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INDIAN BARE ACTS

ANDHRA PRADESH STATE AUDIT RULES 2000

 
RULES SUPPLEMENT TO PART – I
The Andhra Pradesh State Legislative Assembly ...

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EXTRAORDINARY 
OF 
THE ANDHRA PRADESH GAZETTE 
PUBLISHED BY AUTHORITY 
 No. 36 HYDERABAD, MONDAY, SEPTEMBER 25, 2000 

NOTIFICATIONS BY GOVERNMENT 
 * * * 

 FINANCE AND PLANNING DEPARTMENT 
 ( F.W. Admn - II )
RULES RELATING TO ANDHRA PRADESH STATE AUDIT ACT, 1989. 
( G.O.Ms. No. 130, Finance and Planning (FW.Admn.II),8
th
 September,2000 ) 
ORDER: 

 In exercise of the powers conferred by sub-section (1) of section – 16 of the 
Andhra Pradesh State Audit Act, 1989 (Act No.9 of 1989), the Governor of Andhra 
Pradesh hereby makes the following rules. 
(RULES) 
1. Short Title and commencement: - (1) These rules may be called the Andhra 
 Pradesh State Audit Rules, 2000. 
(2) These rules shall come into force at once. 
2. Definitions: - In these rules unless the context otherwise requires, 
 (a) ‘Act’ means the Andhra Pradesh State Audit Act, 1989 
 (b) “Group basis audit ‘in relation to audit means conduct of audit of a group of 
 Local or other Authorities by a group of Auditors., 
 (c) ‘Illegal Payments’ means all the payments referred to in sections 8 and 10 and 
 read with correspondingly in theses rules. 
 (d) ‘Other Authority’ means the authorities specified in the schedule appended to 
 the Act. (e) ‘review’ means check by higher authority wherever necessary in respect 
 of the audit work done by an Auditor or Auditors who conduct the basic 
 work on items most susceptible of misapplication of rules or orders which 
 lead to illegal payments. 
 (f) ‘Special letter’ means the letter or letters containing the list of audit objections 
 of surchargeable nature, 

 (g) ‘Surcharge Certificate’ means the certificate by which the charge or the 
 liability of a surchargee is communicated. 
 (h) The words and expressions used in these rules but not defined shall have the 
 same meaning assigned to them in the Andhra Pradesh State Audit Act, 1989. 
 3. Powers and Functions of the Director:- (1) The Director shall, in addition to 
 the powers vested in him under the Act, and the rules made there under, 
 exercise the powers and perform the functions of the Head of the Department 
 under the various rules, codes and orders of the Government. 
(2).The Director may inspect the accounts of Local Authorities and other 
 Authorities specified in the Schedule. 
 (3) The Director may condone the audit of accounts of any Local Authority or 
 other Authority, where the audit is not possible due to loss of records on 
 account of floods, fire and theft and other natural calamities in consultation 
 with the heads of Administrative Departments of the Local Authorities or 
 other Authorities concerned. 
(4) The Director shall have to power to initiate disciplinary action against the 
 authorities who are found negligent in enforcing and misusing the powers 
 under the provisions of the Act and the rules and they are liable for 
 disciplinary action in accordance with the procedure laid down in the Andhra 
 Pradesh Civil Services ( CCA ) Rules, 1991: 
 Provided that in the cases where the Government is the disciplinary authority, 
 such cases shall be referred to the Government for taking disciplinary action 
 as per the Andhra Pradesh Civil Services ( CCA ) Rules, 1991: 
 Provided further that the disciplinary cases pending as on the date of 
 commencement of these rules shall be finalized by the Director as per these 
 rules. (5) The Director may call for all the files including the files relating to 
 confidential 
 nature which are not produced to auditors, by the Chief Executive Officer and 
 deal with them in accordance with the standing instructions for the handling 
 and custody of such documents issued from time to time in this regard. 
 (6) In respect of non-notified Gram Panchayats and other authorities of smaller 
 transactions, and where the individual audit or group basis audit to such 
 authority by an Auditor for audit is not considered desirable or feasible in 
 terms of time spent on transits etc.., the Director may through his Subordinate 
 Staff organize to conduct the audit of the said authorities on group basis, at 
 Mandal Headquarters or at such other places as Specified. The responsibility 
 for making available the records at Mandal Headquarters or at the specified 
 places shall continue to rest with the Chief Executive Authority concerned. 
