Transcript Document

29th Quarterly Review Meeting of Finance Controllers-SSA
PRESENTATION
ON
AUDITED ACCOUNTS
&
AUDIT REPORTS 2009-10
By : U.K. VERMA
Consultant (Financial Management)
TSG, EdCIL, New Delhi
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Requirements under Para 106 of FMP Manual:
 Annual Accounts of the SIS to be audited by Chartered Accountant
Firm(s) appointed by Executive Committee as Auditors each year;
 Audit Report & Audited Accounts duly approved by the State Executive
Committee, along with other documents, i.e Utilization Certificate, Annual
Financial Statement, Procurement Audit Certificate, Management Letters,
FMR I,II & III, status of compliance / settlement of previous audit
observations etc to be submitted to MHRD on or before 1st November every
year
 To ensure timely completion of Audit, adherence to the Audit Calendar
under Para 109 of the FMP manual suggested; particularly appointment of
Auditors in April and closing of books of accounts by 30th June every year.
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Revised Audit Calendar to be followed :
1.
Date of EC’s approval for engagement of Auditors
Feb each year
2.
Date of appointment of CA firm
April each year
3.
Collection of Expenditure Statements/UCs from sub-district level By 15th May each year
4.
Adjustment of advances in accounts to be completed
5.
Liabilities for expenditures incurred during the year but not paid By 15th June each year
By 15th June each year
for to be provided in accounts
6.
Finalization of accounts and annual financial statement
By 30th June each year
7.
Commencement of Audit work
1st July each year
8.
Reply to Preliminary Audit Memos State/ at District/ Sub-District Within 3 days of the Receipts of Audit
Level
Memo
9.
Submission of draft Audit Report to the SPO / DPO by CA
BY 31st August each year
10.
Discussion on draft audit report to be completed by SPO/DPO
By 15th September each year
11.
Submission of Final Audit Report to SPO
30th September each year
12.
Approval of audited accounts & audit report by State Govt./EC
15th October each year
13
Despatch of Audit Report to GOI
By 1st November each year
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Performance of States in 2008-09 vis a vis 2009-10 :
 Defaulter States not submitted Audit Report & Annual Accounts before 31st December
Sl
States / UTs
1
2008-09
2009-10
Sl
States / UTs
A&N Island
19
Lakshdweep
2
Arunachal Pradesh
20
Madhya Pradesh
3
Andhra Pradesh
21
Maharastra
4
Assam
22
Meghalaya
5
Bihar
23
Manipur
6
Chandigarh
24
Mizoram
7
Chhattisgarh
25
Nagaland
8
Daman & Diu
26
Orissa
9
Dadra & Hagar Haveli
27
Punjab
10
Delhi
28
Puducherry
11
Goa
29
Rajasthan
12
Gujarat
30
Sikkim
13
Haryana
31
Tamil Tadu
14
Himachal Pradesh
32
Tripura
15
Jammu & Kashmir
33
Uttar Pradesh
16
Jharkhand
34
Uttarakhand
17
Kerala
35
West Bengal
18
Karnakata
2008-09
2009-10
12 States
22 states
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Status of Communication of MHRD Comments on Audit Report:
Sl
States / UTs
MHRD
Comment
sent on
State’s
Reply
received
Sl
States / UTs
MHRD
Comment
sent on
1
A&N Island
16-11-10
29-11-10
19
Lakshdweep
29-04-11
2
Arunachal Pradesh
08-02-10
20
Madhya Pradesh
01-02-11
3
Andhra Pradesh
13-12-10
21
Maharastra
01-02-11
4
Assam
12-11-10
22
Meghalaya
03-01-11
5
Bihar
23
Manipur
24-01-11
6
Chandigarh
02-11-10
24
Mizoram
7
Chhattisgarh
27-12-10
25
Nagaland
8
Daman & Diu
14-12-10
26
Orissa
9
Dadra & Hagar Haveli
27-04-11
27
Punjab
-
28
Puducherry
27-01-11
05-01-11
25-11-10
07-01-11
10
Delhi
11
Goa
21-01-11
29
Rajasthan
01-12-10
12
Gujarat
21-12-10
30
Sikkim
