Compliance of Outstanding Audit Observations made by Statutory Auditor 38 th Quarterly Review...

Compliance of Outstanding Audit Observations made by

Statutory Auditor

38th Quarterly Review Meeting of Finance Controllers, New Delhi

Annexure R

All State implementing societies SSA are getting their annual accounts audited by the Statutory Auditor

The Audit Report submitted by Statutory Auditors is also reviewed by the MHRD.

A deficiencies letter indicating the deficiencies / discrepancies in the audited accounts and certain key audit observations are being sent to the SIS regularly.

The compliance of the Audit observations contained in audit reports are required to reported to MHRD every quarter.

Large number of Audit observations pertaining to previous years upto FY-2010-2011 are still pending compliance/ settlement. The details are as under:

Sl. No.

Name of the state Year of Audit Report

1. Andhra Pradesh 2006-2007

2. Arunachal Pradesh

2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010 & 2010-2011

Sl. No.


3. Assam 2008-2009, 2009-2010, 2010-2011, 2011-2012

4. Bihar 2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011, 2011-2012

5. Chhattisgarh 2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011,2011-2012

Sl. No.


6. Chandigarh 2008-2009, 2009-2010

7. D&N Haveli 2009-2010

8. Goa 2008-2009, 2009-2010 & 2010-2011

9. Gujarat 2008-2009, 2009-2010 & 2010-2011

10. Haryana 2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010 & 2010-2011

Sl. No.


11. Himachal Pradesh

2007-2008, 2008-2009, 2009-2010 & 2010-2011

12. Jammu & Kashmir

2009-2010

13. Jharkhand 2009-2010, 2010-2011 14. Karnataka 2006-2007, 2007-2008, 2008-

2009, 2009-2010, 2010-201115. Kerala 2006-2007, 2007-2008, 2008-

2009, 2009-2010, 2010-2011

Sl. No.


16. Lakshadweep 2010-2011

17. Madhya Pradesh

2006-2007, 2007-2008, 2008-2009, 2009-2010 & 2010-2011

18. Maharashtra 2007-2008, 2008-2009, 2009-2010 & 2010-2011

19. Manipur 2005-2006, 2006-2007 & 2010-2011

20. Meghalaya 2006-2007, 2007-2008, 2008-2009, 2009-2010 & 2010-2011

Sl. No.


21. Mizoram 2005-2006, 2006-2007, 2008-2009, 2009-2010 & 2010-2011

22. Nagaland 2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010 & 2010-2011

23. Odisha 2010-201124. Punjab 2007-2008, 2008-2009, 2009-2010 &

2010-201125. Puducherry 2006-2007, 2009-2010 & 2010-2011

Sl. No.

Name of the state

Year of Audit Report

26. Rajasthan 2008-2009, 2009-2010 & 2010-2011

27. Sikkim 2006-2007, 2009-2010 & 2010-2011

28. Tamil Nadu 2006-2007, 2007-2008, 2008-2009, 2009-2010 & 2010-2011

29. Tripura 2006-2007, 2007-2008, 2008-2009, 20009-2010 & 2010-2011

Sl. No.


30. Uttar Pradesh 2007-2008, 2008-2009, 2009-2010 & 2010-2011

31. Uttarakhand 2010-201132. West Bengal 2009-2010 & 2010-2011

Audit Compliances :Statutory audit compliance is still outstanding from the states as given in the table below: -

Year States

2005-06 (7 States)

Arunachal Pradesh, Bihar, Haryana, Chhattisgarh, Mizoram (file missing), Manipur and Nagaland

2006-07(16 States)

Arunachal Pradesh, Andhra Pradesh, Bihar, Chhattisgarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Manipur, Mizoram, Meghalaya, Nagaland, Puducherry, Sikkim, Tamil Nadu and Tripura

Year States

2007-08(15 States)

Arunachal Pradesh, Bihar, Chhattisgarh, Haryana, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Meghalaya, Nagaland, Punjab, Tamil Nadu, Tripura and Uttar Pradesh

2008-09(21 States)

Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Chandigarh, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Tripura, Tamil Nadu and Uttar Pradesh.

Year States2009-10(26 States)

Andhra Pradesh, Assam, Arunachal Pradesh, Bihar, Chandigarh, Chhattisgarh, Dadra & Nagar Haveli, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Mizoram, Nagaland, Puducherry, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttar Pradesh & West Bengal

2010-11(29 States)

Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, D&N Haveli, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttar Pradesh , Uttarakhand & West Bengal

There is an urgent need to settle the old outstanding paras as with the passage of time there is an increasing likelihood of the records not being available.

MHRD attaches high priority to compliance of outstanding audit observations made by statutory auditors.

SIS–SSA are requested to launch a special drive to settle all outstanding audit observations pending since FY-2005-2006.

Following States have huge backlog of settlement of outstanding audit observations pertaining to FY-2005-2006 to FY 2011-2012.

1. Arunachal Pradesh 8. Maharashtra

2. Bihar 9. Meghalaya

3. Chhattisgarh 10. Mizoram

4. Haryana 11. Nagaland5. Karnataka 12. Tamil Nadu

6. Kerala 13. Tripura

7. Madhya Pradesh

Audit observations pertaining to :

FY-2005-2006 7 States

FY-2006-2007 16 States

FY-2007-2008 15 States

Should be settled within next 6 months. Progress would be again reviewed in 39th Review Meeting with Financial Controllers.

1. Arunachal PradeshYear Nature of Observations Action Taken by State Action taken by

MHRD (Minutes in FC meeting

2005-2006

Excess expenditure of Rs. 480.90 lakhs incurred over approved allocation in civil works, maintenance grant, teacher grant, TLE and SIEMAT.

