AUDIT REPORT ON THE ACCOUNTS OF GENERAL FUNDS AND …amudalavalasa.cdma.ap.gov.in/sites/default/files/budget/2015-16 MC... · audit report on the accounts of general funds and schemes

AUDIT REPORT

ON THE ACCOUNTS

OF

GENERAL FUNDS AND SCHEMES

OF

MUNICIPAL COUNCIL,

AMADALAVALASA,

SRIKAKULAM DISTRICT

FOR THE YEAR 2015-16

GOVERNMENT OF ANDHRA PRADESH

STATE AUDIT DEPARTMENT

From To Sri D.D.G Muller, The commissioner,

District Audit Officer, Municipal Council, State Audit, Amadalavalasa, Srikakulam. Srikakulam District.

Lr.S.A.No. 03/2017-18; Dt. 24.06.2017

Sir,

I am to forward herewith the Audit Report on the Account of

Municipal Council, Amadalavalasa, Srikakulam District for the Year 2015-16

and request that the replies to the Audit report in triplicate together with the

resolution of the Council duly approving the replies, may be sent within 2

months from the date of receipt of the Audit Report for onward transmission to

the Secretary to Government, Municipal Administration, Andhra Pradesh,

Hyderabad as required under Rule- 8(i) of the A.P. State Audit Rules 2000 issued

vide G.O.Ms.No.130 F&P (F.W Admn.II) Dated 8-9-2000 issued there under A.P.,

State Audit Act1989.

Yours faithfully, Sd/-

D.D.G. Mullar District Audit Officer State Audit:: Srikakulam

Copy to the Director of Municipal Administration, A.P., Hyderabad.

Copy submitted to the Director of State Audit, A.P, Hyderabad.

1) DRAFT AUDIT REPORT ON THE ACCOUNTS OF MUNICIPAL COUNCIL

AMADALAVALASA FOR THE YEAR 2015-16

i) Team of Auditors: Sri J. Yedukondalu, Assistant Audit Officer Sri L. Kondala Rao, Senior Auditor

Sri S.V.N. Prasad, Senior Auditor

Sri P. Rajasekhar, Senior Auditor Sri T. Ramesh Babu, Junior Auditor Sri G. Ravikumar, Junior Auditor

Smt L. Jyothi, Junior Auditor Kum A. Jyoshna, Junior Auditor

ii) Time taken for Audit: The audit was conducted by the team of Auditors as

detailed below:

# Name & Designation of

the Auditor Time taken for completion of Audit

1 Sri J. Yedukondalu, Assistant Audit Officer

25 to 28.07.2016, 19 to 21 & 24.01.2017, 14, 23, 27 & 28.02.2017 and 08 to 10, 14 to 18, 22 to 25, 27, 28 & 30.03.2017

2 Sri L. Kondala Rao, Senior Auditor

25 to 28.07.2016, 19 to 21, 24 & 30.01.2017, 21 to 23, 27 & 28.02.2017 and 13 to 16, 20 & 21.03.2017

3 Sri S.V.N. Prasad, Senior Auditor

19 to 21, 24 & 30.01.2017, 07, 08, 14 to 16, 21 to 23, 27 & 28.02.2017 and 15 to 16, 21, 22 27 & 28.03.2017

4 Sri P. Rajasekhar, Senior Auditor

25 to 28.07.2016

5 Sri T. Ramesh Babu, Junior Auditor

19 to 21.01.2017, 14, 23, 27 & 28.02.2017 and 08 to 10, 14 to 18, 22 to 25, 27, 28 & 30.03.2017

6 Sri G. Ravikumar, Junior Auditor

19 to 21 & 24.01.2017, 14, 23, 27 & 28.02.2017 and 08 to 10, 14 to 18, 22 to 25, 27, 28 & 30.03.2017

7 Smt L. Jyothi, Junior Auditor

19 to 21.01.2017, 21 to 23.02.2017 and 14 to 18.03.2017

8 Kum A. Jyoshna,

Junior Auditor

19 to 21.01.2017, 21 to 23.02.2017 and 14 to

18.03.2017

iii) Review and Approving Authority : Sri D.D.G Muller, District Audit Officer State Audit, Srikakulam

iv) Date of review :

v) The office of the Executive Authorities were held by the following officers

during the year under report:

# Name of the Official

(Sri./Smt.) Designation

Period of working

From To

1 Sri M. Jeevarathnam Commissioner 01.04.2015 31.03.2016

2 Smt. T. Geetha, Chair Person 01.04.2015 31.03.2016

2) INTRODUCTION:

a) The Nagara Panchayath, Amadalavalasa was established as Municipality on

06.2.1987.The total Area covered by the Municipality is 19.65 Sq.Kms

approximately and total population is 39806 as per the 2011 census. There is

no council for the reporting year and hence it was under the supervision of the

Special Officer. There are 10819 households in the Municipality. The following 6

surrounding Grama Panchayaths were merged to constitute Municipality:

1) Thimmapuram 4) Laksmudipeta

2) Venkayyapeta 5) Chinthada

3) Gedelavanipeta 6) Nandagiripeta

There is lot of scope for improvement in future, if the policies of the

Government are implemented with true spirit. As on the date of audit, the

following Government and Municipal facilities are available to the public.

1) Railway Station -1

2) Post Office -1

3) Police Station -1

4) Fire Station -1

5) Banks -5

6) R.M.S. -1

7) Govt Degree College -1

8) Govt. Junior College -1

9) Govt.High School -1

10) Municipal High School -4

11) Municipal U.P.Schools -8

12) Municipal Ele. Schools -21

The predominant schemes like Self Employment Scheme, A.C.D.P,

N.S.D.P, Office Building and CM Announcement Scheme, Pavala Vaddi

Pathakam, DWACRUA, Solisd Waste Management, APURMSP and Tribal Sub

Plan etc., are being implemented in the Municipality during the year.

b) Basic Information of the Municipality:- As per the information uploaded in

the Municipal website (online) some of the important items of information given

below which will be helpful to assess the socio-economic performance indicators.

Public services/amenities

1 Total Quantity of drinking water supplied 1.73 MLD

2 Per capita water supply per day 47 LPCD

3 No. of House Service Connections 1402

4 No. of public taps 178

5 No. of public bore-wells 171

6 No. of sewer connections -

7 Length of roads (in Kms) (CC + BT+WBM (Metal)+ Kutcha = Total

71.98 Kms

8 Length of drains (in Kms.) (Pucca+Kutcha) 37.50 Kms

9 No. of street lights (Highmast + Poles + Central Lighting Poles+ SV Lamps +Tube Lights=Total)

1674 No.s

10 No. of public parks 2

11 No. of play grounds 1

12 No. of public markets 1

13 Total no. of shop rooms in all shopping complexes

46

14 No. of community halls 11

15 No. of maternity and child health center 1

Urban Poverty Alleviation

1 No. of notified slums 31

2 No. of non-notified slums 11

3 Total slums 42

4 Slum population Male 11136

5 Slum population Female 11322

Total Slum population 22458

6 Percentage of slum population 56.42%

7 BPL population 27932

8 Percentage of BPL population 70.17%

Socio-Economic Activities

1 No. of Women SHGs 500

1A. No. Of SHGs & PWDs 28

2 No. of SLFs 20

3 No. of women covered under SHGs 6404

4 No. of SHGs linked with bank credit 268SHGs /

Rs.413.33 Lakhs

5 No. of Old-age pensions 1994

6 No. of Widow pensions 980

7 No of Disabled pensions 574

8 No of. Under abhaya Hastam 87

Particulars of Master Plan

Sl. No. Item Details

1

Area of General Town

Planning Scheme

(Master Plan)

19.65 Sq.KMt

2 Area of the Municipality 19.65 Sq.KMt

3

Villages covered in General

Town Planning Scheme

(Master Plan)

Amadalavalasa, Timmapuram,

Venkayyapeta, Kuddiram,

Chintada,Kasimvalasa

4 Overall Land use allocation

break up

1) Residential = 1145.92 Ac.

2) Commercial = 141.37 Ac.

3) Industrial use = 262.88 Ac

4) Public & Semi public use = 62.84 Ac.

5) Transports & Communication = 597.00 Ac

6) Recretional use = 379.43 AC.

7) Grave yards = 28.50 Acs

8) Water courses = 220.57 Acs

9) Hilllocks = 21.07 Acs

10) Agricultural use = 2001.87 Acs

5 Proposed road widths 40`-0" to 100`-0"

6 Land use Zoning

regulations

DTP Scheme not yet approved.

Only Draft Master Plan prepared.

7

Control on building

height/FSI/FAR/ground

coverage etc

Ground floor + 2

c) Commissioners: The following Commissioners worked in the Municipality for

the period shown against them as detailed below:

S.No. Name of the commissioner

(Sri/Smt) Period of working

1 T.Seetharamanjaneyulu 06.02.1987 TO 29.09.1987

2 B.H.V.L.N.Rao(FAC) 30.09.1987 TO 10.11.1987

3 K.Nageswara Rao 11.11.1987 TO 13.01.1988

4 P.D.Asheervadam 14.01.1988 TO 31.01.1989

5 P.Kanaka Rao(FAC) 01.02.1989 TO 22.06.1989

6 T.CH.Someswararao 23.06.1989 TO 02.12.1990

7 D.Vasudeva Murty 03.12.1990 TO 09.03.1993

8 T.V.R.Murty(FAC) 10.03.1993 TO 12.09.1993

9 P.C.S.Prasad 13.09.1993 TO 21.07.1994

10 T.V.R.Murty(FAC) 21.07.1994 TO 09.05.1995

11 Ramesh Kumar Behara(FAC) 10.05.1995 TO 21.07.1995

12 P.Venkateswara Rao 21.07.1995 TO 21.09.1997

13 G.Venkateswarlu(FAC) 23.09.1997 TO 31.10.1997

14 R.Sundara Rao 01.11.1997 TO 28.02.1999

15 G.Venkateswarlu(FAC) 01.03.1999 TO 11.01.2000

16 S.C.Lakshmayya 12.01.2000 TO 30.04.2000

17 V.Ravindranadh(FAC) 01.05.2000 TO 27.05.2000

18 K.V.Ramana(FAC) 28.05.2000 TO 23.06.2000

19 Y.Ramam(FAC) 24.06.2000 TO 12.10.2000

20 M.Udayasankar(FAC) 13.10.2000 TO 27.02.2001

21 P.V.V.S.Murty(FAC) 28.02.2001 TO 23.07.2001

22 G.Sanyasi Rao 24.07.2001 TO 28.08.2003

23 M.R.Prasad Gupta(FAC) 29.08.2003 TO 03.02.2004

24 P.V.Rama Lingeswar 04.02.2004 TO 06.05.2005

25 Y.Appaji(FAC) 07.05.2005 TO 20.08.2005

26 S.Govinda Swamy(FAC) 21.08.2005 TO 15.06.2006

27 G.V.S.S.R.A. Sharma 16.06.2006 TO 31.08.2006

28 A.V.Ramani(FAC) 01.09.2006 TO 06.11.2006

29 B.S.Ch. Venkata Rao(FAC) 07.11.2006 TO 21.12.2006

30 G.Krishna Mohan 22.12.2006 TO 20.05.2013

31 P. Pola Rao(FAC) 21.05.2013 TO 26.06.2013

32 N.V.V.S.V.P Nukeswar Rao 27.06.2013 TO 16.09.2014

33 B. Siva Gurumurthy (FAC) 17.09.2014 TO 22.09.2014

34 N.V.V.S.V.P Nukeswar Rao 23.09.2014 TO 12.12.2014

35 M. Jeevarathnam 13.12.2014 TO 31.03.2015

36 M. Jeevarathnam 01.04.2015 TO 31.03.2016

d) Chairpersons: The following Chairpersons held the office in the Municipality

for the periods shown against them as detailed below:

S.No. Name of the Chairperson(Sri/Smt) Period of working

1 B.V.Narsinga Rao 06.02.1987 TO -

2 Dr L.Apparao - TO 30.06.1992

3 T.V.Subba Rao, Spl Officer&RDO 01.07.1992 TO 15.01.1993

4 K.Bhaskara Rao, Spl Officer&RDO 16.01.1993 TO 25.08.1993

5 P.G.Patrudu, Spl Officer&RDO 26.08.1993 TO 31.05.1994

6 P.Sathya Rao, Spl Officer&RDO 01.06.1994 TO 30.06.1994

7 J.Janardhana Rao, Spl Officer&RDO 01.07.1994 TO 15.08.1994

8 G.Gopala Krishna, Spl Officer&RDO 16.08.1994 TO 26.09.1994

9 C.Parameswararao, Spl Officer&RDO 27.09.1994 TO 21.03.1995

10 B.Satyavathi 22.03.1995 TO 22.03.2000

11 B.Satyavathi 23.03.2000 TO 24.05.2004

12 K.Appalanaidu 25.05.2004 TO 29.03.2005

13 S.Venkateswara Rao,

Spl Officer RDO

30.03.2005 TO 29.09.2005

14 B.Ramesh 30.09.2005 TO 21.08.2011

15 N.Satyanarayana, Spl Officer

RDO Srikakulam

22.08.2011 TO 31.03.2012

16 G.Ganesh Kumar, Spl Officer

RDO Srikakulam

01.04.2012 TO 31.03.2013

17 G.Ganesh Kumar, Spl Officer

RDO Srikakulam

01.04.2013 TO 31.03.2014

18 T. Geetha, Chairperson 01.04.2014 TO 31.03.2015

19 T. Geetha, Chairperson 01.04.2015 TO 31.03.2016

e) Cadre Strength: The particulars of Cadre strength as on 31.03.2014 are given below:

S.No. Name of the Post No. of posts Sanctioned

No. of posts working

No. of posts Vacant

Office Establishment-Regular

1 Commissioner 1 1 0

2 Manager 1 1 0

3 PW Inspector 1 0 1

4 Town Planning Supervisor 1 0 1

5 Town Planning Building Inspector 2 2 0

6 Municipal Assistant Engineer 2 2 0

7 Thoti 1 0 1

8 Attenders/Office Subordinates 7 0 7

9 Bill Collectors 6 5 1

10 Junior Assistant 6 5 1

11 Revenue Mazdoor 3 3 0

12 Record Assistant 2 1 1

13 URDI 1 1 0

14 Health Assistant 1 0 1

15 Sanitory Inspector 1 1 0

16 PH Maistries 2 2 0

17 Typist 1 0 1

18 Community Organisor 1 0 1

19 PH Workers 17 14 3

20 Senior Assistant 2 2 0

21 Town Planning Tracer 1 0 1

22 Night Watchman 2 0 2

23 Town Planning Officer 1 1 0

Elementary and Secondary Education-Regular

1 Panel Head Masters 3 3 0

2 LFL Head Masters 7 7 0

3 School Assistants 30 27 3

4 Physical Education Teachers 1 0 1

5 Music Teacher 1 0 1

6 Drawing Teacher 1 0 1

7 Craft Teacher 1 0 1

8 Vocational Teacher 1 0 1

9 Telugu Pandits Grade-I 2 1 1

10 Hindi Pandits Grade-I 1 0 1

11 Hindi Pandits Grade-II 5 3 2

12 Telugu Pandits Grade-II 6 5 1

13 Secondary Grade Teachers 91 83 8

Contract Workers

1 Public Health Workers 40 40 0

2 Engineering workers 41 41 0

3) APPOINTMENT AND SCOPE OF AUDIT:

1. The following team of Auditors was appointed as Statutory Auditors on behalf

of the Director of State Audit, AP, Hyderabad under Section-3(1) of the AP

State Audit Act,1989 to conduct audit of Municipal Council, Amadalavalasa

for the year 2015-16 as per the action plan approved by the Director of State

Audit, A.P., Hyderabad:

i) Sri J. Yedukondalu, Assistant Audit Officer

ii) Sri L. Kondala Rao, Senior Auditor

iii) Sri S.V.N.Prasad, Senior Auditor

iv) Sri. P. Rajasekhar, Senior Auditor

v) Sri T. Ramesh Babu, Junior Auditor

vi) Sri G. Ravikumar, Junior Auditor

vii) Smt L. Jyothi, Junior Auditor

viii) Kum A. Jyoshna, Junior Auditor

2. As per the standing instructions the audit of 100% Receipts, 100% of

Expenditure of 12 months in respect of General Funds and Schemes of

the Municipal Council, Amadalavalasa for the year ended 31st March 2013.

The objections were raised based on the defects identified during the course

of audit with reference to audit material (Registers, records, files and certified

statements etc.,) provided by the institution.

3. The audit was conducted in accordance with the generally accepted auditing

practices (standards) and principles laid down in the Audit Manual of State

Audit Department of Andhra Pradesh, as applicable to the Municipal Council.

The said standards require that we plan and conduct the audit to obtain

reasonable assurance about whether the financial statements are free from

material misstatement. An audit includes examining, evidence supporting the

accounts and disclosures in the financial statements.

4. The Audit was conducted by the auditors based on the work allotment issued

by the Assistant Audit Officer as detailed below:

#

Name and

Designation

(Sarva Sri/Smt/Kum)

Work Allotted Signature

1 J. Yedukondalu,

Asst Audit Officer.

1. General Supervision

2. Account Verification

3. Finalization of Draft Audit Report duly consolidating

the paras submitted by the Auditors

4. All Works

5. Audit of MDR Receipts

6. Implementation of RTI Act.

7. Audit of Town Planning Receipts

Building Applications

Lay Outs

BRS/LRS

Advertisement Tax

Encroachment Fee

Town Planning Development Fund

2 L. Kondala Rao,

Senior Auditor

1. Audit of Revenue Section Receipt Items

Property Tax

Vacant Land Tax

Title Transfers

Verification of Monthly lists related to Property

Tax

Water Supply – Tap Connections

Water Tax

2. Audit of Receipt & Expenditure

Salary and Pension Account except Works (002)

3. Audit of the following Schemes/Accounts

Shop Rooms Revolving Fund

SJSRY-Community Structure

SJSRY-Infrastructure

Any other item of work entrusted by the AAO

from time to time.

3 S.V.N. Prasad,

Senior Auditor

1. Audit of Engineering Section Receipts and

Expenditure items

Establishment of Engineering and Education

Sections

2. Audit of Public Health Section Receipt Items

D & O Trade License

Births and Deaths and other Miscellaneous

Receipt

Expenditure of PH Section.

3. Audit of Deposits and Advances

4. Audit of the following Schemes/Accounts

Provident Fund

Education Funds

Water Supply Donations

IDSMT Shop Rooms Accounts

School Buildings Account

Investments Account


from time to time

4 P. Rajasekhar,

Senior Auditor

1. Audit of Receipt & Expenditure

General Fund except Works (001)


from time to time.

5

T. Ramesh Babu,

Junior Auditor

1. Audit of the following schemes/Accounts

Pavala Vaddi Pathakam

NFBS Scheme

BPS Account

Tribal Sub Plan Grant

Plan Grant

Urban Health Centers

Parks and Play Grounds

SJSRY-UWEP Grant

14th Finance Grants

Verification of Petty Cash Book

Assistance

to Asst.,

Audit

Officer

6

G. Ravi Kumar,

Junior Auditor

1. DDO Account

2. Audit of the following schemes/Accounts

JBY Scholarships

UPA Funds

Municipal Elections

12th/13th Finance Grants

Office Building & CM Announcement

Fish Market Account

Verification of PA Register

Assistance

to Asst.,

Audit

Officer

7

L. Jyothi,

Junior Auditor

1. Tracing and Sorting of Vouchers

2. Tracing of MRs and Challans w/r Chitta

3. Tracing of DDs/Cheques/MOs received

4. Verification of Postage Account

5. Assistance to Senior Auditors in tracing of demand

register of property tax, water tax, e-Seva

collection statements etc.,

Any other item of work entrusted by the AAO from time

to time

8

A.Jyoshna,

Junior Auditor

5. A) To get the Registers, records and necessary audit material from the

Executive Authority, the following Half Margin letters were issued as per the

existing audit procedure:

Intimation Lr.SA.No. 34/AAO(MP)/2016-17; dt.13.07.2016 of the

Assistant Audit Officer, State Audit (MP), Srikakulam.

Intimation Lr.SA.No. 73/AAO(MP)/2016-17; dt 05.01.2017 of the

Assistant Audit Officer, State Audit (MP), Srikakulam.

Half Margin Lr.SA(MP).No.01/MC/2016-17; dt. 25.07.2016 of the

Assistant Audit Officer, State Audit(MP), Srikakulam.









B) OBJECTIVES AND PURPOSE OF AUDIT:

i. Ascertaining fairness, truth fullness and completeness of assertions made

in the financial statements.

ii. Ascertaining accuracy an authenticity (certification) of accounting

transactions or assertions there on.

iii. Ascertaining the results of operation and state of affairs (Economy,

Efficiency and Effectiveness) of the institution in terms of „4‟ „Fs‟.

a) Funds (Fiscal accountability Receipts: Art.2,5,7 to 11 of APFC Regularity

and propriety of Exp;- 3,4,38 to 44 and 56 of APFC(Vol.I)

b) Functionaries:- Managerial Accountability

c) Functions :- Programme Accountability

d) Forms / Formats:- Information accountability.

iv. Asset Management.

v. Detection and Safe guard against irregularities, extravagancy,

vi. Carelessness or fraud in realization and utilization of Public money.