22-10-10
13
Haryana
11-01-11
31
Tamil Tadu
25-10-10
14
Himachal Pradesh
27-04-11
32
Tripura
15
Jammu & Kashmir
33
Uttar Pradesh
02-11-10
16
Jharkhand
12-01-11
34
Uttarakhand
06-12-10
17
Kerala
29-04-11
35
West Bengal
25-10-10
18
Karnakata
27-12-10
08-04-11
State’s
Reply
received
29-11-10
27-01-11
06 states
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
State’s Position in order of Date of Signing of Audit Report :
Sl
States / UT
Date of signing
of Audit Report
Sl
States / UT
Date of signing
of Audit Report
1
Chandigarh
21.06.2010
17
Lakshwadeep
01.12.2010
2
Andhra Pradesh
18.09.2010
18
Nagaland
02.12.2011
3
West Bengal
20.09.2010
19
Daman & Diu
07.12.2010
4
Sikkim
24.09.2010
20
Meghalaya
08.12.2010
5
Tamil Nadu
30.09.2010
21
Karnataka
16.12.2010
6
Assam
30.09.2010
22
Goa
17.12.2010
7
Delhi
11.10.2010
23
Jharkhand
18.12.2010
8
A&N Island
12.10.2010
24
Madhya Pradesh
21.12.2010
9
Uttar Pradesh
26.10.2010
25
Orissa
29.12.2010
10
Uttarakhand
01.11.2010
26
Mizoram
30.12.2010
11
Manipur
09.11.2010
27
Puducherry
11.01.2011
12
Haryana
10.11.2010
28
Maharashtra
24.01.2011
13
Rajasthan
16.11.2010
29
Arunachal Pradesh
28.01.2011
14
Dadra & Hagar Haveli
20.11.2010
30
Kerala
07.02.2011
15
Chhattisgarh
26.11.2010
31
Bihar
21.02.2011
16
Gujarat
30.11.2010
32
Himachal Pradesh
06.04.2011
Not
yet
Sent :
Punjab
*Audit Report of Tripura & Jammu & Kashmir received on 4th & 6th May ‘2011 respectively
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Findings of Audit
For the purpose of this presentation, important
points from the State’s Audit Reports of similar
nature or
identical thereto have been
highlighted, grouped and
focused
for
discussions. It may not be construed to be the
complete audit observations of the State for the
purpose of compliance. The State FCs are
suggested to go through the detailed Audit
Report and Management Letters of their
respective State for all purposes of Compliance &
Reporting.
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Some procedural deficiencies in Annual Accounts:
 Uniform Accounting System not followed in all states. Some states
still follow Cash basis of Accounting instead of Accrual basis as
prescribed in FMP Manual; (Andhra Pradesh, Dadar & Nagar
Haveli,Gujarat,Uttarakhand, Himachal Pradesh, Karnataka, Kerala, Manipur,
Lakshadweep, Puducherry)
 Closing balance of unspent grant from last year not brought
forward in the Income & Expenditure Account by some states
whereas being taken in other cases;
 Statutory Provisions under the Income Tax Act, 1961, EPF (MP)
Act,1952, VAT etc. are not properly complied with.
Exp. in respect of previous year and even year before previous year
have been taken in the Income & Exp. A/c of 2009-10 (Andhra Pradesh,
Assam, Jharkhand, Lakshadweep, Tamil Nadu)
Separate set of books of accounts in respect of SSA, NPEGEL &
KGBV are not maintained. (Gujarat, Himachal Pradesh )
th – 14th May 2011 - Shimla ( Himachal Pradesh)
12Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Some procedural deficiencies in Annual Accounts:
Realization against sale of old fixed assets are fully credited to the
Income & Expenditure A/c without giving effect to the Fixed Assets
Schedules ( Kerala)
 No Schedule /details of Cash & Bank Balance, Outstanding
advances / liabilities forming part of Balance Sheet or Activity wise
expenditure under any component has been annexed with annual
accounts (Kerala)
The Balance Sheet as at 31st March 2010 shows no fixed assets as
on the date in some cases. It probably means that all fixed assets like
office furniture, Equipments, Office automations, Vehicles etc.
