February 2014 Audit Plan for 2014-15 Page 1

Audit Plan of AMG IV for 2014-15

Key Focus Areas for Audit Plan 2014-15

This group intends to focus attention on selected programmes/activities of different

Ministries/Departments/CABs, using a thematic risk-based approach, rather than conducting

routine audits of DDOs/CABs.

We plan to take up following activities:

Stand alone PA Review

Tribal Sub Plan (Education Sector)

→ Thematic reviews (with the assistance of State PAGs)

NIL

→ Thematic reviews (with our own resources)

NIL

→ IT Audits

NIL

Further, we plan to undertake the Financial/Certification audits of 47 units (including the

Proforma Audit of DMS and one sub-unit of National Horticulture Board) and

Transaction/Compliance audits of 43 units (including the audit of 8 units u/s 14, for which

man-days have been provided in the audit plan).

In addition, planning exercise includes for Stand-Alone PA reviews as well as thematic mini-

reviews for the years 2015-16 and 2016-17.

1 Background

AMG IV group conducts the audit of 3 Central Ministries viz. Agriculture, HRD and Labour

& Employment and their 32 attached/subordinate offices under section 13 & 15 and the

transaction audit of 198 autonomous bodies under section 14 & 19/20 of CAG’s (DPC) Act

1971. Besides, this group is also responsible for the audit of 9 Finance/Appropriation

Accounts, 13 PAOs, certification of accounts of 47 autonomous bodies (including Proforma

Account of DMS and one sub-unit of National Horticulture Board) and 14 externally aided

February 2014 Audit Plan for 2014-15 Page 2

projects units under these Ministries. Audit entities/units are further categorized into three

types:-

(i) Financial/Certification audits: - Comprising of audit of 3 Finance and 6 Appropriation

accounts, Certification of accounts of 46 CABs u/s 19 and 20 of the CAG’s (DPC) Act, audit

of 13 Pr. PAOs/PAOs, Proforma Accounts of DMS and 14 externally aided project units.

(ii) One All India Performance audits (TSP)

(iii) Transaction/Compliance audit of 230 units under Sections 13, 14, 15, 19 & 20

(excluding 13 Pr. PAOs/PAOs).

A summary of expenditure of all units of the GOI Ministries/Departments under audit

jurisdiction of this Group is enclosed as Annexure-I (a) & (b).

Further, thrust areas have been identified in each Ministry (Annexure-II) and domain

information of each thrust area would be gathered during the transaction audit of the

Ministries.

2 Allocation of Audit Effort for 2014-15 - Summary

Based on available manpower and after considering deployment at Headquarter, it is

proposed to deploy 8 audit parties during the year. Consequently, the total party days

available for audit works out of 1706 party days, as detailed in Annexure-III.

Party days during 2014-15 would be distributed as under:

Units Party Days Percentage

Financial Audit (including Proforma

Account of DMS)

Certification/Appn./Finance Accounts’

Audit (including provision for review of one

selected Grant)

47

24

543

178

31.83

10.43

All India Performance Audit of TSP

(M/o HRD)

01

160

9.38

PM’s 15 point programme* 01 20 1.17

Capacity related and other issues relating to

FRBM Act. (As per Hqr direction)

01 20 1.17

Misc. (ATNs, DP processing, assistance to

Hq in finalizing reviews, etc.

- 50 2.93

Compliance/transaction Audits (Including 8

units u/s 14 for which provision for 59 party

days have been made).

43 735 43.08

Total 117 1706 100

*In the meeting held on 12/02/2014, it was decided that AMG-I will conduct the MsDP review. It was also

decided that PM’s 15 point programme will also have to be included in the review and AMG-IV will

provide the audit inputs for the PM’s 15 point programme as the Ministry dealing with this program falls

under the audit jurisdiction of AMG-IV.

February 2014 Audit Plan for 2014-15 Page 3

Details of the allocation of audit efforts in connection with the available party days and its

further distribution for planned auditable units are given at Annexures IV & V.

Details of the distribution of party days among above units are given in Annexure-V.

