The Comptroller and Auditor General (CAG) in Maharashtra has asked the state government to consider appointing an independent auditor for Municipal Corporations to fix weak internal controls.
In its report presented to the Legislature yesterday in Nagpur, CAG noted that even though the state government adopted the National Municipal Accounts Manual (NMAM), only five corporations have implemented double entry accounting system from 2006-07.
It said that the audit of annual accounts is not being done by most of the Municipal corporations for the past seven years by the Municipal chief auditor indicating weak internal controls.
Except Brihanmumbai Municipal Corporation (BMC) and Solapur Municipal Corporation, no audit was conducted during the period 2000-01 to 2006-07 and no reports were submitted to the standing committee.
CAG said Municipal chief auditor is appointed by the respective corporation and, entrustment of audit of accounts of the corporations to a person, who is under administrative control of the corporation dilutes the independency of the auditor.
During 2006-07, the total expenditure of all the corporations put together increased by 20 per cent over the expenditure of the previous year. The increase in income during the same period was 25 per cent. Octroi receipts continued to be the major source of revenue for the Urban Local Bodies (ULBs).
Although the state adopted the NMAM for implementation from July 2005-06, BMC, Bhiwandi-Nizampur, Navi Mumbai, Sangli-Miraj-Kupwad and Solapur have followed the accounting method. The report said ULBs should ensure timely clearance of the audit observations specially on financial irregularities for overcoming the deficiences in their working.
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