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Financial
Tamil Nadu

Report of 2007 - Financial Audit on Urban Local Bodies and Panchayati Raj Institutions, Government of Tamil Nadu

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

Overview

This Audit Report, dealing with the results of audit of accounts of Local Bodies, is prepared in two parts and consists of six chapters. Part I deals with Urban Local Bodies and part II on Panchayat Raj Institutions. A synopsis of important audit findings is presented in this overview.The urban population of the State as per the 2001 census was 2.75 crore constituting 44 per cent of the State population. The decadal growth rate of the urban population was 43 per cent.The Director of Local Fund Audit is the statutory auditor for all the Urban Local Bodies. As of October 2008, Audit of Urban Local Bodies was mostly in arrears for a period ranging from one to three years. As of March 2008, the number of paragraphs of Inspection Reports issued by the Director of Local Fund Audit relating to Urban Local Bodies pending settlement aggregated to 3,36,239. As against 18 functions listed in the Twelfth Schedule of the Constitution,only 13 functions were transferred to Municipalities and Municipal Corporations and 12 functions to Town Panchayats.During 2007-08, own revenue collection of the Urban Local Bodies was Rs 1,368 crore of which tax-revenue was Rs 822 crore. During last three years,revenue collection by the Urban Local Bodies, instead of showing increasing trend, was widely fluctuating under Tax revenue, Non-Tax revenue including Professional Tax and Property Tax.

During 2006-07, Twelfth Finance Commission grants were released to Urban Local Bodies with delays ranging between two and 316 days. The State Government did not pay interest for the delayed release of grants.Despite directions of the Public Accounts Committee for furnishing prompt replies, 121 recommendations of the Public Accounts Committee on the Reports of the Comptroller and Auditor General of India for the years 1985-86 to 1996-97 (seven reports) relating to the Municipal Administration and Water Supply Department were pending final settlement (December 2008).

Performance audit on functioning of 57 Town Panchayats out of 561 in the State in selected areas revealed the following.None of the test checked Town Panchayats prepared annual action plan/district development plan as contemplated in Article 243ZD of the Constitution.Failure of Panagudi Town Panchayat (Tirunelveli District) in collecting Property Tax, Licence Fee and half yearly fee from 196 windmills for the period from January 2004 to March 2008 has resulted in loss of revenue of Rs 3.10 crore.Failure to effect new water connections by two Town Panchayats in Tirunelveli District has deprived the Town Panchayats in getting additional revenue of Rs 2.06 crore (initial deposit: Rs 1.40 crore and water charges: Rs 0.66 crore).Fifty three Town Panchayats did not levy water cess amounting to Rs 99.17 lakh.Four Town Panchayats did not foreclose the loans availed from World Bank and another financial institution, though they had enough funds and paid avoidable interest of Rs 15.75 lakh.Town Panchayats failed to utilise funds of Rs 1.02 crore relating to Swarna Jayanthi Shahari Rozgar Yojana and upgradation of kutcha houses of rural poor due to non-identification of beneficiaries.Instances of partial to no collection of primary solid waste and nonsegregation of waste into biodegradable and non-biodegradable including partial collection of secondary waste were noticed.

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