Government follows cash basis accounting and capital expenditures are expended on a year-to-year basis. Therefore, the account balances are not carried forward in subsequent years, indicating absence of adequate financial control. It is important that government agencies maintain accurate and up-to-date memorandum records and exercise adequate administrative, supervisory and other controls including physical controls over the custody, use and control of government property. Periodic maintenance of property is necessary to render them economically useful. Surplus and unserviceable ones need to be surrendered or disposed off in an appropriate manner. Government property includes land, buildings, equipment and machinery, vehicles, furniture and fixture, roads and bridges, other physical infrastructures, construction materials, etc. The requirements of property management have been detailed in the Property Management Manual for the Government Agencies while other audited agencies have their own systems and procedures.
The objective of assessment of Property Management System is to ascertain the extent and adequacy of systems and procedures established and applied by the agencies over the custody, use and control of property as a part of overall financial management system in the public sector.
The auditor verifies, observes, compares and ascertains the compliance of each main indicator and sub-indicator against specific criteria derived from applicable laws, rules, regulations and other relevant documents.
The main indicators and sub-indicators to assess and evaluate the property management system are given in Table – 5.
|Sl. No.||Main Indicators||Sub-Indicators|
|1||Receipts, Inspection and acceptance||i. Inspections|
|2||Inventory and Registration||i. Recording
iii. Registration of non-expendable items
|3||Custody and Control||i. Storage and Safe Keeping|
|4||Issues||i. Property Requisition|
|5||Maintenance and Utilisation||i. Periodic/Routine maintenance
|6||Physical Verifications of Property||i. Independent periodic verification|
|7||Disposal, Transfer and Losses||i. Identification of Obsolete/surplus items
ii. Transfer to DNP
iii. Inter/Intra agency transfer
iv. Handing over and relief of Accountability
v. Loss and Write-off