A state Government spent rupees fifty lakhs on renovation of Raj Bhavan’ for its Governor. In the C & AG’s opinion this expenditure was more than what occasion demanded? It is an exampled of –

 Options:

a) Propriety audit b) Performance audit c) Audit against provision of funds d) None of the above

The Correct Answer Is:

a) Propriety audit

Correct Answer Explanation: a) Propriety audit.

A propriety audit is a type of audit that evaluates whether the financial transactions and expenditures made by an organization or government entity comply with established rules, regulations, and ethical standards.

It focuses on the appropriateness of actions, decisions, and expenditures in relation to the principles of good governance and public interest.

In the given scenario, where a state government spent rupees fifty lakhs on the renovation of Raj Bhavan for its Governor, the Comptroller and Auditor General (C & AG) opined that this expenditure was more than what the occasion demanded.

This opinion suggests that the propriety of the expenditure is questionable, as it may not align with the principles of prudence, economy, and efficiency.

Now, let’s delve into why the other options are not correct:

b) Performance audit:

A performance audit primarily focuses on evaluating the efficiency, effectiveness, and economy of programs or activities to determine whether they have achieved their intended objectives. It involves assessing the use of resources, management practices, and the overall performance of a program.

In the case of the state government’s expenditure on the renovation of Raj Bhavan, the concern raised by the C & AG is more about the appropriateness of the expenditure rather than the performance of a specific program or activity. Therefore, a performance audit is not the most suitable category for addressing this specific issue.

c) Audit against provision of funds:

This type of audit is concerned with ensuring that expenditures are in accordance with the budgetary allocations and provisions of funds for specific purposes. While it is essential to ensure financial compliance, especially in terms of budget allocations, it does not necessarily address the question of whether the expenditure in question was appropriate for the occasion.

The C & AG’s concern goes beyond mere compliance with the provisions of funds; it questions the judgment and appropriateness of the expenditure.

d) None of the above:

This option is not correct because the situation described in the question is closely aligned with the principles of a propriety audit. The C & AG expressed an opinion that the expenditure on the renovation of Raj Bhavan was more than what the occasion demanded, indicating concerns about the appropriateness and prudence of the spending.

While other types of audits may touch upon elements of financial management or compliance, none of them specifically address the propriety and ethical considerations that are at the heart of the C & AG’s opinion.

In essence, the choice of a propriety audit is appropriate in this scenario because it directly addresses the concerns raised by the C & AG regarding the judgment, ethics, and appropriateness of the state government’s expenditure on the renovation of Raj Bhavan for its Governor.

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