The Bombay Local Fund Audit Act 1930 Complete Act - Bare Act

Adapted and modified by the Adaptation Laws of Indian laws Order in council

Amended by Bom. 12 of 1949

Adapted and modified by the Adaptation of Laws Order, 195O Amended by Bom. 9 of 1955.

Adapted and modified by the Bombay Adaptation of Law (State and Concurrent Subjects) Order, 1956.

Adapted and modified by the Mabarashtra Laws (State and, Concurrent Subjects) Order,

Amended by Mah. 3 of 1961.

5 of 1962.

35 of1963.

25 of 1968.

40 of 1971.

39 of 1977.

An Act to provide for and regulate the audit of the local funds under the management or control of certain local authorities in the 3[State of Maharashtra except Greater Bombay.

Whereas it is expedient to provide for and regulate the audit of the local funds under the management or control of certain local authorities in the 1[State of Maharashtra except Greater Bombay in manner hereinafter appearing; .

2

It is hereby enacted as follows,:

This Act may be called the Bombay Local Fund Audit Act, 1930.

This Act extends to the whole of the State of Maharashtra, except Greater Bombay.]

2[(1) In this Act, unless there is anything repugnant in the subject or context

(a) "Auditor" means the 3[Chief Auditor] or a other person empowered by 4[the 5[State Government] to perform the functions of an auditor under this Act;

6[(aa) "Chairman" means 7[in the case of the Municipal Corporation of the City of Nagpur, the Municipal Commissioner for that City, 1[the case of a Zilla Parisbad or Panchayat Samiti constituted under the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961, the Chief Executive Officer as defined in that Act,] and in the case of any other local authority, the president or chairman thereof;] and includes in the case of a dissolved or superseded local authority, the person or persons lawfully appointed to exercise the powers and perform the duties of such local authority;

2[(aa) "Chief Auditor" means the Chief-Auditor,

Local Fund Accounts and includes 3[the Deputy Chief Auditor, Local Fund Accounts (Senior) and] the Deputy Chief Auditor, Local Fund Accounts]

(ab) "Detailed audit" means an audit of accounts for the whole year]

x

(c) "Local authority" means a local authority as defined in clause (26) of Section 3 of the Bombay General Clauses Act, 1904, and includes a school board constituted under the [Bombay Primary Education Act, 1947] 6[and a Panchayat Samiti constituted under the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961];

(d) "Local Fund" means any fund to the control or management of which a local authority is legally entitled and includes the proceeds of any cess, rate duty or tax Which Such authority is-legally entitled to impose, and any property, vested in such authority

1[(e) "Special audit" means an audit Of accounts pertaining to a specified item or series of items requiring thorough examination.]

1[(2) On the commencement of the Bombay Local Fund Audit (Extension and Amendment) Act, 1960, any reference to the Examiner of Local Fund Accounts or the Assistant Examiner of Local Fund Accounts in any rule, requisition or order made under this Act, or in any other law for the time being in force, or in any instrument Or document, shall be construed as a reference to the Chief Auditor, Local Fund Accounts or, as the case may be, the Deputy Chief Auditor, Local Fund Accounts.]

The accounts of any local authority whose accounts are declared by 1[the[4[State Government], by a notification in the 5[official Gazette], to be subject to audit under this Act shall, notwithstanding anything contained in any enactment by which such local authority is constituted or in any rules made thereunder, be subject to audit in all respects in the manner provided by or under this Act

[the Chairman] of every local authority, whose accounts are declared under Section 4 to be subject to audit under this Act, shall present or cause to be presented for audit all accounts of its local fund in the manner and form prescribed by rules under Section 15 to the auditor yearly or at such period or periods as may be required by the Commissioner

(l) For the purpose of any audit under this Act, an auditor may

1[(a) require in writing the production at the head office of the local authority of such vouchers, statements, returns, correspondence, notes or other documents in relation to the accounts as he may think fit;]

(b) require in writing any salaried servant of the local authority accountable for, or having the custody or control of 1[such vouchers, statements, returns, correspondence, notes or other documents] or any person having directly or, indirectly, by himself or his partner, any share or interest in any contract with or under the local authority to appear in person before him at the head office of the local authority, and answer any question;

(c) in the event of an explanation being required from the 3[chairman or other honorary officer or member of a local authority, in writing invite such person to meet him at the head office of the local authority and shall in writing specify the point on which his explanation is required.

