LexThe Telangana State Audit Act, 1989.
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Open in Lexace · Ask the AI about this actTHE TELANGANA STATE AUDIT ACT, 1989.
(ACT NO. 9 OF 1989)
ARRANGEMENT OF SECTIONS
Sections
1. Short title, extent and commencement.
2. Definitions.
3. Appointment of Director.
4. Audit of Accounts.
5. Presentation of Accounts for Audit.
6. Production of documents and attendance of
persons for audit.
7. Furnishing of audit report.
8. Contents of audit report.
9. Procedure to be followed after furnishing the report.
10. Director to surcharge illegal payment or loss
caused by gross negligence or misconduct.
11. Director to submit audit and review report.
12. Penalties.
13. Officers and employees of the State Audit
Department to be public servants.
14. Protection of action taken in good faith.
15. Amendment of the Schedule.
16. Power to make rules.
17. Repeal of Ordinance 1 of 1989.
THE SCHEDULE.
THE TELANGANA STATE AUDIT ACT, 1989.1
ACT NO.9 OF 1989.
1. (1) This Act may be called the 2Telangana State Audit
Act, 1989.
(2) It extends to the whole of the State of 2Telangana.
(3) It shall be deemed to have come into force on the
7th January, 1989.
2. In this Act, unless the context otherwise requires—
(a) ‘audit’ means pre -audit, concurrent audit, post
audit, cent percent audit, resident audit, test audit, special
audit and such other examination of accounts as the
Government may from time to time, specify;
(b) ‘auditor’ means the Director of State Audit
appointed under section 3 and includes any other person
on whom all or any of the powers of the auditor under this
Act, are conferred;
3[(c) a Gram Panchayat, a township, a Manda l Praja
Parishad or a Zilla Praja Parishad constituted under the
Telangana Panchayat Raj Act, 2018.]
1. The Andhra Pradesh State Audit Act, 1989 received the assent of the
Governor on the 19th April, 1989. The said Act in force in the combined
State, as on 02.06.2014, has been adapted to the State of Telangana,
under section 101 of the Andhra Pradesh Reorganisation Act, 2014
(Central Act 6 of 2014) vide. the Telangana Adaptation of Laws Order,
2016, issued in G.O.Ms.No.45, Law (F) Department, dated 01.06.2016 .
2. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
3. Clause (c) is substituted for clauses (c) and (d) in section 2 by Act
No.5 of 2018.
Short title, extent
and
commencement.
Definitions.
2 [Act No. 9 of 1989]
(e) ‘Concurrent audit’ means a post audit of a day -to-
day accounts of a specified period, with a general review of
the accounts from time to time;
(f) ‘Director’ means the Director of State Audit
appointed under section 3;
(g) ‘fund’ means any fund the control and management
of which a local authority or other authority is legally entitled
to and includes any cess, rate, duty fee or tax leviable by,
and any property vested in, such authority;
(h) ‘Government’ means the Sta te Government of
4Telangana;
(i) ‘local authority’ means:—
(a) a municipal corporation constituted under the law
relating to municipal corporation for the time being in force;
(b) a municipal council constituted under the
5Telangana Municipalities Act, 1965;
6[(c) a gram panchayat, a township, a 7Mandal Praja
Parishad or a 7Zilla Praja Parishad constituted unde r the
8Telangana Panchayat Raj Act, 1994;]
4. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
5. Adapted by G.O.Ms.No.142, Municipal Adminis tration and Urban
Development (F2) Department, dated 29.10.2015.
6. Clauses (c) and (d) substituted as clause (c) by Act No.13 of 1994.
7. Substituted by Act No.41 of 2006.
8. Adapted by G.O.Ms.No.9, PR & RD (Mandal ) Department, dated
12.09.2014.
[Act No.9 of 1989] 3
(e) A market committee constituted under the
9Telangana (Agricultural Produce and Livestock) Market s
Act, 1966;
(f) Rashtra Karshaka Parishad, Commodities
Federations and Mandal Karshaka Parishads constituted
under the 10Andhra Pradesh Rashtra Karshaka Parishad and
Allied Bodies Act, 1988; and
(g) A Zilla Grandhalaya Samstha consti tuted under
the 11Telangana Public Libraries Act, 1960;
(j) ‘notification’ means a notification published in the
12Telangana Gazette and the word ‘notified’ shall be
construed accordingly;
(k) ‘post audit ’ means the detailed audit conducted
after the transactions are completed;
(I) ‘pre audit ’ means the preliminary au dit before
receiving the money or arranging the payments;
(m) ‘prescribed’ means prescribed by rules made
under this Act;
(n) ‘resident audit’ means concurrent or pre audit of
expenditure and review of receipts;
(o) ‘Schedule’ means the Schedule appended to this
Act;
9. Adapted by G.O.Ms.No.8, Agriculture & Cooperation (Marketing II)
Department, dated 02.08.2014.
