Chapter X BUDGETS, ACCOUNTS AND AUDIT

Annual Budget Estimates of a Municipality:

1. (1) The budget estimate of a Municipality for a year shall be prepared in the prescribed form and presented before the Board of Councillors at a meeting, specially convened for the purpose, not later than the tenth day of March every year: Provided that no deficit shall be shown in the budget estimate so prepared.
2. (2) The budget estimate for the ensuing year shall be adopted after discussion by the Board of Councillors within two weeks of presentation.
3. (3) A copy of the budget estimate adopted by the Board of Councillors shall be sent to the Director of Local Bodies of the Government of Mizoram for information and shall be available for inspection by the members of the public in the manner prescribed.
4. (4) A revised budget for the current year shall be framed in the prescribed form during the middle of the year and presented before the Board of Councillors for adoption after the first day of October, but not later than the thirty-first day of December, each year.
5. (5) Notwithstanding anything contained in the foregoing provisions of this section, the State Government may, on the prayer of a Municipality, direct that the budget estimate, or the revised budget estimate, of a Municipality may be presented or adopted at a later date for reasons to be recorded in writing.

Power to alter budget grants:

1. (1) The Board of Councillors may, on the recommendation of the Executive Council, from time to time during the year,-
   • (a) increase or reduce the amount of any budget grant under any head;
   • (b) make additional provision in the budget to meet any special or unforeseen requirement arising during the same year;
   • (c) transfer any amount or a portion of any amount of the budget grant under any head to the account of the budget grant under any other head.
2. (2) Every addition or alteration made in the budget grant under sub-section (1) for any year shall be deemed to be included in the budget estimate finally adopted for that year.

Annual financial statement:

1. (1) Within three months of the close of a year, a financial statement for the preceding year in respect of a Municipality shall be prepared in the form and manner prescribed, and presented before a meeting of the Board of Councillors.
2. (2) A copy of the financial statement shall be given to the Director of Local Bodies of the Government of Mizoram and shall be available for inspection by the members of the public in the manner prescribed.
3. (3) Notwithstanding anything contained in the foregoing provisions of this section, the State Government may, on the prayer of a Municipality, extend the date for presentation of the financial statement of a Municipality for reasons to be recorded in writing.

Balance-sheet:

1. (1) Every Municipality shall cause to be prepared annually a balance-sheet of assets and liabilities in the prescribed form within six months of the close of a year.
2. (2) The balance-sheet shall be placed before a meeting of the Board of Councillors.
3. (3) A copy of the balance-sheet shall be given to the Director of Local Bodies of the Government of Mizoram.
4. (4) Notwithstanding anything contained in the foregoing provisions of this section, the State Government may, on the prayer of a Municipality, extend the date of preparation and presentation of the balance-sheet of a Municipality for reasons to be recorded in writing.

Appointment and power of the Auditor:

1. (1) The municipal accounts as contained in the annual financial statement shall be examined and audited by an Auditor appointed in that behalf by the State Government.
2. (2) The Executive Council shall submit such further accounts to the Auditor as may be required by him.
3. (3) The Auditor so appointed may-
   • (a) require, by written notice, the production before him or before any officer subordinate to him of any document which he considers necessary for the proper conduct of the audit,
   • (b) require, by written notice, any person accountable for, or having the custody or control of any document, cash or article to appear in person before him or before any officer subordinate to him,
   • (c) require any person so appearing before him to make or sign a declaration with respect to such document, cash or article or to answer any question or prepare and submit any statement, and
   • (d) cause physical verification of any stock of articles in course of examination of accounts.
4. (4) The Auditor may, after giving the person concerned an opportunity of being heard, disallow any item of accounts contrary to the provisions of this Act, and surcharge the amount of any illegal payment on the person making or authorising it, and charge against any person responsible therefore the amount of any deficiency or loss incurred by the negligence or misconduct of such person or any amount which ought to have been, but is not, brought into accounts by such person, and shall, in every such case, certify the amount due from such person: Provided that any person aggrieved by an order of payment of certified sums may appeal to the State Government whose decision on such appeal shall be final.
5. (5) Any person who wilfully neglects or refuses to comply with the requisition made by an Auditor shall, on conviction by a court, be punishable with fine which may extend to one hundred rupees in respect of each item included in the requisition.

