Sikkim Local Fund Audit Act, 2012

SIKKIM GOVERNMENT GAZETTE

EXTRAORDINARY

PUBLISHED BY AUTHORITY

Gangtok 30TH June 2012 No.312 GOVERNMENT OF SIKKIM

LAND REVENUE & DISASTER MANAGEMENT DEPARTMENT

No. 22/LD/P/12 Dated: 21.6.2012 NOTIFICATION

The following Act passed by the Sikkim Legislative Assembly and having received the assent of the Governor on 3rd day of May, 2012 is hereby published for general information:-

THE SIKKIM LOCAL FUND AUDIT ACT, 2012

Act No. 22 of 2012

Arrangement of Sections

Short title, extent, and commencement
Definitions
Appointment of Director
Audit of accounts
Power of audit of accounts of certain authorities, bodies, institutions, or funds
Audit of accounts of stock and stores and verification of cash balance
Manner in which audit is to be conducted
Auditor to be deemed to be a public servant
Liability of local authorities to prepare and present accounts for audit
Completion of audit of accounts
Power of auditor to require production of accounts and attendance of persons
Audit reports to be sent to certain officers and bodies as Government may direct
Contents of audit report
Procedure to be followed after receiving the report of the Director under section 13
Powers and duties of the Director
Delegation of powers and functions
Power to dispense with detailed audit
Defalcation or loss in money or stores to be reported by the Executive Authority
Laying of audit report
Protection of actions taken in good faith
Special provision for pending audit
Power of Government to make rules
Power to remove difficulties
Savings

THE SIKKIM LOCAL FUND AUDIT BILL, 2012

BILL NO. 22 OF 2012

AN ACT

To provide for and regulate the audit of local funds under the control of certain local authorities in the State of Sikkim.

WHEREAS it is expedient to provide for and regulate the audit of local funds under the management or control of certain local authorities in the State of Sikkim;

BE IT ENACTED by the Legislature of Sikkim in the Sixty-Third Year of the Republic of India as follows:

Section 1: Short Title, Extent, and Commencement

(1) This Act may be called the Sikkim Local Fund Audit Act, 2012.

(2) It extends to the whole of Sikkim.

(3) It shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.

Section 2: Definitions

In this Act, unless the context otherwise requires:

(a) "auditor" means the Director of Local Fund Audit and includes any other officer of the Local Fund Audit Directorate empowered by the Director to perform the functions of an auditor under this Act;

(b) "concurrent audit" means a continuous audit of accounts of a local authority by auditors specially appointed by the Government by virtue of the powers conferred on them by the relevant enactments;

(c) "detailed audit" means an audit of accounts of all transactions for the whole year or for the period specified by the Director;

(d) "Director" means the Director of Local Fund Audit and includes any person empowered by the Government to perform the functions of the Director of Local Fund Audit;

(e) "Executive Authority" means the Executive Authority of the Local Authority;

(f) "Government" means the State Government of Sikkim;

(g) "local authority" means:

(i) a Municipal Corporation or Municipal Council/Nagar Panchayat constituted under the Sikkim Municipal Corporations Act, 2007 (5 of 2007) and Part IX A of the Constitution of India, or a Gram Panchayat/Zilla Panchayat or District Planning Committee constituted or deemed to be constituted for the local administration of a Panchayat area under the Sikkim Panchayat Act, 1993 in accordance with the provisions of Part IX of the Constitution of India;

(ii) Any other authority, body, or institution established by or under any law or orders of the Government and responsible for the administration of a local fund;

(h) "Local Fund" means:

(i) a fund administered by the local authority which, although not part of a Government Department, has been established by or under the law or orders of the Government, and

(ii) any other fund which the Government may, by notification in the Official Gazette, declare to be a local fund for the purposes of this Act;

(i) "Prescribed" means prescribed by rules made under this Act;

(j) "Schedule" means the Schedule appended to this Act;

(k) "Special Audit" means an audit of accounts pertaining to specific items or series of items requiring thorough examination, and includes re-audit of the accounts for a period already covered by audit as specified by the Director;

(l) "State" means the State of Sikkim.

Section 3: Appointment of Director

(1) The State Government shall, by notification in the Official Gazette, appoint a person with qualifications prescribed to be the Director of Local Fund Audit in charge of the audit of accounts of a local authority or local fund included in the Schedule.

(2) The State Government may appoint such other officers in the Local Fund Audit Directorate to assist the Director in the exercise of his powers and the discharge of his functions and duties under this Act.

(3) All officers and staff of the Local Fund Audit Directorate shall be subordinate to the Director, who shall have general superintendence and control over them in the performance of their functions under this Act or the rules made thereunder.

Section 4: Audit of Accounts

(1) Notwithstanding anything contained in any other law for the time being in force, but subject to the provisions of the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971, the Director shall, in the manner provided by or under this Act, conduct the audit of accounts of a local authority or local fund included in the Schedule.

(2) The State Government may, by notification in the Official Gazette and for reasons to be specified therein, add any other authority, body, institution, or local fund to the Schedule referred to in sub-section (1). Upon publication of the notification, such authority, body, institution, or local fund shall be deemed to have been added to the Schedule.