SIS confirmed excess expenditure vide letter dated 29th January, 2007.

SIS advised to get it regularized and advise the particulars of PAB approval. Latest reminder sent on 25th January, 2013.

Contd… Arunachal PradeshYear Nature of Observations Action Taken by

StateAction taken by MHRD (Minutes in FC meeting

2006-2007

(i) Rs.369.81 lakhs spent over the approved allocation in civil works, maintenance grant, management cost, REMS, TLE, community training and MIS.

(ii)Mis-procurement under CAL of Rs.50.00 lakhs in 2005-06 and Rs.84.00 lakhs in 2006-2007.

Pending for want of final action taken report from SIS.

Latest reminder sent on 31st August, 2012.

Contd…Arunachal PradeshYear Nature of Observations Action Taken by


2007-2008

Excess expenditure of Rs. 2.78 lakhs over the approved allocation in EGS/AIE, management cost and teachers salary.

Pending for want of appropriate comments from SIS.

SIS advised to rectify the mistakes vide letter of 26th April, 2012.

2008-2009

(i)Excess expenditure of Rs. 20.52 lakhs over the approved outlay in CRC, TLE and community training.

(i) Comments submitted by SIS under letter 28th March, 2012

SIS advised to take PAB approval for excess expenditure under letter 26th April 2012.



2008-2009

(ii) Rs. 54000.00 short credited in Pangchao NGO in Tirup district. It is not reflected in NGO grant-in-aid account.

SIS is jouranalising the entry by letter dated 2nd August, 2010.

To be reported to the statutory auditor and final action to be advised to MHRD (10th August, 2010).

2009-2010

Excess expenditure of Rs. 253.17 lakhs over the budget allotment under teacher training, out of school children, IED, REMS and innovative activity.

Pending Latest reminder sent on 5th December, 2012.



2010-2011

Excess expenditure of Rs. 181.603 over budget allotment in teachers grant, remedial teaching, free textbooks, TLE, REMS, innovative activity and uniforms.

Pending for want of appropriate comments from SIS.

Latest reminder sent on 5th December, 2012.

2. Assam :Year Nature of

ObservationsAction Taken by State Action taken by MHRD

(Minutes in FC meeting

2008-2009

1.Expenditure of Rs.6822.69 lakh shown in ‘others’ in the Annual Consolidation financial statement without any budget allocation, expenditure is irregular as it does not carry PAB approval.

1. Expenditure of Rs.6822.69 inclusive of Rs.5122.69 lac as prior period expenditure & Rs.1700 lac as expenditure incurred on Printing & Supply of Free text book, expenditure Statement for Rs.5122.69 lac was duly certified by C.A and approval from PAB for Rs.5122.69 lac is being sought Separately.

1. Prior period expenditure Rs.5122.69 lac shown activity wise but year wise break up is not shown. The year wise break up should also indicate the activity wise approved AWP&B & amount of expenditure already booked in accounts against approved budget. (23-2-2012) also discussed in 37QRM

Contd…Assam :Year Nature of



2008-2009

2.Outstanding advances of Rs.494.41 lac have to be regulated as per clarification issued by Ministry on 1/7/2010.

2. Out of Rs. 494.41 lac Rs.203.38 lac has been adjusted in 2009-10shown as prior period expenditure in FMR-III. Action has been taken to adjust remaining amount.

2. Rs.203.38 pertaining to prior period adjusted in 2009-10 require PAB approval. (23-2-2012) also discussed in 37QRM




2008-2009

3. Write back the stale cheque/ excess booking of expenditure do not constitute receipt but reduce the expenditure already debited. This result overstatement of expenditure in previous year and inflated the receipt in current year.

3. As per BRS some cheque not enchased from SSA account after the expiry of validity period stale cheque has been cancelled, treated as expenditure reduction of prior years. For accounting purpose amount shows in the receipt side of cash book, expenditure reduction was reflected in Final account.

3. Cheque written back same were not enchased relate to release of funds to the districts/ SMCs, the same should have been credited to Advance account and not taken as receipt as cash book under expenditure reduction head. (23-2-2012) also discussed in 37QRM.




2009-2010

Reimbursement of Rs.1875 lac received from SG & exp. of FTB shown in consolidated Annual Financial Statement are not SSA receipts/expenditures therefore Rs48707.03 lac and not Rs.50582.03 lac as shown in UC/ Financial Statement.

During 2009-2010 Rs.1800 was received from GOA on account of FTB to SC,ST& Gen category boys, Rs 75 lac from Director of IT for imparting training to teachers, amount utilized for the said purpose by SSA Assam. Same was shown in the books of accounts as receipt and payment in R& P a/c.

Expenditure of Rs.1875 lac funded by GOA & Director IT cannot be treated SSA expenditure, same does not carry the approval of PAB. This has to be excluded from the total exp. of 50582.03 (1-2-2011) reminder issued on 2-6-2011, 22-7-2011, 29-9-2011, 4-10-2011, 11-1-2012, 12-3-2012, 21-6-2012& 3-7-2012.

Contd…Assam :

Year Nature of Observations

Action Taken by State Action taken by MHRD (Minutes in FC meeting

2010-2011

1. Unspent fund under pre project activities Rs. 1.90 Lac & DPEP Rs.4.21 lac lying with the darrang dist. & transferred to SSA account. The unspent balance need to be refunded to the MHRD

1.The matter is being communicated to the Darrang Dist for taking necessary action in this regard.