 The Authority or the Authorities having the administrative control over the 
 said Local or other Authorities shall take all necessary measures to ensure 
 production of all records as desired by the auditors. 
(7) If any difficulty arises in enforcing the various provisions of these rules, unless 
 they require orders from the Government, the same can be clarified by the 
 Director. 
 4. Procedure for conduct of Audit:- (1) The Director shall arrange to conduct 
 the audit of any Local authority and other authorities specified in the 
 Schedule to the Act in the manner indicated below: 
(i) Post – Audit of the accounts of local authorities other than those falling 
under Section 6 (a) of the Andhra Pradesh Charitable and Hindu Religious 
institutions and Endowments Act,1987. 
(ii) Concurrent audit of the accounts of Hindu Religious and Charitable 
Endowments and institutions falling under Section-6 (a) of Andhra Pradesh 
Charitable and Hindu Religious institutions and Endowments Act,1987. 
 (2) The Director may with permission of Government change the type of audit of 
 any local authority of other authorities. 
 (3) The Director may arrange concurrent audit of the institutions working under 
 the Tirumala Tirupathi Devasthanams in addition to post-Audit in consultation 
 with the Chief Executive officer, Tirumala Tirupathi Devasthanams. 
 (4) Where it is found necessary on account of special circumstances, the Director 
 may arrange Special audit of the accounts of the local authority and other 
 authorities specified in the schedule to the Act. 
 (5) The Director may also arrange Pre-audit of the Local authority or other 
 authorities with the permission of Government. (6) The Director shall arrange to complete the Audit of accounts of local authority 
 and other authorities, after receipt of accounts and related records, in a 
 reasonable time not exceeding two years from the date of receipt of accounts 
 and records. If the audit could not be completed within the said period, he shall 
 report forthwith to the Government in Finance Department, explaining the 
 reasons and the circumstances therefore. 
 5. Preparation and Furnishing Accounts:- (1) Every Chief Executive Officer 
 shall prepare an Annual Account in the form prescribed, under the respective 
 Acts, rules Statutes or any other order of the Government and where such form 
 is not prescribed in respect of any Local Authority or other Authority, in the 
 form prescribed by the Director and send a copy of it to the Auditor authorized 
 by the Director. 
 (2) A copy of the Annual Account referred to in sub-rule (1) shall be sent 
 within the time specified, under the respective Acts or Rules or Statutes and 
 where a time limit is not specified in respect of any Local Authority, it shall be 
 submitted by 31
st
 of May of the succeeding Financial year. 
 (3) The failure on the part of any Chief Executive Officer to produce the 
 accounts for Audit within the time stipulated in accordance with the provisions 
 of the Acts or rules or to get the audit completed without following the 
 procedure, amounts to negligence and punishable under Section12 of the Act. 
 Authority (4) The Government shall have the right to impose a cut or 
 withhold the release of grants, if the Local or other authorities fails to submit 
 their utilization Certificates without valid reasons. 
 6.Production of Records to Audit:-(1) The auditor shall give notice to the 
 Authority before the commencement of audit. During the course of audit, the 
 auditor may indicate in writing the nature of information and the kind of 
 documents, registers and records which are necessary or the explanation for 
 the purpose of audit, through a half margin letter. The person or the authority 
 to whom such requisition is made shall comply with the requirements. 
 (2) The persons who are being addressed with the half margin letters shall be 
 either the persons who are having custody or control of the information called 
 for and accountable to it or he must be the chief executive authority. 
 (3) The person or persons called upon to furnish the information by the 
 auditor shall sign the letter issued by the Auditor in token of having 
 acknowledged the same. 
 (4) Any person who fails to comply with any requisition under this rule shall 
 be punishable under Section 12 of the Act. 7. Submission, Approval and issue of audit reports:- (1) The Director may 
 authorize any of his or her subordinates to prepare a report on the accounts 
 audited, registers, examined and to send such report after approval, to the 
 concerned local authority or other authorities. 
 (2).The Auditor who audited the accounts shall prepare and submit the audit 
 report to the officers noted in column (2) who in turn shall approved and issue 
 the reports to the authority noted in column (3) as mentioned in the table 
 below. 
TABLE
Sl.No. Designation of the 
Officer. 
Name of the Local Authority or other authority. 
(1) (2) (3) 
 1 Regional Deputy 
Director/ Deputy 
Director 
Zilla Parishads, Municipal Corporations, Tirumala 
Tirupathi Devasthanams, Urban Development 
authorities, District Rural Development Agencies 
and Universities. 
