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INSPECTION
CODE
GOVERNMENT OF INDLA
MINISTRY OF FINANCE
DEPARTMENT OF EXPENDITURE
CONTROLLER GENERAL 0F ACCOUNTS

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PREFACE
This inspection Code contains detaiied instructions on inspec-—
tion by the Ofiice of Controller General of Accounts, Department
of Eapentiitnrer Ministry of Finance and Internal Check to be
conttucted by the Internal Audit Units of the respective Minis-
tricsffiepartinents.
2. The Code also spells out the role of the Controller General
of Accounts in carrying out inspection. of the Pay and Accounts
Ufiices and Offices of Drawing ii; Disbursing Oflicens under vari-
ous Ministries/ Departments.
3. While the Code gives detailed instructions concerning the
items to be checked at the time of internal audit of initiai and
subsitiiary accounts maintained in different offices and the proce-
tiure to be adopted in processing the points taken up in internal
audit and monitoring of follow-up action thereon the Ministryf
Department may supplement these instructions for any special
items of work peculiar to them in consultation with the oflice
of Co-ntro'iier General. of Accounts.
The provisions contained in this Code shall form the basis
of internal Audit Manuals ot' the Ministries/Departments, Any
provision contained intlic Internai Audit Manuals et the
Ministriesr’Departntents which is in contravention of this code
may he resieWed and suitably amended in consultation with the
Controiler General of Accounts.
New nets (GIRIJA ESWARAN)
Dateti : 217-88 Controller General of Accounts

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CHAPTER H
CHAPTER. 1]!
CHAPTER HE
CHAPTER F1?
CHAPTER V
CHAPTER V1
QHAPTER V11}
1N DEX
lNTRO DUCT [ON a e
SCOPE AND EXTENT OF
INTERNAL AUDIT
NATURE OF CHECKS TO
BE EXERCISED . I
DETAILED AUDiT OF INlTIAL
AND SUBSIDIARY ACCOUNTS
RECORDS. ,
'[NTERNAL AUDIT OF PAY 3-:
ACCOUNTS OFFICES
INTERNAL AUDIT OF MERGED
DRAWING & DIS BURSING
GFFICERS. . a . m
INSi’ECTEON BY C.G.A’s OFFICE
-1TS EXTENT AND SCOPE.
PAQE
H]
S4

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The abhreeiarieae need in, thie eezte may be read as fellews 2—-
A.O.
nae.
C. 6-2: All
(LEA.
(JG-A.
(3.5.151.
CA.
CAM.
GREG.
-C.B.D.T.
C.P.W.D.
C.G.H.S.
C‘E‘rir.
OPE.
13.13.13-
D.C.R.G.
13.6.8.8: D.
PA.
PE.
-G.P‘.F.
6.1:. Ra.
HBA.
1. AUG.
LS.
LIE.
MBA.
0.17.5.
PAL}.
BER.
P.P.U.
33,3.
BBL
SET.
S.T.D.
FA.
Aeeeunte Oflieer
.aasiet ant Aeeennte Officer
Cemptreller and Aaditer Gmmral of India
Chief Aeeennting Authority
Cenireller General of Accounts
Chief Cemreiier ef Aeeeunta
Cenireller 0f Aeeennte
CivilAee-annte Manual.
Central Beard et‘ Eaeige and Customs
Centrai Beard of Direet Taxes
Central Pabiie Werka Department
Central GUVTIITIIEIH Health Scheme
Chiidrene Eriueatienai Assistance
Canrribatery Prevident Fund
Dirawing and Disbursing Ofieer
Death—Cem-Retirement Gratuiry
Direeiaaate General ef Supplies and Disposals
Financial Adviser
Forage. Sefviee
Geaerai Preeident Fund
General Financial Rules
Hun-ea Building Advance
junifilf ACCOLII‘LEB Oififier
Leave Salary
Life Inearanee Corporation
Meter Car Advanee
Over Time Aliewanee
Pay and Aeeeunts OifieejPay and Aeeennts Offieer
Pay Bill Register
Pensien Payment Order
Publie Seeter Bank
Reaaree Bank of India
Statement of Central Traneaetiens
Subaeriher Trunk Dialling
Traeeiling Aiiewanee