3 Summary of Achievements during 2013-14

3.1 PA Reviews

All India PA review report of Employees Provident Fund Organization

(EPFO) was updated and approved by HQ as Stand Alone Report. The

Report lay in Parliament on 18.02.2014

All India PA review of the Employees State Insurance Corporation is under

consolidation. The report on ESIC is to be laid in parliament in the Monsoon

session 2014.

All India Performance Review of Rashtriya Krishi Vikas Yojna has been

conducted and the report in this regard is under compilation. The report on

RKVY is also to be laid in parliament in the Budget session in 2014.

Pilot studies and preparation of guidelines for the All India PA on TSP was

conducted and guidelines on TSP submitted to Hqrs in January 2014.

However, the party has been directed in February, 2014 to prepare afresh

guidelines on TSP. The Report on TSP is to be laid in winter session 2014.

3.2 Compliance Audit Report

The compliance audit paragraphs originally floated by this Group during the year 2013-14 are

now being processed for the forthcoming Compliance Audit Report. For the year ending 31st

March 2011 and 2012, the position of DPs printed was as under:

Year

ending

Report Target DPs sent

to Hqrs

DP Printed Money Value

(Rs. in lakh)

31.3.2011 28 26 18 13 248.00

31.3.2012 30 20 15 10 9359.00

3.3 Financial Audit (Finance & Appn. Accounts, SAR & Audit Certificate for EAPs)

Audit of 3 Finance Accounts and 6 Appropriation Accounts grants for 2012-13 has

been completed along with detailed review of Grant No.2 (Ministry of Agriculture).

However, queries on the detailed review of Grant No. 2 were being attended by the

concerned audit team.

Out of 32 CABs, the SARs in respect of 29 CABs for the year 2012-13 have been

issued as of date and 2 SARs are under finalization and are yet to be issued. Besides,

one SAR was issued for the year 2011-12. The accounts in respect of one CAB for

the year 2012-13 were not yet received.

Audit Certificate for one Externally Aided Project viz. National Agricultural

Innovation Project (involving 9 units), was issued till date and the audit of one

another EAP i.e. Vocational Training Improvement Project (M/o labour &

February 2014 Audit Plan for 2014-15 Page 4

Employment) has been completed and issue of certificate in this regard is in progress.

Statements of Expenditure in respect of remaining 3 EAPs are still awaited.

4 Audit Plan for 2014-15

4.1 Financial Audit

The resources proposed to be allocated during 2014-15 for financial audits are broadly the

same as for the previous year. This would cover:

Audit of 03 Finance accounts, 06 Appropriation Accounts, 1 Pr. PAO

14 External aided/World bank projects units

Certification of annual accounts of 47 Central Autonomous Bodies (including 13

maintained institutions of DU, 01 sub-unit of NHB and 01 audit of DMS proforma accounts

(Annex-V)

4.2 Performance Audits, Thematic Review Paras, IT Audit and Stage Audit of PPP

Project—nil

4.2.1 Stand-Alone PA Review.

Topic Justification

Tribal Sub Plan

(Education Sector),

Ministry of HRD

The Government has been implementing Tribal Sub Plan as

a part of its obligation to implement the directive principles

of State policy enshrined in the Constitution of India. The

present Tribal Sub Plan strategy was started early in the

year 1975-76 with the beginning of Fifth Five Year Plan for

socioeconomic amelioration of the tribal communities. The

ST development effort was revamped and invigorated in

order to fulfill the constitutional mandates of ensuring

better quality of life of the schedule tribes.

The basic objective of Tribal Sub-Plan is to channelised the

flow of outlays and benefits from the general sectors in the

Central Ministries/Departments for the development of

Scheduled Castes and Schedules Tribes at least in

proportion to their population, both in physical and

financial terms. The Mid Term Appraisal of the Eleventh

Plan has noted that several Central Ministries/Departments

have not earmarked adequate funds to TSP, proportionate

to the share of STs in the population.

The broad objectives of the TSP are as follows: Substantial

reduction in poverty and un-employment.

Creation of productive assets in favour of

Scheduled Tribes to sustain the growth likely to

accrue through development efforts.

Human resource development of the Scheduled

Tribes by providing adequate educational and health

services, and

Provision of physical and financial security against

all types of exploitation and oppression.