 2 Deputy Director. 
( Directorate ) 
A.P. Housing Board, Hyderabad. A.P. Employees 
Welfare Fund. 
 3 Audit Officer. Local Authority or other Authority other than those 
mentioned in items (1) and (2) above. 

 Provided that the Director may authorise any of his subordinate 
 authorities to approve and issue reports of any Local authority or other 
 Authorities in the manner other than that provided above. 
(3) Every auditor who completes the audit shall submit the report to the 
authority as specified in sub-rule (2). Where the institution is reviewed with 
reference to the said report, the reviewing authority shall submit the report 
after the completion of the review. The responsibility for submission of the 
report shall therefore lie on the reviewing authority wherever such review is 
conducted. 
(4) (a) Not with standing anything contained in the A.P. Travelling 
Allowances Rules, A.P. Finance Code and the A.P. Treasury Code, if no 
reports are submitted within a period of 45 days from the last day of the 
month in which audit was conducted, and by the reviewing authority within a 
period of 15 days from the date of completion of such review, the auditor or 
the reviewing authority as the case may be shall not automatically be entitled 
for the full pay and allowances, travelling allowances and daily allowances for 
the said period of audit or of the review. The pay and allowances, travelling 
allowances and daily allowances for the said periods, if drawn, shall be 
recoverable from them and remitted to State Funds at such percentage rates, and the period spent on audit shall be subjected to such treatment as specified 
in Sub-Rule (5). 
Provided that in case of reports pending as on the date of issue of these 
rules, the period of two months shall be computed from the date of coming 
into force of these rules. 
Provided further that the Draft audit reports returned with objections by 
the competent authority for rectification of defects shall be resubmitted within 
a period of seven days from the date on which the Auditor receives such 
reports. If the reports are further returned for rectification, such returned 
reports shall be resubmitted within a period of three days from the date of 
receipt. If such reports are still found to be not free from the objections as 
earlier noticed they are is liable for penal action according to sub-rule (4) 
thereof. The competent authority to issue orders imposing the penalty is the 
authority next above the authorised to approve the reports. 

(b) The Director may with specific reasons to be recorded in writing and in 
exceptional cases, grant extra time, for submission of the reports. 
 (5) (a)The rate of recovery of the amount mentioned in sub-rule (4) shall be 
(i) at 100% of the traveling allowance, Daily Allowance, if the reports are 
not submitted within the stipulated period including the extended 
period under sub-rule (4). 
(ii) at 100% of the traveling allowance, Daily Allowance and 50% of Pay 
and Allowances if they are not submitted in the period of ten (10) 
days from the day of the expiry of the said period including the 
extended period, and 
(iii) at 100% of the traveling allowance, Daily Allowance and Pay and 
Allowances if the Reports are not submitted within a period of five (5) 
days thereafter. 
(b) Where 100% recovery of traveling allowance and Daily Allowance alone, 
has been imposed, there shall be no effect on the period spent on duty. Where 
50% recovery on pay and allowances alone, has been effected, the first half of 
the period spent on audit shall be treated as non-duty and where 100% 
recovery of traveling allowance, Daily allowance and pay Allowances, has 
been effected, the entire periods of audit shall be treated as non-duty. Fraction 
of a day equal to 0.5 shall be treated as one day. If the month and the number 
of days spent on audit are not verifiable the days as ascertained from the 
observed data/work-norms including the transit days for the particular Local 
or other authority and the month or months from the beginning of the second quarter of the Accounting year following the one to which the pending report 
relates, shall be adopted. 
 Provided that where recovery has been 100% of travelling allowance, 
Daily Allowance and Pay and Allowances and that the chances of submission 
of reports are remote or unlikely to be obtainable even after a reasonable time 
of 30 days, the entire period spent on audit or the review as the case may be 
shall be treated as “Dies non” and the institutions whose reports could not be 
obtained as such be ordered in the circumstances for re-audit under the 
written orders of the Director, and the auditor subjected to further disciplinary 
action. 
Note: 1. Where an institution has been audited by a team of auditors headed 
by an Assistant Audit Officer or by senior most of them, the audit notes 
obtained from an auditor, shall be treated as a report for purpose of the rule -7 
and the report of the institution composed of the said notes of all the 
Auditors including that of the head of the audit party, shall be so treated for 
the purpose of the said rule. However the delay in submission of the report of 
the Institution on account of delay in obtaining the notes shall lie on the head 
of the team only, if work distribution among auditors is found to be 
unscientific or uneven. 
