The Comptroller and Auditor General (CAG) is proactively offering assistance to states in certifying their municipal accounts, signaling a commitment to enhanced transparency and increased private investment in urban infrastructure. This initiative, announced by CAG Sanjay Murthy on Saturday, aims to add credibility and value to municipal financial systems, thereby encouraging private sector participation in urban projects.
Murthy highlighted that the CAG will soon disseminate best practices and models for municipalities to adopt. The adoption of these practices would ideally lead to a situation where financial audit observations are minimized, provided that municipal accounts are meticulously maintained and revenue sources are transparently tracked. The CAG's willingness to certify state government accounts comes at a crucial time, coinciding with the Centre's anticipated launch of the Rs 1 lakh crore Urban Challenge Fund, designed to support large-scale projects through public-private partnerships. The Ministry of Housing and Urban Affairs is currently finalizing the framework for this fund, which was initially announced in the Budget.
The Urban Challenge Fund presents significant opportunities for municipal bodies, and the CAG intends to play a pivotal role in ensuring the transparency of accounts within these urban local bodies. By offering certification services, the CAG aims to foster greater confidence among investors, facilitating the flow of funds into urban development projects.
To further strengthen accounting practices at the grassroots level, the CAG has partnered with the Institute of Chartered Accountants of India (ICAI) to develop online courses aimed at creating a pool of certified accountants for panchayat and municipal bodies. These courses are designed to address the shortfall in the preparation of accounts across various tiers of local self-government, as highlighted by audits and reports. A key objective is to train individuals, preferably from local areas, who are willing to work as accountants in these local bodies.
The certification courses, launched in November 2023, are practical-oriented, enabling students to prepare accounts for local government units effectively. The first batch of students underwent screening exams in April 2024, with the main examination scheduled for July 2024. Registration for the second batch is underway, with several state governments encouraging participation. For instance, West Bengal has urged municipal corporations and municipalities to sponsor nominations, while Rajasthan has directed all accounting personnel in Urban Local Bodies to enroll in the course.
These online courses consist of certificate programs tailored for accountants in Panchayats, divided into Level 1 for Gram Panchayats and Level 2 for Zilla and Block Panchayats. Similar specialized certificate courses are available for municipal bodies, with Level 1 focusing on Town Panchayats and Level 2 addressing the complexities of Municipal Corporations and Municipalities.
Beyond these initiatives, the CAG has been actively involved in providing training and support to states. This includes offering training materials and experts, with a training manual based on the National Municipal Accounts Manual currently under finalization. The CAG has also produced auditing standards and guidelines for local bodies, including manuals, training modules, and standardized budget and account formats.
The emphasis on transparent and reliable financial systems is critical for attracting serious bidders and funding for urban projects. By taking proactive steps to assist states in certifying municipal accounts and enhancing accounting practices at the local level, the CAG is helping to create an environment conducive to sustainable urban development and increased private sector investment.
