F.No. SD-22/10/2017-ICGovernment of India

Ministry of Skill Development & Entrepreneurship

2nd Floor, Shivaji Stadium AnnexShaheed Bhagat Singh Marg,

New Delhi. 110001Dated 15.03.2019

To,Ms. Shabnam Sinha,Task Team Lead Education,India Education Global Practice,The World Bank Group,70, Lodhi Estate,New Delhi - 100 003.

Subject: Submission of C&AG Audit Report for FY 2017-18 under SANKALPProject- reg.

Madam.,

The undersigned is directed to refer to your email dated 07.03.2019 regardingOverdue of Audit Report for FY 2017-18 and to forward herewith the Audit Report of theaudit conducted by the Comptroller and Auditor General of India for the FY 2017-18 inrespect of SANKALP Project, for your kind information and necessary action please.

Y 'rs faithfully,

Encl: As above.

(Lendup Sherpa)Under Secretary to Govt. of India

Tel.no 23450842

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The Secretary,Ministry of Skill Development and Entrepreneurship,

2" Floor, Shivaji Stadium Annexe,Shaheed Bhagat Singh Marg,Connaught PIace, New Delhi-1 10001

X-TtT NV~ Wif ~t~T C YIW World Bank Assisted-SANKALP project (Logn no. 8769IN) W EET 3dI È 3qt ~ ftcq~Š 2f

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1I1Nspectioln report on certification Audit of World Bnk Assisted - Skills Acquisition and

Kloldte Awiareness tr Livelihiood( Promotion (SANKA-P) project (Loan No. 8769 IN &

Program 11) P-158435) for the )Tar -31 -.

Part-I-A

The Certftioti Audit oftle World Bank assisted Skills Acquisition and Knowledge Awareness

for Livelihood ProlliOtioll (SANKALP) project (Loan No. 8769 IN) for the year 2017-i wasf the Otlce of the Additional Dy. Comptroller and Auditor General

ceEal te byndtr New clri comprising Shri V.K. Gupta, Sr. Audit Officer, Shri Jay Praksh,

Assistant Audit Officer. Shri Mahesh Narm3an. Assistant Audit Officer and

Auditor from 1 1.0 .L2010 to 17.01.2019 (0- working days).

Scope and Objective of tie Project

Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) project

ais to implement tie mandate of the National Skill Development Mission (NSDM)*, which was

launched on 151h july 2017 by Nlinistry of Skill Development & Entrepreneurship (MSDE) through

its core sub-missions. The programnune implementation period is September 01, 2017 to March 31,

2023. The project will be implemented in mission mode through World Bank support and is aligned

with the overall objectives of the NSDM. The main objectives of the project include strengthening

institutional mechanisms at both national and state levels, building a pool of quality trainers and

assessors, creating convergence among all skill training activities at the state level, establishing

robust monitoring and evaluation systen for skill training programs, providing access to skill training

opportunities to the disadvantaged sections and most importantly supplement the 'Make in India'

initiative by catering to the skill requirements in relevant manufacturing sectors. SANKALP is an

outcome oriented project supported by World Bank. The project will focus on the overall skilling

ecosystem covering both Central (MSDE, NSDA and NSDC) and State agencies and outcomes will

be measured through Disbursement Linked Indicators (DLIs) agreed between MSDE and the Bank.

A DLI verification protocol has also been established to measure DL1s on a periodic basis.

Funding

Under SANKALP four key result-areas have been identified, viz. (i) Institutional Strengthening;

(ii) Quality Assurance; (iii) Inclusion and (iv) Expanding Skills through PPPs. The results shall be

achieved in time bound manner by utilising the project funding of $ 675 Mn (T 4455 crore). The

project is funded by three major parts: (i) World Bank loan assistance of $ 500 Mn (? 3300 crore)wider Program for Results (P for R) instrument which includes Program Funding and Technical

Assistance (TA); (ii) States' contribution $100 Million (Z 660 crore) and (iii) Industry contributionof $75 Million (Z 495 crore).