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CHAPTER I
INTRODUCTION
1.1 In. exercise of the powers conferred by the lat Proviso
to sub-section (1) of Section 10 of the CdrAGis (Duties, Fosver's
and Conditions of Services) Act, 1971 {56th of 1.9%}, the
President, after consultation with the C'&AG of India has reliev-
ed the latter from the responsibility for compiling ii), the
accounts of the Union. Goveriunent (Civil) in stages as on let
April, i.9’l6, 1st July, 1976 and 1st October, 19%, (ii) the
accounts of the Union Territory Administration of Delhi and
the accounts relating to tar-res, duties and other receipts and
deposits realised. or refunded under any law for the time being
in force and administered by the Department oi: Revenue and
Banking including Central Board of Direct Taxes and Central
Board of Excise and Customs with efiect from. 1st April, 19??
and (iii) the accounts of the Union. Territory Administration
of Andaman and Nicobar Islands from lst June, 1986. The
responsibility of compiling. the accounts of. the following still
rests with. the Comptroller and Auditor General of India :P—
t i) Indian Audit and Accounts Department;
(ii) Union Territorj,r Administrations of Chandigarh.
Dadra and Nagar Haveli. and Lah'shdweep; and
(iii) Pensions including pensions to freedom fighleI'S, their
dependents etc., and pensions in lieu of. resumed
jagirs, lands, territories etc., and pensions and awards
in. consideration of distinguished services.
1.2 For consolidating the accounts of. Centre fiivil Ministries?
Departments and for preparation of Annual. Accounts of the
Union Government an organisation functioning under the Con—
troller General of Accounts has been. created in the Department
of Expenditure of the Ministry of Finance. Consolidation of
monthly accounts of the Union Government from the inonthlv
accounts submitted to him by the various Ministries and Deparn
rnents has been entrusted to him with efiect from 1st April.
19-77. The C.G.A. in this connection has responsibility for
establishing and maintaining a technically sound accounting
system in the Departmentalised Accounts Offices. To order to
maintain the requisite technical standard of accounting he has
powers to inspect the De-partrnentalised Accounts Offices to
1

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ensure that accounts are maintained accurately, comprehensively
and in a correct tnanner.
if} While the Organisation of Controller General of Accounts
has been set. up for consolidation etc. of accounts of Central
Government, the Secretary of the Ministry/Department concern—
ed has been designated as the Chief Accounting Authority for
that MinistrvfDepartment. He discharges his functions through
and .tvith the assistance of the Financial Adviser of the Ministrgg’
Department. The Financial Adviser, for and on behalf of the
Chief Accounting Authority is responsible for :—
(a) arranging aii payments through the Pay and Accounts
Oitices/Principal Accounts Offices except Where the
drawing and disbursing Officers are authorised spe-
cifically to make certain types of payments;
(1)) compilation and consolidation of. accounts of the
department in the forty prescribed and its submis-
sion. to the Controller General of Accounts; pre-
paration of Annual Appropriation Accounts for the
Demands for Grants of his Ministry/Department,
get it duly audited and submit to the (18.1%., duly
signed by the Chief Accounting Authority; and
t c) arranging internal inspection of: payment and accounts
records maintained by the various subordinate tor-
tnations and Pay and Accounts Offices of the
Department.
i.4 T he scheme of dcparttnentalisation of Union Government
accounts provides for setting up of an efficient internal audit
organisation to ensure both accuracy in accounts and ethcicncy
in the operation of the accounts set. up. Accordingly. internai
aufiit organisations have been set up in most of the Ministriesf
Deprutrnents. The scope and function of the internal audit
organisation depends on the nature of work, the number of.
subordinate offices, the strength of the establishment, nature and
quantum of expenditure etc. Each Ministry/Department, there-
fore, has to draw up a Manuai of Internal Audit, specifying the
duties and functions of the organisation vvith particular reference-
to the cont'iitions prevailing in the Ministrylr’Departtncnt. The
guidelines contained in the ensuing paragraphs will regulate the
worit-ing at these organisations. but these are of a very broad.-
nature and have to he sup'pientented by detaiieci instructions to
he issued hv each Ministrgr’Departntent. '