Audit report:

1. (1) As soon as practicable after the completion of the audit, but not later than three months thereafter, the Auditor shall prepare the report on the accounts audited and examined, and shall send such report to the Chairman and a copy thereof to the Director of Local Bodies of the Government of Mizoram or such other officers as the State Government may direct.
2. (2) The Auditor shall include in his report a statement showing-
   • (a) every payment which appears to him to be contrary to law,
   • (b) account of any deficiency or defalcation or loss which appears to have been caused by the gross negligence or misconduct of any person,
   • (c) the account of any sum received, which ought to have been, but have not been, brought into any account by any person,
   • (d) any other material impropriety or irregularity which may be observed in the accounts.

Executive Council to remedy the defects upon audit report:

1. (1) The Executive Council shall forthwith remedy any defect or irregularity that may be pointed out by the Auditor in his audit report and shall report to the Director of Local Bodies of the Government of Mizoram or such other officers as the State Government may direct: Provided that if there is a difference of opinion between the Executive Council and the Auditor, the matter may be referred to the Board of Councillors and, if the difference still persists, to the Director of Local Bodies of the Government of Mizoram or to such other officer as the State Government may direct.
2. (2) The State Government may pass such order upon the audit report as it thinks fit for compliance by the Municipality.

Power of the State Government to enforce an order upon audit report: If any order made by the State Government under this Chapter is not complied with, it shall be lawful for the State Government to take such steps as it thinks fit to secure the compliance of the order and direct that all expenses therefore shall be defrayed from the Municipal Fund.

Special audit: In addition to the audit of annual accounts, the State Government may, if it thinks fit, appoint an Auditor to conduct special audit pertaining to a specified item or series of items requiring thorough examination, and the procedure relating to audit shall also apply mutatis mutandis to such special audit.

Internal audit:

Municipal Accounts Committee Municipal Accounts Committee:

1. (1) The Board of Councillors shall, at the first meeting in each year or as soon as may be at any meeting subsequent thereto, constitute a Municipal Accounts Committee.
2. (2) The Municipal Accounts Committee shall consist of such number of Councillors, not being less than three and not more than five, as the Municipality may determine, to be elected by the Councillors from amongst themselves: Provided that the Chairman, the Vice-Chairman or any other member of the Executive Council shall not be a member of the Municipal Accounts Committee.
3. (3) The Board of Councillors may, from time to time, associate with the Municipal Accounts Committee such persons having special knowledge in public accounts and administration, not being Councillors and not exceeding one-half of the number of Councillors in such Committee, and for such term, as it thinks fit. Such persons shall not have the right to vote at the meeting of the Municipal Accounts Committee.
4. (4) The members of the Municipal Accounts Committee shall elect from amongst themselves one member to be its convenor.
5. (5) The members of the Municipal Accounts Committee shall hold office until a new Committee is constituted.
6. (6) Subject to the provisions of this Act and the rules and the regulations made thereunder, it shall be the duty of the Municipal Accounts Committee-
   • (a) to examine the accounts of the Municipality;
   • (b) to examine and scrutinise the report on the accounts of the Municipality by the Auditor appointed under this Chapter;
   • (c) to examine and scrutinise the report of special audit, if any;
   • (d) to examine and scrutinise the report of physical verification of stock, if any;
   • (e) to submit report to the Board of Councillors every year and from time to time on such examination and scrutiny;
   • (f) to discharge such other functions as may be entrusted to it by the Board of Councillors.
7. (7) The Municipal Accounts Committee may call for any book or document and send for such officer of the Municipality as it may consider necessary for explaining any matter in connection with his work.
8. (8) The manner of transaction of business of the Municipal Accounts Committee shall be such as may be determined by it from time to time.