Regulation 117 — Audit Regulations 2020
Original Rule Text
117. Arrangements for maintenance of accounts and audit
Under Articles 243 J and 243 Z of the Constitution, the legislature of a State may, by law, make provisions with respect to the maintenance of accounts and the auditing of such accounts of Panchayati Raj institutions and urban local bodies. The local fund auditor, who is generally an officer of the State Government, is responsible for audit of Panchayati Raj institutions and urban local bodies. In certain states, the Examiner of Local Fund Accounts, who is an officer of the Comptroller and Auditor General, is responsible for the audit of accounts of Panchayati Raj institutions and urban local bodies.
What This Means
Under Articles 243J and 243Z of the Constitution, state legislatures can make laws governing how Panchayati Raj institutions (PRIs) and urban local bodies (ULBs) maintain their accounts and get them audited. Usually, a state government officer called the Local Fund Auditor handles this audit. In some states, the Examiner of Local Fund Accounts — who is a CAG officer — performs this function instead.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Constitutional basis: Articles 243J (PRIs) and 243Z (ULBs) empower state legislatures
- 2States can legislate on accounts maintenance and audit of local bodies
- 3Local Fund Auditor (state government officer) is generally responsible for PRI/ULB audit
- 4In some states, Examiner of Local Fund Accounts (a CAG officer) handles this audit
- 5This creates a dual system — some states under state audit, others under CAG supervision
Practical Example
In Rajasthan, the Examiner of Local Fund Accounts (a CAG officer) audits all gram panchayats and municipal bodies. In contrast, in Uttar Pradesh, the Local Fund Auditor (a state government officer) performs this function. This regulation recognizes both models and sets the stage for the CAG's Technical Guidance and Support (TGS) role where direct CAG audit does not exist.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why does the CAG not directly audit all local bodies across India?▼
What is the difference between Local Fund Auditor and Examiner of Local Fund Accounts?▼
Which states have the Examiner system?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.