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CHAPTER H
SCOPE AND EXTENT OF INTERNAL AUDI l‘
The Internal Audit Organisation will work directly under
the EI.C.A..-*’C.A. with. the overall responsiliiiitg for internal audit
remaining with the Financial Adviser of the Ministrylfljepart-
rnear concerned. The Principal Accounts Office, the Pay and
Accennts {)tlices as well as the ofiices of D.D.Os in. Ministries!
Departments. lntlian Missions and other Government of India
offices abroad, shall be within the jurisdiction. of internal audit
organisation of the concerned MllllSll'Y-"DCPtll'iil'lfi-l‘li. Internal
Audit Organisation. shall also check initial accounts maintained
in the executive oilices to ascertain. how far the rules and regatta
none. systems anti procedures in accounting and Financial matters-
are iieing followed. The scrutiny" should inter-tilts: cover the
clieclftiing of all accounts records including those relating to fund
seen-tints, loans and advances, disposal of confiscated stores
(CBEC), review of the installation and operating c-tlicicncg of
cape raise equipment and machinery anti examination of the
records relating to the physical verification of stores, equipincnts/
tools anti plants. Examination of the accounts of autonomous
sortie-s substantially financed by Government but which are not-
subjcct to Statutory Audit, (institutions which get less than
Rs; laltlis by way of grant l'illl, which, at present, do not
seine-attain the purview of audit by Statutory Audit) fall within
th.e‘f,.1iiniliit of lnternal Antiit Organisation of the Ministry! '
Delniijrtnie n t .
Note: In selecting the missions anti other Govt. of .lnriia
Offices abroad as well as autonomous institutions, the
internal Audit Organisation should draw up pros,
grannnes in consultation with the administrative
sections of the Ministryr’Deparnnent concerned. "
3 . .
. ll H

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2.2 DUTIES OF INTERNAL AUDIT
' The duties of_ the internal audit organisation. will inter-elm
include the follonang 1——
(i) stud},r of accounting procedures prescribed for the
department with a ViCiW to ensuring that they are
correct z-niequate and free from any deteets or
lacunae;
(ii) rr‘atoh that the prescribed procedures and the orders
issued from tune to time are intpiementeri property;
{iii) scrutiny and check. of pajnuents end. accounting work
of the accounting units;
(iv) im-Iestigation of important. arrears in accounting and
other connected records;
(v) periodical review of all aeeounts records;
(Vi) pursuaneejsettien'ient of objections taken in rest
audit notes Issued by statutory audit oflieea- anti
other matters relatmg to statutory audit;
(vii) examine and report on points or irregularities
brought. to its notice by the Principal Accounts
Ofiiee/PADs; ' ' a '
(viii) coordination. with other MinistriesfDepartnleets and
UCLA. regarding internal audit procedures.
as PROCEDURE eon CONDUCTING INTERNAL noon."
The work relating to internal audit should norrnalljg:r be con-
dueted by locally inspecting various units and offices and I by
"ou-the-spot‘ verification of accounts. records. The work of the
teen! inspection parties may be coordinated by a headquarters
eeil, depending upon the nature, number and. size of the internal
audit parties. . -
2.4 QUANTUM OF AUDIT
{an internal audit! party should conduct a generai res-'iew‘ of
all the accounts records maintained by an ofliee since the last ins-
pection or in ease of new units, since the formation of the oflioe.
Apart from the generel review, it should also eond uet a detailed
eheek of accounts records of one month in a. year to be selected
by the Controile-r/Deputy Controller inoharge of internal audit;