C) AUDIT METHODOLOGY:

1. Examination of Vouchers / Books of accounts / records / files (list) with

reference to Codal Provisions / Act Provisions / General Orders of

Government etc.,

2. Checking the Arithmetical accuracy

3. Analysing the transactions and making observations

4. Conclusion and recommendations.

5. Communication of Audit Report seeking replies and submission of State

Audit and Review Report to be placed before the Hon‟ble AP Legislative

Assembly.

6. Initiation of Surcharge action on fit cases U/S 10 of AP State Audit Act

1989.

7. Continuous persuasion for settlement of pending objections etc.,

6) Scope of Audit –Scope Of Audit Reduced Due to Non - Maintenance Of Various Vital And Important Records:

During the course of audit for the year 2015-16, it is noticed that

certain vital and important records were not maintained/were being partly

maintained. The non-maintenance and non-production of records and

irregular maintenance of the registers without tallying with the account figures

gives scope for all sorts of irregularities such as misappropriations,

defalcations and other major financial losses.

a) Annual Accounts in DEABAS:

The Annual Accounts in Double Entry Accrual Based Accounting

System required under GO.Ms.No.233 MA dt.22.5.2002 read with the guidelines

issued in the National Municipal Accounts Manual for the year 2015-16 were

furnished on 19.5.2014 after lapse of 1 year to the prescribed time limits. The

delay in furnishing of Annual Accounts leads to delay in conduct of audit.

Further, the subsidiary accounts except Trial Balance, the Income and

Expenditure statement, Balance sheet were not furnished to audit.

b) Maintenance of Cash Books:

During the course of audit, it is noticed that separate cash books

were maintained for each account/fund/scheme as instructed by the grant

releasing authorities. Most of the cash books were not updated even at the

closer of the next financial year which is irregular. The same were updated

during the course of audit under the good guidance of the auditors. Further, it

is observed that multi cash books were maintaining for the same account which

may leads to leakage of funds. The details of head wise receipt not recorded in

the cash book. The detailed objections were raised in the audit report.

c) Maintenance of Pass Books:

During the course of audit, it is noticed that separate Pass books

are being maintained for each account/fund/scheme as instructed by the grant

releasing authorities. Most of the pass books were not updated even at the closer

of the next financial year which is irregular. The same were updated during the

course of audit. Further, it is observed that multi bank accounts were

maintaining for the same account/fund/scheme ( eg. ACDP Funds, BSY,

APURMSP etc.,) which may leads to leakage of funds. The detailed objections

were raised in the audit report.

d) BUDGET:

Under section 126 and 127 of A.P Municipalities ACT`1965 and

according to rule 8 of rules deal with preparation of Budget, allotments and

transfer of funds, issued in G.O.Ms.No.36 MA Dt.7-10-1970 and G.O.Ms.No.740

M.A Dt. 12-12-1977, the budget as approved by the council, should be

submitted to the Government through the District Collector and Director of

Municipal Administration by 31st December by every year.

This Statement is known as Annual Financial Statement or Budget,

and is prepared considering the requirements of the different branches, the

obligatory civic Amenities of the City with all efforts to provide the maximum

possible amounts under each Head of Account.

Budget consists of the following heads:

Receipts: Expenditure:

Revenue Receipts Revenue Expenditure

Capital Receipts Capital Expenditure

But, the approved budget was not produced to audit for

verification. This reduced the scope of audit to find out the excess expenditure

incurred above and over the budget.

e) Revenue Section:

The staff of the Revenue Section maintaining the records related to

Property Tax and Water Tax. Though the Demand Registers and Arrear Demand

Registers were updated most of the entries were found in pencil figures. The

same were made in ink in the presence of the auditors. The demand of tax for

certain assessments were left blank and stated that they were exemptions

granted to Ex-servicemen etc., Demand of certain assessments were altered with

white fluid which gives scope for leakage of revenue. Registers containing

Monthly lists were furnished but connected building application files were not

furnished by the Town Planning and Engineering sections which shows lack of

co-ordination between Town Planning and Revenue sections. The Assessment

Master sheets available in E-Suvidha software also not furnished. The

correctness of the tax fixed for new assessments could not be ascertained in view

of the above position. Further, huge amounts were pending realization. The taxes

were collected through E-Seva counters and transferred to municipal funds

later. As verified from the collection receipts it is noticed that the particulars of

Current and arrears were not specified.

f) Engineering Section:

The preparation and preservation of Estimates, Agreements, M-

Books together with connected work files is being done by this section. General

works, scheme works, water supply works are being executed in the supervision

of the Engineering Section. As verified from the records it is observed that in

many of the cases the estimations were deviated for certain items in execution

and leads to excess payments in that particular items. But revised estimates

were not prepared and get approval from the competent authority. The amounts

deducted towards statutory recoveries like VAT, IT, NAC, CMRF etc., from

certain scheme works were not remitted to the head of accounts concerned. The

detailed objections were raised in the audit report.

g) Town Planning Section:

The Town Planning Section watching the income generating from

Advertisement Tax, Entertainment Tax, Building Penalization Scheme,

Processing of Building Applications and Encroachment fee etc., The Executive

Authority is not watching the realization of Vacant Land Tax while issuing

permission for construction of buildings. The status of applications received,

disposed and pending disposal in respect of BPS was not disclosed. The registers

were maintained for calendar year instead of financial year. The same was

rectified during the course of audit under the guidance of auditors.

h): Public Health Section:

In the Public Health Section, the Demand Register for D & O trades

was not maintained duly recording the additions and deletions in the proforma

prescribed. The implementation of Food Adulteration Act in Municipal area is

not forthcoming in the records. The area wise work allotment to the sanitation

staff was also not forthcoming.

Note:

1) The accounts related to Adverse Seasonal Conditions and FDR Works were considered only for

account verification but not audited as the same are being auditing by the Relief Accounts Audit

Party.

2) ACDP not audited as the same were allotted to the Assistant Audit Officer, State Audit (ZP),

Srikakulam.

i) OVERVIEW:

Amadalavalasa Municipality is a 3rd Grade Municipality. It was

entrusted broadly with the following functions as per the provisions of the

Municipal Acts in force:

Public Health, Sanitation, conservancy and solid waste management.

Provision of water supply, drainage and sewerage.

Construction and maintenance of roads, drains, culverts and bridges.

Provision of street lighting.

Urban poverty alleviation programmes.

Slum improvement and upgradation.

Provision of public parks and play grounds.

Construction and maintenance of public markets and slaughter

houses.

Urban planning and town planning.

Regulation of land use and construction of buildings.

Maintenance of Elementary and Secondary Education.

Urban development programmes.

Vital statistics including Registration of births and deaths.

Maintenance of burial grounds etc.,

PART-II

7) General Review of Financial position:

The financial position of the institution during the year has considerably

decreased/increases due to amounting expenditure incurred/income realized than

the previous year. Since the General Account (ORDINARY) closed with a balance

of Rs. 1,90,05,931.00 as against the Closing Balance of Rs. 3,90,25,824.00 of

the previous year.

A statement of financial position as it stood as on 1st of every month was

not placed before the council as required by rule 47(1) of the rules relating to the

receipts and expenditure of the Municipality, Amadalavalasa issued in

G.O.Ms.No,.686,MA Dt.30-7-68. Necessary action may be taken to place the same

before the council for approval.

GENERAL ACCOUNT CLOSING BALANCE AS ON 31-03-2016:

Opening Balance as on 01.04.2015 39025824.00

Add: Receipt during the year 2015-16 10046124.00

Total 49071948.00

Less: Payments during the year 2015-16 30066017.00

Closing Balance as per Cash Book 19005931.00

Less Cash on Hand 168692.00

Closing Balance as per Pass Book 18837239.00

The consolidated closing balance as per Cash Books of individual

accounts/funds/schemes as on 31-03-2016 is Rs. 1,90,05,931.00 is in

agreement with the consolidated closing balance of various funds as per

abstracts of account for March, 2016 and is also in agreement with the

consolidated closing balance in the Treasury and Bank pass Books after allowing

for the un-cashed cheques and unremitted revenue on hand at the close of the

year subject to the reconciliation as detailed below:

CONSOLIDATED CLOSING BALANCE AS ON 31.03.2016

Sl.

No Name of the Fund Account Account Number

Closing balance

as per Cash Book

Closing

Balance as per Pass Book

1 General Fund Account 8448-102-03-001 19005931 18837239

2 Salary and Pension Account 8448-102-03-002 5627858 6074724

3 13th Finance Grant 8448-102-03-003 22075868 22075868

4 14th Finance Grant 8448-102-03-004 10505377 10505377

5 ACDP 844812022 2521274 2521274

6 S.J.S.R.Y-UWEP 11384009913 878140.40 878140.40

7 Solid Waste Management

(12th Finance Grant) 11384010555 1229042 1229042

8 Town Planning Development

charges Account 11384009902 2627416 2627416

9 E.I.U.S. 11384009572 193938.62 193938.62

10 Tribal Sub Plan Grant 11384010259 53711.23 53711.23

11 Municipal Elections 4734 4734

12

Office Building &

C.M.Announcement

Account

11384009594 1251826 1251826

13 I.D.S.M.T Account 11384009583 9715184 9715184

14 School Buildings Account 11384010033 1626968 1626968

15 UPA Fund 30962546203 19714 19714

16 Water supply contribution

Account 11384009888 196404.00 190954

17 Flood Damage Relief (Natural calamities)

11384009899 133150.40 133150.40

18 Parks & Play grounds

Account 11384010373 840517.90 840517.90

19 Adverse Seasonal

Conditions 11384018099 1260778 1260778

20 Building Penalization

Scheme 30377715698 1876724 1875724

21 Plan Grant 30586956533 3731492 3731492

22 Shop Revolving Fund

(IDSMT) Account 11384010306 391656.2 391656.20

23 D.D.O.Account 30794960698 866047 656497

24 Fish Market construction

Account 910010034521084 127457 127457

25 Urban Health Centre

(I.J.Naidu colony) 868610110001068 21182 21182

26 Urban Health Centre,

Mettakkivalasa 868610100007389 15378 15378

27 IEC 751501 751501

28 40% SLUM 384751 384751

29 Old age Pensions Account 1006252207 17812.5 17812.50

30 J.B.Y.Scholarships 71010007286 8840.50 8840.50

31 Provident Fund-I 7309896975 718938 718938

32 Pavala Vaddi Scheme 1006265839 50252 50252

33 N.F.B.S.Scheme 1006253186 109590 109540

34 NOAP Pension A/c 710100034466 367951.50 367951.50

Total 89207405.23 89269529.25

ACCOUNT WISE FINANCIAL POSITION FOR THE YEAR 2015-16

Sl. No

Name of the Fund Account

Opening Balance as on 01-04-2014

Receipt during the

year Total

Expenditure during the

year

Closing balance as per Cash

Book

State Bank of India

1 General Fund Account

– 001 39025824.00 10046124.00 49071948 30066017.00 19005931

2 Salary and Pension

Account – 002 11413266.00 17165276.00 28578542 22950684.00 5627858

3 13th Fin Grant – 003 24906998.00 0.00 24906998 2831130.00 22075868

4 14th Fin Grant - 004 0.00 10505377.00 10505377 0.00 10505377

5 ACDP 2521274.00 0.00 2521274 0.00 2521274

6 S.J.S.R.Y-UWEP 843666.42 114474.00 958140.42 80000.00 878140.4

7 12th Fin Grant 2122039.44 69791.00 2191830.44 962788.00 1229042

8 Town Planning

Development charges Account

2084097.54 575217.00 2659314.54 31899.00 2627416

9 E.I.U.S. 186407.62 7531.00 193938.62 0.00 193938.6

10 Tribal Sub Plan Grant 51625.23 2086.00 53711.23 0.00 53711.23

11 Municipal Elections 4550.00 184.00 4734 0.00 4734

12 Office Building & C.M.

Announcement Account

2898057.00 98299.00 2996356 1744530.00 1251826

13 I.D.S.M.T Account 9337931.68 377252.00 9715183.68 0.00 9715184

14 School Buildings

Account 1589575.94 64218.00 1653793.94 26826.00 1626968

15 UPA 18948.00 766.00 19714 0.00 19714

16 Water supply

contribution Account 484928.00 590707.00 1075635.00 879231.00 196404.00


127979.36 5171.00 133150.36 0.00 133150.4


Account 939971.86 36995.00 976966.86 136449.00 840517.9

19 Adverse Seasonal

Conditions 2831984.27 81104.00 2913088.27 1652310.00 1260778


Scheme 1840591.00 73371.00 1913962 37238.00 1876724

21 Plan Grant 3602177.00 145369.00 3747546 16054.00 3731492

22 Shop Room Revolving

Fund 376448.22 15208.00 391656.22 0.00 391656.2

23 D.D.O.Account 914092.00 3779714.00 4693806 3827759.00 866047

Axis Bank 0.00 0.00 0.00 0.00 0.00

24 Fish Market

construction Account 310920.00 6520.00 317440 189983.00 127457

Bank of India 0.00 0.00 0.00 0.00 0.00


(I.J.Naidu colony) 20384.00 823.00 21207 25.00 21182


Mettakkivalasa 14781.00 597.00 15378 0.00 15378

Andhra Bank 0.00 0.00 0.00 0.00 0.00

27 IEC 0.00 836767.00 836767 85266.00 751501

28 40% SLUM 0.00 384751.00 384751 0.00 384751

29 Old Age Pensions 8214.50 48265175.50 48273390 48255577.50 17812.5

30 J.B.Y.Scholarships 8496.50 344.00 8840.5 0.00 8840.5

APGV Bank 0.00 0.00 0.00 0.00 0.00

31 Provident Fund 343367.00 574869.00 918236 199298.00 718938

32 Pavala Vaddi Scheme 48364.00 1948.00 50312 60.00 50252

33 N.F.B.S. Account 105366.00 4284.00 109650 60.00 109590

34 NOAP Pension A/c 353759.50 14252.00 368011.5 60.00 367951.5

Total 109336085.08 93844564.5 203180649.58 113973244.5 89207405.23

Account wise Reconciliations:

i) Salary and Pension Account:

Reconciliation


Add: Uncashed Cheques

1. Ch.No. 003493/11.04.2012 Rs. 1136.00

446866.00 2. Ch.No. 003483/19.03.2013 Rs. 1136.00

3. Ch.No. 006295/30.07.2015 Rs. 444594.00

Less: Cash on Hand NIL

Closing Balance as per Treasury Pass Book 6074724.00

ii) DDO Account:

Reconciliation


Add: Uncashed Cheques 18500.00

Total 884547.00

Less: Wrong entry made in pass book: Rs.227500.00

Bank Charges : Rs. 550.00 228050.00

Closing Balance as per Treasury Pass Book 656497.00

8) NON COMPLIANCE OF PENDING AUDIT OBJECTIONS – PRECEEDING

YEARS – NEEDS EARLY ACTION:

The replies to the audit reports for the years from 1986-87 to 2014-15 together with the resolution of the Standing Committee for Finance

have not been sent to the Commissioner of Municipal Administration through the Director of State Audit, AP., Hyderabad as instructed by the Government

in Memo.No.442/Accts.III/62-2, P&LA Department dt.2.4.1962 read with Govt.Memo.Roc.No.546/Accts.III/62-2, P&LA Department dt.3.5.1962. the records do not reveal the observance of the above orders. The progress of

settlement of the audit objections during the year 2015-16 was slow/not much satisfactory as defects pointed out in 1183 objections involving an amount of Rs. 3661.54 as shown below are pending settlement at the close

of preceding years up to 2015-16. Early action may be taken to settle the audit objections.

S.NO

Year of

Audit Report

Pending as on 31.03.2015

No Amount (lakhs)

1 1986-87 2 0.29

2 1987-88 1 0.11

3 1988-89 1 0.05

4 1989-90 1 0.82

5 1990-91 1 0.46

6 1991-92 4 4.20

7 1992-93 3 0.74

8 1993-94 16 15.62

9 1994-95 16 16.85

10 1995-96 7 19.18

11 1996-97 14 4.63

12 1997-98 10 3.86

13 1998-99 9 7.78

14 1999-00 73 140.14

15 2000-01 64 103.00

16 2001-02 61 53.63

17 2002-03 55 26.53

18 2003-04 121 423.42

19 2004-05 48 251.59

20 2005-06 57 183.11

21 2006-07 45 167.56

22 2007-08 21 19.09

23 2008-09 61 184.33

24 2009-10 95 590.95

25 2010-11 89 262.03

26 2011-12 69 348.44

27 2012-13 69 316.43

28 2013-14 74 249.61

29 2014-15 96 267.09

TOTAL 1183 3661.54

9) GRANT-IN-AID:

During the course of audit, it is observed that the following grants

were received to the municipality for different purposes to the extent of

Accounts furnished in audit. The details of which are noted in the

annexure. The grants adjusted, expenditure incurred and the balances left

over as on 31-03-2016 are noted in the following Annexure:

Sl.

No

Name of the Fund

Account

Opening Balance as on

01-04-2014

Receipt during the

year

Total Expenditure during the

year

State Bank of India


– 001 39025824.00 10046124.00 49071948 30066017.00


Account – 002 11413266.00 17165276.00 28578542 22950684.00

3 13th Fin Grant – 003 24906998.00 0.00 24906998 2831130.00

4 14th Fin Grant - 004 0.00 10505377.00 10505377 0.00

5 ACDP 2521274.00 0.00 2521274 0.00

6 S.J.S.R.Y-UWEP 843666.42 114474.00 958140.42 80000.00

7 12th Fin Grant 2122039.44 69791.00 2191830.44 962788.00

8 Town Planning


2084097.54 575217.00 2659314.54 31899.00

9 E.I.U.S. 186407.62 7531.00 193938.62 0.00

10 Tribal Sub Plan Grant 51625.23 2086.00 53711.23 0.00

11 Municipal Elections 4550.00 184.00 4734 0.00

12

Office Building & C.M.


2898057.00 98299.00 2996356 1744530.00

13 I.D.S.M.T Account 9337931.68 377252.00 9715183.68 0.00

14 School Buildings

Account 1589575.94 64218.00 1653793.94 26826.00

15 UPA 18948.00 766.00 19714 0.00

16 Water supply

contribution Account 484928.00 590707.00 1075635.00 879231.00


127979.36 5171.00 133150.36 0.00


Account 939971.86 36995.00 976966.86 136449.00

19 Adverse Seasonal

Conditions 2831984.27 81104.00 2913088.27 1652310.00


Scheme 1840591.00 73371.00 1913962 37238.00

21 Plan Grant 3602177.00 145369.00 3747546 16054.00


Fund 376448.22 15208.00 391656.22 0.00

23 D.D.O.Account 914092.00 3779714.00 4693806 3827759.00

Axis Bank 0.00 0.00 0.00 0.00

24 Fish Market

construction Account 310920.00 6520.00 317440 189983.00

Bank of India 0.00 0.00 0.00 0.00


(I.J.Naidu colony) 20384.00 823.00 21207 25.00


Mettakkivalasa 14781.00 597.00 15378 0.00

Andhra Bank 0.00 0.00 0.00 0.00

27 IEC 0.00 836767.00 836767 85266.00

28 40% SLUM 0.00 384751.00 384751 0.00

29 Old Age Pensions 8214.50 48265175.50 48273390 48255577.50

30 J.B.Y.Scholarships 8496.50 344.00 8840.5 0.00

APGV Bank 0.00 0.00 0.00 0.00

31 Provident Fund 343367.00 574869.00 918236 199298.00

32 Pavala Vaddi Scheme 48364.00 1948.00 50312 60.00

33 N.F.B.S. Account 105366.00 4284.00 109650 60.00

34 NOAP Pension A/c 353759.50 14252.00 368011.5 60.00

Total 109336085.08 93844564.5 203180649.58 113973244.5

10) ANALYSIS OF REVENUE RECEIPTS:

When compared the receipts of the three financial years income received from Tax resources increased and non-tax revenue decreased. The

Property tax compensation, Surcharge on Stamp Duty was increased under Assigned revenues.

The source of revenue receipts during the year were through Revenue raised by the municipal council Receipts from state Government towards, surcharge on stamp duty,

property Tax compensation, profession tax compensation, Magisterial fines and motor vehicle tax etc,

Grant-in-aid received from state Government. The following is the analysis of the receipts under Tax resources, Non-tax resources and statutory grants released by the Government during the year

along with the corresponding figures of previous years.

# Receipt Head 2013-14 2014-15 2015-16 Remarks

TAX REVENUE

1 Property tax 6847132 11687320 10265785 Decreased

2 Water tax 1159760 1645909 296680 Decreased

Total 8006892 13333229 10562465

NON-TAX REVENUE

1 Advertisement tax 62083 10738 26549 Increased

2 Encroachment fee 51400 185150 1052778 Increased

3 Town Planning 243880 1210161 577697 Decreased

4 Shop room rents 446161 831476 585293 Decreased

5 Market fees 832000 880000 1192700 Increased

6 Chinthada sandy 441633 473640 557256 Increased

7 Slaughter house 10600 11208 11100 Decreased

8 D & O Trader 110025 112965 126305 Increased

9 Births & deaths 0 19885 34885 Increased

Total 2197782 3735223 4164563

GOVERNMENT GRANTS

1 Profession tax

compensation 0 0 0

2 Property tax compensation 0 0 0

3 Entertainment tax 0 0 2700 Increased

4 Surcharge on stamp duty 2688708 4111800 4018182 Decreased

5 Per capita grant 0 0 0

Total 2688708 4111800 4020882

Out of the total income 15.70 % was towards collection under tax and

non-tax resources and 4.28 % towards Grant-in-aid and other miscellaneous

sources.

