The Local Fund Audit Department has been in existence from the year 1880. It was originally under the control of the Accountant General of the then composite Madras State. The audit of the Accounts of the Local Bodies was entrusted to the Department. The Local Bodies comprise of several Institutions like Municipalities, Municipal Corporations, Zilla Parishads, Mandal Parishads, Gram Panchayats, Agricultural Market Committees, Zilla Grandhalaya Samsthas, Hindu Religious and Charitable Institutions including TTD, Universities, A.P. Housing Board, A.P. Wakf Board, AP Residential Educational Institutions Society, Official Receivers, State and District Chambers of Panchayat Raj etc. Gradually, the Department is also entrusted with the Audits of the Accounts of Natural Calamity Relief Fund administered by the District Collectors, and A.P. Employees Welfare Fund.
Consequent on enactment of AP State Audit Act 1989 (Act 9 of 1989) and issue of Rules there under with GOMS No. 130 Finance and Planning (FW. Admin II) Dept dt: 8-9-2000 (Notified in the AP Gazette dt. 25-09-2000), this Department has been renamed as State Audit Department
The main functions of State Audit Department are:
- Conduct the audit yearly and issue the audit reports of the institution included in the Schedule to A.P. State Audit Act, 1989 and other institutes entrusted to this department by Government from time to time.
- Raise objections pointing out the irregularities such as out flow of finances from the funds of institutions contrary to the provisions of the Acts governing the said institutions, financial rules, budget and other allied government orders and instructions issued from time to time.
- Report to Government regarding irregularities noticed in the audit.
- Settlement of audit objections and issue surcharge certificates wherever the financial loss could not be recovered.
- Maintain receipt and expenditure of PRI bodies
- Issue of Pension Payment Orders in respect of all retired Class IV employees of State Government, including Head Constables, Excise Constables and Forest Guards
- Issue Pension Verification Certificates to retired employees up to the cadre of superintendents in PRIs, municipalities, and housing board, etc.
- Preparation and submission Consolidated Audit and Review Audit Report on the table of Legislative Assembly.