Chapter VIII Chapter VIII

Budget. (1) The Chief Officer shall each year on or before the 31st day of December prepare and place before the Standing Committee — (i) a statement showing the income and expenditure of the Council for the previous financial year; (ii) a statement showing the income and expenditure of the Council from the 1st day of April to the 30th day of November of the financial year then current and an estimate of the income and expenditure for the remaining portion of the current year; (iii) an estimate of the income and expenditure of the Council during the ensuing financial year and an estimate of the closing balance in the municipal fund at the end of the current year; (iv) proposals for any change in the taxes, fees or other charges to be levied for the ensuing year. (2) Such statements and estimates shall be prepared under such heads of account and in such form as may be prescribed by Government. (3) The Standing Committee shall consider the estimates and the proposals of the Chief Officer and submit them to the Council with such recommendations as it may deem fit to make, before the 31st day of January: Provided that, if the Standing Committee fails to make its recommendations before the 31st day of January, the Chairperson shall place the statements and estimates before the Council without the recommendations of the Standing Committee. (4) The Council shall consider the estimates prepared by the Chief Officer and the recommendations of the Standing Committee, if any, and adopt the budget estimates with or without modifications not later than the last day of February: Provided that when a Council is indebted to Government, the budget of the Council shall be adopted only with the previous sanction of the Director: Provided further that nothing in the first proviso shall be deemed to prevent the Council during the first quarter of the financial year or till the budget is sanctioned, (5) No budget shall be approved by the Council unless provision is made therein— (a) for the payment as they fall due of all sums and of all instalments of principal and interest for which the Council may be liable under this Act or any other law for the time being in force; (b) for the payment of contributions to the special funds constituted under this Act such as the Salary Reserve Fund; (c) for the payment of salaries and allowances of the officers and servants of the Council; (d) for a minimum cash balance at the end of the year (exclusive of the balance, if any, in any statutory fund) of such amount as may be prescribed by rules made by the Government. (6) The budget so sanctioned may be varied or altered by the Council, from time to time, as circumstances may render desirable: Provided that the Standing Committee or any other Committee appointed under this Act may within the budget so sanctioned, sanction reappropriations not exceeding such limits as may in respect of each class of Council be prescribed by rules, from one sub-head to another or from one minor head to another under the same major head and controlled by the same Committee. A statement of such reappropriations shall be submitted to the Council at its next meeting: Provided further that no such reappropriation, shall be done from the amounts earmarked towards the repayment of any loan and interest thereon and towards contributions to any fund or funds constituted under the provisions of this Act. (7) (a) Save in an emergency, no sum shall be expended by or on behalf of any Council unless such sum is included in the budget for the time being in force. (b) If any sum which is not so included in the budget, is expended in an emergency, the circumstances in which such sum was expended shall forthwith be reported by the Chairperson to the Council and the Director, with an explanation of the way in which it is proposed to cover such extra expenditure.

(1) Accounts of the receipts and disbursements of every Council shall be kept in accordance with the rules contained in the Municipal Account Code prescribed by the Government and shall be placed before the Council in the prescribed manner. (2) After the end of each official year the Chief Officer shall arrange to get prepared, and if so required by section 100 get audited by the Municipal Auditor, the accounts of the Council for the year and shall place them before the Council not later than the 30th day of June of the following year. (3) An abstract of the annual accounts as passed by the Council showing the receipts and disbursements of the municipal fund under each head of receipt and disbursements, the charges for establishment, the balance, if any, of the fund remaining unspent, and such other information as may be required by the Government shall be forwarded by the Council to the Director, not later than the 31st day of July of the next financial year.

Publication of Accounts. The quarterly and annual accounts, receipts and disbursements, and the budget when sanctioned, shall be open to inspection by any adult inhabitant in the municipal area. A note to that effect that a statement of such accounts and the budget are so kept for inspection shall be published in the local newspapers.

The accounts of all municipal Councils shall be subject to audit in all respects, in such manner as the Government may, by rules prescribe.