AUDIT MANUAL

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CONTENTS

Chapter oneINTRODUCTION 1

Chapter TwoAUDIT PROCEDURES AND PRINCIPLES 2

Chapter ThreeINTERNAL CHECK AND CONTROL 4

Chapter FourCOMMENCEMENT OF AUDIT 5

Chapter FiveAUDIT OF PAYMENTS 5

Chapter SixAUDIT OF RECEIPTS 9

Chapter SevenCASH BOOK AUDIT 10

Chapter EightAUDIT OF BALANCE SHEET 11

Chapter NineAUDIT OF FUNDS AND GRANTS 19

Chapter TenFOREIGN CONTRIBUTION ACCOUNT 19

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Chapter ElevenFINAL STATEMENTS OF ACCOUNT 20

Chapter TwelveCHATEHL CONTRIBUTION 21

Chapter ThirteenAUDIT FEE 22

Chapter FourteenINCOME TAX 22

Chapter FifteenPENSION AND PROVIDENT FUND AUDIT 23

Chapter SixteenRANGDEN TSOKCHUNG AUDIT 23

Chapter SeventeenALLOWANCES AND COMPENSATION FOR CTA STAFF 25

Chapter EighteenAUDIT OF SCHOOL, CARPET MANUFACTURING & HOSPITAL 28

Chapter NineteenAUDIT REPORT 28

Chapter TwentyLANGUAGE BASE 30

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Chapter oneINTRODUCTION

1.1.0 In1959,TheTibetanGovernmentinExilewassetupinIndia.Theneedforaseparateauditofficewiththeobjectiveofsupervisingandscrutinizingtheaccountsandrecordsofallgovernment,semigovernmentandvariousundertakingsoftheCentralTibetanAdministrationwasstronglyfelt.Thusin1962,aseparateOfficeoftheAuditorGeneral(OAG)wasestablishedunderthesupervisionofKashag.ItwasthenheadedbyanofficerwitharankofSecretary.Accordingly,auditrulesandRegulationswerealsoformulatedinconformitywiththesituationsatthattime.

AUDITORGENERAL1.2.0 WiththeadoptionoftheCharteroftheTibetansinexilein1991asthesupremelawgoverningthe

functionsofCentralTibetanAdministration,theOfficeoftheAuditorGeneralwascommissionedasanAutonomousBodystatusunderthearticle106oftheCharter.Article107providedforanAuditorGeneraltobeappointedbyHisHolinesstheDalaiLama.Accordingly,thefirstAuditorGeneralwasappointedonthe23rdofSeptember1991.

AUDITMANUAL1.3.0 TheverypurposeofthisAuditManualistoensureastandardprocedureofauditingandtoachieve

uniformity inall auditingprocedures rather than followingone’sownpersonal interpretationsandopinionsatthetimeofactualauditing.Itisthereforemandatoryforallauditorstofollowandadheretotheinstructionsprovidedinthemanualratherthantorelyonpersonalinterpretation&opinion.ThepurposeofauditistoenabletheDepartments,officesandInstitutionstoefficientlycarryoutitsvariousactivities.Itisnotaimedatfindingfaults.Takingthisintoconsideration,guidanceshouldbesoughtandgivenasprescribedinthismanual.Theconcernedparties/staffshouldmaintainahealthyandmutuallybeneficialprofessionalrelationship.

DUTIESANDPOWERSOFTHEOFFICEOFTHEAUDITORGENERAL1.4.0 Article108oftheCharteroftheTibetansinExileandtheRegulationsoftheOfficeoftheAuditor

General1992,clearlyhighlightstheDutiesandPowersoftheofficeoftheAuditorGeneralasunder:i) TheOfficeoftheAuditorGeneralshallcompletetheauditoftheaccountsofalltheDepartmentsand

its branches and fullyGovernmentFunded autonomous institutionswithin7months commencingfromtheendoftheaccountingyearandsubmitthecertifiedStatementofAccountandreportthereofto theAssembly ofTibetan People’sDeputieswithin 9months commencing from the end of theaccountingyear.

ii) TheofficeoftheAuditorGeneralshallcompletetheauditoftheaccountsofthesemiGovernmentfundedprojectsbefore theendof thenextfinancialyear. In caseof recurring sanction,utilisationcertificateandreportthereofshallbesubmittedbeforethereleaseofthenextyear’sfinalinstallment.

iii) TheOfficeoftheAuditorGeneralshallhavethepowertoreviewalltheaccountsoftheprevioustenyearsandsuchpowershallbeexercisedonly:a) IfitisdeemednecessarybytheOfficeoftheAuditorGeneral;orb) IfitisrequiredtodosobyanyoftheHeadDepartments,ortheAssemblyofTibetanPeople’s

Deputies or the StandingCommittee of theAssembly or theCabinet or the Supreme JusticeCommission.IncasetheReviewReportconflictswiththepreviousAuditReportthelatermaybedeemed void.

iv) Thediscrepanciesorcaseswhichultravires theprinciplesofaccountingrevealedin thecourseof

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reviewauditshallbereportedtotheAssemblyofTibetanPeople’sDeputiesthroughtheconcernedMinistrywithinthestipulatedtimeperiod.

v) TheOfficeoftheAuditorGeneralshallalsohavethepowertoaudittheannualaccountsofalltheself-fundedautonomousinstitutionsunderthejurisdictionoftheGovernment.ItshallsubmittheAuditReport andFinancialStatementof such institutions to theAssemblyofTibetanPeople’sDeputieswithin3monthscommencingfromthedateofconclusionofsuchaudit.

Chapter TwoAUDIT PROCEDURES AND PRINCIPLES

2.1.0 AUDITOBJECTIVES:Theauditoristoensurethattheprescribedstandardsofaccountingareobservedandthatthetransactionsareenteredunderproperheads.Itisfurtherrequiredtoseethat:i) Theexpendituresareincurredaccordingtothebudgetsanctioned;ii) Theexpendituresareincompliancewiththeobjectivesoftheamountsanctioned;iii) Thepurposesofthesanctionareserved;iv) Effortsaremadeforjudiciousexpenditure;v) Pricequotations,properbillsandreceiptsareobtained,qualitycontrolismaintainedandthatthetax

lawsoftheresidentcountryaredulyobserved;vi) Properrequisitionforspecialsanctioniscompliedwithandthattheexpendituresoincurreddoesnot

exceedstheamountsosanctioned.

2.2.0AUDITPROCEDURES:AuditproceduresasprescribedintheRulesandRegulationoftheOfficeoftheAuditorGeneralasgivenundershallstrictlybeobserved.i) TheOfficeoftheAuditorGeneralshallstandardizeandprescribethemaintenanceofbooksofaccount,

systemofaccounting,pro-formaofreceipt&disbursement,incomeandexpenditureandbalancesheettoallitsunits.Forthispurpose,itmaytrainpersonnelifsorequired.ButnostaffoftheOfficeoftheAuditorGeneralshallwriteorhelpwritethebooksofaccountofanyunits.

ii) All accounts andother relateddocuments afterbeingverifiedbya competent authority shouldbesubmittedtotheOfficeoftheAuditorGeneralwithinfollowingspecifiedtime.a) Commencing from themonth ofApril, the period to close every account of 1st quarter, 2nd

quarterand3rdquarterwillbe30daysfortheDepartmentsinDharamsalaand45daysfortheunitssituatedoutsideDharamsalaand60daysfortheofficeofRepresentatives(Abroad)

b) Forthe4thquarter,theperiodtoclosetheaccountsare45daysfortheDepartmentsinDharamsala,60daysfortheunitssituatedoutsideDharamasala&90daysfortheofficeofRepresentatives.

iii) Incaseofanyunitsfailingtosubmitthebooksofaccountandtheotherrelateddocumentswithinthestipulatedperiodoftime,theOfficeoftheAuditorGeneralshallmakeinquiryandissuenotificationtotheconcernedDepartment.

iv) In the course of audit, all the books of accounts relating to Receipts and Payments, Income andExpenditureAccount, Cash Balance, Bank Statement, Balance Sheet and other related files anddocumentsshallbeproducedbeforetheauditor.Ifneedbe,eventheconfidentialdocumentsshouldbeproducedbeforetheAuditorGeneralforscrutiny.

v) In thecourseof audit, theunit shall immediatelygiveexplanationandclarifyall auditqueriesordiscrepanciesraisedbytheauditor.Anyunconvincedqueriesorerrorsshallfurtherbedealtwiththecompetentheadoftheconcernedunit.Stillunconvincedandun-clarified,suchcases,shallfinallybeappendedwiththecertifiedStatementofAccount.

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vi) TheOfficeoftheAuditorGeneralshall,inconsiderationofthesituationofanyofitsunits,executeRevenueAudit,CostAudit,Administrative&ManagementAudit,SystemAudit,PerformanceandProprietyAuditandSocialAudit

vii) TheOfficeoftheAuditorGeneralshallalsoexecutetestauditasandwhencircumstancesdemand.

2.3.0 AUDITPLANNING:i) Planningofauditisveryessentialforanefficientconductofaudit.Whileplanningauditfollowing

aspectsshallbetakenintoaccount.a) Natureofbusiness&itsoperationb) Accountingpolicy&procedureandc) Reliabilityofinternalchecks&controlsystem

ii) Asperannualaudit allocation, after every threemonths,detailed information specifying theunitswhichwereaudited,beingauditedandremainingun-auditedmustbesubmittedtotheheadoffice.

2.4.0 AUDITPROGRAM:Auditprogramisablueprintcontainingdetailsaboutwhatshouldbedone,bywhomandhowmuchtimeitshouldtake.Itplaysavitalroleinanefficientandtimelycompletionoftheaudit.Auditprogrammustbeprepared as per annexure1(A)+(B)Followingaspectsmustbehighlightedintheauditprogram.i) Proceduretobeadoptedduringthecourseofexamination.ii) Distributionofworkamongthestaff.iii) Ananticipatedtimeforthecompletionofanauditwork.iv) DiscussionofAuditProgramwiththeheadofabranchofficeorconcernedDeputy/UnderSecretaryin

theheadofficeisnecessary.Auditorshouldexecuteauditworkaccordingtotheauditprogramandifanychangeisneededtotheauditprogram,ithastobediscussedwiththeaboveconcernedofficers.

2.5.0 AUDITOBSERVATIONNOTE:Allobservationsmadeduring thecourseofanaudit shouldbeproperly recorded.Thiswouldserveasanimportanttooltotheauditorforfuturereferencesandevidenceoftheworkdone.Allobservationsshallberecorded,withallthenecessaryinformation,inthemannerasprescribedintheAnnexureII.

2.6.0 AUDITMEMO:TheprovisionintheArticle6oftheRegulationsoftheofficeoftheAuditorGeneral,“Inthecourseofaudittheunitshallimmediatelygiveexplanationandclarifyallauditqueriesordiscrepanciesraisedbytheauditor.Anyunconvincedqueriesorerrorsshallfurtherbedealtwiththecompetentheadoftheconcernedunit.Stillunconvincedandun-clarifiedcases,ifany,shallfinallybeappendedwiththecertifiedstatementofaccount”mustbecompliedwith.Forthis,anauditmemohastobeissued.Audit memo is an audit query on audit observation, in written, to the competent authority whereby anexplanation/clarificationinwrittenissought.(referAnnexureIII)

2.7.0 AUDITDIARY:Everyaudit teammustmaintainadiarytorecorddailyactivitiesundertakenduringthecourseofanauditincludingproceedingsofanymeeting/discussionheld,verbalexplanationsandclarificationsgivenetc.

