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ARMY LOCAL AUDIT MANUAL (PART-I) VOL-I, II & III
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Army Local Audit Manual (Part –I)
Volume-I, II & III
PREFACE
This manual contains instructions for the local audit and inspection of store and cash accounts of Army Units and Formations (as distinct from those of M.E.S., Air Force, Navy and Factory). It consists of two parts viz: -
Part I-Containing instructions for the local audit of store accounts, railway warrants, credit notes, books of Form D and other concession vouchers, Service books, L.P.C. books etc.
Part II-Containing instructions for the inspection of Public Fund Accounts.
2. All Officers and members of staff should make themselves fully conversant with the contents of this Manual. Ignorance of its provisions will not be accepted as an excuse for any departure from these provisions or failure to comply with them.
3. This Manual is a departmental publication. The instructions contained therein are supplementary to Rules in the Civil and Defence Audit and Account Codes, Financial and other Regulations for theArmy, Store Accounting Instructions, Scales of A.S.C. Supplies, the various departmental Regulations and Standing orders etc. When dealing with work in the office and in correspondence with other offices in the Department, the relevant paras of this Manual should invariably be cited. No change which involves a substantial departure from these instructions should be effected without the previous approval of the Controller General of Defence Accounts.
4. The Principal Controller of Defence Accounts (Southern Command) Pune will be responsible for keeping the Manual corrected upto date. For this purpose, he will propose corrections whenever necessary and send the draft amendments to the Controller General of Defence Accounts in duplicate for approval, quoting the orders on which the correction proposed are based.
5. This edition of the manual supersedes the 1977 Reprint Edition,
NEW DELHI (R. K. MATHUR)
Dated: 27-11-91.CONTROLLER GENERAL OF DEFENCE
ACCOUNTS
For easy handling, this Part-I of the Army Local Audit Manual has been printed in three Volumes as under: -
Volume-I Chapters I, II, III and Appendices
Volume-II Chapters IV, V, VI and VII
Volume-III Chapters VIII, IX, X, XI
TABLE OF CONTENTS
VOLUME-I / Paras / PageCHAPTER I
CHAPTER II
CHAPTER III / General Duties and Responsibilities of Local
Audit Officers and their staff......
General Rules for the Conduct of Local Audit.
General Rules for the Audit of Store Accounts of
Supply and Store Depots. / 1-30
31-110
111-145
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-
-
-
APPENDICES
APPENDIX'A'-Extent of Audit......
APPENDIX'B'-Local Audit Objections.....
APPENDIX'C'-List of Reports and Returns
APPENDIX'D'-List of Registers......
APPENDIX'E'-List of Books of Regulations
APPENDIX 'F'-Instructions for the preparation of Annual Audit Certificate
APPENDIX 'G'-List of Auditable Accounts, subsidiary documents and Ancillary
Records,
VOLUME-II
CHAPTER IV
CHAPTER V
CHAPTER VI
CHAPTER VII / Audit of Accounts of Store Depots......
Audit of Store Accounts of Units and
Headquarters Formations......
Audit of Store Accounts of Hospitals......
Audit of Store Accounts of Manufacturing
Establishments...... / 146-280
281-314
315-335
336-359
VOLUME-III
CHAPTER VIII
CHAPTER IX
CHAPTER X
CHAPTER XI / Audit of Cantonment Fund Accounts......
Audit of Accounts of Miscellaneous
Formations......
Audit of Railway Warrants, Credit Notes,
Concession Vouchers, Service Books etc....
Technical Development Establishment......
(a) Research and Development
Organisation......
(b) Quality Assurance Organisation...... / 360-405
406-445
446-470
471-481
482-486
Army Local Audit Manual Part-I
VOLUME - I
DEFINITIONS
1. / Consignor's LAO / TheLAO,AAO/SO(A),ALAO, Local Audit Staff or station Auditors auditing the store accounts of the Depot, Unit of formation issuing the stores.2. / Consignee's LAO / TheLAO,AAO/SO(A),ALAO Local Staff or station Auditor auditing the store accounts of the Depot, Unit or- formation receiving the stores.
3. / ALAO(Group Superintendent) / The ALAO (superintendent) Local Audit staff.
