Chapter IX FINANCE, ACCOUNTS, BUDGET AND AUDIT

(1) The Government shall create ‘Development Fund’ [DF] with a seed capital of Rs. 200.00 crores in case of each Metropolitan Region Development Authority and Rs. 100.00 crores in case of each Urban Development Authority for the purpose of administering the Act. (2) The Authority shall have the power to maintain and manage the Development Fund and allocate finances based on the plans and programmes of the functional departments or line agencies for undertaking development of amenities and infrastructure facilities and to monitor and exercise financial control over the budgetary allocations concerning development works made through it to the various public agencies, line agencies and other agencies; Revolving Fund - (3) The Government shall create a ‘Revolving Fund’ [RF] for the Authority with a fund of Rs. 100.00 crores in case of each Metropolitan Region Development Authority and Rs. 50.00 crores in case of each Urban Development Authority for the purpose of performing its functions under the Act and for undertaking development of amenities and infrastructure facilities in the development area.

(1) The Authority shall manage and operate the Development Fund to which shall be credited: (a) all moneys received from the Central Government and the State Government by way of revolving fund, grants, loans, advances or otherwise; (b) all moneys borrowed by the Authority by way of loans or debentures; (c) all moneys received by the Authority from the disposal of lands, buildings and other properties, movable and immovable; (d) sum of money received from projects implemented under Development Schemes; (e) all moneys earned from remunerative projects and schemes by way of rent or otherwise, and disposal of its assets; (f) sum of money received by way of user charges; (g) all development charges or other charges, fees received under the Act or rules or regulations made there under; (h) all monies received from financial institution or other agencies in the form of equity; and (i) any other sum of money received by the Authority from any other sources, including constituent Local Authorities, for performing its functions. (2) The Development Fund shall be utilized towards meeting:-- (a) the expenditure incurred in the administration of the Act; (b) the cost of acquisition of land for the purposes of the Act; (c) expenditure for any development of land for ensuring planned development in the development area; (d) any expenses incurred by the Authority in connection with preparation of Perspective Plan [PP] or Master Plan [MP] or Infrastructure Development Plan [IDP] or Area Development Plan or Zonal Development Plan or Land Pooling Scheme [LPS] or Town Planning Scheme [TPS] or a Development Scheme or any other plans, undertaking surveys, studies, and execution of projects and schemes; (e) the maintenance of sinking fund and other separate accounts required under the Act; (f) the construction of buildings, development of infrastructure and provision of amenities and such other public purposes as required. (3) The Authority may accept grants, subventions, donations, and gifts from the Central or State Government or Local Authority or any individual or body whether incorporated or not, for all or any of the purposes of the Act on such terms and conditions as mutually agreed upon. (4) The Authority may, from time to time, for the purposes of this Act, raise loans from the Government or mobilise resources from any other source, either by creation and issue of debentures, bonds or otherwise. (5) Loans, debentures and bonds issued under this section may be guaranteed by the Government as to the repayment of the principal and the payment of interest at such rate as may be agreed upon. (6) The Authority shall pay interest on such loans at such rates and at such times, and shall make such provision for the mode and time or times of repayment of principal. (7) The Authority may, from time to time borrow by way of temporary loan or overdraft from a bank or otherwise, any sum which it may temporarily require,-- (a) for the purpose of defraying expenses pending the receipt of revenues receivable by it in respect of the period of account in which those expenses are chargeable; or (b) for the purpose of defraying, pending the receipt of money due in respect of a loan authorized to be raised under sub-section (4), expenses intended to be defrayed by such loan. (8) The Authority shall maintain a sinking fund for the repayment of loans and moneys borrowed and shall pay every year into the sinking fund such sum as may be required under the borrowing contract and sufficient for repayment within the period fixed for all moneys so borrowed. (9) The Development Fund shall be ring-fenced to ensure that it can only be used for the purposes specified under the Act and also for the purposes of infrastructure in the development area. Utilization of funds for any other purposes other than the specified under the Act shall be exercised only after placing the proposals before the Authority by the Metropolitan Commissioner / Vice-Chairperson and after approval by the Authority. (10) The Development Fund shall be governed by the following principles, namely:-- (3) The Authority may, from time to time, for the purposes of this Act, accept grants, subventions, donations or gifts from the Central Government or a State Government or a local authority or any private body or individual, whether incorporated or not, for all or any of the purposes of the Act on such terms and conditions as mutually agreed upon.

