As per Section 4 of the Kerala Local Fund Audit Act 1994 , the audit of accounts of local authorities and Local funds included in the Schedule to the Act has to be conducted by the Director of Kerala State Audit Departmentin the manner provided by or under the Act. The Kerala Local Fund Audit Rules 1996 (B) framed for Implementing the provisions in the Act were issued in G.O (P) No.180/96/Fin dt.9.2.1996. The power to issue charge and surcharge certificates for the recovery of losses sustained by the local fund institutions as disclosed in audit is vested with the Director of Local Fund Audit vide Section 16 of the Kerala Local Fund Audit Act 1994 and Rule 20 of the Kerala Local Fund Audit Rules 1996.

 

A.Details of Accounts Audited during 2014-2015

Annual audit of accounts of 5974 Institutions have been completed by this Department, besides issuing audit notes and objection slips in the major concurrent audit institutions, during 2014-15.

B. Audit Report Issued/Closed

A total of 30521 Audit Reports have to be pending closure on 1.4.2014 and 1583  Audit Reports were closed during 2014-15 financial year.  28938 numbers of Audit Reports are pending closure as on 31.3.2015.

C. Audit Certificates Issued

1836 numbers of Audit Certificates were issued during the year  2014-15.

D. Misappropriation and serious Irregularities

During the year 2014-15 irregularities were noticed in Grama Panchayats, Block Panchayats, Municipalities, Corporations, Universities, Devaswom Boards etc.  The details are included in the respective Audit Reports issued from various sub offices.  In addition to these, misappropriation cases were noticed in some of the Institutions.

 

E. Pension Papers disposed off

The verification and certification of pensionary claims of Municipal employees, employees of Development authorities, Corporations, Devaswom, HR &CE Institutions, Universities, KSHB, SIEP, SIL etc are done by the Department.  A total of 2656 pension files have been verified and claims certified by the Department during 2014-15.

1. F. Result of Audit

The magnitude of the expenditure, incurred by all the Institutions which were subjected to audit during 2014-15, amounts to Rs.1451842/- lakhs. As a result of audit transactions to the tune of Rs.47645.58/- lakhs were held under objection and Rs.9245.224/- lakhs disallowed

 

 

G. Audit Charge

The Department earns revenue to Government in the form of audit fee from the Auditee Institutions.  An amount of Rs.351527370/- is pending collection towards audit charges at the end of 31.3.2015.  An amount of Rs.414336975/- is demanded and Rs.62809605/- is collected during   2014-15.

Section 19 (4) of Kerala Local Fund Audit Act empowers this department to collect the arrears of audit charges if it were not paid within one year from the date of its becoming due and  where no grant or sum is payable by the Government to the local authority  by effecting  the provisions of Kerala Revenue Recovery Act 1968.

H Charge and Surcharge action

The power to issue charge and surcharge certificate for the recovery of losses sustained by Local Fund Institutions as disclosed in audit is vested with the Director of Kerala State Audit Department vide Section (16) of the Kerala Local Fund Audit Act 1994 and Rule 20 of the Local Fund Audit Rule 1996. As per the rules the executive authority of Local bodies has to send a rectification report to the  auditor within a period of 2 months of receipt of the audit report.

On receipt of the rectification report, the issuing authority has to issue further remarks within a period of 2 months and to forward charge and surcharge proposals to the Director of Kerala State Audit Department for pending items. In the case, where no rectification report has been furnished by the executive authority after the expiry of 2 months, the report issuing authority will issue further report to the executive authority and charge/surcharge proposals to the Director of Local Fund Audit.

Even though earliest  efforts are being made to recover the losses through the issue of charge and surcharge certificates and recoup the losses mentioned in the audit reports  of Local Self Government Institutions etc, the act of recoupment is time consuming and much tardy. It is prescribed in Section 16 (4) of the Kerala Local Fund Audit Act that every sum certified to be due from any person by the auditor under this Act shall be paid by such person to the Executive authority within  one month after the intimation to him of the decision of the Director under within that time such person has filed an application before the District Court against the decision under sub section (3) and such amount if not so paid or such amount  as the District Court shall declare to be due shall be recoverable under the provisions of the Kerala Revenue Recovery Act 1968 (Act 15 of 1968) for the time being in force as if it were an arrear of public revenue due on land. It is to be noted here that very little is being recouped through charge and surcharge action.