1. A further report in this matter will be awaited.(10 sep, 2012) also discussed in 37QRM




2010-2011

2. Advances of Rs 1075.52 lakh outstanding at the end of the year 31/3/2011 including advances of 2002-03 onwards, balance sheet shows 1004.57 lakh. Difference of 70.95 lakh not adjusted for long period.

2. Closing balances of advances as on 31/3/2011 reflected Rs.1004.57 lakh in audited balances sheet, no difference in this respect.

2. Year wise details given in schedule MI, advances as on 31.3.2011 work out to Rs. 1075.12 lakh, please review and clarify the difference of Rs.70.55 lakh .(10 sep, 2012) also discussed in 37QRM.

Contd…Assam :Year Nature of Observations Action Taken by State Action taken by MHRD


2010-2011

3. Amount of Rs.140 lakh was debited from SBI dispur on 19.10.2010 to the SMO A/C was unauthorized & Fraudulent and under investigation by police, restored & credited on 16.9.2011.

3. FIR No. 1905/10 lodged in the Police station the investigation is in progress.

3. Action taken report on FIR awaited. .(10 sep, 2012) also discussed in 37QRM

3. Andhra Pradesh :Year Nature of



2005-2006

(i) Excess expenditure of Rs.2214.57 lakh was incurred on CRC, civil works and SIEMAT.

The Action Taken Report on these items was initially called for from the State on 14-12-2007.Again taken up the matter with the State on 6-5-2008. Despite the issue of 22 reminders, the last being on 11-7-2012, the reply is still awaited from the State.The Status of compliance of Audit Observations was discussed in the 37th Review Meeting of the State Finance Controllers held on 29th-30th April 2013 and emphasized the need for prompt compliance of the outstanding audit observations in a time bound manner within 3 months.

The State on 2-5-2008 has furnished the action taken report on all items except this item.The action taken report on this item is still awaited from the State.

Contd…. Andhra Pradesh :Year Nature of



2006-2007

(i) Copy of audited accounts and audit report under NPEGEL was not found attached with the audit report.

The missing documents were called for from the State on 8-12-2008. Despite the issue of several reminders, the last being on 15-5-2012, the documents are still awaited from the State.The Status of compliance of Audit Observations was discussed in the 37th Review Meeting of the State Finance Controllers held on 29th-30th April 2013 and emphasized the need for prompt compliance of the outstanding audit observations in a time bound manner within 3 months.

The State has not furnished the copy of the required documents.

Contd…. Andhra Pradesh :Year Nature of Observations Action Taken by State Action taken by MHRD


2009-2010

(i) Procedural lapses of : (a)Treating advances

as expenditure;(b)Outstanding

advances not included in the closing balances

(c)Expenditure incurred on unfinished works without obtaining PAB approval for the spill over outlay.

The Action Taken Report on all points included in the audit report was initially called for from the State on 13-12-2010.Again taken up the matter with the State on 15-3-2012.Despite the issue of several reminders, the last being on 18-9-2012, the reply is still awaited from the State.

The State has clarified some of the points on 12-7-2011, but the clarifications on these points have not been furnished.

The reply from the State on these items is still awaited.

Contd…. Andhra Pradesh :Year Nature of Observations Action Taken by State Action taken by MHRD


2009-2010

The Status of compliance of Audit Observations was discussed in the 37th Review Meeting of the State Finance Controllers held on 29th-30th April 2013 and emphasized the need for prompt compliance of the outstanding audit observations in a time bound manner within 3 months.

4. BiharYear Nature of Observations Action Taken by State Action taken by MHRD


2005-2006

1. Advances made to speed for years 2002-2003 and 2003-2004 charged in the year 2005-2006.

2. Embezzlement of Rs.80.39 lakhs in Araria & other financial irregularities amounting to Rs.5764.64 lakhs identified by AG Audit.

1. Work is in progress2. It is under investigation

by State vigilance department.

Reminder issued on 11th July 2012 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.

Contd… Bihar

Year Nature of Observations Action Taken by State Action taken by MHRD (Minutes in FC meeting)

2006-2007

1. Large amounts outstanding in bank reconciliation.

2. Shortage found in physical verification (computers) at DPO-Motihari.

3. Large amount debited by PNB Chapra, BOI Chapra & Rs.31.03 lakhs debited by different bank at Nawada not clarified to audit.

1. Work in progress, would be completed by 2012-2013.

2. Computers from SSA offices were sent for some emergent public purposes. Now the DPC Motihari has requested the DM (vide this letter No.602 dated 8th April 2008) to return back all computers system to SSA office.

3. Reconciliation work in progress.

Reminder issued on 11th July 2012 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.

Contd… BiharYear Nature of Observations Action Taken by

StateAction taken by

MHRD (Minutes in FC meeting)

2007-2008

1. Expenditure of Rs.17.32 lakhs shown as capital expenditure, is not as per AWP&B approved by PAB.

2. The advances amounting to Rs.143703.39 lakhs stated to have been adjusted upto 31.7.2011 do not appear to have been shown in expenditure reported by your office for the period 1.4.2011 to 30.9.2011.

3. Recertification Report for an expenditure of Rs.80887.45 lakhs (advances treated as expenditure) for the year 2007-2008 not furnished yet.

1. Pending2. Pending3. Reply received

in February 2013 (under examination)

Reminder issued 12th February 2013 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.

Contd… Bihar

Year Nature of Observations Action Taken by State

Action taken by MHRD (Minutes in

FC meeting)

2008-2009

1. Near disclaimer of opinion in context of non-availability of opening trial balance and weaknesses in bank reconciliation.

2. Previous year audit observations pending.

1. Pending

2. Pending

Reminder issued 4th July 2012 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.

