Pre-audit is the examination of financial transactions before consummation. It is basically a special development of the control aspect of accountancy. It is an integral part of the accounting and payment process. However, the findings and determination made therein are tentative in nature as they are subject to review in post-audit.
Pre-audit operates as follows:
- determination that the proposed expenditure is for a purpose in compliance with the appropriation law and other laws and regulations;
- assurance that sufficient funds are available to enable payment of the voucher;
- determination that the proposed expenditure is not unreasonable or extravagant and that the unencumbered and unexpended balance of the appropriation it would be charged to is sufficient to cover all probable costs; and
- determination that the transaction is approved by proper authority and duly supported by authentic underlying evidences.