DISTRICT AUDIT REPORT ON THE ACCOUNTS OF GRANTS

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DISTRICT AUDIT REPORT ON THE ACCOUNTS OF GRANTS RELEASED UNDER NATURAL CALAMITIES M.H.2245 BY THE

GOVERNMENT FOR THE YEAR 2010-2011 OF WARANGAL DISTRICT

1. Name of the Auditor : Sri M. DASARATH

2. Time taken for Audit : 01-04-2010 TO 31-03-2011

INTRODUCTIONS :-

1. The Government of Andhra Pradesh has created a separate head of account VI.M.H.2245 for calamity relief fund and grants are being released through various Government Orders to several Government Departments/Local Bodies/Autonomous Institutions in the state for taking up relief operations necessitated due to occurrence of Natural Calamities. The relief operations range from repairs and restoration of public buildings, road, irrigation works, electrical installations construction works of cyclone shelters, transportation of people and live stock of low lying areas to safe places during flood season, providing of food and clothing to cyclone/flood affected people, payment of exgratio to the kin of people who lost their lives due to natural calamities, supply of seeds/fertilizers pesticides/livestock on subsidy basis of farmers, providing drinking water to people living in drought areas, and payment of old age pensions etc., the relief operations mentioned above are not exhaustive and Government is spending huge sums every year for the purpose of relief on account of Natural Calamities.

2. The District Audit Officer, Relief Accounts will conduct the audit of the grants released to difference executing agencies in the concerned district and issues Institutions wise Audit Notes and U.C. duly counter signed besides marking such copies of Audit Notes and Utilization Certificates to the District Collector concerned.

3. A consolidated Audit Report incorporation all defects noticed during the course of the Audit of the accounts of Grants released by Government to different Departments/Local Bodies/Autonomous Bodies in the State is being prepared. A statement of total grants released by Government G.O. wise during the year and total expenditure incurred by different executive agencies during the year and expenditure incurred by them is enclosed to this report besides the statement of Utilization Certificates issued executive agency wise. The report intends to bring to the notice of Government in brief the irregularities committed by different executive agencies District-wise in incurring the expenditure out of grants released to them.

4. The executive agency wise audit notes issued shall be read as part of the District Audit Report whereas the District Audit Reports shall be read as part of the State Audit Report. This report contains two part, part one narrative portion of the different irregularities noticed during the course of audit of the accounts of grants released to different executive agencies and part-II containing the Statements of Institution wise particulars para number of the concerned institutions audit notes where in the irregularity is pointed out and amount if any held under objection.

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1. Variation in Account figures : -NIL-

During the course of the audit of the accounts of grants released by Government, providing relief on account of Natural calamities during the year 2010-2011, it is noticed the ___________________ maintained by the various grant receiving authorities revealed one more of the following defects. Action would need to be taken to rectify the defects and right the accounts. All such cases are detailed in Statement-I enclosed to this report.

a) Wrong totals in cash book/bank pass book.b) Non-reconciliation of cash book figures with bank pass book.c) Non-certification of cash book balance periodically by competent

authorities.

2. Diversion of funds :

During the course of the audit of the accounts of the grants released by Government providing relief on account of Natural calamities during the year 2010-11 in the districts noted it is observed that certain of the grants receiving authorities have diverted grants received by them and expended the funds for other purposes, other than the purpose which they were sanctioned. It is also noticed that in some cases the executing authorities not adhere to the ceiling laid down by Government while incurring expenditure on different components of the scheme/programme, though the total expenditure incurred by them is the grant limit. Diversion of grants released by Government for specific purpose requires ratification of Government wherever necessary. A1 such cases are detailed in State-2 enclosed to this report.

3. Non-utilization of allocated amounts Rs : NIL

It is observed during the course of audit of the accounts of the grants released by Government for providing relief or account of Natural Calamities during the year that certain grant receiving authorities have not utilized the allocated amounts for various relief operations as intended by Government. Calamity relief is of grant importance and urgency and thereof it is suggested instructions may be issued to all grant receiving authorities to utilize the allocated amounts in full and to fulfil the objective of allocations. All such cases are details in State-3 enclosed to this report.

4. Non-realisation of subsidy amounts etc Rs. : NIL

5. Mis-utilization of Grants Rs. : NIL

It is observed during the course of audit of the accounts of grants released by Government to different executing agencies during the year 2010-11 that certain mis-utilization of grant by certain executing agencies took place on account:

a) Utilization of grants for the purchase of sub-standard items of goods.

b) Utilization of grants for minor repairs/replacements instead of original works.

