 3408 0384 2846
9003 1220 7639 6935 6854 4869 1102 7442 9950 8340 4925
6780 7363 7937 6003 7784 1985 8344 4992 3597 5700 8313
2120 0828 4725 7407 3013 2729 1211 4771 2958 9281 0288
5962 5593 6635 4833 8626 8455 7769 9359 1703 4007 9405
4758 5533 8713 0554 5717 3882 1285 3303 6576 8019 9713
6780 9259 7974 0731 6771 8733 5568 3786 3306 5642 4449
0194 3236 2923 8553 3768 2888 7127 2334 1975 6422 9562
5626 3457 2821 7566 6851 7991 2596 9634 1232 4460 2345
7607 3711 7415 6367 5316 5519 2688 2883 3162 5596 5498
7797 7909 0789 2004 4097 3817 6965 8274 6045 0492 0921
2110 2061 0030 9651 1812 0545 1950 7912 2571 5286 4356
6841 6488 8774 8316 9854 0062 9080 8947 4538 2493 0002
5649 6364 7136 3970 9462 5325 5103 2933 6231 4620 2198
9827 1311 8809 0857 4072 1384 8413 5110 8973 5070 4883
5773 8163 2347 6655 4542 4324 8361 8258 7948 5195 3343
3362 7987 7210 1165 2110 9568 6503 9345 6071 5588 4270
2209 2137 0227 3656 0256 6496 6710 2790 0147 7385 2204
8838 1855 7705 7399 2842 0357 1047 8104 4786 1506 6699
5610 5199 5772 8243 6905 0620 3685 9289 5352 6841 5356
4675 0002 5031 3669 6954 3994 6597 8724 8673 2770 8111
0821 3163 6713 2628 0968 3034 6064 9155 6535 9183 8713
5365 3125 1325 9800 3862 2062 9996 3958 9978 7086 2974
8825 1164 2152 6487 2915 820 3780 9437 4797 7387 9711
6581 6949 3053 5762 4148 8188 1168 8263 3770 9158 7874
3838 8379 1661 5121 3714 1516 6685 0998 9810 8392 0656
0517 3665 1612 3963 5827 3341 0358 7151 1190 5373 6250
8769 3611 6468 6902 5562 1307 6068 5526 9617 7856 8633
5275 7435 3190 3674 5320 3441 7202 3938 1348 9189 7990
4754 7595 7010 5747 1092 4141 3377 9084 3196 3083 6614
3331 7386 0108 8253 8453 2548 1081 1015 6898 8548 6184
8261 0846 3435 5315 2400 9930 4586 6556 1803 6831 9934
7456 7898 8288 6304 9566 9312 4129 1842 6931 6142 8765
2250 6950 1636 4168 8181 2662 6800 4242 0260 1531 8753
9134 2835 1010 5350 0435 4148 3505 8283 5683 7302 3675
9407 9311 5459 9951 2105 7507 1645 6145 5771 3093 3310
3891 7760 2168 0288 1260 9399 8522 9773 3997 0941 6311
6462 7044 2881 5466 9051 9264 8091 4140 5596 7660 5586
7370 5076 2938 7440 8108 7559 5318 4915 5739 9416 0899
1105 3304 4053 6272 0665 1197 5284 5665 3328 8514 4657
1019 7539 2582 1926 4287 0063 8284 7749 4630 5742 6744
2763 0553 8274 8612 2266 4090 0056 8122 0244 7564 6701
7950 7404 2668 2128 9648 8059 2702 0506 2183 6355 6260
0718 3949 8369 7284 1913 3690 0084 0345 6103 7281 9416
0587 8549 2460 9246 8916 4360 5265 4509 8499 7038 5580
6877 7939 2654 9249 0180 8909 0379 6129 8654 2320 1117
2171 7729 4210 8249 2988 4366 7267 2986 9913 9532 1953
0124 0939 8725 0574 2265 0482 3598 3251 7757 0156 1132
4026 7805 9517 8993 2787 9271 4111 8495 4371 0672 9765
0737 3462 3589 2131 5837 5647 9464 7172 1836 0705 6012

35
 RANDOM SAMPLING NUMBERS-Contd
78 79 80 81 82 83 84 85 86 87 88
8719 6926 9815 0247 4369 5438 0492 9447 2182 9542 7255
7902 4396 2980 7314 8278 1489 1296 6955 35558 9902 9315
8660 9897 2653 0693 9581 2349 1020 9013 4204 3893 0189
1007 7971 9955 1051 0868 8469 2849 7416 9890 1679 3197
9249 0708 1044 1602 9053 7638 2695 0611 8350 6809 7977
5988 0788 3715 7319 5566 9868 6990 0324 3716 7421 3830
6212 3022 6362 0165 1307 7206 6918 0786 4219 2583 6487
3280 6139 0829 6953 9344 6983 0918 6932 0584 0729 1674
2562 8362 8165 7249 7145 6532 3484 6256 0865 8457 1631
2701 0037 8911 3295 5088 4576 5534 3357 7241 2630 4901
0454 1426 1414 3316 3002 2728 8792 0792 7176 8995 6619
8457 9434 4591 4222 8977 9826 3474 4254 5921 6082 1533
5030 6902 9139 5976 0466 9366 2473 5809 9517 0842 1329
8286 5664 6789 1709 4697 3964 0691 5642 0312 3267 8874
3324 1739 5124 9282 3363 0262 0812 1427 2369 3793 9593
2625 6648 6225 4345 6717 6667 3358 2090 6275 1527 1358
9464 9412 1097 5742 1570 4278 6747 9931 6119 4483 7774
4177 3869 5646 2897 0916 5934 1457 2401 1626 6554 4755
2908 7455 5849 3913 5339 4217 1415 1129 5055 4633 8154
3064 3492 6169 5986 4090 5219 0697 2576 8385 1553 1374
7667 1559 3064 4646 2980 7418 0827 6155 4507 1427 1298
9877 3196 2875 2717 0984 8035 8362 2896 7255 0004 7588
8746 3877 2841 1109 7014 7205 6802 1855 4622 9396 4114
6766 2212 0317 5050 5061 0358 6157 4553 9417 9663 7653
3213 2301 3528 1007 4773 5774 6591 4559 4003 2825 9787
0820 6339 2486 4869 9862 6070 9035 7327 0432 9278 4127
8981 4019 9918 7491 1017 5883 1207 9334 7042 9041 2559
5698 2738 6232 5786 2522 3805 0452 5340 3882 4785 0917
7658 6584 3424 3633 0746 8896 5892 6990 7860 4800 1126
3686 5784 3599 9450 5252 9735 0011 6498 7303 5965 8236
2056 0107 1465 0405 4930 3444 4140 3961 4969 7926 0203
7878 4113 5349 1168 8212 7466 1283 8009 4619 0526 1294
3220 7925 9159 3604 3017 8373 0383 4262 4599 6922 3342
1400 3896 2923 1201 8643 4458 8408 8040 7809 9149 1261
6354 1949 7450 1250 9078 6773 2003 0134 0960 4403 5338
5988 5108 4134 0805 3552 7236 1120 8938 5141 0064 1746
9449 3300 1054 7601 4057 9438 4506 9442 8057 0808 5120
0308 6354 3064 8348 3297 1162 8074 1473 6956 5871 4150
0792 3344 5600 5638 3482 8775 6611 8595 8602 0484 7715
4920 1405 2055 4716 5873 8281 3194 5373 8370 5730 2073
0782 2362 7075 8499 3072 9366 6314 6336 0799 3865 6099
5961 7789 1820 0711 4907 7863 0719 3622 3906 0361 5428
5695 2454 2841 3407 2344 6044 5984 3322 5862 1514 0363
9044 8473 2926 9184 8156 2051 3749 4731 8012 6883 4135
9748 1772 2987 1390 7451 5936 6016 9117 9232 3779 8952
9765 3507 5007 6166 4610 5648 9408 2132 4213 8508 3515
1035 2719 8844 3715 3116 9924 9668 0747 3329 2636 9671
6774 8100 8501 3067 0634 4802 6164 7164 0311 2781 5865
5857 4049 2795 5573 0458 1645 2737 1026 3055 0878 5826
8012 1856 7126 2603 6147 8303 3577 4056 2078 9970 4151

36
 RANDOM SAMPLNG NUMBERS-Contd
89 90 91 92 93 94 95 96 97 98 99
7591 3488 1220 2275 3026 6421 5733 0444 2955 0802 0412
6343 1749 5232 8121 8604 4696 1308 8672 2024 4935 4702
5054 8445 5258 5913 5217 8628 5582 0721 0338 2841 0931
4526 4950 2002 3314 5431 4127 3722 6948 2125 5888 5157
6245 4918 8718 3357 0602 1585 3289 3165 9689 6166 0513
2871 1943 3445 9558 7977 4451 8478 2417 7140 3370 6025
7400 4052 1666 8169 6690 5265 8825 8124 0691 7306 6222
5828 4501 8231 9353 2191 2772 0671 8420 4133 7164 5874
8390 6794 5205 2218 7209 8437 4842 2337 2187 1630 0956
0970 9544 0139 5362 1495 4601 328 2903 5074 2694 6780
6028 4781 4286 1699 7885 9736 0684 3674 9065 2012 1217
8538 6560 5230 0594 4305 1833 3965 7747 5820 3170 9652
5479 7753 9723 4737 1742 9446 0750 3431 1091 6757 4895
4162 9002 2984 2436 1092 7663 7825 1592 3649 3709 1231
3947 8995 1581 3809 3828 9025 2548 7013 7971 2172 0347
8309 2500 2480 3738 0951 9591 0213 1868 6950 2606 0229
4135 0367 0389 5018 6346 6374 0387 3697 2555 0557 2503
4656 9211 9862 1124 3871 4118 1840 3465 2455 0138 4844
3554 5475 0401 7457 9906 3929 2732 3777 7742 9719 6379
7174 5716 9468 0507 4746 0544 4262 9410 4486 6897 0769
3354 6125 8172 6188 6632 9504 4764 5080 5833 5737 3408
5715 7080 9714 4878 4595 4240 6333 8845 0623 0965 1136
4530 5544 7748 9633 8811 1047 3646 9592 3918 9148 9173
2396 1346 8557 8547 9302 8829 9841 0763 7963 8675 9582
1047 7135 7592 7754 4216 4170 5726 9787 5218 6064 2866
8186 5100 0215 3771 2703 3846 2519 4282 5451 6533 3266
8529 2721 6606 3221 9688 6370 8440 2887 7300 5613 5072
2808 7290 5752 3989 0296 0569 2004 6654 2093 4338 7853
7647 5534 2287 7348 5842 1079 8295 6981 2013 7736 1529
4778 3899 7066 2632 5711 7188 9428 8853 0294 7085 1441
5996 3991 8640 9199 1332 2523 2533 0444 7354 8140 6861
9590 2525 2755 7331 8820 0047 0063 2444 6175 4353 5837
1173 6034 0525 1081 1241 0734 7804 8878 6185 6176 2085
9517 5721 9638 5996 3580 0833 3340 9132 9004 1968 0308
7566 3291 3849 2396 1392 7855 4212 6366 7689 1448 0340
3029 1077 5995 0495 7170 6654 4721 1578 4263 3144 7474
2311 9080 5478 9946 5935 4332 9131 9225 3972 4962 6525
4175 6599 2149 5826 0041 0015 9114 1735 2012 3008 1530
7824 0967 6708 7781 7993 2193 5640 8735 3175 6938 3148
0830 0766 2255 4088 5580 1144 6415 2802 3611 7363 4576
2339 1486 2967 2236 2780 5371 8671 9855 2905 8793 2209
3285 9176 7726 0114 2581 7349 2058 8583 1724 2192 8428
5704 8573 8816 9840 1490 9553 8628 7262 2884 3743 5431
9419 2216 9429 8234 9906 6606 6103 9234 2359 5577 0566
3727 9620 8697 9256 9469 3387 5751 9287 2044 6719 4578
0424 8573 7778 6234 3412 6148 5969 9422 2718 0419 4297
9128 8186 2169 8259 5053 9492 0181 0824 5440 8753 1723
2672 4752 6529 7900 7868 3054 4218 9227 8198 1799 0852
4595 1016 5719 4647 7558 1853 9463 9968 3738 7259 6840
9538 3432 1172 4472 0783 8275 8114 4258 9996 4488 1528

37
 RANDOM SAMPLING NUMBERS-Contd
100 101 102 103 104
8092 6572 3847 1768 8813
5453 9243 6137 4686 0623
3504 3413 9237 0220 3227
5659 9822 4723 1898 9679
1834 8526 3064 0602 9909
7313 7900 0389 8093 2306
5879 4919 2734 5937 8623
8780 6198 8274 3970 1243
8270 0111 2544 3765 4360
9694 7076 2969 7091 6344
5084 4607 4833 6315 3636
9916 7766 9927 0409 9387
1584 6628 5913 4359 8250
3950 8186 2885 0346 1028
1648 7196 1539 3409 5135
8737 5870 7033 6030 0967
6858 9212 9203 2213 0623
4507 3338 6355 6709 2547
2108 4469 6457 2192 3655
2516 0081 2538 2938 1149
3329 4779 7652 7762 2661
3566 6098 1924 4548 8560
9309 4476 9595 5839 2871
7267 8857 5153 6126 9298
9939 8248 0481 6936 2167
8879 9486 0900 7869 9465
8946 1456 3088 6551 7606
6657 5728 9741 2488 1831
5715 5126 2273 9315 6055
1229 7644 7734 3300 3832
2279 2150 0145 3290 4965
3070 0408 4181 7834 8399
1090 0162 2591 8657 2441
6267 9872 3549 1789 5619
1554 9011 6610 4241 8176
1841 1996 1179 7579 1945
4943 0064 4257 3649 5393
0530 1202 0047 8429 8620
1860 2914 9261 9060 4432
1816 3545 0237 1259 9688
8080 9913 8754 0669 9897
3018 9337 9171 5880 9089
1902 6008 2300 4628 0869
5705 2647 8348 1577 8568
3855 1146 9793 2150 3268
6037 3562 2601 3977 8254
1472 9922 6277 1915 0255
8645 4894 0269 7211 5378
6923 5092 0016 9362 9289
3087 0581 2929 1491 1534

38
 Chapter 7

Internal Audit – Planning and Procedure

7.01 Internal Audit Wing should prepare an audit plan based on risk analysis. The
assessment of risk should be inclusive of internal as well as external risk
factors. Some of the illustrative risk factors were indicated in Chapter 4 of this
Manual. In this process, Internal Audit Wing would help to identify and
evaluate significant risk exposure and contribute to risk management and
internal control in the office. The audit plan should provide resources for
appropriate follow up for audit resolution of the issues raised in audit.
7.02 It is the duty and responsibility of the Internal Audit Section to completely test
check all the sections in the office within a period of four years. However, if
different period (cycle time) for coverage is fixed under the Manual governing
the functioning of a particular category of field office, the Internal Audit of all
sections shall be completed at least once in that period. The Internal Audit of a
section should normally be completed within 10 working days. The audit party
may consist of one AAO and two auditors (This can be varied by the Head of
Department, depending upon the manpower position and exigencies of work).
The Internal Audit should be done in such a way that the various aspects of
work done in the section are critically examined and hidden arrears, if any, are
brought to the notice of PAG/AG. The working of the sections should be
examined with reference to the provisions of
1. Various codes/Manuals issued by CAG.
2. Manual of the Section concerned.
3. Office orders/circulars issued from time to time
4. The Comptroller & Auditor General of India’s Memorandum of
Secret Instructions.
5. Local Memorandum of Secret Instructions and
6. Resolutions of the State Government.

7.03 The three kinds of periodicity for the test check of sections are: Annual,
Biennial and Quadrennial.
7.04 The selection of the sections for test audit should be made on risk assessment.
The House keeping sections viz., General Section and Estate Section should
be audited annually along with sections assessed to be having high risk. All
controlling sections of functional wings, Legal Cell and Audit Planning and
Co-ordination Cell (APC Cell) are audited once in two years. All the other
sections should be audited once in four years.
The Sections under the direct control of PAG/AG should also be subjected to
Internal Audit. The frequency of audit mentioned above may be varied at the
discretion of the Head of Department.
The internal auditors should apply the care and skill expected of a reasonably
prudent and competent internal auditor. Due professional care does not imply
infallibility.

39
 The internal auditor should exercise due professional care by considering the
o Extent of work needed to achieve the assignments and objectives.
o Relative complexity, materiality or significance of matters to which
audit procedures are applied
o Adequacy and effectiveness of risk management, control and
governance process.
o Probability of significant errors, irregularities or non-compliance; and
o Cost of an audit procedure in relation to potential benefits
Internal auditor should use the computer aided audit tools and other data for
analysis techniques.
7.05 The illustrative checks to be carried out during the test audit of
sections/Groups are indicated in the subsequent chapters of this Manual.
These checks should be supplemented by preparing detailed checklists based
on the provisions of codes/Manuals/Rules and instructions. It will be the
responsibility of the Internal Audit Wing to conduct test audit in an adequate
manner to attain their objectives. The test checks should be applied to a
sample of transactions, items of work selected on random basis as well as the
month selected by the PAG/AG for review.
7.06 Test check by Internal Audit Section amongst other things includes surprise
check of administration sections (including cash).
7.07 The errors and omissions pointed out by Internal Audit should be corrected
expeditiously after the submission of the Report. The Group Officer should
submit the compliance report to the Head of Department within one month of
date of issue of the Report. In cases where the Compliance Report is not
received, the Internal Audit Section should invariably verify after two or three
months, whether the errors or omissions pointed out earlier have been rectified
and the persistent repetitions of the same defects should be brought to the
notice of PAG/AG. The re-checking work should be done within three days.
7.08 Important items of work to be seen personally by supervisory officers
During test audit, certain important items of work should be seen by Asst.
Audit Officers. An illustrative list is given below:
 Investigation of important arrears.
 Review of corrections to ledger balances.
 Review of annual adjustments
 Consolidation of monthly arrear reports.

40
7.09 The IAO should personally see the following items of work without
intervention of Asst. Audit Officers
1. Review Register
2. Half yearly review of Cash Book
3. Disposal of /Fax messages/E. mail
4. Check of fortnightly reports of outstanding letters etc.
7.10 The PAG/AG may at his discretion vary the cycle of test check according to
the circumstances and needs of the office and utilize Internal Audit Section for
corrective action in areas found weak or defective.
7.11 Horizontal check
Horizontal check is the check of certain processes done in various sections of
branch where the test audit is in respect of a section selected (it covers all
items of work in the section). Horizontal check is carried out in respect of an
item common to many sections of a branch. Horizontal check of an item in
respect of that item gives a comparative picture of each section. It is useful and
supplementary to test audit of the section. It is left to the discretion of the
PAG/AG to arrange for the horizontal check whenever he considers it to be
necessary and useful.
7.12 The following records of one branch at least should be taken up each quarter,
for Horizontal check.
1. Calendar of Returns.
2. Register for watching Receipts of Government orders.
3. Register of recovery at the instance of audit.
The result of check should be communicated to the section concerned and
compliance watched.
7.13 List of items of work which may be entrusted to Internal Audit
 Check of statistics in support of staff proposals.
 Cent percent review of all complaint cases which were not settled for
six months from the date of complaint was lodged.
 Test of 5% to 10% complaint cases received in the office.
 Scrutiny of audit and review conducted by the Central Audit Parties
and Integrated Audit Units.
 Checking of maintenance of Portfolio files.
 Adequacy or otherwise of existing arrangements for audit and review.
 Correctness of audit fees.
 Test check of receipts, approval, issue and pursuance of Inspection
reports.

41
  Test check of records and functioning of sections, Resident Audit
offices and Branch offices.
 Monitoring of the implementation of important office orders issued
from time to time
 Investigation of important arrears.
 Half yearly review of cash Book
 Test check of Service Books
 Scrutiny of service books of personnel who would be completing 30
years of service or attaining 55 years of age.
 Independent scrutiny of details in support of Budget proposals of
different wings.
 Check of statistics of regular, temporary and casual staff.
 Check of rosters for reservation of vacancies for candidates belonging
to Scheduled Castes and Tribes.
 Check of list of candidates appearing in Subordinate Audit Service
(SAS) Examination in terms of para 9.2.3 of MSO (Admn.) Vol I
 Check of Honorarium and Overtime claims.
 Check of Gradation list.
 Review of complaints addressed to CAG.
 Review of calendar of Returns and Attendance Register.
 Liaison between Director General of Inspection (DG(Inspn)) and
Sections during the inspection of the office.
 Liaison between Peer Review Team and Sections.
 Investigation of procedural omissions / irregularities and audit lapses
brought to the notice by DG(Inspn).
 Submission of appraisal report of work done by Internal Audit
Section to DG(Inspn).
 Checking of quality of audit conducted and commenting specifically
on this aspect in its report so that suitable measures may be initiated
for improvement wherever necessary.
 Any other special work allotted by PAG/AG.
Other items of work

7.14 The Head of Department may in his discretion entrust Internal Audit Section
with the work of consolidating the Monthly Arrear Report of all sections and
sending Consolidated Report to the office of the CAG of India in accordance
with the existing instructions. However, it is preferable that the work is
entrusted to some other section like APC Cell.

42
7.15 According to the CAG of India’s secret instructions the statistics in support of
Budget estimates forwarded to Headquarters every year is to be checked by
Internal Audit Section. The scrutiny should be restricted to the correct
application of standards on which additional staff is claimed. The adhoc
requirements are to be scrutinized with reference to the actual volume of work
involved. The result of such check should be submitted directly to the
PAG/AG.
Complaints
7.16 Internal Audit Section will send to CAG, a quarterly report in respect of cases
of complaints received in CAG’s office and referred to the office for a report
thereon. The report is to reach CAG’s office by 2nd May, August, November
and February. To enable Internal Audit Section to send this report, Group
Controlling Sections in the office dealing with the complaints, after processing
will communicate to Internal Audit Section by 25th of April, July, October and
January. The Internal Audit Section should ensure that the report is sent to
Headquarters within the due date. A watch register should be maintained in
accordance with the Headquarters instructions for watching complaints pending
for over two months and such complaints should be reviewed by PAG/AG.
Internal Audit Section should enter all the complaint cases referred to by
Headquarters in a separate register and note the progress therein. Internal Audit
Section should conduct a 100 per cent review of all complaint cases received
from Headquarters office and which are not settled for six months from the date
of complaint was first lodged. Internal Audit Section should also conduct a test
check of 5 to 10 per cent of complaint cases received in the office and
addressed by name to the AG and those directly received by sections.
7.17 According to Headquarters directions, the PAG/AG shall equip himself with the
checking machinery capable of rectifying the mistakes before the Finance
Accounts are submitted for approval. Internal Audit section is entrusted with
the responsibility of undertaking certain checks in the Finance Accounts.