4. / Manufacturing Establishment / An Army ordnance factory, an ArmyClothing Factory, an Armed Forces Medical store Depot, including its factory and repair workshop, a DairyFarm, a young Stock Farm and a Bakery.
5. / Stores / Include animals.
6. / Supply and store Depot / Includes an Arsenal, an ordnance Depot,Air craft Depot, Vehicle Depot, A.S.C. Supply Depots (including Base and station supply Depots) or Sub-Depot; Grain Crushing Depots and Government (Controlled Mills.
7. / Units / Means all units of the fighting services, Animal Transport Units, Mechanical Transport Units, Ordnance workshop Companies. Units of Territorial Forces and N.C.Cs. Hospitals, Squadrons of the Air Force and all others which do not come under the category of supply and Store Depot and manufacturing establishment.
8. / A.A.O. / An AAO/SO (A) or clerk of the Defence Accounts Department attached to a unit for preparation of its pay accounts.
9. / Issue Voucher / A voucher on which storesare issued.
10. / Receipt Voucher / A voucher on which storesare received.
Note 1:The "Receipt Voucher" of the consignee is the same as the `Issue Voucher' of the consignor.
Note 2:Other definitions of restricted application, e.g., pairing, linking. Final receipts, Final Issue, etc., will he found in the relevant chapters or appendices in the body of the Manual
CHAPTER-I
GENERAL DUTIES AND RESPONSIBILITIES OF
LOCAL AUDIT OFFICERS AND THEIR STAFF
Para / ParaInternal Check by the Defence Accounts Department / 1 / List of accounts and registersto be audited / 11
Agencies by which local audit is conducted / 2 / Financial Advice / 12 to16
Duties and responsibilities of the L.A.O. / 3 / Local audit completion report / 17 &18
Review of orders and sanction / 4 / Important financial irregularities / 19
Dutiesof ALAO (Group Superintendent), localaudit staff / 5 / M. F. A. I. / 20
Discretion vested in L.A.O. in carrying out local auditduties and programme of 6to8 work / 6 to8 / Annual audit certificate / 21
Frequency of local audit / 9 / Appropriation accounts / 22 to26
Programme of local audit / 10 / List of reports and returns to berendered and registers to be maintained by audit offices / 27
Internal check by the Defence Accounts Department
It is the duty of the Defence Accounts Department to conduct locally the internal check of the accounts, i.e., ledgers, returns, stock and due sheets, and/or such other records connected with the receipt and issue of stores, required to be prepared and maintained by the various Army supply and store depots and unit/formations as may be prescribed for the purpose in the various books of Regulations and other Government orders issued from time to time for each class of depot or unit/formation. This internal check is distinct from the statutory audit of these accounts and recordsconducted by the representatives of the Director of Audit, Defence Services.
Agencies by which local audit is conducted
2.The audit of store accounts is conducted locally by L.AOs acting under the orders of the LC.D.A./C.D.A. It is organised under two categories, viz.:
(a) Audit by the local audit staff: Local audit is normally carried out by a staff of Assistant Accounts Officer/Section Officer (Accounts) and Auditors/clerks placed under a local audit officer. A local audit staff is attached in some cases to large store depots. Local audit staff under the immediate charge of an A.L.A.O. (Group Superintendent) is located at important military stations/centers forthe purpose of auditing the accounts of the Units at those stations/centers. At stations of senior Auditors the local audit staff consist of only one senior auditors or clerk, he is called a "station auditor". At stations where there is insufficient work for a full time station auditor, local audit is conducted by the local audit staff from the nearby station/centre.
(b) Review of local audit by an Indian Defence Accounts Semite Officer: This review is carried out in accordance with the rules laid down in Appendix II to Office Manual Part I.
Duties and responsibilities of LAO
3.(i) The responsibility of the LAO, is inseparable from that of his staff, final responsibility for the efficient conduct of Local Audit, therefore, rests always with L.A.O., A.F In addition to the specific duties the L.A.O. is expected to conduct an intelligent reviewof the audit work of his staff and to apply surprise test checks periodically. The L.A.O., will in all cases investigate the reasons for the non-linking of vouchers selected for test linking by the Local Audit staff. He must ensure that the non-linking of vouchers is not due to a defect in the accounting system of the unit.