(4) The Authority may, from time to time, for the purposes of this Act, raise loans from the Government or mobilise resources from any other source, either by creation and issue of debentures, bonds or otherwise.

(5) Loans, debentures and bonds issued under this section may be guaranteed by the Government as to the repayment of the principal and the payment of interest at such rate as may be agreed upon.

(6) The Authority shall pay interest on such loans at such rates and at such times, and shall make such provision for the mode and time or times of repayment of principal.

(7) The Authority may, from time to time borrow by way of temporary loan or overdraft from a bank or otherwise, any sum which it may temporarily require,--

(a) for the purpose of defraying expenses pending the receipt of revenues receivable by it in respect of the period of account in which those expenses are chargeable; or

(b) for the purpose of defraying, pending the receipt of money due in respect of a loan authorized to be raised under sub-section (4), expenses intended to be defrayed by such loan.

(8) The Authority shall maintain a sinking fund for the repayment of loans and moneys borrowed and shall pay every year into the sinking fund such sum as may be required under the borrowing contract and sufficient for repayment within the period fixed for all moneys so borrowed.

(9) The Development Fund shall be ring-fenced to ensure that it can only be used for the purposes specified under the Act and also for the purposes of infrastructure in the development area. Utilization of funds for any other purposes other than the specified under the Act shall be exercised only after placing the proposals before the Authority by the Metropolitan Commissioner / Vice-Chairperson and after approval by the Authority.

(10) The Development Fund shall be governed by the following principles, namely:--

(a) The Head of the Finance Section of the Authority shall be responsible for administering the Development Fund and should be responsible for its administration, management and monitoring;

(b) The Development Fund shall be audited annually by reputed professional audit firms;

(c) The Development Fund shall be managed using professional fund management practices including treasury, cash management and investment portfolio management;

(d) All returns generated via investments made using Development Fund to accrue back to the Development Fund only;

(e) The Head of the Finance Section shall prepare and submit annual investment plans (along with the budget) outlining investment and funding strategy for the year.

(1) The Authority shall prepare in such form and at such time, every year, as may be prescribed, a budget in respect of the financial year next ensuing, showing the estimated income and expenditure of the Authority and shall forward to the Government such number of copies, as may be prescribed. The financial year of the Authority shall begin on 1st April of each year and end on 31st March of the succeeding year, except that the first financial year of the Authority shall begin on the date of constitution of the Authority and shall end on 31st March of the succeeding year.

(2) The Authority shall maintain proper accounts and such other relevant records of its transactions and affairs and shall do all things necessary to ensure that all payments out of its moneys are properly authorized and that adequate control is maintained over the assets of, or in the custody of, the Authority and over the expenditure incurred by the Authority. The Authority shall prepare an annual statement of accounts including the balance sheet in such form as may be prescribed by the Government.

(3) The accounts of the Authority shall be subject to audit annually by the Accountant General of the State and any expenditure incurred by him in connection with such audit shall be payable by the Authority to the Accountant General as fixed by the Government.

(4) The Accountant General or any person as may be appointed by him in connection with the audit of accounts of the Authority shall have the same rights, privileges and authority in connection with such audit as the Accountant-General has in connection with the Government accounts and in particular shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect the office of the Authority.

(5) The accounts of the Authority as certified by the Accountant General or any other person so authorized by him in this behalf, together with the audit report thereon, shall be forwarded annually to the Government, and the Government shall cause a copy of the same to be laid before the State Legislature.

The Authority shall prepare for every year, an Annual Plan and Report of its programs and activities during the year, and submit the Annual Plan and Report to the Government in such form and on or before such date as may be prescribed.

The Authority may invest its funds in accordance with the standard investment power of statutory bodies as defined under law.

(1) The Authority shall constitute for the benefit of its whole time paid members, officers and other employees in such manner and subject to such conditions, as may be prescribed, such pension and provident fund as it may deem fit.

(2) Where any such pension or provident fund has been constituted, the Government may declare that the provisions of the Provident Fund Act, 1925, (Act.No.19/1925) shall apply to such fund as if it were a Government Provident Fund.