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This Report contains six chapters. The first and the second chapters contain an overview of finances and observations on financial reporting in Panchayat Raj Institutions. The third chapter contains observations arising out of performance and compliance audits of the Panchayat Raj Institutions. The fourth and the fifth chapters contain an overview of finances and observations on financial reporting in Urban Local Bodies. The sixth chapter contains observations arising out of performance and compliance audits of the Urban Local Bodies. A synopsis of the findings is presented in this overview.