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Ul
The fierce-stage of bills/rouchers/cases etc. other than those
pertaining to the accounts records of the selected month to be
checked in detail by igternal audit as part of the general review
of aecounts of an ofiice, will be left to the discretion of the
head the internal audit unit. The extent and nature of checks
will. ineiudc the following :--
a) detailed scrutiny of accounts records required to be-
maintained in Pay and Accounts Offices/n1 the
offices of DDOs;
i' o) verification of payment and accounting procedures
in the departmentglised system of accounts including
procedures to be followed by cheque drawing DDOs,
to see in particular that the scope and extent of pre-
check and post-check. by PAOs are adequate and
that the procedures for maintenance of provident
fund accounts, finalisation of gension cases etc. are
being rial},r observed;
verification of the extent and frequency of control
and checks exercised by the head of office, in order
to locate any lacunae in procedures whereby frauds
or defalcations may be possible either individually or
in collusion. Where necessary; steps to remove
such. lacunae should be suggested;
to) scrutiny of sanctioning and purchase procedures in
the office inspected, so as to ensure that they are
free from any defect or lacunae;
c} checking of procedures in regard to disposal of assets
to ensure that there exist adequate scrapping/con-
demning procedures;
'11:") scrutiny of general oliice management procedures
adopted by the heads of olfiees locally where these-
have financial and accounting implications. so as to-
suggest tightening up administrative and financial
control, savings in expenditure or streamlining Of
accounting.
2:5" iP‘iisOGRAMME FOR ENTERNAL INSPECTION
, ‘ii'ine programme for internal inspection for each of the parties
he chalked out by the internal audit organisation and got

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agproved by the Chief Coatroiler/Coatroiier/Depatv' Coaitreil'er
of Accounts incharge of the internal. aadit. T i met}: intimation oi
of the proposed visit of the inspection part3; vviii he sentito all
the ofl‘icers concernedi A copy of the programme will aiao he
forwarded to the PAS concerned. ' --
1
pi.
2.6 RECORDS; DOCUMENTS TO BE. MADE AVAIL“-
' TO THE .iNTERNi-EL AUDET PARTIES
The heart oi? the office to be inspected will he ativiseti of the
dates of inspection vveii in advanee. A list of records to he
examined. during iateraai audit shall also he prepared aaiii seat
‘to him, aioagtvith the notice of inspection so that these are
hep-t ready by him heiiore the arrival oi: the party.
The accounts records maintained by the eii'icea viaitetii tviii.
be iti‘at'ie available promptly to the internal audit- partiea.
hiote i~'i.he payments made by a cheque drawing DBL}
during the aeieeted montMs) will be verified. eg- the
internal audit party with reference to the eouaterfoiia
of cheque-a? copies of. the bank seroilsj pa}? hill
register or o'iiiee copies oi“ the paid. vouchers avaih
able with the D".D'.O. It. is, therefore, not neeeaaarv'
tor the partyF to obtain original paid vouchers etc.
from the PAC. However, in the case oi payments.
of long-term leans/advances etc. for which the hills
are presented by him to the P.A.O. for pre-eheeit
and pavmeetfl the internal audit party aha'ii ohtaia
from the RAD? a list of ail such paianeata made
by him rioting moathia) seieeteti for audit for the
purpose. of checking that the chequesfhaak tirafta
marked ‘Aceoeat Payee” had. been made over to the
correct payees anti their acknowledgements ob
tained; and that the cheques/hank drafts iaa'aed in.
favour of the cheque-drawing DDO for ata'aagiag
payment in cash had been entered in the cash hook
maintained by him.
Note 2—4-11 the caae of. DDOS without cheqaeg-tira‘ariaa
powers? the origiaai paid vouchers for the iaoatMs}
selected for local audit would he required by the
internal audit partiea. These shotiid; therefore, he
obtained. hv them from the PASS. However} the lists