Note: 2. When more than one Institution has been audited on a single day by 
an auditor or team of auditors, the reports of all the institutions, audited shall 
be treated as one single report due from an auditor or team of auditors for 
purpose of rule-7. 
(6). The Director before issue of orders under the proviso to sub-rule-(5), shall 
take into account such factors which throw light on the circumstances under 
which an auditor was unable to submit the reports and where the nonsubmission was reasonable to be considered he may consider postponing to a 
reasonable time for the issue of such orders, and in the public interest also, he 
shall pass such orders. 
(7) Where the period of audit has been treated as non-duty under sub-rule (5) 
and where an Auditor applied for sanction of leave to which he is entitled, he 
may be sanctioned with such leave following the leave rules or the 
Fundamental Rules by which such Auditor or Auditors are governed. 
(8) All Audit reports on approval by the competent authority shall within the 
time as prescribed by the Director, be communicated to the Chief Executive 
authority or concerned Local Authority or other Authority along with Special 
Letter by Registered Post With Acknowledgement due containing all items of 
objections which fall under the purview of clause (a) of sub-rule (4) 0f rule-9. Provided further that such Special letter containing the Surchargeable 
audit objections, shall be issued by Registered Post with Acknowledgement 
due to all prospective surcharges individually. 
 Provided further that in the event of the non-availability of required 
information for fixing responsibility and accountability, the District Collector 
shall conduct enquiry and furnish details of the loss caused and of the person 
or persons responsible thereof, within a period not exceeding six months. 
 (9) Failure to conduct audit and submit audit report within the stipulated 
time shall be construed as willful absence from duty and shall be dealt with in 
accordance with the provisions of F.R. 18. 
8.Follow up Action on Audit Reports and Settlement of Objections:- (1) On 
receipt of the audit report the Chief Executive Officer concerned shall submit, 
a report within a period of two months from the date of receipt of the audit 
report rectifying all the defects pointed out in the report and within four 
months from the date of receipt of Special letter mentioned in sub-rule (9) of 
Rule-7, a report of having rectified the defects pointed out in the said audit 
report and in the Special letter, to the officer who issued the Audit Report and 
the Special letter. 
(2) On receipt of the report from the Chief Executive Officer, the 
Director or Authority authorised by him for the purpose, shall take up a 
further examination of the report under clauses (a), (b) and (c) of sub-section 
(2) of section 9 of Act. 
(3) The Director may under clause (d) of sub-section (2) of section 9 of 
the Act condone any objection wherein the compliance of which is not 
possible due to loss of records connected with its disposal due to any natural 
calamity. 
(4) The Director, if he considered that any case which appears to 
support a presumption of criminal misappropriation of fraud deserving 
special attention or immediate investigation, he shall bring to the notice of the 
Government for such action as they consider necessary. 
 9.Initiating Surcharge Proceedings, Appeal and the Recovery:- (1) (a) under 
section -10 of the Act, the Director is empowered for initiating surcharge 
proceedings against the persons responsible for causing loss to the funds of 
Local Authorities or other authorities. 
(b) The powers of Director under section 10 of the Act, shall also be 
exercised by the authorities Specified in column (2) in respect of the Local 
authority or other Authority specified in the corresponding entry in column (3) 
of the table given hereunder. TABLE 
Sl. 
No. 
Name of the 
Authority. 
Name of the Local / other Authority 
1 2 3 
 1 Regional 
Deputy 
Director 
 1. All Hindu Religious and Charitable endowments and 
 Institutions whose Executive Authorities are in the rank 
 of Deputy Commissioner and above except Tirumala 
 Tirupathi Devasthanams. 
 2. All Private Engineering Colleges receiving grants-in aid 
 from the Government. 
 3. All aided Colleges and Schools other than Government 
 Colleges and Schools. 
 4. All Polytechnics receiving aid from the Government. 
 5. Municipal Councils (Special grade and selection grade). 
 6. Mandal Parishads. 
 7. Zilla Grandalaya Samsthas constituted under the A.P. 
 Public Libraries Act, 1960. 
 8. Agricultural Market Committees. 

2 Audit Officer. 1. Gram Panchayats. 
2. Municipal Councils (up to and inclusive of first Grade) 
 including notified Area Committees. 
 3. All Hindu Religious and Charitable endowments and 
 Institutions whose Executive Authorities are in the rank 
 less than that of Deputy Commissioner. 
