Part IXA: The Municipalities

Article 243Z: Audit of Accounts of Municipalities

Original Article:

The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the Municipalities and the auditing of such accounts.

Amendments:

Article 243Z was introduced through the 74th Amendment Act, 1992, to ensure accountability in municipal financial operations.

Explanation:

This Article empowers State Legislatures to regulate the maintenance and auditing of municipal accounts. It emphasizes transparency, accountability, and proper financial management in urban governance.

Clause-by-Clause Explanation:

1. Maintenance of Accounts: Municipalities must maintain financial records as per the laws enacted by the State Legislature.
2. Auditing of Accounts: Independent audits ensure that municipal funds are used effectively and without corruption.

Real-Life Examples:

• The Tamil Nadu Local Fund Audit Act mandates annual audits of municipal accounts, ensuring accountability in cities like Chennai.
• In Kerala, regular audits revealed mismanagement in certain municipalities, prompting corrective actions and better fund utilization.

Debates and Deliberations:

During discussions on Article 243Z, members highlighted the need for transparency and accountability in municipal financial management.