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Financial
Kerala

Report of 2003 - Financial Audit of Local Self Government Institutions of Government of Kerala

Date on which Report Tabled:
Date of sending the report to Government
Government Type
Local Bodies
Local Body Types
Local Bodies
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Sector -

Overview

This report includes chapters containing the observations of audit on Finances of Local Self Government Institutions (LSGIs) and the results of supplementary audit under the scheme of Technical Guidance and Supervision. It also includes two performance reviews and eight paragraphs on transaction audit including a long paragraph on Kerala Information Network for Local Bodies.

Consequent on the 73rd and 74th amendments of the Constitution of India, the State Legislature enacted the Kerala Panchayat Raj Act, 1994 (Act 13 of 1994) and the Kerala Municipality Act, 1994 (Act 20 of 1994). Government transferred responsibilities, institutions and schemes relating to matters enlisted in the Schedules of the respective Acts to the Panchayats and Municipalities with effect from 2 October 1995.A comprehensive picture of finances of LSGIs is not available as the LSGIs were not submitting abstract of the annual reports showing Receipts and Payments account certified by the auditors by 15th May of each year as prescribed in the Acts.In spite of receiving Eleventh Finance Commission grant of Rs 1.83 crore for the period 2000-01 to 2003-04 for the maintenance of accounts of Grama Panchayats and Block Panchayats, the accounts were in arrears. As of 31 March 2004, 4578 number of accounts were in arrears.

The main sources of funds of LSGIs are (i) own fund (ii) funds devolved upon them by the State Government for the decentralised planning and State sponsored scheme (iii) centrally sponsored scheme funds (iv) loans and (v) other sources. From the year 1997-98 the State Government distributed 35 to 40 per cent of its annual plan out lay to LSGIs. Against the budget provision of Rs 10207.01 crore, the State Government had disbursed Rs 8741.87 crore during 1997-98 to 2003-04. The release included Rs 6945.39 crore as Plan funds. The Plan funds of Rs 581.20 crore were not utilised by LSGIs mainly due to inadequate capacity and delays in plan formulations.Though LSGIs had created assets valued at Rs 552.82 crore during the years 2002-03 and 2003-04 out of Plan fund, the details of assets created were not available. The value of assets created during the years 1997-98 to 2001-02 were not accounted by the LSGIs.The Government have not so far framed the rules and manuals for budget and accounts of Panchayat Raj Institutions and Urban Local Bodies. Consequently, the Kerala Panchayat (Accounts) Rules 1965, Kerala Municipalities (Accounts) Rules 1963 and the Kerala Municipal Corporation (Accounts) Rules 1967, which are at variance with the new formats,continue to be in force.

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