10. This Act has been repealed by Act No.24 of 1991.
11. Adapted by G.O.Ms.No.35, School Education (Training) Department,
dated 21.12.2015.
12. Substituted by G.O.Ms.No.45, Law (F) Department, dated
01.06.2016.
4 [Act No. 9 of 1989]
(p) ‘Special Audit ’ means an audit of accounts
pertaining to a specified item or series of items requiring
thorough examination.
(q) ‘surcharge’ means the amount for which, the
auditor in exercise of powers vested in him under this Act,
makes a person liable for the loss, waste, misapplication or
misappropriation, of any money or other property belonging
to any local authority.
3. (1) There shall be appointed by the Government a
Director of State Audit to be incharge of the audit of the fund
of local authorities and other authorities specified in the
Schedule in the whole of the State hereinafter referred to as
'Director' and as many other persons as they consider
necessary to exercise the powers and perform the funct ions
of the Director under this Act in relation to such areas as
may be specified.
(2) The powers to be exercised and functions to be
performed by the Director shall be such as may be
prescribed.
(3) The Director shall exercise general control and
superintendence over the officers of the State Audit
Department in the performance of their functions under this
Act or the rules made thereunder.
(4) Notwithstanding anything in sub -section (1), the
Director of Local Fund Audit functioning before the
commencement of this Act, shall continue to be such
Director and function as such until a new Director is
appointed under sub-section (1) and the Department known
as the ‘Local Fund Audit Department ’ prior to the
commencement of this Act, shall here -in-after be known as
the ‘State Audit Department’.
Appointment of
Director.
[Act No.9 of 1989] 5
4. Notwithstanding anything in any other law for the time
being in force but without prejudice to the powers and
functions of the Comptroller and Auditor General (Duties,
powers and Conditions of service) Act, 1971, it shall be
lawful for the Director to conduct an audit in respect of any
local authority or any other authority specified in the
Schedule in the manner provided by or under this Act and to
recover the cost of audit in respect of such authorities as
may be specified by the Government, by order subject to
such rules as may be made in this behalf.
5. Every Chief Executive Officer shall present or cause to
be presented for audit all the accounts of the fund which he
administers annually within such period in such form and in
such manner as may be prescribed.
6. (1) for the purpose of any audit under this Act an
auditor may—
(a) require the Chief Executive Officer concerned in
writing the production, at the head office of the local
authority or ot her authority of such receipts, vouchers,
statements, returns, correspondence, notes or any other
documents in relation to the accounts as he may think fit;
(b) require in writing—
(i) any salaried employee of the local authority or
other authority accountable for or having the custody or
control of such receipts, vouchers, statements, returns,
correspondence, notes or other documents; or
(ii) any person having directly or indirectly by
himself or his partner any share or interest in any contract
with or under the local authority, or other authority to appear
in person or by an authorised agent before him at the head
Audit of Accounts.
Presentation of
Accounts for
Audit.
Production of
documents and
attendance of
persons for audit.
Central Act 56 of 1971.
6 [Act No. 9 of 1989]
office of the said authority and answer any question or sign
a declaration with respect thereto;
(c) in the event of an explanati on being required from
the Chief Executive Officer, invite such officer in writing
specifying the points on which his explanation is required to
meet him at the head office of such officer; or
(d) exercise such other powers as may be
prescribed.
(2) The auditor may fix a reasonable period of not less
than three days for the purpose of compliance of the
provisions of sub-section (1).
(3) The auditor shall give the local authority or other
authority not less than one week notice in writing of the date
on which he proposes to commence the audit:
Provided that for special reasons to be recorded in
writing the auditor may give a shorter notice than a week or
commence a special or detailed audit on the authority of the
Government or the Director without such notice.
7. The Director shall, as soon as practicable after the
completion of audit prepare a report on the accounts
audited and examined by him and send such report to the
concerned local authority or other authority i n such manner,
as may be prescribed.
8. The audit report shall contain a statement of—
(a) every payment which appears to him to be contrary
to law;
Furnishing of
audit report.
Contents of audit
report.
[Act No.9 of 1989] 7
(b) the amount of any deficiency, waste or loss which
appears to have been caused by the gross negligence or
misconduct of any person in the performance of his duties;
(c) the amount of any sum received which ought to
have been accounted but is not brought into account by any
person; and
(d) any material impropriety or irregularity which he
may observe in the expenditure or in the recovery of money
due.
