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CAG sees faulty accounting by LSGIs in Kerala

Posted on Dec 13, 10:46PM | UNI

Most of the Local Self Government Institutions (LSGIs) in Kerala were not adhering to the procedures relating to reporting monthly progress of expenditure, according to a report by the Comptroller and Auditor General of India (CAG) here today.

Defective preparation of Annual Financial Statements, non-preparation of Monthly Accounts, improper maintenance of Asset register, etc were also noticed in the Report for the year ending March-2011, which was tabled before the Kerala Assembly today.

The Report said the LSGIs had completed only 30 per cent of the projects formulated during 2010-11. The Development Expenditure Fund to LSGIs funded from State Budget constituted 22 per cent of the State Plan Outlay. As against revenue of Rs 438.56 crore collected by LSGIs, the expenditure on establishment was Rs 464.06 crore. The share of GOI grant in the total receipts increased from nine per cent in 2006-07 to 16 per cent in 2010-11.

Out of Rs 1888.38 crore released by Government of India/State Government for Centrally Sponsored Schemes, an amount of Rs 670.94 crore was retained by SLNAs/PAUs according to the report.

The Report further stated there was no fair and transparent system for assessment of property tax in the Kochi corporation area. There were wide variations in computation of property tax for similar properties in the same area. The Corporation has no mechanism to watch the stage of construction relating to lapsed permits.

Due to dispensing with the need to obtain Occupancy Certificate issued by the Town Planning Section as the sole basis for getting water and electricity connection, a vital control mechanism to bring new buildings into tax net has been lost, the report said.

The collection of profession tax has suffered due to lack of comprehensive database. Profession tax was not being realised from traders/professionals in the Corporation area.

The report further stated inspections as laid down for monitoring and collection of Entertainment tax were also not being carried out.