7.18 Programme of work

The programme of work of Internal Audit Section for each quarter should be
got approved by the 5th of the month preceding the quarter. The sections to be
taken up for audit, items for Horizontal check and the month of account for
detailed scrutiny etc. should be got approved by PAG/AG. After the selection is
done, intimation should be sent to the sections concerned by 10th of the month
preceding the month in which test audit is to be taken up for keeping the
records ready.
As far as possible all sections in a functional group should be taken up for test
audit in one spell. In the case of larger functional groups comprising of several
subgroups, test audit of all sections in one subgroup should be arranged as far as
possible. Test Audit of

43
 50 per cent of the sections may be arranged in one spell and the remaining in
the other spell.
The number of sections taken up for test audit in various quarters should as
far as possible be evenly distributed. The actual number of sections to be
taken up for check in each month or quarter will depend upon exigencies of
circumstances, subject to the condition that number of sections checked in a
month may not exceed 3 and the number of sections checked in a quarter
should not exceed 8. However, this may be relaxed by the Head of
Department.
The sections should send on the same day, the records called for by Internal
Audit Section which should ensure that such records are returned promptly.
The common defects in the working of the sections noted during the test
audit should be periodically brought to the notice of these sections by
issuing circulars.
7.19 The IAO will be responsible for the general supervision of entire Internal
Audit wing. The duties and responsibilities of Internal Audit officer will be
as mentioned below, in addition to the duties mentioned elsewhere in this
Manual, and which may be assigned to him by PAG/AG.
1. Complete supervision of the Internal Audit Section.
2. Review of items of work without the intervention of AAO as
prescribed.
3. Completed Internal Audit reports and similar reports will be finalized
by the IAO after discussing various points raised therein with the
Branch officer and Group officer before they are submitted to
PAG/AG.
4. 50 per cent of the Service Books selected for check every quarter.
7.20 The duties of Sr. Auditors/Auditors in Internal Audit Section will be as per
the Register of Duty List.
Progress Register
7.21 The issue, return and the submission of the Internal Audit Report to the
PAG/AG and its final closing should be watched through a Progress
Register. A similar register may be maintained to ensure watch in respect of
1) Triennial Review Reports
2) Service Books Check Report
3) Review of Attendance Registers
4) Horizontal check Reports
5) Half Yearly Cash book check Reports
The Internal Audit Section should issue reminders to defaulting Sections
through Group Officer concerned, and also bring to the notice of PAG/AG,
the position of outstanding reports once in a month

44
 indicating the sections which have not furnished the report and the period
from which the reports are outstanding.
Preservation of records
7.22 Preservation of records is required to be made as indicated below:

Sl. Particulars of records Period of preservation

No.
1. Internal Audit Reports Two years after closure of the report and
settlement of all paras
2. Watch Register of Two years after the closure of all Internal
Internal Audit Reports Audit Reports or till the inspection of
DG(Inspn) is completed and the
observations of DG(Inspn) are settled;
whichever is later
3. Correspondence relating One year after the closure of the report
to DG(Inspn)’s report and settlement of all paras
4. Monthly statements of One year; provided, all outstanding
complaint cases to CAG cases are included in the monthly
statements

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 Chapter 8

Internal Audit of Administration Group

8.01 As per Office Order No. 83SMU/PP/Restructuring/5-2011 dated 21st

March 2012, the office of the Principal Accountant General (Civil and
Commercial Audit), Kerala was renamed as Office of the Principal
Accountant General (General and Social Sector Audit), Kerala and the
office was restructured as follows into Sectoral Group headed by Group
Officers.
Sectoral Group Charge
Administration Administration
Central Co-ordination
Certification of Finance and
Appropriation Accounts
Work relating to co-ordination and
production of CAG’s annual report on
State Finances
Social Sector I Audit of accounts of State
including Local Departments/agencies/PSUs/ABs grouped
Bodies within Social Sector
Technical Guidance and supervision
(TGS) functions relating to Audit and
Accounts of Local Bodies
Social & General Audit of accounts of State
Sector II Departments/agencies/PSUs/ABs grouped
within ‘Social and General Sector’
Social & General Audit of accounts of State
Sector III Departments/agencies/PSUs/ABs grouped
within ‘Social and General Sector’
With effect from 1st April 2018, the Sectoral Groups ‘Social Sector I
including Local bodies’ at Thiruvananthapuram and ‘Social and General
Sector III at Thrissur were mutually transferred. i.e SS I to Thrissur and
SGS III to Thiruvananthapuram.
This chapter deals with the checks to be exercised while auditing different
sections under the Administration Group.
8.02 Some of the matters generally dealt with by Administration Group
include,
1. Staffing, organization, Service Books etc.
2. Cash, Valuables and related records
3. Contingent bills and Advances
4. Leave Travel Concession (LTC), Medical, Children Education
Allowance (CEA) and Travelling allowance (TA)claims

46
 5.Pensionary benefits to staff
6.Procurement of goods and services
7.Stock Registers
8.Old records management
9.System of receipt and issue of letters
10.General maintenance of office.
11.Expenditure including telephones, liveries, Service Postage
stamps etc.,
12.Estate function
13. Information Technology Support Cell
The illustrative checks to be exercised and points to be seen are given
below:
(a) Staffing
(i) The number of sanctioned posts for the office in each cadre,
viz.Sr.AO/AAO, Sr.Auditors/Auditors, DEOs miscellaneous
posts and MTS, the number of persons actually in position and
reasons for any variation may be obtained.
(ii) Number of temporary posts, if any, specially sanctioned for
clearance of arrears/special items of work indicating the period
of sanctions and other details may be obtained.
(iii) Number of sanctioned posts in training reserve and number of
untrained officials and reasons therefor may be obtained.
(iv) How many ad-hoc/casual/temporary posts(Group-wise) were
sanctioned during the last three years and for what purpose?
How many posts were filled in? What are the periods for which
those were filled in?
(v) How many members of employees up to and including the grade
of Sr.AOs have been working for more than five years in the
same group and for more than three years in same sections on
date? Whether the cases for their retention are being reviewed
from time to time and orders of PAG/AG obtained in
compliance of Headquarters office instructions/instruction
contained in CAG’s MSO (Admn) Vol. I?
(vi) Whether confirmation of any person in initial cadre is held up; if
so, ascertain the reasons cadre-wise and individual-wise.
(vii) How many persons were sent for training within three months,
within six months and within one year of recruitment from the
period of last audit to date? How many persons could not be
sent on training after recruitment during the period from last
inspection to date and for what reasons?

47
(viii) What is the number of total employees trained in computer
(Cadre-wise /Package-wise, including persons trained on their
own outside office, persons who gained working knowledge by
actual practice and self-study even though they might not have
attended formal departmental training programmes.
(ix) How many of the computer trained persons are working on
computers?
(x) Whether computer training programmes are arranged through
Regional Training Institutes (RTIs) and In-house trainings, as
per instruction of Headquarters?
(xi) Whether there has been any case in which candidates otherwise
not eligible/educationally qualified as per extant orders/rules
were allowed to appear in the departmental examinations?
Whether approval of competent authority obtained?
(xii) How many persons who have passed the qualifying examination
are awaiting for promotion? What are the reasons for not
making promotion of such persons?
(xiii) Whether entitlements of Government servants extended with the
benefit of Modified Assured Career Progression Scheme
(MACP) have been checked in the light of orders/clarifications
issued by GoI/Office of CAG from time to time?
(xiv) How many persons were employed as casual labourers on daily
wages as of first of the month of audit? Find out the date from
which employed.
(xv) Whether the engagement of casual labourers was justified with
reference to norms.
(xvi) Whether any casual labourer is engaged continuously for more
than 206 days in a year.
(xvii) (a)Whether Headquarters instructions regarding engagement of
casual labourers etc. are being strictly adhered to? If not, the
reasons thereof.
(b) Whether GoI/Headquarters instructions issued from time to
time regarding grant of temporary status to casual labourers are
being scrupulously adhered to? If there had been any deviation,
the details thereof with justification may be obtained.
(xviii) Whether attendance registers are checked by Branch
Officers/Group Officers periodically and whether actions are
taken on crosses for late coming, absence, etc.

48
(xix) Whether Headquarters instructions regarding discontinuance of
the practice of operating leave chain are being followed
scrupulously? If not, reasons thereof may be examined.
(xx) What is the number of Supervisors in position vis-à-vis post
sanctioned by Headquarters? Aspect of temporary appointment
of Supervisors in Deficit Audit Offices in terms of headquarters
office instructions in this regard should be seen. It should also
be seen that the Supervisors temporarily promoted as Assistant
Audit Officers are reverted as and when qualified SAS passed
candidates are available for promotion.
(xxi) What is the number of SAS passed candidates not promoted as
on first January each year? Why they could not be promoted?
(xxii) Whether GoI/Headquarters instructions issued from time to time
on compassionate appointments regarding verification of
applications, adherence of prescribed quota, time limit for
making compassionate appointment, financial condition of the
applicant/family etc. are being strictly followed.
(xxiii) Whether prior approval of Deputy CAG or such other
competent authority was obtained before making compassionate
appointments in cases where it was required under extant
scheme of compassionate appointment.
(xxiv) Whether Government’s instructions issued from time to time on
post-based reservations are being followed scrupulously in the
maintenance of cadre wise/methods of appointment-wise
reservation rosters? Current status of cadre-wise backlog of
Scheduled Caste (SC)/ Scheduled Tribe (ST)/ Other Backward
Communities (OBCs) and efforts made to clear the same may be
examined.
(xxv) Check the material provided to the Departmental Promotion
Committee (DPC) relating to preparation of promotion panels in
respect of all cadres.
(xxvi) Whether Headquarter’s instructions issued from time to time
regarding avoidance of delay in promotions are being strictly
followed? If there has been any case(s) of delay during the
current/previous panel year, the details may be examined.
(xxvii) In the revised instructions relating to post based recruitment, the
number of persons-in-position in a particular quota
(Seniority/Departmental Examination/ Direct Recruitment) of a
cadre is not to exceed the number of posts prescribed as per
given percentages in the relevant recruitment rules. Whether
there has been any case of deviation from these instructions? If
so, the reasons thereof may be examined.

49
 (xxviii)Whether there has been any case of termination from
service/delay in confirmation of candidates directly recruited
through Staff Selection Commission (SSC) due to delay in
timely imparting of training in regional language as per
Headquarters instructions.
(xxix) Whether training was given to staff in problem areas?
Inter alia see:-
How many training programmes have been conducted during
the year/previous financial year?
What are the topics covered therein and also state level of
participants in the training programme?
(xxx) Cases of sexual harassment of working women at work place:
(a) How many cases of sexual harassment are pending
(b) Present position of each case
(c) Whether committee prescribed for the purpose has been
formed; if so, collect details.
(d) Reason for not finalizing the cases so far.
(xxxi) Whether complaint register to monitor the grievances of SC/ST
employees is maintained as per the instructions of Headquarters
and reviewed by the Group Officer monthly.
(xxxii) Check the material relating to preparation of gradation list.
(xxxiii)Whether the Transfer and Posting Boards were constituted for
recommending the transfer and posting of all the Group ‘B’ and
‘C’ staff of the office as stipulated by Headquarters in Circular
dated 06.01.2014?
(xxxiv) Whether the details of the Transfer and posting Board
constituted and the guidelines on transfer and posting and
posting orders were uploaded on the official website?
(xxxv) Confirm that the Group ‘B’ and ‘C’ staff were not transferred
from a particular post before the lapse of a minimum period of
two years.
(xxxvi) Check whether Government employee who is a care-giver of
dependent daughter/son/parents/spouse/brother/sister with
specified Disability as certified by the certifying authority were
exempted from the routine exercise of transfer /rotational
transfer?
Administration Setup and other matters
(i) What is the number of sections in the Administration group?
Ascertain the distribution of work amongst them.

50
 (ii) Whether Calendar of Returns is maintained in the prescribed
form and submitted regularly to the concerned Group Officers
and Head of Department (Wherever required)
(iii) Whether any control register is maintained in the Secretariat of
Head of Department or of any other co-ordinating section to
watch the timely submission of those returns to the Head of
Department?
(iv) What are the names of the officials with their designation
against whom the disciplinary proceedings are pending? Also
supply the following information for each case:-
a. Date of incidence
b. Date on which disciplinary proceedings initiated
c. Nature and present position of the case
d. Since when pending
e. Reasons for not finalizing the case so far
f. Any other remarks to be offered by Administration in regard
to delay in finalization of disciplinary cases.
(v) Check the records relating to grant of cash awards with
reference to the eligibility, and relevant rules.
(vi) Check the material relating to preparation of Activity Report
and Administrative Report.
(vii) Court cases/Tribunal cases
Information in the following proforma may be collected and
examined
Year Nature of Date Date of Whether disposed Expenditure If not Reasons
case in of disposal in favour of incurred disposed, for
brief filing Government stage at delay, if
/Government which any
Servant or any pending.
other party
(1) (2) (3) (4) (5) (6) (7) (8)

(viii) Annual Performance Appraisal Reports

Information in the following proforma may be collected and examined
Year Total No. of Total Annual Balance Reasons Follow-up
staff cadre-wise Performance for non – action
/year-wise Appraisal Reports receipt taken, if
received year-wise any

(ix) Whether any confirmation, promotion etc. could not take place
in time due to delay in receipt of Annual Performance Appraisal
Reports.

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 (x) Complaint Cases
Total numbers of complaint cases received, disposed and balance
pending for the period from last inspection to date may be ascertained.
Also ascertain what control mechanism exists for redressal of
complaints/grievances of staff.
(b) Service Books
1. Internal Audit Section is required to test check the service books of
the office staff. For this purpose, IA Section should maintain a
register of service books in alphabetical order. In the first quarter of
each year, this register should be updated by taking note of service
books for check every quarter.
2. The selection will be done in such a manner that all the service
books are subjected to check within a cycle of four years. The
check of service books should be conducted with reference to the
personal files in respect of each official maintained in the
Administration Section. A suitable note of having done the check
should be recorded in the service books checked, indicating the
cycle for which the check is done.
3. The service books of the staff of IA Section should be got test
checked by any other section.
4. The service books of the officials deputed to the offices of the
Principal Directors of Audit Indian Accounts in UK and USA
should be checked by IA Wing before the service books are sent
abroad so that the next review will not be due before the term of
deputation of the official expires.
5. The remarks raised as a result of the check shall be communicated
to Administration Section in the form of report as it is done in the
case of Internal Audit reports. The report should be sent not later
than 15th of the month following the quarter for which the selection
is done. Compliance of the report should be watched as in the case
of Internal Audit Report and after all the points are settled, it should
be closed under the orders of the IAO.
6. A report on the scrutiny of service books should be submitted to the
PAG/AG on completion of the checking of service books in the last
quarter of the year.
7. Whether “Register of Service Books” was maintained and entries
were made therein regarding new Service Books opened or received
from other offices etc. and Service Book sent to other offices?
8. Whether belated claims for alteration of date of birth were accepted
in violation of directions contained in OM dated 16.12.2014?

52
Illustrative Checks:
The test check should be conducted on the following lines:-
(i) Check whether entries are attested (including re-attestation after
every five years).
(ii) Check whether the record with reference to which the date of
birth has been verified is noted against the entry in the service
book.
(iii) Check whether the entries regarding physical fitness,
verification of antecedents etc. have been noted in the service
book
(iv) Check whether any erasures overwriting or
unattested/unauthorized entries in the service book.
(v) Check whether particulars regarding the appointment,
promotion, punishment, etc. have been correctly recorded with
reference to the orders.
(vi) Check whether signature of government servant is taken every
year in token of rolls.
(vii) Check whether service has been verified with reference to pay
bills/acquittance rolls.
(viii) Check whether the date of increment has been worked out
correctly with reference to the dates recorded in the service
book.
(ix) Check whether service books of all the employees are
maintained properly along with their leave account? Check
whether all entries in the service book including entries for
leave are made based on office order issued by the office.
(x) Check whether the leave account has been correctly maintained
and the entries of leave taken, balance at credit, etc. are correct
with reference to the leave record in the personal file and
whether leave availed are reconciled with attendance record.
(xi) Check whether particulars of Foreign Service and the note
regarding the recovery of leave salary and pension contribution
is taken in respect of officials who were on Foreign Service.
(xii) Check whether the options exercised by the Government servant
regarding revision of pay/pension have been pasted in the
service book.
(xiii) Check whether the note regarding the receipt of nomination for
Death cum Retirement Gratuity (DCRG) is taken in the service
book.
(xiv) Check whether the records of LTC availed of (All
India/hometown) are declared correctly

53
 (xv) Check whether details of family members are kept pasted in the
service book.
(xvi) Check whether certificate relating to taking of oath of
allegiance/affirmation to the Constitution of India is available.
(xvii) Check the affixing of photograph of Government servant and its
renewal after every 10 years.
(xviii) Whether periodical verification of the service books is
conducted?
(xix) Whether registers for nomination in respect of DCRG/Group
insurance scheme, family pension, GPF are maintained up to
date and periodically physically verified?
(xx) Check whether the leave account of child care leave was
maintained in the proforma prescribed in Department of
Personnel and Training (DOP&T), OM dated 29.09.2008 and
kept along with the Service Book?
(xxi) Whether Aadhaar number of the Government employees were
entered in the Service Books?
(xxii) Whether “Register of Service Books” was maintained and
entries were made therein regarding new Service Books opened
or received from other offices etc. and Service Book sent to
other offices?
(xxiii) Whether belated claims for alteration of date of birth were
accepted in violation of directions contained in OM dated
16.12.2014?
(c) Cash
(i) How many persons were working as Cashier and Assistant
Cashier in Cash Branch? Ascertain their names and date of
appointment as Cashier and Asst. Cashier, as the case may be.
(ii) What is the currency of Fidelity Bond/Insurance policy in
respect of each officials and due dates of their renewal? The
records through which the renewal of Fidelity Bond/Insurance,
etc., is watched may also be examined.
(iii) What is the maximum amount of cash handled by each Cashier
and Asst. Cashier at any time during the last one year? What
was the actual cash balance at the close of each day during the
month of inspection? Are there huge cash balances?
(iv) Ascertain the names of Drawing and Disbursing Officers
(DDOs) for the period from last inspection (to date).
(v) Whether there had been any case of
defalcation/losses/embezzlement of cash in the office since last
inspection? If so, a brief history of the case indicating the action
taken may be obtained and kept in inspection file

54
(vi) What was the amount of imprest sanctioned by the headquarters
office? Whether detailed account is being maintained? Whether
certificate of balance was being sent to Headquarters.
(vii) In case imprest is insufficient, whether Headquarters office was
approached for raising the amount of imprest?
(viii) Whether Abstract Contingent (AC) bills are being drawn? If so,
details of AC bills drawn during the last three years and their
clearance may be obtained. Reasons for delays in clearance, if
any, may be examined.
(ix) Year wise total amount of honoraria paid to the employees and
whether approval of Headquarters office was obtained for
payments made beyond prescribed ceilings.
(x) Whether there is any discrepancy in the reports sent to
Headquarters on staff strength as on previous 1stMarch as
compared to pay bills drawn (number of persons on duty, leave
and deputations (group wise)).
(xi) Whether cash book and other documents are being maintained
as per procedure laid down in Receipts and Payments Rules.
(xii) Whether periodical surprise check of cash is carried out by
personnel other than from Administration wing.
(xiii) Whether the cash book is maintained in the prescribed form
(presently GAR 3).
(xiv) Whether the pages of cash book are machine numbered and a
certificate of count of pages recorded on the first page before a
cash book is brought into use.
(xv) Whether all monetary transactions have been entered in the cash
book as soon as they have occurred and attested by the DDO
(xvi) Whether the cash book is closed regularly and properly checked
and at the end of each month DDO has personally verified the
cash balance and has recorded a signed and dated certificate to
that effect.
(xvii) Whether the totals have been checked by a person other than the
writer of the Cash Book.
(xviii) Whether surprise physical verification of cash has been
conducted at periodical intervals by the DDO.
(xix) Whether there is a voucher for every entry setting forth full and
clear particulars of the claim and all information necessary for
its proper classification and identification in accounts.

55
(xx) Whether the amounts received have been paid in full into the
bank without undue delay, for credit to Government Account
under proper head.
Note:- The verification of credits of the selected month’s
receipts should be made with reference to the bank
reconciliation statements of receipts prepared by the DDO.
(xxi) Whether a receipt in the prescribed form (presently GAR 6) has
been issued to the payer when money is received. This receipt
is to be signed by the DDO who should satisfy himself at the
time of signing the receipt that the amount has been entered in
the cash book.
(xxii) Whether there are erasures or overwriting in the cash book.
Erasure or overwriting of an entry once made in the Cash book
is prohibited. If a mistake is discovered it should be corrected
by drawing a line through the incorrect entry and recording the
correct entry in red ink.
(xxiii) Whether adequate security as envisaged in the General Financial
rules in respect of cashier has been obtained, accepted by the
competent authority and relevant documents kept in the safe
custody of the Head of Office.
(xxiv) Whether Government money has been kept in strong cash box
secured by double lock.
(xxv) The officers in charge of Internal Audit parties may get the cash
balance verified by the officers of the cash branch in their
presence and have a certificate of verification recorded in the
Cash Book.
(xxvi) Whether the account payee cheques issued by the PAO/Cheques
drawing DDO in favour of Government servants and third
parties are being entered in the cash book. Such cheques, being
payable only to the parties, should not be entered in the cash
book. The delivery and acknowledgements of such cheques
should however, be watched through a separate register.
(xxvii) Check whether Permanent advances were sanctioned by the
orders of the Head of Department and acknowledgements from
the officers holding the Permanent Advances as on 31st March
were obtained in April and forwarded to Headquarters?
(xxviii)Whether all payments to the Govt. Servants including salary
payments were made by electronically signed payment advices
for direct credit to their Bank accounts.
(xxix) Check whether the one time relaxation granted for payment by
other recognized modes on the above provision in cases

56
 of hardship with the resume duly approved by the Head of the
Department.

(d) Register of Valuables

Illustrative Checks/Points to be seen
(i) Whether the register is being maintained in the prescribed form.
(ii) Whether the cheques/demand drafts received have been entered
in the register on the day of their actual receipt.
(iii) Whether full particulars of the valuables are recorded in the
register
(iv) Whether the valuables (cheques/demand drafts, etc.) have been
sent to the bank soon after their receipt for credit to Government
Account.
(v) Whether the register is being closed every fortnight or at such
other intervals as may be prescribed.
(vi) Whether the credit of valuables has been traced in the bank
scroll and particulars thereof recorded in the register.
(e) Register of Bank Drafts
It may be seen,
(i) Whether the register of bank drafts is being maintained in the
proper from.
(ii) Whether full particulars i.e. Bill No. and date have been
indicated before cheque is sent to bank for preparation of the
bank drafts.
(iii) Whether the bank drafts have been sent to the party (intended
recipient) without delay.
(iv) Whether the date of acknowledgement has been indicated in the
columns prescribed for this purpose.
(f) Contingent Bills
It may be seen,
(i) Whether the rules regarding preparation of contingent bills are
being observed by the Drawing Officer and proper bill forms are
used for withdrawal of funds.
(ii) Whether expenditure has been incurred within the provisions of
budget grant for that particular head of account.
(iii) Whether, in case of contract contingencies, the proposed
expenditure has not exceeded the contract/grant.
(iv) Whether each voucher bears a pay order signed by the DDO
specifying the amount both in words and figures.

57
 (v) Whether all the paid vouchers which are not required to be sent
to the PAO have been stamped “paid and cancelled” by the
DDO so that these may not be misused.
(vi) The contingent bills for wages of Mazdoors engaged in manual
work and paid at daily or monthly rate, rent, electricity and other
charges incurred on the hire of private buildings, expenditure on
light refreshment, etc. are in accordance with the rules and the
Government orders issued from time to time.
(vii) Whether the flow of expenditure during March in any financial
year is not on high side with a view to exhausting the budget
allotment.
(viii) Whether expenditure has been sanctioned by the competent
authority and sanction to the expenditure has been attached with
the bill.
(ix) Whether a register of contingent charges, to watch the
expenditure under each sub-head is maintained in the prescribed
form (presently GAR 27),budget provisions against each sub-
head have been noted on the top of the columns provided and
that every entry has been attested by the DDO before any
payment is made.
(x) Whether progressive totals of expenditure under various sub-
heads are being struck so that expenditure dues not exceed the
budgetary allotment.
(xi) Whether the vouchers bear dated acknowledgement of the
payment received together with a stamped receipt in case of
payments above the prescribed monetary value.
(xii) Whether all the vouchers for purchase of stores bear a certificate
by the competent officer regarding entry of stores in the stock
register, indicating the page number of the stock register; and a
certificate by the competent authority that the quantities of stores
received were in order and that the stores were according to the
approved specification.
(xiii) Whether a detailed contingent bill is sent to the PAO in respect
of amounts withdrawn on abstract contingent bill soon after the
money has been utilized and that the unutilized amount has been
refunded to the Government account.
(g) Advances
(i) Ascertain separately the number and amount of TA advances
and LTC advances outstanding as on the starting date of the
month of commencement of inspection? Also ascertain the year-
wise position.

