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This Report contains four chapters. The first and the third chapters contain an overview of the functioning, accountability mechanism and financial reporting issues of Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) respectively. The second chapter contains a Performance Audit paragraph and a Compliance Audit paragraph on the Audit of financial transactions of PRIs. The fourth chapter contains two Compliance Audit paragraphs and three individual paragraphs on ULBs. A synopsis of the findings contained in the Performance Audit and Compliance Audits are presented in this overview