Authority for Audit :

Section 13 and Section 14 of CAGs (DPC) Act, 1971. 

Section 14, 19 and 20 of CAG’s (DPC) Act, 1971 in respect of Autonomous Bodies 14(2) & 27(3) of BOCW   Act 1996.


Application of Manuals for the conduct of audit:

  • Manual of Standing Orders (Audit) issued by the CAG of India
  • Manual of Inspection State (Civil) issued by the Accountant General.
  • Manual of Inspection State ( Autonomous Bodies) issued by the
    Accountant General
  • Circular instructions issued from time to time.
  • Auditing Standards.


Types of Audit conducted:

  1. Compliance Audit – Assessing the extent to which laws and regulations have been respected (Audit of Transactions).
  2. Performance audit is an independent assessment or examination of the extent to which an organisation, programme or scheme operates economically, efficiently and effectively.
  3. Special Audit - When a special audit is requested by State Government in cases of suspected misappropriation etc, the AG shall have the discretionary powers either for taking up the special audit or for disagreeing to the requests for conducting special audit, considering the merits of the case.
  4. Follow up audit - This type of audit is taken up mainly to verify the corrective action taken by the corporation on the observation made in earlier Audit Reports. The Performance Auditing Guidelines 2014, provides guidance/ procedure in a comprehensive manner for follow up audit.
  5. Distric centric Audit - This new type of Audit provides special emphasis on grassroot service delivery. Beneficiary survey of choosen functions is an important aspect of this type of Audit wherin rural and urban local bodies in the chosen districts are taken up for function-based audit. 


Audit Activity:

The audit objections raised by the field parties and issued in the form of Inspection Reports are pursued in Head Quarters Sections till their logical end.  Major irregularities are brought to the personal attention of the Secretaries of the Departments concerned for immediate corrective action.  Important observations are processed further into Draft Paras for inclusion in the Audit Report, of the Comptroller and Auditor General of India.

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