Chapter IV CONTRACT, FINANCE, ACCOUNT AND AUDIT

Execution of contracts, etc.—Every contract or assurance of property on behalf of the Board shall be in writing, and executed by such authority or officer and in such manner as may be provided by regulations.

Board Fund.—The Board shall have its own fund to be called "the Board Fund", which shall be deemed to be a local fund and to which shall be credited all money received by or on behalf of the Board, otherwise than by way of loans.

1. (1) The Board shall also have another fund, to be called "the Loan Fund", which shall also be deemed to be a local fund and to which shall be credited all money received by or on behalf of the Board by way of loans from the financial institutions like HUDCO, L.I.C., National and international funding agencies including World Bank.
2. (2) Without prejudice to the provisions of section 26 or sub-section
3. (1) of this section the Board may, with the previous approval of the State Government, constitute such other funds as may be necessary for the efficient performance of duties and to discharge its functions under this Act.

The Board shall not, as far as practicable and after taking credit for any grant or subvention from the State Government carry on its operations under this Act at a loss.

The State Government may, under appropriation duly made in this behalf, from time to time, make grants and 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 and the Board may mutually agree.

Under appropriation duly made in this behalf, the State Government may make an initial contribution to the Board Fund.

1. (1) The Board may, from time to time, with the previous sanction of the State Government and subject to the provisions of this Act and to such conditions as the State Government may, by general or special order, impose, borrow any money required for the purposes of this Act by making arrangements with the Banks or other Bodies or Institutions of the State Government made for this purpose.
2. (2) The Board may advance any part of such borrowings to any local body for the performance of its duties and discharge of its functions relating to water-supply and sewerage services on such terms and conditions as the Board may determine.

The Board shall create a depreciation reserve and make annual provision therefor in accordance with such principles as may be prescribed.

The State Government may guarantee the repayment of any loans and payment of interest on all or any of the loans given or transferred to the Board for the purposes of this Act.

1. (1) The Board shall, before the commencement of, and may at any time during a financial year, prepare a statement, or a supplementary statement, as the case may be, of the programme of its activities during that year as well as a financial estimate in respect thereof and the same, shall be submitted to the State Government in such form and by such dates as the State Government may, by general or special order direct, for the previous approval of the State Government : Provided that in the event of such previous approval not being received before the commencement of the financial year for which such financial statement has been submitted, the Board shall be entitled to expend on all accounts up to an amount not exceeding the amount approved for the corresponding period of the previous financial year and such amount shall not include any sum spent out of the grants on subventions during the said period.
2. (2) The Board shall cause to be maintained such proper books of account and other books in relation to its accounts and prepare the balance sheet in such form and manner as to regulations may require.
3. (3) The accounts of the Board shall be audited by such Auditor, in such manner and at such times, as the State Government may by general or special order direct. The Auditor so appointed shall have such powers of requiring the production of documents and the furnishing of information respecting such matters, and shall have such powers in respect of disallowance and surcharge as may be prescribed.
4. (4) The accounts of the Board as certified by the Auditor together with the audit report thereon shall be forwarded annually to the State Government who may issue such directions to the Board as it may deem fit and, the Board shall comply with such directions.
5. (5) The State Government shall cause the accounts of the Board to be published in such manner as it thinks fit.