(2) The auditor may, in any requisition or invitation made under sub-section (1), fix a reasonable period 4[ x x x x x] within which the said, requisition or invitation shall be complied with.

(3) The auditor shall give to the local authority not less than two weeks' notice in writing of the date on which he proposes to commence the audit weeks or commence special or detailed audit on the authority of 1[the State Government, Commissioner or Chief Auditor] without giving notice.]

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Provided that, notwithstanding anything contained in this sub-section, the auditor may, for special reasons, which shall be recorded in writing, give shorter notice than two

(l) Any person who wilfully neglects or refuses to comply with any requisition lawfully made upon him under clause (a) or clause (b) of sub-section (1) of Section 6 shall be liable, on conviction before a Magistrate, to a fine which may extend to one hundred rupees

Provided that no proceedings under this section shall be instituted except on the written sanction of the Commissioner

Provided Further that before giving such sanction the Commissioner shall call upon the person against whom the proceedings are to be instituted to show cause why the sanction should not be given.

(2) No Court inferior to that of a Magistrate of the class shall try any offence against this Act.

As soon as practicable after the completion of the audit, but not late than three months thereafter,] the 4[chief Auditor] shall prepare a report on the accounts audited and examined and shall send such report to the local authority concerned and copies thereof to such officers and bodies as[the 2[state] Government may direct.

The 1[Chief Auditor] shall include in his report a statement of (a) every payment which appears to him to be contrary to law,

(b) the amount of any deficiency or loss which appears to have been caused by the gross negligence, or misconduct of any person,

(c) the amount of any sum received which ought to have been but is not brought into account by any person, and

(d) any material impropriety or irregularity which he may observe in the accounts other than those mentioned in clauses (a) (b) and (c) above.

Procedure to be followed after report of the 1(Chief Auditor], under Section 8, the

2[(1) On receipt of a report under Section 8, the chairman shall remedy any defects or irregularities which have been pointed out in the report, and shall place report, together with a statement of the action taken or proposed to be taken thereon and an explanation in regard thereto before a meeting of the local authority. He shall also, within 2[four months] of the receipt of the report, send to the 1[chief Auditor] intimation of his having remedied the defects or irregularities, if any, pointed out in the report or shall, within the said period, supply the 1[chief Auditor] any further explanation in regard to such defects or irregularities as the local authority may wish to give.]

(2) On receipt of such intimation or explanation, the 1[chief Auditor] may, in respect of all or any, of the matters discussed in his report,

(a) accept the intimation or explanation given by the [xxx] Chairman and withdraw the objection or

(b) direct that the matter be re-investigated at the next audit or at any earlier date, or

(c) hold that the defects or irregularities pointed out in the report or any of them have not been removed or remedied

(8) The 1[chief Auditor] shall send a report of his decision to the Commissioner within one month of the date of the receipt by him of the intimation or explanation of the [xxx] chairman referred to in sub-section (1) or in the

event of the [ x,] chairman failing to give such intimation or explanation, on the expiry of the period of2[four months] mentioned in the said sub-section and 4[shall forward to the chairman a copy of such report, specifying therein in particular the portions thereof to be published under sub section (4)]. If the 1[Chief Auditor] holds that any defects or irregularities have not been removed or remedied he shall state in the report whether, in his opinion, the defects or irregularities can be regularised and if so, by what method ; and if they do not admit of being regularised, whether they can be condoned and, if so, by what authority. He shall also State whether the amounts to which the defects or irregularities relate should, in his opinion, be surcharged or charged.

