Section 41(1) in Tamil Nadu Village Panchayats (Receipts and Expenditure and Maintenance of the Accounts of Village Panchayats) Rules, 2000
(1)Any defalcation or loss of moneys or stamps belonging to a village panchayat shall be reported immediately after discovery by the president or any one of the inspecting officer to the Inspector and Auditor appointed under section 193 of the Act. A further and complete report shall also be submitted to such auditor as soon as may be after the matter has been fully enquired into, by such inspecting officer setting for the nature and the extent of the defalcation or loss. The errors or neglect of rules by which such defalcation or loss was rendered possible, and the prospects of effecting a recovery.
