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What features do Financial Administration of Loca…

What features do Financial Administration of Local Bodies have?

What features do Financial Administration of Local Bodies have?

Chiranjibi Feb. 18, 2018

Salient Features of Financial Administration of Local Bodies:

(i) Budgetary Procedure: The objective of local bodies budgetary procedure are financial accountability, control of expenditure, and to ensure that funds are raised and moneys are spent by the executive departments in accordance with the rules and regulations and within the limits of sanction and authorisation by the legislature or Council. Different aspects covered in budgeting are determining the level of taxation, fees, rates, and laying down the ceiling on expenditure, under revenue and capital heads.

(ii) Expenditure Control: At the State and Central level, there is a clear demarcation between the legislature and executive. In the local body, legislative powers are vested in the Council whereas executive powers are delegated to the officers, e.g., Commissioners. All matters of regular revenue and expenditures are generally delegated to the executive wing. For special situations like, reduction in property taxes, refund of security deposits, etc., sanction from the legislative wing is necessary.

(iii) Accounting System: Municipal Accounting System has been conventionally prepared under the cash system. In the recent past however, it is being changed to the accrual system of accounting. The accounting system is characterized by

(a) subsidiary and statistical registers for taxes, assets, cheques etc.,

(b) separate vouchers for each type of transaction,

(c) compulsory monthly bank reconciliation,

(d) submission of summary reports on periodical basis to different authorities at regional and state level.