58
 (ii) Why the advances pending for more than prescribed period
could not be recovered from the salary of the officials
concerned?
(iii) How many TA claims/LTC claims submitted by employees are
pending with the office for more than one month as on the
starting date of the month of commencement of inspection?
(iv) Whether control registers for all interest bearing and non-interest
bearing advances are maintained in order to keep watch on their
timely recovery. In this connection, check whether the House
building/Motor Cycle advances are being maintained in the
proforma as prescribed by Headquarters office and regularly
submitted to the Branch Officer/Group Officer watched through
Calendar of Returns. Also look into the aspects of obtaining
requisite documents and charging of penal interest at the
prescribed rates in case of defaulters.
(v) Enhancement of ceiling of House Building Advance (HBA)
sanctioned on or after 01.01.2016 but before 09.11.2017 (i.e.
difference between the previously sanctioned amount and the
new eligible amount) determined on the basis of basic pay as per
the 7th Central Pay Commission (CPC) was made after
complying with the conditions prescribed by OM dated
29.06.2018.
(vi) Check whether the repayment capacity of the official was
computed as stipulated in OM dated 09.11.2017.
(vii) Confirm that any amount of interest bearing and non-interest
bearing advances abolished by 7th CPC were continued to be
granted incorrectly.
(h) Leave Travel Concession
The following are the illustrative checks to be exercised/points to be
seen during Internal Audit of payments of LTC.
(i) Check whether declaration of home town has been received
from each official and recorded in the Service Book in
accordance with the applicable instructions.
(ii) Check whether the declaration of home town once made has
been allowed to be changed more than once during the service.
(iii) Check whether the concession is allowed to any Government
Servant or his family members where the official has not
completed one year’s regular service as on the date of journey
performed by him or by his family, as the case may be.
(iv) Check whether the concession to home town is allowed not
more than once in a block of two calendar years.

59
(v) Check whether any official undertakes the journey in a chartered
bus, van or other vehicles, which are owned by private operators
(vi) Check whether any official undertakes the journey in private
cars (the cost of propulsion being borne by Government Servant
himself)
(vii) Check whether the advance granted to the officials, if any, has
been adjusted in full.
(viii) Check whether any civilian official avails himself of LTC for
journey to any place in India for more than once in a block year
of four calendar years
(ix) Check to see that there is no bar for the Government Servants
and his family members to visit the same place or different
places of their choice (anywhere in India)
(x) Check to see that the leave travel concession for journey to any
place in India is allowed only in lieu of and in adjustment
against the leave travel concession to the home town including
concession, if any, carried forward to which an official may be
entitled at the time of journey to any place in India is
undertaken.
(xi) Check whether the officials are submitting adjustment bills
within the prescribed period after completion of the journey.
(xii) Check whether LTC was admitted to an employee while on
Child Care Leave (CCL) without obtaining prior approval of
appropriate competent authority to leave headquarters?
(xiii) Whether fresh recruits were allowed to travel to their hometown
along with their families on three occasions in a block of four
years and to any place in India on the fourth occasion and this
facility was made available only for the first two blocks of four
years applicable after joining the Government for the first time?
(xiv) Whether any cases of availing LTC during closed holidays only
without taking any leave was noticed?
(xv) Whether any re-imbursement was made in respect of air journey
performed by children having age below five years of
Government Servants who are not entitled for air travel in LTC
as the Railway authorities not charging children for such
journeys
(xvi) Whether the employees were allowed to travel by airlines other
than Air India for availing LTC on sectors where Air India
initially did not provide services but later started operation in
those sectors
(xvii) Check whether full re-imbursement as per the entitlement of the
Government Servant was admitted for journeys

60
 performed by dependent family members from any place in
India to Headquarters/place of posting of the Government
Servant and back.
(xviii) Whether Air Travel entitlement for LTC for employees of Level
6 to 8 of the Pay Matrix was admitted that eligible for TA in
violation of OM dated 19.09.2017?
(xix) Whether any daily allowance, incidental expenses and
expenditure incurred on local journey were incorrectly admitted
for travel on LTC?
(xx) Check whether in case of journey between the places not
connected by any public/ Government means of transport,
expenditure for travel by private/personnel transport was
admitted in excess of the maximum limit of 100 kms?
(xxi) Check whether the dynamic fare component applicable in
Rajadhani/Shatabdi/Duronto trains was reimbursed in cases
where a non-entitled Government Servant travels by air and
claims re-imbursement for the entitled class of
Rajadhani/Shatabdi/Duronto trains?
(xxii) Check whether in case of non-entitled Government Servant
travelling by air on LTC and claiming entitled rail fare, the
condition of booking the air tickets through authorized travel
agents was erroneously insisted upon?
(i) Medical re-imbursement
(i) Whether expenses incurred on the engagement of special
nurse/attendant/ayah at the residence of the patients were
incorrectly claimed and admitted?
(ii) Whether the re-imbursement for the different types of Intra-
ocular lens implants were limited to the rates provided in Rule 8,
GID (16) or the actual cost whichever is less?
(iii) Whether the serving central Government employees residing
within the municipal limits of the Central Government Health
Scheme (CGHS) covered city were given a one-time choice to
opt for CGHS (instead of Central Service (Medical
Attendance)(CS(MA))Rules) from the nearest CGHS wellness
Centre.
(iv) In the case of the following artificial appliances viz. supply of
the Heart pacemaker and the replacement of its Pulse Generator,
replacement of diseased Heart Valves, Artificial electronic
Larynx and Artificial Hearing Aid, once the instrument/
equipment was prescribed by the specialist in a Government
/Recognized hospital, whether the Administrative Department
had made the payment direct to the supplying agencies as
stipulated and not direct to the Government Servant?
(v) Whether the rates of monthly subscriptions for availing CGHS
facility were revised with effect from 01.01.2017 as stipulated in
OM dated 09.01.2017?

61
 (vi) Whether various entitlements of CGHS beneficiaries were
sanctioned as revised by OM dated 09.01.2017?
(vii) Whether the Government Servants who were on leave or
deputation abroad were reimbursed under CS (MA) Rules
erroneously?
(viii) Whether medical reimbursement claims of Government Servants
who were admitted in the hospital before retirement but
discharged from the hospital after a number of days on attaining
the age of retirement was not admitted?
(ix) Whether the sales tax paid by Government servant, while
purchasing special medicines from the market are not admitted?
(x) In case a Central Government Servant was transferred from an
area covered under CGHS facility to that under CS (MA) Rules
whether the family of that Central Government Servant was
allowed to avail CGHS facility for a period beyond six month
from the date of transfer?
(xi) Whether Out Patient Department medicines purchased by
CGHS beneficiaries were reimbursed?
(xii) Whether serving CS (MA) and CGHS beneficiaries were
granted 90% medical advance of the approved CGHS package
rates for all indoor treatments, irrespective of major or minor
diseases, on receipt of a certificate from the treating physician of
a government recognized hospital as per guidelines given in OM
dated 15.05.96 and OM dated 29.10.92 for CS (MA) and CGHS
beneficiaries respectively.
(j) Children Education Allowance
(i) Check whether the assistance was given to a child of
Government Servant without ascertaining that the child studied
in a recognized school.
(ii) It is to be ensured that the assistance was given to one of the
Government Servants only if both husband and wife are Central
Government Servants
(iii) Check whether the assistance was given to Government Servant
for period treated as dies-non.
(iv) It is to be ensured that in case of failure of sterilization
operation, the CEA/Hostel Subsidy was admitted only to
children born out of the first instance of such failure.
(v) Check whether hostel subsidy was reimbursed to Government
Servant for day-boarding children incorrectly?
(vi) Check whether fees paid to organizations/institutions other than
schools or private tutors were reimbursed?

62
 (vii) Whether the office had made reimbursement of CEA/Hostel
subsidy more than once in a financial year?
(viii) Whether the hostel subsidy was paid in respect of a child
studying in a residential educational institution located at a
distance less than 50 kms from the residence of the Government
Servant?
(k) Travelling Allowance
(i) Whether the entitlements on travel and transfer as revised in OM
dated 13.07.2017 were effected from 01.07.2017?
(ii) Whether it was ensured that the air tickets for official tour were
purchased only directly from Airlines or by utilizing the services
of M/s. Balmer Lawrie and Company Ltd, M/s Ashok Travels
and Tours and Indian Railway Catering and Tourism
Corporation Limited (IRCTC)?
(iii) Whether Government employees availing free boarding and
lodging, and incurred any expenditure on local travel, the re-
imbursement was made as per the rates provided in Para 2 E of
Annexure to OM dated 13.07.2017?
(iv) Whether claims for travelling allowance were submitted within
sixty days from the date of completion of the journey?
(v) Whether claims for travelling allowance of a Government
Servant had been allowed to remain in abeyance for a period
exceeding one year were investigated by the Head of the
Department?
(vi) Whether the taxes paid for hotel accommodation over and above
the travel entitlement ceiling were not reimbursed?
(vii) Whether if a Government Servant performs local journey, the
entitlements were limited as prescribed in letter dated
12.09.2018 of Deputy Secretary to GoI?
(l) Pensionary Benefits
(i) How many service books of officials who have completed 25
years of service or left with five years of service for retirement
are to be verified as envisaged in Central Civil Services (CCS)
(Pension) Rules as on date?
(ii) Whether there are any cases of persons who have already retired
from the office but whose pension cases/final payments of
Provident Fund (PF) have not been finalized? If so, the details of
each case and reasons for the delay may be obtained in the
following proforma:-
Sl. Name Design- Date Date Date Date of Date of Reasons Remarks
No. of the ation of of of Payment Payment for
official retire- PPO GPO of Leave of PF delay
ment encash- dues
ment

63
(iii) How many nominations for Central Government Employees
Insurance Scheme (CGEIS) in respect of the employees of the
office have been received, accepted and kept in Vol.II of the
Service Books? What action has been taken to obtain wanting
nominations? Whether the register for the purpose is being
submitted to the Branch Officer (BO)/Group Officer (GO)
periodically with analysis of wanting nominations?
(iv) Whether periodical physical verification of nominations for
family pension and DCRG was being carried out? If so, the
results of physical verification may be seen.
(v) Whether there are Court/ Central Administrative Tribunal (CAT)
cases regarding pensionary benefits? If yes, obtain full details.
(vi) Check whether undertaking to the pension disbursing bank was
submitted by the retiring Government Servant along with
pension papers.
(vii) Guidelines for furnishing photographs with pension forms were
adhered to?
(viii) Retirement gratuity and death gratuity to Government Servants
covered by National Pension System (NPS) were given in
deserving cases?
(ix) Whether the absorbee pensioners who had taken 100% lumpsum
amount in lieu of pension and 1/3rd pension had been restored
after 15 years, full pension were restored after the expiry of
commutation period of 15 years?
(x) Check whether divorced daughters were denied family pension
from the date of divorce where the divorce proceeding had been
filed in the court during the life time of the employee/pensioner/
or his /her spouse but divorce took place after their death?
(xi) Check whether childless widow of a deceased employee who
had expired before 01.01.2006 had been denied family pension
after her re-marriage which took place prior to/on or after
01.01.2006 even though fulfilling the condition that her
independent income from all sources was less than the minimum
prescribed pension.
(xii) Check whether contribution from the employees under the NPS
were recovered at the rates prescribed and credited along with
Governments contribution?
(xiii) Check whether employees under the New Pension System were
sanctioned withdrawal not exceeding 25% of accumulated
pension wealth of the employees contribution for specified
purposes only.

64
 (xiv) Check whether the various forms substituted by the amendment
to CCS (Pension) Rules, 1972 made with effect from 20.02.2014
have been used by the office for processing pension and other
related payments?
(m) Central Government Employees Group Insurance Scheme
The following points should be seen by Internal Audit parties.
(i) Whether the head of the office is maintaining a Register of
members in the prescribed form.
(ii) Whether nominations have been obtained by the head of office
from each member, that they have been pasted in the service
Books of the officials and that entries regarding the receipt of
nominations have been made in the Service Books.
(iii) Whether the subscription is being recovered from the salaries of
the members through regular pay bills at the prescribed rates.
(iv) That in case of death of a member, the insurance money has
been paid correctly to the nominee at the prescribed rates(In
addition, the member would be allowed the amount from the
Saving fund at the prescribed rates)
(v) That the amount of subscription under the old scheme has been
credited to the employees’ provident fund accounts as per orders
on this subject.
(n) Procurement of goods and services
(i) Whether the office is adhering strictly to the implementation of
policy for providing preference to domestically manufactured
electronic products in Government procurement?
(ii) Check whether the procedure followed for making public
procurement confirm to the yardsticks prescribed under Rule
144 of General Financial Rules (GFR) 2017?
(iii) Check whether the rate contracts published by Directorate
General of Supplies and Disposal (DGS&D) are followed, in the
case of goods which are not available on Govt-e-Market place
(GeM), to the maximum extent possible
(iv) Check whether goods or services available on GeM were
procured through other modes
(v) Check whether goods or services available on GeM were
procured through GeM following the procedure laid down under
Rule 149?
(vi) Check whether the procurement of goods through Limited
Tender Enquiry from Registered suppliers only
(vii) Check whether any bidder who was debarred under Section 151
of GFR has been allowed to participate in the procurement
process before completion of the stipulated period?

65
(viii) Check whether the goods or services, the procurement of which
are to be made mandatorily from the Agencies or items for
which price preference is given under Rule 153 are purchased
following the procedure prescribed?
(ix) Whether in all cases where purchases of goods upto the value of
25,000/- (Rupees Twenty five thousand only) on each occasion
made without inviting quotation, the certificate prescribed under
Rule 154 is attached?
(x) Whether purchases of goods costing above 25,000/- and upto
2,50,000/- was made on the recommendations of a duly
constituted Local Purchase Committee consisting of three
members of an appropriate level as decided by the Head of
Department?
(xi) Whether in case of direct procurement of rate contracted goods
from suppliers, check whether the prices to be paid for such
goods are exceeded those stipulated in the rate contract?
(xii) Check whether the tender enquiries, the corrigenda thereon and
details of bid awards are published on the Central Public
Procurement Portal (CPPP)?
(xiii) Whether for procurement of goods of estimated value of
25 lakh and above, invitation of tenders by advertisement (in
CPPP, on GeM and in the official website of the department) is
used?
(xiv) Check whether demand for goods are divided into small
quantities to make piecemeal purchases to avoid the necessity of
obtaining the sanction of higher authority required with respect
to the estimated value of the total demand.
(xv) Check whether when the estimated value of the goods to be
procured is upto 25 lakh, limited tender enquiry method is
adopted by sending copies of bidding document directly by
speed post/registered post/courier/e-mail to firms which are
borne on the list of registered suppliers.
(xvi) For purchasing high value plant, machinery etc. of a complex
and technical nature check whether two bid system
(simultaneous receipt of separate technical and financial bids)
are obtained and also check whether the financial bids of only
the technically acceptable offers were opened at the second
stage?
(xvii) In the case of advertised tender enquiry or limited tender
enquiry, check whether late bids i.e. bids received after the
specified date and time for receipt of bids were considered?
(xviii) Check whether single tender enquiry was resorted to in the
circumstances stated in Rule 166 of GFR only.
(xix) Check whether any maintenance contracts were entered into on
goods during its warranty period.

66
(xx) Check whether bid security (also known as earnest money)
ranging between two per cent to five per cent of the estimated
value of the goods to be procured was obtained in all cases
except from Micro and Small Enterprises (MSEs).
(xxi) Check whether there are any cases where the bid security
collected from the unsuccessful bidders not returned to them
after the expiry of the final bid validity or before the 30th day
after the award of the contract.
(xxii) Whether performance security for an amount of five to ten per
cent of the value of the contract and valid for period of sixty
days beyond the date of completion of all contractual obligations
including warranty obligations was obtained from the successful
bidder to whom the contract was awarded?
(xxiii) Whether there are cases where bid security was not refunded on
receipt of performance security?
(xxiv) Check whether advance payments were made to suppliers in
excess of the limit prescribed in Rule 172(1) of GFR 2017.
(xxv) Check whether the measures as laid down in Rule 173 of GFR
for ensuring transparency, competition, fairness and eliminating
arbitrariness in the procurement process were taken.
(xxvi) Whether to ensure efficiency, economy and accountability in the
Public Procurement System, the key areas mentioned in Rule
174 of GFR were addressed?
(xxvii) Check whether the official of the procuring entity or the bidder
has violated the Code of Integrity enumerated in Rule 175(i) of
GFR?
(xxviii)Whether approval of competent authority was obtained before
engaging consultants?
(xxix) Where the estimated cost of the consulting service is
upto 25 lakh, check whether a long list of potential consultants
was prepared on the basis of formal or informal enquiries from
other Ministries or Departments or Organizations involved in
similar activities etc.
(xxx) Where the estimated cost of the consulting services is above 25
lakh, in addition to preparation of long list as in (xxix) above,
check whether an enquiry for seeking ‘Expression of Interest
from consultants was published in the CPPP, on GeM and in the
official website of the Department.
(xxxi) Check whether the request for proposal (RFP) contained the
essential things stated under Rule 186 of GFR.

67
 (xxxii) Check whether the proposals were received from the consultants
in ‘two bid system’ with technical and financial bids sealed
separately.
(xxxiii)Check whether a Consultancy Evaluation Committee was
constituted and technical bids received were analyzed and
evaluated by this Committee.
(xxxiv) In cases where the three methods of selection of consultants viz.
1. Quality and Cost Based Selection. 2. Least Cost System and
3. Single source selection/consultancy by nomination were
followed, whether the conditions enumerated under Rule 192,
193 and 194 respectively were adhered to?
(xxxv) Whether the tender enquiry for outsourcing of services
contained the essential elements enumerated in Rule 200?
(xxxvi) Check whether for invitation of bids for estimated value upto 10
lakh, preliminary list of likely contractors were scrutinized, a
limited tender enquiry was issued to the prima facie eligible and
capable contractors asking them to submit their offers within a
specified date and time.
(xxxvii) Check whether for invitation of bids of outsourcing services
for estimated value above 10 lakh, advertisement on CPPP, on
GeM and in the official website of the Department was given.
(xxxviii) In cases where non consulting service was procured from a
specifically chosen contractor, check whether the circumstances
leading to such procurement by choice and the special purpose it
would serve were clearly recorded.
(xxxix) Whether the service of Multi Tasking Staff (MTS) were utilized
for the duties including ‘watch and ward’?
(xl) Whether the outsourcing of MTS were done in accordance with
the percentage of vacancy in MTS cadre in accordance with
relevant provisions of GFR after obtaining administrative
approval from Headquarters Office?
(xli) Whether MTS were allotted with the duties enlisted in the
Circular No.18-NGE/2010 of 28.06.2010 from Headquarters.
(o) Purchase of Stationery
(i) Whether the head of office has incurred expenditure on purchase
of stationery in excess of the powers delegated to him.
(ii) In case the head of office has incurred expenditure in excess of
powers delegated to him, whether the same is regularized by
obtaining sanction of the competent authority.

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(p) Staff Cars (Government Vehicles)
In respect of offices maintaining staff cars/vehicles, the Internal Audit
party should see that following records are maintained:
(i) Log Book for each staff car in form SY 263
(ii) A register of repairs and replacements indicating the cost and
dates.
(iii) A register showing the cost of petrol, Mobil Oil etc. consumed
and all incidental expenditure.
(iv) An inventory of equipment.
(v) Check whether any expenditure was incurred for taking
insurance against third party risk of staff car in violation of
Headquarters instructions?

(q) Log Books

While scrutinizing the log books and their records the following points
should be borne in mind:-
(i) It is maintained in the prescribed form.
(ii) The entries made in the log book are in ink.
(iii) The entries of mileage at the beginning of the journey and also
at the completion of the journey are noted by the officers using
the staff cars themselves except in the case of officers of the
rank of Joint Secretary and above where these entries may be
made by their Private Secretaries/Personal Assistants.
(iv) The log books are scrutinized by the head of Office (or senior
officer of the rank of Joint Secretary in Secretariat offices) to
ensure that there is no misuse.
(v) That the log books are closed at the end of each month, and
summary showing details of off duty and on-duty journey
performed during the month is prepared in the prescribed
proforma.
(vi) That the staff cars are used for bonafide official duties at
headquarters.
(vii) That the staff cars have not been taken outside headquarters
without the approval of the competent authority.
(viii) That staff cars are not used for non-duty purposes to the places
of entertainment, public amusement, play-grounds, pleasure trips
etc. and by officers on leave.
(ix) The sanction of CAG has been obtained for all cases of
replacement of staff cars.
(x) That the average monthly consumption of petrol/diesel per
kilometre is calculated at the end of each month and that this
average is not on the higher side.

69
 (xi) The cost of repairs and replacement is not on the higher side
(xii) That the replacement of the spare parts are not frequent.
(xiii) The reasons for frequent repairs/breakdown of the vehicles are
not such as to indicate any negligence on the part of the drivers.
(xiv) All the bills paid towards the cost of petrol are entered in the
Petroleum Oil and Lubricants (P.O.L) Register as well as in the
log book and that the entries agree.
(xv) It should also be seen that DDO has recorded the following
certificates on the contingent bills relating to payment of petrol:-
a. Certified that the quantity of petrol purchased has been
entered in the log book of the respective vehicle.
b. Certified that the necessary recoveries have been made/are
being made from the parties concerned who have used the
staff car for non-duty journeys.
(xvi) That all non-duty journeys are charged at the rates specified in
Rule 21 of the Staff Car Rules and the charges at these rates are
recovered promptly and for the distance covered by the staff car
from the time it leaves office/garage till returns to office/garage.
(xvii) That the controlling officer has personally checked the inventory
of equipment every month and any loss arising out of negligence
is made good through appropriate recovery.
(xviii) That no cleaner has been appointed for cleaning of the staff car.
(xix) That no extra allowances is paid to staff car drivers for cleaning
and washing of the cars as this forms a part of their duty.
(xx) That the staff cars are not parked at the residences of the drivers
or of the officials.
(r) Grants-in-Aid
(i) Scrutinize the methods by which the sanctioning authority
satisfy itself of the fulfilment by the grantee of the conditions
precedent to the issue of sanction.
(ii) Test check of the accounts or the returns submitted by the
grantee to see that the conditions were actually fulfilled.
(iii) The test check referred to above is conducted normally in the
office of the sanctioning authority. It should be seen that before
sanctioning grants-in-aid, the sanctioning authority has satisfied
itself that proper arrangements exist for the scrutiny of the
accounts of the grantees and that rules have

70
 been framed to ensure that grants are utilized by the grantees for
the purpose for which they are intended and that unspent
balances are refunded to Government after the close of the
financial year.
The following points should receive special attention:
(iv) The grant-in-aid was properly spent on the specified objects
within the time allowed in the sanctioning order or within a
time, if no limit has been fixed.
(v) Money has not been unnecessarily drawn in advance of the
requirements to avoid lapse of funds.
(vi) The conditions attached to the grants-in-aid are fulfilled.
(vii) Any portion of the amount of grant-in-aid which is not
ultimately required for expenditure upon the specified object is
promptly refunded to Government and that no unspent balance
of the previous grant-in-aid, if any, is lying with the grantee.
(viii) That the register of grants-in-aid is maintained by the
sanctioning authority in a proper form and all columns provided
therein are complete and correctly filled in.
(s) Stock registers
A. Accession Register
(i) Whether Accession Register as prescribed in GFR is maintained
for codes and Manuals, Secret Memorandum of Instructions and
other books and physical verifications as contemplated in MSO
(Admn.)Vo.-I is being carried out annually? When was the last
physical verification? What action was taken to set right the
discrepancies?
(ii) What are the names of local manuals maintained in the office
(Group-wise)? Which is their year of print (1st edition)? which
is the year of latest publication?
(iii) Whether up to date correction slips have been issued and pasted
in the respective manuals?
(iv) Whether any of the manuals were revised/updated in accordance
with Headquarter office instructions?
(v) Whether any manuals are lying with Government/other printing
presses for printing? If yes, since when and what efforts have
been made by the office to get the manuals printed early?
(vi) Whether proper record of books issued to various functional
groups/Sections and field parties have been maintained and
availability of books reported by them annually, before the date
of annual physical verification of books.