February 2014 Audit Plan for 2014-15 Page 5

4.2.2 Thematic Reviews

Nil

4.2.2.1 Thematic Reviews with the Assistance ___________________________

Topic Justification

Nil N/A

4.2.2.2 Other Thematic Reviews (with our own audit resources) for 2014-15

Thematic paras

Topic for thematic draft

paragraphs proposed

Justification

Nil N/A

4.2.3 IT Audit

Topic Justification

Nil N/A

4.2.4 Stage Audit of Public Private Partnership (PPP) Project and feasibility study for PA

review

Topic Justification

Nil N/A

4.3 Compliance Audit

Risk assessment of all the compliance auditee units has been carried out for transaction audit

as per parameters suggested by the Headquarters. The exercise of risk assessment comprises

of evaluation of inherent risk parameters and control risk parameters. In addition to this, audit

materiality for the report has also been considered. However, keeping in view the audit

materiality and audit coverage of units; 1706 party days available with the Group have been

earmarked from the available resources for conducting compliance audit of 43 units under

section 13, 14, 15, 19 and 20.(including provision for 59 man-days for 8 units u/s 14 where

February 2014 Audit Plan for 2014-15 Page 6

accounts are expected to receive through Spl Cell). Details of units selected for compliance is

given in Annexure V.

4.4 Back up/Contingency Plan

In the event of saving of party days for unforeseen reasons, audits foreclosed due to lesser

than estimated risks etc., these days would be utilized for taking up the audit of 12 units

which have been included in the Back-up/Contingency audit plan as per Annexure VII.

5 Tentative Plan for 2015-16

5.1 Stand-Alone PA Reviews

Topic Justification

Nil N/A

5.2 Thematic reviews – with assistance of State PAGs/AGs/PDA London, Washington,

Kualalumpur

Topic Justification

Nil N/A

5.3 Thematic reviews – with own audit resources

Topic Justification

Nil N/A

5.4 IT Audit– with own audit resources

Topic Justification

Nil N/A

February 2014 Audit Plan for 2014-15 Page 7

6 Tentative Plan for 2016-17

6.1 Stand-Alone PA Reviews

Topic Justification

1. Implementation of Right to Education Act

Right to Education Act (RTE)

Elementary Education sector is the most important sub-sector of the education system, laying the foundations of the education edifice. The goal of universal elementary education, encompassing universal access and retention, bridging of gender and social category gaps, and improvement in the quality of education, was sought to be achieved through the country’s flagship programme, Sarva Shiksha Abhiyan (SSA), launched in 2001-02. Over the years, SSA has contributed significantly to universalisation of access and bridging of gender and social category gaps in elementary education.

In 2010-11, Article 21-A of the Constitution of India and the Right of Children to Free and Compulsory Education (RTE) Act, 2009 became operational to make elementary education a fundamental right of all children in the 6-14 age group. This development has far-reaching implications for the elementary education sub-sector, and indeed, the implementation of the SSA programme. The RTE Act, 2009 provides for:

(i) The right of children to free and compulsory education

till completion of elementary education in a neighbourhood

school.

(ii) It clarifies that “compulsory education” means

obligation of the appropriate government to provide free

elementary education and ensure compulsory admission,

attendance and completion of elementary education to

every child in the six to fourteen age groups. “Free” means

that no child shall be liable to pay any kind of fee or

charges or expenses which may prevent him or her from

pursuing and completing elementary education.

(iii) It makes provisions for a non-admitted child to be

admitted to an age appropriate class.

(iv) It specifies the duties and responsibilities of

appropriate Governments, local authority and parents in

providing free and compulsory education, and sharing of

financial and other responsibilities between the Central and

State Governments.

(v) It lays down the norms and standards relating inter alia

to Pupil Teacher Ratios (PTRs), buildings and

February 2014 Audit Plan for 2014-15 Page 8

infrastructure, school working days, teacher working hours.