Therefore, coercive steps may be taken towards improvement of

financial position.

Code No-01

11) VARIATION OF FIGURES IN THE RECEIPTS AND PAYMENTS ACCOUNT

UNDER MUNICIPAL GENERAL AND CAPITAL PROJECT FUND IN ERP SOFTWARE WITH THAT OF RECEIPTS AND PAYMENTS AS PER CASH BOOKS AND SUBSIDARY REGISTERS-NEEDS RECONCILIATION:

During the course of verification of the Receipts and payments of General

fund and Capital Project fund in the ERP Software with that of cash books,

Chitta, DCB Statements and other relevant subsidiary registers etc., variations

noticed. Further, huge amounts were shown in the software under unclassified

and other heads which causes much difficulty in cross verification of the figures

during verification of the subsidiary registers.

Some major variations were detailed below for observation:

# Head of Receipt

Amount as

per DEABAS Receipt &

Payment Account

Amount as

per Manual Registers

(DCB, Cash book etc.,)

1 Property Tax (Arrear &Current) 20855695 12146895

2 Water Tax (Arrear &Current) 2404163 296680

3 Vacant Land Tax 97975 121925

4 Daily Market 1620692 1192700

5 Slaughter House 11850 11100

6 Shop Room Rents including IDSMT Roof rent 675724 750893

7 Advertisement Tax 17671 22010

8 Encroachment Fee 1125460 422938

9 Town Planning receipts 3249734 3152947

10 EMD 77041 16670

Therefore, action would need to be taken to reconcile the figures and

classify the unclassified and other heads of receipts and payments accounts of

the Municipal General fund and Capital project fund accounts in the ERP

software in accordance with the proper head of accounts as per the cash books

for verification of the correctness with the relevant subsidiary register.

Code No-01

12) PROPERTY TAX-VARIATION BETWEEN DEMAND REGISTERS AND REGISTER OF E-SEVA COLLECTIONS/ONLINE COLLECTION DATA SHEETS-

NOT PRODUCED- NEEDS RECONCILE THE INFORMATION:

During the course of audit for the year 2015-16, as verified from the DCB

Statement and Annual Account provided in Double Entry Accrual Based

Accounting System with manual Demand Registers and E-Suvidha statements

and E-Seva collection particulars of Property Tax, it is noticed that demand and

collection particulars varies from statement to statement as detailed below:

S.No. Base Record/Statement

from which the information adopted

Demand Collection Remarks

1 DCB Statement appended to Annual Account in DEABAS

26112623 23728547 It is noticed

that the information provided by E-Suvidha including

penalty Rs. 13,99,841.00 on arrears.

2 Information as per DCB

ward wise received from E-

Suvidha

- 13685959

3 Information as per receipt particulars received month

wise from E-Seva

- 10584784

4 Manual Demand Registers 13600597 10265785

As verified from the above data relating to property tax, it came to know

that the data obtained from various sources i.e Annual Account, DCB statement

downloaded from E-Suvidha software, month-wise collection particulars received

from E-Seva, Manual demand registers and E-Seva Audit report for the year

2015-16 was not at all reconciled.

In view of the above position, the correctness of the demand, collection

particulars of property tax with reference to Annual account could not be

ascertained in audit. Non-reconciliation of data received from various sources

gives scope for leakage of revenue.

Hence, action would need to be taken to reconcile the data available

in various sources with that the information available in Demand registers and

correct information duly certified by the competent authority produced for

verification and loss caused if any in the matter would need to be made good

from the person or persons responsible.

Code No-01

13) LIBRARY CESS – VARIATION BETWEEN ONLINE DATA MONTHLY

COLLECTION STATEMENTS AND REGISTER OF MEE-SEVA CHEQUES –

NEEDS RECONCILE THE INFORMATION:

During the course of audit for the year 2015-16, as verified from

the online data monthly collection statements and register of mee-seva cheques,

it is noticed that the discrepancy of the library cess between online monthly

collection statements and register of mee-seva cheques as detailed below.

Particulars Based record Balance shows

Library cess Register of mee-seva cheques 8,25,203.00

Library cess Online data monthly collection statements 4,80,655.00

Difference 3,44,548.00

In view of the above position, the correctness of the library cess

collection with reference to annual account could not be ascertained in audit.

But there is a vast difference of library cess gives scope for leakage of revenue.

Hence action would need to be taken to rectify the variation of

library cess. But the correct information duly certified by the competent

authority and produced to audit for verification and loss caused if any in the

matter would need to be made good from the person or persons responsible

Code No-04

14) BALANCES AVAILABLE IN IN-OPERATIVE P.D.ACCOUNTS – NEITHER UTILISED NOR REMITTED TO GRANT RELEASING AUTHORITY- NEEDS EARLY ACTION:

During the course of audit for the year 2015-16, it is observed that the following

P.D. Accounts were in operative since long time as detailed in the annexure. But no

action was taken to remit the balances left under various schemes to state funds which

is contrary to the provisions.

# Name of the Fund

Account

Opening

Balance

as on

01-04-2015

Receipt

during the

year

Total

Expenditure

during the

year

Closing

balance as

per Cash

Book

1 14th Fin Grant - 004 0.00 10505377.00 10505377 0.00 10505377

2 ACDP 2521274.00 0.00 2521274 0.00 2521274

3 E.I.U.S. 186407.62 7531.00 193938.62 0.00 193938.6



6 I.D.S.M.T Account 9337931.68 377252.00 9715183.68 0.00 9715184

7 UPA 18948.00 766.00 19714 0.00 19714


127979.36 5171.00 133150.36 0.00 133150.4

9 Shop Room Revolving Fund 376448.22 15208.00 391656.22 0.00 391656.2


(I.J.Naidu colony) 20384.00 823.00 21207 25.00 21182


Mettakkivalasa 14781.00 597.00 15378 0.00 15378

12 40% SLUM 0.00 384751.00 384751 0.00 384751



15 N.F.B.S. Account 105366.00 4284.00 109650 60.00 109590

16 NOAP Pension A/c 353759.50 14252.00 368011.5 60.00 367951.5

Total 13176315.11 11320574 24496889.11 205 24496684.43

From the above tabular information, it is observed that an amount of Rs.

24496684.43 was kept with the institution without utilization even a single pie except

meeting bank charges during the year. As per the guidelines of the various schemes, the

entire amount/grant either should be utilized with reference to the specific action plan,

or unspent balance should be remitted to the grant releasing authority as the case may

be on or before closer of the financial year so as to avoid locking of funds. But the same

was not done in the instant case which is highly irregular in terms of government

orders.

Therefore, immediate action may be taken to close the accounts by remitting

the balances with interest accrued as on the date to the grant releasing authorities early

and fact intimated to audit.

Code No-07

15) DCB FOR CURRENT AND ARREAR PERIODS-BALANCE OF TAXES AND

NON TAXES–HUGE AMOUNTS PENDING COLLECTION-NEEDS ACTION: Rs. 2,85,85,443.00

During the course of audit on the accounts of Municipality for the

year 2015-16, as verified from the Demand Registers of taxes and non taxes

for both current and arrears of Amadalavalasa municipality, it is noticed

during audit that an amount of Rs. 2,85,85,443.00 was pending collection

during the year as detailed below:

S. No Item of Receipt Details Demand Collection Balance % of

collection

1 Property Tax Current 13600597 10265785 3334812 75.48

Arrear 20020390 1881110 18139280 9.40

2 Water Tax Current 3179920 146700 3033220 4.61

Arrear 2404790 149980 2254810 6.24

3 Encroachment

Fee

Current 815000 422938 392062 51.89

Arrear 629850 629840 10 100.00

4 D&O Trades Current 126305 126305 0 100.00

Arrear 0 0 0 0

5 Daily Market Current 1192700 1192700 0 100.00

Arrear 548438 0 548438 0.00

6 Chintada Sandy Current 557258 557258 0 100.00

Arrear 1 0 1 0.00

7 Slaughter

House

Current 11100 11100 0 100.00

Arrear 1400 0 1400 0.00

8 Shop Room

rents

Current 723620 528825 194795 73.08

Arrear 551091 56468 494623 10.25

9 IDSMT Roof

rent

Current 240896 124200 116696 51.56

Arrear 116696 41400 75296 35.48

10 Fishery Ponds Current 65188 65188 0 100.00

Arrear 0 0 0 0

TOTAL 44785240 16199797 28585443

From the above information, it is noticed that only 36.17 % of income

realized under various taxes and non taxes leaving 63.83 % pending realization.

Out of total collection huge amount was collected from current year only.

Further, the collection of arrears is very poor and action was not taken in this

matter in a sufficient manner.

When comparison made between the collection of taxes and non taxes,

progress of collection of arrears of non taxes like leased amounts of daily market,

Chintada sandy, Slaughter house and IDSMT Roof rent etc., is very poor and

follow up action taken against the defaulters also not forth coming in audit.

However, the non collection of taxes and non taxes leads to deteriorate

the financial position of the institution and reduces the scope of developmental

activities.

Hence, action would need to be taken to collect the balances at an early

date and the loss caused if any would need to be made good from the person or

persons responsible under intimation to audit.

Code No-07

16) BALANCE OF ADVERTISEMENT TAX NOT COLLECTED –NEEDS ACTION:

As verified from the advertisement tax records of Amadalavalasa

municipality for the year 2015-16, it is noticed during audit that an amount of

Rs. NIL was shown as balance towards advertisement tax as detailed below:

Demand Collection Balance

Arrear 1575 1575 0

Current 24974 24974 0

Total 26549 26549 0

Under the Rule-4 of the Advertisement Tax Rules-1967, the advertisement

tax has to be approved by the commissioner and then only they should be

erected. But the approved orders were not produced to audit for verification.

According to Rule-119 of Advertisement Tax Rules-1967, the

collection of tax on advertisement may be worked out for a period not

exceeding one year on the terms and conditions fixed by the council. The rate

of tax is on annual basis. It should be collected at 1/12th of tax every month.

But the said tax was not collected in accordance with the said rules. If any

advertisement is erected for less than a month, full month rate has to be

collected under rule 7 of Advertisement Tax Rules `1967. But it was also not

implemented with the provisions contained in the said rules.

In addition to the advertisement tax` fee or rent` for using the land

of the municipality can also be charged under rules 6 of advertisement tax

rules 1967. But the rent or fee, so far collected for such advertisements were

not made available to audit, which is irregular. If any person fails to pay the

tax, the advertisements has to be removed, and the charges there of are

recoverable from him. But the provisions contained in the said rules were not

implemented.

In addition to the above lapses, the balance of advertisement tax for

the year 2015-16, amounting to Rs. NIL was also not realized.

Hence, action would need to be taken to realize the balance of

advertisement tax. In the above circumstances, loss if any caused to the

institution would need to be made good from the person or persons

responsible.

Code No-07

17) TIME BARRED TAXES AND NON TAXES-NEEDS EARLY ACTION:

As verified from the Demand Register for current and arrear years, it is

noticed that huge balances of taxes, fees, leased amounts for amounting to Rs.

90,92,400.00 was`due` to the municipality were allowed to become barred by

limitation of time prescribed under section 365(1) of the A.P Municipality Act

1965.

According to Section-365(1) of the A.P Municipality Act 1965, no

distraint shall be made, no suit shall be instituted and no prosecution shall be

commenced in respect of any sum due to the council under this Act after the

expiration of a period of 3 years from the date on which distraint might first have

been made, or after the expiration of a period of 9 years from the date on which a

suit might first have been instituted, or after the expiration of a period of 6

years from the date on which prosecution might first have been commenced, as

the case may be. But, no coercive steps have been taken to recover through

distraint; prosecution and filing suit etc., as laid down under section 365 of A.P

Municipalities Act`1965.

According to section 365(2) of the A.P municipalities Act`1965 it is the

duty of Commissioner to place before the council a list of arrears due to the

municipal council which are likely to become time barred at least one year before

the limitation stating the reasons for non collection of such taxes, fees and

leases and seek instructions of the council in regard to recovery of such

Balances. According to section 365(3) of the Commissioner fails to submit such

list, or omit to shown in such list any arrears due to failure on the part of bill

collector or any other employees entrusted with the collection of these amounts

the commissioner or such bill collectors or other employees as the case may be

are deemed to be negligent and action under section 374(1) of the A.P Municipal

Act-1965 for the recovery of all such recoveries should be made from the

commissioner and his subordinates and fact reported to audit.

Hence, action would need to be taken to initiate necessary action against

the defaulters for collection of arrears immediately and the loss caused if any in

this regard would need to be made good from the person or persons responsible

duly reporting the same to audit.

Name of the tax Financial Year Balance to be collected(Rs.)

Property Tax

1992-93 230041

1993-94 209872

1994-95 177585

1995-96 176417

1996-97 117646

1997-98 42385

1998-99 187495

1999-00 193187

2000-01 225626

2001-02 243666

2002-03 447343

2003-04 427324

2004-05 438777

2005-06 1617501

Total-1 4734865

Name of the Non-tax Financial Year Balance to be collected(Rs.)

Water Tax Up to

2014-15 1532570.00

Encroachment Fee Up to

2014-15 0.00

Advertisement Tax Up to

2014-15 1575.00

MDR Balances

2005-06 14460.00

2006-07 57711.00

2007-08 73440.00

2008-09 13440.00

2009-10 26440.00

2010-11 34096.00

2011-12 44368.00

2012-13 1343033.00

2013-14 1216402.00

Total-2 4357535.00

Grand Total(1+2) 9092400.00

Code No-07

18) PROPERTY TAX – PROPERTY TAX NOT COLLECTED ON GOVERNMENT

BUILDINGS – LOSS – NEEDS EARLY REALISATION: During the course of audit for the year 2015-16, as verified from the

Demand Registers of Property tax for both arrear and current years, it is

noticed that an amount of Rs. 2,14,74,092.00 was pending realization as

detailed below:

Item of Receipt

Details Demand Collection Balance

Property Tax

Current 13600597 12065785 3334812

Arrear 20020390 1881110 18139280

Total 33620987 13946895 21474092

Out of total pending property tax an amount of Rs. 86,76,906.00

was pending realization from the following Government Department Buildings

towards Property Tax for the period from 1993-94 to 2015-16 as detailed

below:

# Name of the

Department

Description of

Assessment Assessment

No

Arrear

with

penal

interest

Current

Total

Amount

Due

1 APSRTC APSTRC Complex 1082004088 292793 12764 305557

2 Co-Operative Society Co-Operative Society 1082003982 380416 14380 394796

3 Co-Operative Society(DCMS)

SKL Co-Operative Society 1082004018 1087011 52164 1139175

4 Mandal Parishad Mahila Mandali 1082000877 28104 392 28496

5 Mandal Parishad Gramachavidi 1082000931 29409 1260 30669

6 Mandal Parishad M.D.O Office Godown 1082000932 30933 2492 33425

7 Mandal Parishad V.D.O Quarters 1082000933 24985 1470 26455

8 Mandal Parishad E.O. Quarters 1082000934 25509 1488 26997

9 Mandal Parishad S.E.O Quarters 1082000935 32500 1906 34406

10 Mandal Parishad M.E.O Office 1082000936 34031 1986 36017

11 Mandal Parishad M.D.O Office 1082000937 13585 816 14401

12 Mandal Parishad Vignan Mandir 1082001241 89219 2498 91717

13 Mandal Parishad Mahila Mandali 1082001244 28096 498 28594

14 Mandal Parishad

Panchayath Samithi

Seeds Godown 1082001251 129226 4234 133460

15 Mandal Parishad MDO Office 1082003978 548553 51292 599845

16 Panchayath Raj PR Office cum Godown 1082000788 263835 13500 277335

17 Police Department

Police Station House

Officer Quarters 1082000789 4772 1232 6004


Police Office Town

Quarters 1082000790 2375 612 2987


Police Construction

Quarters 1082000791 23460 6000 29460

20 Police Department Police Station Quarters 1082000792 60613 15504 76117


Police Constable -2

Quarters 1082000793 60613 15504 76117


Police Station New

Building 1082000794 141232 15338 156570


Police Station Old

Building 1082000795 30910 7908 38818

24 Revenue Dept., MRO Office 1082000979 951764 55190 1006954

25 Social Welfare Dept., Govt. Boys Hostel 1082000880 1316641 39524 1356165

26 Social Welfare Dept., Govt., SC Hostel 1082003671 1024909 46006 1070915

27 Social Welfare Dept., Govt. BC Boys Hostel 1082003672 7994 25604 33598

28 Social Welfare Dept., Govt. Boys Hostel 1082003751 726524 37378 763902

29 Social Welfare Dept., Govt. BC Hostel 1082003882 789209 53822 843031

30 Zilla Parishad Z.P.Bunglow 1082000787 10249 4674 14923

8189470 487436 8676906

But the pending amount was not collected during the year 2015-16

and the action taken to collect the amount is not forthcoming to audit.

Hence, action would need to be taken to collect the balances form

the departments concerned and loss if any caused to the Institution due to

non-collection of dues would need to be made good from the person or persons

responsible under intimation to audit.

Code No-07

19) SHORT COLLECTION OF TITLE TRANSFERS – LOSS TO MUNICIPALITY – NEEDS ACTION: Rs. 10,609.00

During the course of audit on the accounts of Amadalavalasa Municipality

for the year 2015-16, it is noticed that an amount of Rs. 10,609.00 was short

collection of title transfers during the year which is irregular.

After verification of the documents and title transfers together with files, it

is found that, the Executive Authority has not collected title transfer fee

according to the provision which causes loss to the Institution.

The Executive Authority has to collect the short collection of Rs. 10,609.00

towards title transfers from the following persons as listed in the Annexure and

credit to the funds of Amadalavalasa Municipality and the fact may be intimated

to the audit.

# Name

(Sri/Smt/Kum)

Property

Value (Rs.)

Amount to

be collected (Rs.)

Amount

collected (Rs.)

Short

Collection (Rs.)

1 L. Santhi 619000 929 500 429

2 L. Santhi 601000 902 500 402

3 K. Narasimhamurthy 1322000 1983 1000 983

4 N. Purushottam 1144000 1716 1000 716

5 N. Sudarshan Rao 1678000 2517 1000 1517

6 P. Nagabhusana Rao 1245000 1868 1000 868

7 B. Varahal Naidu 2900000 4350 1000 3350

8 S. Srinivasa Rao 571000 857 300 557

9 P. Ramesh 1685000 2528 1000 1528

10 T. Narayana Rao 839000 1259 1000 259

18909 8300 10609

Code No-07

20) SHORT COLLECTION OF LIBRARY CESS – LOSS TO MUNICIPALITY –

NEEDS ACTION: Rs. 93,389.00

During the course of audit on the accounts of Amadalavalasa Municipality

for the year 2015-16, it is noticed that an amount of Rs. 93,389.00 was short

collection of Library Cess during the year which is irregular.

After verification of the documents and Library Cess together with files, it

is found that, the Executive Authority has not collected Library Cess according

to the provision which causes loss to the Institution.

The Executive Authority has to collect the short collection of Rs. 93,389.00

towards Library Cess as listed in the Annexure and credit to the funds of

Amadalavalasa Municipality and the fact may be intimated to the audit.

# Month Property Tax

collected

Library Cess

Short collection of Library Cess

Collected To be collected

1 April-2015 147871 7761 11830 4069

2 May-2015 110742 6973 8859 1886

3 June-2015 1585439 112677 126835 14158

4 July-2015 733239 48801 58659 9858

5 Aug-2015 334386 21039 26751 5712

6 Sep-2015 261865 16149 20949 4800

7 Oct-2015 165111 10478 13209 2731

8 Nov-2015 786009 53633 62881 9248

9 Dec-2015 2997278 205674 239782 34108

10 Jan-2016 365295 22405 29224 6819

11 Feb-2016 888492 71079 71079 0

12 Mar-2016 3106677 248534 248534 0

Total 11482404 825203 918592 93389

Code No-08

21) ADVANCE PAID TO Sri. K. Srininvasa Rao, Manager and Sri. G. Ravi,

Asst., Engineer, MC, AMADALAVALASA - AMOUNT NOT ADJUSTED – NEEDS ACTION: Rs. 83,000.00

# Vr.No/Date Particulars Amount

1

59/18.05.15

Advance Paid to Sri. K. Srinivasa

Rao, Manager towards TA Advance

3000.00

2

585/11.01.16

Advance paid to Sri. G. Ravi, Asst., Engineer, for the purpose of

procurement of Plants.

80000.00

Total

83000.00

An amount of Rs. 83000.00 was drawn and paid to Sri. K. Srinivasa Rao,

Manager and Sri. G. Ravi, Asst., Engineer, MC, Amadalavalasa towards

Travelling Advance and procurement of plants. The above advance amount was

not adjusted till the closure of audit.

The executive authority is requested to take necessary action to get the

amount of advance adjusted to General funds of Municipal council under

intimation to audit.

Code No-08

22) ADVANCES – PAYMENT OF ADVANCES-HUGE AMOUNT PENDING

ADJUSTMENT AND CERTAIN PROCEDURAL IRREGULARITIES NOTICED –NEEDS ACTION: Rs. 16,90,628.00

During the course of audit for the year 2015-16, as verified from the books

of accounts with reference to the Advance Recoverable Register, it is noticed that

an amount of Rs. 1,64,000.00 was drawn and paid towards various Advances to

the Municipal staff and recovered Rs. 2,66,200.00 duly leaving Rs.16,90,628.00

as unadjusted advance as on the closer of the year as detailed below:

Financial

Year

Opening

Balance as

on

01.04.15

(Rs.)