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c) Utilization of relief grants by Local Bodies for sinking of bore wells/construction of pipe lines for supply of drinking water to people which should have been done out of their own budget provision.

d) Supplying of substandard seeds and fertilizers and pesticides to the formers by dealers authorized by grant receiving authorities in drought areas.

e) Supply of feed seeds by Animal Husbandry authorities to farmers for raising cattle feed when the necessity ceased.

f) Payment of exgratio to the kin of the people who lost their lives due to natural calamities in cash instead of supply of small scale machinery and raw material to create permanent rehabilitation.

The above cases of irregularities are brought to notice. A statement showing the above irregularities is enclosed to this report as Statement-5.

6. Mis-appropriations Rs. : NIL

7. Advance pending adjustment Rs. :

During the course of the audit of the accounts of the grants released by Government for providing relief on account of Natural Calamities it is observed that certain advances paid to the Departmental Officials for the purchase of Stores/purchasing materials or services and Advances paid to Contract during the course of execution of works entrusted to there were not adjusted in full or in part. Action would need to be taken by the respective executive agencies to get the advances adjusted and unspent advances remitted to State Funds. All such cases are detailed in Statement-7 enclosed to this report.

8. Un-utilization / Under Utilization of Grants / Unspent amount not remitted to State Funds Rs. 2,29,557/- :

During the course of the audit of the accounts of grants released by Government for the year 2010-11 for providing relief on account of Natural Calamities it is observed that certain grant receiving authorities have not drawn the grant released by Government in full in some cases and in certain cases the grants drawn were not at all spent. It is also noticed that some of the executing authorities have not remitted the unspent balance of grant state funds. Un-utilization or under utilization of grant released for specific purpose amounts to defeating the very purpose for which the grant has been released and non-remittance of unspent balance results in locking of funds. It is, therefore, suggested that suitable instructions may be given total the executing agencies to utilize the grants in full within stipulated time and also to remit the unspent balances to State Funds so that these unspent balance can be sanctioned to the needy areas. All such cases of utilization/under utilization of grants are detailed in Statement-8 enclosed to this report.

9. Excess utilization of grants Rs. 31,823/-

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10. Depositing of lapsable grants in P.D. Account by executing Authorities for utilization in succeeding Financial Year :

During the course of the audit of the accounts of grants released by Government of providing relief on account of natural calamities during the year 2010-11, it is observed that, certain lapsable grants have been deposited in the P.D. accounts by the executing authorities for utilization in the succeeding year, permission of the competent authority was also not obtained.

This is irregular and the same is therefore, brought to the notice of the Government. All such cases are detailed in Statement-10 enclosed to this report.

11. Irregular and wasteful Expenditure Rs. :NIL

During the course of the audit of the grants released by Government, for providing relief on account of Natural Calamities during the year 2010-11, it is noticed that certain Executive authorities have incurred expenditure which can be termed as wasteful on account of sinking of bore well which turned out dry and purchase of sub-standard materials for construction works. The first principle of financial property as laid down under Art. 3(b)(u) of A.P.F.C. Vol-I says that “every Government servant is expected to exercise the some diligence and care in respect of expenditure from public money under his control as a person of ordinary prudence would exercise in respect of expenditure of his own money”. In these cases the executing authorities appear to have either ignored the principle or did not give proper care which resulted in wasteful expenditure. The irregularity is brought to notice.

12. Excess payments : Rs. NIL

During the course of audit of the accounts of grants released by Government, for providing relief on account of Natural Calamities for the year 2010-11 certain cases of excess payments were noticed in the expenditure incurred by the various executing agencies on account of :

a) Erroneous calculation of unit of work turned out and also due to adopting higher unit rate than the approved rates

b) Non-deduction of previous payments in the work bills which making final payments.

c) Non-deduction of cost of materials supplied to the Contractors in the work bills.

d) Elimination of elements like F.S.L. additional F.S.D. seignorage charges, SC/IT etc., ,while making final payments.

e) Cost covered for the items of works not provided in the original sanctioned estimate and not covered by revised estimate.

Statement showing the names of the executing agencies para numbers of audit notes where the defect is pointed out is enclosed to this report as Statement-12. Action would need to be taken to recover the excess payments from the person or persons responsible at an early date.