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at payments and eheqaes issued by the Pa'tOsf
cheque-drawing DDOs in. the case at payments per-
taining te- such. 13.53.05 will not he required by
internal audit. parties and the-Se need net be called
tar treat the PA Us.
Nate EWThe lists at pa}-'tnen-‘.s anti pairt ranchers will be far—
nished by the FAQ tn the parties preinpiIy-en-reeeipt
of necessary requisitions. A iist. showing particular-s
tn". tiiserepaneiesr'defacts ar ether irregularities, if
any, noticed during tit-:2 etaaisc at seerufiny Of naalt
scrolls with reference tn the reiatett paid ranchers
and cheques- remaining unsettled tn" any other isn—
'pertant paint requiring investigation may alse tie
tarnished by the RAD-s tn the internai audit p-afiie-s
tar ‘Or. the spet‘ eaaininatian and repnrt.
Nfite ii—Jn. the east; of Divisitn'tal Ofiiees working on the patina
tie warks system, the paid ranchers and ether. erigi-
nat records pertaining to the mentht’s) seieetett :ter
audit shall Hillliifll‘lff he sent by the FAQ to the
internal audit party. A record of paid
vouchers
tarnished ter’reeenreti bani; treat
internai. audit
parties wiil be Int-tintaineti by the FAQ in a register
in the farm in the Anneaare “AK This register wit].
he. res-*iewed. Hlt'it'lii'fljr' anti neeessary action taken
where the paid watchers have net been received
back. It wilt be the tnspeetiag Officer’s reap-ensi-
hiiit}: tn return the retarhers iinntetiiateiy after in~
'ernal aatiit at the enneeraed nfiiee is eUtapi'etetil.
Hate fi—The abeve insttaetiens wilt aisn he toilets-ad r-aatatis
nttttanrtfs in the case at antiit 0E DDU'S Offices t0
he etinttaeteri. by statatnr'r atttiit parties.

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8
2.? FREQUENCY OF INTERNAL AUDIT
The frequency of internal audit will obviously - depend upon
the stall strength sanctioned for Internal Audit Organisation as
well as the number of units falling under its purview. The num—
ber of. days for iuspeotion, as also the frequency would depend
on the amount of expenditure, the nature of transaction s, the
state of arrears and the general health of accounts of each unit.
It would, however, be desirable to aim for internal audit of all
important offices once a year.
2.8 DRAFTIN G AND PROCEDURE FOR SUBMISSION OF
INSPECTION REPORTS
The inspection report? should he couched in polite language.
Oiiensia'e or strong words, sareastie language ete. should on no
account, figure in the report. No suppositions, assumptions or
allegations should be included in the report. Only faets should
he mentioned and inevitable eouelusions drawn. There should
be no reference to responsibility being fixed for any irregularity;
it is for" the administrative authorities to take action in the matter.
The inspection report should be in two parts, Part—I eontaining
introductory and Part-ll irregularities noticed during the current
attditfitlspeetion.
{ii} Outstanding paras in the internal audit- reports should
be reviewed and arrangement made for their early settlement.
The internal audit parties should take up all the outstanding
paras pertaining to an office during its next inspection and settle
them on the spot. Where such a settlement is not possible, the
outstanding points with their latest position should be incorporat-
ed in the new report and thereby the old report(s) should be
considered as closed.