Sanctioned

during the

year 2015-

16(Rs.)

Total(Rs.)

Recovered

during the

year

2015-16

(Rs.)

Outstanding

balance as on

31.03.16(Rs.)

1995-96 21981.00 0.00 21981.00 0.00 21981.00

1996-97 78025.00 0.00 78025.00 0.00 78025.00

1997-98 81067.00 0.00 81067.00 0.00 81067.00

1998-99 38870.00 0.00 38870.00 0.00 38870.00

1999-00 62403.00 0.00 62403.00 0.00 62403.00

2000-01 19809.00 0.00 19809.00 0.00 19809.00

2001-02 2900.00 0.00 2900.00 0.00 2900.00

2002-03 20964.00 0.00 20964.00 0.00 20964.00

2003-04 4876.00 0.00 4876.00 0.00 4876.00

2004-05 171021.00 0.00 171021.00 0.00 171021.00

2005-06 242760.00 0.00 242760.00 0.00 242760.00

2006-07 54990.00 0.00 54990.00 0.00 54990.00

2007-08 42666.00 0.00 42666.00 0.00 42666.00

2008-09 19880.00 0.00 19880.00 0.00 19880.00

2009-10 89000.00 0.00 89000.00 13000.00 76000.00

2010-11 178100.00 0.00 178100.00 76500.00 101600.00

2011-12 236300.00 0.00 236300.00 34500.00 201800.00

2012-13 185716.00 0.00 185716.00 18000.00 167716.00

2013-14 154600.00 0.00 154600.00 36600.00 118000.00

2014-15 86900.00 0.00 86900.00 62400.00 24500.00

2015-16 0.00 164000.00 164000.00 25200.00 138800.00

1792828 164000.00 1956828.00 266200.00 1690628.00

Annexure-I: Statement showing the list of advances sanctioned:

# Name of

the Fund Vr..No./Date

Name of the Employee &

Designation (Sri/Smt)

Type of

Advance

Amount

(Rs.)

1 General

Funds

59/18.05.15 K. Srinivasa Rao TA 3000.00

2 585/11.01.16 G. Ravi, Asst., Engineer Procurement of

Plants 80000.00

3

Salary &

Pension Account

142/08.07.15 P. Dhanunjeya Rao MCycle 35000.00

4

180/06.01.16

FA sanctioned to 23 Last

Grade Services employees

@ 2000/-

FA 46000.00

Total 164000.00

Annexure-II: Statement showing the list of advances Recovered:

S.No. Nature of Advance Amount Recovered(Rs.)

1 Marriage Advance 80500.00

2 Festival Advance 57200.00

3 Motor cycle Advance 128500.00

Total 266200.00

Procedural Irregularities:-

As per the instructions issued in GO.Ms.No.175 Fin (A&L)

Dept.,dt.15.5.2010, the following guidelines should be followed while sanctioning

Motor Cycle Advance:

MCA should be sanctioned to the Government employees who drawing the

pay of Rs.11530/-P.M and above.

Advance should be sanctioned either 7 times of Basic pay or actual cost of

the vehicle whichever is less but not more than Rs.60000.00.

The interest should be levied @5%P.A. for Class-IV and @5.5% to the rest

of the employees.

In addition to the above, the following guidelines also have to follow by the

Executive Authority:

Full eligible amount of advance shall sanctioned as per Government

Memo.No.36851/1413/A1/A&L/83; dt.18.11.1983 of Finance department.

Certificate should be furnished to the effect that agreement and security

bond issued have been obtained from the individuals and retained in the

office.

Certificate that no previous advances are pending if the MCA is sanctioned

for second time and that the earlier advance is fully recovered with interest

and clearance certificate is obtained from the competent authority should

be enclosed.

Certificate to the effect that his/her spouse is not a Government servant

and if either of them happens to be government servant that no advance is

sanctioned to him/her be obtained and enclosed.

Certificate that the lonee has not been sanctioned any other conveyance

advance during the preceding 5 years be enclosed.

Sanction of MCA is accorded to drivers of Government vehicles as per

GO.Ms.No.333, Fin Dept., dt.14.12.1983.

As per para-4 of GO.Ms.No.333, Fin Dept., dt.14.12.1983, account payee

cheque shall be issued in favour of the dealer from whom the driver

intends to purchase the vehicle and cheque is not to be issued in favour of

the DDO.

A Watch register observing the recovery of the advance sanctioned should

be maintained etc.,

But as verified from the advance sanction files, there is no documentary

evidences except the sanction orders which is highly irregular in terms of the

above government orders.

Hence, action would need to be taken to follow the procedure here after

and loss caused in the matter if any due to non observance of rules would need

to be made good from the person or persons responsible under intimation to

audit.

ASSIGNED REVENUES: Code No-09

23) RECEIPTS OF ASSIGNED REVENUES FROM GOVERNMENT NOT WATCHING – INCOME LOST – NEEDS EARLY ACTION:

During the course of audit of municipality for the year 2015-16, it is

noticed that the following assigned revenues such as compensation due to

abolition of property tax, compensation due to abolition of profession tax,

entertainment tax, per capita grant, surcharge on stamp duty, Magisterial fines

motor vehicle Tax and seigniorage fee etc., were adjusted to the funds of the

institution as detailed below.

It is the responsibility of the grant receiving authority to watch the

demand and receipt of statutory income guaranteed in the Acts and rules.

Receipt head Amount

realized(Rs.) As per the Income and

Expenditure statement

appended to the Annual

account in DEABAS

system it was noticed

that no amount was

adjusted except SSD, ET

during the year 2015-16

Profession Tax

compensation

-

Property tax compensation -

Per capita grant -

Entertainment Tax 2700.00

Magisterial fines -

Surcharge on stamp duty 3366972.00

Hence, adequate action has to be taken for the adjustment of the

amounts, which are not adjusted in time duly maintaining the D.C.B. particulars

for each head. The amounts `due` under assigned revenues have to be entered

separately in the register of M.D.R. and got adjusted to municipal funds, by

addressing the collection authorities and fact of the adjustment may be reported

to audit.

Code No-09

24) ECONOMY - ECONOMY IN EXPENDITURE NOT OBSERVED- IRREGULAR

- NEEDS ACTION:

During the course of audit for the year 2015-16, it is noticed that huge

amounts were spent towards contingent items and maintenance of the

institution which is avoidable.

The government has issued instructions to watch the economy of

expenditure so as to reduce the avoidable expenditure vide GO.Ms.214, Fin

(W&M) Dept., Dt: 20.8.2009 and amended from time to time.

But the effective action has not been taken to curtail/reduce the

avoidable expenditure as detailed below:

Sl.No. Head of expenditure Amount Spent

(Rs.)

1 Telephone & Mobile phone charges 227181

2 POL Charges 1103149

3 Electrical Charges 12150

4 Printing and Stationary 112697

The un-productive expenditure incurred as above will hamper the progress

and financial position of the institution which need to be reduced to be possible

on time.

Hence, action would need to be taken to follow the guidelines of the

Government in the interest of institution.

Code No-09

25) EAR MARKED FUNDS- ALLOCATION OF EAR MARKED FUNDS-

STATUTORY RULES NOT OBSERVED-IRREGULAR: During the course of audit for the year 2015-16, it is noticed that

the statutory rules were not observed while allocation of Ear Marked Funds.

According to the rules relating to preparation of budget under AP

Municipality Rules issued in GO.Ms.No.619, (M.A) Dept., Dt.07.10.1967 every

Urban Local Body has to allocate/Ear Mark the following funds out of their

general revenue as detailed below:

S.No Name of the Component

Percentage of funds

to be allocate on

general revenue

as per rules

1 Welfare programmes for Schedule Castes 15%

2 Welfare programmes for Schedule Tribes 7.5%

3 Welfare programmes for Women & Child Welfare 5%

4 Slum Area Development Programmes 40%

5 Public Health Related Programmes 30%

But no allocation was made towards the welfare of the weaker sections

and violated the Government Orders as stated above.

Hence, action would need to be taken to allocate the Ear Marked funds

as required above for the balanced development of all sections of public.

Code No-09

26) MUNICIPAL SOLID WASTE (MANAGEMENT& HANDLING) RULES 2000-

IMPLEMENTATION DETAILS CALLED FOR: According to Municipal Solid Waste( Management & Handling)

Rules,2000 Municipal Authorities are responsible for collection, storage,

segregation, transportation, processing and disposal of Municipal Solid Waste.

The Municipal Authority or an operator of a facility shall make an application for

grant of authorization for setting up waste processing and disposal facilities

including landfills after obtaining necessary authorization from the AP Pollution

Control Board.

a) The schedule fixed in the rules are as follows:

S.No. Compliance& Criteria Schedule

1 Improvements to existing land fill sites as

per proceedings of rules

By 31st

December,2003 or

earlier.

2 Identification of land filling sites for future

use and making sites ready for operation Once in six months

3 Setting up of waste processing and disposal

facility.

By 31st

December,2001 or

earlier.

4 Monitoring the performance of waste

processing and disposal facilities

By 31st

December,2002 or

earlier.

However, the scheme was not implemented as per the schedule.

b) Submission of Annual Reports:

As per the Rule-4(4) of Municipal Solid Waste( Management &

Handling) Rules,2000 the ULB shall furnish its annual report in the form

prescribed to the Secretary in Charge of the Urban Department by 30th June of

every year with a copy to the AP AP Pollution Controle Board. The date of

submission of such annual report was not furnished to audit.

c) Implementation of 3-bin system:

Segregation of waste after collection is pre-requisite for setting up of

waste processing and disposal facility. As per Municipal Solid Waste(

Management & Handling) Rules,2000 three separate colored storage dampered

bins were to be set up intermediately points. One each for biogradable waste,

non-biogradable waste and for other types of waste. But the information was not

furnished to audit.

d) Plastic Manufacturing Units:

The Municipality has to levy penalties on plastic manufacturing units

as per Municipal Solid Waste (Management & Handling) Rules,2000 . But such

action was not forth coming to audit.

Hence, action would need to be taken to implement the scheme in a scientific way.

Code No-09

27) FIRE CESS – FIRE CESS @ 1% ON PROPERTY TAX NOT LEVIED-

IRREGULAR: During the Course of audit for the year 2015-16, as verified from the Demand

Registers of Property Tax, it is noticed that an amount of Rs. 1,02,65,785.00 was

collected towards property tax for the current year. But the firecess @ 1% was not

collected which is violation of government orders.

As per the instructions of “the High Level Multi Disciplinary committee-

2007” the Firecess has to be collected @ 1% on collection of Property Tax to take

precautionary measures against fire accidents.

In addition to collection of firecess, the following instructions were

issued:

Every builder which exceeding 500 Sq.mts plinth area or 6

mts hight should be accorded the permission from the Fire

Department.

Every Municipality has to conduct survey to identify the

Buildings without having permission from Fire Dept.

The Municipality has to issue 2 notices within 60 days to

rectify the defect.

Action has to initiate against the defaulters if they didn‟t rectify the

defect etc.,

But the fire cess was not collected and implementation of the instructions

not forth coming to audit.

Hence, action would need to be taken of collect the Fire Cess @1% of

property tax and remitted to head of account concerned duly deducting the

collection charges under intimation to audit.

Code No-09

28) TOWN PLANNING – APPROVAL OF BUILDING PLANS - LABOUR CESS NOT RECOVERED - NEEDS RECOVERY:

As verified from the Building Application Register and files

concerned, it is noticed that the Labour Cess @ 1% was not recovered from the

owners of the approved plans and remitted to Labour Welfare Department.

As per GO. Ms. No.59 (Labour & Welfare) Department Dt: 26-6-07

and circular memo 5473/ Labor II/A1/ 07-04, Dt: 3-1-2008 of LFT & F Circular

No. 4763/PFJ/FA/F1-07 Dt: 4-2-2008 the Executive Authority/ plans approving

authority as the case may be has to be recovered the labour cess @ 1% and the

same should be remitted to the Labour Welfare Department. But the same was

not done during the year though the similar objection was raised in the previous

audit report which is irregular in terms of the above Government Orders.

Hence, action would need to be taken to recover labour cess on the

value of construction and remitted the same to the head of account concerned

under intimation to audit.

Code No-09

29) NON CONDUCT OF INTERNAL CONTROLS – NOT FORTH COMING-IRREGULAR - NEEDS ACTION:

During the course of audit for the year 2015-16, it is observed that

the internal controls were not exercised as required under G.O.Ms.No.247, GAD,

Dt.08-02-1962 and G.O.Ms.No.34 Fin.Dept., Dt.23-01-1989 and G.O.R.T

No.1416 (Fin & Plg) Dept., Dt.01-07-1997 and instructions issued from time to

time.

As per the instructions issued in the above Government Orders, the

following checks should be exercised from time to time:

10% of collections made by the bill collectors should be checked by the

Executive Authority.

Periodical checks should be checked by the Revenue Officer on the

collections made by the bill collectors.

The cash balance available with the Cashier should be verified physically

periodically.

All the cash books should be reconciled monthly, quarterly and annually

with the treasury/bank pass books.

The financial position position of the institution should be reviewed by the

council/standing committee every month.

The postings of entries in the Ledger accounts should be checked and

certified by the Sectional heads.

All the outstanding bills should be scruitinized by the Head of the Office.

All the receipt books should be authenticated by the head of the Office.

Assessment Register should be authenticated by the Commissioner once

in 5 years.

All the Tools and Plants should be verified and certified by the

Commissioner annually.

All the stores and stocks should be verified and certified by the

Commissioner at reasonable intervals.

Edible articles should be inspected by the Health Officer from time to time.

Planning, implementation and objectives and policies of the Department.

Operational performance

Distribution of work among the existing staff.

Managerial efficiency, compliance of orders, rules and instructions of the

Department.

Efficiency check of various sections and divisions of the institution.

Leakages of revenue.

Irregularities/losses/thefts etc.,

But the above checks were not forth coming to audit in many cases in

the relevant records. Non-conduct of internal control checks from time to time

may leads to deteriorate the all round development of the system/institution.

Hence, action would need to be taken to conduct internal control

checks periodically.

Code No-09

30) AP MUNICIPALITIES DEVELOPMENT CONTROLE RULES-2008 - NOT

IMPLEMENTED – IRREGULAR: The Government of Andhra Pradesh issued orders to implement new

regulations in “AP Municipalities Developmental Contract Rules-2008” in all

municipalities with immediate effect.

As per the instructions issued in AP Municipalities Developmental Control

Rules-2008 the following rules should be observed by the municipality:

For constructions exceeding 300 Sq.Mts plinth Area:

1. 10% of area should be mortgaged to the Municipality.

2. Additional property Tax should be levied for the buildings

which not followed the rules.

3. Impact fee has to collect from the buildings exceeding 4

stairs etc.

Similar setbacks should be followed for the buildings situated in the plinth

area exceeding 200 sq mts.

Solar heaters and external lighting should be arranged to the buildings

exceeding 10 mts hight.

Impact fee should be collected as prescribed below.

a) Residential Buildings @ Rs. 150/- to 800/- per sq.mtr.

b) Commercial Buildings @ Rs.200/- to 1500/- per sq.mtr.

c) Institutional and Educational Buildings @ Rs.150/- to 800/- per

sq.mtr.

Double of the property tax has to collect if the occupancy certificate not

furnished.

All the builders and developers has to take license compulsorily etc.,

But the connected records pertaining to implementation of the above

rules not made available to audit.

Hence, action would need to be taken to produce the connected

records.

Code No-09

31) PROFESSION TAX – COLLECTION OF PROFESSION TAX FROM THE CONTRACTORS NOT FORTHCOMING- NEEDS ACTION:

During the course of audit for the year 2015-16, as verified from the work

files and list of works obtained from Engineering section, it is noticed that the

works were executed by the contractors.

But the collection of Profession Tax along with the Register of

Registered Contractors was not forthcoming to audit. In the absence of the above

information the candidature to participate in tenders and execution of works

could not be ascertained. The non collection of Profession Tax results in loss to

the Government.

As per the provisions laid down in the schedule-I of Andhra Pradesh,

Tax on Professions, Trades calling and employment Act 1987 at the rates fixed

as detailed here under:

Category of Contractors Rate of Profession Tax Amount Rs.

Special Class & Class I 2,500.00

Class II 1,500.00

Class III 500.00

Hence, action would need to be taken to collect the profession tax as

detailed in the above table and remitted to the head of account concerned and

produce the remittance particulars along with the Register of Registered

Contractors to audit for verification.

Code No-09

32) TAXES - DEMAND OF CERTAIN TAXES NOT FIXED – LOSS - NEEDS

ACTION:-

As verified from the cash Book and annual account, it is noticed that

the demand of the following taxes was not fixed and collected during the year.

Tax on Carriages & Carts

Tax on Animals

Tax on Agricultural Lands

Tax on Vacant Lands etc.,

TAX ON CARRIAGES AND CARTS:

Under Sections 103 to 111 of the AP Municipalities Act 1965, the

Tax on Carriages and Carts should be levied by the Municipality as follows:

a) The tax shall be levied on annual basis.

b) The rates of levy shall be in accordance with rule 21 of schedule II to the

Act.

c) The tax is payable if the carriage / cart is kept or used within the

municipality for an aggregate period of not less than 120 days in the year.

If the period is more than 30 days but less than 120 days only a moiety of

tax.

d) The carriages / carts specified in Sec. 107 are exempt.

e) When the tax is paid a license has to be granted.

f) A municipal number has to be affixed on the carriage / cart after collecting

the fees fixed for the cost of number plate.

TAX ON ANIMALS:

Under Sections 112 to 113 of the AP Municipalities Act 1965, the Tax

on Carriages and Carts should be levied by the Municipality if the animals

specified in Schedule II to the Act., are kept, the tax shall be levied not exceeding

the maximum rates specified in rule 21 of Schedule II of the Act.

But the demand of the above taxes was not fixed by the Municipality

which causes loss to the municipality.

Hence, action would need to be taken to fix the demand and collect

and loss caused if any due to non collection of above taxes would need to be

made good from the person or persons responsible.

Code No-09

33) D&O TRADES – LICENSE FEE DEMAND NOT FIXED AND COLLECTED

FOR IML SHOPS & BARS – LOSS – NEEDS RECOVERY:

As verified from the D & O Trades License Fee Receipt it is noticed

that the IML shops demand for license fee was not fixed and collected. The

reasons for not fix up the demand and collection of the license fee were not

forthcoming to audit.

The Authorities of the Municipality not obtained the details of

auction of IML Shops from the Prohibition and Excise Superintendent of Excise

Department. The above details may be obtained duly addressing for the details

and fix up the license fee. If the details could not be obtained from Excise

Department the authorities may be conducted a survey by the field staff and

Levy license fee.

As per G.O. Ms.No.111/R&E/R-I98 of the Director of Vigilance

Enforcement, Andhra Pradesh, Hyderabad not less than 1 % of the annual rental

value has to be levied and collected towards License fee from IML shops/bars.

Accordingly, the Municipal Council has to follow the guidelines of the G.O and

collect the License fee as per Rules cited above.

Further, the same is to be collected before, 28-2-2008, in the event

of late collection, 25 % penalty is to be levied and collected from the licensee

along with the original license fees and remitted to Municipal Funds. The loss in

this regard needs to be recovered from the person or persons responsible and

made good to Municipality Funds.

Code No-09

34) SECURITY DEPOSIT – SECURITY DEPOSIT NOT COLLECTED FROM THE

CABLE OPERATORS NEEDS EARLY ACTION:

It is ascertained during audit, that the security deposit was not collected

from the cable T.V operators during the year.

According to the provisions contained in the A.P Entertainment Tax Act-

1939 under Section(1) of Section 15-C every “Master Cable” operator in „Category

– A‟ who is seeking a license, under section 15(B) for a “Master Control Room”

shall deposit an amount of Rs.50,000.00 and every cable operator in any of the

remaining categories i.e “category – B,C and D” who is seeking a license under

section 15-B for a control room shall deposit an amount of Rs.25,000.00 towards

security deposit.

But it was not ascertained, any relevant information having the “Master

Control Room” or a “Control Room” for a Cable T.V network operated by T.V

operators in their jurisdiction, they shall pay the security deposit neither

Rs.50,000.00 nor Rs.25,000.00 as applicable. The reasons were also not

explained during audit for non-collection of security deposit from such

operators. In this regard, loss if any caused to the institution, due to the above

reasons, would need to be made good from the person or persons responsible.

Code No-09

35) LICENCE FEES – NON LEVY OF LICENCE FEES FROM CALBE

OPERATORS – NEEDS EARLY ACTION: During the course of audit it is ascertained that, the license fee was

not levied on cable T.V Operators during the year.

According to the provisions contained in the A.P Entertainment tax

Act`1939, under section (1) of section 15-B, as amended, every cable operator

seeking a license shall be charged a fee at the rate of Rs.5000/- in case of

category-A Rs.3000/- in case of category-B Rs.2000/- in case of category-C

and Rs.500/- in the case of category-D.

But the Executive Authority has not ascertained the information

having the cable T.V operators in their jurisdiction and levied the license fee on

cable TV Operators during the year. The reasons of non-levy license fee on

Cable TV Operators were also not explained in audit. In this regard loss if any

caused, due to the above reasons would need to be made good from the person

or persons responsible.

