Section 6 in Tamil Nadu Panchayats (Issue and Disposal of Audit Report of Village Panchayats) Rules, 2000
6. Procedure for conduct of audit.
(1)The auditor shall scrutinise every item of expenditure and decide whether the executive authority has conducted the financial transactions of the village panchayat in accordance with rules and orders issued by the Government and other competent authorities, from time to time, and also with the approval of the village panchayat. As far as the receipts are concerned, the auditor shall verify, whether the executive authority has properly assessed all the eligible persons or properties under various taxes leviable by the village panchayat. He shall decide items of expenditure which are not admissible and items of loss of revenue, or leakage of revenue which are attributable to the negligence of the executive authority and clearly establish the persons responsible for the loss of income or irregular and inadmissible expenditure.(2)The auditor shall specify the grounds or the basis of authority or the non-observance or violation of rules, instructions, norms or orders which has led to a material impropriety of irregularity in a transaction involving financial implications which he find in any financial transaction item of expenditure of or revenue receipt to, the village panchayat.(3)The auditor shall report to the village panchayat any loss, waste or misapplication of money or other property owned by or vested in the village panchayat if such loss, waste or misapplication is a direct consequence of the neglect or misconduct of the executive authority or any other subordinates with names of persons directly or indirectly responsible for such loss, waste or misapplication.(4)The audit report on the accounts of the village panchayat for a financial year shall be sent to the executive authority and a copy of the same sent to Assistant Director of Rural Development (Audit) within fifteen days of the completion of audit.(5)The Assistant Director of Rural Development (Audit) shall check the audit report of not less than ten per cent of the total number of village panchayats in the district to verify the correctness of audit done by the auditor.(6)During the course of audit, when the auditor of the village panchayat notices, any defalcation or misappropriation of the fund of the village panchayat, he shall immediately bring the fact to the notice of the Inspector for taking necessary action under the Act including prosecution of the executive authority. Copy of such report shall also be sent to the Assistant Director of Rural Development (Panchayat) and Assistant Director (Audit).(7)The executive authority shall forthwith rectify the defects or irregularities, if any, which may be pointed out by the auditors and report the same to the village panchayat.