2.8.0 INTIMATIONTOTHEAUDITEE:Beforecommencementofanyaudit,itisimportanttoinformtheauditeeconcernedwellinadvanceabouttheaudit.

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2.9.0 ANYPROBLEMFACEDWHILEAUDITING:Auditormayfacemanycomplexissuesoruncertaintiesintheinterpretationofrulesandregulations.Insuchcases,avoidindividualjudgmentandfollowasguidedbelow.a) AuditorisrequiredtoseekguidancefromtheHeadOffice,inwritten/e-mail.b) Headofficewillprovideinstructionbackinwritten.c) Decisiontakenwillbeseparatelyfiledforfuturereferences.

2.10.0 QUALITY&TIMECONTROLFORAUDITWORK:i) Theseniorauditorwillsuperviseandreviewtheworkdonebytheassistant(s).ii) Theprogressof the auditworkwill bemonitored regularlyby the concernedBranchHeadat the

branches andbyUnderSecretary /DeputySecretary at headoffice, to see that theworkhasbeenperformedinaccordancewiththeauditprogram&qualityhasbeenmaintained.

iii) Beforecompletionofauditwork,areviewwillbecarriedoutbytheconcernedJointSecretaryforunitsinDharamshala.

Chapter ThreeINTERNAL CHECK AND CONTROL

3.1.0 ASCERTAININGTHESYSTEM:Attheoutset,theauditorshouldacquainthimself/herselfwiththeinternalcheckandcontrolsystemoftheunitunderaudit.Thiswillhelptheauditortoidentifythoseareaswherehecanrelyuponwithoutanydetailinvestigation/examination.Thiswill alsoallow theauditor todevotemore time toother important issues/matters.Theauditormayexecutethefollowingexercisestostudytheinternalcheckandcontrolsystem:i) Discussionwithstaffofvariouslevels,ii) Studiesof:

a) Proceduralmanual-normsorproceduralrequirements;b) Jobdescription-responsibilityandaccountabilityofeachstaff;

iii) Observationofthesystem.

3.2.0 SYSTEMEVALUATION:Afterhavingacquaintedwiththesystemofinternalcheckandcontroltheauditorshouldevaluatewhether:i) Theinternalcheckandcontrolsystemsandproceduresareadequateenoughtodetectmaterialerrors

andfrauds;ii) Thesystemprovidesforanychancetocollusionamongthestaffornot;iii) Therearesoundreasonsforthechangesinthecontrolsystem,ifany;andiv) Thesystemisacosteffectiveone.

3.3.0 COMPLIANCETEST:Afterevaluationofinternalcheckandcontrolsystems,theauditormayfindcertainareaswherecanhedecidenottoexercisedetailexaminations.Beforetakingsuchdecision,acompliancetestmustbetakentoensurethattheinternalcheckandcontrolsystemsareadoptedinpracticealso.Thiscanbedone,byselectingafewrepresentativesamplesofdifferenttransactionsandexaminingthemindepth,especially,theproceduralandthecheckandbalanceaspects.Basedonthisevaluation,anauditprogramcanbechalkedout,keepinginviewthenatureoftheauditandthetimeavailable.Intheareaswheretheinternalcheckandcontrolsystemisinadequate,adetailexaminationshall be done.

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3.4.0 REPORTONWEAKNESSESOFINTERNALCHECK&CONTROLSYSTEM:Anyweaknessdetectedintheinternalcheckandcontrolsystemsshouldbediscussedwiththemanagementandnecessarystepstobringchangesshouldberecommendedinthereport.

Chapter FourCOMMENCEMENT OF AUDIT

4.1.0 STUDYOFORGANISATION:Beforethecommencementofactualaudittheauditormuststudythefollowing:i) Organisationalsetupbyreferringtoorganisationalcharts.ii) Mainobjectivesandfunctionsoftheorganisation.iii) Delegationofadministrativeandfinancialresponsibilitiesandpowers.iv) RulesandRegulationsprescribedifany.v) Previousyearsauditreportsandstatementsofaccountandexplanationssubmitted.vi) MinutesofBoardandGeneralMeetings.vii) Annualreport.

4.2.0 ANALYSISOFACCOUNTINGSYSTEM:Theauditormuststudytheaccountingmanual,policiesandproceduresthereoftounderstandtheaccountingsystem.Inthisregard,theauditorshallconductfollowingchecksandsee:i) WhethertheaccountingsystemadoptedareinconformitywiththeGenerallyAcceptedAccounting

Principlesandhavemaintainedalltherelevantrecords.ii) Whether there exists a sound system to check the errors or irregularities in recording financial

transactions.iii) Whetherthereexistaneffectivebudgetarycontrolandanyvariationbetweentheactualexpenditure

andbudgetedamount,ifany,ispromptlyanalysed.iv) Whethertheaccountingrecordsmaintainedareclearandadequatetogiveallnecessaryinformation.

4.3.0 COMPLIANCEOFPREVIOUSAUDITREPORT:Itisrequiredthatallauditeemuststudytheauditreportandnecessaryauditrecommendationmustbecompliedwith.Toensurethis,theauditorshallunfailinglyanalysethecompliancereportandtheprogress.Lapses,ifany,mustbehighlightedintheauditreport.

Chapter FiveAUDIT OF PAYMENTS

5.1.0 WHILECARRYINGOUTTHEAUDITOFPAYMENTS,CHECKWHETHER:i) Thereisaproperbudgetalongwithatargettobeachievedduringthesetperiod.ii) Theexpendituresincurredareinaccordancewiththebudgetandfinancialrulesandregulations.iii) Sanctionisaccordedtoallexpenditurebyacompetentauthority.

5.2.0 VOUCHING:Vouchingisanexaminationofalldocumentaryevidencesavailabletosupporttheauthenticityofatransaction,recordedinthebook.Whilevouching,theauditorshouldensurethat:i) Thepaymentissupportedbypropervoucherdulyauthorizedorsanctionedbyacompetentauthority.ii) Thedateofthebillorinvoicerelatestotheperiodunderaudit;

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iii) Thepaymentandtheactualpayees’receiptaregenuine;iv) Thereisproperinternalcheckandcontrolavailableontheselfmadebillorinvoiceonplainpaper,

suchpaymentsshouldbeatleastcertifiedbytwopeople;v) Allbillsareproperlyverifiedbythestaffconcerned.Incaseofpurchase,itshouldbeverifiedandthe

chargeofstockisdulyacceptedbythestorein-charge;vi) Allvouchersareproperlydefacedafterverification.vii) Alladjustment/transferentriesmustbeverifiedandauthorised/sanctionedbyacompetentauthority.

5.3.0 AUDITOFPURCHASE:Whileauditingpurchases,theauditorshallseethat:i) Allpurchasesaremadeeconomicallyandinaccordancewithrulesordirection,ifany;ii) QuotationsmusthavebeencalledforallpurchasesexceedingamountofRs.20,000.00;iii) The purchase has beenmade from the lowest quotation unless there are recorded reasons to the

contrary;iv) Ratepaidisthatoftherateshowninthequotationapproved.v) Certificateofqualityandquantityarefurnishedbythestorein-chargeandverifiedbytheaccountant

beforeanypaymentismade;vi) Allpurchasesaremadestrictlyaspertherequirements;vii) Awidepublicityismadeforcallingthequotation.Atleastthreequotationsfromdifferentsuppliers

musthavebeenpresentedineverycase;viii) Specificmakeandbrandrequiredmustbementionedinthepublicityinvitingsuchquotationand;ix) In caseof immovablepropertydocuments such as title deed, saledeed, registration andmutation

papersetc.,areproperlysecured.

5.4.0 SALARY&ALLOWANCE:Whileauditingsalariesandallowances,followingessentialpointshavetobechecked:i) The amount of salary drawn by a staff is in accordance with the relevant entitlement rules and

orders;ii) Appointmentofthestaffisaspertherulesandregulationsandpostsanctioned;iii) Thepaydrawnbyanewlyappointedstaffisaspertheappointmentletter;iv) chatehlcontributionsandothernecessarydeductionshavebeenmadeinaccordancewiththerelevant

rules and orders (seechapterXIIfordetail);v) Salariespaidhavebeenproperlyrecordedinthesalaryregister(seeannexureIV)vi) Thepaymentofsalarymustbedulyacknowledgedbythepayeestaffonly;andvii) Salaryincrementsareaspertherulesandorders.viii) Anygovt.servant,retainedingovt.servicebeyondthedateofsuperannuatesintherules&regulation,

mustbehighlightedinreport.

5.5.0 TRAVELLINGALLOWANCE:Whileauditingtravellingallowance,followingpointsshouldbechecked:i) TheclaimsareinaccordancewiththerelevantTArulesandorders;ii) Thepurposeofthejourneyisofficialandisdulyauthorisedbythecompetentauthority;iii) TAclaimsaredulysupportedbyreceiptsandpropersanctionobtained;iv) Rentreceiptsinoriginalareproducedforallreimbursementofroomrent;v) Alltravellingbills/claimsaresettledwithintwomonthsfromthedateofcompletionofthejourney.

Note:SeechapterSeventeenforvariousallowancesfortheCentralTibetanAdministrationstaff.

5.6.0 AUDITOFVEHICLELOGBOOK:

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Whileauditingvehiclelogbook,followingpointsshouldbeexaminedtoensurethat:i) Aseparatelogbookismaintainedforeachvehicleintheprescribedform(seeannexureV)ii) Thereshouldbepriorwrittenapprovalforallvehiclerunning;iii) Inthecaseofprivateuse,properhirechargeshavebeencollected;iv) Thepurposeofjourneyisalwaysrecordedindetailwiththesignatureofpersonusingthevehicle.

(Useoftermsimply“officialuse’’isnotatalladequateandhencebediscouraged);v) Incaseoflowmileageperliterofpetrolordiesel,causesshouldbeinvestigatedintime;vi) Vehiclein-chargeshouldmaintainseparateregisteroftools&equipmentandrepairs&maintenance

foreachvehicle.vii) Thereispriorwrittenapprovalforallrepairsofvehicle.

5.7.0 AUDITOFTELEPHONEREGISTER:Whileauditingtelephoneexpensesfollowingpointsshouldbeexaminedtoensurethat:i) Aseparatetelephoneregisterismaintainedforeachtelephone(number)intheprescribedform(see

annexureVI)ii) Alllongdistantcallsaremadeunderproperauthorityanddulysignedbythepersonmakingthecall

withhisnameandthephonenumbers;iii) Purposeofcallwhetherofficialorprivateisclearlymentioned;iv) Incaseofofficial,purposemustbedescribedbriefly;v) Incaseofprivatecallsrecoverieshavebeenmade;andvi) The bills received from the telecom department tallies with the entries made in the register and

deviation,ifany,isexaminedthoroughly.