Contd… Bihar



FC meeting)

2009-2010

1. Progress in reconciliation of an amount of Rs.3285.33 lakhs parked for Errors/omissions of earlier years be reported.

2. Yerawise/activity wise breakup of advances to Rs.350289.62 lakhs and reasons for non-adjustment within the prescribed period have not been given.

Pending Reminder issued 5th December 2012 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.

Contd… Bihar



FC meeting)

2009-2010

3. Bank Reconciliation statement and conformity certificates of balances with the bank could not be made available for audit. Where BRS have been prepared, which reveal huge amount of unidentified, unlocated and unmatched credit and debit, outstanding cheques being carried forward.

Pending




2009-2010

4. Advance: In certain District offices of BEPC subsidiary registers for advances given under different programmes including staff advances have not been produced to us due to the reasons, advances as appearing in the Balance Sheet could not be verified.

Pending


StateAction taken by MHRD (Minutes in FC meeting)

2009-2010

5. Liability for Expenses : a. Stale cheques Rs.43,02,06,672.00

(SSA) Rs.24,20,570(KGBV) Rs.10647,740.00 (NPEGEL). The district offices has resorted to transfer the amount ‘cheques issued but not presented’ to bank to ‘Stale cheque account’ without making any effort for their matching and identification for proper adjustment. In absence of adequate details, nature of liability the correctness of above amount and the existence of liabilities could not be verified.

Pending

Contd… BiharYear Nature of Observations Action Taken

by StateAction taken by MHRD (Minutes in FC meeting)

2009-2010

b. In absence of Inward Bill Register, the adequacy of provisions for liabilities could not be verified.

c. An aggregate amount of Rs.56.42 lacs heave been provided for liabilities in the books of accounts of Gopalganj, Madhubani, Begusarai, and Supoul District offices without incurring the expenditure during the year under reference which no bill vouchers etc. could be made available.

Pending

Contd… BiharYear Nature of Observations Action Taken

by StateAction taken by MHRD (Minutes in FC meeting)

2009-2010

d. The observations of special Audit of DLO Saran carried out by a firm of charted Accountants during the year are under scrutiny of the management and impact thereof on the accounts for the year has not been ascertained and quantified.

e. Internal audit carried out by Charted Accountants firms is not commensurate with the size, volume and nature transactions of the BEPC offices.

Pending

Contd… BiharYear Nature of Observations Action

Taken by State


FC meeting)2010-2011

1. On scrutiny of the management letter issued by the Auditor a copy of which has been received with your letter

(a) The books of accounts are not being maintained properly.

(b) Bank accounts are not properly reconciled.

(c) There are un-identified/un-located/un-rectified debit entries lying in the Bank Reconciliation statements.

Pending Reminder issued 20th April 2012 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.


Taken by State


FC meeting)

2010-2011

(d) Interest earned on Bank accounts is not accounted for.

(e) Register of advances is not maintained.

(f) Adjustment of advances given for disbursement of Teacher salary to the DSE/DPC is adjusted as expenditure without the certifying document having been received. The utilization certificates/expenditure statements have not been shown to the Auditors for the following expenditure under Teacher salary.

Pending


Taken by State


FC meeting)

i) Araria Rs. 31,77,35,000.00(ii) Darbhanga Rs.43,31,58,000.00(iii) Katihar Rs.33,50,59,619.00(iv) Kishangan Rs.8,43,97,913.00(v) Muzaffarpur Rs.67,39,27,892.00(vi) Patna Rs.30,52,21,000.00(vii) Purnia Rs.38,11,03,054.00(viii) Samastipur Rs.56,84,72,500.00 ------------------------ Total Rs.309,90,74,978.00

Pending


Taken by State

Action taken by MHRD (Minutes in FC meeting)

2010-2011

(g) Proper UCs for the funds disbursed for Teacher Salary have not been obtained made available to the Auditor in Bhojput, Burear, Gaya, Gopalganj, Jamui, Jahanabad, Lakhisarai, Nalanda, Nawada, Rohtas Saran, Shekhpura, Siwan Vaishali Districts.

(h) Payments made to VSS/BRC/CRC in the nature of grants are directly treated as expenditure without obtaining the SOE/UC.

Pending


Taken by State


2010-2011

(i) Fixed Assets register is not properly maintained.

(j) Physical verification of Final Fund Fixed Assets was not conducted.

(k) Audit Report compliance was not available.

l) (i) Financial statements for the year 2009-10 were not presented for approval and adoption by the EC. (SPC).

(ii) Physical verification report of stores was not produced.

Pending


Taken by State


(iii) TDRS were physically available but books of account TDR is showing negative balance. No records were produced.

(iv) Details of advances outstanding was not available. Advances were given to such persons whose identity is not available with the Accounts Branch.

(v) Many cases of irregular payments.(vi) Rs.58,09,600 was debited to different

account heads of Media component on 31.03.2011 which are not related to the activities performed.


Taken by State


2010-2011

(ii) The procurement audit certificate submitted by your office is not in the prescribed format.

(iii) The reply given is incomplete. The reasons for non adjustment of advances have not been furnished.

(iv) No comments.

(v) Reason for showing different figures of opening balance in different financial statements have not been given.

(vii) The difference has to be reconciled quickly.


Taken by State


2010-2011

(viii) Advances need to be adjusted in the financial year to which the grant relates. For adjustments of advances in subsequent years approval of PAB for spell over is required.

(ix) This has to been done and register of advances properly maintained.


Taken by State


2010-2011

(x) State cheques need to be reversed at the time of Reconciliation of Bank Balance with cash/Bank Book balance every month which is not being done in Bihar SSA. Needful has to be got done on priority basis as considerable amount of Rs.51.16 Crores is lying un-utilized in Bank Reconciliation statements.

