Initiatives in Local Bodies Audit & Accounts Arrangements

Technical Guidance and Supervision (TGS) Entrustment

In pursuance of the recommendations of the Eleventh Finance Commission, CAG has been entrusted with Technical Guidance & Supervision / Support (TGS) in a majority of the States. As of 31st March, 2007, out of 24 States where 73rd & 74th amendments are applicable, full entrustment of TGS of PRIs and ULBs to CAG has been received in 19 states. Efforts to seek full entrustment in remaining states continue.

Theoretical Framework – Documentation developed and prescribed by CAG

*  Auditing Standards for PRIs and ULBs

 Guidelines for Certification audit of accounts – PRIs

*  Manual of Audit for PRIs

 Audit training modules for ZPs, PSs and GPs

*  List of Codes for functions, and activities of PRIs

*  Budget and Accounts formats for PRIs

*  New Accrual accounting system suggested for ULBs with detailed formats

Training Module on PRI accounts and budget –2 parts– theory and practical

Administrative Structure for Local Bodies Audit

In order to provide TGS in a more effective manner, 17 new offices have been created in 16 States all over the country, headed by Sr.DAG/DAG, with staff sanctioned separately. This has placed the administrative structure of LB audit on a firm footing to strengthen local bodies audit so as meet the expectations and discharge responsibilities entrusted to CAG.

PRI & ULB Accounts and budget formats

As a major initiative, the accounts and budget formats for PRI prescribed by CAG have been accepted and formal orders issued by 11 states, though 22 states have positively responded. These formats and accounts codes have been further simplified to enable their easy adoption. For simplified Accounting System for PRIs please click here.   The Accrual accounting system for the municipalities suggested by the Task Force set up by CAG and approved by the Ministry of Urban Development, has generally been agreed to be adopted by almost all the states. Based on the Task Force Report, a National Municipal Accounts Manual has been developed by the Ministry of Urban Development and the CAG.

Formats for creation of Database on Finances of PRIs/ULBs

Draft database formats for PRIs/ULBs at the district and state levels as suggested by CAG, have generally been agreed to be adopted by 16 states, out of which, 7 states have initiated action to set up the infrastructure for collection, transmission and maintenance of the database.

For the database at the central level, Ministry of Panchayati Raj has accepted the formats and NIC has been entrusted to develop input screens on the Ministry’s portal and link this to all states for uploading of state-wise data.

Audit Training Modules

Zilla Parishad(ZP), Panchayat Samities(PS) and Gram Panchayat(GP) audit training modules have been developed by RTI Kolkata, based on West Bengal Acts. This has been circulated to all the states to suitably adapt the manual and organize training programmes for IAAD staff as well as Local Fund audit staff.  The training in LB Audit for local fund audit staff has been organized in Andhra, Rajasthan, Maharashtra and Uttar Pradesh.

Audit Training Module on Urban Local Bodies has been developed by RTI Kolkata.  The training module has been circulated to all the States.  Training programme on Audit of Urban Local Bodies has also been conducted in Uttar Pradesh and Maharashtra.

Training in PRI Accounts

We have so far organized 1st phase of the training of the training for trainers  in new budget and accounts formats for PRIs, suggested by CAG in 9 states of Bihar, UP, Orissa, Chhattisgarh, Uttaranchal, Assam, Kerala, Himachal Pradesh,Gujarat, Andhra Pradesh and Tamil Nadu. Training of the 2nd phase (by trainers of the 1st phase) was also completed in Bihar and Kerala.  10000 PRIs functionaries and elected representatives in Kerala were trained in PRI budget and accounts formats.


Audit Reports for the year 2005-06 in respect of 14 States have been finalized.  Out of these, 4 Audit Reports (Kerala, Tamil Nadu, Karnataka and Andhra Pradesh) have been finalized for placement in the respective State Legislatures.  Annual Technical Inspection Reports (ATIR) have been prepared in respect of 10 States (Himachal Pradesh, Madhya Pradesh, Uttar Pradesh,  Gujarat, Assam, Orissa, Goa, West Bengal, Jharkhand and Bihar) for submission to the respective State Governments.  In addition, CAG's Audit Reports for the year 2005-06 in respect of Maharashtra and Rajasthan and ATIR of Sikkim are also being finalized.

Comptroller and Auditor General of India, 10 Bahadur Shah Zafar Marg, New Delhi 110 002, India