procured out of SSA management cost have not been treated as
“Fixed Assets“ and are being written off during the year of its
procurement (Dadar & Nagar Haveli, Kerala)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Some procedural deficiencies in Annual Accounts:
 Receipt of unspent balance from sub-district level / SMC / VECs or
amount not related with SSA funds have been credited in the Income
& Expenditure Account under Miscellaneous / Other Receipts ( Andhra
Pradesh, Assam, Gujarat, Karnataka, Madhya Pradesh, Meghalaya, Tamil Nadu)
 Figures shown in the Utilization Certificate / Consolidated Annual
Financial Statements / FMRs , Receipt & Payment Account are not in
agreement with each other. (Andhra Pradesh, Assam, Chandigarh, Daman
& Diu, Gujarat, Karnataka, Lakshadweep, Rajasthan, Sikkim, Tamil Nadu, West
Bengal)
 Expenditure for the year under different head(s) exceeds the
budgetary provisions which requires specific approval of PAB or
regularized by the respective state (Andhra Pradesh, Himachal Pradesh,
Jharkhand, Karnataka, Kerala, Meghalaya, Rajasthan, West Bengal)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Some procedural deficiencies in Annual Accounts:
Operation of multiple Bank Accounts under SSA / NPEGEL & KGBV
(Himachal Pradesh)
 Books of Accounts are kept opened even after 9-12 months after
close of the financial year which should be closed on or before 30th
June every year after
making necessary adjustments
and
incorporating the same in the books.(Himachal Pradesh)
Bank Reconciliation Statement not prepared properly and unpresented Cheques appearing in the Bank reconciliation statements
not considered to be properly treated either for transferring in state
cheques or expenditures to be written back in the books of accounts.
Interest / Bank Charges appearing in the BRS not accounted for
(Andhra Pradesh, Gujarat, Himachal Pradesh, Jharkhand, , Karnataka, Madhya
Pradesh, Manipur , Meghalaya)
 Outstanding Advances not reconciled, confirmed
and poor
progresses in adjustments (Assam, Bihar, Himachal Pradesh, Orissa)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Some procedural deficiencies in Annual Accounts:
 Utilization Certificate not in Annexure-XIX prescribed under para
106.17 of the Financial Management & Procurement Manual (Assam,
Chhattisgarh, Dadar & Nagar Haveli)
 Procedural lapses in procurement procedures like Non publication of
tenders in required manner, Non – evaluation of responsiveness of the
technical and financial bids, awarding the works without prior approval
of the Purchase Committee and settlements of claim without quality
certifications; (Assam, Kerala , West Bengal)
 The Auditing Firm has not furnished its Partner’s Membership No and
Firm Registration No. (FRN) while signing the Audit Report which is now
mandatory as per guidelines of ICAI. (A & N Island, Haryana , Meghalaya,
Sikkim, Tamil Nadu, Uttarakhand)
 Non- Coverage of NPEGEL & KGBV Account under Audit (Karnataka)
 Stock Register not maintained , Physical verification of stores not done
(Assam, Rajasthan)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Some procedural deficiencies in Annual Accounts:
 Advance paid for implementation of activities charged as expenditure
without supporting of UC / SoE/ in violation of the provisions of Para
75.1 of the FMP Manual (Andhra Pradesh, Daman & Diu, Haryana, Jharkhand,
Madhya Pradesh, Rajasthan, Sikkim, Uttarakhand, West Bengal)
 Missing Documents, i.e., Consolidated Financial Statement, FMRs,
Management Letter of Auditors, yet to be submitted (Goa, Haryana,
Jharkhand, Madhya Pradesh, Maharastra, Manipur, Orissa, Puducherry)
 The Statutory Auditors have made no mention about coverage under audit
of SMCs / VECs – SIS yet to disclose the facts with necessary certification by
the Auditors;(Assam, Bihar, Orissa, Puducherry, Rajasthan, Sikkim, Uttarakhand)
 Compliance of Previous Audit Observations have not done. The Current
Years Auditors either have expressed displeasures over the progresses of
compliance or there is no mention on status of compliance in the Audit Report
/ Notes on Accounts . (Assam, Bihar, Gujarat, Orissa, Puducherry, Rajasthan, Sikkim,
Uttarakhand, West Bengal)
Previous years figures are not given in some of the state Annual Accounts
(Kerala);
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
STATE’S SPECIFIC ISSUES INVITING INTENSIVE CARE :
ASSAM
 Instead of reconciling the difference of Rs.47503.00 lakhs between
fund transferred to DPOs and the funds actually received by DPOs,
has charged this as expenditure.
