(1)The accounts of every Grama Panchayat shall be audited each year by such officer as may be authorised by the Controller of State Accounts (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 Grama Panchayat.(3)The auditor may,-(a)require in writing the production before him of such vouchers, 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 Grama 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 question or prepare and submit any statement;(d)in the event of an explanation being required from the Adhyaksha or other member of the Grama 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 willfully 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 Grama Panchayat and to the Executive Officer.(6)On receipt of the audit report, the Grama 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 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 Executive officer may, in consultation with the auditor,-(a)accept the intimation or explanation given by the Grama Panchayat and order the withdrawal of the objection, or(b)direct that the matter be reinvestigated 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 Grama Panchayat.(8)The 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 Executive Officer may direct by an order in writing that such person shall pay to the Grama 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 Executive Officer shall take steps to recover it as an arrears of land revenue and credit it to the Grama Panchayat Fund.(9)Any person aggrieved by the order of the Executive Officer, under sub-section (8) may, within thirty days of the receipt by him of a copy of the decision, appeal to the Chief Executive Officer who shall pass such orders as he may deem fit.(10)Any appeal under sub-section (9) pending before the Government on the date of commencement of the Karnataka Panchayat Raj Act, 1993 shall stand transferred to the Chief Executive Officer and such appeal shall be decided by him as if it had been filed before him.(11)The Controller of State Accounts Department shall submit a summary of observations made in the audit report and rectifications made by the Grama Panchayats to the Government.