71
 (vii) Ascertain the value of books purchased during last three years
indicating the value of Hindi and English books purchased.
(viii) Ascertain the details of review of old books/codes and manuals
conducted during last years to weed out the books which are not
required.
(ix) Similar information may be obtained in respect of sale of waste
paper, scrap, etc.
B. Computers, Printers or other machines
(i) Whether proper records are maintained regarding all machines
and equipment and whether any accounting machines,
duplicators, computers, printers or other machines are lying out
of order? If so, details thereof may be obtained along with the
dates from which they are lying out of order and action taken to
get them repaired? In case any of them are unserviceable, the
action taken to dispose them off may be verified.
(ii) Whether annual physical verification was conducted? If so,
when such last verification was done and with what results?
C. Dead Stock Register
(i) When was the last stock verification of dead stock articles
carried out? Whether the verification disclosed any
Surplus/Shortages? If so, whether the shortages have been got
regularized and surplus taken to stock?
(ii) Whether a separate register of repairable /unserviceable furniture
maintained to account for the repairable and unserviceable
items.
(iii) Whether furniture articles are lying in unserviceable condition?
If so, what steps have been taken to get them repaired or to
dispose them off?
(iv) Expenditure (year wise) incurred on repair of furniture during
last three years may be collected and reviewed.
(v) Whether all the consumable and non-consumable items are
entered in the registers?
(vi) Whether proper record is maintained in respect of furniture and
other items supplied to officers’ flat/residence for official use
vis-à-vis scale of furniture admissible?
(vii) Whether proper records are maintained relating to procurement
of forms and stationery including indents for their distribution
and stock in hand?
(viii) Whether Inventory Registers and History Sheets of machines
purchased including computers, AC, coolers, vehicles,
photocopiers, vacuum machines, shredders,

72
 printers, servers, Fax machines, UPS, EPBX system etc. are
maintained properly.
(ix) Whether a stock register of computer hardware and software
maintained to record all purchases made indicating their
machine nos./configuration details.
(x) Whether the surplus or obsolete or unserviceable goods of
residual value above 2 lakh are disposed of by (a) obtaining
bids through advertised tender or (b) public auction by following
the procedure stipulated in Rule 219 and Rule 220 of GFR,
2017?
(xi) Ascertain the total number of fire extinguishers in the office and
their location.
(xii) Ascertain whether all the fire extinguishers are in working
condition. What is the date of expiry of their refill? Is periodical
mock firefighting exercise is done?
(xiii) How many persons have been given training in firefighting?
(xiv) Whether all stock items having identification letters/numbers
marked/painted on them in accordance with Headquarters
instructions?
D. Asset Register
(i) Check the maintenance of Asset Register of physical assets and
furnishing of returns to Headquarters, in accordance with
Headquarters instructions.
(ii) Check whether the fixed assets are physically verified once in a
year and outcome recorded in the Asset Register.
(t) Old Records management
(i) Whether registers of files are maintained year wise by each
section?
(ii) Whether files for more than two years are reviewed annually by
each section to weed out/transfer the files to old record section?
(iii) Whether any regular review was being done regarding files and
records and weeding them as and when necessary? If so, period
up to which records destroyed/weeded out may be
obtained/checked.
(iv) Whether Old Records Register was being maintained? The
records for the third preceding year are required to be sent by
various sections. Verify the position of receipt of records in the
Old Records Section.
(v) Whether physical verification was being done continuously in a
phased manner, i.e., section-wise in such a way that all sections
are covered in a spell of two years?

73
 (vi) Whether orders from Group Officer for weeding out/destruction
were obtained and whether the registers were submitted to the
Group Officer after doing needful?
(u) System of receipt and issue of letters
(i) Whether periodical verification by the Branch Officer are being
made in accordance with Office Procedure/Manual with all
connected records to see that all letters received are diarized,
action taken and all letters received for issue were despatched in
time?
(ii) Whether the letters required to be sent by E-mails are sent by E-
mail? If not reasons for the same may be examined
(iii) Whether the Dak monitoring system has been computerized as
instructed by Headquarters.
(iv) Whether there is any delay in distributing the letters among
concerned sections/wings?
(v) Whether the letters are diarized in each of the sections and
letters are delivered to concerned officials and acknowledgement
obtained and also disposal indicated properly by recording
relevant file number in which the letter was dealt with.
(vi) Whether weekly/fortnightly report of outstanding letters is being
prepared and submitted regularly and submission watched
through Calendar of Returns.
(vii) Whether all the letters to be issued are issued immediately?
(viii) Whether there is a system to update the addresses of the
different offices from time to time to avoid transit loss, etc.?
(v) General Maintenance
Check whether the Record (or General) Section is making satisfactory
efforts for the maintenance of the following (Give remarks as
satisfactory/unsatisfactory).

No. Item Remarks

(i) State of lawns, gardens, open space around office
(ii) State of lawns and garden and open space around
residential houses
(iii) State of toilets in office
(iv) Cleanliness of corridors and stair cases
(v) State of lifts
(vi) Appearance of office building
(vii) State of tables, chairs and side shelves in section
(viii) State of recreation
(ix) Firefighting equipment
(x) Cleanliness of canteen and hygiene in kitchen and
canteen

74
(xi) State of water coolers, air-conditioner and Water
filters
(xii) Clean look of curtains, walls, floors, windows,
doors, fans and lights in sections
(xiii) Wearing of uniforms, shoes and caps by staff to
whom liveries are supplied
(xiv) State of compound walls, security fences and
deployment of watch and ward staff in office and
residential premises (separately)
(xv) Upkeep of records
(xvi) Maintenance of old record section/room
(xvii) Display of office circulars in notice board and their
periodic removal

(w) Expenditure
The essential points to be seen in the Internal Audit of expenditure are
as follows:-
(i) That payments made by the cheque drawing DDOs are in
accordance with the rules and orders governing them, their
arithmetical calculations are correct and the
recoveries/deductions made from bills are in order; and that the
list of payments accompanied by paid vouchers are sent every
week by them as per instructions to the concerned P.A.O by the
prescribed dates.
(ii) For expenditure beyond the powers of head of Office, there
exists a sanction, either specific or general, accorded by the
competent authority.
(iii) For every payment made, there is a voucher complete in all
respect or a certificate of payment where it is not possible to
support a payment by a voucher.
(iv) There is a provision of funds sanctioned by the competent
authority.
(v) The expenditure has not been incurred solely to prevent lapse of
budget allotment.
(vi) In case of work done or purchases made, the accepted tender
along with the rejected tenders, comparative statements and
notices of tender are available in the office of the accepting
authority along with the reasons for non-acceptance of lowest
tender.
(vii) The payment has been made to the proper persons and it has
been acknowledged and recorded so that a second payment on
that account is not possible.
(viii) The charges do not exceed the rates or scale fixed under
rules/orders issued by the competent authority.

75
 (ix) The payments have been correctly accounted for in the initial
accounting records.
(x) Sub-vouchers and acquittance for amounts up to Rs.100/-and
retained by the DDO are marked cancelled, after their entry in
the contingent charges register, so as to prevent further use of
the vouchers.
(xi) Sub-vouchers for amounts in excess of Rs.100/-have been sent
to the Pay & Accounts Office concerned along with the bill.
(x) Telephones register
The following points should be borne in mind while conducting the
audit of telephone Bills/Register of Telephones and other connected
records.
(i) that telephone with STD facility has been provided to the
officers entitled to the facility.
that the telephones register for bi-monthly rent and call charges
is being maintained to prevent double payment.
(ii) that ISD facility is allowed on official telephone in respect of
Administrative Secretaries only.
(iii) that officers below the rank of Deputy Secretary, official
telephone with ISD facility is provided by the Administrative
Secretary/Head of Departments in consultation with the
concerned Financial Advisor.
(iv) that residential telephones are allowed to officials below the
rank of Deputy Secretary or equivalent on functional basis
subject to the condition that this facility should be restricted to
25% of the sanctioned strength of Group ‘A’ Officers in that
office.
(v) that officers of the level of Secretary and equivalent are entitled
to one mobile handset costing not more than 25,000/- once
during the whole tenure.
(vi) that the telephone charges are reimbursed based on the level
/designation and the rates issued in OM dated 26.03.2018.
(vii) that no SIM cards are provided by the office
(viii) that there is no separate ceiling for the
landline/mobile/broadband/mobile data/data card.

(y) (i) Liveries Account

While conducting Internal Audit of the liveries account, it should be
seen that the provisions contained in the Hand Book of Uniforms have
been observed by the D.D.O. In particular it should be seen:-

76
 (i) That the Register of Liveries is maintained by Head of office in
the prescribed form and entries in regard to receipts as well as
issue of Liveries to Group ‘C’ and Group ‘D’ officials are made
in the register under proper attestation.
(ii) That issue of liveries for Group ‘C’ and Group’D’ officials have
been made according to the prescribed scale.
(iii) That washing allowance is paid to Group ’C’ and Group ’D’
officials in accordance with the rules and orders issued by the
Government of India from time to time and in case of officials
proceeding on leave for more than 15 days in a calendar year,
necessary recoveries on account of washing allowance have
been effected from their salary bill for the month of January
each year.
(iv) That the uniforms have been issued only to those employees
who are eligible.
(v) Measurement card for each employee is maintained in the
prescribed form.
(vi) Where the local purchase of articles of uniform beyond the
normal limits laid down by DGS&D becomes necessary for
some administrative reasons or delay by DGS&D etc. specific
permission for the same is obtained from DGS&D or CAG's
office.
(vii) That the uniforms have been withdrawn from employees who
have either resigned or have been discharged or promoted to the
post where such uniforms would not be used.
(y) (ii) Stamp account
The stamp account should be scrutinised to see that
(i) The daily account of stamps is maintained properly in the
prescribed form under proper attestation.
(ii) The stock of closing balance has been correctly carried over
under proper attestation.
(iii) All purchases have been entered in the register.
(iv) The physical verification has been conducted at the end of each
month and the certificate to that effect recorded.
(v) All issues are supported by proper receipts.
(vi) Denomination wise closing balance has been entered at the end
of each month.
(z) Consumption of Electricity
It should be seen that economy instructions issued by the Government
of India in connection with the consumption of electricity in
Government offices etc. are duly observed. In the

77
 case of Central Government Installations/Workshops etc. where the
consumption of electricity is very high and where high voltage
transformers have been installed for the bulk supply of electricity, it
should be seen that average actual consumption of electricity is not less
than minimum limit for which the charges are levied by the Electricity
Board. If the actual consumption of electricity is much less than the
sanctioned load, the departmental officers may be advised to consider
the possibility of a reduction of the sanctioned load so as to save
expenditure on electricity due to excess billing.
Electricity used in Government Offices is exempt from levy of
electricity duty. It should be seen that such duty has not been paid and
wherever paid it should be pointed out for recovery.
(aa) (A) Office Building
(i) What is the number of buildings along with floor area in which
the office is located?
(ii) How much floor area is available vis-à-vis the actual
requirement as per approved scale?
(iii) How much area is in possession/owned (indicating if title deed
with PAG or Central Public Works Department (CPWD) and
leased (separately) used for office.
(iv) Ascertain the Average Gross office area per employee (taking
Group A to C) together excluding casuals) as per previous 1st
March.
(v) In case of building taken on rental basis for office ,what is the
rent per month and whether the same is covered by fair rent
certificate?
(vi) Whether any proposal was sent to Headquarters Office for
acquiring of land/building for office ? If yes, when and what is
the present status of the proposal?
(vii) Whether any land is possessed by the office for construction
purpose?
(a) What are the plans for construction?
(b) Whether Administrative Approval/Financial Approval have
been obtained?
(c) Whether the work is executed through CPWD or any other
agency?
(d) What were/are the stipulated dates of commencement and
completion of the works?
(e) Whether any cost/time overruns occurred, examine the
reasons therefor?
(f) What is the expected date of completion in case of delay?

78
 (g) Whether adequate mechanism exist for supervision of
execution of the works regarding
quality/specification/timelines.
(h) Whether copy of the contract agreement concluded for
construction of office building is available to ensure/check
that the work is being executed as per specifications asked
for and concluded.
(i) Whether any periodical reports on the progress of work is
obtained from CPWD?
(viii) Whether there has been avoidable loss on account of payment of
rent for rental building due to delay in execution/completion of
the civil and other works.
(ix) Whether Estate Manager (Ministry of Urban Development) was
requested to allot space for the office? If yes, when and how
much?
(x) Whether space has been allotted by the Estate Manager, if yes,
when and how much?
(xi) Whether the space allotted by Estate Manager is adequate and
suitable for the purpose.
(xii) Whether the space allotted is taken into possession? If not,
reasons thereof.
(xiii) Whether any notice has been received from the Estate
Manager/headquarters office for de hiring the rental
accommodation as per the time schedule prescribed
(xiv) What action has been taken to de-hire the rental accommodation
as desired by Estate Manager/Headquarters Office?
(xv) Whether the office building needs to be
renovated/reconstructed/restored?
a. If yes, whether future requirement like generating more
space, provision for computerization, modern and modular
furniture/fixture, integration and co-ordination among
various Offices/Wings, functional smoothness etc. have
been taken care of.
b. Whether any consultant architect has been engaged for the
purpose? If yes, the basis for selection, his past experience,
quantum of fees and other terms and conditions for payment
of fees may be ascertained.
c. Whether the work is to be got executed through CPWD or
private agency? If through private agency, what is the basis
for selection of the agency and what are the terms and
conditions of the contract.
d. In case of restoration/renovation/reconstruction of heritage
building, whether the contractor has got

79
 adequate experience for similar type of works? If not,
reasons to select such contractors may be examined.
e. Whether the stipulated time schedule has been adhered to?
f. Mechanism evolved to ensure appropriate quality, quantity
and timeliness in the work.
g. Whether bar chart was prepared for completion of various
activities as per the time schedule.
h. Whether there were time/cost overruns; if so, examine the
reasons therefor.
i. Whether various activities got disturbed due to non-
completion of one/two key activities in time? If yes, action
taken to overcome the bottlenecks.
j. Whether periodical meetings were convened by the
designated authority to get the work completed in time and
as per specifications.
k. Whether effective pursuance were made to get required
clearance from local bodies and whether the project got
delayed for want of required clearance from local bodies?
(xvi) Whether any position of the building/space has been given on
rent to any Government office/Private agency? If yes, how the
rent was fixed and whether with the permission of Headquarters
Office?
(xvii) Ascertain the Office accommodation area not used for seating
staff or officers but used for storing Records Stationery, Stores,
Recreation Club, Co-operative Society, Garage, Cycle Shed,
Canteen, Post Office, bank etc.
(xviii) Whether proper arrangements are made for safe guarding by
Watch and Ward of the office building?
(xix) Whether adequate firefighting equipment with trained personnel
exists?
(xx) Whether the office is sending Quarterly Return to the
Director(Works), Headquarters on works for which
administrative approval and expenditure sanction have been
accorded by Head of Department in the previous quarter?
(xxi) Whether regular mock drills are organized? If yes, list the
incidence of mock drills for last five years.
(xxii) Whether annual Joint Fire Safety Evaluation with CPWD & Fire
Services Department is conducted? Details of the same may be
checked.
(xxiii) Whether rear building exit plan is explored during mock drill?

80
 (xxiv) Whether physically handicapped persons are included in mock
drill?
(xxv) Whether sign boards in the corridors and passages giving
guidelines while making exit through all fire safety routes are
arranged?
(xxvi) Whether fire safety doors are painted with fire resistant paint?
(xxvii) Whether fire resistant construction materials, hardware, paint,
wires etc. are used for construction, repairs renovation and
upgradation of buildings?
(xxviii)Whether a fire accident team is trained in each floor of the
office?
(xxix) Whether the vacant office space, if any, is handed over to the
concerned CPWD enquiry, under intimation to Directorate of
Estates, Ministry of Urban Development, Government of India?
(xxx) Whether digital photographs are sent in case of progress report
on major works through e-mail to Principal Director (HQ) and
Director (Works)?
(B) Residential Buildings
(i) Ascertain the total staff strength (Persons in Position) category-
wise.
(ii) Number of staff quarters available (type I to type V)
(iii) Whether details of fixture and fittings have been noted in the
register of buildings to check during handing/taking over of each
quarter as well as for maintenance purpose.
(iv) Ascertain the number of staff staying in quarters (type I to type
V)
(v) Ascertain the number of staff staying in rented accommodation
who are eligible for accommodation (type I to type V)
(vi) Ascertain the percentage utilization of staff quarters (type I to
type V)
(vii) Ascertain the total number of applicants in waiting list (type I to
type V)
(viii) Ascertain whether any residential quarter had been allotted to
CPWD/State Electricity department etc., If so, under what
authority.
(ix) Ascertain the total number of quarters required (type I to type V)
i.e. total of column (iv + viii).
(x) Ascertain the number of quarters proposed for
construction/hiring on lease hire/purchasing ready built houses.

81
(xi) Whether the staff quarters are physically checked periodically
by a nominated officer to see that no quarter is unauthorized
sublet/occupied. Whether any register has been maintained to
record results of verification and follow-up action if any.
(xii) Ascertain the total number of quarters occupied unauthorized
/illegally by employees/families of employees/others.
(xiii) Whether action has been taken against the unauthorized
occupants as per rule including recovery of penal licence fee?
(xiv) Whether quarters have been proposed to be purchased from any
private agency, Housing Board, Development Authority etc.
(xv) Ascertain
 the total number of houses proposed to purchase along with
justifications
 From whom they are proposed to be purchased and basis for
selection of site and agency.
 Whether rates are justified and approved by headquarters
Office?
 Stipulated and actual dates of taking over possession of the
houses.
 Reasons for delay in taking over possession, if any.
 Whether agreement has been executed with the agency from
whom the houses were/are purchased.
 Whether any advance has been given to the agency on this
account.
 Whether there is a clause in agreement for accruing interest
on advance given to the agency in case of delay on the part
of the agency in handing over possession?
 Amount of cost escalation.
 Whether entire escalated cost has been borne by the Office?
If yes, examine the justification thereof.
(xvi) Whether any land has been procured for construction of
residential houses? If yes, from whom and whether procured at
market rate or concessional rate?
(xvii) Whether all legal formalities like registration of deed etc. have
been completed and the land is free from all encumbrances?
(xviii) Whether plans have been prepared to construct houses on the
land procured? If yes, ascertain:

82
 (a) Category-wise details of the houses along with
justification
(b) Whether administrative Approval/Financial Approval have
been obtained.
(c) Whether the plan of the building was approved by local
authority
(d) Whether the work is executed through CPWD or other
agency.
(e) What were/are the stipulated dates of commencement and
completion of the works?
(f) Whether any cost/time overrun. If yes, reasons thereof.
(g) What is the expected date of completion of the work
incase of delay?
(h) Whether adequate mechanism exists for supervision of
execution of the works regarding
quality/specification/timeliness.
(xix) Whether Government accommodation is available and
employees are staying in rental houses resulting in payment of
House Rent Allowance (HRA)? If yes, reason for non-occupying
the Government Accommodation by the employees may be
ascertained.
(xx) Whether electricity is purchased by the office and supplied to
the employees at fixed rate? If yes, the reasons of procurement
and distribution of the electricity along with total amount of
difference between both of them may be obtained.
(xxi) Whether periodical surprise inspections are conducted to ensure
that only allottees are living in Government Accommodation? If
yes, how many times? Results of the surprise inspections may be
checked.
(xxii) Whether any house/space is used for non-residential purpose? If
yes, by whom and for what purpose? Whether any action has
been taken in this regard?
(xxiii) How are the security, sanitation and cleanliness arrangements in
the residential quarters?
(xxiv) Whether there is any system/mechanism to invite/entertain
suggestion and complaints regarding maintenance, security,
sanitation and cleanliness arrangement in the residential houses?
If yes, how many suggestion/complaints were received and what
action was taken thereon?
(xxv) How is it ensured that at the time of vacating the house, the
occupant obtains no dues certificate from all the concerned
Agencies/Authorities and the house surrendered is ready to be
allotted to another applicant?

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 (xxvi) Whether the rates and terms of Guest Houses are amended and
implemented with effect from 01 February 2011?
(xxvii) Whether revised flat rates of Licence Fee for the General Pool
Residential Accomodation (GPRA) at Poonkulam and
Melethumele have been implemented with effect from 01 July
2017?
(xxviii)Whether there is any case of unauthorized occupation and
subletting of GPRA? If yes, the rates of damages for the same is
levied as prescribed in OM dated 07/09/2016?
(xxix) Whether there are any cases of retention of General pool
accommodation on retirement of allottees after the extended
period of 6/8 months. If yes, whether licence fee is deducted as
per OM dated 31.07.2013 of Directorate of Estates?
(xxx) Whether the vacant spaces, if any, are utilised as per the order
prescribed in the Headquarters order dated 26.06.2009?
(xxxi) Whether the documents mentioned in Headquarters Letter No.
67/W&PG/10-99/Vol III dated 02.03.2010 is forwarded to
Headquarters in support of the work estimates?
(ab) IT Support Cell
(i) What is the total number of Personal Computers
(PCs)/laptops/Servers/Printers etc. in the office?
(ii) Whether returns required to be sent by Email are sent to
headquarters by E-mail.
(iii) Whether Computers, UPS, Laptops etc. were purchased during
last four years? Entire details of the same may be obtained.
(iv) Whether the computers and other hardware items were
purchased following GFR procedures?
(v) Who are the annual maintenance contractors for computers etc.,
What is the basis of selection of the contractors? Whether the
annual maintenance rate exceeds 6% of the cost of the items?
Whether Annual Maintenance Contract (AMC) is given with
prior approval of HQrs/Competent Authority?
(vi) How is performance of AMC contractors? In case of any
dispute, please give the details.
(vii) Whether all computers are Unicode enabled so as to use Hindi
text processing?

Name of Number of Total no. of No. of each machine on

software Licenses machines on which installed along with
which location/room no. where
installed the machine is placed

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 (viii) Whether arrangements have been made for uninterrupted power
supply to all computer machines. In this connection please
collect information in the following proforma:-
(i) UPS (size in KVA) Numbers Total KVA

(ii) Machines No. covered under UPS No. not covered under
UPS
Servers
PCs
Printers

(ix) Whether backup of important data is regularly taken?

(x) What is the frequency of data backup?
(xi) On what media is the backup taken?
(xii) Whether backup data is stored offsite? If so, the location of
storage.
(xiii) Whether physical verification of computer hardware done?
(xiv) Whether promotion/posting orders are hosted in Office website?
(xv) Whether tour programmes of field parties are hosted in the
website?
(xvi) Whether the website is updated regularly?
8.03 Audit of FINAT Section
1. Use of Voucher Level Computerisation in Audit
Various modules available in Voucher Level Computerisation (VLC)
are to be utilized for effecting the required audit checks.
a. Budget and Appropriation module
The following points are to be seen.
(i) Whether DDO based Budget and expenditure is studied to see
unusual excesses, savings and expenditure pattern for Audit and
planning for Audit.
(ii) Whether monthly appropriation audit is conducted regularly.
(iii)Whether areas where substantial excess expenditure occurred have
been identified for in depth analysis.
(iv) Whether the monthly check provide the basis for annual
appropriation audit.

