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In the first phase IPAI has issued 35 reports.

Presentation on Compliance of Observations of IPAI by Chief Consultant, TSG and Finance Controller, SSA, Madhya Pradesh. Compliance of Observations of IPAI. In the first phase IPAI has issued 35 reports.

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In the first phase IPAI has issued 35 reports.

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  1. Presentation on Compliance of Observations of IPAI by Chief Consultant, TSG and Finance Controller, SSA, Madhya Pradesh

  2. Compliance of Observations of IPAI • In the first phase IPAI has issued 35 reports. • Only 15 States (Arunachal Pradesh, Assam, West Bengal, Gujarat, MP, Uttarakhand, Bihar, Kerala, Karnataka, Maharashtra, Tamil Nadu, Haryana, Orissa, Punjab and Rajasthan) have so far settled the observations of IPAI in entirety. • Remaining 20 States / UTs need to submit comments against the pending paras of IPAI. • The cases of diversion of SSA funds for non SSA activities already pointed out to the States / UTs.

  3. Compliance of Observations of IPAIContd../- • States / UTs need to recoup the SSA accounts with the amounts diverted. • IPA has submitted 35 reports of 2nd phase study by March, 2010. • All the reports of IPAI of 2nd phase study have been shared with the States. • None of the States / UTs has settled the IPAI observations of the 2nd phase study. • States / UTs need to confirm the cases of diversion of SSA funds for non SSA activities as pointed out by IPAI in the 2nd phase study report.

  4. IPAI-Audit Phase-II-Observations & Replies Madhya Pradesh

  5. The observations of the IPAI have been grouped into two categories • General observations • Specific observations

  6. GENERAL OBSERVATIONS

  7. General Observation-Short fall in conduct of Meetings of GC/EC Action Taken: • The meetings of EC are convened in regular intervals and all important issues relating to functioning of society are decided with the approval EC. The number of EC meetings held during the year • But convening of GC on a regular fashion was not possible on account of various reasons including the busy schedule of chairman and other key members who are selected at Government Level. • How ever efforts have been made for convening the GC every year and one meeting in each of the last two years 2008-09& 2009-10 was conducted

  8. General ObservationDelay in Fund Releases by State&SPO to Districts • Action Taken • Reply :The State Government always releases its initial share of contribution much ahead of schedule, i.e. at the very beginning of financial year. The remaining ratio of funds by the State Government were also released on timely basis. In fact Government of India did not release its share of funds on time. • The flow of funds under SSA is through E-Transfer, from SPO to Districts & Districts to Sub- District Levels. The initiation of fund transfer is on the basis of real time balances of sub-ordinate offices.

  9. General ObservationExcess Expenditure over Budget provisions Action Taken • The SSA field level officers have been provided with FMP manual and the SPO has been reiterating the necessity of limiting the expenditure to the extent of provisions in the AWP which has been approved by the PAB. • How ever in rare cases where it is genuinely required , the SPD has proposed re appropriation for approval before PAB

  10. General Observation :Huge Advances Pending Action Taken • During the Financial Year 2008-09 a special drive has been conducted for settlement of advances with a directive from the Chief Secretary, Government of M.P. to all the District Collectors to settle the advances by duly obtaining UCs and Completion Certificates. • This special drive helped in securing UCs&CCs for an amount of Rs438.93 Crores have been obtained and adjusted in the audit report of 2008-09. • The special drive launched in the previous year is being continued to obtain the UCs and thus by reducing the outstanding advance.

  11. General ObservationManagement Structure and Financial Monitoringis weak Action Taken • At Present no post is vacant at State level. Internal Audit Cell has been established at SPO. Only 2 post of APC & 10 posts of Accountant are vacant at District level. Out of 322 posts, 82 Block Accountants are lying vacant at Block level. • The Process of recruitment of 92 block& District level accountants has already been initiated by giving an advertisement in news papers. • The finance staff are being imparted with refresher training and for the year 2009-10, 951 mandays and for the 20010-11, 1385 mandays of training of block level accountants was completed with the help of CEDMAP& ICOF. And 100 mandays of training for district level officers was also completed in the month of August-09 in the state Academy of Administration. • The SPD is conducting monthly review meetings on financial activities of the field level officers either through video conferencing or through a meeting .