Code No-09

36) ENCROACHMENTS NOT CLASSIFIED AND OTHER DEFECTS-NEEDS

RECTIFICATION:

During the course of audit for the year 2015-16, as verified from the

Municipal Records, it is noticed that an amount of Rs. 10,52,238.00 was

collected towards encroachment fee during the year as detailed below:

The list of encroachments in the municipal area was not prepared by the

municipal building inspector and verified by the Commissioner. The

encroachments were not got classified as objectionable or Temporary/Permanent

and got approved by the municipal council. All the objectionable encroachments

should be removed and the un-objectionable encroachments may be licensed

under section 193 of A.P.M.Act`1965 duly collecting requisite fee. Hence, early

action would need to be taken for rectification of the defects under intimation to

audit.

S.No Item of Receipt Details Demand Collection Balance

1 Encroachment

Fee

Current 815000 422398 392062

Arrear 629850 629840 10

Total 1444850 1052238 392072

Code No-09

37) ADVERTISEMENTS ISSUED IN ELECTRONIC MEDIA AND CINEMA

HALLS –NOT FORTH COMING IN THE DEMAND REGISTER OF ADVERTISEMENT TAX-NEEDS ACTION:

As verified from the records on advertisement tax of the Amadalavalasa

municipality for the year 2015-16, it is noticed that the advertisement tax on the

advertisements issued in electronic media including cable T.V. and cinema halls

on ad-various bases at 10% on the rates charged by the advertisers was not

collected for the year 2015-16.

Government have issued instructions in G.O.Ms.No.266 MA dt.5-5-00 and

added ``Rule-7B`` to the A.P. Municipalities (Advertisement Tax) rule 1967

permitting the municipalities to levy advertisement tax on Electronic media

including cable TV on ad-various basis at 10% on the rates charged by the

advertisers.

Under rule 3 of the rules relating to the collection of advertisement tax as per

G. O. Ms. No. 470 M.A,Dt.24-7-1967 as amended the proprietor of the cinema

hall or in charge of the cinema hall, shall send the monthly statements of the

slides, advertisement and trail files exhibited during the month and wall posters

erected an walls. But the said returns were not obtained and produced to audit.

Also it is noticed that the road side margine advertisements were also not

forth coming in the demand register of Advertisement Tax. But action was not

taken any steps to collect the advertisement tax on Electronic Media including

cable T.V on ad-various basis at 10% on the rates charged by the advertisers

during the year, which is contrary to the government instructions and sustained

loss to the institution. The same would need to be made good from the person or

persons responsible besides action to collect tax for the year 2015-16.

Code No-09

38) PF- PF SUBSCRIPTIONS NOT DEDUCTING AS PER SLAB RATES- NEEDS

ACTION:

During the course of audit for the year 2015-16, it is noticed that the

Provident Fund subscriptions were not deducted as per the guidelines issued in

Govt.Memo.No.56148/Acct/87-3(PR&RD) Dept,Dt.15.4.1988.

The PF subscription should be deducted at the rate of 6% of the basic

pay of all the regular and temporary employees who have completed one year of

service. The same was extended to PR Employees and Urban Local Bodies also

as per above said memo. But the recovery was not made as per the above

guideline which is irregular.

It is also ascertained that the annual PF Statements showing the balance

particulars at the close of the financial year were not issued to subscribers.

Hence, action would need to be taken to deduct the PF Subscriptions as

per the standing instructions of the Government and the details may be

furnished to audit for verification.

Code No-09

39) ADVERTISEMENT TAX NOT LEVIED ON PUBLIC ROAD MARGINS – LOSS NEEDS RECOVERY:

As seen from the advertisement tax collection register or it is noticed

that the advertisement tax not levied on publicity boards. The cinema halls

and other advertisements in the municipal area was not levied and collected as

under section 114 of A.P. Municipal Act`1965. Therefore, there is a loss of

revenue to the municipality funds for non-levy of the above said tax.

Hence, early action would need to be taken to levy and collect the

advertisement tax and credited to the municipal funds.

Code No-09

40) PURCHASE OF MATERIAL – TENDERS NOT CALLED FOR – NEEDS

RATIFICATION:

As verified from the Cash Book, Vouchers and connected purchases files

for the year 2015-16, it is noticed that an amount of Rs. 21,18,719.00 was

drawn and paid towards purchase of material like stationery, electrical material,

PH Conservancy etc., by confirming quotations locally during the year under

report as detailed below:

Sl.No. Particulars

Amount

(Rs.)

1 Purchase of Electrical material 78490

2 Printing & Stationary 112697

3 Water Supply Material 1137118

4 Furniture 35000

5 Vehicles 755414

Total 2118719

From the above details it was noticed that before purchasing the above

material the annual requirement was not assessed and not called for limited

tenders for purchase of the materials as the amount exceeded Rs. 20000.00 but

below 5 lakhs in terms of G.O.Ms.No.489, Fin&Pl (TFR.I) Dept, Dt.08.12.2008.

Further, the stationary was purchased in piece-meal manner so as to avoid

calling of tenders which is highly irregular.

Therefore, action may be taken to got the ratification orders from the

competent authority and the fact reported to audit and further while purchasing

any material the procedure prescribed by the Government may be followed

properly.

Code No-09

41) PURCHASE OF NEWS PAPERS TO OFFICE – OLD NEWS PAPERS NOT SOLD – NEEDS EARLY ACTION:-

During the course of audit for the year 2015-16, on

verification of the annual account and Cash book, it is noticed that an amount of

Rs. 20705.00 was drawn and paid towards purchase of news papers to Libraries

in the Municipality. But as per Government Memo No.23/2 progs.62-1 P&LA

dated 1-2-1983, the old news papers have to be disposed off in auction for every

three months and sale proceeds have to be remitted to Municipal Funds. But no

sale proceeds have been realized during the year.

Therefore, early action would need to be taken to dispose the old news

papers and sale proceeds have to be remitted to Municipal funds and fact

reported to Audit.

Code No-09

42) TAXES - REMITTANCE OF EDUCATION CESS – NOT FORTHCOMING – NEEDS ACTION:


demand registers for both arrear and current years in respect of Property Tax,

it is noticed that an amount of Rs. 1,21,46,895.00 was collected towards

property tax during the year as detailed below:

Amount collected towards property tax current as per

DCB Register

10265785

Amount collected towards property tax Arrear as per DCB

appended with Annual Account

1881110

Total Property Tax collected 12146895

According to section 37 to 39 of A.P. Education Act, 1982, the Education

Cess collected as a component of property tax has to be remitted to the

Education Department to enable them to release the education grant to

Municipalities every year.

But the collection and remittance particulars of Education Cess to

the Education department were not forth coming to audit.

Non-remittance of Education Cess hampers the progress of the quality of

education in the jurisdiction of Municipal Corporation and leads to divert the

collected amount for other purposes.

Hence, action would need to be taken to remit the amount if it was

unremitted or short remitted and fact reported to audit for verification.

Code No-09

43) OUT SOURCING MUNICIPAL SERVICES THROUGH AGENCIES – NOT CALLING OF FRESH TENDERS – NOT TO CONTINUE THE EXISTING OUT

SOURCING AGNECY YEARS TOGETHER WITHOUT FOLLOWING TENDERS EVERY YEAR – NEEDS EARLY ACTION

During the course of audit on the accounts of Municipal Council,

Amadalavalasa for the year 2015-16, as verified from the out sourcing of

Municipal Services (Public Health Works) file, it is noticed that the not calling of

fresh tenders, not to continue the existing outsourcing agency years together

with out following tenders every year. As per the GoAP, Municipal Administration

Department was issued circular Memo.Roc.No. 1994/2007/M3-1, dated

30.05.2014, has instructions are hereby issued with regard to calling tenders

for engagement of out standing services for maintenance of sanitation and solid

waste management through agencies in the Urban Local Bodies, to all

Commissioners of Urban Local Bodies in the State. The following instructions in

the detailed below.

1. Not to continue the existing out sourcing agencies years together without

following tender procedure every year

2. All Municipal Commissioners must call for fresh tenders as per the

existing guidelines and tender rules for the year 2015-16 without waiting

for revised tender rules to the issued by the Government with a condition

that the contract can be terminated at any time after 2 months without

any notice.

3. In all cases where tender period ends in during march of the year 2015-16,

fresh tenders shall be called for as per existing tender rules without

extending the period of contract on any ground.

Basing on the said information, contrary to the above instructions, the

Municipal Council, Amadalavalasa continued out sourcing of Municipal Services

Agency of Mahatma Scavengers, Amadalavalasa, Contractor, Sri K.

Tarakeswarrao. Out sourcing of Municipal Services workers wages were paid to

them from the Municipal Funds. Therefore the expenditure incurred towards

wages of Rs. 75,68,610.00 cannot be admitted in audit and it is held under

objection.

Any loss caused to the institution due to the above reason would need to

be recovered from the person or the persons responsible.

Code No-09

44) ARREAR DEMAND REGISTERS NOT WRITTEN UP – NEEDS EARLY

ACTION:

On verification it is observed that the Arrear Demand Registers of the

Property Tax, Vacant Land Tax are not up to date and postings were not made

fully for the years and current financial year. The Arrear Balances of the taxes

up to the ending with 31.03.2016 are as detailed below.

# Tax Arrear Demand

(Lakhs)

Current/Arrear

Collection

Balance

1 Property Tax 200.20 18.81 181.39

2 Vacant Land Tax 0.00 0.00 0.00

200.20 18.81 181.39

As seen from the above pending is very heavy and effective steps would

need to be taken immediately to realize the balances at an early date. The out

standing bills for Vacant Land Tax and Water tax are also produced for audit to

verify the correctness of the balances.

In the absence of the postings in the Arrear Demand Register and non

production of the out standing bills the correctness of the balances could not be

checked by the Audit.

The Executive Authority is advised to immediate action to yet the out

standing bills verified and any loss caused to the MC funds be recovered from

the persons responsible.

Code No-09

45) D & O TRADES – CATEGORY WISE TRADE NOT BIFURCATED IN THE D&O TRADES FOLLOW THE GAZETTE – NEEDS EALRY ACTION.

As seen in the D&O trades collection register, there is no A,B,C and D

categories bifurcation in the register as specified in the Municipal Council

Gazette. The Executive Authority has not followed the Gazette and not

maintained the collection register. It is highly irregular.

Code No-09

46) VUDA – DEVELOPMENT CHARGES – COLLECTED – NOT REMITTED TO

VICE-CHAIRMEN VISAKHA URBAN DEVELOPMENT AUTHORITY (VUDA)

ACCOUNT – NEEDS EALRY ACTION

During the course of audit on the accounts of Municipal

Council, Amadalavalasa for the year 2015-16, it is observed that, an amount of

Rs. 4,58,303.00 has been collected for 2015-16 and cumulative sum of Rs.

25,39,920.00 for the period from 2007-08 to 2015-16 towards Vuda

Development Charges by the Municipal Authorities along with other fees for

approving the Building Applications and lodged in the PD Account of Town

Planning Development Fund (A/c No: 11384009902 of SBI, Amadalavalasa)

operated by Municipal Commissioner, Amadalavalasa.

According to the Government Orders issued in G.O.Ms.No. 215, MA&UD

Department, dated 10.04.1977 and G.O.Ms.No. 439, MA&UD Department, dated

13.06.2007, the Vice-Chairmen, Visakha Urban Development Authority has

passed a resolution number 14, dated 30.07.2010 and was communicated to the

Municipalities situated in the purview of VUDA, vide Rc.No. 1659/03/L1, dated

30.07.2010. Where in it was directed to the Municipalities to collect the VUDA

development charges and shall be remitted directly into the VUDA account. The

amount so collected by Urban Development Authorities shall be kept in a

separate account and shall utilize 85% of the income to implement the

provisions of master plans viz., (a) traffic improvement (b) construction of bridges

(c) development of green belts and parks etc., and remaining 15% can be utilized

for administration and other maintenance as per their action plan for the

implementation of master plan proposals.

In spite of the Govt., Orders, the Executive Authority has not taken any

action to remit the amount to VUDA Account and lodged a huge sum of Rs.

20,81,617/- in the town planning development fund, which is irregular. As there

is every scope that these amounts might be diverted, the Executive Authority is,

therefore, directed to remit the said amount to the VUDA account and

compliance to audit.

Code No-09

47) OUT SOURCING EMPLOYEES – HUGE AMOUNTS SPENT TOWARDS

WAGES – IRREGULAR – NEEDS ACTION

During the course of audit for the year 2015-16, it is noticed that an

amount of Rs. 1,27,89,263.00 was spent towards wages of outsourcing

employees, is abnormal.

Out of total expenditure, 11.22 % of expenditure incurred towards wages

of outsourcing employees which is irregular and objection in audit.

Hence, the Executive Authority is requested to minimize the expenditure

on outsourcing employees in future course.

Code No-09

48) TOWN PLANNING SECTION - OPEN SPACE CONTRIBUTION CHARGES

NOT COLLECTED/SHORT COLLECTION – IRREGULAR- NEEDS ACTION Rs. 15,94,320.00

During the course of audit of Municipal Council, Amadalavalasa for the

year 2015-16, as per the Building License Feeses approved by the council, the

Open Space Contribution Charges @ 14% of present market value of the site has

to be collected for the buildings which are to be constructed in newly built up

area or in unauthorized layouts, before issuing permission for the construction.

The short collection / non collection of open space contribution was

noticed for the below applicants while approving the Building Applications by the

Municipal Council, Amadalavalasa.

Hence the above said amount has to be made good to the Funds by

recovering the amount from the person or persons responsible.

# BA No Name

Present

Market

Value as per

Revenue

Records

Open Space

contribution

charges

collected

Open Space

contribution

charges to be

collected

Difference

To be collected

1 2 3 4 5 6 (4*14%) 7

1 35/15 P. Radha 1750000 131750 245000 113250

2 26/15 S. Appalanaidu 1595000 54600 223300 168700

3 50/15 L. Visweswararao 1230000 63000 172200 109200

4 53/15 K. Nagamani 1483500 23400 207690 184290

5 54/15 S. Devender 1500000 57160 210000 152840

6 56/15 R. Kalpalatha 5620000 73600 786800 713200

7 63/15 S. Satyanarayana 1500000 57160 210000 152840

Total 1594320

Code No-10

49) LIBRARY CESS – REMITTANCE OF LIBRARY CESS TO ZGS NOT FORTHCOMING – NEEDS ACTION

During the course of audit for the year 2015-16, as verified from the demand registers (not updated) and DCB scrolls obtained from Revenue Section in respect of Property Tax, it is noticed that an amount of Rs.1,21,46,895.00

was collected towards property tax during the year. But the remittance of Library Cess to Zilla Grandhalaya Samstha was not forth coming to audit.

As per the existing rules Library Cess should be calculated@8 % on

property Tax Collection. Out of the total amount worked out 15% of amount has to be utilized for improvement of Libraries in the Municipal Corporation

Jurisdiction and remaining 85% should be remitted to the Zilla Grandhalaya Samstha under the instructions issued in G.O.Ms.No: 87 MA Dt: 25-1-2000. But the amount collected towards Library cess, utilized in the Municipal

Corporation Jurisdiction and remitted to the Zilla Grandhalaya Samstha etc., was not forthcoming to audit which required under circular RC. No.13888/2002-F1 Dt.14-08-2008, from the Commissioner & Director MA & UD

Department and G.O.Ms. No: 68, Dt: 12-9-2007. As per the information provided by the revenue section, an amount of Rs.

8,25,203.00 was remitted towards Library Cess during the year as detailed below:

S. No

Month No. of trans

Total Property

Tax collected

Library Cess deducted

Tran Charges

deducted

Net amount received

1 April-2015 157 147871 7761 882 139228

2 May-2015 169 110742 6973 949 102820

3 June-2015 2648 1585439 112677 14876 1457886

4 July-2015 1150 733239 48801 6461 677977

5 Aug-2015 441 334386 21039 2478 310869

6 Sep-2015 356 261865 16149 2000 243816

7 Oct-2015 284 165111 10478 1596 153037

8 Nov-2015 1208 786009 53633 6787 725589

9 Dec-2015 3254 2997278 205674 18281 2773323

10 Jan-2016 596 365295 22405 3348 339542

11 Feb-2016 800 888492 0 4580 883912

12 Mar-2016 1779 3106677 319613 10185 2776879

Total

11482404 825203 72423 10584878

But the remittance particulars of Library Cess to the ZGS together with

original challans were not forthcoming to audit for verification. In the absence of the same the correctness of remittance of library cess could not be ascertained

in audit. Hence, action would need to be taken to remit the amount as per the government orders and remittance particulars may be furnished to audit for

verification.

Code: 10

50) DEPOSITS RELATED TO DDO ACCOUNT-CERTAIN SALARY RECOVERIES NOT REMITTED- NEEDS EARLY REMITTANCE: Rs. 95,682.00


cash book, Deposits register and remittance files, it is noticed that an amount of

Rs. 95,682.00 was not remitted towards statutory recoveries like GIS, Court

recoveries etc., to the head of accounts concerned which is irregular.

It is the duty of the Executive Authority to watch the remittance of

pay bill recoveries in time. But the same was not done. The head wise recovery,

remittance and pending remittance particulars as per Deposit register related to

pay bill recoveries were detailed below:

Recovery head Recovered

during

2015-16

Remitted during

2015-16

Pending

remittance as on

31.3.2016

LIC-Office staff 46652 38458 8194

LIC-PH staff 5862 5322 540

LIC of Secondary Education Staff 340568 299406 41162

LIC of Elementary Education Staff 168398 144512 23886

Postal RDs of Secondary Education

Staff 22500 18600 3900

Postal RDs of Elementary Education

Staff 81000 63000 18000

Total 664980 569298 95682

Non remittance of statutory recoveries like GIS and court attachment

amounts creates further legal complications to the individuals and Executive

Authority. Hence, action would need to be taken to remit the amounts to the

head of accounts concerned. The loss caused if any in the matter would need to

be made good from the person or persons responsible.

Code No-11

51) D & O TRADES – ARREAR DEMAND REGISTER INRESPECT OF LICENSE FEE NOT PRODUCED – NEEDS EALRY ACTION.

The Arrear Demand Register for the year 2015-16 in respect of license fee

was not maintained and produced to audit. Early action would need to be taken

by the Executive Authority to maintain the Arrear Demand Register (D&O

Traders) under license fees for the year 2015-16 and produced to audit.

Code No–11

52) LASPED DEPOSIT REGISTER – NOT MAINTAINED AND PRODUCED – NEEDS EALRY ACTION.

During the course of audit, it is noticed that the lapsed deposit register

was not maintained and produced for verification of audit. According to Art., 271

of AP Financial Code Volume – I, all deposits of over 3 years pending refunds

should be lapsed. In the absence of the lapsed deposit register, the following

checks could not be made in audit for verification of the lapsed deposits as on

31.03.2016.

Any refund made from lapsed deposit without obtaining the council

resolution.

Any payment made in excess of the original credit.

Any amount made previously.

Any double payment was made.

Any payment made without obtaining the relevant documents from the

original deposits.

The Executive Authority is requested to take early action, maintain the lapsed

deposit register and produced to audit for verification.

Code No–11

53) PURCHASE OF FURNITURE AND ELECTRIAL GOODS – CONNECTED STOCK REGISTER WAS NOT PRODUCED TO AUDIT – NEEDS EARLY

ACTION Rs.1,13,490.00

During the course of audit, it is noticed that an amount of Rs.1,13,490/-

was drawn and paid towards purchase of Revolving chair, Refrigerator, smart

phones and Laptop as detailed below.

# Vr.No/Date Details Amount

1 385/26.10.2015 Revolving chair 35000

2 362/13.10.2015 Refrigerator 6990

3 326/24.09.2015 Smart phones 37500

4 120/17.06.2015 Dell Laptop 3542 34000

Total 113490

But connected stock register showing the opening balance, material

received, issued and balance of materials was not produced to audit. In the

absence of the same, the correctness of the materials used could not be verified

in audit. Early action would need to be taken for production of the stock register

of the material.

Code No–11

54) LEGAL CHARGES PAID – CONNECTED FILES PAID RECEIPS NOT PRODUCED Rs.1,49,000.00

During the course of audit on the accounts of Municipal Council,

Amadalavalasa for the year 2015-16, it is noticed that an amount of

Rs.1,49,000/- was drawn and incurred towards legal charges paid to

Advacate/Legal Agency as detailed below. But the connected files permission of

the Administrative Authorities, budget provision and paid receipts to the legal

authority were not produced to audit for verification. Further the suit register

was also not produced to audit. In the absence of the same the correctness of the

expenditure and stage of cases cannot be verified in audit. Hence the entire

expenditure cannot be admitted in audit and held under objection.

# Vr.No/Date Particulars Amount

1 18/21.04.2015 Paid to Sri I. Ravindra babu 7000

2 19/21.04.2015 Paid to Sri I. Ravindra babu 7000

3 52/18.05.2015 Paid to Sri N.Venkateswarlu 5500



6 163/09.07.2015 Paid to Sri Rammohan choudary 7500

7 201/13.08.2015 Paid to Sri Rammohan choudary 4500

8 291/02.09.2015 Paid to Smt. Santhi neelam 40000

9 413to415/16.11.15 Paid to Sri K. Ramu and Sri N.Venkateswarlu 19000

10 458to463/04.12.15 Paid to Sri N.Venkateswarlu 47500

Total 149000

Early steps may be taken to produce the suit register along with required

documents to audit for verification to admit the said expenditure.

