Compliance Financial Performance

Report of 2009 - Compliance, Financial and Performance Audit on State Finance of Government of Meghalaya

Date on which Report Tabled:
Fri 19 Mar, 2010
Date of sending the report to Government
Government Type
Sector Finance


Government of Meghalaya responded to the Twelfth Finance Commission's (TFC) recommendation by legislating 'Meghalaya Fiscal Responsibilities and Budget Management (MFRBM) Act' in November 2006. It sets out a reform agenda through fiscal correction path in the medium term with the long-term goal of securing growth stability for its economy. The State Government implemented the Value Added Tax in May 2005 which will go a long way in increasing tax revenue of the State.

The State Government has done well in establishing an institutional mechanism on fiscal transparency and accountability as evident from the year-on-year presentation of outcome budgets. These outcome indicators tend to serve the limited purpose of measuring the performance against the targets. They do not, however, give the 'big picture' of the status of financial management including debt position, cash management, etc. for the benefit of the State Legislature and other stakeholders.

The Comptroller and Auditor General's (C&AG) civil audit reports step in to fill this gap. C&AG's reports have been commenting upon the Government's finances for two years since the MFRBM legislation and have published two reports already. 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 center-stage once again, a stand-alone report on State Government finances is considered as an appropriate audit response to this challenge.

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