Under the provisions contained in Article 243 J & 243 Z of the Constitution of India, State Governments have mandate to conduct the audit of Panchayati Raj Institutions and Municipalities (Urban Local Bodies). Accordingly, Haryana State has entrusted the Statutory Audit of Panchayati Raj Institution to Local Audit Department under rule 99 of the Haryana Panchayati Raj Finance, Budget, Accounts, Audit, Taxation and Works Rules, 1996 and Statutory Audit of Urban Local Bodies was entrusted to Local Audit Department under rule XVII.17 of the Municipal Account Code, 1930. Besides, Panchayati Raj Institutions and Urban Local Bodies, department of Local Audit Haryana is also Statutory Auditor for State Universities under various acts of the concerned universities as shown in Annexure-A.
As per instructions contained in Para vii of the notification 14/78/2003-3FA dated 20.12.2011-
“The annual technical inspection report of CAG as well as the annual audit report of the Director, Local Audit Haryana will be placed before the State Legislature and the Comptroller and Auditor General or his representative will have the right to report to the State Legislature the results of audit at his discretion”Further as per notification number HVS-LA-64/2013/17 dated 11.03.2013 a Committee on Local Bodies and Panchayati Raj Institutions was constituted to examine the reports, if any, of the Examiner, Local Fund Accounts (now Director, Local Audit).
HISTORY OF THE DEPARTMENT
Prior to 1st April, 1937, the Local audit Department was a combined Local Audit and outside Audit Department, entrusted with the audit of Government accounts and institutions, which was a central charge in addition to the Local Fund Audit on behalf of the Punjab Govt. The Department was under the Administrative control of the Comptroller and Auditor General. The cost of the Department was apportioned between the Central and State Governments according to the work done on behalf of each Government. With the separation of the outside Audit Department from the Local Audit Department with effect from the 1st April, 1937, the Local Audit Staff was organized as a separate establishment, but continued to be under the charge of the Comptroller and Auditor General. The State Government paid to the Central Government the cost of the Department as worked out in accordance with the provisions of rule 127 of the Fundamental Rules in addition to actual expenditure on travelling and contingencies. This arrangement continued till 31 March, 1944, with effect from the 1st April, 1944, the control of the Department was taken over by the State Government in the Finance Department. As a result re-organization of the States, the accounts under the charge of the erstwhile Pepsu Local Audit Department also came over to the Local Audit Department, Punjab. With effect from the 1st November, 1956, with the coming into being the Haryana State with effect from the 1st November, 1966, the Staff of the Local Audit Department, Punjab, allocated to the Haryana State constituted the Local Audit Department, Haryana.
The Local Audit Department (LAD) is the State Government statutory auditor for conducting the audit of accounts of local funds i.e.any fund for the control or management of which, a local authority is legally entitled and includes the proceeds of any cess, rate, duty or tax which such authority is legally entitled to impose and any property vested in such authority. The audits of various other accounts by virtue of Administrative instruction are also conducted by the LAD. Local Fund is not a part of consolidated fund of the state.
Local Funds administered by the Urban Local Bodies (10 Municipal Corporations, 19 Municipal Councils and 57 Municipal Committees), 21 State Universities and 1 Board of School Education, Bhiwani are under the Pre Audit System. Whereas, audit of approximately 13000entities in the state, which come under the purview of the Local Audit Department including Panchayati Raj Institutions (22 Zila Parishad, 138 Panchayat Samitis and 6200 Gram Panchayats)and6000Educational Institutions & other miscellaneous Local Funds etc. are under the Post Audit System.