Audit Reports
Kerala
Report of 2009 - Compliance and Financial Audit on State Finance of Government of Kerala
Overview
The State Government enacted the Kerala Fiscal Responsibility Act, 2003 with a view to ensure prudence in fiscal management and fiscal stability by progressive elimination of revenue deficit and sustainable debt management consistent with fiscal stability, greater transparency in fiscal operations of the Government and conduct of fiscal policy in a medium-term framework. The Act came into force on 5 December 2003. According to this Act, the revenue deficit had to be eliminated by the end of March 2007 and fiscal deficit reduced to two per cent of the estimated gross State domestic product (GSDP) by the same period. Subsequently, the Twelfth Finance Commission (TFC) recommended elimination of revenue deficit and fiscal deficit to three per cent of GSDP by March 2009. The State Government could not adhere to these targets primarily due to adoption of the State Pay Commission's award.
Therefore, the State had to postpone the achievement of its targets till the end of March 2011.
The Comptroller and Auditor General of India's Audit Reports have been commenting upon the State Government's finances for over five years since the Fiscal Responsibility legislation. Since these comments formed part of the Civil Audit Report, it was felt that the audit findings on State finances remained camouflaged in the large body of audit findings on compliance and performance audits. The obvious fallout of this well-intentioned but all- inclusive reporting was that the financial management portion of these findings did not receive proper attention. In recognition of the need to bring State finances to centre stage once again, a stand-alone report on State Government finances is considered an appropriate audit response to this challenge. Accordingly, from the report year 2009 onwards, the Comptroller and Auditor General of India has decided to bring out a separate volume titled 'Report on State Finances'.
Based on the audited accounts of the Government of Kerala for the year ended March 2009, this report provides an analytical review of the Annual Accounts of the State Government. The report is structured in three Chapters.
Chapter 1 is based on the audit of Finance Accounts and makes an assessment of the Kerala Government's fiscal position as at 31 March 2009. It provides an insight into trends in committed expenditure, borrowing pattern besides a brief account of Central funds transferred directly to the State implementing agencies through off-budget route.
Chapter 2 is based on audit of Appropriation Accounts and it gives a grant- by-grant description of appropriations and the manner in which the allocated resources were managed by the service delivery' departments.
Chapter 3 is an inventory of Kerala Government's compliance with various reporting requirements and financial rules. The report also has an appendage of additional data collated from several sources in support of the findings.