NATIONAL DISASTER MANAGEMENT AUTHORITYMinistry of Home Affairs, Government of IndiaNATIONAL CYCLONE RISK MITIGATION PROJECT (NCR P)1 Floor, "NDMA Bhawan", A-1, Safdarjung Enclav

New Delhi-110029Telephone: 011-26701744

Fax: 011-26714321F.No.1-43/203-PMU (Vol. 1) Dated: January i, 2017To

(1) Shri D.Singh,Sr. Disaster Risk Management Specialist (NCRMP)T.T.L., NCRMP, The World Bank,Hindustan Times House,18-20, K.G.Marg,New Delhi-110001.

2) Ms. Tripti Jain,Financial SpecialistThe World Bank,70, Lodhi Road,New Delhi-3.

Sub: Audit Certification on the Project Financial Statements andAudit Reports for PlUs - regarding

Sir/Madam,

w am directed to enclose herewith copies of External Audit Reportswith Audit Ce rtifi1cation on the Project Financial Statements on the followingProject implementation Units (PlUs), National Cyclone Risk Mitigation Project(NCRMP) conducted by the Accountants General concerned/ Statutory Auditorfor the period noted against each for further necessary action at your end.(i) PIU, Government of West Bengal, Department Disaster Managementfor the years 2014-15 & 2015-16 in respect of NCRMP-1l conducted/prepared by the Office of the Principal Accountant General, IndianAudit & Accounts Department, West Bengal.(ii) PIL, Government of Karnataka, Revenue Department (D.M) for theyear 2015-16 in respect of NCRMP-1l conducted/prepared by Office ofthe Accountant General, Karnataka.

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(iii) PIU, Government of Goa, Water Resources Department, WorksDivision III for the year 2015-16 in respect of NCRMP-1lconducted/prepared by Office of the Accountant General, Goa.(iv) PIU, The Gujarat State Disaster Management Authority(GSDMA)conducted by M/s. Mehta Sheth & Associates, Chartered Accountantsfor the periods* July 1, 2014 to March 31, 2015* April 1, 2015 to March 31, 2016* April 1, 2016 to September 30, 2016

PlUs are also being advised to submit replies to the aforesaid reportsimmne di atel y.

Yours faithfully,

(S.S.Jain)Deputy Project DirectorEnd: as above.

Government of Karnataka

No. RD. 82 ETC 2015 Karnataka Government Secretariat,M.S. Building,

Bengaluru, dated: 04.11.2016

From:The Secretary to Government,Revenue Department (D.M),M.S.Building,Bengaluru.

To:The Project Director,NCRMP II,1st Floor, NDMA BhavanA-1, Safdarjung Enclave,New Delhi- 110029.

Sir,Sub: Authorization of expenditure/accounts & audit of World

Bank assisted NCRMP-II by office of C&AG-reg.Ref: Your letter No.1-1/2016-PMU/i 128 dated:03.10.2016.

I am directed to refer to your letter cited on the above subject and to state that theannual financial report/ statement, utilization certificate and management letter has beensubmitted to the Accountant General of Karnataka to enable him to audit the World Bankassisted NCRMP being implemented by the Government of Karnataka. The AccountantGeneral of Karnataka has undertaken and completed the audit of accounts of NCRMP-II forthe year ended 31.03.2016. The audit certificate together with statement ofexpenditure/financial statement for the year 2015-16 received from the Accountant Generalof Karnataka is herewith attached for your information and further necessary action.

nours faithfully,

(B.S. Srinivasa)-Under Secretary to Government (I/C)

Revenue Department (DM & Ser 1&3)

Copy to:Sri. Deepak Singh, Task Team Leader and SDRM Specialist, World Bank. 70 Lodi Estate,New Delhi- 110003- for information.

Statement of Sources and Application of FundsName of the Project:

World Bank assisted NationmalCalamity Risk Mitigation Project-IIImplemented by Secretary, Revenue Department (Disaster Management for the year ended201516

Credit No. 56934N

(Amount in RupeeslPartieulirs Current Year Cumulative up to(2015-16) Previous Year Project to date

2014-15 (2 015 -160Opening Balance,(if cash 4000 000Balances are controlled by theentity) (A) 0.000

Receipts:Funds from Government through 0o000Budget (These will include 41,20,00,000external assistance received by 41,20,00,000Government for the Project) 4

Funds received directly by 0.000Project implementing authoritythrough external assistance

eneficia! Contribution (if an 0.000 0.000 0.000Total Receipts (B 0.00041,20,00,000

41,20,00,000Total Sources (C=A+B) 0.000

41,20,00,000 41,20,0,000

Expenditures by ComponentComponent A- Last Mile 0.000 0.000Connectivity 0.000

Component B- Cyclone Risk 0.000 0.000Mitigation.Infrastructure 0.000Component C- Technical 0.000 0.000Assistance to Disaster RiskAssessinent and Recovery and 0.000Understanding and StrengtheningMulti Hazard Risk ManagementComponent D- Project 0.000Management and Implementation 35,89,054 35,89,054SupportTotal Expenditures O.oo

. (D)=(1)+(2)+(3) 35,89,054 35,89,054

Closing Balance, (if cash balances 0. 000 0.000are controlled by the entity) (C-D) 0.000Note: All Central Budget releases are routed through FD, GOK.

State Budget releases are inclusive of both Central (7V'Y and State (25 are in respect ofComponent B (75%1/) funded. In respect of Componen A, Co &ar0%udd

I. This Financial statement is prepared on a cash basis of accounting as per provisions of theFinancial Rules aind codIe Is applicable. a e rvsoso h2. The above figures will be based on monthly/quarterly abstract accounts prepared by the accountscompiling officers, duly reconciled by the respective DDS with details of reconciled amounts tobe furnished.3. Names of accounting units whose financial statements are aggregated to prepare the consolidatedaccounts.