As such during the year 2014-15, 38 numbers of Charge Certificates and 186 numbers of Surcharge Certificates were issued and the total amount involved came to Rs.2165581/- and Rs.15257107/- respectively.  Against the issued certificates Rs.350921/- has been reported as recouped.

In addition to above, 28 numbers of Charge Notices and 338 numbers of Surcharge Notices were issued during the year.  The total amount involved came to Rs.38,92,722/- and Rs.4,58,55,840/- respectively.  The amount recouped against Charge Notice was Rs.12,660/- and Surcharge Notice was Rs.3,24,549/-

 

1. J. Charitable Endowment

There are 1321 Endowments vested with the Treasurer of Charitable Endowments, Kerala as on 31.3.2015, within the provisions of the Charitable Endowments Act 6 of 1890 (Central Act) The total amount of Corpus vested with the Treasurer of Charitable Endowments as on 31.3.2015 comes to Rs.118952662/-.  During the year under report a sum of Rs.2703521/- has been received by way of interest and a total amount of Rs.392679/- released to various administrators, on demand.  An amount of Rs. 85600000/- has been invested for amalgamated fund.  Rs.7967115/- has been received as interest on various fixed deposits and Rs.50,00,000/- has been released for amalgamated fund meant for the welfare of Ex-service men.

K. Local Fund Accounts Committee Reports

Local Fund Accounts Committee was constituted by Rule 261(G) and (4) of Rule of Procedure and Conduct of Business in the Kerala Legislative assembly vide Notification No. 27/Legn.2/2002/Leg. dated: 18.2.2003 and the first Local Fund Accounts Committee was constituted on 27.06.2003.

The Chairman of Local Fund Accounts Committee is Shri.Varkala Kahar and the members are as follows.

1. Shri.A.P.Abdullakutty
2. Shri.K.Achuthan
3. Shri.M.Chandran
4. Shri.K.K.Jayachandran
5. Shri.Mullakara Ratnakaran
6. Shri.N.Shamsudeen
7. Shri.K.Sivadasan Nair
8. Shri.P.SreeRamakrishnan
9. Shri.G.Sudhakaran
10. Shri.M.A.Waheed.

The main responsibility of the Committee is to examine the Consolidated  Audit Reports of the accounts audited by the Director of Kerala State Audit Department which is laid annually before the Legislative Assembly. In addition to this, Committee also examines the Audit Report on Local Self Government Institutions submitted by the Comptroller and Auditor General of India by amending the Rule 261(G) of the rules of procedure and Conduct of Business in the Legislative Assembly.

Altogether the Honourable Local Fund Accounts Committee has considered the consolidated reports of accounts audited by the Director of Local Fund Audit for the years 1998-99, 1999-2000, 2000-01, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11,    2011-12.

20 sittings of the Local Fund Accounts Committee (2011-14) and the first meeting of the Local Fund Accounts Committee (2014-16) were held during the year 2013-14 and gave its recommendations for the smooth and proper functioning of the Local Self Government Institutions and other Institutions.

Local Fund Accounts Committee 2014-16 has conducted 30 meetings during 2014-15 and considered Consolidated Audit Reports from 1999 to 2012-13.

Local Fund Accounts Committee (2011-14) has submitted following reports before the Legislative Assembly during the year 2013-14.

 

Sl. No.	Year of Local Fund Accounts Committee	Report No.	Subject	Date of submission to Legislative Assembly
1	2011-14	14	Report on Thiruvananthapuram Municipal Corporation	22.06.2013
2	2011-14	18	Report on Municipalities of Wayanad and Malappuram	09.04.2013
3	2011-14	19	Report on Kerala and Mahatma Gandhi University	09.04.2013
4	2011-14	20	Report on Kochi Corporation	09.05.2013
5	2011-14	21	Report on District Panchayats of Kottayam and Idukki	09.04.2013
6	2011-14	23	Report on Village Panchayats of Malappuram	23.01.2014

1. L. Settlement of objections

Sub rule (1) of the Rule 21 of the Kerala Panchayat Raj (Procedure for verification and audit of accounts) Rules 1997 envisages that the Executive authority of Grama Panchayats on the decision of the Panchayat should furnish a rectification report to the auditor after rectifying  the irregularities and defects observed in the audit report with copy to the Government within 2 months of the date of receipt of audit report. Inspite of the above  statutory requirements follow up action on the part of the Local bodies for the  settlement of objections raised in audit is not satisfactory resulting in huge accumulation of audit objections over the years. In the same manner as stated above, the Municipal Authorities are also required to furnish compliance report to the audit within two months.

