EPFO Issues New Circular on Fairness and Transparency in Audit Process — 24 October 2025
Important update for EPFO officers and officials
The Employees’ Provident Fund Organisation (EPFO) issued a circular dated 24 October 2025 introducing instructions to strengthen fairness, transparency and accuracy in its internal audit process. The circular — Audit/PolicymatterCirculars/2025/40 — is issued by the Office of the Additional Central P.F. Commissioner (Audit) and applies to all Auditee Offices/Units, Internal Audit Parties (IAPs), and Zonal Audit Committees (ZACs).
Purpose
The circular prescribes procedures for communicating audit observations with financial bearing on officers or officials, obtaining their inputs, and ensuring those inputs are considered before final audit conclusions are drawn.
Key instructions and procedures
1. Communication of preliminary audit memos (Audit Slips)
When an Internal Audit Party (IAP) issues preliminary memos (audit slips) alleging deficiencies with financial implications involving officers or staff, the Auditee Office/Unit must forward the audit slip, supporting details and related documents to the concerned officer(s)/official(s) so they can respond.
2. Time-bound response mechanism
Concerned officer(s)/official(s) must provide their inputs within the timeframe specified in the communication to enable timely preparation of replies.
3. Consideration and enclosure of inputs
The Auditee Office/Unit must consider the inputs when preparing its reply to the IAP and must enclose the officers’/officials’ inputs with that reply for transparency.
4. IAP’s responsibilities
Before taking further actions — such as dropping audit slips, finalising engagement conclusions, recommending corrective actions, or preparing a Draft Audit Report (DAR) — the IAP must consider both the Auditee Office/Unit’s reply and inputs from the concerned officers/officials.
5. Handling already-issued Draft Audit Reports (DARs)
If a DAR has been issued without considering officers’/officials’ inputs, the Auditee Office/Unit must ensure those inputs are included in the reply to the DAR.
6. Mandatory consideration before Final Audit Report (FAR)
Inputs/comments from concerned officers/officials must be considered before approving the Draft Audit Report and issuing the Final Audit Report (FAR).
7. Pending audit paras
For pending audit paras, the Auditee Office/Unit must obtain and consider the inputs/comments from concerned officers/officials in para-wise replies or revised replies submitted to the Zonal Audit Committee.
Circular details
Circular Number: Audit/PolicymatterCirculars/2025/40
Date of issue: 24 October 2025
Issued by: Abhay Ranjan, Additional Central P.F. Commissioner (Audit)
Authority: Issued with approval of the Competent Authority
Significance for EPFO personnel
The circular strengthens procedural fairness and natural justice in EPFO’s internal audit mechanism. It ensures officers and staff who are the subject of audit observations with financial implications can present their perspective before final audit conclusions are drawn — thereby improving accountability and credibility of the audit process.
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