Opportunities for CAs in Accounting of Local Bodies

Government of India has taken various initiative to catalyze accounting reform in Local Bodies to empower them. Latest initiative is the issuance of National Municipal Accounts Manual (NMAM), As per manual, the Fifteenth Finance Commission has implemented entry level condition  for Local Bodies (both Urban and Rural) of making timely availability of annual accounts for the previous year and audited accounts for the year preceding previous year in the public domain online for qualifying for any grant. This also follow for various incentive given under the schemes such as JNNURM, AMRUT etc. Local Bodies in India  are legging behind and  still struggling to complete backlog  of their accounts and its audit, even on cash basis, and in majority of cases accrual basis accounting is far away .

This recommendation of Fifteenth Finance Commission  has created a big opportunity for Chartered Accountants (CAs), they can  to support Local Bodies in enabling them to timely fulfil the entry level conditions of the grants for proper maintenance of accounts to obtain the grants. In this direction the Committee on Public and Government Financial Management (CP&GFM) of ICAI has launched and is conducting Certificate Course on Public Finance & Government Accounting that aims at making members understand the nuances and finesse of Government Accounts. The Committee is in constant discussion with the concerned Ministry and office of C & AG to empanel Chartered Accountants/firms for the year of 2022-# and utilize the services of the CAs for the purpose to ensure professional execution and attainment of desired objectives of timeliness, accuracy, accountability and transparency. CA members has to grab these opportunities by doing Certificate Course and empanelment with CA& G to fructify these opportunities,

In addition to above CAs can render following professional services :

(1) Building capacity of accounts/ finance staff of local bodies by providing them required guidance/ trainings on various aspects such as preparation of accounts as per applicable accounting framework, online accounting platform, generation of financial reports, etc.

(2) Auditing the accounts / its program/ funds of local bodies for  ensuring that the resources or public funds are utilized efficiently and effectively and the financial statements depict true and fair view of state of affairs (financial position and financial performance) of local bodies.

(3) Providing guidance and assisting in budgeting and efficient & smooth functioning of day to day operations of local bodies.

(4) Guiding in implementation of ongoing accounting reforms such as

(i) migration of accounts of ULBs from cash to accrual accounting system,

(ii) sustain new  accrual accounting system already been implemented ,

(iii) improve financial reporting and public financial management of local bodies  resulting in better service delivery and decision making .

(5) Guiding suitably in amending the respective States Municipal/ Municipality Acts (required if any) to incorporate relevant legal mandate to enable them for smooth implementation of accounting reforms, etc.

(6) Assisting in  framing/ drafting & effective implementation of many Government schemes/ program, efficient and smooth functioning of day-to-day operations of the Government.