  12. General ObservationBooks of Accounts-Maintenance is not proper Action Taken • The various books of accounts are being maintained in the manner prescribed in para 50 of the FMP manual. • The concurrent auditors of the respective districts have been instructed for verification and proper maintenance of all the books of accounts at District Level.

  13. General ObservationBank Accounts and Bank Reconciliation-Not done on regular basis Action Taken • With a view to have better financial management the number of bank accounts at all levels have been restricted to one scheme one account • The number of bank branches have been limited to State Bank of India & State Bank of Indore and in exceptional cases where both these banks are not available, the accounts are being maintained in 7 nationalized banks. • The concurrent auditor has been instructed to ensure that the Bank reconciliation is done every month during monthly concurrent audit. As such the bank reconciliation status in the state is almost up to date.

  14. General ObservationTeachers’ Training-should be taken up only when there are changes in curriculum Action Taken • 10day residential course is conducted to 1,47,895 in-service PS teachers and 56755 MS teachers. • A separate 10 day non-residential training to PS/MS teachers was also completed by Feb-10. • The induction training to newly appointed teachers , who are un-trained is being imparted through SCERT, CTE & DIET. • The module for the training is prepared by SCERT curriculum section on the basisof quality issues like Dakshta, ABL, ALM etc.

  15. General ObservationProcurement Procedures to be inspected timely Action Taken • The procurement of various services for the activities of the mission has been done strictly in accordance to the provisions of the FMP manual. • The major activities of the mission such as civil works, printing & distribution of text books are being done through Govt. Agencies like MPHB,BDA,MPTBC etc. • The procurement audit is being carried out by both the concurrent & statutory auditors

  16. General ObservationStrengthening of Internal Audit& Timeliness of Annual Audit Action Taken • The internal audit is being carried out in the entire mission offices through Concurrent Auditors by conducting monthly audit. • An internal audit cell at SPD has been established with officers drafted from State Treasuries & Accounts Department to take follow up action and compliance on audit related issues. • With the introduction of monthly concurrent audit the statutory audit report for the year 2008-09 could be submitted on 30th December 09. This has been an improvement from 07-08 report which was submitted in the month of April09. The current year report will be submitted as per the scheduled date. • The audit objections in the year 2007-08 have been complied with and such compliance has been reported upon in the audit report of 2008-09. The audit 2008-09 also covered VECs who are in receipt of more than Rs1.00lakh grant per year.

  17. SPECIFIC OBSERVATIONS

  18. Specific Observations • Observation:Text Book Corporation got text books printed from private printers. The TBC deducted Rs54 lakhs from the printers for late printing of books during 2007-08. As total cost of books was already paid by SPO to TBC, any penalty recovered should have been refunded to SPO which has not been done” • Action Taken: The penalty amount of Rs54 lakhs have been recovered from TBC while paying subsequent payment of Rs92,63,50,999/ on 24th March09. • Observation:Rs3.62 crores was recovered less from the TBC on account of TDS by SPO during 2007-08 & 2008-09. • Action Taken: An amount of Rs1.89 crores was recoveredThere was a dispute between Text Book Corporation and Income Tax Department on TDS and the case been won by TBC in their favor and no further TDS can be applied on payments to TBC.

  19. Specific Observations • Observation : Funds released under the schemes to various DPOs, in turn, to other subordinate units and other executing agencies were treated as final expenditure pending receipt of Utilization certificates. • Action Taken : The procedure of treatment of expenditure at PTA level is that after expending the funds received, on the specified activities of the mission the Utilization certificates are collected by the respective Jan Shikshaks at cluster level, he then compiles them and in turn transmits them to blocks. The BRC in turn compiles all the UCs of its clusters and sends a statement to the ZSK. The ZSK consolidates all such statements from blocks and keeps them intact for future adjustment entries/reference. • The Chartered Accountant submits the report based on the ‘Significant Accounting polices’ forming part of accounts and on the basis of which the Utilization Certificates were adjusted as expenditure by the CA firms. It does not imply that the respective DPC broadly produces an expenditure statement in lieu of advances made. They centrally obtain UCs from respective agencies and keep them in the manner as prescribed under 73.1 & 73.4 of FMP manual.

