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Financial
Madhya Pradesh

Report of 2006 - Financial Audit on Urban Local Bodies and Panchayati Raj Institutions, Government of Madhya Pradesh

Date on which Report Tabled:
Date of sending the report to Government
Government Type
Local Bodies
Local Body Types
Panchayat Raj Institutions,Urban Local Bodies
Sector -

Overview

The Report consists of two Parts. Part-I on Urban Local Bodies (ULBs)consists seven chapters and Part-II on Panchayati Raj Institutions (PRIs) consisting five chapters which contain introduction, audit comments on accounting procedures, deficiencies/lacunae in implementation of schemes,irregularities in execution of works, loss of revenue receipts and other points of interest. A synopsis of audit findings contained in the report is presented in this overview.The accrual system of accounting was made applicable from April 2008 onlyin 14 Municipal Corporations (MCs) and was yet to be applied in remaining ULBs.

The provisions of Model Municipal Law (MML) with modification as suggested by CAG for section 93 to 96 of MML were not incorporated in the concerned Acts of ULBs.The Steering Committee to see the implementation of budget and accounting formats, as suggested by the Task Force, was not formed (October 2008) The IInd State Finance Commission(SFC) recommended (December 2003) the need for building up database in respect of municipal finances which was accepted by the Government (March 2005). The Government agreed (June 2004) in principle to adopt the formats of database as prescribed by CAG but the final action for development of database was awaited (October 2008).The SFC grants of Rs. 3.51 crore under the sub-component of Gandi Basti pertaining to the year 2005-06 to 2006-07 were retained by the Directorate and lying unutilised (April 2008).

Reconciliation of difference of Rs. 35.87 crore in balances of cash book and bank accounts was not done by 18 ULBs.Non-recovery of advances of Rs. 2.62 crore from individuals of 20 Nagar Nigam/ Nagar Palika.Non-recovery of premium of shops (Rs. 2.24 crore) and rent (0.73 crore).Non- deduction of Labour Welfare Cess of Rs. 0.63 crore from contractors bill of construction work.Non-realisation of Rs. 1.77 crore being loan amount and contribution from the beneficiaries for conversion of dry latrines into pour flush latrines. The 74th Constitutional Amendment Act, 1992 (effected from June 1993) had defined the process of decentralisation of governance in India to empower Urban Local Bodies (ULBs). This led to transfer of functions, functionaries and funds to ULBs. Functions relating to Public Health, Education and Poverty Alleviation were not being performed by the ULBs. Functions devolved to the ULBs were being performed by the PRIs. Five thousand two hundred and fifty functionaries though stated to have been transferred to ULBs were not found actually transferred.Interest payable to ULBs for the delay in release of TFC grants was not paid.Non-utilisation of IInd instalment of TFC grants of Rs. 7.84 crore during the financial year 2006-07.Non-fulfillment of all parameters of Solid Waste Management.

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