Financial Administration: Budget, Auditing and Financial Control
Financial Administration: Budget, Auditing and Financial Control
This domain tests the budget cycle, constitutional funds, audit and legislative financial control.
Core rules and concepts
- The annual budget is the government's statement of estimated receipts and expenditure. In India the Union budget is the Annual Financial Statement under Article 112; state budgets follow similar constitutional rules.
- The Consolidated Fund holds all revenues and loans; expenditure from it needs legislative appropriation. The Contingency Fund is for unforeseen advances, and the Public Account holds provident funds and similar deposits.
- Stages: preparation, legislative authorisation (demands for grants, appropriation bill), execution, accounting and audit.
- The Comptroller and Auditor General audits government accounts and reports to the legislature; audit is post facto and does not authorise spending.
- Parliamentary control works through the Public Accounts Committee, Estimates Committee and Committee on Public Undertakings; internal control uses financial rules, delegation and expenditure sanctions.
Worked example
A department spends money on a new scheme before the appropriation bill is passed. That violates financial control because executive spending requires legislative authorisation; a vote on account can cover interim needs but is not the same as the full budget.
Traps
Do not mix the Consolidated Fund with the Public Account. Do not say the CAG controls or approves expenditure. Do not treat budget presentation as the end of the process; execution and audit matter.