(1) The municipal accounts as contained in the financial statement, including the accounts of special funds, if any, and the balance sheet shall be examined and audited by Director Local Fund Audit or his equivalent authority or an auditor appointed by the State Government from a panel of professional Chartered Accountants prepared in that behalf by the State Government.
(2) The Comptroller and Auditor General of India shall provide Technical Guidance and Supervision (TGS) over proper maintenance of accounts and audit thereof of municipalities.
Explanation- The Technical Guidance and Supervision (TGS) over municipalities by the Comptroller and Auditor General of India shall include providing guidance regarding maintenance of accounts, auditing standards, certification guidelines, training for capacity building, comments on accounts and test audit of municipalities selected as a representative sample.
(a) The Comptroller and Auditor General of India shall prepare an Annual Technical Inspection report based on the Technical Guidance >kj[k.M xtV ¼vlk/kkj.k½] o`gLifrokj 9 Qjojh] 2012 473 and Supervision (TGS) and the test check of accounts of municipalities, to be placed before the Standing Committee.
(b) The Annual Technical Inspection report of C&AG along with the Annual Report of the Director of Local Fund Audit shall be placed before the Legislature by the State Government.
(3) The Municipal Commissioner or the Executive Officer shall submit such further accounts to the Auditor and Comptroller and Auditor General of India, as may be required.
(4) The auditor appointed under sub- section (1) may: -
(a) require, by a notice, in writing, the production before him, or before any officer subordinate to him, of any document which he considers necessary for the proper conduct of the audit,
(b) require, by a notice, in writing, any person accountable for, or having the custody or control of, any document, cash or article, to appear in person before him or before any officer subordinate to him,
(c) require any person so appearing before him, or before any officer subordinate to him, to make or sign a declaration with respect to such document, cash or article or to answer any question or prepare and submit any statement, and
(d) cause physical verification of any stock of articles in the course of examination of accounts.
(5) The auditor, or the officer subordinate to him, may report any item of accounts contrary to the provisions of this Act to the Standing Committee or the Council as the case may be.
(6) The Standing Committee or the Council shall consider the report of the auditor along with test audit report of the Comptroller and Auditor General of India, as early as possible and shall, if necessary, take prompt action thereon, and shall also, if necessary, surcharge the amount of any illegal payment on the person making or authorizing it, and charge against any person responsible therefor the amount of any deficiency or loss incurred by the negligence or misconduct of such person or any amount which ought to have been, but is not, brought into account by such person, and shall, in every such case, certify the amount due from such person:
Provided that any person aggrieved by an order of payment of certified sums may appeal to the State Government whose decision on such appeal shall be final.
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(7) Any person who willfully neglects, or refuses to comply with, the requisition made by an auditor, or the officer subordinate to him, shall, on conviction by a court, be punishable with fine which may extend to two thousand rupees in respect of each item included in the requisition.
118. Audit report.
(1) As soon as practicable after the completion of audit of the accounts of the municipality, but not later than the thirtieth day of September each year, the Auditor shall prepare a report of the accounts audited and examined and shall send such report along with Test Audit Report of Comptroller and Auditor General of India to the Municipal Commissioner or the Executive Officer.
(2) The auditor shall include in such report a statement showing –
(a) every payment which appears to the auditor to be contrary to law;
(b) the account of any deficiency or loss, which appears to have been caused by gross negligence or misconduct of any person;
(c) the account of any sum received which ought to have been, but has not been, brought into account by any person, and
(d) any other material impropriety or irregularity in the account.
119. Placing of audited accounts before Council.
(1) The Municipal Commissioner or the Executive Officer shall place the audited financial statement, the balance sheet and the report of the auditor and his comments along with Test Audit Report of the Comptroller and Auditor General of India thereon before the Standing Committee which, after the examination thereof, shall place them before the Council with its comments, if any.
(2) The Municipal Commissioner or the Executive Officer shall remedy any defect that has been pointed out by the auditor in his report.
120. Submission of audited accounts -
(1) The Municipal Commissioner or the Executive Officer shall, after adoption of the financial statement and the balance sheet and the report of the auditor along with Test Audit Report of the Comptroller and Auditor General of India by the Council, forward the same to the State Government together with a report of the action taken thereon by the municipality and shall also send copies thereof to the Auditor and the Comptroller and Auditor General of India.
(2) If there is any difference of opinion between the auditor and the municipality or if the municipality does not remedy the defects or the >kj[k.M xtV ¼vlk/kkj.k½] o`gLifrokj 9 Qjojh] 2012 475 irregularities mentioned in the report of the auditor within a reasonable time, the auditor shall refer the matter to the State Government whose decision thereon shall be final and binding.