85
(v) Whether a comprehensive review of budgetary procedure is
conducted based on the persistent savings/excess in the past years and
current year’s figures.
(vi) Whether re appropriation orders are issued by competent authority
not in excess of the total grant amount, not for new service, or new
instrument of service, not from one grant to another and not from
voted to charged and vice versa, not from plan to Non plan and vice
versa.
(vii) Whether a quarterly review is conducted regarding Treasury
Accounts, distribution of accounts/vouchers to section, their
compilation and consolidation to identify the areas of weakness if
any.
(viii) Whether the delay in submission is analyzed and comment included
in Chapter 1 of Audit Report.
(ix) Whether Central Audit Parties perform a quarterly review of receipts
and issue of suspense slips, Departmental Adjusting Accounts (DAA)
(suspense) broad sheets and Objection Book (OB) suspense.
(x) Transfers from consolidated Fund to Public Account is analyzed and
commented in Audit.
(xi) Whether statistical sampling is used for selection of Vouchers in
Central Audit as well as local audit.
(xii) Whether amounts transferred to various autonomous bodies is
analyzed and commented upon in Chapter 1 of Audit Report in case
sizable amount of Government Budget has gone out of audit purview.
(xiii) Whether the scheme Reviews on the basis of details captured in
VLC regarding allotment and release of funds Audit has commented
on cases where funds could not be spent due to delay in
allotment/release of funds or where the funds were released at the fag
end of the year.
(xiv) Whether the inputs like monthly civil accounts, appropriation
accounts, unadjusted AC Bills, NIL payment vouchers, errors noticed
in the vouchers relating to a Department are used by audit in
conducting integrated audit.

Part II
(i) Whether it is examined that variations under Revenue Expenditure,
Capital expenditure, Loans and charged and voted categories have
been separately worked out and acted upon.
(ii) Exhibition of expenditure in Appropriation Accounts follows the
provisions in the Budget. Whether it is also ensured that there are no
mistakes in carrying out the annual adjustments and or following the
‘Accounting’ Mechanism as stipulated in the Budget estimates.

86
(iii)Whether comments on defective budgeting are highlighted
considering abnormal savings/excesses, surrenders, re appropriation
etc.
(iv) Transfer Entries are not passed to transfer funds to schemes that were
not provided for in the Budget.
(v) Government has discharged liabilities for guarantees due to default in
repayment of loan and interest by the loanee institution. If yes in
how many cases and how much amount was involved.
(vi) Whether loans were guaranteed for institutions whose past record of
repayment was poor. If yes, in how many cases and how much
amount was involved.
b. Book Module
Finance Accounts
(i) Whether the number and size of withdrawals from contingency Fund
have been analyzed and commented up on?
(ii) Whether advances from contingency Fund and their subsequent
recoupment is watched carefully to ensure that they are properly
accounted for and that there is no omission?
(iii)Whether it is ensured that payments made by Reserve Bank of India
(RBI) through daily scrolls are properly accounted for by treasuries
and that there is no omission regarding rectification?
(iv) Whether it is ensured that minus balances wherever occurring in the
Finance Accounts are suitably explained by means of a Foot Note and
whether it is investigated for reconciliation/rectification as they may
throw up misclassification of transactions in accounts.
(v) Whether the balances under debt, deposit and remittances heads are
reviewed and verified. It may inter alia be seen how far the final
results of detailed accounts kept, work up to and agree with the
balances in the ledger.
(vi) Whether a trend analysis of the current year and past four years has
been made and comments included in Chapter I in respect of
i Assets and liabilities
ii Revenue Receipts
iii Tax revenue
iv Non Tax Revenue
v Sectoral expenditure
vi States Share of Union Taxes and duties
vii Grant in aid from Central Government
vii Interest payments
ix Loans and advances by State Government
x Capital expenditure
xi Revenue deficit

87
 xii Internal debt
xiii Fiscal deficit
xiv Other liabilities
xv Loans and advances from Central Government and Ways and
Means advances.
1. Whether the investments by the Government and cash balances
have been analyzed that these are not unauthorized, irregular and
unsound.
2. Audit Checks to be exercised based on Financial Attest Auditing
Guidelines for audit of State Government Accounts
(i) Whether the FINAT is entrusted with the planning, execution,
reporting and documentation of audit of Finance Accounts and
Appropriation Accounts as well as coordination with the other
teams in the Financial Audit Wing (FAW) dealing with scrutiny of
vouchers, sanctions etc.?
(ii) Check whether the FINAT coordinates with audit teams
contributing to Financial Attest Audit (FAA), local audit parties
responsible for substantive audit as part of FAA and Treasury
Inspections teams of office of Accountant General (A&E)?
(iii) Check whether the internal control assurance given by AG(A&E) is
validated by independent test checks?
(iv) Check whether assurance from the Finance Department /other
departments is obtained through A&E office or directly, on the
correctness of the data (on guarantees given by State Govt.,
investment in Statutory Corporations/Govt. companies, incomplete
works etc.,) depicted in the annual accounts to be certified?
(v) Check whether independent test checks are conducted for
confirming the robustness of the systems prevalent in these
departments for completeness and accuracy?
(vi) Check whether it is ensured that risk analysis of account areas,
accounting information, accounts rendering units, expenditure
incurring units and revenue collection units are decided prior to
commencement of audit?
(vii) Check whether appropriate sampling methods as provided in
Chapter 2 and 4 of FAA Manual are applied to draw the sample
transactions for the conduct of FAA and the same are communicated
to a FAW, field audit parties and treasury inspection teams?
(viii) Whether 100% check of the transactions and related heads of
accounts detailed in para 2.18 of Financial Attest Auditing
Guidelines for audit of State Government Accounts (FAASGA) is
done?
(ix) Whether a ‘Matrix’ showing, the assertions sought to be proved,
samples of transactions and vouchers selected for carrying out the
test, substantive audit tests to be carried out

88
 and the responsibility centre for the substantive test was prepared?
(x) Whether the receipt of ‘Information sheets’ based on the ‘Matrix’
supplied to all the audit teams involved in the FAA of Finance
Accounts and Appropriation Accounts (FA&AA) showing, the
nature for substantive audit test, the units/accounts area/account
information on which the test was carried out and the result of the
substantive audit tests carried out by FAW, Local Audit Parties and
Treasury Inspection units is monitored?
(xi) Whether the ‘information sheets’ are received in FINAT after
vetting by the concerned HQrs section?
(xii) Whether an assurance has been received from the AG(A&E) that the
budget data was correctly transferred to the VLC system?
(xiii) Whether check of IT controls in the VLC system has been
conducted as a preparatory activity to assess the reliability of the
systems?
(xiv) Check whether the audit checks stipulated in para 3.7 were carried
out while auditing sanctions for the purpose of audit of Finance and
Appropriation Accounts?
(xv) Whether the Register showing the irregularities noticed during the
audit of sanctions has been maintained and list of unsettled cases are
being sent to FINAT in March?
(xvi) Whether FINAT analyses the unsettled cases received and
appropriate decisions are taken while conducting the audit of
Financial statements?
(xvii)Whether copies of contracts endorsed to Audit are also being
scrutinised?
(xviii) Whether the vouchers are audited as per detailed guidelines
given at Annexure E of FAASGA?
(xix) Whether the results of the Central and Local Audit of vouchers
are communicated to FINAT in the information sheet
(Annexure C of FAASGA) on a monthly basis?
(xx) Whether the sampling methodology adopted in the selection of
vouchers is shared with the AG(A&E) for selection of
transactions to be examined during treasury inspections?
(xxi) Whether it is ensured that checks on financial controls in
treasury and on selected transactions are carried out during
Treasury Inspection as per Annexure F of FAASGA?
(xxii) Whether AG (A&E) sends quarterly reports on issues noticed in
Treasury inspection to the Audit office?
(xxiii) Whether FINAT has analysed the inputs from desk audit and
local audit of selected vouchers, treasury inspection

89
 reports and monthly accounts to ascertain their impact on the
financial statements?
(xxiv) Whether the result of the aforesaid analysis of the inputs is
reported in the Report on State Finances, if considered
significant, or informed to the State Govt. in the form of a
Management Letter?
(xxv) Whether detailed audit of the monthly civil accounts, Report on
Monthly Expenditure (Monthly Appropriation Accounts) for
the months of September, January, February, March
(preliminary) and March (supplementary) has been conducted
by FINAT?
(xxvi) Whether the Monthly Civil Accounts is audited in accordance
with the audit checks given in annexure G of FAASG?
(xxvii) Whether the Report on Monthly Expenditure (Monthly
Appropriation Accounts) are audited in accordance with the
audit checks given in Annexure G of FAASGA?
(xxviii) Whether FINAT has test-checked the transactions indicated in
the ‘Verified Date wise Monthly Statements’ for each month?
(xxix) Whether FINAT has conducted review of at least two grants
which were selected for audit based on professional judgment?
(xxx) Whether a Register to record errors and omissions noticed
during audit of Monthly Civil Accounts, Report of Monthly
Expenditure is maintained by FINAT?
(xxxi) Whether unsettled cases which may have impact on accuracy or
completeness of Finance and Appropriation Accounts are
considered for audit comments for qualification of accounts as
well as for inclusion in State Finance Audit Report (SFAR)?
(xxxii) Whether entry conference has been done before the start of
Phase II of audit implementation?
(xxxiii) Whether AG(A&E) and sub Auditor (AG (E&RSA)) have
participated in the Entry Conference?
(xxxiv) Whether for auditing the statements of Finance Accounts and
Appendix of Finance Accounts, the audit checks as prescribed
in the Annexure I of FAASGA are applied?
(xxxv) Whether for auditing the final Appropriation Accounts, the
audit checks as prescribed in Annexure J of FAASGA are
applied?
(xxxvi) Whether a confirmation report on the audit checks included in
Category I: ‘Automated checks’ is obtained from AG (A&E)?

90
 (xxxvii) Whether draft Note to Accounts (NTAs) are vetted before
inclusion in the Accounts?
(xxxviii) Whether the audit observations elaborating and accentuating the
NTAs are communicated to AG (A&E) and State Govt. and
considered for inclusion in the State Finance Audit Report?
(xxxix) Whether the draft audit comments on the Finance and
Appropriation Accounts are sent to the Finance Department for
their replies and a copy has been sent to AG(A&E).
(xl) Whether Exit Conference with Finance department to discuss
the draft comments on accounts and issues relating to
certification has been conducted?
(xli) Whether AG (A&E) and Sub-Auditor (AG(E&RSA)) are
requested to participate in the exit conference?
(xlii) Whether the minutes of Exit Conference has been prepared and
issued to the State Govt.?
(xliii) Whether ‘Audit File’ as prescribed in para 4.1 of FAASGA is
maintained?
(xliv) Whether the ‘Assurance Memo’, to provide assurance to the
controlling ADAI/DAI about the completeness and robustness
of the process being followed while compiling and certifying
the accounts by the concerned authorities, is sent to
Headquarters?
(xlv) Whether unqualified opinion with emphasis of matter is given
when the financial statements present a true and fair view, but
there are certain issues or concerns which are to be brought to
the notice of stakeholders as part of the audit opinion?
3. Checks based on Practice Note dated 27.03.2019 of Professional
Practices Group
(i) Whether it is ensured that the certified Finance and Appropriation
Accounts and SFAR are presented to the State Legislature
simultaneously?
(ii) Whether deviations, if any, from the process of financial attest
audit as prescribed in Financial Attest Audit Manual 2009 and
brought to the notice of DAI/ADAI concerned before forming/
expressing the audit opinion on the Govt. Accounts?
(iii) Whether cases of scope limitation are brought out in the Audit
Certificate and SFAR?
(iv) Whether before making any comment/qualification in the Audit
Certificate/SFAR, the matter has been brought to the notice of
Finance Secretary or Chief Secretary?

91
 (v) Whether cases of persistent irregularities noticed in the
management of State Finances, the underlying risk and
recommended course of action are brought out in the audit
observations included in SFAR?
(vi) Whether cases of ‘Emphasis of Matter’ included in the Audit
Certificate as per format prescribed in the Practice Note?
(vii) Whether non-compliance to rules and procedures on issues like
National Pension Scheme, Personal Deposit Accounts, Reserve
Funds, AC/DC bills and utilization certificate of Grant-in-aid
vouchers have been considered for Emphasis of
Matters/Qualifications as per instructions contained in the Practice
Note 1 of 2019?
8.04 Central Audit
a. Audit of Vouchers
(i) In case of the sample selected for review whether the prescribed
checks (including checking of classification etc) were exercised.
(ii) Whether the selection of vouchers for central Audit was based on
any risk assessment using Computer Centric Techniques?
(iii) Payment of money by transfer (NIL payment Vouchers) from the
consolidated fund to the public Account (deposit Heads, Panchayat
Accounts etc) are required to be scrupulously audited and
reviewed every month and receipt of a certificate that this has
been done is to be watched by Integrated Audit Unit (IAU)
Sections. Has this been done?
(iv) After scrutiny of such NIL payment vouchers, the I.A.U Sections
are required to furnish a consolidated report every month to Report
Section detailing such NIL payments effected during the month.
Has this been done?
(v) All purchases made in proforma invoices and the materials which
have not been received and taken to stock are to be audited in
detail and Central Audit parties should furnish details of such
purchases to I.A.U Sections for further follow up action. Has this
been done?
(vi) The Central Audit of vouchers pertaining to a month should be
conducted as soon as the monthly accounts are closed and the
posting of the vouchers in the registers prescribed is completed by
the Accounts Office. Has this been done?
(vii) In case of any departure from (vi) above, special circumstances
should exist and express sanction of competent authority should be
obtained. Has this been done?
(viii) A specific schedule indicating the dates by which the Central
Audit process relating to each month’s vouchers to be completed
should be prescribed and clearly set out in the office Manual. Has
this been done?

92
 (ix) Ascertain the quantum of arrears on account of any delay in
Central Audit Work.
(x) Special attention is to be paid to Central Audit of vouchers for the
month of March. Has this been done?
(xi) Co-ordination with Accountant General (A&E) and Audit Office.
See whether a good degree of coordination and cooperation exists
between the two offices.
(xii) Review whether statistical sampling techniques are adopted to
facilitate an objective approach in audit.
(xiii) Review whether the duties and responsibilities of Central Audit
personnel are broadly as indicated in Chapter I, Section III of
MSO (Audit) and any local manuals. Also review whether any
changes in the distribution of work are ordered in writing by the
competent authority.
(xiv) Review how Senior AO/AAO ensures that all members of Central
Audit Party perform their duties promptly, regularly and
efficiently, guides the staff under him and always keeping himself
posted with the progress of audit.
(xv) Whether portfolio files for, centrally sponsored and state plan
schemes are maintained and reviewed.
(xvi) Vouchers and other documents which were not received with the
monthly accounts, on receipt subsequently are to be audited in the
same manner as received at the stipulated time. Has this been
done?
(xvii) Cases where certificates of payments are received in lieu of lost
vouchers or payees receipts are to be audited in detail as a special
case, in the same manner as original vouchers even if they have
not been selected for audit. Has this been done?
(xviii) Acceptance of certificates of payments in lieu of wanting paid
vouchers is to be done in accordance with the monetary units
prescribed, after exercising the primary accounting checks with
same manner as in the case of original vouchers. Has this been
done?
(xix) Particulars of certificates of payments so accepted are to be
recorded in a register maintained for this purpose. Has this been
done?
(xx) Unusual features of maladies related to the non-production of
original vouchers noticed in the course of audit of these certificates
of payments are to be brought to notice of Audit officer for further
investigation. Has this been done?
b. Audit of sanctions
(i) Copies of sanctions issued by the State Governments and their
subordinate authorities are received by IAU Section concerned and
examined in accordance with the relevant

93
 instructions in the MSO (A) and local manuals before admissions
in Audit. Has this been done?
(ii) Whether a data base of sanction orders is maintained in the
prescribed manner?
(iii) Review whether the Audit Office has made arrangements for the
receipt, processing and scrutiny of sanctions and maintenance of
files/folders in a regular and systematic manner.
(iv) The IAU Section is required to communicate objections arising out
of audit of sanctions to the departments concerned with copies
thereof to the Accounts office and closely watch their settlement.
Has this been done?
(v) The audit office should evolve suitable procedures for ensuring
that the results of all sanctions are readily available before the
Central Audit of the relevant transactions take place.
(vi) All sanctions relating to foreign travel received in IAU Section
should be entered in a register and copies made available to
Central Audit parties for arranging audit of the related
transactions. Has this been done?
c. Audit of Abstract Contingent Bills
The AC Bill register maintained in the office of the Accountant
General(A&E) is to be checked in detail by the Central Audit Parties
with reference to the AC Bills and Non-payment Detailed Contingent
Bills received from the compilation sections and cases of amounts
drawn on AC bills and kept outside Government Accounts particularly
in the month of March are to be collected and pursued with the
Department/Government by IAU Section for inclusion in the Audit
Report. Has this been done?
i. Completion of audit
After scrutiny and editing of audit notes/memos, the IAU Section
forward them in convenient batches to the Departments concerned.
Has this been done ?
ii. Pursuance of objections
The audit office is required to be watching the systems and procedures
for and the effectiveness of pursuance of objections of an accounting
nature, such as non-availability of DC Bills, vouchers, payees’ receipts,
errors in the treasury accounts etc. that are required to be watched by
A&E office and should audit, to the prescribed extent, these wanting
documents. Has this been done?
8.05 Audit of Audit Planning and Co-ordination Cell
The following checks are to be exercised while conducting the Internal
Audit of the Audit Planning and Co-ordination Cell:

94
 (i) Whether the various reports are submitted to the Accountant
General on time?
(ii) Whether the reports to CAG office are sent on time?
(iii) Whether circular instructions are issued on common matters
relating to the functional wings?
(iv) Whether a data base of all the audit units is prepared and updated
regularly?
(v) Whether the Special Purpose Vehicles (SPVs) and Trusts/Societies
implementing beneficiary oriented schemes are included in the
data base as implementing units?
(vi) Whether the selected samples of implementing units contained
SPVs and Trusts/Societies?
(vii) Whether the regulatory bodies under the jurisdiction of the office
are included in the data base maintained for planning purpose?
(viii) Whether the planning and conduct of the compliance audit of
Regulatory bodies become a part of the annual compliance audit
plan of the office?
(ix) Whether an upto date database of Public Private Partnership (PPP)
projects is prepared to enable selection of a sample of such
projects during regular audit of the public partner?
(x) Whether a suitable mechanism has been devised for obtaining the
details of PPP arrangements regularly?
(xi) Whether the indicative risk factors for PPP arrangements provided
at annexure II of the Guidance Note dated 24.08.2016 of
Professional Practices Group is used to select a sample of PPP
projects?
(xii) Whether the budget documents, budget speech and important
policy decision of the Government were analysed and used the
inputs from those documents to improve the audit plan?
(xiii) Whether the guidelines issued for identifying the risk areas were
followed during the preparation of audit plan?
(xiv) Whether the data from VLC/audit entity/third party is used for risk
analysis and audit planning?
(xv) Whether a data base of topics which can be taken up for
Performance Audit/Compliance Audit with feedback from
functional wings is maintained?
(xvi) Whether an updated data base on paper clippings/media reports is
kept?
(xvii) Whether the risk assessment of Apex audit units, Audit units and
Implementing units is made as per provisions of Compliance
Auditing Guidelines, 2016?
(xviii) Whether three year rolling audit plans are prepared?

95
 (xix) Whether at the end of each year, the plan for the remaining two
years is re-visited and plan for the third year added?
(xx) Whether in alignment with the three year rolling strategic audit
plan, the Annual Audit Plans are prepared and approval of CAG
received?
(xxi) Whether the annual audit plan has been approved by Audit
Planning Group before sending the same to CAG office?
(xxii) Whether audit plan is prepared keeping in view the instructions
issued by Headquarters office regarding standard for number of
man hours per person per annum for computation of staff strength?
(xxiii) Check the comprehensiveness of Audit Plan (including I.T audit
Plan) vis-à-vis availability of staff, priority for inspection and
periodicity adopted for local audit of units/formations.
(xxiv) Whether the Audit Planning Group meets from time to time to
review the implementation of Audit Plan.

8.06. List of Returns to be sent to Headquarters

Sl. Name of Return Due Date

No
C.Cell
1 Return on APARs in respect of Gazetted (except the Yearly (Second week of
Commercial officers posted in E&RSA) and Non-Gazetted December)
employees
2 Return on disciplinary cases and details of complaints First week of every month
regarding sexual harassment of women at the workplace
3 Return of the cases reviewed under FR 56 (j) and rule 48 of Quarterly (First week of the
CCS (Pension) Rules, 1972 month following the quarter)
4 Report on vigilance cases against Gazetted Group ‘B’ and Half Yearly (First week of the
Non-Gazatted Group ‘B’ and ‘C’ staff in IA&AD and month following the half year)
Review mechanism to ensure probity among Government
servants
5 Return on court cases, vigilance and disciplinary cases in Half Yearly (First week of the
respect of Commercial Officers. month following the half year)
6 Position of blank answer books, Printed, utilised , in stock Half Yearly (First week of the
etc. in respect of various offline mode Departmental month following the half year)
examinations
Estate
1 Return relating to private/State Government building hired By July of every year
for office accommodation/Rest House/Guest House etc.
2 Availability of residential accommodation in IA & AD By 15th January and 15th July
Cash
1 Settlement of terminal claims and other complaints of retired 10th – Monthly
employees
2 Statement of Pension and other retirement benefits – 1st – Quarterly
complaints of retired officials/employees

96
 Sl. Name of Return Due Date
No
3 List of Central Government Servants (IA&AS) who 31st January - Annual
completed 18 years of service
4 Monthly expenditure statement of HBA 5th – Monthly
5 Acknowledgement of Permanent Advance 15th April - Annual
6 Review of Expenditure (RoE) statement for full year after 10th July - annual
closing supplementary account (March Final)
7 Budget proposal for subsequent year and RE for current year 30th September - Annual
8 RoE of Gr. A &Gr.B and non-Gazetted staff 2nd – Monthly
9 Statement of expenditure in respect of Loans and advances – 15th – Monthly
other than HBA
10 Report on pending AC Bills/TTA/LTC/TA claims for more 10th – Monthly
than Six months
11 Report regarding actual expenditure on Pay and various 30the April, 31st July, 31st
allowances October & 31st January
12 Flash figures for the month of February and March – 15th February - Annual
Monitoring of expenditure
Legal Cell
1 Quarterly return of legal cases pertaining to employees of IA By 15th of January, April, July
& AD & October of every year
2 Quarterly return of legal cases of non-employees of IA & AD By 5th of January, April, July &
(Non-IA & AD cases) October of every year
3 Right to Information By 15th of January, April, July
& October of every year
Administration
1 Details showing the number of posts of AOs as on 1st of each 2nd week of every month
month, No. of posts filled, on leave etc.,
2 Statement showing sanctioned strength & staff in position 10th of every month
3 Monitoring of SS & PIP through WEB based application 10th of every month
4 Report on caste verification of Gr. B.C.D employees Bimonthly
appointment on or after 01.01.1995 on the basis of ST
Certificate
5 Report on caste verification of Gr. B.C.D employees Bimonthly
appointment on or after 01.01.1995 on the basis of ST
Certificate (comml.)
6 Report of surplus/deficit SAS 15th of every quarter
7 SAS/DAE staff waiting for promotion as AAO/Auditors 5th January and July
8a Half Yearly distribution list of IA&AS officers and materials 10th of June and December
for all India, Civil List
b Half Yearly distribution list of IA&AS officers and materials 3rd January
for all India, Civil List –Amendments
9 Information relating to Telephone List/Distribution of Gr. A As and when changes occur
officers and other information
10 Personnel including AOs on deputation within and outside By 15th January and 15th July
each Audit Office
11 Half yearly report for monitoring the conduct of IT Audit test By 31st January and 31st July
for Sr.AO/AO/AAO