  20. Specific Observations • Observation:There were in all 139711 units to be audited by the internal audit cell but the coverage is only 10 units • Action Taken : The District concurrent auditors have been entrusted to conduct audit of 20PTAs&5CRCs per block from the year 2008-09. • As per GOI guidelines only the PTAs receiving more than Rs1.00 lakh need to be audited as such this policy of 20PTA per block will cover them over a period of three years. • The finance wing of state office is not expected to audit each and every unit of PTA. Further the statutory Auditors are covering 20% of PTAs during the year 2009-10, i.e. more than 21400 units will be covered.

  21. Specific Observations • Observation: State resource centre ( an NGO) was paid Rs8.24 Crores during 2006-07 and Rs 2.53 crore during 2007-08 for PTA training and again Rs4.25 Crores on 2nd march 2009 for the same NGO. Training however started during July2009 only. This showed undue benefit to the NGO • Action Taken :The amount advanced to the SRC( State Resource Center) during the years 2006-07 & 2007-08 is Rs17.31 Crores out of which, the SRC has furnished Utilization Certificate for Rs13.78 crores. The Balance amount has been returned by the SRC vide cheque no:730684 dated 31st March 2008. • During the year 2008-09 the training program could be started only in the month of July 2009 because of General Elections. • The State Resource centers all over the country were established by MHRD, Government of India, only for dissemination of teachers training & monitoring of literacy projects. As such there is no such undue benefit to the NGO is involved.

  22. Specific Observations • Observation: The expenditure on civil works had been showing reducing trend leaving huge balances from the year 2006-07 to 2008-09. This had affected the progress of civil works. PAB also commented upon the slow progress of works. During 2007-08 only 12% of works were completed, 80 % were in progress & 8 % were not started at all. • Action Taken : The progress of the civil works during the year 2007-08 was affected due to • Non- availability of land in few cases • Agency could not be settled timely in urban areas and also higher tendered rate in some cases • Many works were completed in rural areas by gram panchayts but UC was not submitted by them due to increased cost of construction. A proposal is under consideration for price escalation. • The Government, based on Manthan recommendation decided to change agency responsible for implementation of SSA works from PTA to Village Panchayats and urban local bodies .This took some time and the change took some time to get properly effected in field.

  23. Specific Observations • Observation:The construction of hostels under NPEGEL,KGBV,CWSN schemes were awarded to outside agencies such as BDA,AKVN,MPHB,MPLUN etc, devising abnormally high cost structure for works ignoring GOI norms. Advance s amounting to Rs64.01 Crores were paid to them from KGBV. Out of total 312 works 154 works were not started. Ujjain Development Authority could not start all the 72 works awarded to it. • Action Taken : The works were not started because of the tender process got delayed due to general elections. And further the tenders were canceled and re invited twice as the tenders quoted were on high rates. • The Ujjain Development authority could not start the works as the tenders received quoted more than 40% excess of standard rates . Now the work has been withdrawn from UDA and has been entrusted to Public Works Department & Rural Engineering Service Department of concerning Districts and these two departments have invited the tenders. Now the agencies have finalized the tenders and good progress has achieved. • The amount given to these Government agencies is not an advance , but it is considered as Work Deposit, a mandatory procedure.

  24. Difficulties with IPAI Audit • The duration of audit program is too lengthy. It spanned over 3 months • If the audit is for such a long duration, it will hamper with the regular work as some of the personnel will be engaged in answering the queries • The audit program went, as if it is on a fault finding mission and more generalized in nature. Instead the audit should be more suggestive for betterment of the implementation of the schemes

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