The basic authority for the audit of the local bodies is derived from Article 149 of the Constitution of India, which, inter-alia, provides that the Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of any authority or body, as may be prescribed by, or under any law made by Parliament or the State Legislatures. The audit of the accounts of these bodies is conducted under the provisions of sections 20 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of service) Act, 1971, amended in 1984 to ensure that these bodies are properly held accountable for the public funds placed at their disposal and they do achieve the objectives with which they are set up or programmes entrusted to them. The provisions of section 18 of the Act, empowering the Comptroller and Auditor General to inspect any office of accounts; to call for accounts records and any other information relevant for the conduct of audit, are also applicable to the audit of the local bodies conducted under the above mentioned section of the Act.

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