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The Audit of Local Bodies is under control of State Government as per provisions under Item 5 in List II State List in the seventh schedule to the constitution of India.  Prior to year 1958, the Local Audit Department was under the administrative control of the Auditor General of India.  Local Fund Audit Department was brought under control of State Government vide Government of Bombay, Finance Department Resolution No TRO-1657/ 805-C / G-3, dated  30 April 1958 with effect from 1st May 1958.  As per section 6 of the Bombay Local Fund (Extension and Amendment) Act 1960, the Examiner, Local Fund Accounts was redesigned as the Chief Auditor Local Fund Accounts. Until 31st October 1964,  the Audit of Accounts of Village Panchayat was being conducted by the auditors working under the control of Collector of each district. Thereafter the audit of Village Panchayat was entrusted to the Chief Auditor, Local Fund Accounts, Maharashtra State, Mumbai from 1st November 1964.  As per Government Resolution, Finance Department No MAS-1161 / 12791/ 650-XI dated 27/12/1961, the Directorate of Accounts and Treasuries Maharashtra State was established with effect from 1st January 1962 under the Administrative control of the Finance Department with the Director of Accounts and Treasuries as its head and the Local Fund Audit Department was brought under the control of this Directorate.

Under the Government Resolution Finance Department No सेवाप्र 20.08/ प्र.क्र.79 /2 /  कोषा (प्र-3) dated 28 May 2008 a separate Directorate for Local Fund Accounts Department has been constituted and the Chief Auditor, Local Fund Accounts has been declared as Head of the Department.  The Head Quarter of the Department is at Navi Mumbai.

This Directorate has six Regional Offices of the Joint Chief Auditor at Kokan Bhavan Navi Mumbai, Pune, Nashik, Aurangabad, Amravati and Nagpur. The Chief Auditor Local Fund Accounts is responsible for the administration of Offices under his control.  Being Head of Department, Chief Auditor is responsible for Management, Supervision and Effective work of the offices under his Administrative Control.  Chief Auditor has also to issue the amendments in Accounts matters and he has also to advise in the Audit matter to the concerned. There are 6 Regional Offices and 33 District Offices in the State.  Annual Inspection of the 2 Regional Offices and the 12 offices of Deputy Chief Auditor is conducted every year by the Directorate. There are in all 1298 posts sanctioned under Government Resolution No FD सेवाप्र-20.08/प्र.क्र.79 / 2 कोषा (प्र-3) dated 28 May 2008.