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13. Instances of cases Un-accounted for (Shortage in Stores and Cash) Rs. : NIL

Instances of cases of un-accounted for store and cash were noticed during the course of the audit of the accounts of grants released by Government for providing relief on account of Natural Calamities during the year 2010-11.

a) The shortage is due to not accounting for the stocks purchased in the stock books.

b) Petrol, Diesel, Oil and others in the log books of the Departments vehicles.c) Disagreement between book balance and ground balance of certain stocks.d) Shortage due to wrong totaling in cash book/stock books and also due to non-

carrying forward of the previous balances.e) Cash balance not handed over while there is a change in the incumbency.

A statement showing the name of the executive agencies the para number of audit notes where in the defect is pointed out is enclosed as Statement-13 to this report.

Action would need to be taken to fix up the responsibility for the cases of unaccounted for stores/cash and recover the loss from the person or persons responsible.

14. Purchase – Non-observance of Rules : Rs. NIL

It is observed during the course of the audit of the grants released by Government, for providing relief on account of Natural Calamities during the year 2010-11 that certain executing agencies have not observed one or more of the following principles in incurring expenditure for the purchase of different goods/services etc.

a) Tender/Quotations were not invited as laid down in Rules.

b) Purchases were made without assessing the actual need and utility of the goods.

c) Purchases were not made from Government authorized suppliers like SSI Units/APCO/Central Jail and rate contractors.

d) Payments were made to firms even without actually receiving the material and without verification of the quality of stock supplied by them.

e) Purchases made without realizing the prescribed contribution from the beneficiary (beneficiaries share).

A statement showing the names of the Executive agencies and para numbers of the it note wherein the defect is pointed out is enclosed to this report as Statement-14 Would need to be taken to obtain the ratification of Government in each case of regularity.

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15. Procedural Lapses : Rs. :

It is observed during the course of the audit of the account of the grants released by Government, for providing relief on account of natural calamities during the year 2010-11 that previous creating authorities from the grants.

a) Issue of work orders without obtaining Administrative and Technical sanction.

b) Payment of work bills without check measurement.

c) Refund of deposits without verifying the original credit and without making entry in the Register of deposits.

d) Adjustment of advances without posting entries in the cash book and without noting in the advances recoverable register.

e) Non-attestation of entries in stock book

f) Merger of funds (grants received for specific purpose) in their non P.D. accounts instead of transferring them to separate bank accounts.

All such cases are detailed in Statement-15 enclosed to this report.

16. Non maintenance / non-production of records Rs. 37,38,121/- :

During the course of the audit of the accounts of the grants released by Government, for providing relief on account of Natural Calamities during the year 2010-11, it is noticed that certain executing authorities have not either maintained or if maintained did not produce the following records for audit. Action would need to be taken to cause for the production of records during next local audit.

1) Vouchers for the payments made 2) Stock Registers3) Measurement Books4) Estimates / Agreement Files5) Tender / Quotation Files6) Material at site accounts.

All the cases are detailed in Statement-16 enclosed to this report.

17. Non-remittance out going dues like Income Tax / Sales Tax and Seignorage charges to concerned Departments Rs. 18,667/- :

It is noticed during the course of the accounts of the grants released by Government to various executing authorities for the year 2010-11 that certain authorities have recovered Income Tax / Sales Tax / Seignorage charges from the contractors bills and did not remit the amounts to the respective Departments but retained with them which is irregular. Action would need to be taken to issue strict instructions to the Executive Authorities to remit all such recoveries to the concerned Department either immediately or before the closer of the financial year in future. All such cases are detailed in Statement-17 enclosed to this report.

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18. Others Rs. NIL

It is observed during audit that certain executing agencies as shown in statement enclosed have incurred an amount of Rs. 2010-11 under various items other than the objections already specified. Such objections have already been incorporated in the Draft Audit Reports.

The relief grants is specially meant for victims of flood and other natural calamities. Incurring the relief grant for purpose like purchase of cement etc., is highly irregular and therefore bought to the notice of the Government.

Such irregularities have been incorporated in Statement-18 enclosed to this report.

19. Details of Executing Agencies and Grants audited : Rs. 40,88,71,895/- :

During the year 2010-11 Government have released grants to different executing agencies in the State for taking up various relief activities on account of Natural Calamities. The details of Grants released G.O. wise and names of executing authorities expenditure audited are given in Statement-19 enclosed to this report.

20. Non-furnishing of Utilization Certificates by executive agencies : Rs. NIL

During the year 2010-11 a total number of Executive Agencies did not furnish ( ) number of Utilization Certificates for a sum of Rs. for verification and counter signature of the District Audit Officer, Relief Accounts in spite of instructions by Government in the connected G.O. wherein the grants were released. Instructions are, therefore, needed to all the executing agencies for preparation of G.O. wise Utilization Certificates and expenditure statement and to produce to the audit for verification and issue of Utilization Certificates at the time of audit itself. All such cases are detailed in Statement-20 enclosed to this report.