5.8.0 AUDITOFCONTRACT&CONSTRUCTION:Whileauditingthecontractofworksorsupplies,followingchecksmustbeexercised:i) Termsofthecontractarepreciseanddefinite;ii) Necessaryadviceonlegalandfinancialmatters,ifrequired,havebeensoughtfromexpertsbeforethe

contractisfinalised;iii) Termsofcontractarenotalteredwithoutpriorapprovalofacompetentauthorityandreasonsrecorded

thereof;iv) Nouncertainliabilitiesorconditionsofanunusualnaturehavebeenenteredinto.v) Whileacceptinganyquotation,financialstatusofthepersonorinstitutionsubmittingthetenderis

takenintoconsiderationbesidesotheraspects;vi) Nopaymentismade,eitherinviolationoftermsandconditionsofthecontractorinexcessofcontract

amount,withoutappropriatereasonandnecessarysanctionbyacompetentauthority;vii) Incase,evidenceisfoundthatanyconcernedofficerhasanyundueinterestwiththecontractingparty

isfound,itisbroughttotheknowledgeoftheconcernedauthorityandalsohighlightedinthereport;viii) If thecontracting ratesacceptedarehigher than theprevailing rates, reason thereof shallbehigh-

lightedintheauditreport;ix) Nopaymentsismadetoanypersonotherthantheactualcontractingfirmorperson;x) Securityamountmentionedinthecontractdeediscollectedontime.Also,intheeventofanydefault,

penaltiesliableunderthetermsofthecontractarefullyenforced.xi) Duringtheauditofcontractdocuments,itisimportanttoseethatthequalitycontrolclauses,testing

&inspectionclausesandescalationclausesarementionedinthecontractdeed.xii) Onpresentationofbillbycontractor,ensure thatclaimsmadeby thecontractor ischeckedby the

constructionsupervisororsiteengineerfrommeasurementbooks,andcertifiedbytheArchitect.xiii) Properlinkageorcomparisonofvariousbillssubmittedbycontractor.xiv) Scrutinizepaymentrelatingtoextraitemsthatisnotpartofagreement.

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xv) Auditorshouldtakepropercarewhilescrutinizingthefinalbillsandbillssubmittedthereafter.xvi) Checkarithmeticaccuracyofthebillsandensurethatratequotedinitisasperthecontractdeed.xvii) Blueprintandcostestimateispreparedandadheredto.

LegalRequirementi) AftermakingablueprintandcostestimatebytheArchitect,permissiontoconstructfirstfromthe

TownplanningandthentheMunicipalCorporationhavebeenobtainedornot.ii) PermissionfromtheMunicipalCorporationforanyalterationininitialblueprintshouldaccordingly

be obtained.iii) Aftercompletionofbuilding,whethernoobjectioncertificate(NOC)fromtheMunicipalCorporation

is obtained or not.

5.9.0 AUDITOFEXPENDITURE:Whilecarryingoutauditof expenditure, auditorhas to see that expenditure isgovernedby the followingessentialities.i) TheexpenditureshavebeenincurredaccordingtothebudgetsanctionedbytheAssemblyofTibetan

people’sDeputies,LocalAssemblyorGoverningBody.ii) Theexpenditurehavebeenmadeincompliancewiththeobjectivesoftheamountsanctioned.iii) Thepurposesofthesanctionhavebeenserved.iv) Effortshavebeentakenforjudiciousexpenditure.v) Pricequotations,properbillsandreceiptshavebeenobtained,qualitycontrolshavebeenmaintained

and the tax laws of the resident state have not been violated.vi) Properrequisitionforspecialsanctionhasbeencompliedwithandtheexpendituresoincurreddoes

notexceedthelimitsanctioned.vii) AllpurchasesoffixedassetsmustberecordedintheFixedAssetsregister.viii) AllpaymentsaboveRs.20,000.00mustbepaidonlyincrossedcheque/demanddraft.

5.10.0 COMPLIANCE/REGULARITYAUDIT:Complianceauditisanimportantaspectofaudit.Itisthedutyoftheauditortoensurethatexpendituressoincurredconformstotherelevantprovisionsoffinancialrules,regulationsandordersissuedfromtimetotime.Incaseanyparticulareventisnotcoveredwithintherules&regulation,itshouldbebroughttothenoticeofthecompetentauthorityandmustbehighlightedintheauditreport.Inregularityaudittheauditorisrequiredtoensurethatfollowingarestrictlyobserved.i) Powerstoframesuchfinancialrules&regulationsarewithinthelimit.ii) Powerstoaccordsanctionandincurexpenditureareinorder.iii) Financialrules,regulationsandordersetc.,arenotinconsistentwiththecharter,rulesandregulations

formulated thereunder and the audit and account requirements asprescribedby theOfficeof theAuditorGeneralfromtimetotime.

iv) Noundueadvantageis takenthereofanyrules,regulationsandordersbyanypersonmakingsuchrules,regulationsandorders.

v) Rulesandordersdon’timpairanyfinancialcontrolefficiency.vi) Financialrules,regulationsandordersareobservednotmerelyinletterbutalsoinspirit.

5.11.0 ECONOMY/PROPRIETYAUDIT:Evenwithproperaccountingorderandregularity,improperutilizationandwasteofmoneyorstorescouldhappen.Thisneedstobecheckedwhileconductingtheauditofexpenditure.Suchexerciseiscalled“ProprietyAudit”.Inproprietyaudit,theauditorhastoexaminethatreasonablyhighstandardoffinancialmoralityandinterestsof the institutionhavebeensatisfactorilymaintainedby theperson incurring theexpenditureand

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thesanctioningauthority.Inthisregardtheauditorhastoensurethatfollowingbasicprinciplesarestrictlyobserved.i) Theexpenditureisnotprimafaciemorethanreasonablyrequired.ii) The expenditure ismadewith same degree of vigilance, as a person of ordinary prudencewould

exerciseinrespectofhisownmoney.iii) The officer involved has not derived any personal benefit from the expenditure either directly or

indirectly.iv) Theexpenditureisreallynecessaryinfurtheranceoftheobjectives.v) Optimumbenefitshavebeenobtainedinrespectofalltheexpenditures.

5.12.0 EFFICIENCYAUDIT:Efficiency audit looks into whether the various schemes/projects operations are conducted and executedeconomicallyandwhethertheyareyieldingtheresultsexpectedofthemi.e.,therelationshipbetweengoodsandservicesproducedandresourcesusedtoproducethemareacceptable.

5.13.0 EFFECTIVENESSAUDIT:Effectivenessauditistheappraisaloftheperformanceofprogrammes,schemesandprojectswithreferencetotheoverallobjectivearrivedataswellasefficiencyofthemeansadoptedtoattaintheobjectives.Thegamutoftheprogramme,schemeorproject,rightfromconceptiontoexecution&functioningiscoveredinsuchappraisals.

5.14.0 TESTAUDIT:i) HeadofthebranchofficeandDeputy/UnderSecretaryintheHeadOfficewilldiscusswiththehigher

authorityintheHeadofficeanddecidewhichDepartment/unitwillbeundertakenforatestaudit.ii) Time allotment for audit, detailedmonths and account heads to scrutinize, and all the transaction

crossingtheprescribedlimitofamountwillalsorequiretobediscussed/decidedasabove.iii) Anymajorirregularities,ifobserved,needtobeinformedtotheHeadOfficeandfurtherinstruction

willbegivenbytheHeadOfficeindiscussionwiththeheadoftheBranchoffice,towhatextentithastobefurtherscrutinized.

iv) It issufficienttostateintheopeningparagraphthatatestauditwasconductedwithoutspecifyingthemonthsbutintheofficefile,howeveranoteshouldbekeptastomonths&accountswhichweresubjectedtodetailedaudit.Theauditorwillnotbeliableforanyerrorascertainedfromthemonths,whichwerenotsubjectedtoscrutiny.

v) Theauditorresponsibletoconducttestauditwillbedecidedinconsultationwiththehigherauthorityintheheadoffice.

Chapter SixAUDIT OF RECEIPTS

6.1.0 RECEIPTAUDIT:Whileauditingreceiptstheauditorisrequiredtoensurethefollowings:i) Receiptbooksareseriallynumberedandstocked.Acertificatethereofisrecordedundertheinitialof

acompetentofficer.ii) Issuesofthereceiptbookandthereturnoftheusedbookletareproperlyrecorded.iii) Originalcopiesarenotdetachedforcancellationofanyreceipt.iv) Allreceiptsareposteddailyinthecashbookunderproperaccounthead.v) Allsourcesofrevenueareproperlyassessedandcollectedwithineverysetinterval.Incaseoflong

interval, surprise cash verificationmay be done to ensure that nomis-utilisation of the fund has

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occurred.vi) Printedofficialreceiptsareissuedforallthereceipts,whetherincashorincheque.vii) Allreceiptsaredulysignedbytheaccountantandthecashier.viii) Allreceiptsareissuedbytheaccountantandnotbythecashier.ix) Checks/draftsreceivedaredepositedintothebankontheverynextworkingday.x) Allforeigncurrencyreceiptsaredulyrecordedinthecashbookattheprevailingexchangerates.xi) Aforeigncurrencyregisterismaintainedshowingdailyreceipts,issuesandbalanceswithrelevant

exchangerates.xii) Thenumberofreceiptbookagreeswiththepurchased/printedquantitiesandarekeptunderlock&

keybytheresponsibleperson.xiii) At thebeginningofafinancialyear, thedepartment/unit insteadofusing the remainingpartofa

receiptbookusesanewreceiptbook.Alwaysmakesuretodiscourageit.Ifpartofareceiptbookisun-utilized,itisnecessarytodefaceit.

6.2.0 AUDITOFSALES:Allsalesrecordedinthebooksofaccountrepresentcashorcreditsalesatthefixedrate.TheAuditormustvouchallsaleswithreferencetostockissue,deliverychallan,ratefixed,salesinvoiceandcash/creditsalesregister.Inadditiontoabovetheauditormustalsoseethat:i) Allsalesmadeduringtheperiodunderaudithaveproperlybeenrecordedinthebooksofaccountwith

properclassificationbetweencashsale,creditsale,exportsaleandsalestax;ii) Thereisapropersystemofobtaininganacknowledgementofthegoodsreceiptfromthecustomeron

deliverychallan;iii) Salesinvoicesareraisedforallgoodsdeliveredtothecustomers;iv) Allcreditsalesmusthavebeenaccountedinthebooksofaccount;v) Anysalesatapricelowerthanthefixedpricemustbesupportedbyproperreason;vi) Thereisclear-cutpolicy/authorisationofcreditsales;vii) Thereisfixedcredittimelimitandsuchlimitisstrictlyobserved;

Chapter SevenCASH BOOK AUDIT

7.1.0 CASHBOOKAUDIT:Cashbookisoneofthemostimportantbooksofaccount.Alltransactionspertainingtocashandbankarerecordedinthisbook.Whileexaminingthecashbooktheauditormustensurethefollowings.i) Openingbalancesofcashandbankarecorrectlybroughtdown.ii) Allreceiptentriesaresupportedbycarboncopiesofthereceiptsissued.iii) Allpaymentsareproperlysupportedbyrelevantdocuments.iv) Alltransactionsarerecordedinthecashbookonthesameday.Non-recordingofanytransactionmust

bebroughttothenoticeofthecompetentauthorityforclarification.v) Cashbookisclosedeverydayandclosingbalancessoascertainedareverifiedatleastonceamonth

bythecompetentofficer,theaccountantandthecashierwiththeirinitials.vi) EntriesoncerecordedintheCashBookarenotalteredorerased.Incaseofsuchinstances,ithastobe

attestedbythecompetentofficer.vii) Thatthereisnotendencytokeepundulylargecashbalanceandalsoensurethatdailycashbalance

maintainedarenotinexcessoftheprescribednorms.viii) Thatprivatecasharenotmixedupwiththeregularofficecashbalance.

