Section 10 in Tamil Nadu Local Fund Audit Rules, 2016
10. Completion of Audit.
(1)The audit on the accounts prepared and presented for audit under section 7 of the Act shall be completed by the Director or the officer delegated by the Director within a period of six months.Explanation. - The period of six months in respect of annual accounts returned for rectification shall be calculated only from the date of resubmission after rectification.(2)(a)The auditor shall prepare the audit report with due care that the objections are stated clearly and precisely as possible and no indisputable facts and figures find place in the report and submit the draft audit report along with the audited accounts to the authority as specified by the Director, for review and approval. The draft audit report shall be submitted within thirty days on completion of audit or on the date communicated by the approving authority, whichever is earlier, by the auditor or audit party;(b)Audit reports or audit notes shall be approved by the Head of office concerned in the following manner : -(i)by scrutiny of the draft audit report or audit notes at the office itself and offering review remarks;(ii)by conducting local passing for one or two days at the institution to verify the records;(iii)after rectifying the defects pointed out by the Director on scrutiny of the draft audit report wherever applicable;(c)The approving authority shall scrutinize the draft audit report and complete the review:Provided that the draft audit reports shall be returned to the auditor with objections by the competent authority for rectification of defects within fifteen days and the rectified draft audit report shall be resubmitted by the auditor within a period of seven days from the date on which the auditor receives such reports;(d)On receipt of rectification report from the auditor, the correctness should be verified by the competent authority and draft audit report may be approved or local passing shall be done at the institution whenever found necessary:Provided that wherever such review is conducted the draft audit report shall be approved and issued without delay;(e)If the reports are further returned for rectification, such returned reports shall be resubmitted within a period of three days from the date of receipt by the auditor. If such reports are still found to be not free from the defects as earlier noticed, the auditors are liable for penal action;(f)The Director may with specific reasons to be recorded in writing and in exceptional cases, grant extra time, for submission of the reports.(3)(a)The auditor shall issue audit slips containing details of audit observations or objections with his dated signature day by day, as the audit proceeds, in duplicate and shall obtain an acknowledgement from the Head of Office of the local authority or local fund with date of receipt in one copy;(b)The auditor shall as far as practicable, issue separate audit slips for each department of the local authority or local fund so that the department concerned can proceed to take action as soon as the audit slip is received;(c)All audit slips issued during the course of audit shall be returned to the auditor by the Executive authority with replies to the objection, and a statement of the action taken or proposed to be taken to settle the objections raised;(d)On receipt of the replies to the points raised by the auditor, the auditor shall, wherever necessary re-issue for further action, any items on which final or sufficient action has not been taken or on which enquiries made have not been satisfactorily answered;(e)All the audit slips pending at the close of audit shall be compiled and incorporated in the audit report or audit notes without any omission.(4)(a)In the local authorities where immediate post audit is conducted audit slips shall be written up then and there on completion of voucher audit and the audit slips written during a fortnight shall be communicated to the executive authority on fortnightly basis. In case of Panchayat Union Councils, audit slips shall be written up then and there on completion of the audit of each transaction and communicated to the Executive authority;(b)The Executive authority shall rectify the defects and furnish replies to the audit slips within fifteen days;(c)On receipt of the reply the correctness should be verified and remarks on the settlement or non acceptance of the reply shall be communicated to the Executive authority;(d)The audit slips pending settlement on the date of closure of the annual audit of a financial year should be consolidated and incorporated in the audit report or audit notes. Based on the reply if any audit slip is dropped after due satisfaction such objections also appended to the original audit report.(5)The auditor or reviewing authority shall show the draft audit report or audit notes to the Executive authority of the respective institutions on the closure of audit and obtain acknowledgement in the draft audit report. He shall have exit level conference on the concluding day of the audit, with the Executive authority and discuss regarding the findings of audit, audit slips issued, audit observations and non-production of records if any and closure of audit.(6)Objections which have been settled on the spot shall be included in the report if the irregularities are of a serious nature or point to any defect in procedure or error in principle.(7)The Director or the officer delegated by the Director shall verify the correctness of the annual accounts during annual audit and certify the annual accounts as prescribed below and append the certified copy of the accounts with the audit report : -(a)Unqualified Certificate. - If the auditor is satisfied in all material respects of the annual accounts, and found that accounts have been compiled properly with reference to subsidiary registers, book of accounts, the financial statements, and Schedules and that the accounts have been prepared according to the Act and rules, unqualified certificate shall be given;(b)Qualified Certificate. - If during verification in local audit, it was found out that there are serious mistakes in the annual accounts such as uncertainly with the amounts, non-tallying with subsidiary registers, books of accounts and other relevant records, the auditor shall issue a qualified certificate pointing out the defects noticed;(c)Disclaimer Certificate. - If in the opinion of the auditor, there is no possibility of the audit to give a clear opinion about the annual accounts, for want of any details, or due to non-closure or non-tallying of subsidiary records, demand, collection, balance statement, disclaimer certificate shall be given by the auditor: Provided that the reasons leading to the disclaimer are mentioned in writing with the details of discrepancies found out in respect of each transaction;(d)Adverse Certificate. - If the auditor cannot agree with the fundamental aspects of the annual accounts and if the accounts are found to be not acceptable due to the reasons that the account books, subsidiary registers and other relevant records have not been written up, demand, collection, balance statement not prepared for revenue items, reconciliation not struck and the figures in the annual account did not match with that of the Financial Statements presented to audit, an adverse certificate shall be given:Provided that the specific reasons thereon shall be recorded in writing and appended to the audit report.(8)The Director shall arrange to complete the audit of local authority and local fund, of which the annual accounts relating to a financial year were not prepared and presented to audit within prescribed time limit, and if the audit could not be completed within a period of two years from the completion of the financial year, he shall report the fact in the annual report being presented to the Legislative Assembly.
