After being placed in the Legislature, Audit Reports stand referred to Legislature Committees appointed under Rules 173 to 203 of Rules of Procedure and Conduct of Business in the Kerala Legislative Assembly. All the paragraphs in the Audit Reports are discussed by the Committee. 

There are three Legislature Committees in Kerala for considering the various Audit Reports viz., Public Accounts Committee (PAC), Committee on Public Undertakings (CoPU) and Local Fund Accounts Committee (LFAC).

PAC/COPU discusses all paragraphs contained in the Audit Reports on Revenue Sector and Economic Sector, General and Social Sector, State Finances.

As per the instructions issued by the Finance Department, Government of Kerala, it is imperative on the part of Government Departments to furnish Remedial Measures Taken Statement (RMT) on all audit paragraphs to the Accountant General (AG) and to the PAC within a period of two months from the date of presentation of the Audit Report to the State Legislature. 

Based on the RMT, AG prepares Memo of Important Points (MIP) incorporating AG’s observations on RMT/Government reply and is forwarded to the PAC/COPU for being used at the time of discussion of Audit Paragraphs by PAC/COPU.

During discussion of Audit Paragraphs by PAC, the concerned Secretary to Government and the Head of the Department will have to appear as witnesses before the committee.

Accountant General will also participate in the meetings to assist the PAC in their deliberations.

On completion of discussion, PAC/COPU will prepare draft reports containing their recommendations and forward the same to AG for verification along with verbatim proceedings.

The verified report will be forwarded to PAC/COPU and the Report will be finalised in a meeting of members of PAC/COPU and representatives of AG in which the recommendations will be rechecked and forwarded for printing and placing it in the Legislature.

Once the Report of PAC/COPU is placed in the Legislature, the recommendations of the Committee will be intimated to the Departments concerned by the Legislature Secretariat for execution and compliance.

Three copies of the Action Taken Statement on the PAC/COPU recommendations will be reported to AG by the Departments concerned for vetting and two copies of the vetted report will be returned to the Departments.  The Department have to furnish 40 final copies of Action Taken Statement to AG by incorporating the corrections made in red ink and the additional details called for by AG.  The final copies will be furnished to the Legislature Secretariat for presentation to the Committee.

The PAC/COPU discusses the Action Taken Statement in the presence of representatives of AG and, if found satisfactory, the statement of action taken on PAC/COPU recommendations will be accepted by the Committee.  If Action Taken Statement is not satisfactory or requires further clarification on the subject, PAC/COPU will make further recommendations and the same will be intimated to the Departments concerned for compliance.  This process will be continued till the PAC/COPU accepts the Action Taken Statements by the departments.

The Draft Action Taken  Reports (DATR) of PAC/COPU will be forwarded to AG for verification and the verified report will be sent for printing after making a thorough scrutiny in a meeting of PAC/COPU with AG and the process will be continued.

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