Code No-11

55) BUDGET NOT PRODUCED – NEEDS ACTION: Under section 126 and 127 of A.P Municipalities ACT`1965 and according

to rule 8 of rules deal with preparation of Budget, allotments and transfer of

funds, issued in G.O.Ms.No.36 MA Dt.7-10-1970 and G.O.Ms.No.740 M.A Dt.

12-12-1977, the budget as approved by the council, should be submitted to the

Government through the District Collector and Director of Municipal

Administration by 31st December by every year.

The commissioner and Director of Municipal Administration has to submit

the same to Government by 15th of February.

As per the instructions issued in GO.Ms.No.619,M.A; Dt.7.10.1967, while

preparing the budget, the following factors need to be considered:

Receipts should not be over estimated.

Expenditure need not be under estimated.

Feeling additional allotment in revised estimate to be avoided.

No need to save money and show large surplus.

Minimum 5% of working balance to be maintained.

Due provision has to be made for obligatory expenditure, viz salaries of

employees, loan repayments, contingencies, O&M, Spill Over Works etc.,

Provision for departmental expenditure only after obligatory expenditure is

committed.

While making development expenditure, provision to be made for welfare

programmes for SC, ST, W&CW @ 15%, 7.5% and 5% respectively as per

Government Orders.

Similarly 40% to be earmarked for slum areas.

30% of funds to be earmarked for Public Health activities.

The programmes, policies, priorities of the council to be reflected.

The assurances, commitments made by council Government to be

reflected.

But the approved budget as prepared above for the year 2015-16 was not

produced to audit. In the absence of the same, it could not be verified in audit as

above.

Hence, action would need to be taken to produce the sanctioned budget

for the year 2015-16 may be produced to audit early.

Code No–11

56) REGISTER OF MISCELLANEOUS LICENSES WAS NOT PRODUCED – NEEDS EALRY ACTION.

The register of miscellaneous license was not maintained and produced to

audit to verity the correctness of collections pointed out in the demand register

under the D&O trades for the year 2015-16. The register would need to be

maintained and produced to audit early.

Code No-11

57) PAYMENT OF VARIOUS AMOUNTS-CONNECTED PAYEES

ACKNOWLEDGEMENTS WANTING:

During the course of audit for the year 2015-16, as verified from the books

of accounts with connected paid vouchers and files, it is noticed that an amount

of Rs. 5,61,480.00 was drawn and paid towards contribution of premium of

GLIC, LIC by way of demand drafts and cheques etc., during the year. As per

procedure it should be seen that the payees acknowledgements for each

payment should obtain in token of receipt of the Demend Draft/cheque by the

Authorities concerned and the same should be produced to audit for verification.

As verified from the Register, the amount was paid to various agencies as

detailed below:

Sl. No.

Head of Payment

Name of the party to whom payment made

DD/cheque No.& Date

Amount (Rs.)

1

Group Scheme LIC

(Master Policy

No.62626)

The Senior Divl.Manager, LIC of India

Pension& Group Scheme Unit, Divisional Office, Jeevan Prakash

Marg, Visakhapatnam

241214/31.07.15 241520/08.09.15 062326/12.11.15 062333/28.12.15 062328/20.11.15 062338/08.02.16

5862.00

2 LIC Premium of Office staff

The Branch Manager, LIC of India, Srikakulam.

46652.00

4

LIC Premium of Secondary

Education staff


340568.00

5

LIC Premium of

Elementary Education

staff


168398.00

Total 561480.00

But the payees‟ acknowledgements in token of receipt of the above amount

were not obtained and produced to audit. In the absence of the same the correctness of the payment could not be certified in audit.

Hence, action would need to be taken to obtain the same and produce to

audit for verification.

Code No-11

58) REGISTER OF UN-AUTHORIZED CONSTRUCTIONS TOGETHER WITH

CONNECTED FILES NOT PRODUCED-NEEDS EARLY ACTION:

The Register of un-Authorized constructions together with connected file

was not produced to audit for verification. In the absence of the same the

correctness of penal amounts on un-authorized constructions to be collected,

collections made and the amount left un collected could not be verified in audit.

The same would need to be produced to verify the correctness of penal

amount collected from building owners. Any loss caused in this regard would

need to be recovered from the person or persons responsible.

Code No-11

59) REGISTER OF LAY –OUTS – NOT PRODUCED NEEDS EARLY ACTION:

As verified from the records of Amadalavalasa Municipality for the year

2015-16, it is noticed that the lay-out register for the year 2015-16 and also for

the previous years were not made available to audit for verification. In the

absence of the said register, the layout applications received if any submitted for

approval could not be identified in audit.

The loss if any caused to the institution would need to be made good from

the person or persons responsible.

Code No-11

60) PAYMENT OF TELEPHONE CHARGES AND CELL PHONE CHARGES-SANCTION DETAILS AND CONNECTED FILES NOT PROPDUCED- NEEDS

EARLY ACTION: During the Course of Audit for the year 2015-16, On verification of cash

book it is noticed that an amount of Rs. 2,09,941.00 was drawn and paid

towards telephone and cell phone charges during the year for usage of the

following telephone and Cell phone numbers utilized by the Municipal staff as

detailed below:

S.NO Phone Number Details of User of the Number

1 08942-286208 Municipal Office Telephone

2 08942-286419 Commissioner Residence

3 08942-286832 Chairperson Chamber

4 08942-287644 Online Computer

5 08942-286489 Chairperson Residence

6 9849905788 Commissioner

7 9849906479 Municipal Asst. Engineer

8 9849908094 Sanitary Inspector

9 9849906957 Revenue Inspector

10 9849908284 Sanitary Maistry

11 9849906973 Town Planning Officer

12 9849906974 AF Mazdoor

13 9849906975 E2 Section staff

14 9849906976 Fitter

15 9849906977 Sanitary Maistry

16 9849906978 Municipal Asst. Engineer

17 9849906979 C3 Section Staff

18 9849906980 Water works staff

19 9849906981 Manager

20 9849906982 G1 Section staff

But the Register of Trunk Calls and the phone bills was not

maintained and produced to audit for verification. It is also noticed that 15 cell

phones were utilized by field staff, manager and others staff members.

As per the existing instructions which were given by the C&DMA the

mobile should be sanctioned to the outdoor staff of the Municipality for

convenience of the public and administrative authorities so as to avoid delay in

discharging their statutory duties. But verified from the above information it is

ascertained that office staff also allotted mobiles and getting payment for their

phone calls along with field staff. But the connected file along with

administrative sanction orders of C&DMA, AP, Hyderabad was not produced to

audit for verification. In the absences of the above the correctness of the

expenditure could not be verified in audit.

Hence, action would need to be taken to produce the trunk call

register and cell phone sanction files etc., to audit for verification.

Code No-11

61) MONTHLY LISTS-CONNECTED BUILDING APPLICATIONS AND ASSESSMENT MASTERS NOT PRODUCED-NEEDS EARLY ACTION:

During the Course of Audit for the year 2015-16, on verification of Register

of Monthly Lists maintained in the format prescribed in MF.No.8-Form:B under

Rule-7(3) in the name of List of houses for which Property Tax levied, it is

noticed that 668 monthly lists were verified by the revenue section regarding levy

of property tax for new houses and revision of tax for certain under assessments

during the year.

As per procedure every new assessment of monthly lists should be verified

with reference to the approved building applications obtained from town

planning section and Assessment Masters available in E-Suvidha software and

correctness should be ascertained in audit. But, connected building application

files and Assessment Masters downloaded from E-Suvidha were not furnished to

audit for verification. In the absence of the above documents the correctness of

the following items with reference to the information available in BA applications

and Assessment Masters could not be certified in audit:

Whether the measurements recorded in ML Register tallied with the

measurements in BA Applications and E-Suvidha software.

Whether the Zonal rates adopted in ML Register tallied with the

rates adopted in E-Suvidha software.

Whether the Monthly Rental Values, Annual Rental Values,

depreciation and Tax fixed as per ML Register tallied with the values

of E-Suvidha software.

Whether the type of construction, purpose, occupation in ML

Register tallied with the rates adopted in E-Suvidha software.

Whether the penalty collected @10% for the constructions which

were not accorded permission for construction etc.,

Whether any under assessment made etc.,

Hence, action would need to be taken to produce the same to audit for

verification of the correctness of the property tax fixed.

Code No.11

62) MONTHLY LISTS NOT PRODUED INRESPECT OF ENCROACHMENTS – NEEDS EARLY ACTION

As verified from the Demand Register of Encroachments, the lists of new

assessments taken to demand for the year 2015-16 were not made available for

verification in audit. All such new assessments are directly taken in the demand

register without any preliminary investigation and orders of the Commissioner.

The monthly lists may be prepared and orders obtained to collect balances after

they are noted in the demand register to ensure that all the encroachments

noticed by the outdoor staff is brought to the demand register.

Code No.11

63) TAXES – LIBRARY CESS – REMITTENCE OF LIBRARY CESS –

PARTICULARS NOT PRODUCED – NEEDS NECESSARY ACTION Rs.9,71,752.00

As verified from the Records, it is noticed that Library cess @ 8% on property tax

collection was worked out and the following amounts relating to library cess was

short remitted. But, as per G.O.No 87, MA&UD Department, dated 25.01.2000 @

15% of the total amount of deduction has to be utilized for improvement of

libraries in the Municipality jurisdiction. But it was not forthcoming the details

of utilization towards said purpose to audit. Hence, as per instructions in the

said G.O., the amount of 15% shown above should also be transferred to Zilla

Grandhalaya Samstha immediately and to produce the details of remittance

particulars to audit.

Property Tax: Rs.1,21,46,895 * 8%

Library Cess: Rs.9,71,752.00

The details of payment made for Rs.9,71,752.00which will be adjusted by

MA&UD department from the Government grants due to the local bodies vide

Circular Rc No. 13888/2002-F1, dated 14.08.2008, from the Commissioner and

Director of MA&U Department not forthcoming. Hence necessary steps may be

taken as per instructions issued therein and fact reported to audit.

Code No-11

64) TAXES & NON TAXES- BYELAWS NOT REVISED-NEEDS EARLY ACTION:

During the course of audit, on verification of various taxes and non-taxes,

it is noticed that the following amount was collected towards taxes and non

taxes during the year.

S. No

Item of Receipt


1 Property Tax Current 13600597 10265785 3334812

Arrear 20020390 1881110 18139280

2 Water Tax Current 3179920 146700 3033220

Arrear 2404790 149980 2254810

3 Encroachment

Fee

Current 815000 422938 392062

Arrear 629850 629840 10

4 D&O Trades Current 126305 126305 0

Arrear 0 0 0

5 Advertisement

Tax

Current 24974 24974 0

Arrear 1575 1575 0

As verified from the byelaws/notifications related to various taxes and

non-taxes, it is noticed that the taxes and non taxes are being calculated duly

adopting the old gazette rates as detailed below:

S.No. Item of tax/non tax Gazette in force

i. Property tax for

residential buildings Gazette No.31/2002, dt.02.3.2002 w.e.f.

01.4.2002

ii. Property tax for

Commercial buildings Gazette No.334/2007, dt.13.9.2007 w.e.f.

01.10.2007

iii. D&O Trades Gazette No.55/98, dt.09.11.1998 w.e.f.

01.08.2000

iv. Town Planning Receipts Gazette No.42/98, dt.18.9.1998 w.e.f.

01.10.2000

According to the Act provisions, fresh notification has to be issued at least

once in 3 years and the rates have to be revised in accordance with the fresh

notification. But fresh notifications were not issued so far even after lapse of so

many years which is irregular and causes loss to the institution.

Hence, action would need to be taken to revise the notification/bye laws

for levy of various taxes and fee in periodical intervals and the loss for non-

revision may be worked out and arrived at and the same may be recovered from


Code No-11

65) APPEALS & RPs – REGISTER OF APPEALS & RPs NOT PRODUCED:

The Appeals and RPs register was not maintained in Municipal Council,

Amadalavalasa to verify the Appeals and RPs received and its disposal along with

the concerned files. In the absence of the same the tax if any was reduced due to

genuine reasons could not be verified.

Code No – 11

66) PAYMENT OF H.T AND L.T BILLS CONNECTED DEMAND NOTICES AND

DEMAND DRAFT RECEIPTS – NOT PRODUCED – NEEDS EARLY ACTION

During the course of audit, it is noticed a total amount of H.T bills

payment of Rs.34,67,090.00 and a total amount of L.T bills payment of

Rs.43,76,568.00 was stated to have been incurred towards electrical charges

payment to the EPDCL, Amadalavalasa of Srikakulam District. But the

connected demand notices and demand draft receipts are not produced to

audit for verification. The payment of expenditure in the detailed below.

# Vr.No Date

H.T bills

Rs.

Vr.No Date

L.T bills

Rs.

1 15 30.06.2015 149174 14 17.04.2015 310287

2 32 20.05.2015 365707 23 17.05.2015 312428

3 50 25.06.2015 318032 33 29.05.2015 401350

4 87 19.08.2015 283773 61 30.07.2015 444594

5 99 07.09.2015 286112 63 12.08.2015 426723

6 126,127 28.10.2015 529038 88 31.08.2015 271615

7 158,159 02.12.2015 290297 125 06.10.2015 12852

8 187 21.02.2016 730091 128,129 31.10.2015 729350

9 225 29.03.2016 256246 159 02.12.2015 197247

10 224 29.03.2016 258620 162,163 28.12.2015 471471

11 - - - 183,184 29.01.2016 161657

12 - - - 208 24.02.2016 170232

13 - - - 209 24.02.2016 250506

14 - - - - 30.03.2016 216256

Total - 3467090 - - 4376568

In the absence of the demand notices and demand draft receipts the

expenditure could not be admitted in audit. Early action would need to be taken

to produced to audit for verification. Any loss caused to the Institution would

need to be recovered from the person or persons responsible.

Code No.11

67) REGISTER OF LAY-OUTS – NOT PRODUCED – NEEDS EARLY ACTION

As verified from the records of Amadalavalasa Municipality for the year

2015-16, it is noticed that the lay out register for the year 2015-16 and also for

the previous years were not made available to audit for verification. In the

absence of the said register the lay out applications received if any submitted for

approval could not be identified in audit. In the absence of the said register loss

if any caused to the Institution would need to be made good from the person or

persons responsible.

Code No. 13

68) CELL PHONE CHARGES - PAYMENT MADE IN EXCESS OF CEILING LIMIT INRESPECT OF CERTAIN EMPLOYEES – NEEDS RECOVERY

Rs.41,974.00

During the Course of Audit for the year 2015-16, it is noticed that the cell

phone charges paid in-excess of ceiling limit for the cell phones used by the

following employees as detailed below.

#

V.No/Date

Amount Month

Name of the

Employee

(Sarva Sri/Smt/Kum)

Amount

Paid

Ceiling

Limit

Excess

Payment

1 11/09.04.2015 12411 03/2015 Commissioner 720 625 95

Sanitary Inspector 710 625 85

RI 1292 625 667

P.H 773 625 148

T.P.B.O. 675 625 50

T.P.O 768 625 143

A.E. 1708 625 1083

G-3 866 625 241

Manager 770 625 145

2 78/29.05.2015 13894 04/2015 Commissioner 1361 625 736


RI 2007 625 1382

P.H 742 625 117

T.P.S 634 625 9

T.P.O 860 625 235

A.E. 1990 625 1365

C-3 849 625 224

Manager 903 625 278

3 85/11.06.2015 12425 05/2015 RI 2046 625 1421

P.H Mastry 779 625 154

T.P.O 921 625 296

A.E. 1845 625 1220

C-3 769 625 144

4 190/10.07.2015 12551 06/2015 Commissioner 674 625 49

RI 1789 625 1164

P.H Mastry 801 625 176

T.P.O 883 625 258

A.E. 1826 625 1201

Manager 780 625 155

5 198/13.08.2015 11770 07/2015 Commissioner 824 625 199

RI 1354 625 729

P.H 840 625 215

T.P.O 760 625 135

A.E. 850 625 225

Manager 794 625 169

6 329/29.09.2015 11201 08/2015 Commissioner 680 625 55


P.H Mastry 810 625 185

T.P.O 907 625 282

A.E.-1 935 625 310

A.E.-2 709 625 84

M.R.I 996 625 371

Manager 1327 625 702

7 386/26.10.2015 12355 09/2015 AE-1 1160 625 535

SI 1084 625 459

PH Mastry 954 625 329

AE-2 773 625 148

RI 1450 625 825

8 1103/09.11.15 22315 10/2015 Commissioner 2250 625 1625

AE-1 2161 625 1536

SI 2229 625 1604

PH Mastry 1931 625 1306

Commissioner Tab 1338 625 713

AE-2 2036 625 1411

MRI 3098 625 2473

C3 677 625 52

Manager 1206 625 581

9 456/03.12.15 11649 11/2015 AE 998 625 373

SI 1182 625 557

PH Mastry 938 625 313


MRI 1041 625 416

C-3 924 625 299

Manager 654 625 29

10 645/27.01.16 8931 12/2015 SI 1068 625 443

PH Mastry 979 625 354

RI 1098 625 473


C-3 1007 625 382

11 682/26.02.16 11731 01/2016 Commissioner 645 625 20

AE-1 853 625 228

AE-2 682 625 57

SI 1042 625 417

PH Mastry 1028 625 403

RI 1755 625 1130

12 700/15.03.16 11211 02/2016 AE-1 894 625 269

AE-2 752 625 127

Manager 647 625 22

SI 1112 625 487

RI 1448 625 823

TPO 678 625 53

C-3 888 625 263

PH Mastry 987 625 362

13 733/27.03.16 11213 03/2016 Manager 648 625 23

AE-1 894 625 269

AE-2 753 625 128

SI 1112 625 487

RI 1448 625 823

TPS 678 625 53

C-3 888 625 263

PH Mastry 987 625 362

Hence, the excess payment would need to be recovered from the employees

concerned and credited to General Funds of Municipality and fact may be

intimated to audit immediately.

Code No-16

69) NON-SUBMISSION OF UTILISATION CERTIFICATES-NEEDS EARLY ACTION:

The utilization certificates for the grants released during the year have not been produced to audit for countersignature.

According to Article-211-A(2) of the A.P Financial Volume-I, it is the

responsibility of the grant receiving authority to send the utilization certificates in

the prescribed proforma duly countersigned by the District Audit Officer, State

Audit. But the utilization certificates for the following grants (Separate statement

enclosed) were not furnished to audit for counter signature and on ward

transmission to the grant releasing authority.

Therefore action may be taken to submit the U.C‟s for countersignature

and onward transmission to the grant releasing authority.

Sl. No

Name of the Fund Account

Opening Balance as on 01-04-2014

Receipt during the

year Total

Expenditure during the

year

Closing balance as per Cash

Book

State Bank of India


– 001 39025824.00 10046124.00 49071948 30066017.00 19005931


Account – 002 11413266.00 17165276.00 28578542 22950684.00 5627858

3 13th Fin Grant – 003 24906998.00 0.00 24906998 2831130.00 22075868

4 14th Fin Grant - 004 0.00 10505377.00 10505377 0.00 10505377

5 ACDP 2521274.00 0.00 2521274 0.00 2521274

6 S.J.S.R.Y-UWEP 843666.42 114474.00 958140.42 80000.00 878140.4

7 12th Fin Grant 2122039.44 69791.00 2191830.44 962788.00 1229042

8 Town Planning


2084097.54 575217.00 2659314.54 31899.00 2627416

9 E.I.U.S. 186407.62 7531.00 193938.62 0.00 193938.6



12 Office Building & C.M.


2898057.00 98299.00 2996356 1744530.00 1251826

13 I.D.S.M.T Account 9337931.68 377252.00 9715183.68 0.00 9715184

14 School Buildings

Account 1589575.94 64218.00 1653793.94 26826.00 1626968

15 UPA 18948.00 766.00 19714 0.00 19714

16 Water supply

contribution Account 484928.00 590707.00 1075635.00 879231.00 196404.00


127979.36 5171.00 133150.36 0.00 133150.4


Account 939971.86 36995.00 976966.86 136449.00 840517.9

19 Adverse Seasonal

Conditions 2831984.27 81104.00 2913088.27 1652310.00 1260778


Scheme 1840591.00 73371.00 1913962 37238.00 1876724

21 Plan Grant 3602177.00 145369.00 3747546 16054.00 3731492


Fund 376448.22 15208.00 391656.22 0.00 391656.2

23 D.D.O.Account 914092.00 3779714.00 4693806 3827759.00 866047

Axis Bank 0.00 0.00 0.00 0.00 0.00

24 Fish Market

construction Account 310920.00 6520.00 317440 189983.00 127457

Bank of India 0.00 0.00 0.00 0.00 0.00


(I.J.Naidu colony) 20384.00 823.00 21207 25.00 21182


Mettakkivalasa 14781.00 597.00 15378 0.00 15378

Andhra Bank 0.00 0.00 0.00 0.00 0.00

27 IEC 0.00 836767.00 836767 85266.00 751501

28 40% SLUM 0.00 384751.00 384751 0.00 384751

29 Old Age Pensions 8214.50 48265175.50 48273390 48255577.50 17812.5


APGV Bank 0.00 0.00 0.00 0.00 0.00

31 Provident Fund 343367.00 574869.00 918236 199298.00 718938


33 N.F.B.S. Account 105366.00 4284.00 109650 60.00 109590

34 NOAP Pension A/c 353759.50 14252.00 368011.5 60.00 367951.5

Total 109336085.08 93844564.5 203180649.58 113973244.5 89207405.23

Code-18 70) DEPOSITS-REFUND OF DEPOSITS-CERTAIN DEFECTS NOTICED-NEEDS

RECTIFICATION: During the course of audit, as verified from the Register of Deposits for

the year 2015-16, it is noticed that an amount of Rs. 5,24,679.00 was received

towards deposits and an amount of Rs. 43,340.00 was drawn and

refunded/remitted to the head of accounts concerned from various accounts of

Municipality during the year as detailed below:

Sl.

