CHAPTER XII LOCAL FUNDS

January 20, 2025
Introductory

(Article. 311)

306..The transactions of local funds (as defined in Article 3) are not included as such in the Government account, except in so far as their cash balances are deposited with the Government under the rules and accounted for under the deposit head “Deposits of Local Funds” within the Public AccountThe Government’s function in regard to such deposits is that of a banker (See Chapter X of this Code and Part VIII of the Kerala Treasury Code).
  1. 307.Some of the important classes of local funds are 
1 District Funds.
2 Municipal Funds (ie., the moneys of Municipal Councils

governed by the Municipal Acts).

3 Kerala State Road Transport Corporation Working Fund.
4 Village Panchayat Fund i.e., the moneys of panchayats governed by the Kerala Panchayats Act, 1960 (Act 32 of 1960).
5 Kerala State Electricity Board Working Fund.
6 Market Committee Fund.
7 Library Fund.
308.  Local bodies (as defined in Article 3) perform functions closely allied to those of the Government and receive aid from the Government in the form of grants and loans for certain purposes. This Chapter refers to the rules relating to some of the financial transactions between the Government and the local bodies.

Grants to Local and Other Bodies

  1. 3 The payment of grants to local and other bodies, e.g., grants for the maintenance of roads, is governed by the general or special orders of the Government in regard to such grants.

The Government may by general or special orders specify the various items of grants that are payable to local and other bodies on account of certain fines realised by Courts and credited to the Government. The grant on account of these fines should be drawn, and paid in the manner indicated in the Kerala Treasury Code (See Rule 196, Chapter III, Part V).

Loans to Local Bodies

  1. Rules relating to the execution of work on behalf of local bodies by the Public Works Department are contained in Articles 31 to 33 of the Kerala Account Code, Volume III and Chapter 16 of the Kerala Public Works Account Code. The detailed procedure to be followed in connection with borrowing by local bodies from the Government is laid down in the Kerala Local Authorities Loans Rules, 1965 (See also Article 235.)

Charges recoverable from Local Bodies

Article 311

311.(a)When the Government agree to render a service to, or incur a charge on account of a local body, the estimated amount of the charge or cost of the service should ordinarily be recovered in advance in accordance with the principle laid down in Article 34. In exceptional cases, however, the Government may authorise the special arrangements detailed in Article 34.

(b) Any amount due to the Government by a local body and remaining unpaid, including any amount overdue for payment in respect of a loan, should be recovered at the earliest opportunity in the manner indicated in Article 35.

Time-limits for claims by Local Bodies

  1. A local body should prefer its claims for any amount which the Government have sanctioned for payment to it not later than the latest date specified by the Government for the payment or, if the Government have not specified any such date in respect of a particular payment or class of payments, within six months, from the date on which the local body receives the orders of the Government authorising the payment [See also Article 55 (c)].

In the case of water supply and drainage schemes or other works for which the Government have promised a grant on the post-payment system, the local body concerned should prefer its claims for the grant within six months of the execution of the work (or instalment of the work, where the work is executed and paid for in separate instalments) unless the local body has been definitely informed that the Government will consider the claim only after provision has been included for the purpose in the budget, in which case the claim for the grant should be preferred within six months of the execution of the work or within one month of the date of receipt of information that provision is available in the budget, whichever is later.

Arrear Claims of Local Bodies

  1. A claim preferred by a local body after the latest date specified for it should not be paid without specific sanction of Government in each case. In the case of statutory grants, the Government will summarily reject every arrear claim which is made after the expiry ofthree yearssubsequent to the year in which the claim fell due, and in the case of non-statutory grants and other amounts due by the Government, they will summarily reject all arrear claims (See also Article 60).

Note:— In the case of items of revenue collected by the Revenue Department on behalf of local bodies, the payment will be sanctioned by such authorities as may be specified by the Government from time to time.