(xi) Civil works constructed out of SSA funds are required to be shown in the consolidated Balance sheet under Fixed Assets as would be seen from the format at Annexure XXI of the Manual on Financial Management & Procurement. This may kindly be ensured.


Taken by State


2010-2011

Your office has not furnished comments/clarification on the auditor’s observation pointed out in para 2. A & B of my D.O. letter dated 8th February 2012.

The External Development Partner while calculating their share of eligible expenditure for the year 2010-2011 have disallowed the expenditure of Rs.3354.91 crores reported by SSA-bihar from the gross expenditure because of persistent long standing weaknesses in FM system under SSA.

5. Chandigarh :Year Nature of Observations Action Taken by State Action taken by MHRD


2008-2009

Rs51.29 lac as excess expenditure paid to NCERT as advances in 2008-09, advances booked as expenditure in 2008-09 and 2009-10

Rs51.29 lac spent on purchase of books as advance expenditure for the year 2009-10.

Rs.51.29 lac paid to NCERT as advance in 2008-09 remain as advance in the books of account and treated as expenditure in 2009-10 after PAB approval, State had treated the same as expenditure in 2008-09 which is not correct and PAB approval for the same has not been obtained, therefore this is an un-authorized expenditure ex- post facto approval of PAB to regularize the same.

Contd… Chandigarh :

Year Nature of Observations Action Taken by State Action taken by MHRD (Minutes in

FC meeting

2009-2010

1. Para is for adjustment of advances of Rs.1.61 lac in 2008-2009.

2. Expenditure booked more than the approved budget of Rs. 23.31 lakh.

1. Rs.1.61 lac outstanding during 2008-09 adjusted in the year 2009-10.

2. State requested revised budget and PAB approval for excess expenditure.

Under consideration

Under consideration

6. Chhattisgarh :

Year Nature of Observations Action Taken by State Action taken by MHRD (Minutes

in FC meeting

2005-2006

(i) The net debit suspense of Rs.50,16,909/- which stands at Rs.31,99,647/- as per the audit report.

(ii)The balance of Rs.2,66,08,219/- which stands at Rs.1,80,87,725/- as per audit report

The Action Taken Report on these items was initially called for from the State on 26-10-2006.Again taken up the matter with the State on 19-10-2007. Despite the issue of several reminders, the last being on 17-9-2012, the reply is still awaited from the State.

The State on 26-9-2007 has stated that districts have been advised to pass necessary entries in their books of accounts.

Contd…Chhattisgarh :


Action Taken by State Action taken by MHRD (Minutes

in FC meeting

2005-2006




in FC meeting

2006-2007

(i) Procedural lapses like refund of unspent balances taken as other receipts instead of minus expenditure under the respective heads, non carrying out of bank reconciliation on regular basis, debit balance in the suspense account, inter scheme transfer of funds, non maintenance of fixed asset register, maintenance of

The Action Taken Report on these items was initially called for from the State on 8-10-2007. Despite the issue of 29 reminders, the last being on 17-9-2012, the reply is still awaited from the State.

The State has not furnished any reply to these points.

Contd…Chhattisgarh :Year Nature of Observations Action Taken by State Action

taken by MHRD


2006-2007

current bank account instead of savings bank account, non submission of accounts to audit in some sub district level units, non following of prescribed procurement procedure etc.



Year Nature of Observations Action Taken by State Action taken by MHRD


2007-2008 (i) Rs.35.20 crore was shown as expenditure under the activity of ‘others’ in the consolidated financial statement. In the footnote it was stated that others include increase in advances receivable, advances payable, adjustment of project funds. Hence, this is to be treated as advance and cannot be treated as expenditure.

(ii)Variation in unspent balance(iii)Variation in suspense account

The Action Taken Report on all points included in the audit report was initially called for from the State on 9-9-2009.Again the matter was taken up with the State on 21-12-2009.Despite the issue of 13 reminders, the last being on 17-9-2012, the reply is still awaited from the State.

The State has furnished the rectification and verification report 1-12-2009 but these points were not properly replied.



Action Taken by State Action taken by MHRD


2007-2008


The State has not furnished any further reply to these points



in FC meeting

2008-2009

1) Unspent balance did not include work in progress and outstanding advances of Rs.108788.65 lakh.

2) Rs.53359.286 lakh shown as expenditure under some heads did not constitute expenditure as the actual usage is not known/recognized.

The Action Taken Report on all points included in the audit report was initially called for from the State on 12-1-2010 for SSA and 11-2-2010 for KGBV and NPEGEL..

The State has not furnished any reply to these points

Contd…Chhattisgarh :Year Nature of Observations Action Taken by State Action taken

by MHRD (Minutes in FC

meeting

2008-2009

(iii) Free text books were distributed to ineligible students. Rs. 566.52 lakh was released to State Hathkargha Vikas Sangh for purchase of Darri under ECCE innovation but the Darri was not delivered till the time of audit.

(iv) Interest not credited in the books of account.

Despite the issue of several reminders, the last being on 17-9-2012, the reply is still awaited from the State.


taken by MHRD


2008-2009

(v) Rs. 5.28 lakh refunded by KGBV, Antagarh of Kanker to the DPO was neither received by DPO nor accounted for in the books of accounts of DPO.

(vi) Prescribed procurement procedure was not followed

(vii) Under NPEGEL Rs.2.69 lakh by Janjgir and Rs. 6.66 lakh by Jorba districts refunded to SPO were not received by the SPO.



taken by MHRD


2009-2010

i. Computers purchase under SSA for Rs.779.03 lakh have been transferred to other departments.

ii. Teachers’ salary was disbursed against sanctioned posts.

iii. Bank reconciliation not carried out regularly.

iv. Interest not credited in the books of accounts

v. Procurement documents not produced to audit

The Action Taken Report on all points included in the audit report was initially called for from the State on 27-12-2010.