(vi) It provides for rational deployment of teachers by

ensuring that the specified pupil teacher ratio is maintained

for each school, rather than just as an average for the State

or District or Block, thus ensuring that there is no urban-

rural imbalance in teacher postings. It also provides for

prohibition of deployment of teachers for non-educational

work, other than decennial census, elections to local

authority, state legislatures and parliament, and disaster

relief.

(vii) It provides for appointment of appropriately trained

teachers, i.e. teachers with the requisite entry and academic

qualifications;

(viii) It prohibits (i) physical punishment and mental

harassment, (ii) screening procedures for admission of

children, (iii) capitation fees, (iv) private tuition by

teachers, (v) running of schools without recognition,

(ix) It provides for development of curriculum in

consonance with the values enshrined in the Constitution,

and which would ensure the all-round development of the

child, building on the child’s knowledge, potentiality and

talent and making the child free of fear, trauma and anxiety

through a system of child friendly and child centred

learning.

(x) It provides for protection and monitoring of the child’s

right to free and compulsory education and redressal of

grievances by the National and State Commissions for

Protection of Child Rights.

Pursuant to the RTE Act becoming operational, the

Government revised the SSA Framework of

Implementation to correspond with the provisions of the

RTE Act.

The following timeframes, mandated by the RTE Act, are

also applicable to SSA:

Activity Time Frame

Estt. of neighbourhood schools 3 years (by 31st

March,

2013)

Provision of school infrastructure 3 years (by 31st

March,

2013)

Provision of teachers as per 3 years (by 31st

March,

2013)

prescribed PTR

Training of untrained teachers 5 years (by 31st March

2015)

Quality interventions and other With immediate effect

February 2014 Audit Plan for 2014-15 Page 9

Provisions.

All States/UTs have notified the State RTE Rules. In

addition, States/UTs took steps to issue several

notifications reiterating the child centered provisions of the

RTE Act. 34 States/UTs issued notifications prohibiting

corporal punishment and mental harassment; 32 States/UTs

issued notifications prohibiting screening for admission and

capitation fees; 32 States/UTs issued notifications

prohibiting expulsion and detention; 33 States/UTs issued

notification banning Board examinations till completion of

elementary education; all the 35 States/UTs notified

academic authority under the RTE Act.

Pursuant to RTE Act becoming operative, the fund sharing

pattern between the Central and State Governments was

also revised.

During the 9th Plan the funding pattern between the

Centre and States for SSA was in the 85:15 ratio.

In the 10th Plan the respective shares of the Central and

State Governments were in the 75:25 ratio. In respect of

the states in the North East Region (NER) during the

last two years of the 10th Plan 15% of the State share

was sourced from the Ministry of DoNER.

In the 11th Plan the prescribed funding pattern was on a

tapering scale of 65:35 for the first two years of Plan,

60:40 for the third year, 55:45 for the fourth year and

50:50 thereafter. In respect of the NER States the

funding was in the 90:10 ratio with the Central share

sourced from the 10% earmarked funds for the NE

States in the SSA Central Budget.

Taking into account the requirements for

implementation of the RTE Act, the Government

revised the fund sharing pattern from the sliding scale

ratio to a fixed share in the 65:35 ratio with effect from

2010-11. The sharing pattern for the NER States

continues to be in the 90:10 ratio.

The approved outlay for SSA for the 11th Plan period was

Rs 71,000 crores. However, on account of the requirements

arising out of implementation of the RTE Act, the

Government approved an outlay of Rs 2,31,233 crore for

the combined RTE_SSA programme for a five year period

from 2010-11 to 2014-15 to be shared between the Central

and State Government in the 65:35 ratio (90:10 for NER).

This outlay of Rs 2,31.233 crore is supported by Grant-in-

Aid of Rs 24,068 crore awarded by the 13th Finance

Commission to the States during 5 year period 2010-11 to

2014-15.