Provided that, in the case of reports on the accounts of school boards and of such local authorities as are specially notified by 1[the 2[State Government] in this behalf the report referred to in this sub-section shall be (sent by the Chief Auditor to the head of a department Or such other officer as the State Government may direct, specifying in the report in particular the portions thereof to be published under sub section (4)]. Such officer shall take such action as may be necessary regarding any defects or irregularities falling under clause (c) of sub-section (2) which may have been brought to notice in the report. If he is of the opinion that the amounts to which any such defects or irregularities relate should be surcharged or charged, he shall forward the report to the Commissioner together with his recommendation in that behalf:

4[
Provided further that, where the amount involved in any defect or irregularity to which objection has not been withdrawn under clause (a) of sub-section (2),

(i) does not exceed two hundred and fifty rupees, the Deputy Chief Auditor, Local Fund Accounts (Senior), or the Deputy Chief Auditor, Local Fund Accounts;

(ii) does not exceed two hundred rupees, the Chief Auditor, Local Fund Accounts, may, if he considers that it ought to be condoned, condone such defect or irregularity. On such condonation, however, the officer concerned shall make a note to that effect in his report.]

(4) The local authority concerned shall, publish in its next administration report, such portions of the report under Section 8 as deal with defects and irregularities falling under clause (c) of sub-section (2), together with the explanation thereof, if any, given under sub-section (1) and the final

report of the 1[Chief Auditor] thereon under sub-section (3) Such report of defects and irregularities, explanation and final report shall be open to the inspection of the public at the office of the local authority for a period o.f one month from the date of their receipt and shall also be 1(published in Marathi in such newspaper circulating within the jurisdiction of the local authority as may be selected by the local authority,] within one month of the receipt by it of the copy of the report sent to the Commissioner under sub-section (3)

Provided that

(i)4[a local authority (not being a ZillaParishad, Panchayat Samiti or a Municipal Council for ˜C' Class Municipal area within the meaning of the Maharashtra Municipalities Act, 1965) whose annual income is less than Rs. 1,00,000. but exceeds Rs. 50,000 may, instead of so publishing the whole of such report of defects and irregularities, explanation and final report in such newspaper, publish in such newspaper a summary thereof [ Marathi], and

(ii) a local authority whose annual income is Rs. 50,000 or less, 6[a Zilla Parishad, Panchayat Sarniti, or a Municipal Council for such ˜C' Class Municipal area] may, instead of so publishing such report of defects and irregularities, explanation and final report in the newspaper publish the same by affixing a copy thereof at its office and at such other conspicuous places within its limits as it may think fit, 7[and by inserting a notice 8[in Marathi] in such newspaper that the copy has been affixed for inspection of the public accordingly.]

1[(5)If the chairman fails to give the intimation or explanation referred to in sub-section (1) within the period therein mentioned, the Chief Auditor shall bring the fact to the notice of the Commissioner. Thereupon the Commissioner may 1[publish in Marathi in any newspaper circulating within the jurisdiction of the local authority] such portion of the Chief Auditor's report under Section.8 as may be specified by the Chief Auditor or as the commissioner may select together with any observations which he Commissioner may make on such report. The cost of such publication shall be forthwith paid by the local authority concerned. If the cost is not so paid, the Commissioner may make an order directing any person, who for the time being has custody of any moneys on behalf of the local authority. as its officer, treasurer, banker or otherwise, to pay the amount of such cost from such money as he may have in his hands or may, from time to time, receive, and such person shall be bound to obey such order. Every payment made pursuant to such order shall be a sufficient discharge to such person from all liability to the local authority in respect of any amount paid by him out of the moneys of the local authority so held by him:

Provided that, the Commissioner may

(i) in the case of [a local authority referred to in clause (i) of the proviso to sub- section (4), publish a summary of such report of defects and irregularities, explanations and the final report 4[in Marathi] in any such newspaper ; and

(ii) in the case of [a local authority referred to in clause (ii) of the proviso to sub-section (4) cause a copy of such report of defects and irregularities, explanations and final report to be kept at such conspicuous place within the limits of the local authority as he may think fit, and a notice to be published in such newspaper that such copy has been kept for inspection of the public accordingly.

(5A) If a local authority fails to comply with any of the provisions of sub-section (4), the Commissioner may cause the relevant reports and explanations or summaries thereof to be published in accordance with the provisions of sub-section (5), so far as they may be applicable, as if there had been a failure to give the intimation or explanation required by sub section (1), and the provisions of sub-section (5) shall apply also for recovery of costs of such publication made by the Commissioner.)

