This Report contains four chapters. The first chapter contains a summary of accountability framework and financial reporting in Panchayat Raj Institutions. The second chapter contains observations arising out of compliance audits of the Panchayat Raj Institutions. The third chapter contains a summary of accountability framework and financial reporting in Urban Local Bodies. The fourth chapter contains observations arising out of thematic audit on Collection and Remittance of cesses in Urban Local Bodies and compliance audits of the Urban Local Bodies.