4 Andhra Pradesh Employees Welfare Fund. 
5. Aided Women Hostels and other institutions other than 
 Government under the welfare Department. 
6. All Official Receivers. 
7. All District Chambers of Panchayat Raj. 
8. Medical lending Libraries at Visakhapatnam, Chittoor, 
East Godawari, Guntur, Kurnool and Warangal. 
9. District Sailors and Soldiers Board at East Godawari, 
West Godawari, Krishna Guntur, Nellore, Chittoor, 
Anatapur, Cuddapah, Kurnool and Ranga Reddy 
Districts. 
10. T.B. Sanitorium in Chittoor District. 
11. Prize Endowments in East Godawari, Chittoor and 
Anantapur Districts. 
12. N.C.C. Trophy, Anantapur. 
13. District Leprosy Fund, Anantapur. 
14. Andhra Pradesh Medical council, Hyderabad. 
15. Andhra Pradesh Medical Pharmacy council, Hyderabad. 
16. Official Trustee, Hyderabad. 17. Andhra Pradesh Bhoodana Yagna Board, Hyderabad. 
18. Aradhana magazine. 
19. Andhra Pradesh Dental Council. 
(2) The objections of the Audit report which are not rectified under 
clause (c) of Sub-Section (2) of Section 9 of the Act read with Sub-rule (2) 
of rule 8 of these rules, which had been included in the body of special letter 
under sub-rule (9) of Rule-7, shall be subject to surcharge under section -10 
of the Act. 
Provided that the objections raised and pending in the audit reports of 
Gram Panchayats, Mandal Parishads, Zilla Parishads, Agricultural Market 
Committees and Zilla grandalaya Samsthas, as on the date of commencement 
of these rules and also those objections on which surcharge was not barred by 
the limitation, if any, under the existing provisions, shall continue to be 
subjected to surcharge proceedings even after these rules came into force. 
(3) (a) The onus for production of records for audit shall lie on the 
Chief Executive authority concerned, under rule-6 and if the records are not 
produced willfully the same shall be subject to surcharge proceedings under 
sub-rule (2) above. The Chief Executive authority shall produce the records 
within four months as specified in sub-rule (1) of Rule-8 for compliance. 
Failure to produce records within the time prescribed shall be liable for 
surcharge proceedings. 
(b) The special letter or letter wherever required shall be caused to be reissued in the same manner as was provided for in the first proviso to sub-rule 
(9) of rule-7 after audit on subsequent production of records. The report to be 
submitted after such audit or review shall be deemed to be a report and to 
form part of original report, for purpose of various other provisions of rule-7. 
Note: Report and the special letter or letters consequent to conducting of 
special audit shall also be treated in the same manner as the report and the 
special letter or letters covered in clause (b) of sub-rule (3). 
(4) (a) Auditor may disallow every item contrary to law and surcharge 
the same on the person making or authorizing the making of the illegal 
payments and may charge against any deficiency, loss or unprofitable outlay 
incurred by the negligence or misconduct of the person or of any sum which 
ought to have been, but is not ,brought to account , by that person and shall in 
every case, certify the amount due from such person, and cause to serve his 
decision to Surcharge in the form of Surcharge Certificate by Register Post 
with Acknowledgement due, to the person against whom it was made. (b) The auditor shall state in writing the reasons for his decision in 
respect of every such disallowance, surcharge or charge and serve the 
Surcharge Certificate in the manner laid down for the service of summons in 
the code of Civil Procedure, 1908. 
(c) If the person to whom the Surcharge Certificate has been sent by 
Register Post with Acknowledgement due, refuses to receive it, he shall 
nevertheless be deemed to have been duly furnished or issued with a copy of 
the certificate within the meaning of clause (a) of sub-rule (4) and the period 
of sixty days fixed in sub-rule (5) and (8) shall be calculated from the date of 
such refusal. 
Explanation: I. For purpose of clause (a) sub-rule (4), the person making or 
authorising to make of the illegal payments, is the person, who on his own 
acts or neglects or makes a final decision leading to illegal payments. Person 
who is authorized to draw the funds and disburse unless he himself is a party 
to such decision, is not necessarily the person charged with authorising or 
making such payments. Person who raises the claim on account of pay and 
allowances leading to illegal payments or in the alternative a person who fails 
to initiate corrective measures for stopping and for recovering the said illegal 
payments, are the persons said to be authorising such payments. But the 
person who raises the claim of such allowances on account of the express 
orders of some other authority is not the person said to be authorising such 
payments. Person making payments or responsible for deficiency, loss or 
waste etc.., originating from his own neglect, misconduct or misinterpretation 
of the provisions, viewed in terms of the relevant provisions of the Act, rules 
or orders governing the Local Authority or Other Authority concerned, is said 
to be the person authorising such illegal payments, deficiencies etc. 
