Panchayat:Repo18/Law Manual Page0629

(i)making expenditure in matters in which, the Secretary or other concerned Officer had pointed out, before taking the decision, that the expenditure might cause loss or there is reason to believe, in the ordinary course, that the transaction would result in loss, shall be considered as loss;
(ii) making expenditure not following procedures in the manner authorised or when there is circumstance, in the ordinary course, to think that the expenditure would not produce the intended result, shall be considered as wasteful expenditure:
(iii) making expenditures of fund under any items,
(a) by diverting amounts for plan schemes to non-plan items;
(b) by diverting amounts other than authorised or allocated in the budget;
(c) by diverting amounts intended from special fund;
(d) by diverting amounts allocated to Special Component Plan and Tribal Sub-Plan without spending for that items;
(e) not in accordance with the Act, Rules, and directions from Government or not in accordance with the functions of the Panchayat or for matters not authorised shall be considered as misuse and action shall be taken accordingly to recover the liability.

Note:- Matters mentioned in this sub-rule are only some examples and the Government may, considering the nature and circumstance of the expenditure fix upon the person concerned any other loss, wasteful expenditure and misappropriation that may be revealed in the enquiry as the liability of the concerned person.

23. Liability to be reported by the Performance Audit Authority and Auditor.— (1) The Auditor or the Performance Audit Team inspecting a Panchayat shall, if notice a financial transaction which may amount to a liability as per Section 253, report the fact at once to the Local Fund Audit Director or Performance Audit Authority, as the case may be, and the Performance Audit Authority or the Local Fund Audit Director shall submit detailed report to the Government after conducting further inspection.

(2) The report submitted to the Government shall contain the names and details of the persons in whose names the liability has been fixed.

(3) If the Government get any complaint or representation in this matter directly, the same shall be sent to the Local Fund Audit Director or the Performance Audit Authority or any other Officer authorised for report, and the Government shall take action on the report sent by them after special enquiry.

24. Fixing of liability on the basis of report.-(1) The Government shall, on the basis of the report under Rule 23, serve a notice to the person alleged with charge, requiring him to show cause why action should not be taken to recover the liability incurred and such notice shall contain a brief description of charges, documents supporting liability and the general nature of liability.

(2) The persons alleged with charges shall submit his explanation within thirty (30) days of receipt of the notice. Government shall give an opportunity for personal hearing if so required by the person alleged with charges.

(3) The Government shall, if it is found even after the examination of the explanation that there exists the liability, issue an order fixing the amount and direct, in writing, the person liable to repay the amount fixed, to the Panchayat, before the date specified.