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9
(iii) Routine errors or omissions or commissions noticed
during the course of inspection should be got rectified on the
spot. Inspection reports should invariably be discussed with the
heads of offices inspected and their comments. if any, suitably
incorporated in the reports. inspection reports should be issued
after being vetted at the headquarters. One copy of the inspec-
tion report will be issued to the head of office inspected and one
cop};r will be sent to the Principal Accounts Officer i.e. Chief
Controlicr/Controilerz’Dy. Controller of Accounts. Important
points should also be brought to the notice of FA/CAA hy the
head of the Internal Audit Organisation. The progress of
settlement of the points raised in the report should be watched
by the Chief COI'iril'OiiEBIT/COHU'OHfil' of Accounts/Deputy Con-
troller of Accounts incharge of Internal Audit Organisation and.
all points outstanding should be reviewed at the time of the
next inspection by the internal audit party.
2.9 PURSUANCE OF TEST AUDIT NOTES ISSUED BY
STATUTORY AUDIT
In order to keep a watch over the settlement of audit oh—
jections included in. the Test Audit Notes issued by Statutory
Audit offices. the Internal Audit Organisation will maintain a.
register in the form in Annexure- ‘B’ setting apart separate felios
for each D.D.O. ~The progress made towards the settlement of
outstanding objections should be reviewed quarterly and appro-
priate further action taken to ensure their speedy settlement.
The compliance with the objections reported to have been made
by D.D-.Os should" be verified during next internal audit of the
concerned office. The register will be produced to Statutcn‘j,r
Audit Parties. whenever asked for, for verification of settlement
of, the objections raised.
2%759 CGAISS

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CHAPTER-III
NATURE OF CHECKS TO BE .EXERCISED
3-1 internal Audit Parties will interact-Ea exercise the
follow-t
ing checks during inspection of accounts records of various
offices :—
3.1.l PAY ANS ACCOUN‘I‘S OFFICES
Internal Audit Party Wilt see that :—
(a)
(b)
(C)
(d)
all accounts records required to be maintained are
maintatned in the prescrtbcd forms, and the accounts
are compiled accurately and it} correct manner;
payments are made in accordance with the ruies and
orders governing then; and the arithmetical calcium--
tions are correct;
last claims of; government servants are correctly paid
and over p-QYments, if any, brought __to the notice of
concerned D-DO for appropriate 3811011;
recoveries/tiedactions made from the bills are in
order;
(e) pay fixations are correct;
(f) all payments and receipts are duly accounted for;
(a)
(hi
all transactions are accounted for under the heads
of account and the classification is checked by the
JAO/AAO/AO to the extent prescribed. No Ull—
authorised head of account is operated in the Class?
fled Abstract / Consolidated Abstract;
various broadsheets and objection books etc. are
maintained properly; the broadsheetg are closed
regularly every month, and the differences between
broadsheets and ledger figures analysed and steps
taken to clear them expeditiously;
12

Page 17
iii)
13
the balances outsta'fiding under various debt: deposit;
suspense and remittance heads are reviewed at
periodical intervals and steps taken to clear the game
as expeditiously as possible;
(j) interest wherever required has been correctly calcu-
(k)
(l) foreign service contributions; wherever
(a) receipt scrolls /pay1uent scrolls with challans
latcd and accounted for;
GPF/CPF accounts are maintained properly and
agreed by maintaining the prescribed broadsheets;
no missing debits/credits and unposted items are
kept outstanding for unduly long periods and the
annual accounts are closed and statement of accounts
issued by the due dates;
necessary,
are recovered. correctly;
loans and advances and grants-in-aid are correctly
paid and over—payments, if any, brought; to the
notice of concerned DD-O- for appropriate action;
and
paid cheques are received in time from the primary:
bank branches checked properly as per instructions
and the discrepancies; it any, pointed out promptly;
(o) in the case of. payments made by cheque-drawing
(a)
('11)
131302;; the lists oi": payments accompanied by paid
vouchers are received every week by the prescribed!
dates from them, checked and properly accounted
for;
the weekly accounts of receipts realised and remitted
by the departmental oil'icers, with duplicate copies
of cliallans, areircceived from them and checked.
properly with the bank scrolls;
the instruciion-s regarding reconciliation of figures
under the heads Public Sector Bank. Suspense and
RB Deposits are duly followed;
(r) the instructions regarding reconciliation of eapendi~
ture and revenue receipt figures are followed;
(s) there is no undue delay in the finalisation of pension-
CHEESE.

