Section 40 of The Water (Prevention and Control of Pollution) Act, 1974
- (1)Every Board shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government or, as the case may be, the State Government.
- (2)The accounts of the Board shall be audited by an auditor duly qualified to act as an auditor of companies under section 226 of the Companies Act, 1956 (1 of 1956).
- (3)The said auditor shall be appointed by the Central Government or, as the case may be, the State Government on the advice of the Comptroller and Auditor General of India.
- (4)Every auditor appointed to audit the accounts of the Board under this Act shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Board.
- (5)Every such auditor shall send a copy of his report together with an audited copy of the accounts to the Central Government or, as the case may be, the State Government.
- (6)The Central Government shall, as soon as may be after the receipt of the audit report under sub-section (5), cause the same to be laid before both Houses of Parliament.
- (7)The State Government shall, as soon as may be after the receipt of the audit report under sub-section (5), cause the same to be laid before the State Legislature.
Summary
- Every Board is legally required to keep accurate records and detailed accounts of all the money they handle.
- A statement showing the final accounts for the year must be prepared in a format chosen by the government.
- The accounts must be checked by a qualified auditor who meets the standards for auditing companies under the law.
- The government chooses the auditor after getting advice from the Comptroller and Auditor General of India.
- The auditor has the legal right to demand any books, receipts, or papers and can visit any Board office for inspection.
- Once the audit is finished, the government must present the audited accounts and the auditor's report to the Parliament or State Legislature.
Practical examples
FAQ
1. Who decides which auditor will check the Board's money under Section 40 of The Water (Prevention and Control of Pollution) Act, 1974?
Under Section 40 of the Act, the government appoints the auditor based on the advice of the Comptroller and Auditor General of India.
2. What specific powers does an auditor have under the 1974 Water Act?
Section 40(4) gives the auditor the right to demand production of books, accounts, vouchers, and other documents, and the right to inspect any of the Board's offices.
3. What happens after the audit of a Board is completed under the Water Act?
According to Section 40, the auditor sends the report to the government, which then must lay it before the Parliament or the State Legislature.
4. What qualifications must the auditor have under Section 40 of the Act?
Section 40(2) requires the auditor to be qualified to act as an auditor of companies under section 226 of the Companies Act, 1956.
Test yourself
Q1.Under Section 40 of The Water (Prevention and Control of Pollution) Act, 1974, which authority must provide advice before the government appoints an auditor?
Q2.According to Section 40 of the Water Act, 1974, what is an auditor empowered to do if they need to see a specific spending record?
Q3.Under Section 40 of The Water (Prevention and Control of Pollution) Act, 1974, who sets the format for the annual statement of accounts?
Q4.Under Section 40 of the Water Act, what must the Central Government do once it receives the final audit report?