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This Report contains five chapters. The first and third chapters contain an overview of the functioning, accountability mechanism and financial reporting issues of the Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) respectively. The second and fifth chapters contain compliance audit paragraphs relating to PRIs and ULBs respectively. Fourth chapter contains a Performance Audit report on ‘Utilisation of Grant under Civic Amenities Head (State Plan) By Nagar Nigams’pertaining to ULBs.