MMCNPIT Act 90GChapter VII · Municipal Property, Funds, Contracts And Liabilities

Section 90G · Annual examination of sinking funds

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(1)

All sinking funds established or maintained under this Act shall be subject to annual examination by the Director, Local Fund Accounts Audit, who shall ascertain whether the cash and the value of the securities belonging thereto are actually equal to the amount which should be at the credit of such funds had investments been regularly made and had the rate of interest as originally estimated been obtained therefrom.

(2)

The amount which should be at the credit of a sinking fund shall be calculated on the basis of the present value of all future payments required to be made to such fund under the provisions of this Act, on the assumption that all investments are regularly made and the rate of interest as originally estimated is obtained therefrom.

(3)

The securities belonging to a sinking fund shall be valued for the purposes of this section at their current market value except for any loan raised before the appointed day for which the Council is liable, which shall always be valued at par.

(4)

The Council shall forthwith pay, into any sinking fund any amount which the Director, Local Fund Accounts Audit may certify to be deficient, unless the State Government specially sanctions a gradual readjustment.

(5)

If the cash and the value of the securities at the credit of any sinking fund are in excess of the amount which should be at its credit, the Director, Local Fund Accounts Audit shall certify the amount of such excess sum and the Council may thereupon transfer the excess sum to the Municipal Fund.

(6)

If any dispute arises as to the accuracy of any certificate made by the Director, Local Fund Accounts Audit, under sub-sections (4) and (5), the Council may, after making the payment or transfer, refer the matter to the State Government whose decision shall be final.

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