The Bombay Local Fund Audit Act, 1930

This Act may be called the Bombay Local Fund Audit Act, 1930.

This Act extends to the whole of the State of Maharashtra, except Greater Bombay.

[(1)] In this Act, unless there is anything repugnant in the subject or context-- Definitions.

1. (a) "Auditor" means the [Chief Auditor] or any other person empowered by [the [State] Government] to perform the functions of an auditor under this Act ;
2. (aa) "Chairman" means [in the case of the Municipal Corporation of the City of Nagpur, the Municipal Commissioner for that City, in the case of a Zilla Parishad or Panchayat Samiti constituted under the Maharashtra Zilla Parishads and Panchayat Samitis, 1961, the Chief Executive Officer as defined in that Act,] and in the case of any other local authority, the president or chairman thereof ; and includes in the case of a dissolved or superseded local authority, the person or persons lawfully appointed to exercise the powers and perform the duties of such local authority ;
3. (aaa) "Chief Auditor" means the Chief Auditor, Local Fund Accounts and includes [The Deputy Chief Auditor, Local Fund Accounts (Senior) and] the Deputy Chief Auditor, Local Fund Accounts ;
4. (ab) "Detailed audit" means an audit of accounts for the whole year ;
5. (c) "Local authority" mean a local authority as defined in clause

1. (26) of section 3 of the Bombay General Clauses Act, 1904, and includes a school board constituted under the [Bombay Primary Education Act, 1947] [and a Panchayat Samiti constituted under the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961] ;

Liability of local authorities to submit their accounts for audit

4. The accounts of any local authority whose accounts are declared by [the State Government], by a notification in the [Official Gazette], to be subject to audit under this Act shall, notwithstanding anything contained in any enactment by which such local authority is constituted or in any rules made thereunder, be subject to audit in all respects in the manner provided by or under this Act :

[The Chairman] of every local authority, whose accounts are declared under section 4 to be subject to audit under this Act, shall present or cause to be presented for audit all accounts of its local fund in the manner and form prescribed by rules under section 15 to the auditor yearly or at such period or periods as may be required by the Commissioner.

1. (1) For the purpose of any audit under this Act, an auditor may—
   • (a) require in writing the production at the head office of the local authority of such vouchers, statements, returns, correspondence, notes or other documents in relation to the accounts as he may think fit ;
   • (b) require in writing any salaried servant of the local authority accountable for, or having the custody or control of [such vouchers, statements, returns, correspondence, notes or other documents] or any person having directly or, indirectly, by himself or his partner, any share or interst in any contract with or under the local authority to appear in person before him at the head office of the local authority, and answer any question ;
   • (c) in the event of an explanation being required from the [chairman or other honorary officer or member of a local authority, in writing invite such person to meet him at the head office of the local authority and shall in writing specify the point on which his explanation is required.
2. (2) The auditor may, in any requisition or invitation made under sub-section (1), fix a reasonable period within which the said requisition or invitation shall be complied with.
3. (3) The auditor shall give to the local authority not less than two weeks' notice in writing of the date on which he proposes to commence the audit. Provided that, notwithstanding anything contained in this sub-section, the auditor may, for special reasons which shall be recorded in writing, give shorter notice than two weeks or commence special or detailed audit on the authority of [the State Government, Commissioner or Chief Auditor] without giving notice.

1. (1) Any person who wilfully neglects or refuses to comply with any requisition lawfully made upon him under clause
   • (a) or clause
   • (b) of sub-section
2. (1) of section 6 shall be liable, on conviction before a Magistrate, to a fine which may extend to one hundred rupees : Provided that no proceedings under this section shall be instituted except on the written sanction of the Commissioner : Provided further that before giving such sanction the Commissioner shall call upon the person against whom the proceedings are to be instituted to show cause why the sanction should not be given.
3. (2) No court inferior to that of a Magistrate of the first class shall try any offence against this Act.

[As soon as practicable after the completion of the audit, but not later than three months thereafter,] the [Chief Auditor] shall prepare a report on the accounts audited and examined and shall send such report to the local authority concerned and copies thereof to such officers and bodies as [the [State]

Audit report what to contain The [Chief Auditor] shall include in his report a statement of—

1. (a) every payment which appears to him to be contrary to law,
2. (b) the amount of any deficiency or loss which appears to have been caused by the gross negligence or misconduct of any person,
3. (c) the amount of any sum received which ought to have been but is not brought into account by any person, and
4. (d) any material impropriety or irregularity which he may observe in the accounts other than those mentioned in clauses (a),
5. (b) and
6. (c) above.

