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Financial
Tamil Nadu

Report of 2004 - Financial Audit on Urban Local Bodies, Government of Tamil Nadu

Date on which Report Tabled:
Date of sending the report to Government
Government Type
Local Bodies
Local Body Types
Urban Local Bodies
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Sector -

Overview

This Report, dealing with the results of audit of accounts of urban local bodies contains three Performance Reviews and nine Audit Paragraphs. A synopsis of important audit findings is presented in this overview.There were six municipal corporations and 151 municipalities in Tamil Nadu as on 31 March 2005. The urban population of the State as per 2001 census was 2.75 crore comprising 44 per cent of total State population. While the growth rate of the total population in the State was 11 per cent during 1991-2001, that for the urban population was 43 per cent.

The revenues of urban local bodies comprise (a) 'Own Revenue' (tax and non-tax), (b) 'Assigned revenue' comprising a portion of the proceeds from Entertainment tax and Stamp duty surcharge on transfer of property, (c) 'Grants' from Government of India and State Government and (d) 'Loans'.During 2004-05, the 'Own Revenue' of all the urban local bodies amounted to Rs 986.35 crore (Tax revenue: Rs 597.86 crore and Non-tax revenue: Rs 388.49 crore). The percentage of revenues raised by the urban local bodies to their total receipts increased from 47 in 2003-04 to 48 in 2004-05.Property tax was the most important source of Tax revenue of urban local bodies. While the percentage of collection of Property tax by Corporation of Chennai increased from 49 in 2003-04 to 51 in 2004-05, that of municipalities declined from 59 to 57 during the above period.The assigned revenue of urban local bodies out of the proceeds of Entertainment Tax in Corporations (except Chennai) and Municipalities in 2004-05 was lower than their proceeds for 2002-03. Similarly, the assigned stamp duty surcharge for all corporations and municipalities declined since 2002-03.

The expenditure incurred by the urban local bodies increased from Rs 1714.96 crore in 2002-03 to Rs 1982.71 crore in 2004-05.Against the demand for user charges (mainly water charges) aggregating Rs 80.98 crore raised by the municipalities during 2004-05, Rs 48.59 crore (60 per cent) only were collected.The Director of Local Fund Audit is the Statutory Auditor for all the urban local bodies. As of July 2005, the certification of annual accounts was pending in respect of 55 municipalities for 2002-03, 101 municipalities for 2003-04 and all the 151 municipalities for 2004-05. The certification of annual accounts for the year 2001-02 was pending in respect of two corporations and for the years from 2002-03 to 2004-05, in respect of all the six corporations.Despite instructions of Committee on Public Accounts for furnishing prompt replies to their pending recommendations arising from the audit paragraphs in the Reports of the Comptroller and Auditor General of India, 133 recommendations (9 Reports) relating to 1985-86 to 1996-97 of Municipal Administration and Water Supply Department were pending as of September 2005. Eighty three Inspection Reports (issued up to September 2004) of Principal Accountant General (Civil Audit) relating to urban local bodies containing 966 paragraphs from 1997-98 to 2004-05 were pending settlement as of March 2005.

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