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Tamil Nadu

Report No. 5 of 2014 - Local Bodies, Government of Tamil Nadu

Date on which Report Tabled:

Tue 12 Aug, 2014

Date of sending the report to Government

Wed 04 Jun, 2014

Government Type

Local Bodies

Local Body Types

Local Bodies

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Sector -

Overview

This Report contains five chapters. The first and the fourth chapters contain summary of finances and financial reporting of Urban Local Bodies and Panchayat Raj Institutions respectively. The second chapter contains one "Information Systems Audit on Computerised activities of five Municipal Corporations". The third chapter contains five paragraphs based on compliance audit of Urban Local Bodies. The fifth chapter contains two paragraphs based on compliance audit of Panchayat Raj Institutions.A synopsis of some of the findings contained in this Report is given below.All functions enlisted in the Twelfth Schedule of the Constitution have not yet been devolved to Urban Local Bodies (ULBs) as contemplated in the 74th amendment to the Constitution. Compilation of annual accounts by ULBs based on the updated municipal accounting manual was delayed since accounting software had to be created on the basis of new coding structure and training was to be imparted to the accounting staff and officers.

Out of annual accounts submitted to Director of Local Fund Audit (DLFA) by ULBs, audit by DLFA was pending in respect of five Municipal Corporations,42 Municipalities and 443 Town Panchayats for the year 2011-12 and one Municipal Corporation, 84 Municipalities and 496 Town Panchayats for the year 2012-13. Due to non-receipt of satisfactory replies, 791 Inspection Reports of the Principal Accountant General containing 3,633 paragraphs for the period 2004-05 to 2012-13 were pending settlement as of December 2013. Computerisation in five Municipal Corporations that took place in 2005 was incomplete even after eight years of its implementation and after incurring an expenditure of Rs.3.74 crore during 2008-13.

Application software implemented in the Corporations suffered from weak process controls resulting in lack of data integrity. This has also led to generation of inaccurate demands under Property Tax, Water Tax, Under Ground Drainage charges and Vacant Land Tax resulting in loss of revenue of Rs.62.73 crore to the Corporations. The Profession Tax Assessment data were incomplete because of which the Corporations could not raise periodical demand against organisations and were forced to accept payment made by the Profession Tax assessees. Discrepancies and errors were noticed in the Birth and Death registration database in all five Corporations. The State Government failed to appoint permanent IT personnel in the five Corporations to man the computerised activities as planned due to which the Server/database administration/networking etc., is administered by Junior Assistants who were not designated as Database Administrator in three Corporations and by outsourced firms in two other Corporations. Control over the process of general revision of Property Tax needed improvement. Control over assessment of Profession Tax and monitoring of the discrepancies in capture of data in the system with manual records under birth/death registration needed reinforcement. The online payment facility which was initially commenced was discontinued in four out of five Corporations, rendering the objective of e-Govemance largely unachieved.

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