- 1.1 Organization
- 1.1.1 The National Capital Territory of Delhi is a Union Territory having legislative powers. The new set up came into existence with effect from 1 December 1993 with its own 'Consolidated Fund of the National Capital Territory of Delhi'. However, its Public Account continues to be maintained by the Govt. of India. The Finance Bill in respect of estimated receipts and expenditure of the GNCT of Delhi for the ensuing year and supplementary grants for the current financial years are laid before the Legislative Assembly with the prior approval of the Lieutenant Governor and Government of India in the form of 'Annual Financial Statement'. After passing of the Finance Bill by the Legislative Assembly, the Lt. Governor gives his assent to the Appropriation Act.
- 1.1.2 In pursuance of the decision of the Government of India, the scheme for the Separation of Accounts from Audit in Delhi was introduced in the GNCT of Delhi w.e.f. 1.4.1977. Accordingly, the Comptroller & Auditor General was relieved of the responsibility of keeping the Accounts of the UT and the same was assigned to the Controller of Accounts of the GNCT of Delhi.
- 1.1.3 The Chief Secretary of the GNCT of Delhi is the Chief Accounting Authority with the overall responsibility for all transactions relating to the GNCT of Delhi. This responsibility is discharged by him through and with the assistance of the Principal Secretary (Finance) who is also the Head of Department of the Directorate of Audit. The Principal Secretary (Finance) is assisted by the Controller of Accounts, who supervises the functions of various Pay and Accounts Offices.
- 1.1.4 Controlling Officers for Revenue and Expenditure Management: Every CO heading a department of the GNCT of Delhi has to administer revenue collection and its accounting and exercise expenditure control through its Pay and Accounts office. In this regard he is to be guided by the procedures laid down under GFR, Receipts & Payments Rules and CAM etc. The main objective of the Directorate of Audit is to supervise the performance of the IA teams placed under its charge.
- 1.1.5 Directorate of Audit: According to the Scheme of Separation of Accounts from Audit referred to in para 1.1.2 above, there would be an Internal Audit Organization with a view to ensuring that records are maintained properly, uniform procedures are adopted in the matter of payment and accounting, corrective measures wherever necessary are initiated promptly and qualitative improvements are brought about in accounting. Further, the internal audit shall also look in to and ensure economy in expenditure and report to the Directorate of Audit periodically so as to render timely assistance to the management and enable the later to issue mid-term corrections, as and when required.
- 1.1.6 The Directorate of Audit which began its activities with effect from 1 July 1997 assumed independent identity w.e.f 1.6.1981. It has been placed under the charge of the Principal Secretary (Finance) who has been declared Ex-Officio Director of Audit and is assisted by Special Secretary (Finance) and Controller of Accounts (Audit).
- 1.1.7 Jurisdiction: The Principal Accounts Office, all the Pay and Accounts Offices, all Departments of the GNCT of Delhi and their units come within the jurisdiction of Directorate of Audit for the purpose of Internal Audit. Besides, all Grantee Institutions/ Local Self Governing Bodies receiving grant-in aid from any of the departments of GNCT of Delhi are subject to internal audit of the Directorate of Audit. List of Government Departments is given at Annexure-1.
- 1.1.8 Autonomous bodies financed by GNCT of Delhi, which may not be subject to Statutory Audit irrespective of the amount involved fall within the ambit of internal audit by the Directorate of Audit.
- 1.2 Role of Internal Audit
- 1.2.1 Internal Audit can play a significant role in assisting the Head of Departments (HOD) to achieve their aims and objectives. IA is therefore considered as an integral part of the management. In public expenditure management system it is necessary that there is a system of "Checks and Balances" to ensure that the executives are discharging their duties efficiently and effectively, which in other words would mean cost-effectiveness and efficacy of government activities. IA is expected to play significant role in improving the following:-
- Quality of public expenditureProper implementation of rules and procedures
- Maintenance of proper records
- Accuracy in expenditure reporting
- Efficiency and Economy in Public Expenditure
- Propriety of Expenditure
- Effectiveness of Expenditure
- Proper realization, accounting and reporting of Revenue Receipts
- 1.2.2 The role of IA defined above is divided in to two segments, namely:
- Regulatory or Compliance Audit
- Efficiency cum Performance Audit.
- 1.2.3 The first four functions can be clubbed under Regulatory or Compliance Audit. The remaining four functions are grouped under Efficiency cum Performance Audit. It would thus be prudent to introduce IA in two stages in a progressive manner. It also assumes that an IA Team assigned the task of carrying out Performance Audit is well conversant with the features of Regulatory Audit.
- 1.3 Functions of Internal Audit
- 1.3.1 IA is an essential input for an efficient Receipt, Payment and Accounting System. IA should not only ensure adherence to rules and regulations and procedures but also guide the spending units. The scope of IA will depend on the nature of activities undertaken by the host department. It is therefore important that before visiting an office the IA Team makes a detailed study of its functions with particular reference to the working conditions.
- 1.3.2 For optimum results, it is essential that every CO ensures that the IA team has access to all files and documents unless classified as secret or confidential by a competent authority. Primary functions of IA team are as under:
- a. Analyze expenditure records including the cashbooks and ledgers. It should see that entries are made cleanly without any overwriting and the PAO/AAO/JAO/DDO has signed the corrections with date.
- b. Scrutinize payments and see that rules, regulations and procedures have been followed properly.
- c. Goods and services have been delivered and payments made as per terms and conditions of the contract. IA should make specific report on the arrears of expenditure and other outstanding commitments.
- d. Scrutinize the payrolls and see that salary has been drawn for the same number and grade of the posts that have been sanctioned by the competent authority.
- e. TDS has been properly worked out and remitted to the Commissioner of Income Tax by due date.
- f. Calendar of reports and returns is being adhered to strictly. Failure in such cases should be brought to the notice of the Controlling officers.
- g. Internal Audit shall also check all accounts records including those relating to fund accounts loans and advances, disposal of confiscated stores, review of the installation and operating efficiency of expensive equipment and machinery and examination of the records of the physical verification of stores, equipments, tools, plants etc.
- h. IA teams should examine revenue collection records to ensure proper realization, accounting and reporting of Revenue Receipts.
- 1.4 Schedule and Quantum of IA
- 1.4.1 The Directorate of Audit should draw annual schedule of internal auditand inform all the spending units in advance. This would ensure (a) that the concerned staff and officers are available when IA team arrives and (b) all records/ documents are readily available to the IA team.
- 1.4.2 Due to paucity of time and manpower, it is difficult for IA teams to carry out hundred percent check of spending units. The IA has therefore to make a selective approach by random selection of months, which would be revealed only on reaching the spending unit to be audited.
- 1.5 Approach
- The Manual has been compiled to make internal audit of every unit comprehensive. Detailed check-lists have been given for the guidance of the IA teams. Future use of IT support in carrying out the internal audit has also been kept in mind. In that, all check points can be incorporated as validation checks in the software that may be developed in future.
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