The Comptroller and Auditor General of India (C&AG) appointed M/s. VR & Associates, a firm of Chartered Accountants, to conduct the audit of…

The type of audit that the Comptroller and Auditor General of India (C&AG) expect M/s. VR & Associates to conduct in this context is Propriety Audit since C&AG expressed concern that the proposed R&D expenditure of 2,000 crores appeared wasteful and lacking justification on the test of public interest. Propriety audit stands for verification of transactions on the tests of public interest, commonly accepted customs and standards of conduct. Propriety requires transactions, and more particularly expenditure, to conform to certain general principles. The following principles should be applied by M/s. VR & Associates: (i) that the expenditure is not prima facie more than the occasion demands and that every official exercises the same degree of vigilance in respect of expenditure as a person of ordinary prudence would exercise in respect of his own money; (ii) that the authority exercises its power of sanctioning expenditure to pass an order which will not directly or indirectly accrue to its own advantage; (iii) that funds are not utilised for the benefit of a particular person or group of persons and (iv) that, apart from the agreed remuneration or reward, no other avenue is kept open to indirectly benefit the management personnel, employees and others.