Despite the issue of several reminders, the last being on 5-12-2012, the reply is still awaited from the State.

The State has clarified some of the points on 30-1-2012 but the clarifications on these points have not been furnished.

Contd…Chhattisgarh :Year Nature of

ObservationsAction Taken by State Action

taken by MHRD


2009-2010 The Status of compliance of Audit Observations was discussed in the 37th Review Meeting of the State Finance Controllers held on 29th-30th April 2013 and emphasized the need for prompt compliance of the outstanding audit observations in a time bound manner within 3 months.


taken by MHRD


2010-2011 (i) Expenditure of Rs.76.06 lakh was shown under the activity head ‘others’ which is not an approved activity.

(ii) Embezzlement of Rs.0.38 lakh by Accountant of Manora Block of Jashpur district.

The Action Taken Report on all points included in the audit report was initially called for from the State on 2-12-2011.

The State has clarified the points on 22-12-2011 and 7-4-2012 and all except two points are outstanding.

Contd…Chhattisgarh :Year Nature of

ObservationsAction Taken by State Action

taken by MHRD


2010-2011 The outstanding points were taken up with the State on 11-10-2012 and the reply is still awaited.


On the Embezzlement, it was stated that the enquiry in under progress.

7. D&N Haveli :


Action Taken by State Action taken by MHRD (Minutes in FC meeting

2009-2010

1. Entries in Cash Book not attested

2. There is no system of Internal Audit

1. Pending

2. Pending

Reminder issued on 29th November 2012 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.

2010-2011

There is no system of Internal Audit

Nil Nil

8. Goa:Year Nature of Observations Action Taken by


MHRD (Minutes in FC meeting )

2008-2009

UC for Rs. 404.88 lakhs awaited from PWD since 2007-08.

Pending Latest reminder sent on 6th July, 2012.

2009-2010

(i) Outstanding advance of Rs. 628.80 lakhs.

(ii) UC for Rs. 15.00 lakhs awaited from Directorate of Education.

(iii) Rs. 180249.00 wrongly debited to SSA Account by the Bank

SIS submitted comments under letter 21st May, 2012.

After consideration of the comments, SIS was advised to report the compliance to the Statutory Auditor and submit status of settlement of objections to MHRD. (Letter dated 12th September, 2012).

8. Goa:Year Nature of Observations Action Taken by



2010-2011

(i) Advance of Rs. 221.48 lakhs is outstanding against PWD for last three years.

(ii) UC for Rs. 60.00 lakhs only received from Directorate of Education against the advance of Rs. 75.00 lakhs.

(iii) Rs. 180249.00 wrongly debited by Bank in 2009-10 to SSA Account.

SIS submitted the comments under letter of 25.05.2012.

SIS advised to report compliance to the Statutory Auditor and submit status of settlement to MHRD (Letter dated 12th September, 2012).Reminder sent on 13th December, 2012.

9. Gujarat:Year Nature of Observations Action Taken by State Action taken by


2008-2009

Excess expenditure of Rs. 236.125 lakh various activities.

The proposal is under consideration of MHRD.

The State on 23-9-2010 has furnished the proposal for regularization of excess expenditure.

2009-2010

(i) Excess expenditure of Rs. 15.12 lakh under BRC.

(ii) Re-appropriation of funds without obtaining the approval of PAB.

The Action Taken Report on all items was called for from the State on 21-12-2010. Again the matter was taken up with the State on 12-7-2011.

The State on 24-6-2011 has furnished para-wise clarifications and other missing documents.

Contd… Gujarat:Year Nature of

ObservationsAction Taken by State Action taken by


2009-2010

After examining the clarifications furnished by the States, the matter was again taken up with the State on 31-8-2012. Despite the issue of several reminders, the last being on 5-12-2012, the State has not taken any action to get the excess expenditure regularized through the PAB.

The State on 20-8-2012 has furnished further clarifications. As regards, the fraudulent transaction it was informed by the State that FIR was lodged by the DPO, Surendernagar on 2-3-2010.

Contd… Gujarat:Year Nature of


(Minutes in FC meeting )

2009-2010


Criminal case No. 1457/10 was continued in District Court, Surendernagar and anticipatory bail was given by District Court to all accused. The police has submitted the charge sheet on 16-10-2010. Further progress is awaited.

Contd… Gujarat:Year Nature of Observations Action Taken by



2010-2011

(i) Funds released to sub-district level units are treated as expenditure.

(ii)Grants returned as unspent are being treated as income instead of minus expenditure.

(iii)Mis-procurement of Rs. 11,33,302/-

The Action Taken Report on all items was called for from the State on 29-11-2011. A copy of MHRD’s letter was sent to the State on 22-2-2012.

The State on 17-2-2012 has sought for a copy of MHRD’s letter dated 29-11-2011.

The Action Taken Report from the State is still awaited.

Contd… Gujarat:Year Nature of Observations Action Taken by State Action taken

by MHRD (Minutes in

FC meeting )2010-2011

(iv) Utilization certificates are not being sent by few VECs.

(v) Procurement procedure is not followed at VEC/VCWCs/CRC.

(vi) Excess expenditure of Rs. 196.88 lakh under various activities.

Despite the issue of several reminders, the last being on 17-9-2012, the State has not furnished any action taken report. The Status of compliance of Audit Observations was discussed in the 37th Review Meeting of the State Finance Controllers held on 29th-30th April 2013 and emphasized the need for prompt compliance of the outstanding audit observations in a time bound manner within 3 months.

