No O&M/Insp/RCC/2007
                            Office of the CGDA
                            West Block-V, R K Puram
                            New Delhi-66
                            Dated: 25^th April, 2008

*******

       This is with reference to  HQrs letter No O&M/Insp/RCC/2007 dated 14th May 2007 whereby the powers of LAOs/RAOs for settlement of objections/observations was withdrawn. As envisaged in the above-quoted letter a feedback on the working of the new system as well as any suggestion for improvement in implementation was obtained from all PCsDA/CsDA. .

2.    A Committee was constituted with Smt Nita Kapoor, PCDA, Western Command, as the Chairperson, to look into the difficulties being faced by the Controllers, in effective implementation of the new Scheme. The Committee has submitted its Report. The recommendations of the Committee have been examined and it has been decided to restore the powers for settlement of objections to the LAOs, as prescribed by rules and regulations prior to introduction of the new system vide this office letter dated 14-05-07. The operative contents of ibid letter dated 14-05-07 therefore stands superceded with immediate effect.

3.    All objections settled under the new scheme will hold good and the respective LAOs will keep a note for the purpose in their records.

4.    However, in order to achieve the desired results and to improve the quality of internal audit, the Committee has recommended that the earlier system needs to be strengthened further through the approach given in the Annexure enclosed.

5.    Confirmation of receipt of this letter may be sent by name to Jt. CGDA (AT-I).

6.    This issues with the approval of CGDA.

                                  (VEENA PRASAD)
                                  Jt CGDA (AT-I)

 Annexure

1    The mechanisms laid down under Para 797 of OM Part II Vol I and Appendix II to OM Part I relating to Inspection/Adm Review and Super Review at the level of IDAS Officers including PCDA/CDA/Addl CDA/JCDA, need to be strengthened and their frequency increased to facilitate further improvement in quality.

2    Close monitoring of working of LAO/RAO by a competent Group Officer in IA Section under the supervision of JCDA/Addl CDA/CDA/PCDA and also by giving adequate training to IA Section as well as to LAOs/RAOs and their staff

3    .LAOs/RAOs Conference needs to be organized in the Main Office of PCsDA/CsDA regularly and in a focused manner to address the issues and problems faced by the LAOs/RAOs and decision areas warranting intervention at his/her level. The duration of such conferences should depend on the strength of the LAOs/RAOs under the Organisation of PCDA/CDA.

4    These Conferences should be organized in a well structured manner by tasking each LAO/RAO or group of LAOs/RAOs to cover specific area of audit and give a focused presentation before the PCDA/CDA. This approach will make the LAOs/RAOs to do a thorough study of the topic assigned and will bring out specific issues/decision areas.

5    Besides the items incorporated by the CGDA in Internal Audit Report (IAR), some of the significant MFAI items, particularly those amongst fresh items, incorporated by the PCsDA/CsDA may be compiled by the HQrs Office and widely circulated to field Controllers for information and guidance. The Controllers concerned may, in turn, circulate such items in their Organization, in addition to the items projected by their LAOs, in order to identify similar risk areas in their Organization and to focus on them.

6    The Ad-hoc Committees formed to review and discuss audit matters could be activated and regular meetings between the executive authorities and audit authorities be held, where important matters relating to Internal Audit/ Statutory Audit can be discussed.