(h) 'prescribed' means prescribed by rules made under this Act; (i) 'Schedule' means the Schedule appended to this Act; (j) 'special audit' means an audit of accounts pertaining to a specified item or series of items requiring thorough examination, and includes re-audit of the accounts for a period already covered by audit as specified by the Director; (k) 'State' means the State of Kerala; (l) 'surcharge' means an amount for which the auditor, in exercise of the powers vested in him under this Act, makes a person liable for loss, waste, misapplication or misappropriation of any money or other property belonging to any local authority.
3. Appointment of Director- (1) The Government shall, by notification in the Gazette, appoint a person, having such qualification as may be prescribed, to be the Director of Local Fund Audit in charge of the audit of accounts of a local authority or a local fund included in the Schedule.
(2) The Government may appoint such other officers in the Local Fund Audit Department to assist the Director in the exercise of his powers and the discharge of his functions and duties under this Act. (3) All officers and staff of the Local Fund Audit Department shall be subordinate to the Director who shall have general superintendence and control over them in the performance of their functions under this Act or the rules made thereunder. (4) Notwithstanding anything contained in sub-section (1) - (a) the Examiner of Local Fund Accounts in the State functioning as such immediately preceding the commencement of this Act shall be deemed to be the Director appointed under subsection (1) and shall continue to function as such Director till a new Director is appointed under that sub-section; and (b) the Joint Examiner of Local Fund Accounts and the Deputy Examiner of Local Fund Accounts functioning as such in the Local Fund Audit Department of the State immediately preceding the commencement of this Act shall, at such commencement, be known as the 'Joint Director of Local Fund Audit' and the "Deputy Director of Local Fund Audit, respectively.
4. Audit of Accounts.- (1) Notwithstanding anything contained in any other law for the time being in force, but subject to the provisions of the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971 (Central Act 56 of 1971) the Director shall, in the manner provided by or under this Act, conduct the audit of accounts of a local authority or a local fund included in the Schedule.
(2) Government may, by notification in the Gazette and for reasons to be specified therein, add any other authority, body, institution or local fund to the Schedule referred to in sub-section (1) and on the publication of the notification, such authority, body, institution or local fund shall be deemed to be added to the Schedule. (3) No authority, body, institution or local fund included in the Schedule referred to in subsection (1) shall be omitted therefrom except by the authority of a law made by the State Legislature.
5. Power of audit of accounts of certain authorities, bodies, institutions or funds- The Director may, with the previous sanction of the Government, and without prejudice to the provisions of sub-section (1) of section 4, audit the accounts of any authority, body, institution or fund not included in the Schedule subject to such terms and conditions as may be agreed upon between the Director and the person responsible for the administration of such authority, body,institution or fund.
6. Audit of accounts of stock and stores and verification of cash balance- (1) The auditor shall have authority to audit and report on the accounts of stores and stock kept by a local authority specified in the Schedule.
(2) The Director may, with the sanction of Government, seek the services of any technical expert for the purpose referred in sub-section (1) if, in his opinion, it is necessary to do so.