Tamil Nadu Local Fund Audit Act, 2014
No: 24 Dated: Dec, 14 2014
Tamil Nadu Local Fund Audit Act, 2014
(Act No. 24 of 2014)
An Act to provide for an effective and efficient audit system to all local authorities and certain other authorities, bodies or institutions and Funds and for matters connected therewith and incidental thereto.
Whereas the Thirteenth Finance Commission in its report recommended that the State Government must put in place an audit system for all local bodies and also recommended that the Comptroller and Auditor General of India must give technical guidance and supervision over the audit of all the local bodies in the State at every tier/category;
And Whereas the Second State Finance Commission has also recommended to enact an Act to provide for and to regulate the audit of the local funds and authorize the Director of Local Fund Audit to audit the accounts relating to the local authorities;
And Whereas it has become imperative to ensure effective spending of the grants of the Government of India and the State Government by the local authorities and other authorities and to promote public confidence on how the public money is expended by the local authorities and other authorities established by the State Government;
Be it enacted by the Legislative Assembly of the State of Tamil Nadu in the Sixty-fifth Year of the Republic of India as follows:-
1. Short title, extent and commencement. - (1) This Act may be called the Tamil Nadu Local Fund Audit Act, 2014.
(2) It extends to the whole of the State of Tamil Nadu.
(3) It shall come into force at once.
2. Definitions. - In this Act, unless the context otherwise requires, -
(a) "audit" includes cent percent audit, post audit, test audit, special audit and such other examination of accounts as the Government may, from time to time, specify;
(b) "cent percent audit" means a post audit of all the transactions of a particular account for the whole financial year or for such period as may be specified by the Director;
(c) "concurrent audit" means a continuous post audit of accounts of day-to-day transactions;
(d) "Director" means the Director of Local Fund Audit appointed under section 3 and includes any person authorised by the Government to perform the functions of the Director of Local Fund Audit;
(e) "Executive authority" means the Chief executive officer or any other officer of a local authority, vested with the power to administer the fund of that authority;
(f) "Government" means the State Government;
(g) "local authority" means, -
(i) any municipal corporation or municipal council or panchayat union council or village panchayat constituted under the relevant law for the time being in force; or
(ii) any other authority, body or institution established by or under any law or order of the Government and specified in the Schedule;
(h) "local fund" means the fund administered by a local authority and other fund specified in the Schedule;
(i) "Local Library Authority" means the Local Library Authority constituted under the Tamil Nadu Public Libraries Act, 1948;
(j) "Local Planning Authority" means the Local Planning Authority constituted under the Tamil Nadu Town and Country Planning Act, 1971;
(k) "market committee" means the market committee constituted under the Tamil Nadu Agricultural Produce Marketing (Regulation) Act, 1987;
(l) "post audit" means the detailed audit conducted after the completion of transactions;
(m) "Schedule" means the Schedule to this Act;
(n) "special audit" means an audit of accounts pertaining to a specified item or series of items requiring thorough examination, and includes re-audit of the accounts for a period already covered by audit;
(o) "State" means the State of Tamil Nadu;
(p) "surcharge" means an amount for which the Director makes a person liable for loss, waste, misapplication or misappropriation of any money or other property;
(q) "University" means the University established or incorporated by an Act of the State Legislature.
3. Appointment of the Director. - (1) The Government may, by notification, appoint a person, having such qualification as may be prescribed, as the Director of Local Fund Audit.
(2) The Government may also appoint such other officers of the Local Fund Audit Department, as it may deem necessary, to carry out the purposes of this Act.
(3) All officers and staff of the Local Fund Audit Department 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 rule made thereunder.
(4) Notwithstanding anything contained in sub-section (1), the Director of Local Fund Audit functioning before the commencement of this Act, shall be deemed to have been appointed as the Director under this Act.
4. Audit of Accounts. - 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 audit or cause to be audited by an officer of the Local Fund Audit Department authorised by him by general or special order in this behalf, the accounts of a local authority or local fund in the manner provided by or under this Act. The officer so authorised shall exercise such of the powers and perform such of the functions of the Director in regard to the conduct of audit under this Act.
5. Power to audit accounts of certain authorities, bodies, institutions or fund not included in the Schedule. - The Director may, with the previous sanction of the Government, and without prejudice to the provisions of section 4, audit the accounts of any authority, body, institution or fund not included in the Schedule subject to such terms and conditions as may be agreed upon between the Director and the person responsible for the administration of such authority, body, institution or fund.