Rule 317 of The General Financial Rules 2017 Audit Fees
Original Rule Text
daily rates prescribed by Government in
consultation with the Comptroller and Auditor
General of India from time to time shall be
charged by the Indian Audit and Accounts
Department for the audit of local and other non-
Government funds, excluding funds for the audit of
which the rates of fees recoverable are prescribed
by law or by rules having the force of law.
Provided that nothing contained in this rule shall be
held to override any special instructions of
Government exempting any particular local body or
institution wholly or partially from the payment of
audit fees.
Visual Summary
Fees for auditing local and non-government funds.
Indian Audit and Accounts Department charges fees.
Government can grant full or partial exemptions.
Executive Summary
Rule 317 of The General Financial Rules, 2017, mandates the Indian Audit and Accounts Department to charge audit fees for local and non-Government funds. These fees are based on daily rates set by the Government in consultation with the Comptroller and Auditor General of India. The rule explicitly excludes funds where audit fees are already prescribed by existing laws or rules. Furthermore, it allows the Government to issue special instructions to wholly or partially exempt specific local bodies or institutions from paying these audit fees.
In-Depth Analysis of the Rule
Introduction: Rule 317 outlines the framework for charging audit fees for non-governmental entities and local bodies, ensuring a standardized approach while allowing for necessary flexibility.
Breakdown of the Rule:
- Basis of Fees: Audit fees are determined by daily rates prescribed by the Government. This prescription is made in consultation with the Comptroller and Auditor General of India (CAG).
- Charging Authority: The Indian Audit and Accounts Department is responsible for charging these audit fees.
- Scope of Audit: The fees apply to the audit of local funds and other non-Government funds.
- Exclusions: The rule specifically excludes funds for which the rates of fees recoverable are already prescribed by existing law or rules having the force of law. This prevents duplication or conflict with other legal frameworks.
- Exemptions: The Government retains the power to issue special instructions to exempt any particular local body or institution, either wholly or partially, from the payment of these audit fees. This provision allows for discretion based on specific circumstances.
Practical Example: Consider a newly formed local municipal corporation that requires an audit. According to Rule 317, the Indian Audit and Accounts Department would charge audit fees based on the daily rates set by the Government in consultation with the CAG. However, if the State Government, through special instructions, decides to provide financial relief to new local bodies, it could exempt this particular municipal corporation from paying the audit fees for a specified period, overriding the general charging provision of Rule 317.
Related Provisions
Understanding Rule 317 is enhanced by examining related provisions within the General Financial Rules, 2017:
- Rule 316 of The General Financial Rules 2017 Audit of Account of Local Bodies: This rule immediately precedes Rule 317 and sets the general terms for the audit of local bodies, providing context for the charging of audit fees.
- Rule 318 of The General Financial Rules 2017 Government Companies: This subsequent rule discusses the recovery of costs for supplementary audits of Government Companies, offering a comparative perspective on audit-related charges.
- Rule 236 of The General Financial Rules 2017 Audit of Accounts: This rule details the audit requirements for grantee institutions, providing a broader view of audit mechanisms within the GFRs.
Learning Aids
Mnemonics
- Audit Fees Charged Locally Except Specially: Helps remember the key aspects: Audit Fees, Charged by IAAD, for Local funds, Excluding law-prescribed fees, with Special exemptions possible.
Process Flowchart
Multiple Choice Questions
1. According to Rule 317 of the General Financial Rules, 2017, who is responsible for charging audit fees for local and non-Government funds?
- A) The Ministry of Finance
- B) The Comptroller and Auditor General of India
- C) The Indian Audit and Accounts Department
- D) The local bodies themselves
Show Answer
Correct Answer: C) The Indian Audit and Accounts Department
2. Under Rule 317 of the General Financial Rules, 2017, what is the basis for determining audit fees?
- A) A fixed annual charge for all entities
- B) Daily rates prescribed by the Government in consultation with the CAG
- C) A percentage of the audited entity’s annual turnover
- D) Rates determined solely by the Indian Audit and Accounts Department
Show Answer
Correct Answer: B) Daily rates prescribed by the Government in consultation with the CAG
3. Rule 317 of the General Financial Rules, 2017, allows for exemptions from audit fees under what condition?
- A) If the audited entity is a non-profit organization
- B) If the audited entity requests an exemption due to financial hardship
- C) Through special instructions issued by the Government
- D) Automatically for all small local bodies
Show Answer
Correct Answer: C) Through special instructions issued by the Government
4. Which types of funds are explicitly excluded from the purview of Rule 317 of the General Financial Rules, 2017, regarding audit fees?
- A) Funds of Central Government departments
- B) Funds for which fees are prescribed by law or rules having the force of law
- C) Funds managed by Public Sector Undertakings
- D) Funds of educational institutions
Show Answer
Correct Answer: B) Funds for which fees are prescribed by law or rules having the force of law
5. What role does the Comptroller and Auditor General of India play in determining audit fees under Rule 317 of the General Financial Rules, 2017?
- A) The CAG solely prescribes the daily rates for audit fees.
- B) The CAG has no role; the Government prescribes rates independently.
- C) The CAG is consulted by the Government when prescribing daily rates.
- D) The CAG collects the audit fees directly from the audited entities.
Show Answer
Correct Answer: C) The CAG is consulted by the Government when prescribing daily rates.
Frequently Asked Questions
Q1: Who determines the daily rates for audit fees under Rule 317 of the General Financial Rules, 2017?
A1: The Government prescribes the daily rates for audit fees in consultation with the Comptroller and Auditor General of India (CAG).
Q2: Can a local body be exempted from paying audit fees as per Rule 317?
A2: Yes, the Government can issue special instructions to wholly or partially exempt any particular local body or institution from the payment of audit fees.
Q3: Does Rule 317 apply if audit fees are already specified by another law?
A3: No, Rule 317 explicitly excludes funds for which the rates of fees recoverable are prescribed by law or by rules having the force of law.
Key Takeaways
- Audit fees for local and non-Government funds are charged by the Indian Audit and Accounts Department.
- The fees are based on daily rates determined by the Government in consultation with the CAG.
- Funds with fees already prescribed by other laws or rules are excluded from this rule.
- The Government holds the power to grant full or partial exemptions from these audit fees through special instructions.
Conclusion
Rule 317 of The General Financial Rules, 2017, establishes a clear and structured mechanism for the collection of audit fees from local and non-Government entities. By defining the charging authority, the basis for fees, and the conditions for exemptions, it ensures financial accountability while providing the necessary flexibility for governmental discretion. This rule is crucial for maintaining the integrity of financial oversight across various public and quasi-public bodies.