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Chapter EightAUDIT OF BALANCE SHEET

8.1.0 INTRODUCTION:Since agreat importance is placedon thefinancial statementof a concern, it is important to see that theBalanceSheetrepresentstrueandfairviewofthefinancialpositionofaconcern.Withameretallyofbalancesheettheworkoftheauditordoesnotcometoanend.Theauditor,stillrequiretoensurethatnooverstatement,understatement,mis-presentationormanipulationofanyfinancialfigureisbeingdoneinanymanner.BalanceSheetformatisstandardisedandeveryauditorshouldseethatpreparationofBalanceSheetisasperthat.(seeAnnexureVII)Briefguidelinestoauditfewofthebalancesheetitemsareasunder:

8.2.0 FIXEDASSET:FixedAssetincludesallthoseassetsoflong-termnature,acquiredforuseinbusiness,possessingphysicalsubstancethatprovidesserviceatleastforfewyearssuchasland,building,machinery,furnitureetc.Whileauditingfixedassetsfollowingpointsmustbeensured.i) Allfixedassetsdepictedinthebalancesheetdoexistphysicallyandareinworkingorder.ii) Anyassetpurchasedisnecessarilyrequiredandasanctionisobtained.iii) Ownership/titleofallassetsiswiththeconcernitself.iv) Properamountofdepreciation,asprescribed,ischarged.v) ProperrecordsoffixedassetsaremaintainedinthefixedAssetregister.(AsperAnnexureVIII)vi) Incaseofnewlyacquiredfixedasset,relevantdocumentssuchasinvoice,titledeedetc.areinorder.vii) Neitherpurchaseofanyfixedassetnoranyexpenditureofcapitalnatureisaccountedasrepairsand

maintenance.viii) Incaseoftitleofanyassetheldbysomeotherperson(s),necessaryarrangementismadetosecurethe

title.Insuchcasesaspecialandirrevocablepowerofattorneyisagoodinstrumenttoretainthetitle.Suchinstancemustbementionedinthereport;

ix) Noexpenditureofrevenuenaturesuchasrenovation,replacement,etc.,istreatedasadditiontofixedasset.

x) AssetcostingRs.1,000.00orlessistobecharged100%depreciation.Recordofsuchassetmustbeplacedinthefixedassetregister.

8.2.1 VerificationofFixedAsset:Verificationoffixedassetpertainstoanexaminationofrelevantrecordsandphysicalcheckingoftheasset.Theauditormustpayparticularattentiontotheverificationsystemandseewhetherthesysteminpracticeisadequateandreliable.Incaseofaninadequatesystem,arandomverificationmustbedonetoensureactualexistenceandgoodconditionoftheasset.

8.2.2 ValuationofFixedAsset:Theauditormustseethatthevaluesoftheassetshavebeenfixedproperlyasunder:i) Allfixedassetsarevaluedatcost.ii) Incaseofdirectpurchasesthecostshallcompriseofthecostpriceandallotherexpensesincurredon

itsacquisitionandinstallation.iii) Incaseofself-builtormanufacturedassetthecostshallcompriseofthosedirectexpensesincurredto

havetheassetbuiltormanufactured.iv) Incaseofdonatedassetthecostshallbethevalueifanymentionedinthedeedofdonationortransfer

document,otherwisemarketvalueandallotherexpensesincurredonitsacquisitionandinstallation.v) Incaseofhirepurchaseassetthecostshallbethetotalamountpaidorpayabletilldate.

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8.2.3 ObsoleteAsset:Incaseofanyassetbecomingobsolete(non-performing), thesameshouldhavebeeneliminatedfromthebooksanddisposedoffinthemannerasprescribedinclause8.1.4

8.2.4 DisposalofAsset:Incaseofdisposalofanyfixedasset,followingaspectsshouldbeobserved.i) Thedisposal isproperlyauthorisedby thecompetentperson.Alsoappropriateproceduressuchas

callingquotations,publicauctionsetc.,areadopted.ii) Incaseoftradingconcern,theproceedsofsuchdisposalshouldbeaccountedintheprofit/lossaccount

andshouldbehighlightedinauditreportalso.Incaseofnon-tradingconcern,itmaybementionedintheincome&expenditureaccount.

8.2.5 DepreciationofFixedAsset:Everyfixedassetmustbechargedfullyeardepreciationirrespectiveoftheperiodofuse.ButtradingconcernsfilingincometaxreturnshallchargefullyeardepreciationforeveryfixedassetpurchasebeforeSeptemberandsixmonthforfixedassetpurchaseafterthat.Buildingunderconstructionshallnotbechargedanydepreciationunlessitisfullycompletedandputintouse.

8.2.6 DepreciationincaseofNon-tradingconcern:Incaseofnon-tradingconcerndepreciationamountshallbedirectlydeductedfromfixedassetfundandwherethereisnosuchfund,fromtheGeneralfund.

8.2.7 DepreciationRate:Ratesofdepreciationforassetsalreadyinuseshallbeaspertheoldrate.Ratesfornewcategoryofassetsacquiredduringtheyearmustbeasprescribedfromtimetotime(seeannexureIX).

8.2.8 TokenValue:Inthecaseofstraightlinemethodofdepreciation,wherethedepreciationamountisreducedfromtheassetvalueeveryyearandwheresuchassetvalueisreducedtonil,atokenvalueofRe.1.00istobeprovidedtillthecompletedisposalofsuchasset.

8.2.9 LossofAsset:Anylossofassetduetonaturalcalamity,theftetc.,mustbedealtwithasunder.i) TheassetlostmustbeeliminatedfromthebooksbyreducingfromtheAssetandGeneral/AssetFund

afteradjustmentoftheaccumulatedamountofdepreciation,ifany,ii) Detailsofeliminationshouldbementionedinthereport.iii) Thoroughinvestigationofsuchlossiscarriedout.iv) Eliminationofsuchlossisdulyauthorisedinwriting.

8.3.0 STORESANDSTOCKS:Theauditofstoresorstocksismainlytoensurethatthepurchases,receiptsandissuesetc.areproperlycarriedout.Sincemismanagementofstocksisasseriousasmismanagementoffund,duecaremustbegivenwhilecarryingouttheauditofstoresandstocks.Generally theauditofstoresandstocksmustbeconducted inaccordancewith therulesordirectives laiddown.Incasetherearenosuchrulesordirectiveslaiddownoranygravedefectsinthesystemofcontrolisdetectedduringaudit,mustbebroughttothenoticeofmanagementbyhighlightingitinthereport

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8.3.1 Purchases:Incaseofpurchasesofstores,thefollowingmustbeexamined.i) Thereisefficiency&effectivenessofpurchasefunctionandsysteminthedepartmentandmaterial

managementasawhole.ii) The purchases are properly sanctioned and are economically made in accordance with rules or

directives.Incaseofhugeandbulkpurchases,quotationsarecalledtoderiveoptimumbenefit;iii) Thestockssopurchasedareproperlyrecordedinthestockbooksintermsofquantity,rates,etc.;iv) Theratesquotedarestrictlyasperthequotationtendered;v) Nounnecessaryaccumulationofstocks,representingblockingofcapitalisdone.Inordertoavoidthis

problemtheremustbeprescribedmaximumandminimumlevelsforeachitemofstock.Maximumlimitshallnotexceedthetotalquantityrequired(eithersaleorissue)forthenexttwomonthsunlesswhereitisnecessarilyrequired.

Ifnosuchlimitsarefixed,itshallbementionedinthereportwithnecessarysuggestion;vi) Allreceipts,whetherpurchaseorobtainedotherwisearebookedasandwhenreceived;andbefore

paymentismade,itisimportanttogetacknowledgementfromdealinginchargeregardingqualityandquantity.

vii) Purchaseismadeonlyonastockitemreachingtheminimumrequiredlevel.

8.3.2 Issue/Sale:Incaseofissueofstores/stocks,followingpointsmustbeseentoensurethat:i) Allissuesofstores/stocksaresupportedbyanindentorarequisitionslipapprovedbythecompetent

authority,andproperlyacknowledgedbytherecipient;ii) Allsales/issues/transfersareproperlyrecordedthrougheitherdebitnotesorinvoices;iii) Allissues/sales/transfersarebookedasandwhenittakesplace;iv) Stocks issued on account of gifts and complimentary must also be properly booked Debit Gift/

PresentationandCreditStockPresentedandshowninProfit/LossandTradingAccountrespectively;v) Dailyclosingbalancesarecorrectlyworkedout;vi) There are adequate systems of check and inter-reconciliation between indents, customers orders,

delivery/shipmentchallansandinvoices;andvii) Allissuesaremadeasjudiciouslyaspossible.

8.3.3 StocksonConsignment:Incaseofstocksonconsignmentfollowingpointsmustbeseeni) A confirmation duly certified is obtained from the consignee in case of any stock held on

consignment.ii) Valueofthestockonconsignmentshallbeshowninthefinalaccountatcostprice.iii) Properrecordofstockonconsignment,stockreceivedonconsignment(stocklist,consignor’sname

etc)mustalsobemaintainedforeachkindofstock.

8.3.4 PhysicalVerificationofstock:Thoughtheauditorisnotmandatorilyrequiredtopersonallycarryoutthephysicalverificationofstocks,yettheauditorhasaseriousresponsibilitytoensurethefairnessofstockpositionascertifiedbythemanagement.Assuchtheauditorisrequiredtoexaminewhetherthemanagementhascarriedoutaproperphysicalverificationofstocksbeforeissuingsuchcertificate.Ifnophysicalverificationofstocksisdoneatallarandomverificationsofstocksmustbedonetoascertaintheactualposition.Inaddition,theauditorisalsorequiredtoseethat:i) Ifphysicalverification isdoneonadayother thanyearend,methodofadjustmentmademustbe

reviewedtoascertaincorrectnessoftheactualbalance;ii) Alltheverificationstatementsaredulyverifiedandsignedbyacompetentauthorityandthestorein-

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charge;iii) Allpurchasesandsales/issuesarecorrectlyrecordedinthestockbookandbalancesupdated;iv) Difference,ifany,betweenthebookandphysicalbalanceisproperlyprobedintoandnecessaryaction

istaken;v) Onlytheactual(physicallyverified)balanceistakenintheclosingstockandshowninthestatement.vi) Incaseofanydoubtonthestockpositionasshowninthecertifiedstatement,theauditorshalldo

physicalverificationatrandomtoverifytheactualposition.Thebelowgivenmethodmaybeadoptedinsuchcases.

Balanceasperphysicalverification xxx

Add:issuesfromthedateofclosingtothedateofphysicalverification xxx

Total xxx

Less:purchases/productionsfromthedateofclosingtothedateofphysicalverification xxx

Positionofstocksasontheclosingdate xxx

8.3.5 StockExcess:Stockfoundexcessduringphysicalverificationshouldbeaddedtothebookbalance.

8.3.6 StockShortage:Stockfoundshortageduringphysicalverificationshouldbereducedfromthebookbalance.

8.3.7 AdjustmentofShortage:i) Thenetofthestockshortagesandexcessesmustbeshownasrecoverablefromthestockin-chargeat

thelastsellingpriceoftheyear.ii) Incasethenetvalueispositivenothingshallbedone.iii) Therecoverableamountshallbecredited toSTOCKSHORTAGESACCOUNTandshown in the

tradingaccountasusual.iv) Itistobeobservedstrictlythatstockshortageshallbeallowedtoadjustagainsttheexcessstockof

homogeneousnature.Homogeneousherereferstotheproductaswellasthematerialoftheproduct.Example;thereshouldbedifferencebetweengold&brassandcottoncloth&brocade.