- -- - -- --------

World Bank aNanie of the Project:Worlmnt d b an k assisted National CalanitylRUsk M itiga o Pr j c iplemented by Secretary, Revenue Departient (isaster aion Project- ee2015-16 nagement}for the Year endedCredit No. 5 693-IN

Scheules Amont In RueesCurrent Year

(2015-16) cululative UP toBank.punds caime Previoin YearPrjctoded c ear A2 010 04- (2015-16)

0000.Total ExPenditåuremade 0000

Wori the SearBol :Outstan ing, 3589054

Ineligible expenditure (D) 00000000

EXpenditur es not cf rlm ed IV e 1298 8931298893Total Eligible

00ExpenTditure Claimed 0000 000t

2290161World, Bank Share.@ of 0000 2290161(F) above'(G) (75% før

-component B & 100% forCom onentA Cand I

*E n expe en d iture for the Y ear 20 15-16 290 16 j- d e0op n nt0ne00 % s eI l

Notes: Dep ecountant Generall. Total eypen)ditr ad eneral Sector)

shw 'nte ate e ofuning the Year (B above) must be the sam steTtlEpniuehn on thAp Slaten ent Of Sources and Applications ofFunds (Dm o the otatEpenditres2. and din C bi ds C ab n the Statement Of Sources-POUsanding AC bi bys (C aove) reflect funds drawn against AC bills that have been booked as

expenditure but not settled bY the end of the Year (Le. unsetedavne)TePoetholsettled du in ear, e Opening balance ofunsettled AC bills drawn dung The Pr shouldrIng year, and AC bll unsettled at the end of the year. the Year, AC billsrExpenddurte not claimed (E above) may reflect timing differences for eligible expendituresmncunred during the year but claimed after the year end. foelgbcxpnius

REPORT ON THE PROJECT FINANCIL STATEMENTS

We have audited the accompanying financial statement of the World Bank assistedNationat Calamity Risk Mitigation Project-11 Implemented by Secretary, Revenue Department(Disaster Management) for the year ended 2015-16 Credit No. 5693-IN, which comprise theStatement of Sources and Applications of Funds and the Reconciliation of Claims to TotalApplications of Funds for the year ended 2015-16. These statements are the responsibility of theProject's management Our responsibility is to express an opinion on the accompanying financialstatements based on our audit

We conducted uruft4n-aeordancewit hu fmg-Standds&Promulgated by theComptroller and Auditor General of India. Those Standards require that we plan and perform,theaudit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. Our audit examines, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. It also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overall statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material respects, the sourcesand application of funds of World Bank assisted National Calamity Risk Mitigation Project-IIImplemented by Secretary, Revenue Department (Disaster Management) for the year ended 2015-16 Credit No.. 5693-IN in accordance with Government of India accounting standards.

In addition, in our opinion, (a) with respect to SOEs, adequate documentation has beenmaintained to support the claims to the World Bank for reimbursements of expenditures incurred,and (b) except for ineligible expenditure as detailed in the audit observations appended to thisaudit report, expenditure are eligible for financing under the Loan/Credit Agreement. During thecourse of the audit, SOEs/FMRs (each application no. and- amount to be included) and theconnected documents were examined and these can be-relied upon to support reimbursementunder the Loan/Credit Agreement

This report is issued without prejudice to CAG's right to incorporate the auditobservations- in the Report of CAG of India for being laid before Parliament/State or UTLegislature.

Sr. AUDIT OFFICER(CERTIFICATION AUDIT)

Audit Report/Observations

1. Disallowance of expenditure in respect hiring of vehicles at Karnataka State NaturalDisaster Monitoring Centre (KSNMDC)

In KSNMDC, expenditure incurred was Rs.4,04,701/- comprising salary of Rs72,516/- to,Proect Accounts Assistant for 3(three) months and hiring of Motor Vehicles for Rs.3,32,185/-for 3(three) months.

However, as neither the World Bank procedure followed nor Contract was entered intonor Trip Sheets was maintained in respect to hiring of vehicles, Rs. 3,32,185/- is treated asineligible for reimbursement.

2. Disallowance in respect of purchase of computers and printers - DC Karwar

The DC, Karwar had procured 09 Acer Computer and 09 Printers, of which 07 Acercomputer and pnnters of the value of Rs. 3,70,566/- were distributed for use at 6 PWI divisionsat Karwar which are not part of the NCRMP-II project.

Thus, an amount of Rs. 3,70,566/- is ineligible for reimbursement as the Computers andPriiters were not put into use for the NCRMP project.

3. Disallowance in respect of purchase of inverter- DC Udupi

The DC, Udupi had purchased 10 inverter (06-3.5 KVA and 04-2KVA) valued atRs.3,98,102/- under the NCRMP-II project. However, these inverters were put to use at variousbranches of DC Udupi, like Endowment, Election, Tappal and Administration.

As these inverters were not put to use for the project, Rs.3,98,102/- is consideredineligible for reimbursement.

4. Improper maintenance of Cash Book & Improper procedure of hiring motor vehicles at O/oof Technical Director, Mangalore

The Office of Technical Director, NCRMP-II, Mangalore had not maintained separatecash book/DC Bill register and neither proper procedures was followed for hiring of MotorVehicle nor Trip Sheets produced. .

Hence, an amount of Rs.1, 9 8,040/-relating to hiring of Motor Vehicles is consideredineligible for reimbursement.

Sr. Audit Officer/Certification Audit