9. (1) On receipt of the audit report under section 8, the
Chief Executive Officer shall remedy any defect or
irregularity which may have been pointed out in the report
and shall place the audit report, together with a statement of
action taken or proposed to be taken thereon and an
explanation in regard thereto before a meeting of the
concerned local authority or other authority specially
convened for the purpose within a period of two months
from the date of receipt o f the audit report. He shall also
within one month of the said meeting, send to the Director a
report of his having remedied the defects or irregularities, if
any pointed out in the audit report or shall, within the said
period, supply the Director any fur ther explanation in regard
to such defects or irregularities as the local authority or
other authority may wish to give.
(2) On receipt of such intimation or explanation, the
Director may, in respect of all or any of the matters referred
to in his report:-
(a) accept the explanation given by the Chief
Executive Officer;
(b) direct that the matter be further investigated at the
next audit or at any earlier date;
Procedure to be
followed after
furnishing the
report.
8 [Act No. 9 of 1989]
(c) hold that the defects or irregularities pointed out in
the audit report or any of them have not been removed or
remedied;
(d) condone any objection, the compliance of which
is not possible due to loss of records connected with its
disposal due to any natural calamity.
(3) Nothing in this section or in section 8 shall preclude
the Director at any time from bringing to the notice of the
Government for such action as he may consider necessary
any information which appears to him to support a
presumption of cr iminal misappropriation or fraud or which
in his opinion deserves special attention or immediate
investigation.
10. (1) The Director may disallow every item of expenditure
incurred contrary to law and surcharge the same on the
person incurring or authorising the incurring of, such
expenditure, and may charge against any person
responsible therefor the amount of any defi ciency, loss or
unprofitable outlay occasioned by the negligence or
misconduct of that person or of any sum which ought to
have been accounted but is not brought into account by
that person and shall, in every such case, certify the amount
due from such person.
Explanation:—It shall not be open to any person whose
negligence or misconduct has caused or contributed to any
such deficiency or loss, to contend that n otwithstanding his
negligence or misconduct the deficiency or loss would not
have occured, but for the negligence or misconduct of some
other person.
(2) The Director shall state in writing the reasons for his
decision in respect of every disallowance, surcharge or
charge and a copy of such decision shall be served on the
Director to
surcharge illegal
payment or loss
caused by gross
negligence or
misconduct.
[Act No.9 of 1989] 9
person against whom it is made in the manner laid down for
the service of summons in the C ode of Civil Procedure,
1908.
(3) Any person aggrieved by any disallowance,
surcharge or charge may, within sixty days after the date of
service on him of the decision of the Director either—
(a) make an application to the concerned principal
civil court of original jurisdiction to set aside such
disallowance, surcharge or charge and the Court, after
taking such evidence as is necessary may confirm, modify
or remit such disallowance, surcharge or charge with such
orders as to costs as it may think proper in the
circumstances; or
(b) in lieu of such application, may appeal to the
Government who shaIl pass such orders as they think fit.
(4) where an applica tion is made to the court under
clause (a) of sub -section (3), the Director shall be the sole
respondent thereto, and the applicant shall not make either
the Government or any other person a party to the
proceedings.
(5) From the decision of the court un der clause (a) of
sub-section (3), an appeal shall lie to the High Court.
(6) Every sum certified by the Director to be due from a
person under this Act shall be paid by such person to the
local authority or the other authority as the case may be,
within sixty days after the date of service on him of the
decision of the Director unless within that time such person
has made an application to the court or an appeal to the
Government against the decision, and such sum, if not so
paid, or such sum as the Cour t or the Government declare
Central Act V of 1908.
10 [Act No. 9 of 1989]
to be due, shall be recoverable as if it were an arrear of land
revenue.
11. (1) The Director shall submit annually a Consolidated
Audit and Review Report on the accounts of the local
authorities, or other authorities in such form and in such
manner as may be prescribe d and furnish the same to the
Government.
(2) The annual Consolidated Audit and Review Report
in respect of local authorities shall be laid on the table of the
Legislature.
12. (1) (a) Any person who wilfully neglects or refuses to
comply with any requisition lawfully made upon him under
clause (a) or clause (b) of sub -section (1) of section 6, shall
on conviction be punishable with fine which may extend to
five thousand rupees.
(b) Any person who is convicted under clause (a) fails
to comply with any such requisition shall be punishable for
each day after conviction during which he continues to
persist in his offence, with a fine not exceeding five hundred
rupees.
(2) No prosecution for any offence punish able under
this Act shall be instituted except with the previous sanction
of the Director.
(3) Before issuing such sanction under sub -section (2),
the Director shall give a reasonable opportunity to the
person against whom the proceedings are to be insti tuted,
to show cause why the sanction for such prosecution shall
not be given.