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 Sl. Name of Return Due Date
No
12 Reservation of vacancies for Ex-servicemen in Group ‘C’ & By 15th January and 15th July
Group ‘D’posts
13 Reservation of posts to the physically handicapped persons By 15th January and 15th July
14 Name of officials who have been on deputation/foreign By 15th January and 15th July
service for a period exceeding 3 years
15 Half yearly report on the compulsory training in Typing to By 15th January and 15th July
Group D promoted Clerks
16 Half yearly report on special casual leave 10th January and July
17 Engagement of retired officials on short term contract basis 10th of April and October
18 Monitoring of pending compassionate appointments 10th April and October
19 Report regarding checking appointment roster by ITA 1st of April every year
20 Report regarding checking promotion roster by ITA 1st of April every year
21 Details of Office bearers of recognized association and 1st of July every year
audited statement of accounts (If not available before 30th
June, the position to be intimated to CAG in July)
22 Gradation List 15th of June every year
23 Eligibility List of AOs for consideration to IA&AS (List will 31st January of every year
be received from CAG)
24 Application for continuance of temporary posts of GOs 1st week of February
25 Proposals for continuance of casual/temporary posts 1st week of February
26 Information regarding post of Hindi work (Staff proposal 30th April
file)
27 Memorandum/Petitions addressed to CAG withheld (Nil 30th April
report not to be sent)
28 Information about utilization of no. of vacancies reserved and 15th February
filled up by the physically handicapped candidates in group
‘C’ & Group ‘D’ posts for the year ending 31st December of
each year. Report in Proforma PWD I& II)
29 Annual Return regarding utilization of number of vacancies 31st January
reserved and filled by Ex-service men for the period ending
31st December each year
30 Annual Statement in SC/ST/OBC/PH-Report I showing the 15th February
representation of SC/ST/OBC/PH as on 1st January and
number of appointments made during the year
31 Report for monitoring & recruitment of minority 20th April
communities
32 Annual Review of Existing Committees by AG End of October
33 Submission of documents of recognized associations 1st July of every year
34 Annual return regarding membership position of Commercial 5th August of every year
Association
35 Annual return of Sexual Harassment of women at work place 1st April
36 Annual return on Compassionate Appointment 30th April
37 Representation of women in IA&AD 15th April every year
38 Annual report on sports quota appointments 15th January every year
Training
1. Report regarding progress of implementation of the Scheme By 10th April, July, October and

98
 Sl. Name of Return Due Date
No
of In-house training No.210/IN-house/Trg/BRS2012 dated January of every year
30.09.2012
2. Annual in house calendar No.210/In-house/Trg/35 28th February every year
Audit Planning and Coordination Cell
1. Annual Report/Performance Report 20th October every year
2. Progress report on revision/updation of manuals 15th April every year
3. Audit plan September every year
4. Report on important points noticed in Central audit 1st May and 1st November every
year
5. Report on fraud/presumptive fraud cases noticed in audit 1st May and 1st November every
year
6. Quarterly Progress Report By 15thApril, July, October and
January of every year

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 Chapter 9

Internal Audit of Functional Wings

9.01 As stated in the beginning of Chapter 8, the Office of the Accountant

General (G&SSA) has three Groups other than Administration: Social &
General Sector I including Local Bodies (SS I & LBs), Social & General
Sector II (SGS II) and Social & General Sector III (SGS III). Of the
above, SSI & LBs is entrusted with the audit of accounts of State
Department/agencies/PSUs, Autonomous Bodies grouped within ‘Social
sector’ and the Technical Guidance and Supervision (TGS) functions
relating to audit and accounts of Local Bodies. The checks to be
exercised while auditing this Group are given in Chapter 10. SGS II and
SGS III wings have been entrusted with the audit of accounts of
departments/autonomous bodies/Corporations/PSUs coming under the
Social and General Sector. The certificate of expenditure on Centrally
Sponsored Schemes implemented by a Department is done by the group
which is doing the audit of that Department. The certification work of
Externally Aided Projects is carried out by SGS II wing.
With a view to assess the functioning of the wings, the following
records/information/clarifications on the various aspects such as
preparation of audit plan, audit programme, technical support, supervision
of audit parties, approval and pursuance of 1.Rs.etc. may be
obtained/checked. In addition to the above, checks based on Compliance
Auditing Guidelines, 2016 and Guidance Note No.226-09-PPG/2017 dated
23.08.2017 are also to be exercised.
9.02 Audit Plan
1. Whether list of auditable units/cycle index register is updated annually.
What is the mechanism applied for its timely updation annually?
2. Whether audit cycle register or database showing periodicity of audit is
maintained?
3. Whether frequency/periodicity of audit was reviewed. If so when?
4. Whether any criteria was spelt out for deciding the periodicity.
5. Obtain three years data showing the status of units planned for audit as
under.
Year Units due for audit as Units provided for audit in Units actually
per laid down the Audit Plan audited during the
periodicity year

6. Whether analysis of man days available and man days utilized for audit
was done? If so, details for last three years may be obtained.
7. Whether any deviation from the audit plan has taken place and, if so
reasons for justification.

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 8. Whether instructions issued by Headquarters from time to time
regarding audit of autonomous bodies are being followed.
9. Whether all the units auditable under Section14(1) and (2) of
Comptroller & Auditor General India’s DPC Act are being audited as
per periodicity of audit prescribed.
9.03 Audit Programming
1. Review the composition of party / manpower available.
2. Whether Annual Audit Programme drawn up including all auditable
units due during the year; if not ascertain the reasons therefor and
whether the shortfall was provided for in the succeeding year.
3. Whether arrears in audit were shown in the arrear report sent to
Headquarters.
4. Whether quarterly programmes are framed in time and issued to the
parties.
5. Whether auditee institutions are informed in advance.
6. Whether questionnaire/list of records to be kept-ready for audit party is
also enclosed.
7. Whether any change in the duration made.
8. Whether such programmes are approved by AG/GO.
9. Whether there is a system of rotation of party personnel.
10. Whether there is a system of rotation of auditee units. Whether names
of audit party members are noted in the register of auditable units along
with the dates of audit.
11. Whether good practices guides for each of the major audits are issued to
audit parties.
9.04 Technical
1. Whether any specific audit manuals were compiled. If so when?
2. Whether party personnel were provided with copy of manuals?
3. Whether guard file of Memorandum of Association/Articles of
Association, important circulars/instructions etc. is maintained by
Headquarters controlling section and important orders circulated to
OAD parties for information and verifying their implementation.
4. Whether individual Audit Note Books are maintained and updated.
5. Whether there is a system of cross referring in respect of points noted
during audit of accounts with transaction audit and vice-versa and
points noted during Central audit with local audit and vice-versa.
6. Whether the audit parties are briefed before commencement of audit
programme.

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 7. Whether there is a system of centralized scrutiny of agenda and minutes
of Board Meetings, sanction, purchase cases, important vouchers etc.
and communication of results of such scrutiny to the audit parties for
detailed examination.
8. Whether list of all Acts and Rules and Journals etc. applicable to each
of the Auditee units has been kept and relevant books are available
readily.
9. Whether press cuttings/News items pertaining to each of auditee unit
are submitted to the Head of Office and results of examination watched.
10. Whether minutes of periodical meetings held by GO with Senior
AOs/AAOs are kept and circulated for compliance of decision taken in
the meeting.
11. Whether any system is in vogue to keep a watch on the amendment in
the Accounts, Rules etc. affecting auditee institution.
12. Whether concurrent audit is done for major contracts and agreements.
13. Whether the registers of important points to be seen for each auditee
units are maintained
14. Whether auditee Profile/database is updated after each visit/audit.
9.05 Supervision
1. What is the extent of supervision by Senior AOs of field parties?
2. How many units remained unsupervised during last three years?
3. What is the extent of supervision by GO?
4. Whether any record of original work done by supervising Senior
AO/GO is kept in audit files.
5. Whether list of objections issued by each member of the audit party as
well as supervising Senior AO/GO as a result of original work done is
kept in the audit files to record contributions of each official.
6. What is the impact on quality of audit due to supervision by GO?
7. Whether AG conducted any supervision of field officers/Parties. If so,
details for last three years may be collected/ checked.
8. Whether tour notes are regularly submitted every month by GOs to AG
bringing out the work done.
9. What are the basics for allocating party days for the audit of various
auditees? Whether any study has been conducted in this regard.

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9.06 Working papers and documentation
1. Whether and on what basis that work has been distributed amongst
members of a party.
2. What is the extent of original work done by Senior AO and whether it
was adequately mentioned in the Title sheet?
3. Whether details of work done by each party member are available?
4. Whether these have been reviewed at appropriate level.
5. Whether all entries in the Title sheet been made and reviewed.
6. Whether there is sufficient indication as to the availability of Key
documents in the file.
9.07 Reporting
1. Whether the Inspection Report (IRs) has been drafted by Senior AO.
2. Whether IRs have been submitted to Headquarters in time and in cases
of delay, whether reminders are issued and reasons for delay recorded
for further action.
3. Whether the IRs have been properly numbered, referenced and
approved.
4. Whether the IRs have been issued within one month as per
Headquarters instruction? Tabulate instances of delay for last two years.
5. Whether IRs have been suitably pursued and followed up and suitable
entries made in the IRs Register. Status of IRs settled during last 12
quarters and pending for above 6 months (page wise) may be obtained
in tabular format.
6. Whether IRs are submitted to AG for review? If so, quantum of IRs
reviewed may be collected.
7. Whether periodical review of old IRs have been made and results
recorded?
8. Whether IR files are called for by AG for review and proper follow up
action taken on the directions of AG and proper records of IR files
called for is maintained.
9. Whether summary of outstanding IR paras is submitted to AG
periodically.
10. Whether reply to IR paras put up to GO with vetting remarks.
11. Whether instances wherein Central Government funds have been
misutilised or unutilized by State Government were brought to notice of
Ministries.
12. Whether details of any records not made available/not examined due to
paucity of time are reported.

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9.08 Potential Draft Para/Draft para Register
1. Whether there is a system of marking Potential Draft Para (PDP) cases
at the time of approval of IRs.
2. Whether instructions exist to collect copies of supporting documents in
respect of each fact and figure for the IR cases proposed to be
considered as a potential draft para case and cross linked.
3. Whether such PDPs marked as identified, segregated and action taken
immediately to process the same as Draft Para (DP).
4. Whether proper pursuance of such PDPs like collection of wanting Key
Documents (KDs), obtaining timely response from
Auditee/Government, obtaining required classifications/ information
etc. done.
5. For settlement/dropping PDPs, at what level decision is taken?
6. Whether system of periodical review of PDP register exists?
7. What is the mortality rate of PDPs marked? Whether reasons for high
mortality rate are analysed?
8. Whether any system for other paras (Part II C, Part III), minor
irregularities exist with a view to identifying PDPs and incorporating
them in the reviews.
9. Whether Audit Reports of other states are studied to identify the cases
for working them to get examined by field audit parties to check similar
nature or irregularities for possible comments through Audit Report? If
so whether cases identified are noted in the register to watch results of
examination?
9.09 Draft paragraphs and material for Audit Reports
1. Whether timely action i.e. within six months of issue of IRs, been taken
for issue of identified DPs to the management?
2. Whether DPs are processed and issued on a regular basis or bunched?
3. Whether timely action is initiated for obtaining reply/additional
information etc.
4. Whether arrangements for timely verification of reply and collection of
KDs/information made?
5. Whether Audit committee meetings are organized regularly to
settle/pursue the paras?
9.10 Important and interesting cases noticed in Audit
1. A gist of all important cases dealt with by various sections is required
to be circulated among other sections as and when they arise. Has this
been done?
2. A gist of important and interesting cases noticed in Audit is to be
compiled, half yearly and forwarded to the CAG

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 so as to reach him by the 7th of January and July every year or such
other date as may be prescribed for circulation among other Audit
Offices. Only the cases on which final views have been formulated and
which are likely to be of interest to other Audit offices are to be
included in the digests. Has this been done?
9.11 Audit of Autonomous Bodies
1. Whether instructions issued by Headquarters office to improve quality
of audit and contents of Separate Audit Reports (SARs) of autonomous
bodies are being scrupulously followed.
2. Whether claims for Audit Fee were raised/initiated on completion of
audit and pursued effectively for early realization? Status of Audit Fee
outstanding may be obtained.
3. Whether all reports and returns as directed by Autonomous bodies wing
of Headquarters are being rendered regularly and monitored through
Calendar of Returns.
4. Whether records of Autonomous Bodies, Programme Book, detailed
instructions and data sheet on autonomous bodies are being maintained.
5. Whether audit of Branch units are being conducted, watched and
consolidated IRs are being prepared as per instructions issued by
Headquarters from time to time.
6. Whether for the audit of autonomous bodies and issue of SARs time
schedule/instructions prescribed by Headquarters from time to time are
being followed.
7. Whether various circular letters/instructions are made available to audit
parties before proceeding for the audit and audit parties are briefed for
compliance of Headquarters requirements.
8. Whether procedures have been streamlined with a view to ensure that
audit of autonomous institutions is not omitted to be taken up through
inadvertence as per instructions issued by Headquarters from time to
time.
9.12 Audit Certification of Externally Aided Projects
1. Whether the matter of non-receipt of SOE was taken up demi-officially
with the Head of the Department of the project implementing agencies
by 1st May of every year.
2. Whether the list of Externally Aided Projects which requires audit
certification has been forwarded to the Accounts and Entitlement office
and copy of the list sent to Headquarters.
9.13 Information Technology Audit
1. Whether a complete data base has been prepared regarding the auditee
units which have computerized their operations/functions.
2. Whether the data base is updated periodically.

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3. What is the system of updating the data base-by visiting the unit or by
calling for information?
4. Whether progress of computerization of functional activities in various
auditee units/organizations has been obtained/ascertained to know the
areas of computerization/ software programme developed/being
developed by each auditee departments and year wise details of
expenditure incurred on computerization programme.
5. Whether any training plan to impart training to members of field audit
parties in respect of software/computer programmes developed/being
developed by major auditee units have been drawn up? If so number of
officials trained during last three years may be obtained.
6. How many units have been identified as significant for Information
Technology (IT) Audit and based on what criteria?
7. How many IT trained officers are available in the office?
8. Whether these officers were trained abroad or in RTIs/RTCs or through
hands on training or through private trainers or on their own efforts.
9. Whether guidelines and instructions issued on IT Audit reporting issued
by DG/PD (IT Audit) are being followed strictly.
10. Whether training modules have been prepared/developed/arranged to
impart training to IT auditors.
11. Whether required infrastructure/logistics are available in the office for
IT auditors.
12. How many units were due for IT audit during last three years and how
many were audited.
13. Whether the IT audit findings were included in the Audit Report.
14. Whether all the instructions and manuals etc. issued by Headquarters
office on IT Audit are available in the office and provided to auditors.
15. Whether the IT audit parties are briefed properly before taking up IT
audit.
16. Whether all the IRs on IT audit have been sent to Headquarters office
within stipulated time incorporating replies of the auditee organizations.
17. Whether in IT audit, General Controls and Application Controls have
been examined thoroughly.
18. Whether the IT audit was carried out in accordance with the
instructions or guidelines prescribed by IT Audit wing of Headquarters
Office.

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9.14 General Points to be seen
1. Maintenance and updating of Registers including Calendar of Returns
2. Closing and submission of registers to officers.
3. Maintenance of IR Register, Performance Register and other registers.
4. Submission of various returns to Headquarters.
5. List of files, Index Register of files etc.
6. Weeding out of old records.
7. Whether correspondence to Headquarters have AG’s approval or not.
Instances may be examined.
8. Effectiveness and efficiency of the in house training programmes,
utilization of slots, coverage and the extent to which they are related to
the audit needs.
9. Whether attempts have been made towards investigative audit. If yes
important points noticed in this regard.
9.15 Quality of audit output
1. Status of total number of Inspection Reports issued during last four
years.
2. Number of Inspection Reports issued with Major objections.
3. Number of Major objections approved as PDP cases/DPs issued and
featured in the Audit Report.
4. P.D.P to DP conversion ratio over last four years.
9.16 Checks based on Compliance Auditing Guidelines, 2016
1. Check whether the Compliance audits are planned to achieve adequate
coverage at an acceptably low level of audit risk, audit processes are
carried out in an economic, efficient and effective manner and result in
a high quality audit report.
2. Check whether list of Apex Auditable Entity, Audit Units and the
implementing units is maintained?
3. Check whether risk profiling of Apex Auditable Entities and Audit
Units are done after reviewing the documents mentioned in para 3.11 of
Compliance Auditing (CA) Guidelines?
4. Based on the risk profile, an Annual Audit Plan of Compliance Audits
to be taken up and completed during the year is prepared?
5. Whether the risk profile of the Audit units are reviewed and updated
periodically to assess continued maintenance or to consider revision on
the risk profile assigned to the Apex Auditable Entities and Audit units
based on new intervening developments, changes etc.

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6. Whether a separate inventory of implementing units under their
respective Audit units is maintained?
7. Check whether it is ensured that all the Apex Auditable Entities are
covered in a reasonable period of time, i.e between three to five years.
8. After preparation of Annual Compliance Audit Plan, individual plans
for the identified Apex Auditable Entities are prepared as stipulated in
para 4.4 of CA guidelines?
9. Check whether a Compliance Audit Design Matrix for the identified
Apex Auditable Entity is prepared in the format given in para 4.17 of
CA guidelines?
10. Whether in case of departments/sectors where e-governance has taken
root and transactions are being conducted in virtualized environments,
digital auditing using the help of digital analytical tools is adopted?
11. Whether when multiple audit teams are constituted for the audit of large
entities, a lead team to provide guidance, liaison support to other teams
throughout the audit process and also to consolidate the audit findings
of all other audit teams is formed?
12. Whether the intimation regarding conduct of compliance audit include
the scope of audit, audit objectives, subject matters selected, criteria,
composition of audit team, duration and schedule of audit?
13. While doing the compliance audit, check whether the audit team has
gathered audit evidence using the techniques such as document
scrutiny, physical inspection/site visits, observation, questionnaires,
surveys, confirmation, re-performance and analytical procedures based
on the needs of the audit?
14. Whether the audit evidence collected through different audit procedures
are evaluated against the relevant, already identified criteria to arrive at
audit conclusions?
15. Check whether an Audit Finding Matrix is prepared in the format given
in para 5.14 of CA guidelines for both positive and negative findings?
16. Before commencement of compliance audit, check whether entry
meetings with the heads of Audit Units are held?
17. At the close of audit, whether exit meeting is held with the officer in
charge of the Audit Unit and the minutes of the meeting prepared and
shared with the Audit Unit and acknowledgement obtained?
18. Whether on completion of audit an Inspection Report presenting all the
findings is issued within 30 days of completion of audit to each of the
selected Audit Units?

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 19. Whether the findings relating to an implementing unit of an Audit Unit
are included in the Inspection Report of the respective Audit Units?
20. Details on Departmental Appreciation Notes on various subject matters
planned, conducted but not issued to the Department may be collected
and reasons therefor analyzed.
21. Ensure whether the outstanding paras of previous Inspection Reports
are reviewed during the conduct of audit and their status included in the
current Inspection Report.
22. Check whether there is regular interaction with the Departmental Audit
Committees to review and settle old paragraphs as per extant orders?
23. Whether the receipt of the ‘explanatory notes/Action Taken Notes’ to
the paragraphs appeared in the Compliance Audit Reports from the
Heads of Departments within the time frame prescribed is monitored?
9.17 Checks based on Professional Practices Group Guidance Note No.226-
09-PPG/2017 dated 23.08.2017 (Improving quality of IRs)
1. Check whether while planning the Compliance Audits, Data Analytics
is carried out by the Data Analytics Group by following the steps
stipulated in the Guidance Note?
2. Whether a guard file is maintained for each auditable entity containing
the legislations/rules/policies/orders, financial and outcome budgets etc.
3. Whether the guard files are updated in every audit?
4. Whether desk review is carried out by the audit party identified for
audit of an individual entity before embarking on the compliance audit?
5. Whether data analytics is used in desk review?
6. In case, desk review is not conducted whether specific relaxation from
the concerned GO is obtained duly explaining the circumstances and
recording the reasons for the relaxation before commencing the audit.
7. Whether the SAO in charge of the audit party has prepared a plan of
audit procedures for the specific entity detailing the audit objectives,
scope of audit, main focus areas for audit and assignment plan for the
team members and the same got approved by the respective GO.
8. Whether technological solutions being implemented in the State offices
are leveraged to enhance the quality and effectiveness of monitoring.
9. Whether the issues emerging from supervision of GO are effectively
followed up and reported.

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10. Whether any systemic issues observed during audit are communicated
to other parties carrying out similar audits to enable a holistic
assessment across all audited entities.
11. Whether the SAO of the field audit party certifies that the audit process
was conducted as planned in accordance with the Auditing Standards
and Code of Ethics and that documentation requirements are adhered
to.
12. Check whether each para in the Draft IR clearly brings out whether the
deficiency / best practice is an isolated case or it has a systematic
connotation?
13. Check whether the paras in the Draft IR are drafted in an orderly
manner by identifying the criteria, describing the condition, correlating
the cause of deviation and determines the effect of deviation?
14. Check whether the reply of the audited entity has been incorporated and
audit rebuttal/contention thereon are clearly presented.
15. While reviewing paras outstanding from previous Inspection Reports,
check whether in case of a continuing deficiency or persistent
irregularities, the audit team identifies the system issue /control
deficiencies.
16. Check whether the IR paras are categorized appropriately as Part IIA
and Part IIB paras respectively.
17. Check whether while seeking approval of GO for issuing the IR, a
judgment of the persistent irregularities that need to be brought to the
notice of the Executive through a Department Appreciation Note is
taken?
18. Whether NIL Reports has been issued only after prior approval of AG?
19. Whether the grading of IR is done as directed in the Guidance Note?
20. Whether the procedure of scoring and grading of IRs are periodically
reviewed by AG?

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 Chapter 10

Audit of Panchayati Raj Institutions and Urban Local bodies

10.01 All matters relating to providing TGS and conduct of audit of Panchayati
Raj Institutions (PRIs) and Urban Local Bodies (ULBs) in Kerala has been
entrusted with AG (GSSA), Kerala.
The following points are to be checked/seen during the audit of SSI&LBs
Wing:
1. What are the number of PRIs/ ULBs in the State?
2. Whether the State has enacted legislation for PRIs/ULBs after 73rd and
74th constitutional amendments.
3. Whether the State Government has accepted the Budget/accounting
formats prescribed by CAG. If yes, whether the State Government has
issued formal orders.
4. Whether any amendment in the State Act has been carried out to
accommodate CAG of India’s role as per the recommendation of 11th
Finance Commission.
5. If the State Government has decided to adopt the accounting formats,
whether any training programme has been organized for the PRIs/ULBs
functionary in the new accounting formats.
6. What is the percentage of expenditure on PRIs/ULBs to the total
Revenue Expenditure of the State?
7. What was the total receipts and revenue from all sources for all
PRIs/ULBs from Central Government/State Government and Central/
State Finance Commissions in the last three years?
8. Compliance by the State Government with recommendation of the State
Finance Commission regarding devolution of funds to PRIs/ULBs eg:
sharing of Non Loan Gross Revenue Receipts?
9. What is the method of transfer of funds to the three tiers of PRIs/ULBs
i.e., whether funds are first given to the first tier and then passed on to
the two lower levels or directly transferred to each tier?
10. Whether VLC has been established in A&E Office.
11. To what extent data captured in VLC is being used for planning and
executing ULB audit.
12. Ascertain the number of adhoc AAO posts sanctioned by Headquarters
for PRIs/ULBs audit and status of their actual deployment.
13. Whether the audit plan approved by Headquarters is being followed.