10. HaryanaYear Nature of Observations Action Taken

by StateAction taken by


2005-2006

1. Reconciliation of Rs.2.92 crores paid as salary to ABRCs for FY-2003-2004 yet to be completed.

2. Refund of Rs.43 crores be credited to combined account to which expenditure was debited and not to credit to State Govt. share under SSA.

3. Expenditure of Rs.3364.68 lakhs on Teacher Salary for FY-2005-2006 incurred by way of depositing the amount to State Govt. Treasury yet to be resolved/refunded.

4. Para 6.2 (ii) of IPAI report yet to be resolved.

Pending Reminder issued on 25th September 2012 and also discussed in 37th quarterly review meeting held with financial controllers requesting them to finalize these pending issues.

Contd… HaryanaYear Nature of Observations Action Taken by State Action taken by


2006-2007

Expenditure of Rs. against teacher salary incurred by way of depositing the amount in State Govt. treasury.

Matter has been taken up with Director-Elementary Education and DG Secondary Education-Haryana

Reminder issued on 1st April 2013 from *AS/MHRD to Principal Secretary, Haryana

2007-2008

PAB approval for excess expenditure of Rs.11.84 lakhs for community mobilization is required.


Contd… HaryanaYear Nature of Observations Action Taken by



2007-2008

2. The advance of Rs.8778.62 booked under Teacher Salary as expenditure in year 2007-2008 has to be got rectified as expenditure based on expenditure statement as required. This irregularity was also pointed out by 10th JRM of SSA during Review of Audit Review.

Pending

Contd… HaryanaYear Nature of Observations Action Taken by



2008-2009

1. Cheques not cleared by Banks do not constitute Miscellaneous Receipt. The proceeds of the Stale cheque are to credited to the head (activity head) to which the expenditure was debited and not to the Misc. Receipt. The misclassification needs to be rectified


Contd… HaryanaYear Nature of Observations Action

Taken by State

Action taken by MHRD (Minutes in FC meeting )

2008-2009

2. Amount of Rs.12051.90 lakhs released for Teacher Salary as shown in the Utilization Certificate was also to be shown as advance in the accounts of the Project but the same was treated as expenditure.

3. Thus advance of Rs.12051.90 lakhs treated as expenditure needs recertification as expenditure from the Statutory Auditor. The advance of Rs.12051.90 lakhs booked as expenditure under Teacher Salary in the financial statements needs to be recertified as expenditure based on the expenditure statement

Pending

Contd… Haryana

Year Nature of Observations Action Taken by

State


FC meeting )

2009-2010

1. An amount of Rs23692.24 lakhs advance given for Teacher Salary was shown as expenditure in the Financial Statements and FMRs. The total expenditure including the above advance was certified as Rs.41339.26 lakhs. The actual expenditure excluding the above advance amount works out to Rs.17647.02 lakhs. As required in Para-75.1 of the Manual on Financial Management & Procurement



Taken by State


FC meeting )2009-2010

the Expenditure Statement should have been obtained and adjustment of advance made in accounts during the year 2009-2010, which has not been done. The advance of Rs.23692.24 lakhs treated as expenditure in the Project accounts, therefore, needs recertification as expenditure based on the expenditure statement as required in the Manual on Financial Management & Procurement (Para-75.1). The directions of the PAB for release of funds also need to be complied with. Needful may, therefore, be got done and Recertification Report furnished to this Ministry at the earliest.


Taken by State


FC meeting )

2009-2010

2. Excess expenditure incurred by Project on School Maintenance Grant/ School Grant/Teacher Grant needs to be regularized by PAB.

2010-2011

1. Expenditure on Text Books/ Maintenance Grant/School Grant/Teacher Grant exceed outlay approved by PAB. Require PAB approval.

Pending Reminder issued on 17th Sept 2012


Taken by State

Action taken by MHRD


2010-2011

2. The closing balance of Rs.37026.84 lakhs (shown in the CAFS) which does not include advances given for Teacher Salary as indicated in the Utilization Certificates for the year 2008-2009 and 2009-2010 (Rs.12051.90 + Rs.23692.24 lakhs) does not reconcile with the closing balance of RS.38363.42 lakhs (Rs.22422.03 Advances against expenditure and Rs.15941.39 lakhs Bank cash & other advances) shown in the Utilization Certificate. The difference of Rs.1336.58 lakhs has to be reconciled.

Pending

11. Himachal Pradesh



FC meeting )

2007-2008

(i) Legal cases involving misappropriation of funds against Shri O. C. Guleria, Shri Rajesh Kumar, IDE Coordinator Shimla, case against DPO Nahan and Solan.

(ii) Excess expenditure of Rs. 456945.00 under text book and Rs. 171431.00 under BRC/CRC .

Cases are pending in the Court (Letter dated 23rd March, 2012)

Excess expenditure confirmed (Letter dated 23rd March, 2012)

Pending final action taken to be reported to MHRD. Para may be treated as settled (Letter dated 5th July, 2012).Report regularization by PAB (Letter dated 5th July, 2012).

11. Himachal Pradesh Year Nature of Observations Action Taken by



2008-2009

(i) Rs. 56.73 lakhs spent for furniture and equipment even though this activity is not approved by the PAB.

(ii) Rs. 2411.54 lakhs shown as expenditure of civil works which is actually advance.

(iii) Rs. 193.43 lakhs spent over the budget allotment for REMS, TLM (CRC), KGBV, FTB, drinking water facility, major repair, boundary wall, repair & maintenance, fixed assets.

