Chapter III THE BOARD’S FINANCE, ACCOUNTS AND AUDIT

2[(1) For carrying on its operations under this Act, the Board shall levy rates, fees, rentals, prorata charges, deposits, taxes, and other charges and shall vary such rates, fees, rentals, prorata charges, deposits, taxes and other charges from time to time in order to provide sufficient revenue,-

1. (a) to cover operating expenses, taxes, interest payments and to provide for adequate maintenance and depreciation, contribution to pension fund including all expenses incurred during the year;
2. (b) to meet repayment of loans and other borrowings;
3. (c) to finance year to year improvement; and
4. (d) to provide for such other purposes beneficial to the promotion of water supply and disposal of sewage in the Bangalore Metropolitan area as the Board may determine.]

1. (2) No part of the revenues of the Board, after meeting the expenses referred to in clauses (a), (b) and (c) of sub-section (1) shall be used to augment the reserves of the Board other than the reserves referred to in sections 24 and 24-A or for the general purposes of the Board including expenses in connection with capital works, other than improvement works.] 1. Subsection 1 and 2 Substituted by Act 6 of 1966 w.e.f. 10.9.1964.

² Substituted by Act 15 of 2010 w.e.f. 16.04.2010.

1. (1) In February of each year the Board shall submit to the State Government a statement in the form prescribed by 1[regulations] of the estimated capital and revenue receipts and expenditure for the ensuing year.
2. (2) The said statement shall include a statement of the salaries of members, officers and servants of the Board and of such other particulars as may be prescribed by rules.
3. (3) The State Government shall as soon as may be after receipt of the said statement cause it to be laid on the table of both Houses of the State Legislature; and the said statement shall be open to discussion therein, but shall not be subject to vote.
4. (4) The Board shall take into consideration any comments made on the said statement in the State Legislature.
5. (5) The Board may at any time during the year in respect of which a statement under sub-section (1) has been submitted, submit to the State Government a supplementary statement, and all the provisions of this section shall apply to such statement as they apply to the statement under the said sub-section.

1. (1) Save where in the opinion of the Board circumstances of extreme urgency have arisen, no sum exceeding 1[one lakh of rupees] on account of recurring expenditure or exceeding 1[five lakhs of rupees] on account of non-recurring expenditure shall be expended by the Board in any year of account unless such sum has been included in a statement submitted under sub-section
2. (1) or sub-section (5) of section 17.
3. (2) Where any such sum is expended under circumstances of extreme urgency, a report thereon indicating the source from which it is proposed to meet the expenditure shall be made so soon as practicable to the State Government.

¹ Substituted by Act 6 of 1966 w.e.f. 17.3.1966.

The State Government may, with the approval of the State Legislature from time to time make subventions to the Board for the purposes of this Act on such terms and conditions as the State Government may determine.

The State Government may, from time to time, advance loans to the Board on such terms and conditions, not inconsistent with the provisions of this Act, as the State Government may determine.

1[(1)The Board shall not borrow any loan without the prior approval of the State Government.]

1. (2) Rules made by the State Government for the purposes of this section may empower the Board to borrow by the issue of bonds or stocks or otherwise and to make arrangements with bankers.
2. (3) The maximum amount which the Board may at any time have on loan under sub- section (1) shall be ten crores of rupees, unless the State Government by notification fixes a higher maximum amount.
3. (4) Stock issued by the Board under this section shall be issued, transferred, dealt with and redeemed in such manner as may be prescribed by rules.

¹ Substituted by Act 15 of 2010 w.e.f. 16.04.2010.

The State Government may guarantee in such manner as it thinks fit the payment of the principal and interest of any loan proposed to be raised by the Board or of either the principal or the interest: Provided that the State Government shall, so long as any such guarantees are in force, lay before both Houses of the State Legislature in every year during the budget session a statement of the guarantees, if any, given during the current financial year of the State, and an up-to-date account of the total sums, if any, which have been paid out of State revenues by reason of any such guarantees or paid into State revenue towards repayment of any money so paid out.

¹ Omitted by Act 6 of 1966 w.e.f. 17.3.1966.

1[23. x x x]

1. (1) The Board shall create a depreciation reserve and, 1[x x x] shall, at the end of every year, credit to such reserve from its revenue, such amount as would if made annually throughout the preserved period of assets specified in the Table appended to the Schedule to this Act and accumulated at compound interest at the rate of three per cent per annum produce by the end of the prescribed period an amount equal to ninety per cent of the original cost of the assets after taking into account the sums already written off and set aside in the books of the Board.
2. (2) The amount to be credited every year to the depreciation reserve under sub- section (1) shall consist of the incremental deposit plus interest on the accumulated balance in the reserve: Provided that the contribution in respect of any asset to the depreciation reserve under this section shall cease at the end of such period as may be prescribed by 1[regulations] or when the asset ceases to be used by the Board, whichever is earlier: 1[Provisos x x x]

¹ Omitted by Act 6 of 1966 w.e.f. 17.3.1966.

² Substituted by Act 6 of 1966 w.e.f. 17.3.1966.

The Board shall create a reserve for improvement works and shall, at the end of every year, credit to such reserve from its revenue such percentage of the balance remaining after meeting its operating, maintenance and management expenses and after adequate provision is made for depreciation, taxes, interest and amortization payments on loans and other borrowings as the Board may determine, taking into consideration the improvement works which the Board will have to execute in order to provide adequate water supply and sewage disposal services in the Bangalore Metropolitan Area. 1. Section 24A and 24B inserted by Act 6 of 1966 w.e.f. 10.9.1964.

In respect of assets of the Government which vest in the Board by virtue of the provisions of this Act, the Board shall pay interest on the cost of such assets at such rate as may, from time to time, be fixed by the Government in consultation with the Board and such interest shall be deemed to be a part of the expenditure of the Board.]

¹ Inserted by Act 15 of 2010 w.e.f. 16.04.2010.

1[24C.Power to write off irrecoverable amounts.- The Board shall have power to write off any amount or sum due to it, if, in its opinion, such amount or sum is irrecoverable: Provided that the Board shall, before writing off such an amount exceeding twenty-five thousand rupees, obtain the sanction of the State Government.]

1. (1) The Board shall cause proper accounts and other records in relation thereto to be kept, including the proper system of internal check and prepare an annual statement of accounts, including the income and expenditure account and the balance sheet in such form as may be prescribed by 1[regulations] 2[x x x] .
2. (2) The accounts of the Board shall be audited by 3[such auditors as may be appointed by the Government] and any expenditure incurred 2[x x x] in connection with such audit shall be payable by the Board 2[x x x] .
3. (3) The 3[auditor appointed by the Government] shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General of India has in connection with the audit of 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 any of the offices of the Board.
4. (4) The accounts of the Board as certified by the 3[auditor] together with the audit report thereon shall be forwarded annually to the State Government and the State Government may issue such instructions to the Board in respect thereof as it deems fit and the Board shall comply with such instructions.
5. (5) The State Government shall,—
   • (a) cause the accounts of the Board together with the audit report thereon forwarded to it under sub-section (4) to be laid annually before the State Legislature; and
   • (b) cause the accounts of the Board to be published in the manner prescribed by 1[regulations] and make available copies thereof on sale at a reasonable price.

¹ Substituted by Act 6 of 1966 w.e.f. 17.3.1966.

² Omitted by Act 18 of 1984 w.e.f. 21.4.1984..

³ Substituted by Act 18 of 1984 w.e.f. 21.4.1984.