Govt plans to make local bodies more accountable

In an effort to bring about greater accountability on the part of local bodies, especially in the area of financial matters, the state government is toying with the idea of making Local Fund Audit department an independent entity.

"We want to reorganise the local fund audit department on the lines of the British Audit Commission , taking into account similar experiences there," the finance minister, Yanamala Ramakrishnudu, told Business Standard. The minister was recounting his experiences during a five-day visit to UK to study the functioning of local audit wings.

The study tour was sponsored by the Department for International Development (DFID). VS Sampath, the principal secretary (finance), and Mohanty, the executive director of Center for Good Governance, accompanied the minister during the tour which took place on December 14-19.

In AP the local fund audit wing looks after the monetary affairs of local bodies , while the treasury department takes care of the financial affairs of the government departments.

Since there is no strong supervision from the local fund audit department, the local bodies, especially municipalities, are not maintaining proper accounts and records.

Auditing of the accounts of municipal bodies has not been done for the past 5-6 years, which led the cash-strapped-bodies to the brink of financial anarchy, the minister admitted. He said the accountability in the decisions and actions of local bodies would be possible only through proper auditing of their accounts.

On the UK experience in ensuring proper auditing of local bodies' activities, he said that the financial transactions and accounts of local bodies in UK were properly maintained and promptly audited as the Audit Commission in that country was fully independent.

And more over, those audit reports would be placed before the British Parliament for its approval, and hence the greater accountability of the local bodies. "The Scottish audit wing even has got penal powers. It can remove the local bodies which fail to submit proper accounts. But till now, this power has not been exercised by Scotland audit wing as such a need has not arisen," he informed.

The accounting and auditing are said to be done separately in Scotland, while both the functions are being done by the same person in local fund audit department in AP.

The finance ministry, along with the Centre for Good Governance, would place the proposed changes in local fund audit before the officials, concerned. It would also invite opinions from different sections of the society before submitting a detailed report to the government.