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ALAM-II (PARA)
Q. Who is responsible for inspection of Regimental Funds of a
Unit/Formation?
Ans. Commanding officer is responsible for inspection of accounts of
Regimental Funds of a Unit/Formation. (Auth: Para 1 ALAM Pt.II)
Q. Is the LAO required to carry out the inspection of regimental fund
accounts of Army units?
Ans. The LAO is not required to carry out the inspection of regimental funds
of Army units, except under definite instructions from the PCDA/CDA.
(Auth: Para 1 of ALAM Part II)
Q. What are the objectives of Inspection of Public Fund by LAO? Can he
inspect Non-Public Funds?
Ans. The main objectives of Inspection of Public Funds by LAO are:
(i) To ensure that all prescribed accounts and documents are maintained
(ii) To ascertain that the accounts are maintained strictly in accordance with
the regulations
(iii) To see that all transactions between individuals and the funds and other
accounts can be easily traced and correctly tallied.
(iv) to ensure that all moneys, including cheques and drafts, relating to
public funds have been duly accounted for and expended in conformity with
regulations.
If LAO is specially required to examine non-public funds such as
regimental, canteen funds, he can do so.
(Auth: Para 5 and Para 73 ALAM Part II)
Q. At what frequency should the inspection of Military Farms be carried out
by the LAO, and how many months' cash account are to be taken up for
detailed audit in an year?
Ans. The inspection of the accounts of a Military Farm by the LAO should be
carried out half yearly. Two months' accounts will be taken up for detailed
audit in a year. (Auth: Para 6 & 7 of ALAM Part II)
Q. What is the frequency of inspection of an NCC unit?
Ans. Inspection of NCC units is carried out on an annual basis without
involving any reduction in quantum of check e.g. two months’ accounts will
be selected for detailed check. (Auth: Note below Para 7 ALAM Pt.II)
Q. Can a Local Audit Officer redraw the list of auditable documents? If so,
whose approval would be required?
Ans. Yes, the Local Audit Officer can redraw the list with the approval of the
PCDA/CDA. (Auth: Para 12 ALAM-II and Para 11 of ALAM-I Vol-I)
Q. In one of the units, LAO called for the records of local purchases i.e.
documents calling for tenders, comparative statement of tenders, Supply
Order etc. for local purchase of stationary items. The C.O. of the unit
explained to the LAO that these documents have already been audited by
the CDA. Please comment.
Ans. No audit or examination of the Accounts or any enquiry into the
matter, which is the duty of the main office of the CDA to deal with, will be
undertaken by the LAO unless especially instructed by the CDA to do so.
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While refraining from encroaching on the functions of the main office LAOs
are expected to give prima facie advice and reasonable help to Commanding
Officer on matters connected with accounts, when such advice or help is
sought or to refer the officer to CDA for orders or instructions when matters
relate to audit points ordinarily dealt by that office. (Para 21 ALAM Part II)
Q. While carrying out the inspection of a unit by the LAO, the C.O.
requested the LAO to carry out a thorough examination and recasting of the
current accounts. The LAO agrees to do it without obtaining the orders of
the CDA/PCDA. Is this in order?
Ans. Not in order. The LAO is required to obtain the orders of the CDA
before taking over the examination and recasting of the current accounts.
(Auth: Para 23 ALAM Pt.II)
Q. In a unit, the LAO finds the accounts in a state of confusion. To whom
should he report?
Ans. If the accounts of a unit are in a state of confusion and require detailed
examination or recasting, the LAO should promptly bring this to the notice
of the CDA with full particulars so that the orders of the CDA may be
obtained for recasting the same, in extreme cases, if considered necessary
by the CDA. (Auth: Para 23 ALAM - II)
Q. During cash inspection of Public Fund in a unit, the LAO also carried out
actual counting of cash of the Imprest Account held by the unit. Please
comment.
Ans. The LAO is ordinarily not required to verify the Cash balances of those
units and formations whose accounts are subjected to audit by Regimental
Audit Boards; but he will invariably see that the prescribed counting of cash
has been done by the board and a certificate to that effect is also recorded
by the Board. In cases, however, where he considers that the State of
Accounts of a particular unit is unsatisfactory, or where cash balances are
found to be heavy, he should invariably verify the cash balance of all Public
Fund Accounts including imprest accounts by actual counting.
(Auth: Note below Para 34 ALAM Part II)
Q. What action is to be taken by the LAO in the following situations during
Cash Inspection?
(a) Cash balance is found to be heavy.
Ans. The LAO should verify the actual cash balance by counting, investigate
the circumstances for the heavy cash balance and advise the OC to reduce
the balance. (Auth: Para 34, ALAM Pt. II)

(b) Bank balances shown in the Cash Book and the Pass Book do not tally.
Ans. The LAO will ask the OC unit to prepare Bank reconciliation statement
and pending explanation of the variation, place it under objection.
(Auth: Para 39, ALAM Pt.II)

(c) Money from Public Funds has been transferred to Regimental Fund.
Ans. This is not authorised and must be placed under objection. The OC
may be placed under objection. The OC may be advised to account for the
transaction in proper account. (Auth: Para 45 (x) & 72 (IV), ALAM Pt.II)