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14
_;_3.1.2 The Internal Audit Party will take an extract form the
Register of P.P.Os maintained in the Principal Accounts Ufiice
in respect of the P.P.0s routed through it as well as those sent
directly by the P.A.O-. (vide para 7.1.4 of CAML A test:
check of these cases as well as those where pension is being paid
by the originating Pay & Accounts office itself should be con-
ducted in the Pay 6e Accounts Office, with reference to the Pen-
ston papers received from the concerned Head of O'Hicc.
3.1.3 CHE'QUE
nanwrwojnon-cneoun nnawmo
DDOs.
Internal Audit Party will see that—
(a)
(b)
(C)
(d)
(e)
(f)
(h)
All. accounts records required to be maintained are
maintained in the prescribed forms;
Payments made by the cheque drawing D'DOs 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; the lists of payments accompanied by paid
vouchers are sent every week by them as per instruce
tions to the concerned FAQ by the prescribed dates;
book;
log
the instructions for the maintenance of cash
contingent; register, stock and stores accounts,
books and other accounts records are duly observed;
‘Account Payce" cheques (in favour of government
servants and third parties being payable onlyr to the--
concerned pnyees) issued by PAD-s after ere—check
of relevant bills to .DDOs are not being entered in
the cash book maintained by them and that the
delivery and acknowledgement of such cheques is
being watched through a separate register required
to be maintained for the purpose;
P21}? fixations are correct;
the weekly accounts of receipts with duplicate copies
of challans are being sent to the concerned PAO;
purchases are made as per roles and orders govern~
ing them; where lowest quotations are not accepted;-
the reasons therefor are recorded;
all snb~vouchers pertaining to contingent charges
not sent to the PAC) along with contingent bills are

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15
available in office, are otherwise in order and have
been properly can-celled;
(i) G.P.F.,[C.P.F. accounts of Group ‘D" employees are
maintained properly;
(j) the instructions for processing/submission of pension
cases to the concerned PAO are observed;
(k) the payment entries of the advances drawn are made
properly in the Pay Bill Register and that recoveries
are being efieoted regularly from the, Government
servant concerned; and that the entries in the
monthly abstracts of recoveries, especially those
relating to “transfer in“r and “transfer out" cases, are
correctly made;
(1) every PD Account (Personal Deposit Account) in
the Ministry /Departn1ent is alive and in operation.
an CHECKING OF RECEIPTS
While the Departmental authorities are primarily responsible
to see that all revenue or other debts due to Government are cor-
rectly and properly assessed, realised and credited to Govern-
ment account, it would be necessary for internal Audit to see
that adequate regulations and procedures have been prescribed in
the Department: to secure an effective check on collection and
accountal of all revenue receipts and refunds and that such re-
gulations and procedures are being followed correctly. It would
also be necessary to ascertain the nature of checks exercised by
the Departmental authorities to ensure prompt detection and in—
vestigation of irregularities, loss of revenue due to double refunds,
refunds with reference to fraudulent and forged vouchers/challans
or other types of omission or commissions in the process of levy,”
collection of taxes or in ordering refunds.
3.2.1 In the Internal audit of revenue receipts the Internal
Audit Party should inter alt'rt ensure the following by such test
checlrs as may be considered necessary :-~
(3.) that the demands are raised promptly in the manner
required by the Law or Act of Parliament and that
no amount due to Government is left outstanding in
its books without sufficient reasons;

Page 20
(b)
15
that the collections and refunds are aceountedfor
regularly and properly under the appropriate: heads
of accounts and that no stuns are credited to Gov-
ernment by debit to a suspense head; credit must fol~
low and not precede realisation-
that proper safeguards exist to ensure that there is
no wilful omission or negligence to levy or collect
taxes or to arrange for refunds, wherever due;
that double refunds, fraudulent or forged refund orders
or other losses of revenue through fraud, default or
mistake are promptly brought to light and investi-
gated; and
that all revenue receipts collected by departmental
officers are promptly remitted to the bank or the
P.A.O., as the case may he, and that the receipts
as per their records are reconciled with those booked
in. Government accounts on the basis of receipted
challans, in. accordance with the procedure laid down
in Chapter 1 of Civil Accounts Manual. '