(6) Nothing in this section or in Section 9 shall preclude the [chief Auditor] at any time from bringing to the notice of the Commissioner, for such action as the Commissioner may consider necessary, any information which appears to the 2[chief Auditor] to support a presumption of criminal misappropriation or fraud 3[or which in his opinion deserves special attention or immediate investigation.]

(l) The Commissioner may, after considering the 4[recommendation of the Chief Auditor under sub-section (3) of Section 10, or the head of the department, or other officer, under the first proviso to that sub-section,) as the case may be, and

after taking the explanation of the person concerned, or making such further inquiry, as he may consider necessary, disallow any item which appears to him to be contrary to law and surcharge the same on the person making, or authorising the making of, the illegal payment ; and may charge against any person responsible therefor the amount of any deficiency or loss caused by the gross negligence or misconduct of that person, or, any sum received which ought to have been but is not brought into account by that person and shall, in every such case, certify the amount due from Such person

Provided that no order of surcharge or charge shall be made under this Act in respect of any item included, or, which ought to have been included in, but was omitted from, any accounts 1[for any period

(i) in the case of a local authority in the Bombay area of the State, prior to the 1st April, 1930;.

(ii) in the case of any local authority in the Vidarbha region, prior to the 8th October, 1932; and

(iii) in the case of any other local authority prior to the 1st April, 1960] ;

1[
Provided further that in making an order of such surcharge or charge in respect of any expence incurred by any Zilla Parishad 2[or any Panchayat Samiti] on any item which appears to the Commissioner to be contrary to law, the Commissioner shall not question the propriety of the expenditure incurred by the Zilla Parishad 3[or any Pan hayat Samiti] or any of its officers, in the exercise of the powers purported to be conferred on it or him under such laws]

(2) The Commissioner shall state in writing, the reasons for his decision in respect of every surcharge or charge and shall send by registered post a copy thereof to the person against whom it is made.

(3) If a person to whom a copy of the Commissioner's decision is sent under sub-section (2) refuses to take delivery thereof he shall be deemed to have duly received it on the day on which it was refused by him.

1[(4)If the Commissioner after considering the recommendation of the Chief Auditor under sub-section (3) of Section 10, or of the head of the department or other officer under the first proviso to sub-section (3) of Section 10, as the case may be, and after obtaining the explanation of the person concerned, or making such further enquiry as he may consider necessary, decides not to proceed further in the matter, he may waive the objection after recording his reasons therefor, and shall communicate the same to the Chief Auditor or the head of the department or other officer, as the case may be.]

(1) Every sum certified by the Commissioner to be due from any person under sub-section (1) of Section 11 shall be paid by such person into the treasury or bank in which the funds of the local authority concerned are lodged, within one month from the receipt by him of the decision of the Commissioner, unless within that time such person has applied to the Court or to 2[State] Government] as provided in Section 13.

(2) The said sum, if not duly paid, or if an application has been made, to the Court or to2 [the state Government against the decision of the Commissioner as provided in sub-section (1) of Section 13, such sum as the Court or 2

1[State] Government] shall declare to be due, shall be recover able 1[as an arrear of land revenue).

(1) Any person aggrieved by any order of surcharge or charge made by the Commissioner under sub-section,(l) of Section 11 may, within one month from the receipt by him of the decision of the Commissioner, either

(a) apply to the District Court to set aside such order; and the Court, after taking such evidence as it thinks necessary, may confirm, modify or remit such surcharge or charge and make such orders as to costs as it thinks proper in the circumstances; or

(b) in lieu of such application apply to 3[state] Government] which shall pass such orders thereon as it thinks fit.

4 The authority bearing the application may, if it thinks fit, stay all proceedings on the certificate pending disposal of the application.]

All expenses incurred by a local authority in complying with any requisition of an auditor under sub-section (1) of Section 6 shall be .payable'out of its local fund

(1) 8[The (State) Government]1[may by notification in the Official Gazette, make rules not Inconsistent with this Act, for the purpose of carrying into effect the provisions of this Act:

1[Provided that, the State Government may under this section, make rules generally for all local authorities, or especially for any class of local authorities, regard being had to the special or local circumstances prevailing in or in relation to the area of the local authority or authorities concerned, or for other reasons, which shall be specified; and the State Government may also for the like reason, exempt any class of local authorities from any of the provisions of the general rules.]

