Chapter VIII Chapter VIII

Audit

The accounts of the Fund of a Gram, Panchayat or 'Zilla Panchayat shall be examined and audited by. an auditor appointed in that behalf by the State Government at such time and place and in such manner as the State Government :may prescribe.

The Sabhapati or, as ,the case may be, the Adhakshya shall produce, or cause .to be produced, to the auditor all such accounts of the' Fund of the' Gram Panchayat or the Zilla Panchayat concerned as may be required by the auditor.

For the purposes of an audit under this Act an auditor may

1. (i) require in writing the production before him of any document or the supply of any information which he considers to be necessary for the proper conduct of the audit;
2. (ii) require in writing the personal appearance before him of any person accountable for, or having the custody or control of, any such document, or having, directly or. indirectly, whether by himself or his partner, any share or interest in any contract made with, by or on behalf of, the members of the Gram Panchayat Or the Zilla Panchayat concerned; (iii ) require any person so appearing before him to make and sign a declaration in respect of any such document or to answer any question or prepare and submit any statement.

Any person who neglects or refuses to comply with the requisition made by the auditor under .section 80 within such time as may be specified, shall, on conviction by a Court, be punishable with a fine which may extend to fifty rupees in respect of each item included in the requisition.

1. (1) Within two months from the date on which an audit under this Act is completed, the auditor shall prepare a report and send a copy of the report to the Sabhapati, or Adhakshya, as the case may be, of the Gram Panchayat or the Zilla Panchayat and to the State Government.
2. (2) The auditor shall append to his report a statement showing:
   • (a) the grants-in-aid received by the Gram Panchayat or the Zilla Panchayat and the expenditure incurred there from ;
   • (b) any material impropriety or irregularity which he may observe in the expenditure or in the recovery of money due to the Gram Panchayat or the Zilla Panchayat or in the accounts of the Gram Panchayat or the Zilla Panchayat Fund;
   • (c) any loss or wastage of money or other property owned by or vested in the Gram Panchayat or the Zilla Panchayat.

1. (1) Within two months from the date of receipt of the report referred to in section 82, the Gram Panchayat or the Zilla Panchayat concerned shall, at a meeting, remove or cause to be removed any defect or irregularity pointed out in the report and shall also inform the auditor of the action taken by it. The Gram Panchayat or the Zilla Panchayat concerned shall give reasons or explanations if any defect or irregularity is not removed.
2. (2) If, within the period referred to in sub-section (I), no information is received by the auditor from the Gram Panchayat or the Zilla Panchayat concerned or if the reasons or explanations given by it for not removing any defect or irregularity pointed out in the report is not considered sufficient by the auditor, the auditor shall if he' has not already exercised or does not propose to exercise the powers conferred upon him by section 84 refer the matter to the State Government within such time and in such manner as the State Government may prescribe.
3. (3) On receipt of the report under sub-section (2), it shall be competent for the State Government to pass such orders thereon as it may think fit. The orders of the State Government shall, save as provided in sections 84 and 85, be final and the Gram Panchayat or the Zilla Panchayat concerned shall take action in accordance with such orders.
4. (4) If the Gram Panchayat or the Zilla Panchayat concerned fails to comply with the order within the period specified therein, the State Government may empower any officer of the State Government to carry out the order.
5. (5) Officer empowered under sub-section
6. (4) shall, for the purpose of carrying out the order, exercise any of the powers which might have been exercised by the Gram Panchayat or Zilla Panchayat concerned.

1. (1) The auditor, after giving the person concerned an opportunity to submit an explanation within a time to be specified by him and after considering such explanation, shall disallow every item of account contrary to law and surcharge' the same on the person making or authorizing the making of the illegal payments, and shall charge against any person responsible for the amount of any, loss incurred by the negligence or misconduct of that person, and shall, in every such case, certify the amounts due from such person: Provided that the auditor may in his discretion waive the surcharge or charge in cases where the amount involved does not exceed 20 rupees.
2. (2) For the purposes of this section any member of Gram Panchayat or Zilla Panchayat, as the case may be, who is present at a meeting at which a motion or resolution is passed authorizing any expenditure which is subsequently. disallowed under sub-section
3. (1) or authorizing any action which results in any such expenditure, shall. be deemed to be a person authorizing such expenditure if dissent is not recorded in the proceedings. All such persons shall be held jointly and severally liable for such expenditure.
4. (3) The auditor shall record in writing his reasons for every disallowance, surcharge and charge made under sub-section
5. (1) and shall, in such manner as may be prescribed, send a certificate of the amount due and a copy of the reasons for his decision to the person in respect of whom the certificate is made, and shall also furnish copies thereof to the Sabhapati or Adhakshya, as the case may be, and the State Government.
6. (4) The State Government may, of its own motion and within one year from the receipt by. it of the copy of the certificate, set aside or modify any disallowance, surcharge or charge and any certificate in respect thereof made by the auditor.

1. (1) Any person from whom any sum has been certified by the auditor to be due under section 84 may, within thirty days of the receipt by him of the certificate, appeal to the State Government to set aside or modify the disallowance, surcharge or charge in respect of which the certificate was made and the State Government may pass thereon such orders as it thinks fit, and such orders shall be final.
2. (2) Where a person referred to in sub-section
3. (2) of section 84, who has been surcharged as authorizing an illegal expenditure, appeals to the State Government under this section, the State Government shall set aside such surcharge if it is preyed to its satisfaction that such person voted for the resolution or motion in good faith.

1. (1) The sum certified by the auditor to be due from any person under section 84 or when an appeal is made under sub-section
2. (1) of section 85, such sum as may be ordered by the State Government to be due from such person shall, within two months of the date of certification, or order, as the case may be, be paid by such person to the Gram Panchayat or the Zilla Panchayat concerned which shall credit the sum to the Fund of the Gram Panchayat or the Zilla Panchayat concerned.
3. (2) Any sum not paid in accordance with the provision of sub-section
   • (l) shall be recoverable as arrears of land revenue if the Gram Panchayat or the Zilla Panchayat, as the case may be, passes a resolution to that effect and communicates it to the District Collector.
4. (3) The District Collector on receipt of such communication under sub-section
5. (2) and on being satisfied with the demand, shall proceed to recover it as soon as may be and the sum so recovered by him shall be sent to the Gram Panchayat or Zilla Panchayat concerned and the same shall be credited to the Fund of the Gram Panchayat or Zilla Panchayat concerned.

1. (1) All expenses incurred by the Gram Panchayat or the Zilla Panchayat concerned in complying with any requisition of the auditor under section 80 and in prosecuting an offender under section 81 shall. be paid from the Fund of the Gram Panchayat or the Zilla Panchayat concerned.
2. (2) AI! expenses incurred by the District Collector in connection with the proceedings for recovery of any sum under sub-section
3. (3) of section 86 from a person, if not recovered from the person, shall be paid from the Fund of the Gram Panchayat or the Zilla Panchayat concerned.