Note: Appendix I to the Office Manual, Part I, lays down the duties of the Accounts officer/Senior Accounts officer/ACDA In-charge Sections and ALA O of Sections. Unless otherwise stated, this Appendix applies equally to LAOS and AL-40 of Local Audit Groups.
(ii) During his periodical visits, the L.A.O., will by personal inspection and supervision, satisfy himself that the A.L.A.Os are carrying out their duties efficiently. He will examine the draft objectionstatements and see that they are correct and properly worded and will verify by test check that the corrections made in the accounts as a result of the objections raised have been properly carried out. He will take up all outstanding objections and points of a controversial nature which have been held over for his scrutiny and orders, and precede with their settlement in personal consultation with the Officer Commanding the unit or other officers concerned, where necessary. He will see that the settlement of objections more than three months old is not delayed by units and will, where necessary, report to Command Headquarters of other higher authorities with a view to obtaining their assistance in settlement thereof. Where he finds that there are no prospects of objections being settled, he will report the matter to the P.C.D.A./C.D.A.
Review of orders and sanctions
4.Local audit officers will examine all orders and sanctions affecting their work, issued by the Government of India and authorities subordinate to them, C.G..D.As letters and Principal Controller's/ Controller's office orders, etc., in order to ensure that they are correctly applied in audit. For this purpose, they will hold monthly conferences (or at longer intervals where so authorised by Principal Controllers/Controllers) with their S.O. (A)/A.A.O., senior auditors and clerks readily available at their headquarters stations. All important and doubtful points arising in the course of local audit will be discussed at these conferences. The results of the conferences will be recorded in a review register. All doubtful points connected with the interpretation or applicability of rules, instructions, etc., will be referred to the Principal Controller/Controller for orders.
A certificate of review of orders and sanctions will be submitted to the P.C.D.A./C.D.A. (Financial Advice Section) monthly by the L.A.Os.
Note:Such monthly conferences should also be held in sub-offices at outstations and a review register of orders discussed should be maintained and produced for inspection by the L.A.O. at the time of his visit. A, certificate of review of the orders should also be rendered by the sub-offices to the L.A.O.
In order to ensure that the instructions issued by the L.A.Os have been correctly followed and carried out by their staff, a certain number of first issues, etc., covered by the orders will be reviewedby them. The result of review of such issues, etc., will also be recorded in a separate column of the review register.
Duties of Assistant Local Audit Officers and Local Audit Staff
5.The A.L.A.O’s staff will perform, in the first instance; all the duties prescribed for the L.A.O., in regard-to the local audit. Original objection statements, re-audit remarks and correspondence of an important nature will be dealt with finally by the L.A.O. Re-audit remarks in respect of objections settled at unit level after necessary verification will, however, be issued by the A.L.A.O. Except when the L.A.O. is present, the A.L.A.O. will discuss all outstanding questions personally with the O.C. the unit or formation or with the officer deputed by the latter. In order to facilitate the work of L.A.O. he will also discuss and settle normal objections where possible. He will bring to the notice of L.A.O. during his periodical visits all objections of importance noticed during the course of his duties.
The L.A.O. however, remains personally responsible for seeing that the accounts which are audited have all been audited in strict compliance with the prescribed rule and orders.
Discretions Vested in LA.O. in Carrying Out Local Audit Duties and Programme of Work
6.In exercising certain test checks on the work of the local audit staff e.g., a test check of the verification of credits in store accounts, etc., the L.A.O. is given discretion in the matter of the extent to which his check is to be applied, but the check exercised should be substantial.
He is expected to carry out such discretionary test checks intelligently and in accordance with the spirit of the orders.
7. The L.A.O. is ordinarily expected to visit each unit/formation once every quarter for the review of local audit work. In the case of outstations where local audit is carried out on a half yearly basis, the review will also generally be carried out half-yearly. To enable the L.A.O. to devote more time to financial advice and to settling on the spot important local audit objections and points of controversial nature, he is allowed a certain amount of discretion in working out the quarterly programme. The exercise of this discretion is subject to the following conditions: -
(a) If, in order to settle important objections on the spot, it is necessary to extend the time originally allowed for the review offact to the EC.D.A. /C.D.A. for confirmation of his action in extending the time.