CHHATTISGARH
Booking of expenditure as shown in FMR under following heads :
(Rupees in Lakhs)
Sl.
No.
Activities
1
Decrease in Advance Recoverable
2
Increase in Advance repayable
3
Increase in Suspense
4
Increase in Current Liabilities
SSA
NPEGEL
KGBV
21140.51
361.92
514.44
32.20
7.977
0.07
0.87
-
37.73
36.95
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
STATE’S SPECIFIC ISSUES INVITING INTENSIVE CARE :
CHHATTISGARH (cont…)
 Salaries for the month of April’ 2010 & May’ 2010 paid in advance
and booked as expenditure for the year 2009-10
 Computer purchased for Rs.779.03 lakhs transferred to other
departments.
 In district Sarguja, Purchase of Photocopier Machine, Stabilizer,
Trolly booked against “Remedial Teaching Funds “
GOA
No efforts for rectification of Rs. 1,80,249/- wrongly debited by bank
Haryana
Exp. Of Rs. 614.86 lakhs in SSA A/c which is relating to State Govt.
HIMACHAL PRADESH
SSA Funds of Rs.105.06 lakh kept under Fixed Deposit;
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
STATE’S SPECIFIC ISSUES INVITING INTENSIVE CARE :
KERALA
 Difference of Rs. 50.00 lakhs in Fund Transfers to DPOs included
in BRC Account.
 Procurement of Vehicles without obtaining permission of MHRD
over and above the budgetary provision and also exceeding the
sanction accorded by state executive committee
RAJASTHAN : Expenditure of Rs. (-) 28.89 lakhs under TLE;
Unauthorised Exp of Rs.1.78 , 1.31 and 31304.00, lakhs ,
Unjustified & Irregular Exp. Of Rs.0.24, 0.91,0.31, 15.71,64.70,
4.64, 5.43, 24.21 lakhs and
Wasteful exp. Of Rs. 0.22 lakh reported by Auditors
SIKKIM
School Grants of Rs.97.35 lakh released on 31st March 2010 treating
as expenditure for 2009-10
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
STATE’S SPECIFIC ISSUES INVITING INTENSIVE CARE :
UTTARAKHAND
Fund Transferred to Sub-District Level is still being shown as
expenditure without complying with Para 74.1 of manual on FMP.
WEST BENGAL
 In the Utilization Certificate an amount of Rs.1561.55 lakhs on
account of un-reconciled opening balance as per last year has been
shown as utilized.
 Maintenance Grant of Rs.68 lacs has been wrongfully disbursed
twice in the district of Purulia, this has lead to deviation with their
budgeted expenditure (NPEGEL)
• In one district it was observed that the interest component at circle
level has been utilized for purchasing of fixed assets over and above
the Budget allocation.
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
World Banks birds eyeview on Audit Reports of some states :
(i) Chhattisgarh :
•
•
•
•
•
•
Audited accounts of districts for period ending March 31, 2008
were rectified and reconciled and revised financial statements
were drawn, but not certified either by statutory auditors or recertification auditors.;
Payments by bearer cheques in many districts and blocks and the
auditor was unable to comment on propriety of expenses.;
In many districts teachers’ salary is disbursed against sanctioned
posts to CEO Janpad panchayat/ BEO, but no claim is received for
the release. DPOs could not provide names of teachers appointed
against sanctioned posts;
VEC audit of schools for receiving grants in excess of Rs.1 lakh in
FY 2009-10 was not conducted;
Bank Balances of 7 DPOs and many blocks are subject to
reconciliation.;
No compliance of observations of previous audit reports.
(Letter no D.O.No.17/1/2010-SSA(DIS) Dated: 13th April 2011 sent to State’s SPD for replies)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
World Banks birds eyeview on Audit Reports of some states :
(ii) Jharkhand :
•
•
•
Settlement of advances relating to civil works and programme
expenditure was very poor. Fresh advances were given without
adjusting previous advances.;
Bank Reconciliation Statement (BRS) is either not prepared or not
prepared properly;
Fixed Asset Registers not maintained in several districts.