8.3.8 ValuationofStock:Everycareshouldbetakentoensurethatclosingstocksareproperlyvaluedatjustifiablerates.Valuationmustbedoneinaccordancewiththemethod“marketpriceorcostprice(FIFO)whicheverisless”andinadditiontothatfollowingpointsmustbeensured.i) Propermethodofvaluationisadopted.ii) Valuesarejustifiablekeepinginviewtheactualconditionofthestocks.iii) Thesamevaluationmethodisconsistentlyappliedeveryyear.iv) Stockexcessesandshortagesaredulyadjusted.v) Costofphysicallyverifiedstockbalanceonlyshouldbeaccounted.vi) Workinprogressareproperlyvalued

8.3.9 Valuationoflivestock:Alltheexpensesincurredtobringthelivestocktoitsproductivitystage,suchaspurchasecost/costofcalving,fodder,cereals,overheadsetcarecapitalisedtoformthecost.

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Inthecaseoflivestockthataremaintainedfortheirproduceorservices,nodepreciationischargedtillthelivestockreachesthestageofdecliningproductivityi.e.nodepreciationforinitialandconstantproductivityperiod.Theaccumulatedcostuptothatstageisproportionatelywrittenoffoncetheearningcapacityofthelivestock starts declining, over the remaining life of the animal by straight-linemethod.Ascertaining theremaininglifeisbittechnicalandhencejudiciouslycalculated.

8.3.10 DamagedandObsoleteStock:Damagedandobsoletestocksshallbewrittenoffonlywithpropersanctionbyacompetentauthority.Incasethereisnosuchsanctionavailable,alistofdamaged/obsoletestocksshallbeseparatelymaintainedandvaluesofsuchstocksshallnotaffectthegrossprofit.Suchlistmustbereviewedandverifiedeveryyeartillthestocksarecompletelydisposedoff.

8.3.11 DisposalofObsoleteStock:Whileexaminingthedisposalsofobsoleteordamagedstockstheauditormustseethat:i) unserviceable,obsoleteanddamagedstocksaredisposedoffintime;ii) necessarysanctionsareaccordedbyacompetentauthorityforsuchdisposal;iii) proceedsfromsuchdisposalareproperlyaccountedinthebooks.

8.4.0 AUDITOFCONSUMERSSTORESWHERELIABILITYSYSTEMISADOPTED:Whileauditing,followingpointsshouldbeexaminedtoensurethat:i) Allpurchaseshowninpurchasea./carerecordedinthepurchaseregister;ii) Allarticlesarefullyissuedtotheshopsandliabilitydelegationadviceissued;iii) Liability register iscorrectly recordedwith reference todelegationadvice, salesa/cprice revision

advice(PRA),stocktransferadvice(STA),andphysicalstockstatement;iv) Salesremittancesaremadedailyorasapprovedbythemanagement;v) Liability register is correctly totaled and balanced. Shortage, if any, is recovered/ shown as

recoverable;vi) check and control is applied from time to time in order to give no room for malpractices like,

unauthourisedpricerevisionandkeepingprivategoodsetc.;vii) Damagedstockarecertifiedbytheboardofmanagementandremovedfromtheshop;viii) Profitmarginisdeductedfromthephysicalstockvaluebeforetakingittotradingandbalancesheet;

and ix) Liabilitystatementpreparedshouldbeattachedwiththefinalaccount.

8.5.0 CASHVERIFICATION:Itisimportanttocarryoutasurprisecashverificationatleastonce,eitherattheyear-endoratanytimeduringtheaudit,toascertaintheactualcashposition.Whilecarryingoutphysicalverificationtheauditormustensurethat:i) allreceiptsandpaymentsaredulyrecordedinthecashbook;ii) nounaccountedpaymentbillsoradvancereceipts(directlypaidby thecashier)maintainedby the

cashierbetreatedascashinhand.iii) asurpriseverificationofthecashbalancesofvarioussectionsmustalsobedonetoascertaintheactual

position.iv) aftercashverificationiscertifiedbytheofficialin-charge,explanationofanykindlikecash&billsnot

includedincashverificationwillnotbeentertained.

8.5.1 StatementofPhysicalCashVerification: Nameoftheconcern: ......................

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DateofPhysicalVerification: ...................... NameoftheCashier: ...................... DetailsofCashinHand:

Denominations Amount

500x

100x

50x

20x

10x

5x

2x

1x

Coins

Total xxxxxxx

Add:Stamps xxxxxxx

TotalCashinhand xxxxxxx

Cashbalanceincashbook xxxxxxx

CashShortage/Excess xxxxxxx

Manager AccountantCashierAuditor(Signature)(Signature)(Signature)(Signature)

8.5.2 CashExcess:Cashexcess,ifany,shouldbeaddedtothebalancebycreditingasuspenseaccount.Incasenoreasonfortheexcesscashisfoundduringtheauditofthenextaccountingyear,sameshallbecreditedtothegeneralfundormiscellaneousincome.

8.5.3 CashShortage:Cashshortage,ifany,mustbereducedfromthebookbalanceandshownasrecoverablefromthecashier.

8.5.4 Cashier’sCash/DayBook:Cashiermustalsomaintainacashbookinwhichdailycashreceiptsandpaymentsarerecorded.Theauditormay take the referenceof this cashbook incases of any cash excesses or shortages.The cashier shall beadvisednottorecordanynon-cashtransactioninthisbookandalsonottopayanyloanoradvancedirectlywithoutentryinthemain(accountants’)cashbook.

8.6.0 AUDITOFBANKACCOUNT:Whileexaminingthebanktransactionsfollowingpointsshouldbegivenattentiontoensurethat:i) Theoperationoftheaccountisdulyauthorisedbyacompetentauthorityinwriting;ii) Thetransactionsareoperatedjointly,atleastbytwoofficers.iii) Nosurplusoridlemoneyshouldlieinthesaving/currentaccountunnecessarily.Ifsoanappropriate

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amountshallbekeptintermdepositsforhigherinterestearning.iv) Aproperregisteroffixeddepositismaintainedanditisreviewedfrequentlytoavoidanydelayin

realisation of the deposits (seeannexureXforformat).Eachfixeddepositshouldhaveaseparatefolioandrenewalofthedepositshouldberecordedinthesamefolio.Onthetransferoffixeddeposittosaving/currentaccount,itshouldbeclosed;

v) AproperBankReconciliationStatementisdrawnaftereverymonth;vi) Aproperyear-endbalanceconfirmationcertificateisobtainedfromtheconcernbank;vii) Allpay-in-slipsaremaintainedinboundedformorattachedwiththepaymentvoucher.

8.6.1 BankReconciliationStatement:Bank reconciliation statementmust be prepared to ensure the correctness of bank balance shown.WhilescrutinisingtheReconciliationStatementfollowingpointsmustbeexaminedtoseethat:i) Alldepositsaregivenduecreditinthepassbook.Anyunduedelayshouldbediscussedandcleared.ii) Amountwithdrawnfromthebankmustappearinthecashbookonthesameday.Ifnot,itmustbe

properlyprobedinto;iii) Bankaccountsarereconciledaftereverymonthandallentriesarepassedinthecashbookintimeto

avoidlengthybankreconciliationstatement.iv) Incasetheaccountanthasnotpreparedthebankreconciliationstatement;theauditorshouldprepare

itandalsoadvicetheaccountanthowtoprepareit.

8.7.0 SUNDRYDEBTORS:Whileauditingdebtors,followingpointsmustbeseentoensurethat:i) Thereareclearpoliciesandrulesregardingcreditsystem;ii) Balanceconfirmationsfromthecustomersareobtainedtoascertainthecorrectnessofthebalances

shown;iii) Incaseofanydifference,necessarystepsaretakentoinvestigateandclearthedifference;iv) Alldebtorsarescrutinizedsoastodeterminetherealiseabilitykeepinginviewtheage,nature,debtors

whereabouts,numberofclaimssofarmadetorecoverthedebts;v) Alldebtorsareclassifiedinto:

a) Gooddebtors;b) Doubtfuldebtors;c) Bad&irrecoverabledebtors

vi) Writeoffofthedebtsarebeingdoneaspertherulesandprocedures;vii) Aperiodicreviewofthedebtorspositionisdoneandasuitableactionistakenagainstthedefaulting

debtors;viii) Amountsinthelistofdebtorstallieswiththefiguresofthemainandtheindividualledgers;ix) Postingsfrommainledgertoindividualledgersaredoneproperlytoavoidanymispresentationofthe

debtorsposition;andx) Ascertainwhetherthereisaprovisionfordoubtfuldebts.

8.8.0 LOANS&ADVANCES:Whileauditingtheloansandadvancesfollowingpointsshouldbeobservedtoensurethat:i) Thepurposeoftheloan/advancegivenisstrictlyinpursuanceoftheactivitiesoftheconcern;ii) Priorandproperarrangementismadejudiciouslyforitsrecoverybeforeanyloan/advanceisgiven;iii) Loan/advancegivenisdulyauthorisedbyacompetentperson;iv) Nofreshloan/advanceisgivenifthebalanceofthepreviousloan/advanceisstillunsettled.;v) Loansandadvancesareclassifiedinto;

a) Good;

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b) Doubtful;andc) Bad

vi) Theamountofinterestpayableorreceivableiscalculatedandaccounted;vii) Amountsinthelistofloansandadvancestallieswiththemainandtheindividualledgerfigures;andviii) Loans/advancesgivenarestrictlyasperthedirectivesoftheKashag’snotificationdated12.8.2002.

8.9.0 INVESTMENTS:Sincemanyoftheorganisationsaregoinginfortheinvestmentoptionofitssurplusmoneyforbettergenerationofincome,itisimportantthatafairinvestmentpositionisshowninthestatementsofaccount.Inordertofulfillthis,followingpointsmustbeseen.i) Whethertheregistermaintainedprovidesallthenecessarydetailsregardingname,amount,period,

rateofreturn,dateofpayment,dateofmaturityetc. (Forthischeckalltheinvestmentcertificatesandreconcilewiththeledgerfigures)ii) Whetherinvestmentyieldsaproperreturn(cost&benefitanalysisistobedone.)iii) Whetheralltheinvestmentsmadearefullysecured.iv) Whetheralltheinvestmentsmadearedulyauthorisedinwriting.v) Whethercertificatesinoriginalofalltheinvestmentsareproperlymaintained.vi) InvestmentsinFixedDepositsareshownunderCash&BankBalancesintheBalanceSheet.

8.10.0 SUNDRYCREDITORS:Sundrycreditorsasshowninthebalancesheetmustbetrueandcorrect.Inordertoensurethis,followingpointsmustbelookedinto:i) AmountintheListofcreditorstallieswiththemainandindividualledgerfigures.ii) Additionsduringtheperiodareinaccordancewiththepurchaseinvoices.iii) Allsettlementsaredulyauthorisedafterproperverification.iv) AllsettlementsofRs.20,000.00orabovearemadeincrossedcheque/demanddraftonly.v) Alllongoutstandingcreditorsarethoroughlyprobedintotodeterminewhethertheyarereallyrequired

to be paid.vi) Postings frommain ledger to individual ledger are properly verified to ascertain true and correct

positionofeachcreditor.

8.11.0 OUTSTANDINGLIABILITY:Itisrequiredthatallincomesandexpensespertainingtoaparticularaccountingperiodaredulyaccountedinthatperioditself,soastopresent:i) Afairoperationalresultoftheperiod;andii) Afairfinancialposition(liabilities&assets)attheendoftheperiod.a) OutstandingExpenses All expenses payable at the year end such as wages, salaries, rent, electricity & water charges,

commission,interestetc.,areproperlychargedtoprofitandlossaccountandshowninthebalancesheetas“OutstandingExpenses/Payable”

b) UnearnedIncomes Generallycertain incomes relating to the followingyearsare received inadvanceduring theyear.