M. General State of Accounts

The standards of maintenance of the books of accounts of institutions which were subjected to audit during the year under report also remain far from the satisfactory as stated in the administration reports of previous  years. Instructions from Audit in the successive  audit reports of the institutions high lighting the need for the proper up keep of the books of accounts have  not been complied with. Hence a proper picture about the state of  funds of the auditee Institutions is not available. Due to non-submission of accounts for audit, the very purpose of accounting and auditing  itself is defeated. The deficiency in the maintenance of books of accounts should be rectified to a considerable extent had regular and periodical inspections been conducted by the performance audit wing as stipulated in the concerned local body’s Act.

 

Statement showing the details of Accounts Audited during 2013-14

(Up to 31.03.2014)

Sl.No.	Name of Institution	Number of auditee institutions	Number of institutions audited	Number of accounts due for audit	Number of accounts audited	Number of Accounts remained to be audited at the close of 2013-2014
1	Grama Panchayats	978	718	2127	1068	1059
2	Block Panchayats	152	120	333	192	141
3	District panchayats	14	14	27	17	10
4	Municipal Councils	60	40	121	54	68
5	Municipal Corporations	8	8	22	12	11
6	Universities	10	9	23	9	14
7	Devaswom Board	1343	88	1277	304	973
8	Welfare fund	27	21	49	33	16
9	KSHB	1	1	1	1	0
10	SIEP	1	1	2	2	0
11	Development Authorities	4	3	9	7	2
12	SIL	1	1	2	1	1
13	Library council	79	63	82	64	18
14	Orphanages	729	537	708	572	136
15	Hospital Development Committee	2062	136	1088	352	736
16	KHRWS	3	2	7	2	5
17	Courts	373	132	201	93	108
18	Cultural Institutions	54	38	50	40	10
19	Miscellaneous Institutions	157	78	174	99	75
	Total	6056	2010	6303	2922	3383

 

Statement showing the number of Audit Reports issued, closed and pending closure as on 31.03.2014

Sl.No.	Name of auditee Institution	Number of audit reports pending closure at the beginning of the year	Number of Audit Reports issued		Number of Audit Reports Closed	Number of audit reports pending closure  at the close of 2013-14
			Number	Total
(1)	(2)	(3)	(4)	(5)	(6)	(7)
1	Grama Panchayats	20364	884	21248	504	20744
2	Block Panchayats	1943	155	2098	33	2065
3	District panchayats	207	15	222	0	222
4	Municipal Councils	1496	56	1552	8	1544
5	Municipal Corporations	251	17	268	0	268
6	Universities	184	8	192	3	189
7	KSHB	36	1	37	0	37
8	Development Authorities	54	8	62	0	62
9	Welfare fund	76	18	94	1	93
10	Courts	138	83	221	102	119
11	Orphanages	0	353	353	353	0
12	Devasom Board	2224	109	2333	0	2333
13	Hospital Development Committee	47	65	112	87	25
14	Library council	20	41	61	54	7
15	Cultural Institutions	281	27	308	17	291
16	KHRWS	9	0	9	0	9
17	Miscellaneous Institutions	287	214	501	163	338
	Total	27617	2054	29671	1325	28346

 

Statement showing the details of Eligibility/Utilization/Audit Certificates issued

during the year 2013-14

Sl.No.	Name of Institution	No.of certificates issued	Amount involved (Rs)
(1)	(2)	(3)	(4)
1	Grama Panchayats	512	7387777845
2	Block Panchayats	84	1472853792
3	District panchayats	8	-
4	Municipality	35	1256138590 Receipts-780543445 Expenditure-738081788
5	Municipal Corporations	2	759032176
6	Devasom Board	Nil	Nil
7	Universities	393	1497927924.5
8	Welfare Fund	1	174986
9	Orphanages	709	273585662.2
10	Hospital Development Committee	21	Nil
11	Development Authority	1	Nil
12	SIL	1	25578000
13	SIEP	1	27120000
14	Library councils	147	91385777.5
15	Cultural Institutions	24	170715666
16	KSHB	1	Nil
17	Miscellaneous Institutions	104	380418445
	Total	2044	13342708863.7