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(d) An officer in the field has deposited his money in the treasure chest for
safekeeping.
Ans. The private deposits of the officers and others cannot be kept in the
treasure chest of the Unit. [Auth: Para 46(xiv), ALAM Pt.II]

Q. What action LAO should take when a serious discrepancy between the
Cash Book and cash in treasure chest is noticed during cash inspection of a
unit?
Ans. The matter should be reported to the OC of the unit and to the CDA
forthwith. (Auth: Para 41 ALAM Part II)

Q. What specific points a Local Audit Officer should see at the time of
inspection of the accounts of units and formations provided with permanent
advances?
Ans. The LAO will see at the time of inspection of the accounts of units and
formations provided with permanent advances that: -
(i) A regular account of expenditure against permanent advances has
been made.
(ii) No unauthorized advances are being paid from the permanent
advances.
(iii) An analysis of the amount recouped is recorded at the end of the
month.
(iv) The permanent advance held is not far in excess of the average
monthly expenditure. (Auth: Para 43 of ALAM Part II)
Q. A unit is moving from the audit area of CDA (NC) to CDA (CC). Can the
inspection of accounts of such a unit be dispensed with by the LAO of CDA
(NC). What is the responsibility of the next LAO of the unit in CDA (CC)?
Ans. In all cases, the cash accounts, etc. of a Unit will be inspected
immediately before it leaves the Audit Area of a CDA. The inspection of cash
accounts of a unit immediately before its move out of an Audit Area can be
dispensed with provided:
(i) The accounts of the Unit were inspected during the nine months
preceding the date of the move of the Unit; and
(ii) The general state of the accounts at the last inspection was found
to be satisfactory.
On arrival of a Unit in the Audit Areas of another CDA, the cash accounts
will be inspected within three months of its arrival, but the month’s
accounts to be inspected will not be the same as that inspected in the old
audit area. All inspection reports will, as far as possible, be settled before
the Unit leaves the Audit Area of one CDA for that of another. Special
reports showing the dates on which the accounts have been last inspected,
the month’s accounts selected for detailed check and information as to
whether the accounts were maintained in a satisfactory state or not,
together with extract of unsettled items and a list of accounts and register
etc., inspected will be sent by the LAO to this CDA for communication by the
latter to the CDA to whose Audit Area the unit has been transferred. In the
case of a unit, the accounts of which were not found to be in a satisfactory
state, the particulars will be stated clearly. (Auth: Para 79 of ALAM Part II)
Q. Orders have been issued for the disbandment of a unit. What should be
specifically checked by the LAO in the closing accounts of such unit?
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Ans. Following should be specifically checked by the LAO in the closing
accounts of such unit:
(i) Credit balances of Public fund accounts are credited to government;
(ii) Stores and other property purchased out of Public funds and remaining
in hand have been disposed of to the best advantage of the State and
proceeds thereof credited to government;
(iii) Stationery and office appliances purchased out of public funds are
disposed of according to rules;
(iv) Credit balances in regimental funds financed wholly from public money
have been credited to government;
(v) All amenity stores are disposed of in accordance with the provisions of
AO 1261/46;
(vi) All points raised in current and previous inspection reports are finally
settled as far as possible before disbandment’
(vii) All unsettled items of objections will be pursued and brought to finality
by the LAO. (Auth: Para 80 of ALAM Part II)
Q. What are the registers and records required to be maintained by a
Defence Estate Officer and to be inspected by the LAO?
Ans. The DEO is required to maintain the following registers and returns,
which are to be audited by the LAO:
(i) General Land Register;
(ii) Standard Table of Rents;
(iii) DEO's Land Revenue Register;
(iv) DEO's Grants Register (building sites);
(v) DEO's Grants Register (agricultural lands);
(vi) DEO's Grants Register (miscellaneous sites);
(vii) DEO's Grants Register (temporary licences).
(Auth: Para 137 of ALAM Part II)
Q. There was a plot of Military Land measuring 5 acres out of which 4.5 acre
was used by constructing an office building. The remaining half acre land
could not be gainfully used and the same was sold by the Defence Estate
Officer with the approval of the Army Commander and the amount was
deposited in the public fund and MRO for the same was sent promptly to the
CDA. Please give your audit comment.
Ans. The sale of land administered by the DEO can be affected only with the
approval of the GOI. Subordinate authorities are not competent to sanction
any such sale and no alteration in the classification of land can be made
without the sanction of the GOI or by such other authority as they may
empower in this behalf. Accordingly, it should be seen in respect of the
items taken up for detailed check that the sanction of the GOI or other
competent authority exists. Therefore, sale of half acre of land by the DEO
with the approval of the Army Commander is not justified unless he is
empowered by the GOI to do so. (Auth: Para 140(i) of ALAM Part II)
Q. General Land Register is a permanent record but was re-written by the
DEO as the earlier register was not in a good condition. Comment.
Ans. General Land Register (GLR) is a permanent record and is not required
to be re-written at fixed intervals. Should, however, the register be re-written
for any reason, the LAO will test check the correctness of the entries in the
new register. To this end, the carry forward of one entry in every twenty
(after taking into account the effect of mutations recorded against the items
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concerned). Selected according to a formula otherwise from the old register
into the re-written register will be checked. (Para 140(iii) of ALAM Part II)

Q. With whose sanction can land held by the DEO be reclassified?

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