If, however, special circumstances connected with a unit make a prolonged stay absolutely necessary, the L local audit of a particular unit or formation, the L.A.O. should report the A.O should report the circumstances to the EC.D.A./C.D.A. in detail by an express letter and obtain his prior concurrence (by wire, if necessary). In such cases, instead of dislocating the whole of his quarterly programme, the L.A.O. should miss out the next unit, the accounts of which as judged from his previous audit are in a good state and return to it later on, if possible. He should at the same time, address a courteous letter of regret to the unit explaining his absence on the date notified in the programme.
(b) In stations where a stationary local audit staff is located and/or continuous local audit is in progress, the L.A.O. need not necessarily visit all such stations or all units located in such stationsevery quarter. The elimination of the L.A.O's visit to any unit should depend on his being completely satisfied [from his personal knowledge or from information received from the Assistant Local Audit Officer (group superintendent) that the accounts of the unit are in a good state and that his visit can be safely postponed until the next quarter.
8.The L.A.O. should always bear in mind the fact that the detailed instructions given in this manual represent the general principles on which audit is to be conducted. The L.A.O. /A.L.A.O. (in the absence of L.A.O)/station auditor is expected to interpret the instructions intelligently.
Frequency of local audit
9.Accounts will be audited once in a quarter (half yearlyin the case of certain smaller units, which are specifically notified by the C.G.D.A. to be as such, for this purpose). At each visit to a unit, the L.A.O. or his staff will complete the audit up to and including the accounts for the month preceding the visit or to the end of the penultimate month, if the visit takes place early in the month. In the case of small temporary formations which close down at hill stations alter the summer months (e.g., ration stands hill depots, etc.), the audit of the accounts will be completed up to the date of their closing down. In the ease of supply and store depots to which a local audit staff is attached, the audit will be conducted on a monthly (continuous) basis,, i.e., the audit of a month's transactions will be commenced soon after the skeleton lists for the month (the last decade of the month in the case of supply depots) have been received. The audit of the accounts of smaller units located at a station, which in the ordinary course is visited quarterlyby the local audit staff, may, if convenient, be conducted quarterly instead of half-yearly.
The audit of all NCC units will be conducted on an annual basis without involving any reduction in the quantum of audit e.g., four months accounts in a year will be selected for detailed check.
Note 1:The half yearly audit of the accounts of smaller aunts is subject to the condition that the accounts of such units are at all times maintained in a satisfactory state.
Note 2:Accounts audited quarterly but not audited within three months following the quarter of audit will be regarded as in arrears. Accounts audited half yearly but not audited within 6 months following the close of half year will be regarded as. in arrears. Accounts audited annually but not audited within 9 months following the period of annual audit will be regarded as in arrears.
Programme of local audit
10.A quarterly programme of local audit, etc., for each station or group in his area will be drawn up by the L.A.O. The programme will provide for the completion within that quarter of the audit due to be carried out in the quarter. It will be submitted to the PC.D.A. /C.D.A. for approval by the 20th of the second month of the preceding quarter. The standard time in man-days as approved and notified by the C.G.D.A from time to time for each class of unit represents the average period required for the local audit of the accounts of that unit, and should be adhered to by the L.A.O. in making out the programme. A separate programme for review of store accounts and inspection of cash accounts of units by the L.A.Os will be prepared and submitted to the PC.D.A./C.D.A. The review of the accounts of units and formations audited by local audit staff during the absence of L.A.O. from a station will also be included in this programme.
The L.A.Os will inform units/formations concerned of their impending programmes of audit, review and inspection sufficiently in advance under intimation to their station/formation headquarters.
List of accounts and registers to be audited
11. To ensure that no accounts are omitted in audit a list of all accounts and registers required to be maintained by each unit (including miscellaneous accounting units which have no settled organisations such as ration stands, schools of instruction, rest camps, embarkation staffs, etc.) in his area and which he hasto audit will be made out by the L.A.O. and sent to the PC.D.A. /C.D.A. for approval. Any additions or alterations to this list will be carried out under the orders of the P C.D.A./C.D.A.