Explanation: II. When there is more than one person charged to have 
authorised or made illegal payments, all such persons shall be equally treated 
for purpose of clause (a) of Sub-rule (3). 
Explanation: III. 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 not withstanding his negligence or misconduct, the deficiency or 
loss would not have occurred but for the negligence or misconduct of other 
person. 
(5) Every person aggrieved by any disallowance surcharge, or charge , 
may within sixty days after the date of service on him of the Surcharge 
Certificate issued by the Auditor either:- 
(a) File an appeal before the Government who shall pass such orders as 
it deems fit. 
 OR 
 (b) Make an application to the concerned Principal Civil Court of 
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; 
 (c) The orders passed by the respective appellate authority shall be final. 
 (d) From the decision of the Court under clause (b) of sub-rule (5) an 
appeal shall lie to the High Court. 
(6) Where an application is made in the Court under Clause (b) of sub-rule 
(5) or an appeal made under Clause (d) ibid, the authority who issued the 
surcharge under clause (a) or as the case may be under clause (b) of sub-rule 
(1) shall be the sole respondent thereto, and the applicant shall not make either 
the Government or any other person a party to the proceedings. 
 (7) Notwithstanding the requirement under the first and second provisos 
to sub-rule (9) of rule -7, that the special letter or letters be sent by Register 
Post with Acknowledgement due, the Surcharge shall not be appealed under 
sub-rule (5) on the ground that the said letter or letters were not received by 
him nor acknowledged by him. It shall however be open for him to contest or 
appeal on the contents of the Surcharge Certificates so received by him with 
reference to the objection or objections the copy of which has already been 
available in the audit report sent to the Chief Executive Authority concerned 
under sub-rule (9) of Rule-7. However in case a copy of the objection on 
which Surcharge was served, is required to be supplied, the authority who 
issued the surcharge shall forthwith supply such copy. 
 (8) Every sum certified by the Director or other authority subordinate to 
him, to be due from a person under these rules shall be paid by such person in 
the nearest Government treasury or in the office of the Local Authority or 
other Authority as the case may be within sixty days after the date of service 
on him of the Surcharge Certificate issued by the Director or other Authority 
subordinate to him and unless within that time such person has made an 
application or an appeal to the authorities mentioned in sub-rule (5), against 
the Surcharge Certificate, such sum, if not paid, or such sum as the said 
authorities declare to be due, shall be recoverable as if it were arrear of land 
revenue. 
 (9) All payments within the meaning of sub-rule (8) shall be reported to 
the authority who issued the Surcharge Certificate, by the Chief Executive 
Authority or the Surchargee soon after such payments are made. Copies of all 
surcharge certificates on which no action has been taken for recovery under sub-rule (8) shall be communicated to the District Collector concerned, by the 
surcharge issuing authority, for initiating action for recovery as if they were 
the arrears of land revenue. The Collector shall send the particulars of the said 
recovery to the said surcharge issuing authority. The District Collector shall 
designate field level officers concerned of Local authorities or other 
Authorities for filing Execution Petitions and attending to other matters 
related thereto. 
10. Furnishing of Audit Reports:- The Director shall submit annually a 
consolidated Audit Report and review report on the accounts of the Local 
authorities or other authorities in such form and in such manner as he thinks 
fit or as may be prescribed by the Government and furnish the same to the 
Government. 
11. Preservation of Audit Reports: Audit Reports issued to the Chief 
Executive Authorities, are the records of permanent nature, unless orders have 
been issued by the Director for destruction. The entire responsibility for their 
preservation shall rest with the auditors in charge of the audit of the Local 
authorities or other authorities under the supervision of the officer 
immediately superior to them. Auditors or authorities who found guilty of 
violation of this rule shall suitably be dealt with under the relevant provisions 
of the law or the rules. 
12. Saving:- Consequent on framing of these rules, the matters relating to 
audit, settlement of audit objections, surcharge and disallowance covered in 
any provisions of the rules and the Acts of the Local Authorities or other 
Authorities, shall to the extent they are not consistent with these rules and the 
Act, be deemed to have ceased to be in force from the date of coming in to 
force of these rules, and all orders, rules, amendments or enactments 
proposed to be made and bearing on the provisions of the Act and these rules, 
shall be made only in consultation with the Government in Finance 
Department. 