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 14. Ascertain the dates on which annual audit programme was drawn up
and got approved by Headquarters.
15. Ascertain the party days allowed for audit of District Panchayat/Block
Panchayat/Grama Panchayat and ULBs under Section 14/15 of DPC
Act.
16. Ascertain the number of audit parties formed/deployed for the audit of
PRIs/ULBs and staff kept in Headquarters for pursuance of IR files etc.
17. Ascertain the total number of party days utilized for audit of
PRIs/ULBs.
18. Review the status of IRs/Paras outstanding.
19. Review the details of meetings held with the State Authorities for
effective pursuance of irregularities/points included in the IRs.
20. Ascertain the percentage of PRIs/ULBs selected for test check/audit of
their accounts and in how many years all the units are planned to be
covered.
21. Review the documents maintained to record major irregularities noticed
and whether the same was reported to Headquarters.
22. Review the position of discussion in Public Accounts Committee
(PAC)/ other Legislative Committees.
10.02 Local Bodies-Criteria for Assessment of Performance of offices based
on the above check List
1. Adequacy of follow up with the State Government for getting
entrustment of TGS, adoption of accounts and amendments in the State
Act to accommodate the role of CAG.
2. Initiatives taken to organize training for trainers for the accounts staff
of PRIs.
3. The extent to which the data from VLC is being used for planning and
execution of Local Bodies Audit (LBA).
4. Assessment of efficiency of audit planning and implementation in terms
of number of Audit Parties, Party days etc.
5. Timeliness of issue of IRs, adequacy of pursuance of IRs/irregularities,
status of pending paras etc.
6. Adequacy of documentation, record keeping for major irregularities and
reporting.
7. Adequacy of Press coverage and discussion in the PAC/ other
Legislative Committees.
10.03 Checks to be exercised based on Manual of Local Bodies Audit
1. Whether the Local Fund Auditor has prepared by the end of March
every year, an annual audit plan for the audit of PRIs and ULBs in the
next year and forwarded it to AG?

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2. Check whether the audit methodology and procedures for audit of PRIs
and ULBs by the local fund auditor is as per various Acts and statutes
enacted by the State Govt. and guidelines prescribed by CAG?
3. Whether the copies of Inspection Reports in respect of selected local
bodies are forwarded to AG for advice on system improvements?
4. Whether LBA wing reviews the Inspection Reports received from the
local fund auditor to make suggestions for improvement of existing
systems being followed by local fund audit department?
5. Whether the LBA wing monitors the quality of IRs issued by local fund
auditor?
6. Whether returns are sent by the local fund auditor in the formats
prescribed by CAG?
7. Check whether in order to provide technical assistance test check of
some of the PRIs and ULBs are conducted and the report of the test
check sent to the local fund auditor for pursuance of actions?
8. Whether it is ensured that objections involving serious irregularities
such as system deficiencies, serious violation of rules and fraud noticed
by the local fund auditor are intimated to AG?
9. Whether it is ensured that an internal control system has been
developed by the local fund auditor in consultation with AG?
10. Whether training and capacity building is imparted to the local fund
audit staff by AG?
11. Whether the District Level Audit Monitoring Committees for timely
settlement of outstanding paras in IRs issued to Local Self Government
Department (LSGD) are held once in three months?
12. Whether the State level Audit Monitoring Committee with Principal
Secretary, LSGD as Chairman, State Performance Audit Officer as
Convenor and DAG (SSI and LBs) as member was constituted and
meetings of the Committee are held once in four months?
13. Check whether in addition to audit under TGS, audit under Sections 14
and 15 is conducted for those Local Self Government Institutions
(LSGIs) which attract the provisions of these sections?
14. Whether transaction audit is conducted in ten per cent of LSGIs and
supplementary audit of 10 per cent of LSGIs is conducted focusing on
the financial statements?
15. Check whether the checks prescribed in para 8.3.2 of Manual of Local
Bodies Audit are applied while auditing the expenditure incurred by
LSGIs?
16. Check whether the checks prescribed in para 8.4.1 of Manual of Local
Bodies Audit are applied while auditing the receipts received by
LSGIs?

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17. Check whether while auditing the stores and stock of LSGIs, the store
balances are investigated and discrepancies thereon highlighted?
18. Check whether the checks prescribed in para 8.7.1 of Manual of Local
Bodies Audit are applied while auditing the grant in aid received and
loans availed?
19. Check whether the entry meeting at the beginning and exit meeting at
the close of the performance/compliance audits are conducted and
minutes prepared and signature of AG as well as Secretary, LSGD
obtained?
20. Whether quarterly conference of the wing is convened in time for
reviewing the performance of party members during the previous
quarter?
21. Whether the IRs are issued within 30 days from the date of completion
of audit?
22. Whether the remittances made to the treasury and payments made from
the treasury for the selected month by the LSGIs are verified in audit?
23. Check whether the service books of the members of staff in an office
are checked by the audit party at the rate of percentage prescribed
according to the periodicity of audit?
24. Whether the declaration that no Government servant has been retained
by service beyond the date of superannuation is attached by the audit
party to the IR?
25. Whether a para on internal control mechanism is incorporated in the IR
after filling the questionnaire on internal control?

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 Information to be collected during internal audit of functional
wings as mentioned in Chapters 9 and 10

Status of auditee units due for audit and actually audited during last four years
(Separately for each wing)

Year No. of auditee units due No. of auditee units No. of units actually
for audit during the planned to be audited audited
year as per laid down during the year
periodicity

Status of Inspection Reports issued during last four years

(Separately for each wing)

Year No. of units No. of IRs pending No. of IRs Issued No. of IRs
audited during to be issued at the during the year Pending at the
the year beginning of the close of the year
year

Status of Inspection Reports Issued

(Separately for each wing)

Delay in no. of days

Year Total IRs 1-15 16-30 31-60 61-90 91-150 Beyond
IRs issued 150
issued in time

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 Status of Nil Reports
(Separately for each wing)

Sl Years
No.
1 Total No. of IRs issued
2. Total No. of major objections containing IRs issued
3. Total No. of Nil major objections containing IRs issued
4. Nil IRs issued

Status of Major Objections considered for Draft Paras

(Separately for each wing)

Sl No. Years
1 Total number of major objections issued
2. Number of major objections approved as PDP cases
3. Number of cases selected for issue of Factual Statement
4. Number of Factual Statements converted into DP
5. Number of cases returned to sections to process them
through IRs

Status of IRs and Paras added and cleared

(Separately for each wing)

Period Opening Additions Clearance Closing

quarter Balance
ending IRs Paras IRs Paras IRs Paras IRs Paras

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 Chapter 11

Documentation

11.01 The Internal Audit Team should adequately document the audit evidence in
working papers, including the basis and extent of planning, work performed
and the findings of audit. Working papers should contain sufficient
information to enable an experienced auditor having no previous
connection with the audit to ascertain from them the evidence that supports
the auditor's significant findings and conclusions.
Importance of adequate documentation
11.02 Adequate documentation is important for the following reasons.
a. Confirm and support the auditors’ opinion and reports.
b. Increase the efficiency and effectiveness of audit.
c. Serve as a source of information for preparing reports or answering any
enquiries.
d. Serve as evidence of the auditor’s compliance with Auditing standards.
e. Facilitate planning and supervision.
f. Help the auditor’s professional development.
g. Help to ensure that delegated work has been satisfactorily performed
and
h. Provide evidence of work done for future reference.
11.03 It should be borne in mind that the content and arrangement of working
papers reflect the degree of proficiency, experience and knowledge of the
auditor. The working papers should be sufficiently complete and detailed
to enable an experienced auditor having no personal connection with the
audit, to subsequently ascertain, what work was performed to support the
conclusions.
11.04 The Internal Audit report must be based on competent, relevant and
reasonable evidence. The audit should be planned to achieve this. The
evidence is gathered by the Party and the conclusions are drawn from the
tests carried out. The review of audit by senior officers has to assess the
adequacy of the evidence and the reasonableness of the conclusions
reached. The Officers responsible for the audit work have to know that all
these items of work have been carried out properly. Good documentation
is, therefore, vital to show the quality of audit attained.
11.05 Every matter relevant to the audit should be recorded in a clear and concise
way. The referencing of documents is especially important to show the
way through the papers. The aim should be to make it easy to anybody not
previously involved with the audit and for senior officers reviewing the
documentation to see exactly what has been done and conclusions reached.
The auditor knows exactly what he has

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 done and what views he has formed; the documentation must make sure
that other people examining the documentation are put in the same position.
The acid test for good documentation is that an experienced auditor with no
previous connection with the audit should be able, without difficulty to
ascertain the evidence gathered and understand and support the conclusions
reached.
11.06 A standard method of filing document is essential. The filing method
should recognize that documents fall into two categories.
 Those relevant to the audit of the section/group under audit generally.
 Those relevant only to the audit of the section/group under audit for a
particular period.
11.07 The documents to which the auditor needs to refer each year should be
placed on a standing file. This file should contain current information
about the section/group itself, such as,
 Organization chart and key personnel.
 Description of accounting systems.
 Manual
 Systems evaluations,
 Relevant job descriptions and authority limits.
 List of locations and main books of record or accounts.
 Specimen copies of formats of registers. (Sy.328, GAR.9, GAR.10 etc.)
 Formulae for reference in items of work like calculation of audit fee,
staff proposals, calculations of man days for internal and external
arrears etc.
 Time targeted/prescribed for various items of work.
 Specimen copies of documents, extract of records and reports
 Previous Internal Audit Reports.
 Previous reports of Director of Inspection.
11.08 The documents relevant for audit for a particular period should be filed in a
manner which brings together related working papers in a series of folders.
11.09 The working paper folders should include documentation which shows,
 the names of audit personnel who carried out the audit work.
 audit work plan
 audit test programme.
 The dates when the audit work was done
 Sources of the information/evidence obtained
 The nature and purpose of audit tests carried out and the results
obtained.
 Follow up records and correspondence.

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 Chapter 12

Reporting and follow up

12.01 The Internal Audit may use comprehensive check lists/ questionnaires for
eliciting information and planning the audit. In many cases non-
compliance with an item in the check list does not automatically warrant an
audit comment. In case some control is missing, audit should check for
compensating control. Besides each item needs to be evaluated based on
overall circumstances in which deviation occurred. Audit Reports should
be carefully drafted taking into account the replies given at various stages
and the result of interview and discussions. The report should indicate
specific irregularities followed by recommendations and not merely
narration of facts.
12.02 There should be only one Report for one section say Cash, Report etc. at a
point of time. The unsettled paras of the previous report should be updated
with remarks that no action was taken since last verification. Such paras
should also be clubbed in one part of the report. The Report of Internal
Audit should be in the format for local audit stipulated in para No. 744 of
MSO(Tech) Vol.I, detailed below:
Part I (a) Introduction
(b) Outstanding Objections in previous Inspection Reports
(c) Schedule of persistent Irregularities
Part II Section A Major Observations
Section B Other Observations
12.03 These reports will be prepared in duplicate and forwarded to the Section
concerned after it is discussed by the IAO with the BO and the Supervisory
GO. The Section shall retain one copy for its use and reference and return
the other copy to Internal Audit Section after complying with the remarks.
After the receipt of the report from the sections the correctness of the
replies should be test checked by Internal Audit Section and the report with
further remarks submitted to AG. After all the points are settled the report
should be closed under the orders of AG after due scrutiny and suitable
note of closure included at the time of submission of synopsis of the
Reports to AG.
12.04 A monthly report should be sent to the Headquarters Office detailing the
principal defects noticed during Internal Audit and action taken thereon and
also an appraisal as to whether procedures and systems prescribed have
been followed and if not what corrective action has been taken so that such
failures do not recur in future. The progress of work of Internal Audit
Section in respect of changes in the Cycle of Internal Audit and other items
of work like post review, triennial review etc., should be shown in the
report.

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12.05 Completion of Internal Audit, issue of reports etc. may be regulated as per
the following time schedule or such tighter schedule as may be prescribed
by the Head of Department.
i) Completion of Internal Audit Within 10 working days (one AAO,
two Auditors)
ii) Issue of Internal Audit Within 20 working days
Memos The Memos should be issued during
the course of inspection wherever
necessary.
The last batch of Memos should be
issued within three days of
completion of Internal Audit.
iii) Return of Audit Memos Within three to seven days of receipt
of Internal Audit Memos in the
section.
The period of seven days allowed
for furnishing replies to Internal
Audit Memos is only to give the
Section internal audited an
opportunity to verify the facts, etc.
If, however, the replies to Internal
Audit Memos are not received
within the period prescribed, the
Internal Audit Reports should be
finalized and issued without waiting
for the replies to Internal Audit
Memos.
iv) Issue of Report Within 15 days of completion of
Internal Audit/within two days of
receipt of AG’s orders on the
Internal Audit Report.
v) Furnishing of replies to the Within one month of receipt in
Internal Audit Reports by the Section. If any difficulty is
Section anticipated in adhering to the
stipulated date, the matter should be
brought to the notice of the Group
officer who after satisfying himself
would recommend suitable
extension of time and take the
orders of AG in this regard.
vi) Submission of the report to AG Within 10 working days on receipt
with further remarks of Internal of the report in the Section.
Audit Section for orders for
final settlement/further pursuance

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 Chapter 13

Quality Assurance in Internal Audit

13.01 The Accountant General should develop and maintain a quality assurance
programme that covers all aspects of internal audit activity and
continuously monitor its effectiveness. The programme includes periodic
internal quality assessment and ongoing internal monitoring. Each part of
the programme should be designed to help to add value to the internal
auditing activity and improve the operations of the office and to provide the
assurance that the activity is in conformity with the prescribed frame work,
standards and instructions.
13.02 The internal audit activity should adopt a process to monitor and assess the
overall effectiveness of the quality programme. The process should include
both internal and external assessment.
Quality programme assessments
13.03 The AG is responsible for implementing processes that are designed to
provide reasonable assurance to the various stake holders of the internal
audit activity that it,
a. performs in accordance with prescribed frame work, standards and
instructions.
b. operates in an effective manner.
c. is perceived by those stake holders as adding value and improving the
organization’s operations.
13.04 These processes include appropriate supervision, periodic internal
assessments and ongoing monitoring of quality assurance and periodic
external assessments.
13.05 Monitoring includes ongoing measurements and analysis of performance
metrics e.g. Cycle time and recommendations accepted.
13.06 Assessments should evaluate and conclude on the quality of internal audit
activity and lead to recommendations for appropriate improvements.
Assessment of quality programmes includes evaluation of:
 Compliance with the prescribed frame work, standards and
instructions.
 Adequacy of the internal audit activity’s scope, goals, objectives,
policies and procedures.
 Contribution to the risk management, governance and control
processes of the Office.
 Effectiveness of continuous improvement activities, and adoption of
best practices and
 Whether the auditing activity adds value and improves the operations
of the Office.

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 Continuous Improvement
13.07 All quality improvement efforts should include a communication process
designed to facilitate appropriate modification of resources, technology,
processes and procedures indicated by monitoring and assessment
activities.
Internal Assessments
13.08 Internal Assessment should include.
 Ongoing reviews of the performance of internal audit activity.
 Periodic reviews performed through self-assessment or by other
persons within the organization, with knowledge of internal auditing
practices and prescribed frame work, standards and instructions.
13.09 Ongoing assessments may be conducted through,
 Supervision during Internal Audit assignments.
 Check lists and other means to provide assurance that, processes
adopted by the audit activity are being followed.
 Feedback from GOs and BOs.
 Observations of Inspection Parties.
 Observations of Peer Review Groups carrying out Peer review of the
office.
 Analysis of performance matrices (cycle time and recommendations
accepted)
 Adherence to time frame or time budgets, audit plan completion,
compliance to Internal Audit observations, recoveries effected etc.
13.10 Conclusions should be developed as to the quality of ongoing performance
and follow up action should be taken to ensure that appropriate
improvements are implemented.
13.11 Periodic assessments should be designed to assess compliance with the
activity's prescribed frame work, standards and instructions and the
efficiency and effectiveness of the activity in meeting the needs of its
various stakeholders.
13.12 Periodic Assessments may
 include more in-depth interviews and surveys of stake holders group
(for e.g. GOs and BOs)
 be performed by members of the internal audit Activity.
 be performed by other competent audit professionals, currently
assigned elsewhere in the office.
 encompass a combination of self-assessment and preparation of
materials subsequently reviewed by other competent audit
professionals from elsewhere in the office and

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 include bench marking of internal audit activity’s practices and
performance metrics against relevant best practices of other field
offices.
13.13 Conclusion should be developed as to the quality of performance and
appropriate action initiated to achieve improvements and conformity to
prescribed frame work, standards and instructions as necessary.
13.14 The Head of Department should establish a structure for reporting results of
periodic reviews that maintains appropriate credibility and objectivity.
Those assigned responsibility for conducting ongoing and periodic reviews
should report to AG while performing the reviews and communicate the
results directly to AG.
13.15 The AG is to share the results of internal assessments and necessary action
plans with appropriate persons outside the activity such as GOs, DG(Inspn)
at Headquarters and Team Leaders of Peer Review Groups carrying out
peer review of the office.
External Assessments
13.16 External assessments such as quality assurance reviews should be
conducted at least once in five years by a qualified independent reviewer or
review team from other field office or Headquarters.
13.17 External assessment of internal audit activity should appraise and express
an opinion as to its compliance with the prescribed frame work, standards
and instructions and should include recommendations for improvement.
13.18 External reviewers including those who validate self-assessment should be
independent of field office and of internal audit activity. The review team
should consist of individuals competent in the professional practicing of
internal auditing in the field offices of I.A & AD.
13.19 The office that is performing the external assessment, the members of the
review team, and any other individuals who participate in the assessment
should be free from any obligation to or interest in the office that is the
subject of the review or its personnel. Individuals who are in another
department of that office although organizationally separate from internal
audit activity, are not considered independent for the purposes of
conducting an external assessment.
13.20 Reciprocal peer reviews of two field offices should not be performed.
13.21 The external assessments should consist of a broad scope of coverage that
includes, the following elements of internal audit activity
a. Compliance with prescribed framework, standards and instructions,
plans, policies, procedures and practices.
b. The expectations from the internal audit activity expressed by
PAG/AG and GOs.

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 c. The integration of the internal audit activity into the organization’s
governance including the attendant relationship between and among
the key groups involved in the process.
d. The tool and techniques employed by the internal audit activity.
e. The mix of knowledge, experience and disciplines within the staff
including staff focus on process improvement.
f. The determination whether the audit activity adds value and improves
the operations of the office.
Self-assessment with independent validation
13.22 An alternative process is to arrange a self-assessment with independent
external validation with the following features.
 A comprehensive and fully documented self-assessment process
 An independent on-site validation by a qualified reviewer.
 Economical time and resource requirements.
Some best practices in internal auditing activity
13.23 The following are some of the best practices in internal auditing activity.
 Obtaining an understanding of auditees so as to satisfy their needs.
 Applying quality principles and developing performances measures.
 Auditing operations as well as controls to improve entity
performance.
 Serving as an agent for change in the organization
 Communicating regularly with in the internal audit activity with
auditees and other stake holders.
 Integrating Information Technology and auditing.
 Emphasizing the professional satisfaction of the internal auditors.
13.24 The Head of Department should share the result of external quality
assessments with various stake holders of the activity like GOs, DG(Inspn)
as well as Peer Review Groups.

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 Chapter 14

Relationship between Internal Audit and Director General of Inspection

14.01 The Internal Audit Wing can usefully supplement the work of the
DG(Inspn) and also serve as liaison between him and the office in pursuing
the objections raised by him till their final settlement and issuing
instructions to ensure that irregularities pointed out by him do not recur.
14.02 The DG (Inspn) at Headquarters office will be the nodal section for
overseeing the work of Internal Audit. It reviews the functioning of
Internal Audit Wing. The Internal Audit Wing can investigate the
procedural omissions, irregularities and audit lapses brought to notice by
DG (Inspn.) and submit appraisal report of the work done by Internal Audit
Wing to the DG (Inspn).
14.03 While Internal Audit is an instrument of control available to the Head of
Office, DG (Inspn) can be helpful to CAG in formulating general policies
in rectification of persistent defects in particular areas.
14.04 While it is necessary to bring important lapses to the notice of CAG by DG
(Inspn.), routine and procedural lapses can be left to be dealt finally by
heads of field offices by their Internal Audit Wings.
14.05 For the guidance of Internal Audit Wings, DG (Inspn) issued a Best
Practices Guide in September 2003, which is to be referred as ready
reckoner to activate groups and controlling sections concerned through
their Internal Audit Wings.
14.06 Records generally seen by Inspection Parties.
OAD wing
1. Register of Auditable units.
2. Note book of orders.
3. Register for watching timely issue of IRs
4. IR pursuance Register.
5. Audit Progress Register.
6. Register of cases marked as PDP cases.
7. Register of important points.
8. Register of special points.
9. Monthly status Report submitted to AG.
10. Register of files.
11. Incumbency register of OAD wing.
12. Register of files called for by AG for review.
13. Register of meetings conducted by GO with Sr.AO/AAO for
improvement of audit.
14. Calendar of returns.
15. Register of complaints

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16. Register of new items.
17. Register of contribution of members of OA parties.
18. Register of Audit fees.
19. Objection Book.
20. Register for watching recovery of Audit fees.
21. Register for watching disposal of Advances and adjustment of TA
Bills of field parties.
22. Target and Achievement Register.
23. Register for watching disposal of Notes received from IAU Sections
for inspection in local audit.
24. Register of serious financial irregularities.
25. Register for collection of statistics to serve as fair index of volume of
work done.
26. Register of local audit undertaken under Section 15, 19 and 20 of
Comptroller & Auditor General of India’s (DPC) Act.
The list is not exhaustive.

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 Chapter 15

International standards on Internal Audit

15.01 The Institute of Internal Auditors (IIA) has issued International Standards
for the Professional Practice of Internal Auditing. The purpose is to
a. Delineate basic principles that represent the practice of internal
auditing as it must be
b. Provide a frame work for performing and promoting a broad range of
value added internal audit activities.
c. Establish the basis for the evaluation of internal audit performance.
d. Foster improved organizational processes and operations.
15.02 The Internal Auditing Standards Board of Institute of Internal Auditors
revised International Standards for the Professional Practice of Internal
Auditing in January 2004. The Standards provides guidance for the conduct
of internal auditing at both the organizational and individual auditor levels.
The standards describe the nature of internal audit activities, key
components of a charter and an annual plan of activities, ways of
conducting engagements and communicating results and criteria for
evaluating the performance of the services.
15.03 Standards comprise Attribute, Performance and Implementation Standards.
Attribute Standards and Performance Standards apply to all internal audit
services whereas Implementation Standards apply to specific types of
engagement such as assurance and consulting activities.
15.04 Periodically new or amended Standards are approved by the IIA’s Internal
Auditing Standards Board. Before making changes, the Board releases
exposure draft of the proposed amendments, additions and deletions for
public comment. This exposure process is a critical step in the formulation
and testing of concepts and the approval of new and amended Standards.
15.05 The standards issued by IIA are reproduced in Annexure after incorporating
the amendments made to the Standards in October 2017.

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 Annexure
(Ref. Para 15.05)
STANDARDS ISSUED BY THE INSTITUTE OF INTERNAL
AUDITORS (IIA)

ATTRIBUTE STANDARDS

1000 – Purpose, Authority, and Responsibility

The purpose, authority and responsibility of the internal audit activity must be
formally defined in a charter, consistent with the mission of internal audit and the
mandatory elements of the International Professional Practices Framework. The
chief audit executive must periodically review the Internal Audit charter and present it to
senior management and the board for approval.

1000.A1 - The nature of assurance services provided to the organization must be

defined in the audit charter. If assurances are to be provided to parties outside the
organization, the nature of these assurances must also be defined in the charter.

1000.C1 - The nature of consulting services must be defined in the audit charter.

1100 – Independence and Objectivity

The internal audit activity must be independent, and internal auditors must be
objective in performing their work.