1. Receipts & Expenditure :

The receipts and Expenditure for the year 2010-11 in the Warangal District are Rs. 40,91,01,452/- and Rs. 40,88,71,,895/-.

2. Result of Audit :

The result of audit is satisfactory.

3. Pending objections :

( 5 ) No. of items of objections involving a sum of Rs. 41,56,880/- are pending settlement for the year 2010-11 replies to the report may be sent to the District Audit Officer, ,Relief Accounts of the concerned District.

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STATEMENT-1

VARIATION IN ACCOUNTING FIGURES

Sl. No. Name of the District

Name of the Executive Agency

Gist of objections Para No. Amount

1 2 3 4 5 6

NIL

STATEMENT-2

DIVERSION OF GRANTS

Name of the District



1 2 3 4 5 6

1 WWARANGAL Municipal Corporation, Warangal

Utilization of unspent balances of one grant to another grant needs ratification

6 Rs.1,38,712/-

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STATEMENT-3

NON-UTILISATION OF ALLOTTED GRANTS




1 2 3 4 5 6

NIL

STATEMENT-4

NON-REALIZATION OF SUBSIDY AMOUNTS ETC.

Name of the District



1 2 3 4 5 6

NIL

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STATEMENT-5

MIS-UTILISATION OF GRANTS




1 2 3 4 5 6

NIL

STATEMENT-6

MIS-APPROPRIATIONS




1 2 3 4 5 6

NIL

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STATEMENT-7

ADVANCES PENDING ADJUSTMENTS




1 2 3 4 5 6

NIL

STATEMENT-8

UN-UTILIZATION / UNDER UTILIZATION OF GRANTS/UNSPENT AMOUNT NOT REMITTED TO STATE FUNDS




1 2 3 4 5 6

1 WWARANGAL MUNICIPAL COUNCIL, JANGAON

Public Health Dept., released Funds under ASC & NC unspent balances not refunded.

8 Rs.2,29,557/-

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STATEMENT-9

EXCESS UTILISATION OF GRANTS




1 2 3 4 5 6

1 WARANGAL MUNICIPAL COUNCIL, JANGAON

Excess expenditure incurred from 2010-11 financial year needs reimbursement

6 Rs. 31,823/-

STATEMENT-10

DEPOSITING OF LAPSABLE GRANTS IN P.D. ACCOUNTS BY EXECUTIVE AGENCIES FOR UTILISATION IN SUCCEEDING FINANCIAL YEAR




1 2 3 4 5 6

NIL

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STATEMENT-11

IRREGULAR AND WASTEFUL EXPENDITURE




1 2 3 4 5 6

NIL

STATEMENT-12

EXCESS AND IN ADMISSIBLE PAYMENTS




1 2 3 4 5 6

NIL

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STATEMENT-13

SHORTAGES IN CASH / STORES




1 2 3 4 5 6

NIL

STATEMENT-14

PURCHASES / NON-OBSERVANCE OF RULES




1 2 3 4 5 6

NIL

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STATEMENT-15

PROCEDURAL LAPSES




1 2 3 4 5 6

NIL

STATEMENT-16

NON-MAINTENANCE / NON-PRODUCTION OF RECORDS




1 2 3 4 5 6

1 WARANGAL Municipal Corporation, Warangal

Non-production of records to audit

7 Rs.14,38,121/-

2 WARANGAL Municipal Council, Jangaon

Funds released under ASC&NC separate cash book was not maintained.

7 Rs.23,00,000/-

TOTAL Rs.37,38,121/-

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STATEMENT-17

NON-REMITTANCES OF OUTGOING DUES




1 2 3 4 5 6

1 WARANGAL Municipal Corporation, Warangal

Recovers and remittances of deductions from the work bills

Remittance particularls not produced to audit.

8 Rs. 18,667/-

STATEMENT-18

OTHER ITEMS OF OBJECTIONS




1 2 3 4 5 6

NILL

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STATEMENT-19

DETAILS OF EXECUTIVE AGENCIES AND GRANTS AUDITED




1 2 3 4 5 6

1 WARANGAL Statement enclosed.

STATEMENT-20

LIST OF EXECUTIVE AGENCIES WHO DID NOT FURNISH U.Cs




1 2 3 4 5 6

NILL

Documents

DISTRICT AUDIT REPORT ON THE ACCOUNTS OF GRANTS