(3) No authority, body, institution, or local fund included in the Schedule referred to in sub-section (1) shall be omitted therefrom except by authority of a law made by the State Legislature.

Section 5: Power of Audit of Accounts of Certain Authorities, Bodies, Institutions, or Funds

The Director may, with prior sanction of the State Government and without prejudice to the provisions of sub-section (1) of section 4, audit the accounts of any authority, body, institution, or fund not included in the Schedule, subject to terms and conditions agreed upon between the Director and the person responsible for the administration of such authority, body, institution, or fund.

Section 6: Audit of Accounts of Stock and Stores and Verification of Cash Balance

(1) The auditors shall have the authority to audit and report on the accounts of stores and stock kept by a local authority specified in the Schedule.

(2) The Director may, with the sanction of the Government, seek the services of any technical expert if deemed necessary.

(3) An officer not below the rank of Deputy Director shall have the authority to make surprise inspections of stock and stores kept by a local authority specified in the Schedule.

(4) The Director or auditor shall verify the cash balance of the fund during audit and inspection.

Section 7: Manner in Which Audit is to be Conducted

The auditor shall conduct the audit annually and at such intervals as may be decided by the Director, or may conduct concurrent audits of local authorities as necessary under the provisions of any governing law or as decided by the Director in consultation with the Government.

Section 8: Auditor to be Deemed a Public Servant

An auditor, for the purposes of the powers and duties conferred and imposed under this Act, shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code, 1860 (45 of 1860).

Section 9: Liability of Local Authorities to Prepare and Present Accounts for Audit

The accounts of a local authority or local fund included in the Schedule for a financial year shall be prepared or caused to be prepared by the Executive Authority, in the prescribed form and manner, and presented for audit within three months of the close of that financial year.

Section 10: Completion of Audit of Accounts

The audit of the accounts prepared and presented under section 9 shall be completed by the auditor within six months of the date of presentation for audit.

Section 11: Power of Auditor to Require Production of Accounts and Attendance of Persons

For the purpose of an audit under this Act, the auditor may:

(a) Require in writing the production of vouchers, statements, returns, correspondences, notes, or any other documents necessary for elucidating the accounts;

(b) Require any employee of the local authority accountable for or having custody or control of such documents, or any person with an interest in any contract with the local authority, to appear in person to provide such information as the auditor may require.

Section 12: Audit Reports to be Sent to Certain Officers and Bodies as Government May Direct

The auditor shall submit the audit reports to the Director, who shall then forward them to the State Government and to the local authority concerned as per the Government directives.

Section 13: Contents of Audit Report

The audit report shall:

(a) Include a statement of accounts audited and any discrepancies or deviations noted;

(b) Detail any comments or recommendations regarding financial management and administrative practices;

Section 14: Procedure to be Followed After Receiving the Report of the Director Under Section 13

Upon receiving the report, the State Government shall:

(a) Send a copy of the report to the local authority for its comments or action on the findings;

(b) Ensure that the local authority takes appropriate action within a prescribed time frame to address the issues raised in the report.

Section 15: Powers and Duties of the Director

The Director shall have the powers to:

(a) Conduct and supervise the audit of accounts under this Act;

(b) Issue directives to auditors and local authorities to ensure compliance with audit requirements;

Section 16: Delegation of Powers and Functions

The Director may delegate any of his powers and functions to any other officer in the Local Fund Audit Directorate, subject to conditions as may be prescribed.

Section 17: Power to Dispense with Detailed Audit

The Government may, by notification in the Official Gazette, dispense with the detailed audit of accounts of a local authority or fund if it is satisfied that such audit is not necessary.

Section 18: Defalcation or Loss in Money or Stores to be Reported by the Executive Authority

The Executive Authority shall report to the Director any defalcation or loss of money or stores within a specified period after it comes to the notice of the authority.

Section 19: Laying of Audit Report

The State Government shall lay the audit report before the State Legislature within a prescribed period of receiving the report from the Director.

Section 20: Protection of Actions Taken in Good Faith

No suit, prosecution, or other legal proceedings shall lie against the Director or any auditor for any action taken in good faith under this Act.

Section 21: Special Provision for Pending Audit

If any audit is pending at the time of the commencement of this Act, the Director shall take necessary steps to complete such audit under the provisions of this Act.

Section 22: Power of Government to Make Rules

The Government may, by notification in the Official Gazette, make rules for the purpose of carrying out the provisions of this Act.

Section 23: Power to Remove Difficulties

If any difficulty arises in giving effect to the provisions of this Act, the Government may, by order, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty.

Section 24: Savings

Nothing in this Act shall affect the provisions of any other law for the time being in force relating to the audit of accounts of any local authority or local fund.

THE SCHEDULE

[See section 3 (1)]

1. All Municipal Corporations

2. All Municipalities

3. All Gram Panchayat Units

4. All Zilla Panchayats

( R. K. Purkayastha )SSJS

L.R-cum-Secretary

Law Department.

File No.16(82)Law Department/1977-2012