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CA Ravi Taori
QNO— Heads of Expenditure in Local Bodies New Course – (N22E)
GA.43.50 Bhaskar CNO - GA.300
CA Sevak is appointed as an auditor of a Municipal Corporation of a big smart city. He wants to verify various
expenditures of the Municipality. Define the term "Municipality" and state what are the heads under which
expenditures incurred by the Municipalities and Corporations can be broadly classified?
Answer Definition of Municipality & Expenditure incurred by it: Definition: A Municipality can be defined as a unit of
local self-government in an urban area. By the term ‘local self-government’ is ordinarily understood the
administration of a locality – a village, a town, a city or any other area smaller than a state – by a body
representing the local inhabitants, possessing fairly large autonomy, raising at least a part of its revenue
through local taxation and spending its income on services which are regarded as local and, therefore, distinct
from state and central services.

Expenditure incurred by the municipalities and corporations can be broadly classified under the following
heads:
(a) general administration and revenue collection,
(b) public health,
(c) public safety,
(d) education,
(e) public works, and
(f) others such as interest payments, etc.

QNO Major Expenditure at Local Bodies Old Course—(N22E)
GA.44 Bhaskar CNO - GA.300
CA Sevak is appointed as an auditor of a Municipal Corporation of a big smart city. He wants to verify various
expenditures of the Municipality. Define the term "Municipality" and state what are the heads under which
expenditures incurred by the Municipalities and Corporations can be broadly classified?
Definition of Municipality & Expenditure incurred by it:
Definition:
A Municipality can be defined as a unit of local self-government in an urban area. By the term ‘local self
government’ is ordinarily understood the administration of a locality – a village, a town, a city or any other
area smaller than a state – by a body representing the local inhabitants, possessing fairly large autonomy,
raising at least a part of its revenue through local taxation and spending its income on services which are
regarded as local and, therefore, distinct from state and central services.

Expenditure incurred by the municipalities and corporations can be broadly classified under the following
heads:
(a) general administration and revenue collection,
(b) public health,
(c) public safety,
(d) education,
(e) public works, and
(f) others such as interest payments, etc.

QNO Audit of Local Bodies-Objectives Old Course --
GA.45 Bhaskar CNO - GA.300 (P16M/M17E/N18M/M19E/M21E/M18E/N21R/N21E/M23R)
State the important objectives of local body’s audit.
Answer ➢ The external control of municipal expenditure is exercised by the state governments through the
appointment of auditors to examine municipal accounts. The municipal corporations of Delhi,
Mumbai and a few others have powers to appoint their own auditors for regular external audit. The
important objectives of audit are:
Law Compliance
Reporting on the adherence to legal and/or administrative requirements;

System
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