 

Statement showing the details of misappropriation cases detected during 2012-13 &  2013-14

Sl. No	Name of Institutions	Cases outstanding at the beginning of the year		Cases detected during the year		Cases settled during the year		Cases in which final action is pending
		No.of cases	Amount involved (Rs)	No.of cases	Amount involved (Rs)	No.of cases	Amount involved (Rs)	No.of cases	Amount involved (Rs)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
1	Grama Panchayats	92	12408898.21	11	16743125	-	-	102	28517221.21
2	Block Panchayats	2	1425995	2	2312730	-	-	4	3738725
3	Municipal Councils	4	378090	2	2398655	1	75782	5	2700963
4	Municipal Corporations	-	-	2	56025	1	11701	1	44324
5	Universities	5	388358.44	1	202415	-	-	6	590773.44
6	Devasom Board	119	2817964.98+393.25 gm gold	5	10484930	-	-	124	13302894.98+393.25 gm gold
7	KHRWS	-	-	1	2849370		-	-	-
	Total	222	17419306.63+393.25 gm gold	24	35047250	2	87483	242	48894901.63+393.25 gm gold

 

 

Analysis of the Pending Defalcation/Misappropriation cases for the year ended 2013-14

Sl. No	Name of Institutions	Cases awaiting Departmental action		Cases in which Departmental action started but not completed		Cases in which criminal investigation pending court		Cases awaiting orders of recovery
		No.of cases	Amount (Rs)	No.of cases	Amount (Rs)	No.of cases	Amount (Rs)	No.of cases	Amount (Rs)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
1	Grama Panchayats	98	14319711.21	21	7996910.45	1	0	29	8537203.21
2	Block Panchayats	3	3738725	-	-	0	0	3	1436095
3	Municipal Councils	3	280692	4	297984	2	280692	3	280692
4	Devasom Board	121	13120878.98	-	0	2	116063	1	24709
5	Universities	5	388358.44	1	202415	0	0	5	388358.44
6	KHRWS	-	-	1	2849370			-
7	Municipal Corporations	1	44324	1	44324	-	-	-
	Total	231	31892689.63	28	11391003.45	5	396755	41	10667057.65

Statement showing the number of pension papers of Auditee Institutions received and

disposed off during the year 2013-14 (up to 31.03.2014)

Sl. No.	Name of Auditee Institutions	No. of cases pending at the beginning of the year	No. of cases received during the year	Total	No. of cases disposed off	Number of cases pending at the close of the year
(1)	(2)	(3)	(4)	(5)	(6)	(7)
1	Grama Panchayats	11	193	204	197	7
2	District Panchayat	0	2	2	2	0
3	Municipal Councils	50	615	665	642	23
4	Municipal Corporations	7	540	547	493	54
5	Devasom Board	14	267	281	248	33
6	Development Authority	0	19	19	19	0
7	KSHB	12	196	208	164	44
8	KHRWS	0	29	29	29	0
9	SIEP	0	1	1	1	0
10	Universities	239	885	1124	1034	90
11	Miscellaneous Institutions	0	0	0	0	0
12	SIL	0	9	9	9	0
13	Library Council	0	4	4	3	1
	Total	333	2760	3093	2841	252

 

 

Statement showing the accounts audited and the amount disallowed and objected

during the year 2013-14 (Rupees in lakhs)

Sl. No.	Name of Auditee Institutions	Total Receipts (Rs. In lakhs)	Total Expenditure (Rs. In lakhs)	Amount Disallowed (Rs. In lakhs)	Amount objected (Rs. In lakhs)
(1)	(2)	(3)	(4)	(5)	(6)
1	Grama Panchayats	565188.89	529446.57	1130.25	18757.12
2	Block Panchayats	179791.18	160493.81	372.27	6378.16
3	Municipal Councils	86506.12	93953.665	272.32	4033.29
4	District Panchayat	63857.78	58111.43	159.78	9132.9
5	Orphanage	3079.92	2946.21	0	0
6	Hospital Development Committee	45.18	29.64	0	0
7	Library Council	1171.78	993.18	0.98	2.34
8	Cultural Institutions	129.85	119.93	0	0
9	Courts	0	0	0	0
10	Municipal Corporations	58333.08	61675.82	129.326	3641.61
11	Universities	92861.633	91332.3	140.471	1008.535
12	Devasom Boards	42333.65	30862.01	173.848	1122.111
13	Welfare Fund Boards	39084.93	20187.3	6.23	142.17
14	Development  Authority	2468.525	1389.176	0.43	0
15	KHRWS	0	0	0	0
16	KSHB	6732.27	8362.97	23.34	31.28
17	SIEP	518.348	374.43	0	76.495
18	SIL	481.62	474.821	3.155	8.168
19	Miscellaneous Institutions	18859.76	16187.6	440960.62	416.01
	Total	1161444.516	1076940.862	443373.02	44750.19