1110 – Organizational Independence

The chief audit executive must report to a level within the organization that allows
the internal audit activity to fulfil its responsibilities.
1110.A1 - The internal audit activity must be free from interference in determining
the scope of internal auditing, performing work, and communicating results. The
chief audit executive must disclose such interference to the board and discuss the
implications.
1120 – Individual Objectivity
Internal auditors must have an impartial, unbiased attitude and avoid conflicts of
interest.
1130 – Impairments to Independence or Objectivity
If independence or objectivity is impaired in fact or appearance, the details of the
impairment must be disclosed to appropriate parties. The nature of the disclosure
will depend upon the impairment.
1130.A1 – Internal auditors must refrain from assessing specific operations for
which they were previously responsible. Objectivity is presumed to be impaired if
an internal auditor provides assurance services for an activity for which the internal
auditor had responsibility within the previous year.

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1130.A2 – Assurance engagements for functions over which the chief audit
executive has responsibility must be overseen by a party outside the internal audit
activity.
1130.C1 - Internal auditors may provide consulting services relating to operations
for which they had previous responsibilities.
1130.C2 - If internal auditors have potential impairments to independence or
objectivity relating to proposed consulting services, disclosure must be made to the
engagement client prior to accepting the engagement.
1200 – Proficiency and Due Professional Care
Engagements must be performed with proficiency and due professional care.
1210 – Proficiency
Internal auditors must possess the knowledge, skills, and other competencies
needed to perform their individual responsibilities. The internal audit activity
collectively must possess or obtain the knowledge, skills, and other competencies
needed to perform its responsibilities.
1210.A1 - The chief audit executive must obtain competent advice and assistance
if the Internal Audit staff lacks the knowledge, skills, or other competencies
needed to perform all or part of the engagement.
1210.A2 – The internal auditor must have sufficient knowledge to identify the
indicators of fraud but is not expected to have the expertise of a person whose
primary responsibility is detecting and investigating fraud.
1210.A3 – Internal auditors must have knowledge of key information technology
risks and controls and available technology-based audit techniques to perform their
assigned work. However, not all internal auditors are expected to have the
expertise of an internal auditor whose primary responsibility is information
technology auditing.
1210.C1 - The chief audit executive must decline the consulting engagement or
obtain competent advice and assistance if the Internal Audit staff lacks the
knowledge, skills, or other competencies needed to perform all or part of the
engagement.
1220 - Due Professional Care
Internal auditors must apply the care and skill expected of a reasonably prudent
and competent internal auditor. Due professional care does not imply infallibility.
1220.A1 - The internal auditor must exercise due professional care by considering
the:

 Extent of work needed to achieve the engagement's objectives.

 Relative complexity, materiality, or significance of matters to which
assurance procedures are applied.
 Adequacy and effectiveness of risk management, control, and
governance processes.
 Probability of significant errors, irregularities, or non-compliance.
 Cost of assurance in relation to potential benefits.

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1220.A2 - In exercising due professional care the internal auditor must consider
the use of computer-assisted audit tools and other data analysis techniques.
1220.A3 – The internal auditor must be alert to the significant risks that might
affect objectives, operations, or resources. However, assurance procedures alone,
even when performed with due professional care, do not guarantee that all
significant risks will be identified.
1220.C1 - The internal auditor must exercise due professional care during a
consulting engagement by considering the:
 Needs and expectations of clients, including the nature, timing, and
communication of engagement results.
 Relative complexity and extent of work needed to achieve the
engagement’s objectives.
 Cost of the consulting engagement in relation to potential benefits.
1230 – Continuing Professional Development
Internal auditors must enhance their knowledge, skills, and other competencies
through continuing professional development.
1300 – Quality Assurance and Improvement Program
The chief audit executive must develop and maintain a quality assurance and
improvement program that covers all aspects of the internal audit activity. A
quality assurance and improvement program is designed to enable an evaluation of
the internal audit activity’s conformance with the Standards and an evaluation of
whether internal auditors apply the Code of Ethics.
1310 – Requirements of the Quality Program and Improvement Program
. The quality assurance and improvement program must include both internal and
external assessments.
1311 – Internal Assessments
Internal assessments must include:
 Ongoing reviews of the performance of the internal audit activity
 Periodic reviews performed through self-assessment or by other persons
within the organization, with knowledge of internal audit practices and
the Standards.

1312 – External Assessments

External assessments must be conducted at least once every five years by a
qualified, independent assessor or assessment team from outside the organization.
1320 – Reporting on the Quality Program
The chief audit executive must communicate the results of the quality assurance
and improvement program to senior management and the board.

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PERFORMANCE STANDARDS
2000 – Managing the Internal Audit Activity
The chief audit executive must effectively manage the internal audit activity to
ensure it adds value to the organization.
2010 – Planning
The chief audit executive must establish risk-based plans to determine the
priorities of the internal audit activity, consistent with the organization's goals.
2010.A1 - The internal audit activity's plan of engagements must be based on a risk
assessment, undertaken at least annually. The input of senior management and the
board must be considered in this process.
2010.C1 - The chief audit executive must consider accepting proposed consulting
engagements based on the engagement's potential to improve management of risks,
add value, and improve the organization’s operations. Accepted engagements
must be included in the plan.
2020 – Communication and Approval
The chief audit executive must communicate the internal audit activity’s plans and
resource requirements, including significant interim changes, to senior
management and to the board for review and approval. The chief audit executive
must also communicate the impact of resource limitations.
2030 – Resource Management
The chief audit executive must ensure that internal audit resources are appropriate,
sufficient, and effectively deployed to achieve the approved plan.
2040 – Policies and Procedures
The chief audit executive must establish policies and procedures to guide the
internal audit activity.
2050 – Coordination and Reliance
The chief audit executive must share information, coordinate activities and
consider relying upon the work of other internal and external assurance and
consulting service providers to ensure proper coverage and minimize duplication
of efforts.
2060 – Reporting to Senior Management and the Board
The chief audit executive must report periodically to senior management and the
board on the internal audit activity’s purpose, authority, responsibility, and
performance relative to its plan and on its conformance with the Code of Ethics
and the Standards. Reporting must also include significant risk and control issues,
including fraud risks, governance issues, and other matters that required the
attention of senior management and /or the board.
2100 – Nature of Work
The internal audit activity must evaluate and contribute to the improvement of the
organisation’s governance, risk management, control processes, using a systematic
disciplined and risk-based approach. Internal audit credibility and value are
enhanced when auditors are proactive and their evaluations offer new insights and
consider future impact.

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2110 – Governance
The internal audit activity must assess and make appropriate recommendations to
improve the organisation’s governance processes.
2110.A1 - The internal audit activity must evaluate the design, implementation,
and effectiveness of the organization’s ethics-related objectives, programs, and
activities.
2110.A2 - The internal audit activity must assess whether the information
technology governance of the organization supports the organization’s strategies
and objectives.
2120 – Risk Management
The internal audit activity must evaluate the effectiveness and contribute to the
improvement of risk management processes.
2120.A1 - The internal audit activity must evaluate risk exposures relating to the
organization’s governance, operations, and information systems regarding the:
 Achievement of the organization’s strategic objectives.
 Reliability and integrity of financial and operational information.
 Effectiveness and efficiency of operations and programs.
 Safeguarding of assets.
 Compliance with laws, regulations, policies, procedures, and contracts.
.

2120.A2 - The internal audit activity must evaluate the potential for the occurrence
of fraud and how the organization manages fraud risk.
2120.C1 – During consulting engagements, internal auditors must address risk
consistent with the engagement’s objectives and be alert to the existence of other
significant risks.
2120.C2 – Internal auditors must incorporate knowledge of risks gained from
consulting engagements into their evaluation of the organization’s risk
management processes.
2130 – Control
The internal audit activity must assist the organization in maintaining effective
controls by evaluating their effectiveness and efficiency and by promoting
continuous improvement.

2130.A1 – The internal audit activity must evaluate the adequacy and effectiveness
of controls in responding to risks within the organization’s governance, operations,
and information systems regarding the:
 Achievement of the organization’s strategic objectives.
 Reliability and integrity of financial and operational information.
 Effectiveness and efficiency of operations and programs.
 Safeguarding of assets.
 Compliance with laws, regulations, policies, procedures, and contracts.

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2130.C1 – Internal auditors must incorporate knowledge of controls gained from
consulting engagements into evaluation of the organization’s control processes.
2200 – Engagement Planning
Internal auditors must develop and record a plan for each engagement, including
the scope, objectives, timing and resource allocations.
2201 - Planning Considerations
In planning the engagement, internal auditors must consider:
 The strategies and objectives of the activity being reviewed and the means
by which the activity controls its performance.
 The significant risks to the activity’s objectives, resources, and operations
and the means by which the potential impact of risk is kept to an acceptable
level.
 The adequacy and effectiveness of the activity’s governance, risk
management, and control processes compared to a relevant framework or
model.
 The opportunities for making significant improvements to the activity’s
governance, risk management, and control processes.

2201.A1 – When planning an engagement for parties outside the organization,

internal auditors must establish a written understanding with them about
objectives, scope, respective responsibilities and other expectations, including
restrictions on distribution of the results of the engagement and access to
engagement records.
2201.C1 - Internal auditors must establish an understanding with consulting
engagement clients about objectives, scope, respective responsibilities, and other
client expectations. For significant engagements, this understanding must be
documented.
2210 – Engagement Objectives
Objectives must be established for each engagement.
2210.A1 – Internal auditors must conduct a preliminary assessment of the risks
relevant to the activity under review. Engagement objectives must reflect the
results of this assessment.
2210.A2 - Internal auditors must consider the probability of significant errors,
fraud, noncompliance, and other exposures when developing the engagement
objectives.
2210.C1 – Consulting engagement objectives must address governance, risk
management, and control processes to the extent agreed upon with the client.
2220 – Engagement Scope
The established scope must be sufficient to satisfy the objectives of the
engagement.

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2220.A1 - The scope of the engagement must include consideration of relevant
systems, records, personnel, and physical properties, including those under the
control of third parties.
2220.A2 - If significant consulting opportunities arise during an assurance
engagement, a specific written understanding as to the objectives, scope, respective
responsibilities and other expectations must be reached and the results of the
consulting engagement communicated in accordance with consulting standards.
2220.C1 – In performing consulting engagements, internal auditors must ensure
that the scope of the engagement is sufficient to address the agreed-upon
objectives. If internal auditors develop reservations about the scope during the
engagement, these reservations must be discussed with the client to determine
whether to continue with the engagement.
2230 – Engagement Resource Allocation
Internal auditors must determine appropriate resources to achieve engagement
objectives based on an evaluation of the nature and complexity of each
engagement, time constraints, and available resources.
2240 – Engagement Work Program
Internal auditors must develop and document work programs that achieve the
engagement objectives.
2240.A1 - Work programs must include the procedures for identifying, analysing,
evaluating, and documenting information during the engagement. The work
program must be approved prior to its implementation, and any adjustments
approved promptly.
2240.C1 - Work programs for consulting engagements may vary in form and
content depending upon the nature of the engagement.
2300 – Performing the Engagement
Internal auditors must identify, analyze, evaluate, and document sufficient
information to achieve the engagement’s objectives.
2310 – Identifying Information
Internal auditors must identify sufficient, reliable, relevant, and useful information
to achieve the engagement’s objectives.

2320 – Analysis and Evaluation

Internal auditors must base conclusions and engagement results on appropriate
analyses and evaluations.
2330 – Documenting Information
Internal auditors must document sufficient, reliable, relevant and useful
information to support the engagement results and conclusions.
2330.A1 - The chief audit executive must control access to engagement records.
The chief audit executive must obtain the approval of senior management and/or
legal counsel prior to releasing such records to external parties, as appropriate.

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2330.A2 - The chief audit executive must develop retention requirements for
engagement records regardless of the medium in which each record is stored.
These retention requirements must be consistent with the organization’s guidelines
and any pertinent regulatory or other requirements.
2330.C1 - The chief audit executive must develop policies governing the custody
and retention of consulting engagement records, as well as their release to internal
and external parties. These policies must be consistent with the organization’s
guidelines and any pertinent regulatory or other requirements.
2340 – Engagement Supervision
Engagements must be properly supervised to ensure objectives are achieved,
quality is assured, and staff is developed.
2400 – Communicating Results
Internal auditors must communicate the engagement results.
2410 – Criteria for Communicating
Communications must include the engagement’s objectives and scope
2410.A1 –Final communication of engagement results must include applicable
conclusions, as well as applicable recommendations and/or action plans. Where
appropriate, the internal auditors’ opinion should be provided. An opinion must
take into account the expectations of senior management, the board, and other
stakeholders and must be supported by sufficient, reliable, relevant, and useful
information.
2410.A2 – Internal auditors are encouraged to acknowledge satisfactory
performance in engagement communications.

2410.A3 – When releasing engagement results to parties outside the organization,

the communication must include limitations on distribution and use of the results.
2410.C1 – Communication of the progress and results of consulting engagements
will vary in form and content depending upon the nature of the engagement and the
needs of the client.
2420 – Quality of Communications
Communications must be accurate, objective, clear, concise, constructive,
complete, and timely.
2421 – Errors and Omissions
If a final communication contains a significant error or omission, the chief audit
executive must communicate corrected information to all parties who received the
original communication.
2431 – Engagement Disclosure of Non-conformance
When noncompliance with the Code of Ethics or Standards impacts a specific
engagement, communication of the results must disclose the:
 Principle(s) or rule(s) of conduct of the Code of Ethics or the
Standard(s) with which full conformance was not achieved.
 Reason(s) for non-conformance.

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  Impact of non-conformance on the engagement and the communicated
engagement results.
.
2440 – Disseminating Results
The chief audit executive must communicate results to the appropriate parties.
2440.A1 - The chief audit executive is responsible for communicating the final
results to parties who can ensure that the results are given due consideration.
2440.A2 - If not otherwise mandated by legal, statutory or regulatory requirements,
prior to releasing results to parties outside the organization, the chief audit
executive must:
 Assess the potential risk to the organization.
 Consult with senior management and/or legal counsel as appropriate
 Control dissemination by restricting the use of the results.

2440.C1 - The chief audit executive is responsible for communicating the final
results of consulting engagements to clients.
2440.C2 – During consulting engagements, governance, risk management, control,
and issues may be identified. Whenever these issues are significant to the
organization, they must be communicated to senior management and the board.
2500 – Monitoring Progress
The chief audit executive must establish and maintain a system to monitor the
disposition of results communicated to management.
2500.A1 - The chief audit executive must establish a follow-up process to monitor
and ensure that management actions have been effectively implemented or that
senior management has accepted the risk of not taking action.
2500.C1 – The internal audit activity must monitor the disposition of results of
consulting engagements to the extent agreed upon with the client.
2600 – Resolution of Management’s Acceptance of Risks
When the chief audit executive concludes that management has accepted a level of
risk that may be unacceptable to the organization, the chief audit executive must
discuss the matter with senior management. If the chief audit executive determines
that the matter has not been resolved, the chief audit executive must communicate
the matter to the board.

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 Glossary
Add Value
The internal audit activity adds value to the organization (and its stakeholders)
when it provides objective and relevant assurance, and contributes to the
effectiveness and efficiency of governance, risk management, and control
processes.

Adequate Control
Present if management has planned and organized (designed) in a manner that
provides reasonable assurance that the organization’s risks have been managed
effectively and that the organization’s goals and objectives will be achieved
efficiently and economically.

Assurance Services
An objective examination of evidence for the purpose of providing an independent
assessment on governance, risk management, and control processes for the
organization. Examples may include financial, performance, compliance, system
security, and due diligence engagements.

Board
The highest level governing body (e.g., a board of directors, a supervisory board, or
a board of governors or trustees) charged with the responsibility to direct and/or
oversee the organization’s activities and hold senior management accountable.
Although governance arrangements vary among jurisdictions and sectors, typically
the board includes members who are not part of management. If a board does not
exist, the word “board” in the Standards refers to a group or person charged with
governance of the organization. Furthermore, “board” in the Standards may refer to
a committee or another body to which the governing body has delegated certain
functions (e.g., an audit committee).

Charter
The internal audit charter is a formal document that defines the internal audit
activity’s purpose, authority, and responsibility. The internal audit charter
establishes the internal audit activity’s position within the organization; authorizes
access to records, personnel, and physical properties relevant to the performance of
engagements; and defines the scope of internal audit activities.

Chief Audit Executive

Chief audit executive describes the role of a person in a senior position responsible
for effectively managing the internal audit activity in accordance with the internal
audit charter and the mandatory elements of the International Professional Practices
Framework. The chief audit executive or others reporting to the chief audit
executive will have appropriate professional certifications and qualifications. The
specific job title and/or responsibilities of the chief audit executive may vary across
organizations.
Code of Ethics
The Code of Ethics of the Institute of Internal auditors (IIA) are principles relevant
to the profession and practice of internal auditing, and Rules of

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Conduct that describe behaviour expected of internal auditors. The Code of Ethics
applies to both parties and entities that provide internal audit services. The purpose
of the Code of Ethics is to promote an ethical culture in the global profession of
internal auditing.
Compliance
Adherence to policies, plans, procedures, laws, regulations, contracts, or other
requirements

Conflict of Interest
Any relationship that is, or appears to be, not in the best interest of the
organization. A conflict of interest would prejudice an individual’s ability to
perform his or her duties and responsibilities objectively.

Consulting Services
Advisory and related client service activities, the nature and scope of which are
agreed with the client, are intended to add value and improve an organization’s
governance, risk management, and control processes without the internal auditor
assuming management responsibility. Examples include counsel, advice,
facilitation, and training.

Control
Any action taken by management, the board, and other parties to manage risk and
increase the likelihood that established objectives and goals will be achieved.
Management plans, organizes, and directs the performance of sufficient actions to
provide reasonable assurance that objectives and goals will be achieved.

Control Environment
The attitude and actions of the board and management regarding the importance of
control within the organization. The control environment provides the discipline
and structure for the achievement of the primary objectives of the system of
internal control. The control environment includes the following elements:
 Integrity and ethical values.
 Management’s philosophy and operating style.
 Organizational structure.
 Assignment of authority and responsibility.
 Human resource policies and practices.
 Competence of personnel.

Control Processes
The policies, procedures (both manual and automated), and activities that are part
of a control framework, designed and operated to ensure that risks are contained
within the level that an organization is willing to accept.

Core Principles for the Professional Practice of Internal Auditing

The Core Principles for the Professional Practice of Internal Auditing are the
foundation for the International Professional Practices Framework and support
internal audit effectiveness.

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Engagement
A specific internal audit assignment, task, or review activity, such as an Internal
Audit, control self-assessment review, fraud examination, or consultancy. An
engagement may include multiple tasks or activities designed to accomplish a
specific set of related objectives.

Engagement Objectives
Broad statements developed by internal auditors that define intended engagement
accomplishments.

Engagement Opinion
The rating, conclusion, and/or other description of results of an individual internal
audit engagement, relating to those aspects within the objectives and scope of the
engagement.

Engagement Work Program

A document that lists the procedures to be followed during an engagement,
designed to achieve the engagement plan.

External Service Provider

A person or firm outside of the organization that has special knowledge, skill and
experience in a particular discipline.

Fraud
Any illegal act characterized by deceit, concealment, or violation of trust. These
acts are not dependent upon the threat of violence or physical force. Frauds are
perpetrated by parties and organizations to obtain money, property, or services; to
avoid payment or loss of services; or to secure personal or business advantage.

Governance
The combination of processes and structures implemented by the board to inform,
direct, manage, and monitor the activities of the organization toward the
achievement of its objectives.

Impairment
Impairment to organizational independence and individual objectivity may include
personal conflict of interest, scope limitations, restrictions on access to records,
personnel, and properties, and resource limitations (funding).

Independence
The freedom from conditions that threaten the ability of the internal audit activity
to carry out internal audit responsibilities in an unbiased manner.

Information Technology Controls

Controls that support business management and governance as well as provide
general and technical controls over information technology infrastructures such as
applications, information, infrastructure, and people.

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Information Technology Governance
Consists of the leadership, organizational structures, and processes that ensure that
the enterprise’s information technology supports the organization’s strategies and
objectives.

Internal Audit Activity

A department, division, team of consultants, or other practitioner(s) that provides
independent, objective assurance and consulting services designed to add value
and improve an organization’s operations. The internal audit activity helps an
organization accomplish its objectives by bringing a systematic, disciplined
approach to evaluate and improve the effectiveness of governance, risk
management and control processes.
International Professional Practices Framework
The conceptual framework that organizes the authoritative guidance promulgated
by the IIA. Authoritative guidance is composed of two categories – (1) mandatory
and (2) recommended.

Must
The Standards use the word “must” to specify an unconditional requirement.

Objectivity
An unbiased mental attitude that allows internal auditors to perform engagements
in such a manner that they believe in their work product and that no quality
compromises are made. Objectivity requires that internal auditors do not
subordinate their judgment on audit matters to others.

Overall Opinion
The rating, conclusion, and/or other description of results provided by the chief
audit executive addressing, at a broad level, governance, risk management, and/or
control processes of the organization. An overall opinion is the professional
judgment of the chief audit executive based on the results of a number of individual
engagements and other activities for a specific time interval.

Risk
The possibility of an event occurring that will have an impact on the achievement
of objectives. Risk is measured in terms of impact and likelihood.

Risk Appetite
The level of risk that an organization is willing to accept.

Risk Management
A process to identify, assess, manage, and control potential events or situations to
provide reasonable assurance regarding the achievement of the organization’s
objectives.

Should
The Standards use the word “should” where conformance is expected unless, when
applying professional judgment, circumstances justify deviation.

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Significance
The relative importance of a matter within the context in which it is being
considered, including quantitative and qualitative factors, such as magnitude,
nature, effect, relevance, and impact. Professional judgment assists internal
auditors when evaluating the significance of matters within the context of the
relevant objectives.

Standard
A professional pronouncement promulgated by the International Internal Audit
Standards Board that delineates the requirements for performing a broad range of
internal audit activities and for evaluating internal audit performance.

Technology-based Audit Techniques

Any automated audit tool, such as generalized audit software, test data generators,
computerized audit programs, specialized audit utilities, and computer-assisted
audit techniques (CAATs).

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 FORM – 1
PROGRESS REGISTER

Date of receipt of first

Date of submission to
Date of completion of

Date of final records

Details of reminders
No. of working days
Name of the Section

Date of issue of the

commencement of
Name of the party

Name of the AAO

Initials of AAO
for completion

Remarks
Auditors
checked

Date of
Sl. No.

report
check

check

reply

AG
1 2 3 4 5 6 7 8 9 10 11 13 14 15

FORM - 2
SECTION-WISE ARREARS
Sl. Details Arrears as on
No.
Last Report Current Report

FORM – 3
STATEMENT INDICATING INCREASE OR DECREASE IN ARREARS
Branch Position as per last report Position as per this Increase(+)/Decrease(-)
Report
Internal External Total Internal External Total Internal External Total

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 FORM-4

STATEMENT INDICATING OVERALL POSITION OF ARREARS

Sl Sect- Position as per last Position as per this report Net Increase(+)/ Decrease(-)
No. ion report

Inter- Exter- Total Inter- Exter- Total Inter- Exter- Total

nal nal nal nal nal nal

FORM – 5
OBJECTIONS OUTSTANDING OVER SIX MONTHS
Sl. Group/ Opening Addition Clearance Closing No. of items Arrears in Man
No. Section Balance Balance outstanding days
(Money
value)
As per As per As per As per
this previous this previous
Report Report Report Report

FORM-6
STATEMENT INDICATING POSITION OF ARREARS IN
CORRESPONDENCE
Sl. Branch As on last report As on this report
No. More than one month More than 3 months More than one month More than 3 months
Letters UORs DOs Total Letters UORs Dos Total Letters UORs Dos Total Letters UORs Dos Total

143