Suchincomesarenottakenasincomeoftheyearinwhichtheamountisreceived.Thesereceiptsaresimplyshownpayableinthebalancesheetas“UnearnedIncome”

8.12.0 WRITEOFF:Anyamountofassetorliabilityshallbewrittenoffonlywithpriorauthorisation.Thecompetentbodiestoaccordsuchauthorisationareasunder:

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i) BoardofDirectors/governingbody,andLocalassembly.ii) ForthoseconcernsnothavingBoardofDirectors/Trustees/GoverningBody/LocalAssemblyfromthe

Departmentunderwhichitcomes.iii) TheKashagforthoseconcerns,fundedfromtheconsolidatedfundofTibetangovernmentinexile

(irrespectiveofwhethergoverningbodyexistsornot)

Chapter NineAUDIT OF FUNDS AND GRANTS

9.1.0 FUNDAUDIT:WhileperformingtheauditofFund(earmarked)theauditorshallensurethefollowingpoints:i) Thefundiscreatedforaspecificpurpose.ii) Thefundiscreatedwithaself-explanatoryaccounthead(generallythepurpose)iii) Thefundisutilisedonlyonthesetpurpose.iv) Allthesubsequentincomes(interest)arecreditedtothefunditself.v) PurchaseofanyassetisshownintheBalanceSheetasusual.vi) AsumequaltothecostofanassetpurchasedoutofafundisaddedtotheGeneralorAssetfund,as

thecasemaybe(Incasefundamountistobewrittendown)vii) Nounnecessaryfundaccountiscreated.Oldandredundantfund,ifany,mustbeaddedtothegeneral/

otherfundafterproperauthorization.

9.2.0 GRANTAUDIT:Inadditiontothefundauditfollowingpointsmustbeseenwhileauditingthegrantaccount.i) Properestimatesarepreparedforeachprojectproposal.ii) Allconditionsmentionedinthegrantagreementaredulycomplied.iii) Thefundisusedonlyforthepurposesforwhichthegrantwasmade.iv) Nofund is transferred toanyotheractivitieswithoutpriorsanctionof thedonoror thecompetent

authority.v) Audit should also try to ascertain how far theoverall objectives of themajor schemeshavebeen

attained&thattherewasnowastefulexpenditure.

Chapter TenFOREIGN CONTRIBUTION ACCOUNT

10.1.0 All auditorsmust ensure that following requirementsare fulfilledwhile submitting theF.C return-FormFC-3.i) AllpropertiescreatedoutofF.CwhethermovableorimmovableshallbereflectedintheF.CBalance

Sheet.ii) Properdistinctionmustbemadebetweentheamountreceiveddirectlyfromforeignsourcesandthe

amountreceivedassecondandsubsequentreceipts.iii) TotalF.CreceiptsasperFCformmustreconcilewith theamountasperdonor’s listandthe total

receiptsasperReceiptandPaymentAccount.iv) TotalF.CutilisationamountmustreconcilewithtotalpaymentasshownintheReceiptandPayment

Account.v) UnutilisedbalanceasperF.CformmustreconcilewiththebalancesasshownintheBalanceSheet

andcash&banksbalanceintheReceiptandPaymentAccount.

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vi) Noadvances,eitherreceiptorpayment,shallbetreatedasforeigncontribution.vii) Subsequentreceiptssuchasinterest,exchangeratedifferencesetc.,shallalsobetreatedasforeign

contribution.viii) NoreceiptotherthanFCshallbebookedintheF.Caccount.ix) AnycontributionreceivedfromEuropeanUnionshallnotbetreatedasforeigncontribution.x) SaleproceedsofanyFCfixedassetmustalsobetreatedassubsequentFCreceipt.xi) Anychangesinregardtothenameof theAssociation, itsaddress, itsChiefFunctionaryandbank

accountmustbereportedtoHomeMinistry,Govt.ofIndia.xii) Prepare and submitworksheetof actual receipt&payment extracted from the receipt&payment

accountregardingFCformandreconciliationstatement.xiii) ThereshouldbeapriorpermissionforeachandeveryF.Creceipts.xiv) Nofundshallbetransferredtoanyorganisationnothavinganypriorpermissionorregistrationunder

ForeignContributionRegulationAct.xv) Any receipts from any organisation whose original source is foreign shall also be treated as FC

receipts.xvi) A set of books of account must be maintained separately for foreign contribution received and

utilised.xvii) Allcontributionsreceivedinkindmustbemaintainedandreportedinthemannerasprescribed(see

annexureXI)xviii)DetailofeachcolumnoftheFCformmustbepreparedandkeptinofficefile.Thisneednotrequired

tobesubmittedalongwiththeFCform.

Chapter ElevenFINAL STATEMENTS OF ACCOUNT

11.1.0 Followingstatementsmustbepresentedalongwiththeauditreportinallcases:Incaseofnon-tradingconcern IncaseoftradingConcerni) ReceiptandPaymentAccount TrialBalanceii) Income&Expenditure Profit&LossAccountiii) BalanceSheet BalanceSheetiv) Schedules&Lists Schedules&Lists

11.2.0 Whilepresentingthefinalstatementsofaccount,theauditormustensurethatfollowingaspectsarealsofulfilled.i) It is important to start the receipt and payment account receipt sidewith opening cash and bank

balancesandclosethepaymentsidewithclosingcashandbankbalances.ii) ManufacturingAccountmustbepresentedforthemanufacturingconcern.iii) ReceiptandPaymentAccountmustalwaysbepresentedinT-formonly.iv) ReceiptandPaymentAccountmustshowtheactualreceiptsandpaymentsduringtheyear.v) Statementsofallunits/branchesofaconcernmustbeconsolidatedsoastoshowanoverallposition

oftheconcern.vi) Interunittransactionsorbalancesmustbeneglectedwhileconsolidatingabalancesheet.vii) Incaseofschedulesorlistofpayablesandreceivablessuchasadvances,creditors,debtors,etc.,itis

importanttoshowthetotal(gross)payablesintheliabilitysideandreceivablesintheassetsideofthebalancesheet.

viii) FiguresoftheReceiptandPaymentAccount/TrialbalanceandBalanceSheetmustcorrelatewiththeledgerfigures.(Theauditormustmarktheledgerfigureswithinitialstocheckanyfuturealteration)

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ix) ProfitandLossAppropriationAccountmustbepreparedtoapportionthenetprofitornetlossaccordingtothefixedratiosandshouldbeappropriatelyshowninthebalancesheet.

x) BusinessProfileandChecklistasprescribedmustbedulyfilledandpresented(seeannexureXII&XIII)

xi) PreviousyearamountmustbeshownintheleftsideoftheIncome&Expenditure/Trading&Profit&LossaccountandBalanceSheet.

xii) While presenting income and expenditure/ trading & profit & loss account, any account head,representingexpenseswithsmallincomecanbeadjustedwitheachother,forexampleincomeraisedintelephone&vehiclecanbeadjustedalongwithitsexpenses.

xiii) NetworthandCapitalEmployedshallbecomputedasunder:

i) NetWorth

A) FixedAssetsatwrittendownvalue xxxB) CurrentAssets xxx

Less:Baddebts/receivables xxxDoubtfuldebts/receivables xxxObsoleteStocks xxx xxx xxxTotalof(A)+(B) xxx

C) Less:CurrentLiabilities xxxLess:Bad/uncertainpayable xxx xxxLess:FundPendingutilisation xxxLess:Fundnottobeutilised xxx xxx xxxNetWorth xxx

ii) CapitalEmployed

A) TotalFixedAssetsatwrittendownvalue xxxB) Currentassets,inventories(lessobsolete&damaged)

Debtors/advances/receivables(lessbadanddoubtful) xxxC) Cashandbanks xxx

Totalof(A)+(B)+(C) xxxLessCurrentliabilities xxxCapitalemployed xxx

iii) ReturnOnCapitalEmployed(ROI)

NetProfit ---------------------X100 CapitalEmployed

Chapter TwelveCHATEHL CONTRIBUTION

12.1.0 BusinessIncome:15%ofthenetprofitasdefinedinclause12.4.0shouldbeprovidedinthecaseofalltheconcernslistedinannexureXIVandshownpayableintherelevantperiod.Incaseitisnotfeasible,

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duetocertainlegalrestrictions,toshowtheamountaspayableinthestatementtheamountshallsimplybementioned in the audit report.BusinessincomeshouldbecalculatedasbelowNetProfit(Beforedeductionof15%)x15 115ForTibetansresidinginIndia,NepalandBhutanhavingnosalaryincomebuthavingbusinessincomeshouldpaytheamountfixedforthenetprofitslabunderwhichonefalls.

12.2.0 SalaryIncome:Allbona-fideTibetanshavingsalaryincomeshallcontributeasumequalto4%onthebasicor2%ofthegrosspaywhicheverishigher.

12.3.0 DeductionfromGrants:APercentageofdeductionforgrant,fromwithinandforeign,shouldbeasperrateprescribedintheannualbudgetbythefinanceminister.Presentrateareasbelow:ContributionreceivedthroughDepartmentofFinance5%ContributionreceiveddirectlybytheDepartment2%ContributionreceiveddirectlybytheSettlement/Welfareofficeandautonomousinstitution1%

12.4.0 NetProfit:Netprofitwhereeverrelevantshallbeconstruedasgrossprofitlessallexpensesexcludingprovisions and reserves, uncertain and non-chargeable to profit, such as provision for education fund,constructionfundetc.,andreservesofanykind.Provisionforbonusshallbetreatedaschargeableexpensesinthiscase.Concerns,havingaccumulatedlosses,shalladjustyearsprofitwithitsaccumulatelossesanditisnotrequiredtodeduct15%ofthebusinessincome.Computationofdeductionshallbefromtheconsolidatedaccountofallitssection. 12.5.0 Remittance:AlldeductionsshallberemittedtotherespectiveRangdenTsokchungasbelow:i) Collectionsonaccountofsalaryandmonthlychatehlexcludingbusinessincomeswithin15daysfrom

thedateofcollections.ii) Collectionsonaccountofbusinessincomebeforetheendofthenextaccountingperiod.iii) RemittanceoftheamountliabletotheDepartmentofFinanceforthecontributionreceivedwithinor

foreignshallbeatthetimeofreceivingit.Otherwiseitshouldberemittedimmediatelyafterreceivingaudit report.

Chapter ThirteenAUDIT FEE

13.1.0 AuditfeefortheStatementsofFinalAccountofDepartments/OrganizationsrequiringcertificationofCharteredAccountantsandInternalAssessmentChargespayabletothisofficeshallbeseparatelyaccounted.AuditfeeshouldbecalculatedasperannexureXV.

Chapter FourteenINCOME TAX

14.1.0 AllauditorsmustcheckwhetherfollowingprovisionsoftheIncomeTaxAct1961,havebeenproperlyobservedornot.Ifnot,properinstructionsshallbegiventoobservethesame.i) AllpaymentsexceedingRs.20,000.00mustbemadeeitherbyaccountpayee’schequeorcrossed

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demand draft.ii) Allreceiptsorpaymentsofdeposits/advancesmustbemadebycrossedchequeordemanddraft,ifthe

amountexceedsRs.19,999.00iii) Incaseofinstitution/trustregisteredunderIncometaxact,allcorpusoraccumulatedfundmustbe

invested/depositedonlyinthefollowingmodesa) GovernmentSavingCertificatesb) PostOfficeSavingAccountc) Co-operativeSocietyBankd) ScheduledorNationalisedBank

Chapter FifteenPENSION AND PROVIDENT FUND AUDIT

15.1.0 AUDITOFPENSION:Auditofpensionconsistsofverifyingthatthequalifyingconditionsgoverningthegrantofpensionarefulfilledandthattheamountofpensionsanctionanddrawniscorrect.Thepointstobeseenduringthecheckofpensionare:i) Checkthestatementofservice,statementofleavewithreferencetotheentriesintheservicebook&

unpaidleavesifany,tobeexcludedfromhisservice.ii) Checkwhetherthepensionhavebeenworkedoutcorrectlyonthebasisofhis/herserviceandasper

therules&regulation.iii) Ensurethatreceiptsofthepensionareproperlyattached.Incase,pensionisdrawnbyanotherperson

onbehalfoftheretiredperson,itisnecessarytoseethatinstructionisgiveninwrittenbytheperson,whoisentitletoreceivepension.

