Urban local bodies accounts maturity to guide efficiency audits, says CAG K Sanjay Murthy

Comptroller and Auditor General of India K Sanjay Murthy said checks on assets and efficiency in urban local bodies relied on how mature their accounts were. Murthy pointed to concerns about the quality of accounts already prepared. Murthy said the CAG would support state governments in improving account quality in the coming years.

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Murthy also said the 16th Finance Commission grants had risen by more than two times. Murthy highlighted the Urban Challenge Fund, which had potential investment of over four lakh crore. Murthy said states used different methods to pass grants to local bodies. Murthy added this led to reporting that lacked uniformity.

Urban local bodies accounts and city finance portal

Speaking at the national conference of State Secretaries on Monday, Murthy said the Ministry of Housing and Urban Affairs had increased transparency. Murthy said this happened through the city finance portal. Murthy said local body accounts were being uploaded on the portal. Murthy said this improved visibility in how accounts were prepared.

Murthy said the CAG’s next priority was to judge the maturity of prepared accounts. Murthy said a pilot review had already started across regions. Murthy said around 700 accounts had been studied. Murthy said the exercise checked how mature these accounts were. Murthy said it also helped identify gaps for stronger reporting.

Finance Commission grants and state transfers to local bodies

Murthy said the issue gained importance during the FC-16 award period. Murthy said FC-16 recommended a condition linked to state transfers. Murthy said 10 per cent of the grant was tied to states giving local bodies funds. Murthy said states had to transfer, from their own resources, at least 20 per cent of the basic grant.

Murthy said FC also felt the CAG could report state grants to local bodies in a uniform way. Murthy said this reporting could be transparent. Murthy said it would give valuable information on transfers. Murthy said it could also help states implement the conditional grant requirement more effectively.

Panchayat Raj institutions and accountable accounts

During another session, Ministry of Panchayati Raj Secretary Vivek Bhardwaj said, "the department has many conversations over the last few months and is very grateful for CAGs support in ensuring that Panchayat Raj institutions now become examples of what a model gram panchayat should be.\" Bhardwaj said this depended on accountability and stronger financial records.

Bhardwaj said stronger Panchayat Raj institutions needed to answer to residents. Bhardwaj said they should address local problems in a clear manner. Bhardwaj also said, \"This is possible by becoming accountable to its people, addressing their problems and keeping such accounts that they become bankable, he added.\" The conference focused on accountability and transparency in local governments.

With inputs from PTI