The cumulative achievements under SSA till September, 2012 include:

February 2014 Audit Plan for 2014-15 Page 10

--------------------------------------- 2. Skill Development

Opening of 3,52,816 new primary and upper primary schools (up to Dec, 2012)

Construction of 2,84,032 new school buildings

Construction of 16,42,867 additional classrooms

Provision of 2,17,820 drinking water facilities

Construction of 6,18,089 toilets

Appointment of 12.48 lakh teachers

In-service training imparted to 18.64 lakh teachers

Supply of free textbooks to 8.32 crore children

Out of an approved outlay of Rs. 2,31,233 crore for the combined RTE_SSA programme for a five year period from 2010-11 to 2014-15, a sum of Rs.76235.05 crore (1/3rd) could be released/utilized under the scheme (as per the ‘Detailed Demand for Grant No. 58 in respect of M/o HRD for the year 2013-14) up to 2013-14, as detailed below:

Year Amt. (Rs. in crore)

2010-11 (Actual) 19636.89

2011-12 (RE) 13228.31

2012-13 (BE) 16111.85

2013-14 (BE) 27258.00

Total: 76235.05

Finding of Inspection Report 2012-13

Non-release of desired ratio by the State of Punjab: Rs. 21351.75 lakh & Delhi: Rs.671.80 lakh

Utilization of funds without approval of activities: Rs. 13.20 crore

Slow progress in implementation of scheme

Non-reconciliation of differences of unspent balances (West Bengal)

Release of grant not in consonance with the guidelines

Execution of scheme without complying terms and conditions

_______________________________________________

Skill Development

The objective of Skill Development is to increase the

productivity and employability of workforce (wage and

self-employed) both in the organized and the unorganized

sectors. The Eleventh Five Year Plan detailed a road-map

for skill development in India, and favoured the formation

of Skill Development Missions, both at the State and

National levels.

February 2014 Audit Plan for 2014-15 Page 11

To create such an institutional base for skill

development in India at the national level, a “Coordinated

Action on Skill Development” with three-tier institutional

structure consisting of the PM’s National Council on Skill

Development (PMNSCD), the National Skill Development

Coordination Board (NSDCB) and the National Skill

Development Corporation (NSDC) was created in early

2008.

PM’s National Council on Skill Development

(PMNSCD)- The main functions of the PM’s National

Council on Skill Development are as under:

To lay down overall broad policy objectives,

financing and governance models and strategies

relating to skill development.

To review the progress of schemes, and guide on

mid-course corrections, additions and closure of

parts or whole of any particular

programme/scheme.

Coordinate Public Sector / Private Sector Initiatives

in a framework of collaborative action.

National Skill Development Coordination Board

(NSDCB)- The NSDCB (under Planning Commission)

coordinates the skill development efforts of a large number

of Central Ministries/Departments and States.

National Skill Development Corporation (NSDC)- The

NSDC is a Public Private Partnership, set up to catalyze the

setting-up of large scale, for-profit sustainable vocational

institutions in the country, by encouraging private sector

participation and providing low-cost funding for training

capacity. NSDC is a not-for-profit company set by the

Ministry of Finance under Section 25 of the Companies

Act. It has an equity base of Rs.10 crore of which the

private sector holds 51% while the Government of India

controls 49%. This makes NSDC a one-of-its-kind public

private partnership in education in India. The NSDC was

set up as part of a national skill development mission to

fulfill the growing need in India for skilled manpower

across sectors and narrow the existing gap between the

demand and supply of skills. The Finance Minister

announced the formation of the NSDC in his Budget

Speech (2008-09).

On 6th June, 2013, the Government of India, Ministry of

Finance (Deptt of Economic Affairs) has notified

establishment of National Skill Development Agency

(NSDA). The NSDA subsumes the PMNSCD, NSDCB

February 2014 Audit Plan for 2014-15 Page 12

and O/O Adviser to PM on Skill Development. The NSDA

will coordinate and harmonize the skill development efforts

of the Government and the private sector to achieve the

skill targets of the 12th Plan. NSDA will be an

autonomous body chaired by a person of the rank and

status of a Cabinet Minister. Deptt of Economic Affairs

will be the nodal department for NSDA to provide

budgetary support.

In the Central Government, around 20 Ministries are

closely involved in skill development. These ministries

mainly operate in one of two ways - through setting up own

training capacity in specific sectors (examples of such

ministries include Ministry of Labor and Employment,

Ministry of Agriculture, Ministry of Health and Family

Welfare etc) or through providing per-trainee costs of

training for specific target populations (examples of such

ministries include Ministry of Rural Development,

Ministry of Women and Child Development etc).