(iii)Orissa :
•
•
•
Huge amounts of un-reconciled balances have remained
unadjusted since a long time in BRSs.
Large advances remain unadjusted in the State Office since a long
time.
Fixed Asset Register was not maintained as per the manual and
physical verification of assets was not conducted.
(Letter no D.O.No.17/1/2010-SSA(DIS) Dated: 13th April 2011 sent to State’s SPD for replies)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
World Banks birds eyeview on Audit Reports of some states :
(iv) Rajasthan :
•
•
•
Non-production of records by some BRCFs and DPCs;
Details of pending UCs were not produced in 6 DPCs and 1 KGBV;
Pending UCs for salary in some districts for funds given to BEEOs.
•
Several observations indicating that control procedures continue
to be weak.
VECs maintenance of accounting and other records not
satisfactory;
Advance to Circles by districts booked as expenditure instead of
advance.
Maintenance of UCs and their control at district levels not
adequate;
Unsatisfactory accounting at circle level. Certain portion of total
fund is distributed by cash and monitoring is not adequate;
System of obtaining Audited Accounts of NGOs is not in force.
(v) West Bengal :
•
•
•
•
•
•
(Letter no D.O.No.17/1/2010-SSA(DIS) Dated: 13th April 2011 sent to State’s SPD for replies)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
World Banks birds eyeview on Audit Reports of some states :
(vi) Uttar Pradesh :
•Salary : Uniform policy is required for drawal of Salary of Zila Basic
Shiksha Adhikari, as in some cases funds allocated under SSA are
used, and sometimes from government treasury.
•Flow of Funds : Proper reconciliation of funds transferred at various
levels is needed. More than two bank accounts have been opened at
district level in some cases. Delay in release of funds and instructions
to the next level by DPOs/DIETs.
•UCs: Many BRCs, NPRCs, VECs/Schools do not comply with directions
regarding submission of UCs.
•TEXT Books : Reconciliation of receipts and distribution of books at
various levels (DPOs, BRCs and Schools) is yet to be introduced.
•Staffing: Coordinators of 878 BRCs and 8249 Nyay Panchayat
Resource Centers were relieved from their posts as part of
administrative overhaul. Alternative arrangements to be made to
avoid gaps in record keeping and financial management.
•Civil Works : Generally weak management of civil works.
th – 14th May 2011 - Shimla ( Himachal Pradesh)
12Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Status of pending Compliance Reports of earlier years:
The following States UTs have not furnished Compliance on Audit
Reports of CAs Audit of the years prior to 2009-10.
2005-06 Andhra Pradesh, Arunchal Pradesh, Bihar, Chhattisgarh, Haryana,
Himachal Pradesh, Manipur, Mizoram & Nagaland
(9 States)
2006-07 Andhra Pradesh, Arunachal Pradesh, Bihar, Chhattisgarh, Haryana,
Karnataka, Kerala, Madhya Pradesh, Manipur, Mizoram, Nagaland,
Meghalaya, Puducherry, Sikkim, Tripura & Tamil Nadu, (16 States)
2007-08 Arunachal Pradesh, Bihar, Chhattisgarh, Haryana, Himachal
Pradesh, Meghalaya, Karnataka, Kerala, Manipur, Nagaland,
Punjab, Rajasthan, Tripura & Tamil Nadu
(14 States)
2008-09 Assam, Andhra Pradesh, Arunachal Pradesh, Bihar, Chandigarh,
Chhattisgarh, Dadra & Nagar Haveli, Daman & Diu, Goa, Gujarat,
Haryana, Himachal Pradesh, Jammu & Kashmir, Jharkhand,
Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur,
Mizoram, Meghalaya, Nagaland, Punjab, Rajasthan, Tripura, Uttar
Pradesh, Uttarakhand & West Bengal
(28 States)
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Audit Observations Classified (2007-08 & 2008-09):
Sl. Nature of Audit
2007-08
No. Observations
(States/UTs)
Accounting
Andhra
Pradesh,
1 Irregularities
Arunachal Pradesh, Bihar,
Chandigarh, Chhattisgarh,
Goa, Karnataka, Kerala,
Lakshadweep,
Mizoram,
Nagaland,
Orissa
Rajasthan, Tamil Nadu &
Tripura
Improper /
Andhra Pradesh, Bihar,
2 irregular Bank Jharkhand,
Kerala,
Reconciliation Maharashtra, Puducherry,
Rajasthan, Uttar Pradesh &
Uttarakh
2008-09
(States/UTs)
Assam,
Bihar,
Chhattisgarh,
Dadra
Nagar Haveli, Himachal
Pradesh,
Kerala,
Lakshadweep, Manipur,
Mizoram & West Bengal
Assam,
Bihar,
Chhattisgarh,
Dadra
Nagar Haveli, Himachal
Pradesh,
Kerala,
Lakshadweep, Manipur,
Mizoram & West Bengal
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Audit Observations Classified (2007-08 & 2008-09):
Sl.
