Audit Report 2024-25
This document is the official Audit Report of Engandiyur Grama Panchayat (located in Thrissur District, Kerala) for the financial year 2024–2025. The financial audit was executed by the Kerala State Audit Department from August 4, 2025, to August 11, 2025, under Deputy Director Rafi John.
A comprehensive summary of the key findings, financial irregularities, and administrative gaps highlighted in the report is detailed below:
1. General Audit Opinion and Scope
Period Audited: The audit comprehensively inspected the local body's revenue collections from October 26, 2024, to August 10, 2025, alongside expenditures and bank withdrawals spanning the entire financial year from April 1, 2024, to March 31, 2025.
Opinion: The auditors issued a Qualified Opinion. They verified that while the annual financial statements mostly reflect a true and fair view of the local body's finances, it remains subject to multiple significant financial omissions and discrepancies documented throughout Part 1 of the report.
Response Deficit: Out of 31 preliminary audit inquiries officially issued to the local body during the review, the Panchayat administration provided responses to only 3.
2. Major Financial Omissions and Accounting Discrepancies
The audit exposed substantial deficiencies in accounting discipline, where large-scale outlays and assets were excluded from the annual accounts, distorting the final balance sheet:
Exclusion of LIFE Mission Loan Repayments: A total sum of ₹9,56,140 deducted at source from the general development fund for repayments toward HUDCO LIFE Mission loans was completely omitted from the annual accounts. This resulted in an overstatement of the local body's liabilities.
Omission of Fixed Endowment Deposits: Endowment funds totaling ₹1,62,501, held across three separate long-term accounts in the Engandiyur Farmers Service Co-operative Bank to give medical aid to impoverished patients, were omitted from the Balance Sheet schedules (Schedules B-12 and B-2).
Revenue Expenditure Exclusions: A major expenditure of ₹10,07,400 allocated from the first installment of the development fund for Anganwadi staff remuneration appeared on the internal tracking software (Sulekha) but was totally excluded from the Income & Expenditure statement. Similarly, a ₹20,000 project supplying daily newspapers to approved libraries was omitted.
Provision Tracking Failure: The Panchayat failed to record a required financial provision for "doubtful recoveries" on historical dues , despite carrying long-overdue property tax arrears totaling ₹19,02,380.
Missing Management Tools: The administration failed to prepare mandatory monthly Bank Reconciliation statements and fell short of properly maintaining key structural logs like the Asset Register, Advance Register, and Deposit Register.
3. Revenue Loss and Regulatory Deficiencies
The audit documented serious procedural failures and missed opportunities in tax and fee collections, leading to direct revenue leakages:
Unrealized Professional Tax: The Panchayat failed to enforce the revised professional tax slabs enacted by the state government starting October 1, 2024, for businesses and local contractors.
Unlicensed Domestic Pets: While the official veterinary census cataloged 535 domestic dogs living within the Panchayat boundaries, only 62 were registered. The failure to enforce pet licensing requirements on the remaining 473 dogs caused a direct local revenue loss of ₹23,650.
Illegal Commercial Operations: A building measuring 740.73 square meters was formally approved and regularized under the "Educational Group" category. However, physical records (Form 6) revealed that it was unlawfully being operated as a commercial auditorium.
Violations of Kerala Panchayat Building Rules (KPBR): Multiple properties were improperly regularized or under-taxed. In one notable instance involving a local hospital structure spanning 6,228.97 square meters, the Panchayat failed to collect regularization fees for a 485.36 sq. meter unauthorized expansion. Furthermore, it failed to levy a statutory 20% basic property tax premium mandated for commercial properties enjoying access to wide roads (like National Highway 17). A field inspection also discovered an unmapped, illegal 5th-floor building extension spanning 189.55 square meters.
4. Implementation Shortfalls in Welfare and Infrastructure Projects
Jalanidhi / Jal Jeevan Mission (JJM): A major project valued at ₹3.35 crores was planned to distribute 4,424 household tap connections. However, the local government struggled to allocate its 15% local-body matching share (₹50.25 lakhs). Due to persistent fund shortages, their formal projects were rejected by the District Planning Committee, directly causing a portion of their Finance Commission Grant to lapse.
Health Grant Underutilization: While the Panchayat effectively leveraged components of its Health Grant across certain schemes, it failed to utilize its allocations on time during 2024–25. For example, a sum of ₹27,75,000 received way back in 2023–24 to finalize Phase 1 construction of the Chettuva Public Health Centre remained unspent.
Welfare Distribution Failures: The audit flagged multi-layered procurement and implementation gaps across social welfare projects, highlighting items like delayed construction of study rooms , non-distribution of laptops bought for Scheduled Caste (SC) students , and unsubmitted distribution documents for bedding equipment bought for SC senior citizens.
Public Works Overpayment (Part 3): During an infrastructure project involving the construction of the Manatavu-Meenkavu bund via a local beneficiary committee, the Panchayat over-allocated and disbursed funds beyond actual expenditures, prompting the audit department to formally disallow and reject ₹5,663.
5. Next Steps and Statutory Obligations
The Deputy Director instructed the Panchayat President and Executive Committee to handle these findings immediately through the following timeline:
Identify Liability: Immediately supply copies of the audit's findings to all officials directly responsible for the recorded financial irregularities.
Convene a Special Meeting: Hold a dedicated leadership meeting within one month to review each paragraph of the report, record formal resolutions, and publish these decisions openly for public awareness.
Submit Rectification Report: Take corrective actions to resolve all noted discrepancies and present a formal "Audit Rectification Report" back to the District Audit Office within two months.