2[(1) On receipt of a report under section 8, the chairman shall remedy any defects or irregularities which may have been pointed out in the report, and shall place the report, together with a statement of the action taken or proposed to be taken thereon and an explanation in regard thereto before a meeting of the local authority. He shall also, within 3[four months] of the receipt of the report, send to the 1[Chief Auditor] intimation of his having remedied the defects or irregularities, if any, pointed out in the report, or shall, within the said period, supply the

1. (1) The Commissioner may, after considering the [recommendation of the Chief Auditor under sub-section
2. (3) of section 10, or the head of the department, or other officer, under the first proviso to that sub-section,] as the case may be, and after taking the explanation of the person concerned, or making such further inquiry as he may consider necessary, disallow any item which appears to him to be contrary to law and surcharge the same on the person making, or authorising the making of the illegal payment; and may charge against any person responsible therefor the amount of any deficiency or loss caused by the gross negligence or misconduct of that person, or, any sum received which ought to have been but is not brought into account by that person and shall, in every such case, certify the amount due from such person: Provided that no order of surcharge or charge shall be made under this Act in respect of any item included, or, which ought to have been included, but was omitted from, any accounts [for any period—
   • (i) in the case of a local authority in the Bombay area of the State, prior to the 1st April 1930;
   • (ii) in the case of any local authority in the Vidarbha region, prior to the 8th October 1932; and
   • (iii) in the case of any other local authority prior to the 1st April 1960] : [ Provided further that in making an order of such surcharge or charge in respect of any expenditure incurred by any Zilla Parishad [or any Panchayat Samiti] on any item which appears to the Commissioner to be contrary to law, the Commissioner shall not question the propriety of the expenditure incurred by the [Zilla Parishad [or any Panchayat Samiti] or any of its officers in the exercise of the powers purported to be conferred on it or him under such law.]
3. (2) The Commissioner shall state in writing the reasons for his decision in respect of every surcharge or charge and shall send by registered post a copy thereof to the person against whom it is made.
4. (3) If a person to whom a copy of the Commissioner's decision is sent under sub-section
5. (2) refuses to take delivery thereof he shall be deemed to have been duly received it on the day on which it was refused by him. [(4) If the Commissioner after considering the recommendation of the Chief Auditor under sub-section
6. (3) of section 10, or of the head of the department or other officer under the first proviso to sub-section
7. (3) of section 10, as the case may be, and after obtaining the explanation of the person concerned, or making such further enquiry as he may consider necessary, decides not to proceed further in the matter, he may waive the objection after recording his reasons therefor, and shall communicate the same to the Chief Auditor or the head of the department or other officer, as the case may be.]

1. (1) Every sum certified by the Commissioner to be due from any person under sub-section
2. (1) of section 11 shall be paid by such person into the treasury or bank in which the funds of the local authority concerned are lodged, within one month from the receipt by him of the decision of the Commissioner, unless within that time such person has applied to the Court or to [the State Government] as provided in section 13.
3. (2) The said sum, if not duly paid, or if an application has been made to the Court or to [the State Government] against the decision of the Commissioner as provided in sub-section
4. (1) of section 13, such sum as the Court or [the State Government] shall declare to be due, shall be recoverable [as an arrear of land revenue]

1. (1) Any person aggrieved by any order of surcharge or charge made by the Commissioner under sub-section
2. (1) of section 11 may, within one month from the receipt by him of the decision of the Commissioner, either—
   • (a) apply to the District Court to set aside such order; and the Court, after taking such evidence as it thinks necessary, may confirm, modify or remit such surcharge or charge and make such orders as to costs as it thinks proper in the circumstances; or
   • (b) in lieu of such application apply to [the State Government] which shall pass such orders thereon as it thinks fit.
3. (2) The authority hearing the application may, if it thinks fit, stay all proceedings on the certificate pending disposal of the application.

All expenses incurred by a local authority in complying with any requisition of an auditor under sub-section

1. (1) of section 6 shall be payable out of its local fund.

1. (1) [The State Government] [may by notification in the Official Gazette, make rules] not inconsistent with this Act, for the purpose of carrying into effect the provisions of this Act : Provided that, the State Government may under this section, make rules generally for all local authorities, or especially for any class of local authorities, regard being had to the special or local circumstances prevailing in or in relation to the area of the local authority or authorities concerned, or for other reasons, which shall be specified; and the State Government may also for the like reason, exempt any class of local authorities from any of the provisions of the general rules.
2. (2) In particular, and without prejudice to the generality of the foregoing power such rules may provide for all or any of the following matters, namely :—
   • (a) the manner and form in which the accounts of a local authority, whose accounts are subject to audit under this Act, shall be kept and presented;
   • (b) the powers and duties of auditors and the procedure to be followed by them for conducting an audit and the times at which such audit may be conducted; and
   • (c) the manner in which all matters required to be published under this Act shall be published.
3. (3) The making of rules under this section shall be subject to the condition of previous publication. [All rules made under this section shall be laid for not less than thirty days before each House of the State Legislature as soon as possible after they are made, and shall be subject to such modifications as the State Legislature may make during the session in which they are so laid, or the session immediately following.]

[Amendments made by section 16 have been incorporated in the principal Acts.]

On the commencement of this Act in the Vidarbha region of the State, the Central Provinces and Berar Local Fund Audit Act, 1933, in its application to that region, shall stand repealed: Provided that, such repeal shall not affect—

1. (a) the previous operation of the Act so repealed; or
2. (b) the right or liability acquired or incurred under the Act so repealed; or
3. (c) any penalty, forfeiture or punishment incurred in respect of any offence committed against any of the provisions of the Act so repealed; or
4. (d) any investigation, legal proceeding or remedy in respect of any such right, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if this Act had not commenced: Provided further that, subject to the preceding proviso, anything done or any action taken (including any appointment or delegation or report made, notification, order, instruction or direction issued, rule framed, certificate obtained or permission granted) under the repealed Act, shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act, and shall continue to be in force accordingly, unless and until superseded by anything done or action taken under this Act.

The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force providing for audit of the accounts of any local authority.