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This Report includes two parts: Part-A represents Panchayati Raj Institutions which include two Chapters. Chapter-I represents ‘An Overview of the Functioning, Accountability Mechanism and Financial Reporting Issues of Panchayati Raj Institutions’ and Chapter-II comprises two Performance Audit of Integrated Watershed Management Programme (IWMP) and Border Area Development Programme (BADP) and four Draft Paragraphs.Part-B represents Urban Local Bodies which include two Chapters. Chapter-III represents ‘An Overview of the Functioning, Accountability Mechanism and Financial Reporting Issues of Urban Local Bodies’ and Chapter-IV comprises eight Draft Paragraphs.