No.
3
4
5
Nature of
Audit
Observations
2007-08
(States/UTs)
Advances/
Andhra Pradesh, Arunachal Pradesh,
Releases/
Bihar, Goa, Haryana, Himachal Pradesh,
Treated
as Jharkhand,
Madhya
Pradesh,
expenditure
Maharashtra, Meghalaya, Nagaland,
Tamil Nadu, Tripura, Uttar Pradesh &
Uttarakhand
Weak Internal Jharkhand, Karnataka, Nagaland & West
Controls
/ Bengal
Internal Audit
Huge
Outstanding
advances/ Non
adjustment of
Advances
Andhra
Pradesh,
Assam,
Bihar,
Chhattisgarh,
Delhi,
Haryana,
Jharkhand, Karnataka, Madhya Pradesh,
Maharashtra, Orissa, Punjab, Tamil Nadu
& West Bengal
2008-09
(States/UTs)
Bihar,
Haryana,
Himachal
Pradesh, Madhya Pradesh,
Maharashtra,
Manipur,
Nagaland, Orissa, Tripura,
Tamil Nadu, Uttar Pradesh,
Uttarakhand & West Bengal
A& N Island, Bihar, Gujarat,
Chhattisgarh,
Karnataka,
Kerala, Lakshadweep, Madhya
Pradesh, Manipur, Mizoram,
Nagaland, Punjab & West
Bengal
Andhra
Pradesh,
Bihar,
Chhattisgarh,
Gujarat,
Jharkhand, Madhya Pradesh,
Kerala, Orissa, Maharashtra,
Tamil Nadu, & West Bengal
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Audit Observations Classified (2007-08 & 2008-09):
Sl.
No.
Nature of Audit
Observations
6
Misappropriation of
Funds / Diversion of
Funds
Fixed Assets Register
not
Maintained
/
Improperly
Maintained
7
8
9
2007-08
(States/UTs)
2008-09
(States/UTs)
Daman & Diu & Lakshadweep, Bihar, Haryana, Himachal
Himachal Pradesh
Pradesh (4 cases) & West
Bengal
Assam, Goa, Karnataka, Kerala, Assam, Bihar, Karanataka,
Madhya Pradesh, Maharashtra, Himachal Pradesh, Madhya
Meghalaya, Sikkim, Tripura & Pradesh, Manipur, Meghalaya,
West Bengal
Mizoram,
Nagaland,
Rajasthan, Sikkim & Tripura
Prior
years Assam, Haryana & Tamil Nadu Assam
,Himachal Pradesh,
Expenditure Adjusted
Maharashtra, Tamil Nadu
but
Activity
wise
details not Available
Irregular / Excess Arunachal Pradesh, Karnataka, Assam, Chandigarh, Daman &
Expenditure
Meghalaya & Rajasthan
Diu,
Gujarat,
Himachal
Pradesh,
Karnataka,
Chandigarh, Madhya Pradesh,
Mizoram, Punjab, Rajasthan,
Tamil Nadu, Uttar Pradesh &
West Bengal
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Audit Observations Classified (2007-08 & 2008-09):
Sl.
No.