(2) In particular, and without prejudice to the generality of the foregoing power such rules may provide for all or any of the following matters, namely

(a) the manner and form in which the accounts of a local authority, whose accounts are subject to audit under this Act, shall be kept and presented

(b) the powers and duties of auditors and the procedure to be followed by them for conducting an audit and the times at which such audit may be conducted; and

(c) the manner in which all matters required to be published under this Act shall be published.

(3) The making of rules under this section shall be subject to the condition of previous publication. 2(All rules wade under this section shall be laid for not less than thirty days before each House of the State Legislature as soon as possible after they are made, and shall be subject to such modifications as the State Legislature may make during the session in which they are so laid, or the session immediately following.)

Repeal of C.P & Berar IX of 1933 and saving :" On the commencement of this Act in the Vidarbha region of the State, the Central Provinces and Berar Local Fund Audit. Act, 1933, in its application, to that region, shall. stand repealed:

Provided that, such repeal shall not affect"

(a) the previous operation of the Act so repealed;

(b) the right or liability acquired or incurred under the Act so repealed; or

(c) any penalty, forfeiture or punishment incurred in respect of any offence committed against any of the provision of the Act so repealed,; or

(d) any investigation, legal proceeding or remedy in respect of any such right, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued ˜or enforced, and any such penalty, forfeiture or punishment may be imposed as if this Act bad not commenced

Provided further that, subject to the preceding proviso, anything done or any action taken' (including any appointment or delegation or report made, notification, order, instruction or direction' issued, rule framed, certificate obtained or permission granted) under the repealed Act shall, in so far is it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions or

1 Short title :These rules may be called the Bombay Local Fund Audit Rules, 1931.

2. Definitions :In these Rules,

(a) Act means the Bombay Local Fund Audit Act, 1930.

(b) A special audit means an audit of accounts pertaining to a specified item or series of items requiring thorough examination.

(c) A detailed audit means an audit of accounts for the whole year.

(d) Expressions which have been defined in the Act shall have the same meaning assigned to them unless the context requires a different interpretation.

3.Audit of accounts of local authorities by auditors be accounts of the local authorities whose accounts are subject to audit under Section 4 of the Act shall be audited by auditors of the Local Audit Department, who are hereby appointed to be auditors under Section 3(a) of Act, under the direction and control of the chief Auditor:

Provided that nothing in this rule shall prevent the chief auditor from carrying out himself an inspection or audit of accounts of any local authority at his discretion.

4. Requisitions under Section 6 to be sent by registered post or by messenger The requisitions referred to in clauses (a) and(b) of sub-section(1) of Section 6 of the Act shall be made by the Auditor and shall be sent

to the Chief Officer or Administrative Officer, as the case may be, or, in his absence the Secretary or other head of the ministerial establishment of the local authority by registered post or messenger. If the is sent by messenger an acknowledgement from the oIft:er concerned with the date of receipt shall be, obtained in the transit book in Form No. I appended to these rules.

5. Invitation to be sent in the form of a letter The invitations which the auditor may issue in pursuance of clause (c) of sub-section (1) of Section 6 of the Act to honorary officers or members of a local authority the shall be in form of a letter addressed to such officer or member; a copy of every such letter shall be retained in the case file. The invitation

shall be sent either by registered post or by messenger and in the latter case an acknowledgement duly signed by him and dated shall be obtained in the transit book in Form No. 1 appended to these rules.

6. Failure to comply with requisition to be reported to the Collector'

If a requisition under clause (a) or (b) of sub-section (1) of Section 6 is ˜sot complied with within the period specified in the requisition, the auditor shall report the failure to the President or the Chairman of the local authority as the case may be, and if the requisition is not then complied with within the next three days thereafter, he shall send the papers to the Collector, With a brief statement of facts, for further action. A copy of such communication shall be forwarded simultaneously to the

7. Notice of date of commencement of audit to be given by the

8. Auditor to conduct audit during office hours :Except in cases where the ˜ Auditor in consultation with the head ˜of the office of the local authority, decides otherwise, the auditor shall, for the purpose of conducting audit, attend at the head office of the local authority during office hours.