 S.K. ARORA, 
 Principal Secretary to Government. 
 A. P. State Audit Act 1989 
The following Act of the Andhra Pradesh Legislative 
Assembly received the assent of the Governor on the 
19
th
 April, 1989 and the said assent is hereby first 
published on the 20
th
 April, 1989 in the Andhra 
Pradesh Gazette for general information: 
Act No. 9 of 1989 
An act to authorize the Director of State Audit to Audit the 
Accounts relating to Local Authorities or other Authorities and 
for matters connected therewith or incidental thereto. 
 Be it enacted by the Legislative Assembly of the State of 
 Andhra Pradesh in the Fortieth Year of the Republic of 
 India as follows:- 
1. (1) This Act may be called the Andhra Pradesh State 
 Audit Act,1989. 
 (2). It extends to the whole of the State of Andhra 
 Pradesh 
 (3). It shall be deemed to have come into force on the 7
th

 January, 1989. 
2. In this Act, unless the context otherwise requires:- 
(a) ‘audit’ means pre-audit, current audit, post audit, cent 
p percent audit, resident audit, test audit, Special audit and 
s 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 persons on whom all 
or any of the powers of the auditor under this Act, are 
conferred; 
 (c) ‘cent percent audit’ means a post audit of all the 
Short title, extent and 
Commencement. transactions of a particular account of specified period; 
 (d) ‘Chief Executive Officer’ means the officer or
 authority vested with powers to administer the fund of 
 Local authority or any other authority specified in the 
 Schedule(herein after referred to as other authority)and 
 includes every officer by whatever designation know 
 dealing with such local authority or other authority; 
 (e) ‘Concurrent audit’ means a post audit of a day-to-day 
 accounts of 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 State Government of Andhra 
 Pradesh; 
 (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 Andhra 
 Pradesh Municipalities Act, 1965; 
(c) a Mandal Praja Parishad, a Zilla Praja Parishad or Zilla 
 Abhivrudhi Sameeksha Mandali constituted under the Andhra 
 Pradesh Mandala Praja Parishads, Zilla Praja Parishads and 
 Zilla Abhivrudhi Sameeksha Mandals Act, 1986; 
(d) a Gram panchayat or a township constituted under 
 the Andhra Pradesh Gram Panchayats Act, 1964; 
(e) A market committee constituted under the Andhra Pradesh 
 (agricultural produce and Livestock)Market Act,1966; 
(f) Rashtra Karshaka Parishads, Commodities Federations and 
 Mandal Karshaka Parishads constituted under the Andhra Pradesh Rashtra Karshaka Parishad and Allied Bodies Act, 
 1988; and 
(g) A Zilla Grandalaya Samstha constituted under the 
 Andhra Pradesh Public Libraries Act,1960; 
(j) ‘notification’ means a notification published in the Andhra 
 Pradesh Gazette and the work ‘notified’ shall be construed 
 accordingly; 
(k)‘post audit’ means the detailed audit conducted after the 
 transactions are completed; 
(l)‘pre audit’ means the preliminary audit 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; 
(p)‘special audit’ means an audit of accounts pertaining 
 to a specified item or series of items required 
 through 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 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 functions 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 

 Appointment of 
 Director Department in the performance of their functions under this 
 Act or the rules made there under. 
 (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’. 
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 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 
other authority of such receipts, vouchers, statements, returns, 
correspondence, notes or other documents in relation to the 
accounts 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 
 Audit of Accounts 
 Central Act 56 of 1971 
 Presentation of 
 Accounts for Audit. 
Production of documents 
and attendance of 
persons for Audit. authorized agent before him at the head office of the said 
authority and answer any question or sign a declaration with 
respect thereto; 
(c) in the event of an explanation 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 purposes of compliance of the provisions of subsection (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 with out 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 in 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; 
 (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 
 Furnishing Audit 
 Report 

 Contents of Audit 
 Report. 
 Procedure to be 
 Followed after 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 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 of 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 further 
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 any earlier date; 
 (c) hold that the defects of 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 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 criminal 
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 authorizing the incurring of such expenditure, and 
may charge against any person responsible therefore the 
amount of any deficiency, 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 
 Furnishing the report. 