(iv) Case of misappropriation of Rs. 181995.00 against Shri Rajesh Kumar, Driver.

Expenditure has been booked under Management Cost.

Noted for compliance in future.

Excess expenditure confirmed by the State. Case pending in the Court. (Letter dated 30th August, 2011)

Treated as settled. (Letter dated 27th February, 2012)Need to be got certified by the AuditorTo be got regularized with the approval of the PAB. Para may be dropped and compliance watched through Audit Report of 2007-08.

Contd.. Himachal Pradesh Year Nature of Observations Action Taken by

StateAction taken by MHRD


2009-2010

Excess expenditure of Rs. 598.07 lakhs over budget allotment in DPOs and SPO office.

Excess expenditure confirmed by the State under letter dated 29th September 2011.

To be regularized by approval of PAB (Letter dated 19th October, 2011)

2010-2011

(i) Excess expenditure of Rs. 26.81 lakhs over budget allotment in Library books, CAL, NPEGEL, maintenance grant and REMS.(ii) Rs. 900.00 wrongly debited by the Bank to SSA Account on 27.02.2008.

Excess expenditure confirmed by SIS under letter 21.03.2012.

DPO instructed to get the entry reversed by the Bank under letter 21.03.2012.

A copy of PAB approval to be provided to MHRD (Letter dated 30.04.2012).Compliance may be reported to the Auditor for settlement of the para (Letter dated 30.04.2012).(Latest reminder sent on 11.10.2012).

11. Jammu & Kashmir :



FC meeting )

2010-2011

Rs.64450.71 lac shown outstanding reason for non adjustment not given

SIS replied to letter dated 20-1-2013 that CA has been requested to furnish detail of Outstanding advances.

Under consideration

12. Jharkhand:Year Nature of Observations Action Taken by State Action taken by


2010-2011

(i) Expenditure of Rs. 212.00 crore was booked under other activities instead of against the approved activities.

(ii)Refund of unspent balances by sub-district units was taken as miscellaneous receipts instead of minus expenditure under the respective heads.

(iii)Non-maintenance of asset register, stock register and non-carrying out of annual physical verification of Assets and Stock register.

These are mainly procedural lapses and no financial implication is involved. The Action Taken Report was called from the State on 16th February 2012. Reminders issued on 19th March 2012, 18th June 2012 and 11th September 2012.

The response from the State is awaited.

Contd.. ..Jharkhand:Year Nature of

ObservationsAction Taken by State Action taken by


2010-2011 The Status of compliance of Audit Observations was discussed in the 37th Review Meeting of the State Finance Controllers held on 29th-30th April 2013 and emphasized the need for prompt compliance of the outstanding audit observations.

13. Karnataka :Year Nature of Observations Action Taken by State Action taken by


2006-2007

Expenditure in excess of approved outlay under BRC – Rs. 82.845 lakhsExpenditure in excess of approved outlay under CRC – Rs. 19.877 lakhs

Pending despite regular reminders

Latest reminder sent on 18th July, 2010

2007-2008

Expenditure in excess of approved outlay – Rs. 11978.869 lakhs

Pending despite regular reminders

Latest reminder sent on 26th February, 2013

Contd… Karnataka :Year Nature of Observations Action Taken by State Action taken by


2008-2009

Expenditure in excess of approved outlay under BRC & CRC – Rs. 557.566 lakhs

State accepted the excess expenditure and promised to get it regularized under their letter dated 18th July, 2009

State to furnish the intimation of regularization by the competent authority. Letter sent to State on 8th January, 2010.

Liability of Rs. 1136.106 lakh provided under CAL in 2008-09 despite the tender finalized in April 2009

State intimated that the tender could not be finalized in 2008-09 due to certain technical difficulties. Requested to consider this as the liability for 2008-09 (State letter of 18th December, 2009)

It was conveyed to the State on 8th January, 2010 that the Plea of State not acceptable. Latest reminder sent on 4th July, 2012.

Contd… Karnataka :



FC meeting)

2009-2010

Refund of Rs. 874.57 lakh taken as receipt.

Expenditure of Rs. 3760.87 lakhs pertaining to 2008-09 has been included in the accounts of 2009-10.

SIS intimated that this was the figure of expenditure of unsettled advances under their letter dated 4th November, 2011

Pending

State was advised that it should have been credited to advance in that year under letter dated 20th September, 2012.

Latest reminder on 20th September, 2012.

Contd… Karnataka :Year Nature of Observations Action Taken by State Action taken by


2009-2010

Expenditure of Rs. 1354.75 lakh spent on free textbooks pertaining to 2007-08 and 2008-09 included in 2009-10.Excess expenditure of Rs. 3026.47 lakhs in civil works Rs. 100.26 lakhs excess expenditure over budget allotment in NPEGEL.

State submitted comments on 19th July, 2011.

SIS agreed to put up the case to PAB for approval under their letter of 4th November, 2011

SIS was advised that expenditure of previous years cannot be included in the current year. Regularization by competent authority is required.

Contd… Karnataka :



FC meeting)

2010-2011

Rs. 603.00 lakhs refunded by district taken as income in 2010-2011.

Pending Reminder issued on 28th August, 2012.

Rs. 230.096 lakhs spent in excess of budget allotment under innovative head.

SIS proposed to take approval of PAB under letter 23rd June, 2012.

SIS to provide PAB approval. Letter sent on 9th July, 2012.

Date post:	01-Jan-2016
Category:	Documents
Upload:	eugene-hardy
View:	222 times
Download:	0 times

Compliance of Outstanding Audit Observations made by Statutory Auditor 38 th Quarterly Review...

Documents