 

Abstract of audit charges pending remittance from institutions as on 31.03.2014

Sl. No.	Name of Institutions	Arrear Demand up to 2012-13 (Rs)	Current Demand 2013-14 (Rs)	Total (Rs)	Arrear collection up to 2012-13 (Rs)	Current collection during 2013-14 (Rs)	Total (Rs)	Arrear balance up to 2012-13 (Rs)	Current balance during 2013-14 (Rs)	Total balance (Rs)
1	2	3	4	5	6	7	8	9	10	11
1	Welfare Funds	12072875	1978527	14051402	1866	0	1866	12071009	1978527	14049536
2	Cultural Institutions	841700	255365	1097065	138339	0	138339	703361	255365	958726
3	Miscellanoeous Institutions	12657745	12589713	25247458	876021	2622327	3498348	11781724	9967386	21749110
4	Universities	142638189	16967941	159606130	6078806	1539245	7618051	136559383	15428696	151988079
5	Devaswom Board	20423650	11771972.96	32195622.96	2399874	2687189	5087063	18023776	9084783.96	27108559.96
6	Development  Authorities	8807555	31173847	39981402	2431068	0	2431068	6376487	31173847	37550334
7	KHRWS	847745	0	847745	0	0	0	847745	0	847745
8	KSHB	105239652	6732269	111971921	0	0	0	105239652	6732269	111971921
9	SIL	96146	106110	202256	0	0	0	96146	106110	202256
10	SIEP	218854	45001	263855	0	0	0	218854	45001	263855
11	Municipal Corporations	27551	362280	389831		0	0	27551	362280	389831
	Total	303871662	81983025.96	385854687.9	11925974	6848761	18774735	291945688	75134264.96	367079952.96

 

 

Statement showing the number of accounts pending submission to audit

Sl. No.	District	Grama Panchayat	Block Panchayat	District Panchayat	Municipal Councils	Municipal Corporations	Universities	Devaswom Board	Miscellaneous institutions	Welfare Fund	Orphanage	Total
1	2	3	4	5	6	7	8	9	10	11	12	13
1	Thiruvananthapuram							2	56			58
2	Kollam								6	66		72
3	Pathanamthitta								113			113
4	Idukki	13	4						115			132
5	Kottayam								25			25
6	Alappuzha	5			6				0			11
7	Ernakulam	14	19		3	3	1		9			49
8	Thrissur					3	3	1	139			146
9	Palakkad							4581	67			4648
10	Malappuram	8	15		6				252		7	288
11	Kozhikkode							175	129			304
12	Wayanad	17					1		0			18
13	Kannur								0			0
14	Kasaragode								0			0
	Total	57	38	0	15	6	5	4759	911	66	7	5864

Statement showing the details of Charge/Surcharge Certificates issued during the year 2013-14

Particulars	Charge Certificate		Surcharge Certificate		Amount Recouped
	No.	Amount (Rs)	No.	Amount (Rs)	Charge (Rs.)	Surcharge (Rs.)
Certificate issued during  2013-14	12	343248	88	4172233		117645

 

Particulars	Charge Notices		Surcharge Notices		Amount Recouped
	No.	Amount (Rs)	No.	Amount (Rs)	Charge (Rs.)	Surcharge (Rs.)
Notice issued during 2013-14	100	7293042	700	198636988	121752	698762

 

Particulars on charitable Endowments  during the year 2013-14

Particulars	F.D Invested (Rs.)	Interest on  F D (Rs)	Amount Released to various Administrators of charitable Endowments/ Amalgamated Fund (Rs)
Corpus funds of Charitable Endowments	33252662	1754300	945381
Unutilised Interest (U.U.I) Added to Corpus
Amalgamated Fund	80600000	9003744	5000000
Total	113852662	10758044	5945381