 Director to surcharge 
 illegal payment or loss 
 caused by gross 
 negligence or 
 misconduct. 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 notwithstanding his 
negligence of misconduct the deficiency or loss would not 
have occurred, 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 to such decision shall be served on the person against 
whom it is made in the manner laid down for the service of 
summons in the Code of Civil Procedure, 1908. 
(3) Any person aggrieved by any disallowance, surcharge or 
charge may, within 60 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 shall pass such orders as they think fit. 
(4) Where an application 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 under 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 Court or Government declare to be due, shall be 
recoverable as if it were an arrear of land revenue. Central Act V of 1908. 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 from and in such manner as may be 
prescribed 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 
Legislative Assembly. 
12.(1) (a) Any person who willfully 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 requisites shall be 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 punishable 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 reasonable opportunity to the person 
against whom the proceedings are to be instituted, 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. 
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 with in 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 therin, add any other authorities to or omit any such 
 Director to submit audit 
 and review report. 
 Penalties 
 Officers and employees 
 of the State Audit 
 Department to be public 
 servants Central Act of 
 1860. 
 Protection of action 
 taken in good faith. 
 Amendment of the 
 Schedule. authority from the Schedule and on the publication of such 
notification such authority shall be deemed 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 purpose of this Act. 
 (2) Every rule made under this Act shall immediately after it 
is made be laid before the legislative Assembly of the State if 
it is in sessions, 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 
Legislative Assembly agrees in making any modification in 
the rule or in the annulment of the rule, the rule shall, from the 
date on which the modification or annulment is notified, have 
effect only in such modified from or shall stand annulled as 
the case may be so, however, that any such modification or 
annulment shall be without prejudice to the validity or 
anything previously done under that rule. 
17. The Andhra Pradesh State Audit Ordinance,1989 is hereby 
repealed. 
Power to make rules. 
 Repeal of ordinance 
 1 of 1989. 
THE SCHEDULE 
[See Section 2 (0) ] 
1. All Hindu Religious and Charitable Endowments and Institutions. 
2. Titrumala Tirupathi Devasthanams. 
3. Andhra Pradesh Wakf Board. 
4. An University established or incorporated by State enactment. 
5. Andhra Pradesh Housing Board. 
6. Only preaudit of Integrated Tribal Development Agency and Engineering 
Division. 
 ( G.O. Ms.No.115 Fin & Plg; dated 26-4-1995 ) 7. An Urban Development Authority Constituted under the Andhra Pradesh 
Urban 
 (Development) Act, 1975. 
8. District Rural Development Agencies. 
9. A Society for Training and Employment Promotion in the State. 
10. Andhra Pradesh Employees Welfare Fund. 
11. All Private engineering Colleges receiving grant-in-aid from the 
Government. 
12. All Aided Colleges and Schools other than Government Colleges and Schools. 
13. All Polytechnics, receiving aid from the Government. 
14. Aided Women Hostels and other institutions other than Government under 
the Women 
 Welfare Department. 
15. Telugu and Urdu Academies. 
16. Ravindra Bharathi. 
17. All Official Receivers. 
18. Parakala Seshavatharam Andhra Pradesh State Chamber of Panchayati Raj. 
19. All District Chambers of Panchayati Raj. 
20. Medical Lending Libraries at Visakhapatnam, East Godawari,West 
 Godavari, Guntur, Chittoor, Kurnool and Warangal Districts. 
21. District Sailors and Soldiers Board at East Godavari, West Godavari, 
 Krishna, Guntur, Nellore, Chittoor, Anantapur, Cuddapah, Kurnool, and 
 Ranga Reddy Districts. 
22. T.B. Sanitorium in Chittoor Districts. 
23. Prize Endowments in East Godavari, Chittoor and Anantapur Districts 
24. N.C.C.Trophy, Anantapur. 25. District Leprosy Fund, Anantapur. 
26. Andhra Pradesh Medical Council, Hyderabad. 
27. Andhra Pradesh Medical pharmacy Council, Hyderabad.
28. Andhra Pradesh Medical Residential Educational Institutions Society, 
 Hyderabad. 
29. Official Trustee, Hyderabad. 
30. Andhra Pradesh Bhoodana Yagna board, Hyderabad. 
31. Aradhana Magazine. 
32. Andhra Pradesh State Council of Higher Education. 
33. Andhra Pradesh Dental Council. 
 P.V.VIDYA SAGAR, 
 Secretary to Government, 
 Law and Legislative Affairs 
 Law Department. 
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