9. Local authority to make suitable arrangements to enable auditor so hold office :"The local authority shall make suitable arrangements to enable the auditor to hold his office for conducting audit.

1O. Audit not to remove any document without the permission of the head of the office The auditor shall not, without the, previous permission in writing of the head of the office of the local, authority whose ac are being audited or of any person authorised by him in this behalf, remove from such office any books, vouchers or documents of any kind whatsoever, except that if in case of fraud or for the good reason he thinks it absolutely necessary to keep the document in his possession, he may do so after passing a receipt therefor and shall at once report the matter to the 1[Chief Auditor].

11. Auditor not to correspond direct with President, Vice-President or Chairman of local authority :"The auditor shall not correspond direct with the President or Vice-President or Chairman or Vice-Chair of the local authority whose accounts are king audited by him except for the purpose of reporting an embezzlement, or for the purposes mentioned In sub-section (1) of Section 6 of tl Act or. for the purposes of Rule 7 or Rule 17.

12. Accounts to be audited annually; The accounts of a local authority shall be audited annually in arrears and as far as possible before the close of the succeeding year case.

13. Accounts for. complete financial year, preceding the date of audit to be ordinarily taken up for audit :"Accounts for the complete financial year or years, preceding the date of audit shall ordinarily be taken up for audit. The Auditor] may, however, have the accounts audited up to date if, in his opinion, such audit is necessary in any particular

14. Detailed audit how to be carried out :(a) The accounts of a School Board shall be audited in detail for the ˜whole year. In the case of other local authorities a test audit of three months' accounts, selected at random shall ordinarily be carried out. The accounts for the month of March shall be necessarily be included in the three months' accounts to be selected for detailed audit. The test audit of three months' accounts shall include a general review of the accounts of the remaining nine months.

(b) In the case of the public works accounts of a local authority a few works shall be selected for detailed audit with connected papers irrespective of the months in which the bills for those works may have been paid.

15. Detailed audit for whole year or special audit to be taken up at discretion of Auditor] or when requested by Collector, or Commissioner:"A detailed audit of the accounts of a local authority for the whole year or a special audit may be taken up at the discretion 01 the * Auditor], if such a course appears to him to be necessary in any case. The Collector or the Commissioner may, in special circumstances, request the * Auditor] to arrange for a special audit or a detailed audit of the accounts of a local authority for any period.

16.. Auditor to verify cash balances, etc, during audit."The auditor shall during the audit verify the cash balances, securities held by a local authority or by any of its officers or servants on its behalf, and also the .postage stamps and the stock of printed forms kept for issue of receipts for payments received.

17. All enquiries and remarks to be communicated through objection statements"All enquiries which it is necessary for the auditor to make and all remarks made by him during audit shall be made or communicated through an objection statement in Form No. 3 appended to these rules.

18. Objection statements to be issued day by day under the dated signature of auditor. auditor shall issue such objection statements over his dated signature day by day as the audit proceeds, and shall obtain an acknowledgment from the head of the office of the local authority, with the date of receipt entered in the transit book in Form I appended to these rules.

19. Auditor to issue separate objection statements for each department."The auditor shall, as far as practicable, issue separate objection statements for each department of the local authority so that the department concerned may pro to take action as soon as the objection statement is received.

20. Objection statements to be returned with the least possible delay."The objection statements shall be returned, with the least possible delay, over the dated initials of the head of the office the local authority together with either an explanation to the objection or a statement of the action taken or proposed to be taken to meet the objections raised and, where necessary, shall also contain replies to the enquiries made by the auditor.

21. Auditor to re-issue any Item on which sufficient action has not ˜hoes taken.."On receipt of the replies to the' points raised by the auditor e shall where necessary re-issue for further action any items on which fi or sufficient action has not been taken or on which the enquiries made have not been satisfactorily answered. Such re-issues shall be marked as "Further Remark" in the transit book in Form No. 1 appended on these rules. .

22. Objection statements to be returned to auditor within three days before the close of audit."All objection statements shall be returned to the audit or within one to three days before the close of the audit, according as may direct, irrespective of the question whether all the objections have been fully answered or not.