No.

Financial

Year

Opening

Balance as on 01.04.2015

Deposits

received

Deposits

refunded

Closing

balance as

on 31.03.2016

1 1979-80 200.00 0.00 0.00 200.00

2 1983-84 310.00 0.00 0.00 310.00

3 1984-85 23949.00 0.00 0.00 23949.00

4 1985-86 540.00 0.00 0.00 540.00

5 1986-87 4695.00 0.00 0.00 4695.00

6 1987-88 62271.00 0.00 0.00 62271.00

7 1988-89 115308.00 0.00 0.00 115308.00

8 1989-90 5200.00 0.00 0.00 5200.00

9 1990-91 50878.00 0.00 0.00 50878.00

10 1991-92 5060.00 0.00 0.00 5060.00

11 1992-93 29352.00 0.00 0.00 29352.00

12 1993-94 14360.00 0.00 0.00 14360.00

13 1994-95 150077.00 0.00 0.00 150077.00

14 1995-96 58225.00 0.00 0.00 58225.00

15 1996-97 66499.00 0.00 0.00 66499.00

16 1997-98 68343.00 0.00 0.00 68343.00

17 1998-99 65575.00 0.00 0.00 65575.00

18 1999-00 156400.00 0.00 0.00 156400.00

19 2000-01 124485.00 0.00 0.00 124485.00

20 2001-02 353899.00 0.00 0.00 353899.00

21 2002-03 312964.00 0.00 0.00 312964.00

22 2003-04 155630.00 0.00 0.00 155630.00

23 2004-05 556067.00 0.00 0.00 556067.00

24 2005-06 272196.00 0.00 0.00 272196.00

25 2006-07 250548.00 0.00 8750.00 241798.00

26 2007-08 124397.00 0.00 0.00 124397.00

27 2008-09 201919.00 0.00 0.00 201919.00

28 2009-10 192440.00 0.00 0.00 192440.00

29 2010-11 314402.00 0.00 6650.00 307752.00

30 2011-12 116500.00 0.00 0.00 116500.00

31 2012-13 207013.00 0.00 20240.00 186773.00

32 2013-14 315350.00 0.00 7700.00 307650.00

33 2014-15 151194.00 0.00 0.00 151194.00

34 2015-16 0.00 524679.00 0.00 524679.00

Total 4526246.00 524679.00 43340.00 5007585.00

As per procedure, It should be seen –

1. that no item of receipt which can be clearly brought to account under any revenue head, pay, pension, leave salary or other allowance and fines, is

credited to deposits; 2. that the written orders of the executive authority have been obtained in

respect of every item credited to deposits; 3. that separate registers or separate pages of the register have been set

apart for recording cash transactions relating to different classes of

deposits, such as election deposits; contractors deposits, security deposits in cash of municipal employees etc.

4. that transactions relating to deposits otherwise than in cash have been recorded in a separate register maintained for the purpose;

5. that deposits taken from contractors, tenderers, municipal employees are

in the form prescribed in the rules;

i. that the deposits received in cash have been promptly remitted into the treasury, and those received otherwise than in cash have been

kept by the executive authority in safe custody; ii. that any deposit or balance thereof which has remained unclaimed for

a period of three years from the date on which it became repayable

and any deposit or balance thereof which does not exceed from the date on which it became repayable have been credited to the

appropriate revenue head of account; iii. that a deposit credited to a revenue head of account has been repaid

only with the sanction of the council;

iv. that the refunds have been drawn on proper vouchers; v. that a certificate to the effect that the entries in the register of deposits

are up-to-date has been recorded in the register by the executive authority at the end of each quarter, and

6. that monthly totals of receipts and refunds have been made in the deposits register and they agree with the figures appearing in the posting register.

But on verification of Register of Deposits with reference to the paid vouchers of various funds/accounts the following defects were identified:

a) the lapsed deposits register was not maintained for the deposits which

completed of 3 years.

b) year wise abstract arrived but head wise abstract of deposits not arrived

c) the deposits register in being not up to date with reference to the subsidiary

registers etc.,

In the absence of the above register, the correctness of the items of the

register could not be ascertained and certified in audit:

Hence, action would need to be taken to up to date the register with

reference to the subsidiary registers and furnished to audit for verification.

Code No-18

71) PROPERTY TAX-DEFECTIVE MAINTENANCE OF DEMAND REGISTERS- CERTAIN DEFECTS NOTICED-IRREGULAR-NEEDS RECTIFICATION:

During the course of audit for the year 2015-16, on verification of Demand

Registers of Property Tax for both current and arrear, it is noticed that an

amount of Rs. 1,21,46,895.00 was collected towards Property tax during the

year as detailed below:

Item of Receipt


Property Tax Current 13600597 10265785 3334812

Arrear 20020390 1881110 18139280

Total 33620987 12146895 21474092

The demand registers are the major source of information showing

assessment wise and year wise demand, collection, balance and to assess the

source of income received to the municipality. It should be maintained with

proper care and supervised from time to time and certified by the competent

authority periodically.

But as verified from the Demand Registers, the following defects were

noticed:

Major postings were found in pencil figures and the same were made in

ink during the audit.

Volume wise and ward wise abstracts were not arrived and certified by

the competent authority.

After completion of audit for the year 2015-16, demand of certain

assessments were altered duly applying white fluid which comes under

tampering of official records.

For certain assessments demand also not recorded and stated that

they are Ex-service men. Even though for exempted categories also demand

shoud be arrived and same should be shown against exemption category.

But the same was not done.

Entries were not attested even by case worker also

DCB of Demand registers not tallied with DCB of E-Suvidha etc.,

In view of the above defects, the correctness of the demand, collection and

balances could not be certified in audit. Hence, action would need to be taken to

rectify the above defects and same may be produced to audit for verification.

Code No-18

72) CHITTA - REMITTANCES - DEFECTS NOTICED-IRREGULAR-NEEDS AVOID SUCH PRACTICE:

During the course of audit of municipality for the year 2015-16, it is

noticed that the Chitta was not maintained properly. Chitta is one of the

crucial records to know the status of day to day collections and remittances.

Chitta should be maintained in the proforma prescribed in M.F.No.103

with 10 columns on a quality paper so as to preserve it for a period of time for

further verification by the officials concerned. It should be maintained in a

chronological order duly recording the collection particulars in full shape

including remittance particulars. Collection should be classified head wise and

monthly, annual abstracts arrived at. It should be cross checked by the

Manager daily and initialed by him.

But, on verification of the register the following defects were noticed:

i. Collection was classified and abstract recorded section wise instead of head

wise.

ii. Some entries were not attested by the competent authority.

iii. Amounts collected physically after 31st March shown with 31st March date.

Due to this practice it is difficult to identify the actual late remittance.

iv. Remittance particulars were wrongly recorded for some entries.

v. Particulars of receipt not forth coming in challans etc.,

In view of the above defects the reliability of the entries recorded was

reduced and correctness of the head-wise receipt with that of account figures

could not be ascertained in audit. Late remittance of collected amounts as

required by law leads to leakage of revenue and gives scope for

misappropriation.

Hence, action would need to be taken to rectify the above defects and

produced to audit for verification and action may taken to discontinue such

practice hereafter.

Code No-18

73) PAYMENT OF POL CHARGES – CONNECTED LOG BOOKS NOT

MAINTAINED PROPERLY-NEEDS ACTION: During the course of audit for the year 2015-16, an amount of

Rs.9,57,588.00 has been drawn and paid towards P.O.L. charges during the

year under report.

But the connected Log Books were not maintained properly which is

highly irregular.

As per procedure the vehicle wise Log Book should be maintained duly

recording the details of distance covered by each vehicle to know the

consumption of Oil and Lubricants daily. In the instant case the details of day

wise distance covered were not forthcoming in the records. The log book shows

only quantity of Petroleum and Lubricants purchased and utilized which is

irregular.

Defective maintenance of Log books leads to leakage of revenue which

results loss to the institution. In view of the above situation, the correctness of

the expenditure could not be certified in audit.

Therefore, action would need to be taken to maintain the said records and

produced to Audit for certification of the above expenditure in audit.

Code No-18

74) WORKS – EXECUTION OF WORKS- CONNECTED REGISTERS NOT

MAINTAINED-NEEDS ACTION During the course of audit for the year 2015-16, as verified from the

M-Books and work files of selected works from various schemes/funds during

the year, but the connected registers were not maintained and produced for

verification.

The following registers should be maintained by the Engineering

Section to the works executed during the year:

Register of Works

Register of M.Books

Register of Tender Schedules

Register of Agreements

Register of E.M.D. & F.S.D.

Register of Work Files and

Register of Estimates and allotments

Register of Work bill Recoveries

Register of Created Assets with Photographs

Register of Contractors

Contractors Ledger

Register of Third Party Quality Control Certificates etc.,

But the same were not made available to audit at zonal level. In the

absence of the above registers the correctness of works could not be ascertained

in audit.

Therefore, action may be taken to be producing the above registers

to audit early for verification.

Code No-18

75) D&O TRADE LICENSES- D & O TRADES DEMAND REGISTER – NOT MAINTAINED PROPERLY – NEEDS ACTION:

As verified from the D&O Trades registers for the year 2015-16, it is

noticed that an amount of Rs.1,26,305.00 was collected towards License fee

during the year under report. The field staff of Public Health section has to

conduct survey every year and recorded data in the D&O Trade Demand Register

in the following proforma prescribed which was followed previously:

Lic

en

se N

o

Nam

e o

f th

e P

art

y

Addre

ss

Natu

re o

f B

usin

ess

Date

of O

pen

ing

Dem

an

d fix

ed

Am

ou

nt

collecte

d

Ch

allan

No.

Date

of paym

en

t

Deta

ils

of

Pro

secu

tion

if a

ny

Bala

nce

Rem

ark

s

Date

of

Pro

ceedin

gs

Page

no.o

f

P.R

egis

ter

It is the basic function of the sectional staff to maintain the Demand

register in the above proforma duly recording additions and deletions to arrive at

demand for the present year. Apparently no such effort was made to fix the

demand for issue of licenses and for proper watch of the collection as per the

rates prescribed in the notification. There is no check on new licenses issued, old

licenses renewed, etc., and DCB Register not in prescribed proforma.

In view of the above practical problem, it is difficult to ascertain the

correctness of the following information:

Details of additions

Details of deletions

The loss of revenue due to non-renewal of license fees, or non- payment by

new establishments.

Details of collection

Details of remittance

Details of action taken against defaulters

Details of arrears/ penal interest collected etc.,

Hence, action would need to be taken to maintain the Demand

registers in prescribed proforma and produced to audit for verification.

Code No-18

TOWN PLANNING:

76) COMPLETION REPORTS-NOT-OBTAINED FROM THE APPLICANTS FOR CONSTRUCTION OF BUILDINGS – NEEDS ACTION:

According to Section 94 of the AP. Municipality Act,1965, the

applicant for license for construction of building should intimate the date of

completion of the construction or occupation of the building whichever is earlier

to the commissioner of the Municipality, the field staff have to obtain within (30)

thirty days from the date of expiry of license. But on verification, it is noticed

that no completion reports obtained from the applicants to whom licenses were

granted for construction of the building were not made available to audit. In the

absence of the completion of reports, it is not known whether the buildings are

completed within the stipulated time or not. It is the responsibility of the town

planning Section not only to issue licenses for construction of the building, but

also to watch the completion of the construction within the stipulated time and

to collect the renewal charges from the applicants, if they fail to complete the

construction within the stipulated time. It is also the responsibility of the town

planning Section to intimate the dates of completion of the buildings to the

revenue section so as to take them to the Demand Register of property tax for

collection of property tax.

Therefore, action may be taken to obtain the completion reports in

time and produced to audit. Any loss caused due to the above irregularity would

need to be collected from the person or persons responsible.

Code No-18

77) REGISTER OF TAP CONNECTIONS-NOT MAINTAINED PROPERLY- NEEDS ACTION:-

During the course of audit, as verified from the note file and tap

connection applications it is noticed that an amount of Rs.5,45,540.00 was

collected towards installation of 223 Tap connections(General-9, OYT-30, BPL-

184) during the year as detailed below:

S.

No Category

No. of

connections

Estimate

charges

Application

Fee

Citizen

Charter Donation Total

1 OYT 30 30000 13500 300 390000 424800

2 General 9 9000 4500 90 73500 83940

3 BPL 184 0 0 0 36800 36800

TOTAL 223 39000 18000 390 500300 545540

But the register of TAP connections was not maintained properly. As per

the existing procedure a register should be opened and all the connections

should be recorded chronologically duly indicating the category and purpose

either domestic or non-domestic connections. In the instant case the register

was not up to date in full shape for the year 2015-16. The entries recorded in

the register were not tallied with the sanction files. The collection was done

uniformly to all the connections without showing domestic or non domestic

resulted in loss of revenue.

In the absence of the above the correctness of the income realized could

not be certified by audit.

Also the following defects were noticed:

1. Abstract of connections i.e pending as on 01.04.2015, received, installed and

pending installation as on 31.03.2016 was not arrived at and certified by the

competent authority.

2. Date of sanction not recorded.

3. The balance of deposits not arrived at.

4. House Service connections register not maintained.

5. Meter reading cards not produced.

6. Meter ledgers not maintained.

Hence, action would need to be taken to rectify the defects and

produced to audit and the loss caused if any would need to be made good from


Code No-18

78) PROVIDENT FUND-DEFECTS IN MAINTENANCE OF PROVIDENT FUND REGISTERS – NEEDS RECTIFICATION:

As seen from the Registers related to Provident Fund under teaching and

non-teaching employees of the Amadalavalasa municipality for the year 2015-

16, the following defects are noticed. As per procedure the following important

registers to be maintained by the municipality as required in the following

manner:

a) Register of subscribers:

1) that it is a complete record containing the names of all employees subscribing to the fund and that they are eligible to subscribe to the fund;

2) that particulars as regard the date of birth, age on the date of admission to the fund, name of appointment held in respect of every subscriber have

been noted in the appropriate columns of the register;

1) that the names of nominees, their age, relationship, occupation and address have been noted in the appropriate columns of the register; and

2) that the nomination of subscriber which purports to leave any amount otherwise than to a member or members of his family has been accepted only

after it has been ascertained in writing that the subscriber has no family.

b) Abstract Register of the Provident Fund:

i) that the names of subscribers, their designation and pay on which

subscription is levied are correctly noted in the register;

ii) that the opening balances under subscription and bonus are correctly noted;

iii) that subscriptions and refund of withdrawals if any, have been correctly

calculated and recovered monthly from the pay of every subscriber;

iv) that interest on subscription and bonus as worked out in the ledger has been credited in columns 20 and 21 of the register;

v) that temporary withdrawals or repayments of amounts standing to the credit of subscription and bonus accounts have been correctly posted in columns 25 and 26; and

vi) that the closing balance has been correctly worked out in columns 28 and 29 of the register.

c) Provident Fund ledger

i) that the accounts of each subscriber showing the opening balance, deposits, refund of withdrawals, withdrawals and monthly balances have been correctly posted;

ii) that the interest has correctly been calculated on monthly balances at the rate fixed by the municipal council;

iii) Particulars regarding investments. (How much out of the fund is invested with details regarding the nature of investments, the period and the rate of

interest in respect of each such investment, etc.

iv) Amount of interest realizable from the investment of the fund.

v) Amount of interest realizable in respect of the remaining amount lying in

the Post Office Savings Bank either for the whole year or part.

vi) Total amount of interest realizable from all sources.

vii) Total amount of interest payable to the Provident Fund subscribers as applicable to the Government employees, for which the surplus funds should

be invested to earn maximum interest. d) Register of temporary advances:

i) That all temporary withdrawals sanctioned have been entered in this register;

ii) that the advances allowed are for objects recognized as legitimate in the Provident Fund rules and that they do not exceed the limits prescribed in the rules;

[ iii) that the sanction of competent authority has been obtained for the grant of advances;

iv) that the number of instalments fixed for the recovery of the advance does not exceed the maximum fixed in the rules; [ v) that the amount of each instalment has been fixed in whole rupees and that

the amount of advance being raised or reduced, if necessary so as to adjust for a fixation of such instalments;

vi) that the repayment commences on the first occasion after the advance is made on which a subscriber draws pay for a full month;

vii) that the interest has been charged at one-fifth percent for the principal and has been recovered after the advance has been fully repaid; and viii) that the recoveries made towards repayment of advance and interest have

been entered in the register.

e) Provident Fund cash book:

i) That the balances shown in the cash book under subscriptions and bonus

agree with the totals of the amounts at credit of the various subscribers as shown in the abstract register; ii) that the total of the balances shown in the cash book under the heads

“Subscription, Bonus, Interest and Miscellaneous” agree with the total of the balance entered under the heads “Investment, Treasury and Savings Bank.”

iii) that the balances entered in the cash book agree with those shown against

“Provident Fund” in the Abstract of Account of Provident Fund transaction for the year as per the Annual Account;

iv) that the balance shown under investments agrees with the total value of securities etc. held under provident fund as per investment register;

v) that bonus is added in the cash book at the close of the year by adjustment from the municipal funds and it is in accordance with the rules;

vi) that the interest on bonus is properly calculated on the opening balances of the year at the prescribed rate and on subscriptions on the average balances as worked out in the ledger

As verified from the above Registers, the following defects were noticed:

1. The opening balance as on 01-04-2015 were not arrived at in the

P.F.Abstract register for the year 2015-16 due to non-calculation of the

interest.

2. The closing balance as on 31-03-16 were not recorded to the respective

Employees account.

3. The abstract of account for the year 2015-16 was not prepared showing the

opening balance receipts of subscriptions and loans recoveries during the

year and loans part final with drawls pending the year and the balances left

were not prepared of the close of the year.

4. The account slips were not issuing to the P.F. Subscribers of teaching and

non-teaching employees of the municipality together with the balances

including the interest of the end of the year.

5. Some of the closing balances were showing minus balances which shows

excess payments made to them.

6. Register of subscribers not maintained.

7. PF Ledger not maintained.

8. Register of temporary with drawls not maintained

9. As per provident fund cash books, closing balance as on 31.03.2016 is Rs.

1,99,298.00 but due to non-maintenance of abstract register the

correctness could not be verified in audit etc.,

Hence, action may be taken to update the records as above and the loss if

any would need to be made good from the person or persons responsible under

report o the audit.

Code No-18

79) MDR - MAINTENANCE OF M.D.R. - DEFECTIVE – NEEDS RECTIFICATION:

As verified from the M.D.R. for the year 2015-16, it is noticed that an

amount of Rs.25,77,139.00 was realized from leases of various sources like

daily market, sandy, slaughter house, fishery ponds, shop rooms and shop-room

roof etc., during the year as detailed below:

S.No Item of Receipt Details Demand Collection Balance

1 Daily Market Current 1192700 1192700

0

Arrear 548438 0 548438

2 Chintada Sandy Current 557258 557258

0

Arrear 1 0 1

3 Slaughter House Current 11100 11100

0

A`rrear 1400 0 1400

4 IDSMT Shop Room Current 723620 528825

194795

Arrear 551091 56468 494623

5 Roof Rent Current 240896 124200

116696

Arrear 116696 41400 75296

6 Fishery Ponds Current 65188 65188

0

Arrear 0 0 0

TOTAL 4008388 2577139 1431249

The Register of Miscellaneous Demand Register is one of the crucial

records related to miscellaneous receipt which should be maintained in the

format prescribed in MF.No.21. It should be maintained duly recording all

sources of miscellaneous receipt with specification of the asset, lease period,

lease amount, deposit received, month wise collection and balance. It should be

cross checked and certified by the competent authority from time to time.

But as verified from the MDR the following defects were noticed:

The entries were not certified by the competent authority.

Collection of penal interest was not shown separately and merged in lease

amount which reduces the demand.

Year wise and lease holder wise balances not arrived.

In respect of Lease amounts remaining uncollected for 3 years suits were not

instituted for recovery before they become barred by limitation of time.

Certain persons were allowed to continue for lease even though they are

defaulters

Lease deeds not get registered

Agreements not get renewed from time to time etc.,

In view of the above defects the outstanding balances become barred by

limitation of time, if suits were not instituted for the recovery of the outstanding

balance will constitute loss to the Municipal Funds. Therefore, the time barred

items i.e., the balance amounts pending recovery for more than 3 years could

not be verified in audit.

Hence, action would need to be taken to rectify the above defects and

collect the outstanding balances from the tenants concerned and credited to

Municipal Funds. Loss caused if any to the institution due to non collection of

dues and balance barred by limitation of time would also need to be made good

from person or persons held responsible.