Most State Governments also have set up State Skill

Development Missions as nodal bodies to anchor the skill

development agenda in the State.

Ministry of HRD

A growing economy like India requires a large and skilled

workforce. However, the lack of quality trainers and

training institutes has created roadblocks to growth. To

meet the challenge, the Ministry of HRD has taken many

initiatives in Vocational Training and Skill Development.

In this regard, a number of schemes have been initiated, viz

:

Vocationalisation of Secondary Education;

National Vocational Education Qualification

Framework;

Skill Development Mission (SDM):

As per Planning Commission, the SDM would have

four sub-missions i.e. Setting up of new

Polytechnics, Strengthening of existing

Polytechnics, Construction of Women’s hostels in

polytechnics, Scheme of community development

through polytechnics.

The Ministry of HRD has released substantial

funds under some schemes.

Setting up of new Polytechnics: Assistance of

Rs.1567 crore as on 31.12.2012 has been released

to 277 districts.

Strengthening of existing Polytechnics:

Assistance of Rs.209.30 crore released as on

31.12.2012 to 500 polytechnics.

Construction of Women’s hostels in polytechnics:

February 2014 Audit Plan for 2014-15 Page 13

Assistance of Rs.202 crore released as on

31.12.2012 to 481 polytechnics.

The Ministry of HRD has also provided substantial funds

for Adult Education and Skill Development during 2010-11

to 2012-13.

(Rs. in crore)

2010-11 2011-12 2012-13

Adult Education and

Skill Development

Scheme

370.68 438.75 531.00

Support to

NGOs/institutions/

SRCs for Adult

Education and Skill

Development

92.68 100.00 105.00

Ministry of Labour

It is also seen that the Ministry of Labour has taken steps

in the matter of Skill up gradation. The Schemes

launched by the Ministry of Labour during 11th

Plan

include Skill Development Initiative through PPP.

Schemes include :

Scheme for Up gradation of 500 government ITIs;

Scheme for up gradation of 1396 government ITIs

through PPP (Rs.2550 crore has been released as on

31.3.2011.)

Skill Development in 34 districts affected by Left

Wing Extremism;

Enhancing Skill Development in NE States and

Sikkim,

Kaushal Vikas Yojana – setting up of 1500 ITIs and

5000 SDCs (Skill Dev Centres) in PPP mode – Total

outlay Rs.12846 crore – Govt Share – Rs.5205 crore.

As per Ministry of Labour’s Outcome Budget 2012-13,

following provisions have been made in a few major

schemes:

Skill Development Initiative Rs.700 crore

Kaushal Vikas Yojna Rs.50 crore

Skill Dev in 34 districts affected

by Left Wing Extremism

Rs.50 crore

Proposed Areas for or enquiries/audit scrutiny.

Audit / Scrutiny of schemes at the Ministry level will

involve :

February 2014 Audit Plan for 2014-15 Page 14

Compliance of GFR provisions by the Ministry,

Monitoring of schemes by the Ministry,

Internal control mechanism in the Ministry,

Release of funds by the Ministry.

As regards implementation of Schemes and utilisation of

funds by implementing agencies in the States, it will

involve scrutiny by field audit offices.

Findings in Inspection Reports

Ministry of HRD

Delay in construction of Women’s Hostel in 115

Polytechnics- sub-mission on polytechnics under

coordinated action for Skill Development –

Blockade of funds Rs.32.70 crore and non-

utilisation of funds {IR 2011-12}.

Short release of funds to Polytechnics under

Community Development Scheme – Sub-mission on

polytechnics under coordinated action for Skill

Development – Rs.93.64 crore. {IR 2011-12}.

Ministry of Labour

Scheme for up gradation of 1396 government ITIs

through PPP – under utilisation of funds {(IR 2011-

12}.

Irregularities in Skill Development Scheme (2009-

10}.

6.2 Thematic reviews – with assistance of other Audit Offices

Topic Justification

Nil N/A

6.3 Thematic reviews – with own audit resources

Topic Justification

Nil N/A