Nature of Audit
Observations
10
Negative Balance in
Term Deposits / Bank
Account :
Default in deduction of
Statutory dues
Non compliance to
Procurement
Procedures:
Non- maintenance /
Improper Maintenance
of Accounts Records
11
12
13
14
2007-08
(States/UTs)
2008-09
(States/UTs)
Bihar & Mizoram
Bihar, Jharkhand
Tamil Nadu
&
Bihar, Goa, Karnataka,
Kerala,
Meghalaya,
Nagaland, Rajasthan &
Uttarakhand
Records not Produced Karnataka
for Audit
Bihar, Jharkhand & Tamil
Nadu
Himachal
Pradesh,
Haryana,
Jharkhand,
Kerala & Madhya Pradesh
Bihar,
Chhattisgarh,
Karnataka,
Kerala,
Madhya
Pradesh
&
Manipur
Chhattisgarh, Karnataka,
Meghalaya & Mizoram
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Audit Observations Classified (2007-08 & 2008-09):
Sl.
No.
15
16
17
18
Nature of Audit
Observations
2007-08
(States/UTs)
2008-09
(States/UTs)
Outstanding UCs
Goa, Jharkhand, Karnataka, Chhattisgarh,
Goa,
Puducherry, Rajasthan & Gujarat,
Meghalaya,
Uttarakhand
Rajasthan,
Puducherry,
Uttar
Pradesh
&
Uttarakhand
Receipts
of Andhra Pradesh, Jharkhand, Assam,
Chhatisgarh,
Unspent amounts Maharashtra reversal of Haryana,
Kerala
&
Treated as Misc. advances & Uttar Pradesh
Maharashtra
Income
Embezzlement
Andhra Pradesh, Himachal Haryana,
Himachal
/Fraud etc
Pradesh
Pradesh
Audit
Reports Chhattisgarh
Chandigarh, Dadra &
found
unNagar
Haveli
&
acceptable
Meghalaya
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Review by IPAI Team
Ministry of Human Resource Development (MHRD) has
initiated review of Financial performances of SIS at state,
district and sub-district level by independent audit teams of
Institute of Public Auditors of India (IPAI). Such exercises of
financial review have been done so far in three phases. All the
SIS FCs must have shared the observations of their respective
state by IPAI Team.
General Observations of IPAI :
The Meetings of General Body Council and State Executive
Committee are not conducted as required by the Bye laws /
Rules of the SIS;
In many states , funds of SSA have been diverted for the
purposes other than those approved by PAB in AWP & Bs;
Books of Accounts are not maintained at state and sub-district
level offices as prescribed in the FMP Manual;
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Review by IPAI Team - General Observations
State shares under SSA/ NPEGEL / KGBV are not released by
State Government on regular basis and within the time frame.
Generally, funds are released at flag end of the financial year
resulting huge unspent balance at year end;
 In most of the cases, fund released against School
Development Grant, Repair & Maintenance Grant and TLM
Grants are booked as expenditure without collecting Ucs / SoEs
from the end users;
 Completion rates of Civil Works are very poor due to lack of
effective supervision & Monitoring, prompt fund transfer
system, training of SMCs / VECs people and even technical
supports from district level offices;
Asset Register for civil works acquired out of SSA fund has not
been maintained in DPO or SPO;
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Review by IPAI Team - General Observations
Advance Register are either not maintained or head wise
outstanding balance is not reconciled with financial ledger;
Procurement Plans are not prepared at any level and while
making decisions on procurement, procedural lapses are
witnessed. Lack of transparency in the procurements;
Unavailability of adequate skilled accounts staff at district and
sub-district level offices.
 Lack of capacity building exercises / training
of accounts
personnel;
 Expenditure in excess of budgetary provisions and/or even
without budgetary provisions in some states;
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Review by IPAI Team – Some State’s Specific Observations
Andhra Pradesh : Several cases of diversion of SSA funds, like
Issues
Amount
SSA funds diverted for non SSA activities 2005-06 to 2008-09
Rs.796.17 lakhs
School grant diverted towards printing
Rs.2236.36 lakhs
Expenditure incurred on IX & X class girl students living in KGBV
Rs.1999.00 lakhs
Funds spent on c of SIEMAT building without approval of PAB.
Rs.179.47 lakhs
Steel Almirah were purchased out of Maintenance grant funds
Rs.141.17 lakhs
Delhi :
Advance payment without a BG to M/s IL & FS for setting up 20 Kiosks-work
which was to be completed by March 2009 not started till July 2009 (Rs.21.60 lakhs),
100% advance payment of Rs.1.52 crore made to M/s Mac Milan for supply of Meena
Material.