Code No-18

80) REGISTER OF BUILDING APPLICATIONS NOT MAINTAINED PROPERLY-NEEDS ACTION:


building register, it is noticed that, the register was not maintained properly. The

Building Applications Register should be maintained in the prescribed proforma

with the following columns:

Serial Number

Building Application Number

Date of receipt of application

Name and address of the applicant

Type of Building

Extent of building

Fee collected (head wise)

Date of disposal with reference number

Remarks

In addition to recording the above information monthly abstract in

respect of applications and fee should be arrived and certified by the

competent authority. But on the verification of the register the following

defects were noticed:

Date of receipt of application was not recorded

Date of disposal of application was not recorded

Monthly and annual abstracts were not arrived at and certified by the

competent authority.

No.of applications received, no.of disposed and pending etc., were not

arrived at.

Fee collected after re-submission of the applications was not recorded.

Extent of building not recorded.

In many cases, there are short collections of various fee noticed

In the absence of the same, the correctness of the amounts shown in the

annual accounts could not be verified with reference to the building application

register. Further cross checks with the property tax demand register also could

not be exercised. The non maintenance and improper maintenance of the said

register may lead to misappropriations with fake challans enclosed to the

building applications as was witnessed in certain municipalities in the previous

years.

Hence, action would need to be taken to rectify the defects and

produced the register to audit for verification. The loss, if any in this regard

would need to be recovered from the person or persons responsible and made

good to municipality funds.

Code No-18

81) ANNUAL ACCOUNTS –CASH BOOK, SUBSIDIARY REGISTERS AND STATEMENTS NOT MAINTAINED IN THE NEW ACCRUAL BASED

ACCOUNTING SYSTEM: The Government have prepared the following manuals in collaboration

with centre for good governance, Hyderabad, C&A.G., Hyderabad has concurred with implementation of the said manual in the state vide G.O.Ms.No.619 Municipal Administration and Urban Development (UBS) Department Dt:21-08-

2007. i) A.P. Municipal Accounting Manual

ii) A.P. Municipal Budget Manual iii) A.P. Municipal Asset Management Manual iv) A.P. Municipal Audit Manual

While implementation of the accrual based accounting system the urban local bodies have to be maintained the following books of accounts, forms & Registers as prescribed and as detailed in table 4.1 of The A.P Municipal

Accounts Manual, which is in violation of Government instructions. But the following Books of Accounts, Forms and Registers as prescribed

with code of Accounts were not prepared and produced to Audit.

Sl. No Name of the Form Form Number

1 Cash Book GEN – 1

2 Journal Book GEN – 2

3 Ledger GEN – 3

4 Receipt Voucher GEN – 4

5 Payment Voucher GEN – 5

6 Contra Voucher GEN - 6

7 Journal Voucher GEN – 7

8 Receipt GEN – 8

9 Receipt Register GEN – 9

10 Statement on status of cheques received GEN – 10

11 Collection Register GEN – 11

12 Summary of daily collections GEN – 12

13 Register of Bills for payment GEN – 13

14 Payment order GEN – 14

15 Cheques issued Register GEN – 15

16 Register of Advance GEN – 16

17 Register of permanent Advance GEN – 17

18 Deposit Register GEN – 18

19 Summary statement of Deposit adjusted GEN – 19

20 Demand Register GEN – 20

21 Notice / Bill GEN – 21

22 Summary statement of bills raised GEN – 22

23 Register of notice fee, Warrant fee, other fee GEN – 23

24 Summary statement of notice fee, Warrant fee, other fee GEN – 24

25 Register of Refunds, Remissions & Write of f GEN – 25

26 Summary statement of Refunds & Remissions GEN – 26

27 Summary statement of Write off GEN – 27

28 Statement of outstanding liability for expenses GEN – 28

29 Document control Register / Stock Account of Receipt /Cheque Book GEN – 29

30 Register of immovable property GEN – 30

31 Register of movable property GEN – 31

32 Register of Land GEN – 32

33 Function wise Income subsidiary Ledger GEN – 33

34 Function wise Expenses subsidiary Ledger GEN – 34

35 Asset Replacement Register GEN – 35

36 Register of Public Lighting System GEN – 36

The following financial statements as per the provisions of the Act

Governing the ULBs & Rules issued there under stipulate preparation of annual

accounts in such form and shall contain such information as Government may

direct from time to time as given under para 9.80 of the A.P. Municipal Accounts

Manual have to be submitted to Audit.

ii) Balance sheet

iii) Income and Expenditure statement

iv) Statement Cash flows

v) Receipts and Payment Accounts

vi) Notes to Accounts, &

vii) Financial performance indicators

But the following statements only have been submitted.

i) Balance sheet

ii) Income and Expenditure statement

iii) Receipts and Payment Accounts

Therefore action would need to be taken to maintain all the records as

prescribed by the Government in New accrual based Accounting System along

with the Financial Statements and produced to Audit.

Code No-18

82) BALANCE SHEET AS ON 31.03.2016 – SEPARATE SCHEDULES NOT ATTACHED TO THE BALANCE SHEET – NEEDS ACTION:

During the course of verification of Balance Sheets as on 31.03.2016, it

is noticed that the separate schedules with the details of various Balance sheet

items in the proformas prescribed in B1to B20 as given under table 9.17 of the

Andhra Pradesh Municipal Accounts Manual were not appended to the Balance

sheets submitted to Audit.

In the absence of the above schedules, the correctness of the details of

opening balances of various items of Balance sheet, additions during the year,

deductions if any during the year and the balance at the end of the year as on

31.03.2015 could not be verified and certified in Audit. Further the deficiencies

and defects as pointed out in the FOBS as on 01-04-2009 would also need to be

rectified and affected in the above Balance sheets.

Therefore action would need to be taken to rectify the above deficiencies

and defects in the FOBS as on 01-04-2009 and the effect of the rectification will

be carry forwarded to the year 2015-16 and the details of various Balance sheet

items in the proformas prescribed in B1to B20 as given under table 9.17 of the

Andhra Pradesh Municipal Accounts Manual may be submitted to Audit for

verification.

Code No-18

83) VACANT LAND TAX – DEMAND REGISTER FOR VACANT LAND TAX NOT

MAINTAINED – NEEDS ACTION: As verified from the Annual Account for the year 2015-16, it is

noticed that an amount of Rs.1,21,925.00 was shown as receipt from Vacant

Land Tax during the year. But the connected Demand Register was not

maintained which is irregular.

Further, it is noticed that the collection of Vacant Land Tax was

shown as VLT demand simply without arriving correct demand. The correct and

final demand duly taking the previous year demand, adding current year new

assessments with reference to the monthly lists and changes as per Mutation

Register were not carried out. In the above circumstances the final demand of

the Vacant Land Tax could not be confirmed.

In this connection it is apt to bring to the notice of the

Commissioner that there is every possibility for unauthorized alterations in the

demand which may result in short collection of Vacant Land Tax. It would give

ample scope for tampering of records, which would not be detectable in audit.

Hence, immediate and necessary steps should be taken to arrive at

the correct final demand and have the same certified to ensure proper demand is

raised and to avoid leakage of revenue from Vacant Land Tax.

Code No-18 84) RECORDS AND REGISTERS-NOT MAINTAINED- NEEDS ACTION:

Records are the basic source of information of an institution to know the

functions and financial position of the organization. These are the preliminary

instruments to detect frauds, misappropriations, leakage of revenue and

financial irregularities of expenditure with reference to the existing rules at any

point of time. The Records and registers are the fundamental evidences before

the Court of Law and they are the performance indicators of the staff of the

organization.

In view of the role of records and registers in emerging society, the

Government made provision through Departmental Acts, Codes, Manuals and

other Government Orders for maintenance of certain records. In the same way,

the Municipal Administration issued instructions from time to time to maintain

a list of registers to the ULBs. However, the following list of records and registers

were not maintained:

A) REVENUE SECTION:

1. Charges list O/S Bills Register

2. Register of Appeals

3. Register of Destrained properties

4. Register of Prosecutions

5. Register of warrants

6. Register M.V. Forms

7. Register Written off and Temporary permissions

8. Money Value Form Registers (Stock Registers)

9. Register Of Cheque Provisional Receipts

10. Bounced Cheque Register

11. Register Of Enhanced Tax, Notices Issued

12. Check List (Supplied By Ap Productivity Council)

13. Outstanding Bill Books Register

14. Register Of Write Off And Remissions

15. Vacancy Remission Register

16. Mutation Register

PUBLIC HEALTH SECTION:

1. License Fee Collection Register

2. Birth & Death Certificate Fee Register

3. Register of Trade Licenses Issued

4. Garbage Lifting Fee Collection Register

ENGINEERING SECTION:

1. Register of Road widening works

2. Register of Measurements Books

3. Register of quality control certificates

4. Register of fines

5. Contractors ledger etc.,

ESTABLISHMENT SECTION:

1. Treasury and Bank Pass Book

3. Cheque Register

8. Stock Register of Tools and Plants

10. Register of Service Register

11. Register of Increments

12. Register of Postage and Stamps

13. Stock Register of Invitatory and Immovable properties

14. Register of Grants

15. Register of Grant Appropriation

16. Register of Revenue yielding Properties

17.Posting Register Of Receipts And Charges

18.Register Of Loans

19.Register Of Saving Deposits Of Employees

20.Petty Cash Book etc.,

TOWN PLANNING SECTION:

1. Register Of Plans Sanctioned During The Year

2. Register Of Completion Certificates Granted

3. 1st Fee Register & 2nd Fee Register

4. Register Of Completion Reports Sent To Property Tax Section etc.,

Therefore, action would need to be taken maintain the records and the loss

of revenue due to non maintenance of records, if any, caused would need to be

recovered from the person or persons responsible, duly initiating the action as

deemed fit under Article 5 read with Article 273 and 274 of Financial Code Volume

– I

Code No-18

85) AGRICULTURE LAND TAX – DEMAND REGISTER NOT WRITTEN-UP – EARLY ACTION CALLED FOR:

The Demand Register of Agriculture land tax for the year 2015-16 was not

written up and produced to audit. The monthly lists furnished by out door

subordinates were not made available during local audit. The mutation register

in respect of Agriculture land tax was not written up for 2015-16. Hence the

DCB statement for Agriculture Land Tax for the year 2015-16 could not be

verified in audit. Necessary action may be taken to finalize the demand under

Agriculture Land Tax by arriving the balance as on 31.03.2016.

Code No-18

86) PROPERTY TAX – APPEALS REGISTER NOT MAINTAINED AND

PRODUED – NEEDS EARLY ACTION:

The Register of Appeals for Property Tax was not maintained and produced

to audit during the year 2015-16 due to non maintenance of Appeals register it

is not known to audit that how many appeals were received, how many appeals

were considered and how many appeals were returned. Hence, the same would

need to be maintained and produced to audit. The loss, if any caused due to non

maintenance of above register would need to be recovered form the persons

responsible.

Code No-18

87) OUT STANDING BILLS NOT VERIFIED – AUDIT PREVENTED FROM VERIFYING OUT STANDING BILLS A.D.Rs NOT MAINTAINED FOR

PROPERTY TAX AND VACANT LAND TAX etc.:

The tax bills are written without counter foils as per the existing

instructions of the Government. The out standing bills in respect of Property Tax

and Vacant Land tax etc., could not be verified in audit as the A.D.Rs for the

year 2015-16 were not written up consequently audit was permitted to delete

any defaulcation by collection staff concerned due to collections made and not

credited to Municipal Funds. The Verification of outstanding bills in audit

practicable only, if all the collections were posted in the demand registers upto

date. But the DCB for 2015-16 was furnished. In the absence of the such

collections being posted the verification of credits by audit for all the bills

(receipts issued) not posted in Demand Registers is not practicable thus the

amount if any collection remitted to Municipal Funds could not be ascertained in

audit. The Demand Registers are not kept upto date, i.e posting of collections

upto date of audit was not made, unless and until the Demand Registers are

posted upto date, the Municipality is not in a position to detect defaulcations

even administratively.

In view of the above state of affairs, the matter calls for very urgent steps

to bring the taxation branch upto date. Any loss caused to the Institution would

need to be made good from the persons responsible.

Code No-18

88) MONTHLY LISTS – RELEVANT DOCUMENTS – SUCH AS SPECIAL

NOTICES VOLUNTARY SLIP DOCUMENTS – ONLNE COPIES NOT PRODUCED:

As verified from the monthly lists register of revenue sector, it is noticed

that the nature of construction along with measurements MRVs, ARV., arrised

was noted in the register and got attested. The relevant support register such as

special notices issued to the owner and online copies was not produced for

verification in audit. It is advised to open a separate file for each monthly list and

all relevant records to be attached to the particular monthly list, files. If any loss

caused to the Institution would need to be made good from the person or

persons responsible.

Code No-18

89) CONSOLIDATED TOOLS AND PLANTS REGISTER NOT MAINTAINED - NEEDS EARLY ACTION:

During the course of audit on the accounts of Amadalavalasa

Municipality for the year 2015-16 it is noticed that the consolidated Tools and

Plants Register for the year 2015-16 was not produced to audit for verification.

An objection was also raised in the previous year‟s audit reports. But no action

was taken by the Executive Authority to maintain the consolidated Tools and

Plants register. Early action would need to be taken to maintain the same and

produced to audit for verification.

The annual verification of the Tools and Plants register would need to

be conducted and also certify the same in the Tools and Plants register.

Code No-18

90) DEMAND REGISTERS – D&O TRADES – CERTAIN DEFECTS IN MAINTANANCE OF DEMAND REGITER OF D&O TRADES:

Even though the demand was settled in respect of license fees for the year

2015-16 the monthly collections were not pointed out in the demand register to

verify the correctness of the collections w.r.t chitta for the year 2015-16. The

classification of trades i.e I class, II class and III class in respect of hotels,

shops etc., were also not pointed out in the demand register to verify the

correctness of the fixation of demand under license fees for the year 2015-16.

The notification under D&O trader for the year 2015-16 was also not produced

to verify the correctness of the fixation of demand under license fees for the

year 2015-16. The loss if any caused to the Municipal Funds in this regard

would need to be recovered from the person or persons responsible.

Code No-18

91) DEFECTS IN MAINTANANCE OF BUILDING APPLICATION APPROVAL

REGISTER – IRREGULAR – NEEDS EARLY RECTIFICATION

During the course of audit for the year 2015-16, as seen from the building

License Application approval register, the following defects were noticed during

the year 2015-16.

1. Details regarding the nature of construction and extent of the construction

were not noted in the register.

2. The date of completion was not noted in the register.

3. The license number and date of issue of license was not noted.

4. The details of date of acceptance or rejection of applications were not

noted with reasons.

5. The column provided in the register with full details about the plans were

not filled completely and certified by the competent authority.

6. Details of completion report received in respect of completed buildings

were not obtained and not recorded in the register.

7. The action taken against un-authorized constructions and deviations etc.,

was not noted.

8. If the construction was not completed in time as per the approved plan the

details of renewals not noted.

9. The register was also not closed with full details. The opening balances of

the plans pending approval as on 01.04.2015, number of applications received

during the year, number of plans approval/refused during the year and the

balances of applications pending approval left as 31.03.2016 not shown in the

building application register.

10. Citizen charges and publication charges not collected.

In view of the above defects the loss if any would need to be made good

from the person or persons responsible under intimation to Audit.

Code No–18

92) MAINTAINANCE OF ADVANCE REGISTER DEFECTIVE – NEEDS RECTIFICATION.

As verified from the register of advances for 2015-16, it is noticed that the

register was not maintained in proper way. All the previous advances pending

recovery as on 01.04.2015 were not brought forwarded and entered in the

register page wise totals or month wise totals were not done. Similarly, an

abstract at the end of the year showing the details of advances pending at the

beginning of the year, advances sanctioned during the year, advances recovered

and adjusted during the year and the advances pending recovery as on

31.03.2016 was not arrived and got attested by the Commissioner. In fact the

register was maintained without furnishing any details for verification in audit.

The register shall be maintained in correct format containing all details as noted

above and produced to audit for verification. Any loss caused to the institution

due to the above reason would need to be recovered from the persons

responsible.

Code No-18

93) TAXES & NON TAXES- BYELAWS NOT REVISED-NEEDS EARLY ACTION:

During the course of audit, on verification of various taxes and non-taxes,

it is noticed that the following amount was collected towards taxes and non

taxes during the year.

S. No Item of Receipt Details Demand Collection Balance

1 Property Tax Current 13600597 10265785 3334812

Arrear 20020390 1881110 18139280

2 Water Tax Current 3179920 146700 3033220

Arrear 2404790 149980 2254810

3 Encroachment

Fee

Current 815000 422938 392062

Arrear 629850 629840 10

4 D&O Trades Current 126305 126305 0

Arrear 0 0 0

5 Advertisement

Tax

Current 24974 24974 0

Arrear 1575 1575 0

TOTAL 40803401 13649207 27154194

As verified from the byelaws/notifications related to various taxes and

non-taxes, it is noticed that the taxes and non taxes are being calculated duly

adopting the old gazette rates as detailed below:

S.No. Item of tax/non tax Gazette in force

i. Property tax for

residential buildings Gazette No.31/2002, dt.02.3.2002 w.e.f.

01.4.2002

ii. Property tax for

Commercial buildings Gazette No.334/2007, dt.13.9.2007 w.e.f.

01.10.2007

iii. D&O Trades Gazette No.55/98, dt.09.11.1998 w.e.f.

01.08.2000

iv. Town Planning Receipts Gazette No.42/98, dt.18.9.1998 w.e.f.

01.10.2000

According to the Act provisions, fresh notification has to be issued at least

once in 3 years and the rates have to be revised in accordance with the fresh

notification. But fresh notifications were not issued so far even after lapse of so

many years which is irregular and causes loss to the institution.

Hence, action would need to be taken to revise the notification/bye laws

for levy of various taxes and fee in periodical intervals and the loss for non-

revision may be worked out and arrived at and the same may be recovered from


94) RESULT OF AUDIT:

The general result of audit is satisfactorily.

95) RECIEPTS AND CHARGES:

The gross receipts and charges during the year were Rs.

9,38,44,564.50 and Rs. 11,39,73,244.50 respectively. 96) PENDING AUDIT OBJECTIONS:

1266 items of objections involving a sum of Rs. 3995.83 Lakhs as

detailed below are pending settlement for the years up to 2015-16:

S.NO Year of

Audit Report

Pending objections

No Amount (lakhs)

1 1986-87 2 0.29

2 1987-88 1 0.11

3 1988-89 1 0.05

4 1989-90 1 0.82

5 1990-91 1 0.46

6 1991-92 4 4.20

7 1992-93 3 0.74

8 1993-94 16 15.62

9 1994-95 16 16.85

10 1995-96 7 19.18

11 1996-97 14 4.63

12 1997-98 10 3.86

13 1998-99 9 7.78

14 1999-00 73 140.14

15 2000-01 64 103.00

16 2001-02 61 53.63

17 2002-03 55 26.53

18 2003-04 121 423.42

19 2004-05 48 251.59

20 2005-06 57 183.11

21 2006-07 45 167.56

22 2007-08 21 19.09

23 2008-09 61 184.33

24 2009-10 95 590.95

25 2010-11 89 262.03

26 2011-12 69 348.44

27 2012-13 69 316.43

28 2013-14 74 249.61

28 2014-15 96 267.09

29 2015-16 83 334.29

TOTAL 1266 3995.83

Sd/-

D.D.G. Mullar

DISTRICT AUDIT OFFICER

PARAWISE ABSTRACT FOR THE YEAR 2015-16

S.No. Para No. Code No. Amount (Rs.)

1 11 01 0

2 12 01 0

3 13 01 0

4 14 04 0

5 15 07 28585443

6 16 07 0

7 17 07 0

8 18 07 0

9 19 07 10609

10 20 07 93389

11 21 08 83000

12 22 08 1690628

13 23 09 0

14 24 09 0

15 25 09 0

16 26 09 0

17 27 09 0

18 28 09 0

19 29 09 0

20 30 09 0

21 31 09 0

22 32 09 0

23 33 09 0

24 34 09 0

25 35 09 0

26 36 09 0

27 37 09 0

28 38 09 0

29 39 09 0

30 40 09 0

31 41 09 0

32 42 09 0

33 43 09 0

34 44 09 0

35 45 09 0

36 46 09 0

37 47 09 0

38 48 09 1594320

39 49 10 0

40 50 10 95682

41 51 11 0

42 52 11 0

43 53 11 113490

44 54 11 149000

45 55 11 0

46 56 11 0

47 57 11 0

48 58 11 0

49 59 11 0

50 60 11 0

51 61 11 0

52 62 11 0

53 63 11 971752

54 64 11 0

55 65 11 0

56 66 11 0

57 67 11 0

58 68 13 41974

59 69 16 0

60 70 18 0

61 71 18 0

62 72 18 0

63 73 18 0

64 74 18 0

65 75 18 0

66 76 18 0

67 77 18 0

68 78 18 0

69 79 18 0

70 80 18 0

71 81 18 0

72 82 18 0

73 83 18 0

74 84 18 0

75 85 18 0

76 86 18 0

77 87 18 0

78 88 18 0

79 89 18 0

80 90 18 0

81 91 18 0

82 92 18 0

83 93 18 0

TOTAL 83 Paras 33429287

Documents

AUDIT REPORT ON THE ACCOUNTS OF GENERAL FUNDS AND …amudalavalasa.cdma.ap.gov.in/sites/default/files/budget/2015-16 MC... · audit report on the accounts of general funds and schemes