(1) The Municipal Accounts shall be audited as provided in section 280 of the Act.
(2) The Executive Officer should personally see that the annual accounts are closed and the accounts for the previous official year written up completely and made ready for audit before the 15th of May of every year.
(3) The Executive Officer shall at the time of audit case to be produced all accounts registers, documents, and other subsidiary papers maintained by the Board which may be required by the audit officers to assist them in their investigation and any further document on record as required by the audit party, they shall also be produced before them.
(4) The objection statement issued by the auditor in the course of audit shall be returned to him promptly and in any case before the close of audit, with notes showing the action taken or which it is proposed to take to settle the objections raised over the signature of the Chairman or Executive Officer. The auditor shall return for further action any times of which final or sufficient action has not in his opinion been taken and when possible, shall before leaving, bring to personal notice of the Chairman, items which have not been disposed of. In particular the auditor shall bring to the notice of the Chairman any item in which he proposes to disallow payment or subject to the approval of the Controlling Authority surcharge any member of the Board.
15. (1) The Board shall consider the audit note and the objection statement at a special meeting in which the audit note should be the only item on the agenda, held not more than one month after receipt of the note, together with an explanation on the part of the Municipal staff on each of the points raised in the note. The Board should also pass a resolution or resolutions expressing its opinion on each of the points. The action so taken shall be indicated on an interleaved copy or on the margin of the audit note, which shall be sent to the Controlling Authority direct within a fortnight after the holding of the meeting. A similar annotated copy shall be kept in the Municipal office and shall be placed before the inspecting officers.
(2) Subsequent correspondence shall be conducted directly be tween the Board and the Controlling Authority as well as the Examiner, Local Fund Audit Department or the authorities to whom powers have been delegated in this behalf under sections 277 and 278 read with section 299. The latter may exercise his discretion on any points that may arise and may finally decide the issues unless he deems it necessary to refer any issue to Government before finalising it.
16. In the following cases objections taken by the Auditors, shall prevail, unless the surcharge is over-ruled by the Controlling Authority or the item is written off with the sanction of the Controlling Authority provided that the Controlling Authority shall have power to refer any case for the sanction of the Government if he considers such sanction to be necessary :-
(1) When a payment has been made from the Municipal fund which contravenes the provisions of section 83 of the Act, and,
(2) When expenditure has been incurred which would not be an appropriate charge on the Municipal fund without the sanction of Government.
CHAPTER-II Taxes, Rents and Fees