(1)The accounts of every Panchayat shall be audited each year by such officer as may be authorised by the Director of Accounts of the Government (hereinafter referred to as the 'auditor').(2)The auditor shall, for the purpose of audit have access to all the accounts and other records of the Panchayat.(3)The auditor may,-(a)require in writing the production before him of such voucher, statements, returns, correspondence, notes or other documents which he may consider necessary for the proper conduct of his audit;(b)require in writing any person accountable for, or having the custody or control of, any such vouchers, statements, returns, correspondence notes or documents or any person having directly or indirectly by himself or his partner, any share or interest in any contract with or under the Panchayat, to appear in person before him;(c)require any person so appearing before him to make and sign a declaration with respect to such vouchers, statements, returns, correspondence, notes or documents or to answer any statements;(d)in the event of an explanation being required from the Sarpanch or other member of the Panchayat, in writing invite such person to meet him and shall in writing specify the point on which explanation is required.(4)Any person who wilfully neglects or refuses to comply with any requisition lawfully made under sub-section (3), shall on conviction, be punished with fine which may extend to one hundred rupees:Provided that no proceedings under this sub-section shall be instituted without the sanction of the Chief Executive Officer.(5)The auditor shall, within one month after the completion of audit, forward a copy of the audit report to the Panchayat [the Chief Executive Officer and Director] [Inserted by the Amendment Act 1 of 1997.].(6)On receipt of the audit report, the Panchayat shall either remedy any defects or irregularities which have been pointed out in the report and send to the Executive Officer within three months an intimation of its having done so, or shall within the same period furnish to the Chief Executive Officer any further explanation in regard to such defects or irregularities.(7)On receipt of such intimation or explanation in respect of all or any of the matters discussed in the audit report, the Chief Executive Officer may, in consultation with the auditor,-(a)accept the intimation or explanation given by the Panchayat and order the withdrawal of the objection; or(b)direct that the matter be re-investigated at the next audit or at any earlier date; or(c)direct that the defects or irregularities pointed out in the audit report or any of them shall be removed or remedied by the Panchayat.(8)The Chief Executive Officer may, after making such enquiry as he may consider necessary, disallow any item of expenditure which appears to him to be contrary to law and surcharge the amount thereof on the person making or authorising the illegal payment and after taking the explanations of the person concerned, the Chief Executive Officer may direct by an order in writing that such person shall pay to the Panchayat the amount surcharged along with interest at fifteen percent per annum on the amount due, from the date from which it became due and if the amount is not paid within two months from the date of such order, the Chief Executive Officer shall take steps to recover it as an arrear of land revenue and credit it to the Panchayat Fund.(9)Any person aggrieved by the order of the Chief Executive Officer under sub-section (8), may, within thirty days of the receipt by him of a copy of the decision, appeal to the Director who shall pass such orders as he may deem fit.(10)The Director of Accounts shall submit a summary of observations made in the audit report and rectifications made by the Panchayats to the Government which shall be laid on the table of the House.