(4) No court inferior to that of a Magistrate of the First
Class shall try any offence punishable under this Act.
Director to submit
audit and review
report.
Penalties.
[Act No.9 of 1989] 11
13. The Director or any other person appointed to exercise
any of the powers or perform any of the functions under this
Act shall be deemed to be a public servant within the
meaning of section 21 of the Indian Penal Code, 1860.
14. No suit, prosecution or other legal proceedings shall
be instituted against the Director or any person acting under
the provisions of this Act for anything which is in good faith
done or intended to be done under this Act or under the
rules made thereunder.
15. The Government may by notification and for reasons to
be recorded therein, add any other authorities to or omit any
such authority from the Schedule and on the publication of
such notification such authority shall be de emed to be
included in, or as the case may be, omitted from the
schedule.
16. (1) The Government may by notification, make rules for
carrying out all or any of the purposes of this Act.
(2) Every rule made under this Act shall immediately
after it is made, be laid before the Legislature of the State, if
it is in session and if it is not in session, in the session
immediately following for a total period of fourteen days
which may be comprised in one session or in two
successive sessions, and if, before the expiration of the
session in which it is so laid or the session immediately
following the Legislature agrees in making any modification
in the rule or in the annulment of the rule, the rule shall, from
the date on which the mod ification or annulment is notified,
have effect only in such modified form or shall stand
annulled as the case may be so, however, that any such
modification or annulment shall be without prejudice to the
validity of anything previously done under that rule.
Officers and
employees of the
State Audit
Department to be
public servants.
Central Act 45 of 1860.
Protection of
action taken in
good faith.
Amendment of the
Schedule.
Power to make
rules.
12 [Act No. 9 of 1989]
17. The Andhra Pradesh State Audit Ordinan ce, 1989 is
hereby repealed.
Repeal of
Ordinance 1 of
1989.
[Act No.9 of 1989] 13
THE SCHEDULE
[see section 2(o)]
1. All Hi ndu Religious and Charitable Endowment s and
Institutions.
2. Tirumala Tirupathi Devasthanams.
3. Andhra Pradesh Wakf Board.
4. An University established or incorporated by State
enactment.
5. Andhra Pradesh Housing Board.
6. Integrated Tribal Development Agency and Tribal
Welfare Engineering Division.
7. An Urban Development Authority c onstituted under the
13Telangana Urban Areas (Development) Act, 1975.
8. District Rural Development Agencies.
9. A Society for Training and Employment Promo tion in
the State.
10. Co-operative Societies registered or deemed to be
registered under the 14Telangana Co-operative Societies
Act, 1964.
11. Andhra Pradesh Employees Welfare Fund.
13. Adapted by G.O.Ms.No.148, Municipal Administration & Urban
Development (M1) Department, dated 31.10.2015.
14. Adapted by G.O.Ms.No.53, Agriculture & Cooperation (Coop.II)
Department, dated 20.05.2016.
14 [Act No. 9 of 1989]
12. All Private Engineering Colleges receiving grant -in-aid
from the Government.
13. All Aided Colleges and Schools other than Government
Colleges and Schools.
14. All Polytechnics, receiving aid from the Government.
15. Aided Women Hostels and other Institutions other than
Government under the Women Welfare Department.
16. Telugu and Urdu Academies.
17. Ravindra Bharathi.
18. All Official Receivers.
19. Parakala Seshavatharam Andhra Pradesh State
Chamber of Panchayati Raj.
20. All District Chambers of Panchayati Raj.
21. Medical Lending Libraries at Visakhapatnam, East
Godavari, Guntur, Chittoor, Kurnool and Warangal Districts.
22. District Sailors and Soldiers Board at East Godavari,
West Godavari, Krishna, Guntur, Nellore, Chittoor,
Anantapur, Cuddapah, Kurnool and Rangareddy Districts.
23. T. B. Sanitorium in Chittoor District.
24. Prize Endowments in East Godavari, Chittoor and
Anantapur Districts.
25. N. C. C. Trophy, Anantapur.
26. District Leprosy Fund, Anantapur.
[Act No.9 of 1989] 15
27. Andhra Pradesh Medical Council, Hyderabad.
28. Andhra Pradesh Medical Pharmacy C ouncil,
Hyderabad.
29. Andhra Pradesh Residential Educational Institutions
Society, Hyderabad.
30. Official Trustee, Hyderabad.
31. Andhra Pradesh Bhoodana Yagna Board, Hyderabad.
32. Aradhana Magazine.
33. Andhra Pradesh State Council of Higher Education.
34. Andhra Pradesh Dental Council.
* * *