15.2.0 AUDITOFPROVIDENTFUND:Whileauditingprovidentfundofstaff,followingpointsshouldbeseen.i) Check whether the rates of deduction of provident fund are in compliance with the rules &

regulation.ii) Interestisworkedoutattheproperrateasprescribedfromtimetotime.iii) Interestsocalculatedisinvariablycreditedtotherespectivesubscribersattheendofeachyear.iv) Amountoftheindividualiscorrectlyenteredinhisledgerhead.v) Temporaryorfinalwithdrawalsofprovidentfundareaspertherules&regulation.vi) Beforethefinalwithdrawalofprovidentfund,Noduecertificateisproperlysubmitted.vii) Ensurethatreceiptsofprovidentfundareproperlyattached.

Chapter SixteenRANGDEN TSOKCHUNG AUDIT

16.1.0 NECESSARYDOCUMENTTOSTUDYBEFOREAUDIT:i) Rules&Regulationpertainingtothevoluntarytax&contributionandrulesofRangdenTsokchung.ii) ResolutionpassedintheminutebookofRangdenTsokchung.iii) FilesrelatingtothecorrespondencewiththeAssemblyofTibetanPeople’sDeputiesandDepartment

offinance.iv) HandingandtakingoverfilesofTsokchung.v) Auditreports&accountstatement.vi) Clarificationofauditreport.

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vii) Otherrelatedfiles.

16.2.0 FINANCIALYEAR:i) FromApril1toMarch31.ii) Ifnotaudited,periodcommencingfromthelatesthanding&takingovertoMarch31.

16.3.0 NECESSARYBOOKS&DOCUMENTS:i) Auditshouldbedonebasedonthecashbookmaintained,ifnot,theyshouldbeadvisedandtrained

on how to maintain it.ii) Incasecashbookisnotmaintained,basedonthestampbalancehandedoverduringthehandingand

takingoverofoldTsokchung,areceiptandpaymentaccountshouldbeprepared.iii) Registerofpeopleresidingintheregion.iv) ListofallthestaffanditspaystructureoftheAutonomousInstitutionintheregion.v) Contributionregisterbook(asperannexure-XVI)vi) Registerofbudgetedexpenses(asperannexure-XVII)vii) Stampregister,showingstampreceived,issued&itsbalance(asperannexure-XVIII)

16.4.0 RECEIPTAUDIT:i) Itisessentialtoexaminewhetherthecollectionofvoluntarytaxcontributionisinaccordancewith

the listofpeople residing in the region,providedby the settlementorwelfareoffice.Sincedetailexaminationforallisnotpossible,atestauditcanbeconductedbytakingafewcampintoconsiderationandhighlightedinthereport.

ii) Examinewhether all the salaried staff coming under theTsokchung has remitted the compulsorycontributiononsalary.SpecialemphasisshouldbegiventothesalariesofteacherandstaffcomingunderInstitutions,whicharenotauditedbytheCTAAudit.Ifanyonefoundnotremitted,shouldbereported.

iii) AnyInstitution,auditedbyCTAAudit,shouldbeguidedtodeductthesalarydeductionbeforemakingpayment&thesameshouldbeaccountedinthebooksofaccount.

iv) Verify that 15%of the profit from the commercial unit has been collected. (Listed in theAnnualBudget).

v) Whetherprescribedamountorratehavebeencollectedfromtheprofitoftheprivateventures.vi) Revenuesareproperlyclassifiedagainstvoluntarycontribution,salarydeduction,profitpercentage

anddonation(extracontribution).vii) SeetheremittanceofrevenuetoDepartmentofFinanceismadewithinthestatedperiodinarticle

15(4)ofthevoluntarytaxrules&regulation.viii) InterestreceivedfromthebalancerevenuekeptwiththebankshouldalsoberemittedtotheDepartment

ofFinance.ix) ExaminewhetherpeopleseekingfreshgreenbookarebonafideTibetan.GreenBookshouldn’tbe

issuedtoNon-Tibetans.

16.5.0 PROCEDURETOAUDITSTAMP:i) Asperarticle15(2)oftheVoluntaryTaxandContributionRegulations“Anycontribution,without

givingorreceivingequivalentstamp,cannotbecontributedorreceived”.Checkwhetheritwasadheredto.

ii) VerifyallthecorrespondencefromtheDepartmentofFinanceandTsokchungregardingthestampissuedandmoneyremittedinreturnagainsttheentriesintheaccountandthestampstockregister.

iii) Tokeep trackof thebalancepositionofgreenbookandstamp, it is imperative tomaintain stockregister.

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iv) Physicallyverifythebalanceofstampandgreenbooktoseewhetherthereisanycashshortageorexcess.

v) Advice thatbalanceof stampandgreenbookat theyear ending31stmarch shouldbephysicallyverifiedandcountersignedbytheChairmanoftheTsokchunganddealingin-charge.Alsoexamineeveryyearwhetherithasbeenfollowedornot.

Chapter SeventeenALLOWANCES AND COMPENSATION FOR CTA STAFF

17.1.0 PERDIEM:PerdiemshallbepaidtoalltheCTAStaffduringanofficialtourasprescribedbelow:i) Rs.225.00perdaytoJointSecretaryandabove.ii) Rs.180.00perdaytoDeputySecretaryandbelow.iii) Rs.160.00perdaytoPeonandDriver.iv) PerdiemtoalltheCTAStaffduringanofficialtourtoabroad(excludingIndia,Nepal,Bhutan)

a) $25perdaytoJointSecretaryandabove.b) $20perdaytoDeputySecretaryandbelow.c) One fourth of the per diem shall be claimed in cases where boarding facilities have been

provided.d) Extra allowance of 50%of the per diem shall be allowed in the case of tour to the areas of

Ladakh, SoloKhumbu, Rasogiri, Lo-Tserog, Dorpatan,Walung, Bomdila, Miao, Tenzingang,Tezu,Bhandara,PokhraTashiling,TashiPalkyil,Jampaling,Paljorling,Orissa,Mainpat.

e) FortravelstoIndia,NepalandBhutan,whereboardingfacilitieshavebeenprovided,halfoftheallowableperdiemshallbeclaimed.

17.1.1 PerDiemSlabs:Perdiemasreferredinclause17.1.0shallbeallowedandcalculatedasbelow:i) GeneralStaff

Perdiemshallbeallowedforamaximumperiodof40daysasunder:a) Fullperdiemforthefirst15daysb) Halfperdiemfortheremaining25days.

ii) StaffoftheOfficeoftheAuditorGeneral InthecaseofstaffofOfficeoftheAuditorGeneralperdiemshallbeallowedforamaximumperiod

of90daysasunder:a) Fullperdiemforthefirst40days.b) Halfperdiemfortheremaining50days.

17.1.2 PerDiemCalculation:i) Fullperdiemfortravelnotlessthansixhoursandcoveringadistanceof12kilometers;ii) Halfperdiemfortravellessthansixhoursandcoveringadistancenotlessthan12kilometers.

17.2.0 TRAVELLINGEXPENSES:Staffsareentitledtotravelasfollows:i) JointSecretaryandabove:

a) Train:1stclassorACIIb) Road:ACdeluxebuses.

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ii) DeputySecretaryandbelow:a) Train:2ndclassIIItierb) Road:Deluxebus.c) Incasetwostaffofdifferentlevelsrequiredtotraveltogetheroutofnecessity,travellingallowance

entitledtothehigherlevelstaffcanalsobeavailedbytheotherstaff,providedapriorsanctionisobtained.

17.2.1 TravelbyAir:Priorsanctionshouldbeobtainedforallofficialtravelsbyairandexaminedasunder.i) StaffattheHeadOffice,OfficesabroadandothersfundedfromConsolidatedFundofCTA,sanction

fromKashag.ii) Staffattheunits,localoffices,school,hospitaletc.whereLocalAssemblyorGoverningBodyisnot

there,sanctionfromtheHeadOffice.iii) StaffatRegisteredAutonomousInstitution,ifprovidedintheInstitutionsrulesandregulations,asper

it.OtherwisesanctionfromtheGoverningBodyfortheairtraveldoneortobedone.iv) Headoffice/DepartmentshallpurchaseairticketfromthePotalaTours&TravelthroughBureauoffice

inDelhi,videKashag’snotificationdated9-8-1998andbookingofbus&trainticketalsofromthePotalatours&travel,videDepartmentofFinance’scirculardated15-11-2003.

17.3.0 TRANSFERALLOWANCE:i) Astaffonhis/hertransfer,fromoneplacetoanothershallclaimhis/hertravelallowanceonlyfromthe

office/unittowhichthestaffistransferred.ii) Transferallowance

a) Rs.1280.00forJointSecretaryandabove.b) Rs.960.00forDeputySecretaryandbelow.

iii) A staff shall be re-imbursedexpenses incurredon transportationofhis/her luggagedue tohis/hertransferfromoneplacetoanotherasunder:a) Maximumof800.00kgs(bytrainonly)forJointSecretaryandabove.b) Maximumof600.00kgs(bytrainonly)forDeputySecretaryandbelow.c) Incaseoftransportationotherthanbytrain,actualexpensesorone-fourthofthetrainwaybills

whicheverislessshallbere-imbursed.d) Incaseofplaceswhereno trainservice isavailable,actualexpensesof transportationshallbe

allowed.

17.3.1 DependenceAllowance:Incaseoftransferofanystaff,allhis/herdependentshallalsobeentitledforcompensationequaltothatofthestaffhimself/herself.Butdependentarenotentitledtoperdiem.

17.3.2 Timelimit:Allclaimsshallbemade,alongwithnecessarysupportingdocuments,suchasactualexpensesbillsshowingluggageweight,namesofpassengers traveled,date,etc.,within twomonthfromthedateonreaching thetransferredplace.

17.4.0 REMOTEAREAALLOWANCE,CITYALLOWANCE,DIFFICULTAREASALLOWANCEANDWEATHERALLOWANCE:i) Remote&DifficultAreaAllowance:

a) Rupees600/00permonthforLadakhregion,Solokhumbu,Rasogiri,LoTserog,Dorpatan,Walung,Bomdila,Tenzingang,Miao,TezuandBandhara.

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b) Rupees400/00permonthforPokharaTashiling,TashiPalkhel,Jampaling,Paljorling,OrissaandMainpat.

ii) CityAllowance:a) Rupees500/00permonthforDelhiandKathmandu.b) Rupees300/00permonthforBangalore.

iii) WeatherAllowanceRs.250/00Permonth:Ladakhregion(4&halfwintermonths)Solokhumbu,Rasogiri,Lo-Tserog,DorpatanandWalung(3&halfwintermonths)

17.5.0 MEDICALALLOWANCE:Witheffectfromthenewpayscale(dated1-1-2003),anystaffwillingtojoinmedicalinsurancemaycontribute1%ofhis/hermonthlygrosssalarytotheDepartmentofHealth.Medicalfacilitieswillnotbeextendedtothosestaff,whooptednottocontribute.AnoptioninwrittentojoinornottojoinaschemewillbetakeninthemonthofDecembereveryyearandisnotallowedtochangeitforoneyear.