Orissa :Extra expenditure Rs.1.62 crore incurred during 2007-2008 & 2008-2009Discount not claimed & payment of transport charges on Text Books;
Punjab :Supply of work books to non entitled category of students Rs.772.03 lakhs.,
Loss due to excessive purchase of books -Rs. 97.66 lakhs, Avoidable expenditure of Rs.
12.37 lacs in Purchase of computers, In fructuous expenditure of Rs. 4.80 lacs in the
purchase of 2400 kits for EG
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Review by IPAI Team – Some State’s Specific Observations
Rajasthan : Excess expenditure on Training of community leaders Rs.23.204 lakhs
Haryana : Loss of interest amounting Rs.1.77 lakhs due to Bank drafts were
prepared at the fag end of the year and subsequently cancelled, In-fructuous
expenditure on a Non-viable & futile project-Sarva Shiksha Abhiyan Netra
paid to the NGO Rs.40 lakhs, Payment of to CADAM for conducting Shiksha
Abhiyan Yatra (SAY) Rs.129.19 lakhs Payment to M/s Rajas Enterprises,
Ambala Cantt. For playway kits for Bachpanshalas, Payment to Utkarsh Unauthorized payment Rs.50 lakhs to Director, Antarkash corporation
Rs.30.96 lakhs, Excess expenditure under CWSN Rs.126.92 lakhs
Uttar Pradesh :No reimbursement claims were received from the Financial
Controller in respect of actual payments made to the Teachers recruited
under SSA-Rs.279623.44 lakhs
West Bengal: DPO Hooghly borrowed Rs. 5 crore from SSA to make payment
of wages under NREGS in the month of March and April 2008. However the
amount was refunded to SSA in June 2008. , A computer and a printer value
Rs. 0.96 lakhs and Rs. 0.71 lakhs respectively were procured from out of
budget of SPO during 2006-07 actually installed in the chamber of MIC(SE),
West Bengal.
Other states have also to see the report and submit replies to MHRD………
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Prompt Settlement of Audit Objections - Suggestions
Pre-Audit Measures :
1. Minimize the objections before its inclusion in Auditor’s Report :
(a) FCs to take stocks of probable audit queries during the
course of audit on regular basis;
(b) Have detailed discussions with Auditors with all
documentary evidences and supporting papers and take
remedial action where ever necessary;
(c) Get all such points deleted which could have explained
satisfactorily ;
Post -Audit Measures :
1. Classify the Audit Objections in different groups :
(a) Deficiencies in Books maintenance;
(b) Errors of Omission, Bank transactions, Bank Reconciliation;
(c) Wrong booking of expenditure, exp. Not supported by UCs ,
Outstanding advances,
(d) Internal audit, internal Control system, Monitoring &
Supervision, and
(e) Financial irregularities, Misappropriation / Diversion of funds
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Prompt Settlement of Audit Objections - Suggestions
Post -Audit Measures (continued…..) :
2. Share the Audit Objections with all programme functionaries
of SPO, District Programme Co-ordinators and Accounts
Officer of DPOs in a joint meeting in presence of SPD;
3. Forward copy of the component wise audit objections to the
respective Component In-charge at SPO and seek their
comments within a prescribes time frame;
4. Take effective administrative / legal action for the financial
misappropriations, if any detected ;
5. Prepare Compliance Report / ATR for approval of the State
Executive Committee;
6. Send Replies /Compliance Report / ATR to MHRD
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Commitment by Finance Controllers to for submission
of the Replies / Compliance Report / ATR on the Audit
Report 2009-10
Submission of Compliance Report / SIS Management Replies
supported by ATR is as such important as Audit of Accounts.;
 Till Date the Ministry has received Replies from 6 (six) states, ie.
A & N Island, Assam , Chandigarh, Haryana, Sikkim and West
Bengal which are under examination and further scrutinizes by TSG
Finance Controllers of remaining states / UTs are to
record their commitment for submission
important documents to the Ministry …………
of
this
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D
29th Quarterly Review Meeting of Finance Controllers-SSA
Thank You ….
12th – 14th May 2011 - Shimla ( Himachal Pradesh)
Annexure-D