Session TitleInternal Control

This session dwells on macro-level discussion on system of Internal Control of ULBs. The micro-level discussions have been made in respective sessions.

Training Module on Audit of ULBs Session 10 2

Session Overview

• We will discuss:

internal control mechanism of municipalities and municipal corporations.

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Training Module on Audit of ULBs Session 10 3

Learning Objective• The required information through group

discussion and lecture will enable the

participantsacquire basic concepts of internal control system

which will help them to draw audit conclusion at the

practical job scenario.

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Training Module on Audit of ULBs Session 10 4

Internal Audit of Kolkata Municipal Corporation(Chapter XI of the Kolkata Municipal Corporation Act, 1980)

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Training Module on Audit of ULBs Session 10 5

Audit of accounts by the Chief Municipal Auditor

• The Chief Municipal Auditor shall– conduct a monthly internal audit of the

accounts;– report thereon to the Municipal Commissioner

who shall cause an abstract of the receipts and expenditure of the month last proceeding, to be placed before the Mayor-in-Council.

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Training Module on Audit of ULBs Session 10 6

Audit of accounts by the Chief Municipal Auditor

• He shall also conduct such other audit of the accounts as the Municipal Commissioner may from time to time direct.

– For the purpose of audit of the accounts he shall have access to all the accounts ,records and correspondence.

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Training Module on Audit of ULBs Session 10 7

Report by the Chief Municipal Auditor

• The Chief Municipal Auditor shall—

– report to the Municipal Commissioner any material impropriety or irregularity in the accounts of the receipts and expenditure;

– furnish to the Municipal Commissioner such information as required.

– deliver to the Municipal Commissioner, a report of the entire accounts.

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Training Module on Audit of ULBs Session 10 8

Report by the Chief Municipal Auditor

• The Municipal Secretary shall forward a printed copy of the report to each member of the Corporation.

• The Municipal Commissioner shall forward copies to the State Government with a brief statement of the action taken.

• The Chief Municipal Auditor shall audit the accounts of the Corporation.

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Training Module on Audit of ULBs Session 10 9

Report by the Chief Municipal Auditor

• The Chief Municipal Auditor shall audit the accounts of:– expenditure from the revenue of the Corporation,– expenditure on account of loan and works,– debts, deposits in the Sinking Funds, advances,

suspense, remittance transactions of the Corporation;

– stores and stocks of the Corporation and shall undertake such physical verification thereof as he

may consider necessary.

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Training Module on Audit of ULBs Session 10 10

Report by the Chief Municipal Auditor

• Check the inventory of the properties of the Corporation including its holdings of lands and buildings.

• Determine the form and the manner in which his reports on the accounts shall be prepared.

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Training Module on Audit of ULBs Session 10 11

Report by the Chief Municipal Auditor

• The powers of the Chief Municipal

Auditor shall be such as may be

determined by the Mayor–in-Council

with the approval of the Corporation.

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Training Module on Audit of ULBs Session 10 12

Report by the Chief Municipal Auditor

• The Chief Municipal Auditor may require accounts, together with all necessary documents to be made available at all convenient times in offices he so desires.

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Training Module on Audit of ULBs Session 10 13

Report by the Chief Municipal Auditor

• The Chief Municipal Auditor shall have – the power to require any documents to be

sent for inspection by him.– the authority to frame standing orders

and– to give directions on all matters relating to

audit.

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Training Module on Audit of ULBs Session 10 14

Internal Audit ofother Municipalities and Corporations

Training Module on Audit of ULBs Session 10 15

Provisions in the Act

• In terms of provisions contained in Section

91 of The West Bengal Municipal Act, 1993,

– the State Government may by rules provide for

internal audit of the day to day accounts of a

Municipality in such manner as it thinks fit.

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Training Module on Audit of ULBs Session 10 16

Manner of conducting internal audit

• The Chairman-in-Council shall check

accounts of the Municipal Fund at least

once in every month.

• In course of such checking, the officer

authorised in this behalf shall identify the

errors, irregularities and illegalities and shall

render all possible assistance in so far as

reconciliation and rectification of accounts.

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Training Module on Audit of ULBs Session 10 17

Manner of conducting internal audit

• He shall also prepare report on checking of accounts of the Municipal Fund for every quarter of a financial year.

• Such quarterly report of accounts shall be placed before the Municipal Accounts Committee and the Director of Local Bodies for examination and report.

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Training Module on Audit of ULBs Session 10 18

Audit points• Could the auditor ensure that

– there was an established system of Internal Audit

in the Corporation/Municipality? Was such audit

conducted monthly?

– in case of Kolkata Municipal Corporation, the

Chief Municipal Auditor sent a monthly report to

the Chief Municipal Commissioner?

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Training Module on Audit of ULBs Session 10 19

Audit points

• Did the Chief Municipal Commissioner regularly place an abstract of the receipts and expenditure of the month last preceding before the Mayor-in-Council?

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Training Module on Audit of ULBs Session 10 20

Audit points

• Could the auditor verify the annual report on internal accounts of the Corporation by the Chief Municipal Auditor? – Were copies of such reports sent to the

State Government?

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Training Module on Audit of ULBs Session 10 21

Audit points

• Were there any cases of material

impropriety or irregularity in the report

on internal accounts?

– If so, were proper remedial measures or

actions taken on the same under intimation

to the State Government?

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Training Module on Audit of ULBs Session 10 22

Audit points• Could the auditor ensure that there

were proper records of check including the results of verification of balances on debts, deposits in the Sinking Funds, advances, suspense, and remittance transactions?

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Training Module on Audit of ULBs Session 10 23

Audit points• Was there any record of undertaking

physical verification of stores and stocks of the Corporation?

• Could the auditor ensure that the Chief Municipal Auditor checked the inventory of the properties of the Corporation including its holdings of lands and buildings?

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Training Module on Audit of ULBs Session 10 24

Audit points

• In case of other Municipalities and Corporations, did the Chairman-in-Council/Mayor-in-Council set up a system of checking of the accounts of the Municipal Fund at least once in every month by an officer specially authorized to do so?

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Training Module on Audit of ULBs Session 10 25

Audit points

• Was there any record to show that the officer authorised to undertake the internal audit actually did the necessary check?

– Was any report on the same forthcoming?

• Were all the quarterly reports on such check placed before the Municipal Accounts Committee and Director of Local Bodies?

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