23. Auditor to report fraud or embezzlement confidentially When a fraud or an embezzlement is detected or may reasonably be inferred any suspicious circumstances or where any irregularity is noticed in the accounts, the auditor shall forthwith report confidentially the circumstances in writing to the President or Vice-President or Chairman or Vice-Chairman of the local authority concerned and also to the When a. fraud- or embezzlement has been fully investigated by the auditor, he shall. submit a complete report on the case to the Chief

24. Result of audit to be recorded in the prescribed report and In Form 3."The result of each audit shall be recorded in the report prescribed by Section 8 of the Act and except in the case of School Boards also in. the objection statement in Form No 3 appended to these rules The report shall be as concise as possible but shall contain a11 the relevant facts and shall, as far as possible, be confined to the points, mentioned in clauses T(a) to (d) of Section 9 of the -Act

25. ˜Objections- admitted and questions settled to be noted' in report only under certain circumstances admitted or questions settled during the course of audit shall be noted in the report Only If the Irregularity is of a serious nature, or if any defect in the system or error in principle which may have been brought to light has not been permanently removed.

26. Auditor's re to be In two parts."(a) The report shall be in two parts namely, Part I"Previous Audit and Part 11"Current Audit. Part I shall contain a brief summary of the remarks still-requiring action or further action, Part U shall contain remarks relating the-current audit.

(b) The details bf-the vouchers or other documents which a bearing on the remarks in the report shall be given in an or appendices to the report ˜together with reference to the paragraph or paragraphs of the audit report. , , .

27. Nature of details to be reported"The auditor shall"

(a) state in the first paragraph of the report the date on which the audit was taken up, the date when it was compacted, and the months which were selected for the detailed audit

(b) give in the opening paragraph of part Ii of the report on the accounts of a municipality a statement of assets and liabilities indicating the financial position of the municipality concerned with a brief resume of

(1) ordinary expenditure,

(2) capital expenditure,

(3) extraordinary expenditure, and

(4) debts, deposits and advances and

(3) in the case of Schools Boards, statements, in such forms as may be laid down by Government from time to time" .

(i) showing the gross expenditure, amount disallowed and the net amount admitted for grant under several heads ; .

(ii) setting forth items disallowed for Government grant with reasons therefore;

(iii) giving the figures of receipts under several heads ;.

(iv) containing miscellaneous objections which do not affect Government grant

(v) showing the amounts to be recovered from Non-Local Authority Municipalities to be appended to the audit reports only in the case of

28. Objection statement to contain remarks On technical Irregularities etc : "The objection statement in form No. 3 appended to these rules shall contain remarks on technical irregularities, defects and omissions in accounts and registers and objections relating to individual items of receipts or payments.

29. Final objection statement to be in two parts : "The final objection statement shall also be in two parts. Part I shall show items relating to the previous audit on which action or further action is necessary, and Part II shall contain items relating to the current audit.

30. Copies of audit notes On the accounts of School Boards to be submitted to Government :"Copies of audit notes on the accounts of School Boards of local authorities under the Bombay Primary Education Act, 1923 shall be submitted to Government for their information.

31. Explanation of President or Chairman to be sent in triplicate: " Explanations to the au4it report to be furnished to the (Chief Auditors by the President or Chairman of a local authority under sub-section (1) of Section 10 of the Act shall be sent in triplicate

Provided that, in the case of School Boards, a copy of the explanation sent by the Chairman of the School Board to the chief Auditor], shall be sent to the President of *

32. Defalcation or loss in money or stores to be reported by the President or Chairman of local authority :"Whenever any defalcation or loss in money or stores Is discovered, the fact shall be promptly reported by the Presi4ent or Chairman of the local authority to the [Chief Auditor] and if the Collector, and in the case of School Board to the Director of Public Instruction also, giving in d the circumstances which led to such defalcate or Loss. Auditor] shall then consider whether such loss was due to any fault in the system and, if so, shall issue the necessary instructions in every other case he shi direct that a special audit be made.

33. The local authorities (except the School Boards constituted under the Bombay Primary Education Act, 1923), shall maintain their accounts in 4 and 7) appended to these rules

34. Without the previous approval of Government no local authority shall introduce any new form or make any variation or alteration In any of the forms sanctioned.