'NSDM is 3n institution registered under PPP model on 0OS_.2011

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The ProjectshlbSub pject thShall be revieweCd alter 3 years alnd aii~tioJl lila MOMli 01, ~irItigl ( iJ jni2017 anid taeprors be1fudstsatr israi'leh, of $ 250) M Wa?I hc,t~i~rroved by te Board of World liaik c MayProject Componet,:

SANK-ALP has bee d'SANKALp seea dsigned to operationaliNe [he S [1 s'tNational a ogram consists of four objectives: (i) Sm issi der the N itioral Mi,n. Theknpr and State levels to guide planning, deliery ndStrntlitheneI hiftition Irechani:aWnl it

IpOved Quality and Market oReinar-iettelfvaliOf skills tyandM tRelevance o'SI) ot l Irgirn (iiOfrsiig training for female trainees and other disadvala(i) rovead (ec) to lnd omplm

hrough privatepublic partnerships (PPPs). v)

Current AuditPara 1: Claim of?613.08 lakli disallowed for reinltirseet froi World ank

(A) Scrutiny of records revealed that an agreent was signed between NSDC and IBMIndia Pvt. Ltd. NSDC appointed Solution Providgr (IM) to provide the solution in accordancewith the terms of the transaction documents at a total cost of? 70.27 crore under SANKAL project. As per payment schedule of the agreement, 20% of the Dcvlopment Charges was to bepaid after submission of design documents (T+10 weeks).

It was noticed that IBM submitted a bill for achieving Design Submission Milestone(Milestone-2, 20% of the Development Charges) for 590.00 lakh in the Month of April 2018.Against this, payment was made on 25 May 2018, i.e. in the Financial Fear 2018-19. fIowever, itwas booked in the financial year 2017-18 in the SoE.Hence, claim of Z 590.00 lakh is not admissible for reimbursement from World Bank in theFinancial Year 2017-18.

(B) Scrutiny of records revealed that an agreement was signed between NSDC and M/s AnkAha Pvt. Ltd. NSDC engaged research agency to conduct a skill gap study for the state ofUttarakahand and to develop a state skill development action plan at a total cost of Z 27.25 lakh underthe SANKALP project. As per payment schedule of the agreement, 30%, 30% and 40% of theagreement cost were to be paid on Submission of Inception Report, Interim Report and Submissionof Final Report respectively.However, it was noticed that payment of Z 24.08 lakh (for submission of Interim Report andFinal Report) was made to the agency in the year 2018-19 whereas it was booked under SoE for theyear 2017-18 as Z23.08 lakh. Difference of Z1.00 lakh between SOE and payment made as pervoucher may be reconciled.Hence, claim of Z 23.08 lakh is not admissible for reimbursement from World Bank in the

Financial Year 2017-18.

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TnowlIll(of 11he '0110k4t()i World llank A!s!i%ted 'Skilis Acquisition and

Yeir- 2017 1 es Hhr I.lvIliiho 1>101 n'(SA NKA LI» project (Loai No. 8769 IN) for the1hi r bc e obrrvation brought out in the report.

The bccl'ecCPibed j Ine Ibe bai% of record!;/ifrormation furnished and,i;I eavailly iHw I I Officc llf'l he Additioiail D)eputy (ornptroller & Auditor General

( e1tl IpPnthiire), New i Clhi diuiji n :lily ,epoibility for ay mis,(informnation and/or non-imifonaitli on Ilhe pu of authlee.

Sr. Audit Officer (AMG-V)

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Report of the Comptroller and Auditor General of India

We have audited the accompanying finanCial statements of the Proposed World 1'ankAssisted - Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SAI1IKALIP)project (Loan No. 8769 IN &- P-158435) for the year 2017-18. Our responsibility is to eXpre;,, anopinion on this financial statement based on our audit.

We conducted our audit In accordance with regulations and standards of audit of thveComptroller and Auditor General of fIdia. T1hose standards require that we plan and perform theaudit to obtain reasonable assurances about whether the financial statements are free of materialmisstatement. Our audit examines, on a test basis, evidence supporting the amounts, and disclosuresin the financial statements. -It also includes assessing the accounting principles Used and significantestimates made by management, as well as evaluating the overall statement presentation. We believethat 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 SANKALP - World Bank assisted Skill India Mission Operation (SIMO)Loan No. 8769-IN for the year ended March 31, 2018, in accordance with consistently appliedGove=nent Accounting Standards.

In addition, (a) with respect of SoEs, adequate supporting documentation has beenmaintained to support claims to the World Bank for reimbursements of expenditure incurred and (b)except for ineligible expenditures as detailed in the audit observations, if any, appended to this auditreport, expenditures are eligible for financing under the World Bank AgreementNo. IDA-?-158435.During the course of audit referred to above, Claims of Expenditure amounting to Z 1046.35 lakhand the connected documents were examined and these can be relied upon except for Z 613.08 1"khwhich was found inadmissible for reimbursement claim.

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 Legislature andUT Legislature.

Dy/.Director (AMG-:V)

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