17.6.0 PROVIDENTFUND:EveryCTAstaff (recruitedbefore31.12.2002) is required tomaintainaProvidentFundAccountwith theDepartmentofFinance.TheProvidentFundAccount(PFA)shallbeoperatedasfollows:i) Everystaffisrequiredtocontribute8%ofthegrosssalarytoPFA.ii) Nostaffisallowedtocontributemorethan8%ofhis/hergrosssalary.iii) Concernorganisation/institutionfromwherethesalaryofastaffisdrawnmustalsocontributeasum

equalto8%ofthesalaryofthestafftothePFAofthestaff.iv) Salary referred to in clause (i) supra shall be the salary entitled to a staff in considerationofhis/

her designation in theCTA staff levels and not the actual salary drawn due to his/her posting orresponsibilityheld.

v) Salaryinthiscaseshallbethebasicpay,dearnessallowanceifanyandserviceincrement(seeannexureXIXCTA’spayscale)

vi) CTAstaffrecruitedafter1/1/2003willhavetomakepersonalcontributiontoPFAbutwillnotgettheequalcontributionfromtheconcernorganisation/institution.

17.7.0 RENTALLOWANCE:Houserentallowancetothestaff,recruiteddirectlybytheoffice/departmentwillbesameasthestaff,recruitedbythePublicServiceCommission(PSC)asbelow:a) Bacheloremployees–Rs.1,200.00permonth.b) Marriedemployees–Rs.1,500.00permonth.

In case ofmarried employees, if either of the spouses avails staff quarter fromHousing&Estate office(CTA),individualdepartmentorautonomousinstitutionandthatthisquarterissituatedwithinadistanceof5kms.fromworkplace,thenanadditionalquartercannotbeallotted.WhetherboththehusbandandwifearerecruitedbyPublicServiceCommissionorbyindividualoffice/department,willbeentitledtoeitheronehousingfacilityoronehouserent.Noexplanation,differentiatinghouserentwithhouserentallowancewillbeentertained.Ifithappens,thecompetentauthorityandtheaccountantwillbeheldaccountable.(Kashag’snotificationdated13.6.2002).

17.8.0 OFFICIATINGALLOWANCE:Staffofficiatingtheresponsibilityofhigherdesignationwillget10%ofthebasicpayofthehigherdesignationandalsobeentitletodrawtravelandperdiembenefitofhigherdesignation.

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Chapter EighteenAUDIT OF SCHOOL, CARPET MANUFACTURING & HOSPITAL

18.1.0 SchoolAudit:Whileauditingschool,fewspecificguidelinestotakenoteofareasfollow:a) Examinewhether thecollectionoffees isasperprescribedrules.SchoolFeeRegister,bifurcating

studentpayingandnotpayingfeesisannuallymaintained.Examinethelistoffeesreceivableandfeesreceivedinadvance,attheyear-end.

b) Giftmoneyfromsponsortochildrenshouldbeaccountedandalsopostedtotheindividualchildrenaccount.Amountreflectedinmainaccountshouldtallywiththetotalofindividualbalances.

c) Determineteacher/studentratio.d) Examinethatqualifiedteachersareavailableandtheyareprovidedwithrequiredtrainingatregular

interval.e) Ifthenumberofdropoutstudentrises,trytofindthecauseofit.f) Availabilityofbasicfacilitiestoschoollikehospitalwithbasicnecessities,playground,library,number

ofbathroomandtoiletcommensuratewithstudentstrengthetc. 18.2.0 Carpetmanufacturing&exportingunits:a) Examine the systemof buying the rawmaterial and ascertain that theprice, quantity, quality and

supplierofthepurchasesareproper.b) Ascertain whether there is proper control system of handing over goods received and recording

them.c) Whetherthecommissiongivenordiscount/rebateallowedwasfixedbytheManagementornot.d) Examine that weaver’s wages are paid according to the rate prescribed by the management and

productionisregisteredfromjobcardforeverywagespaid.e) Examineindetailthematerialsissuedforallworkandmaterialsreceivedfromeachworkinreturn.f) Examinewhethertheexportofcarpethasbeenmadeinconformitywiththerelevantlegalprovision

of the land.g) Examine the bill of lading, invoice, bank credit advice, packing list and custom clearance

documents.h) Whethereveryorderfromcustomerisdulyregisteredandexecutedwithinthestipulatedtime.

18.3.0 HospitalAudit:a) Examine thedoctor/nurse/patient ratio, numberofnurses andquality, numberofpatients, number

ofpatientsleavingwithoutbeingcurede.g.tuberculosispatientandavailabilityofbasicmedicines,laboratory,ambulance,generator,oxygenetc.

b) Alsoseethehygieneofthehospitalandmortalityrateinthehospital.

Chapter NineteenAUDIT REPORT

19.1.0 Amostvitalobjectofauditreportistostimulatemanagement’sactiontocorrectproblemareas.Theauditor’scontributiontotheorganisationismeasurednotinfindingsdisclosedorlengthofreports issued,butinincreasingoperationaleffectivenessandefficiencyandeconomythatresultsfromcorrectiveactionstakenbymanagement.However,therearenumberofinstanceswherethemanagementhasnotactedupontherecommendations.Aneffectivereportingneedstobecarriedoutinordertoinitiateimprovements.

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19.2.0 IMPORTANCEOFREPORT:AnAuditReportshouldshowfindingsinapositivemanner,speciallythecorrectivemeasurestakenbythemanagement.Negative&inconsiderateauditreportdestroysauditor-auditeeco-operativespirit.Destructionof this spirit spells the end of audit effectiveness.Auditor’s empathy is essentialwhen evaluatingwhy aproblemexistsandhowtheauditorcanactasacontributingpartnerwithmanagementincreatingapositiveopportunitytotheproblem.Theauditreportshouldbeareportoffindingsaswellasmeansofstimulatingactions.Theaudit report shouldpinpoint the realcontrolweakness.Report shouldcontainanalysisof theproblemsandevaluatetheseverityandeffectofthoseproblems.Itshouldconvincethereaderthatauditors’recommendationsorsuggestionsshouldbeputintopractice.

19.3.0 READERSOFTHEREPORT:Reportshouldconsiderthereadertowhomitisdirected.Readerheredoesnotmeanonlytheconcerntowhomthereportisaddressedto,butallthosewhoaretomakeuseofthereport.SinceanAuditReportshouldbeareportoffindingsandmeansofstimulatingaction,itshouldbedirectedtotheimmediatelevelofmanagementwhose activity has been audited andmake every attempt to achieve the stated purpose of correcting theweaknesses.Thereportshouldbesowritteninsuchawaythatitistakenasanaidtotheorganisation.

19.4.0 CONTENTSOFREPORT:Contentsofanauditreportshouldconsistofthefollowingfiveelements:i) Whatshouldbedone:Thisisthebasisthattheauditorusestomeasureagivensubjectunderaudit.It

maybeaprocedure,practice,law,policyofaccountingprinciple.ii) Whatisbeingdone:Thisiswhattheauditorhasobservedwhileauditingafactualrecord.Itneedsto

bestatedsimplyandclearlywithnecessarydatainabsoluteorrelativeterms.iii) Whatmadethedeviation:Here,causesthatledtodeviationsarestated.Thisisaverydelicatepartof

the report, as the auditor has to use his expertise to pinpoint.iv) Whatistheeffectofdeviation:Hereeffectofthedeviationontheorganisationistobestated.Itmay

indicatetherisktheauditeeisbeingexposedto.v) Whatistherecommendation:Thisisauditor’sspecificrecommendationorsuggestionforcorrective

actiontobetakenbytheauditee.

19.5.0 REPORTFORMAT:i) Allreportmustbepresentedaspertheprescribedformat(seeannexureXXforformat)ii) ItisnotrequiredtoclarifyanyexplanationgiventotheauditreportbytheDepartmentaftertherelease

ofthereport.Explanationsshallbecompulsorilyreviewedduringthenextauditperiodandfurthermentionmaybemadeinthereport,ifrequired.

iii) Whilereviewingthepreviousyear’sauditreport,auditormustseetheexplanationmadebytheheadoffice/DepartmenttotheAssemblyofTibetanpeople’sDeputies.Ifnotcompliedwith,theexplanationofheadofficemustbeincludedintheauditreport.Ifexplanationmadewasincorrect,itmustbestatedclearlyintheauditreport.

iv) Incaseofanyindictmentofeithertheauditororthegenuinenessofanyremarkmadeinthereport,theAuditorGeneralmaytakeanystephedeemfit.

19.6.0 DISCUSSIONOFDRAFTREPORT/STATEMENTOFACCOUNT:Asprovidedinthearticle6(5)oftheOfficeoftheAuditorGeneralRegulation1992,anopportunitymustbegiventotheauditeeforexplanationonauditobservations,beforegivingshapetothefinalreport.Thedraftreportmustbeconveyedanddiscussedwiththeresponsibleofficer(s)oftheauditeeconcern.Thisprimarilyisintendedtobringoutqualityandfactualauditreport,bygivinganopportunitytotheauditeetoplacetheir

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clarificationsandalsotoavoidoccasionalmistakeseitherduetowronginformationorlackofinformation,misinterpretationetc.bytheauditor.Itisimportantthatanyexplanation/clarificationgivenagainstanyauditobservationplacedin thereportmustalsobementionedin thereport inbrief.Allauditorsarenecessarilyrequired tocomplete thedraft report at theplaceofaudit. Initialof theconcernedauthoritymust alsobeobtainedtoacknowledgethediscussionofthereport/statementsofaccount.

19.7.0 REPORTSUBMISSION:Reportonauditofanykindmustbesubmittedwithinsevendaysafterthecompletionoftheaudit.

19.8.0 SECRECYOFREPORT:Nocontentsorinformationoftheauditreportshallbedisclosedun-officiallytoanyoneuntilthereportisofficiallyreleased.

19.9.0 IMPORTANTPOINTSTOKEEPINMINDWHILEDRAFTINGAUDITREPORT:i) Thefullfinancialimplicationsofeachobjection,orapproximatevaluethereof,calculatedfromthe

datainhandshouldbebroughtoutintheauditreporttostressthesignificanceandgravityoftheauditobjection.

ii) Anyminorandproceduralobjectionswhichcouldnotbesettledonthespotshouldbeincludedintheauditregisterandnotbementionedinauditreport.

iii) Nosupposition,assumptionsorallegationsshouldbeincludedintheauditreport.Onlyfactsshouldbementionedandinevitableconclusionsdrawn.

iv) Auditorshouldalsonoteanylargevariationsintheincomeandexpenditureoftheyearascomparedwiththefiguresforthelastyearandasfaraspossiblegivethecauseswhichhavecontributedtothis.

v) Itisimportantthatstatementandfiguresinrelationtoanydefectsorirregularitiesdiscoveredshouldbebasedoncleardocumentaryevidence.

Chapter TwentyLANGUAGE BASE

20.1.0 Foreasyuse,thisauditmanualisabilingual.Incase,circumstancearisesinfuturewheredifferenceisfoundbetweenthetwolanguages,thenoneintheTibetanlanguageshouldbeconsideredasbase.