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Internal Audit Report

of

Chapra Nagar Parishad

For the period from 01.04.2014 to 31.03.2015

Date of Audit: From 01.06.2016to10.06.2016 Report Issued on 9 August 2016

Conducted by Roy Ghosh & Associates Chartered Accountants

3 C R Avenue, 1st Floor Bharat Bhawan Kolkata – 700072

Phone No.22360048

Roy Ghosh & Associates (Chartered Accountants)

2 3 C R Avenue, 1st Floor Bharat Bhawan, Kolkata-700072

EXECUTIVE SUMMARY

1. INTRODUCTION Name of the Municipality Chapra Nagar Parisad Period covered under current audit 01.04.2014 to 31.03.2015 Name of Executive Officer for the period under Audit

Mr. Vijay Kumar Upadhyay

2. RESULTS AND FINDINGS

Strengths observed during audit engagement In the existing system as prevailing in the Nagar Parishad, day to day work is in progressive manner in respect of collection of revenue and execution of the projects.

Weaknesses observed in the functioning of office, maintenance of records etc. observed during the audit engagement: i. Non preparation of Financial Statements resulting in weakness

in control over Accounts. ii. Non preparation of Bank Reconciliation Statements

iii. Lack in follow-up procedure in collection of huge arrear dues in relating to Property and other Taxes.

iv. Non-performing the variance analysis between budget and actual expenditure for a particular period resulting in short comings in budgetary control.

v. Delay in deposit of collected revenue has been observed. vi. Delay in deposit of Income tax deducted at source and Value

Added Tax resulting in violation of tax provisions and attraction of interest.

vii. Provident Fund has been deducted from the staff’s salary periodically but the same has been not deposited in PF A/c since long period of time.

viii. Short/Non deduction of Liquidated Damages with respect to payment to Contractors has been observed.

ix. Non-maintenance of Assets Register in complete manner resulting in chances of mis-utilization of assets.

3. OPINION

The management has to take stringent effort in forming accountability at various levels of the ULB, introducing reforms in financial management and accounting systems, development of strong internal control and organizational design of Municipalities, ensuring capacity building of the municipal personnel and other matters incidental thereto for overall improvement of the ULB.

4. AUDIT RECOMMENDATIONS I. Books of Accounts should be prepared under Double Entry System and

accrual basis should be followed.



II. ERP software should be implemented in the ULB for preparation of financial statements and other necessary information as and when required by the management. Employees of all departments will be trained with the software for entering day to day transactions.

III. Stringent follow up is necessary for recovering arrear dues relating to Property tax and other sources of income.

IV. Bank Statements or Treasury Statement shall be collected and Bank Reconciliation Statement should be prepared on monthly basis. Balance Confirmation Certificate to be obtained from the respective Bank or Treasury periodically.

V. Fixed Assets Register has to be prepared for all fixed assets owned by the ULB, assets will be numbered, wherever applicable and location of assets should be mentioned in such Register. Physical Verification of such fixed assets has to be conducted by appointing external professional agency at each year end.

VI. Stock/Store Register has to be updated in all respect. Purchase, issue and balance of each item have to be maintained separately.

5. COMMENTS FROM MANAGEMENT

Point wise management replies have been provided in separate Annexure “A”.

6. ACKNOWLEDGEMENT Considering the Physical Environment, accessibility, literacy of the Human Resources, communication facilities and so many other hindrances, we are in opinion that, the working of the unit has a deep impact on the economic & social aspects and values of the inhabitants of the demarcated area. And the unit specifically dedicated for the development of Nagar Parishad in the state of Bihar according to plan & for matters ancillary thereto. We convey our heartfelt thanks to the entire human resources of the “Chapra Nagar Parishad” for rendering their help for smooth completion of this assignment.



DETAILED AUDIT REPORT

1. INTRODUCTION The Internal audit of Chapra Nagar Parishad covering the period from 01.04.2014 to 31.03.2015 was conducted by following persons under the guidance of CA M. Das. i. Mr. K. Sadhukhan

ii. Mr. S. Singh

2. ADMINISTRATION The present governing body of the ULB has taken charge on June, 2012. The incumbencies in the key administrative and executive positions are as under: i. Smt. Sova Devi, Chairman from June, 2012 till the date of audit and

ii. Shri Anjay Kumar Rai, Executive Officer from August, 2015 till the date of audit.

3. REVIEW OF OUTSTANDING AUDIT PARAS: STATUS OF AUDIT

OBSERVATIONS IS AS UNDER: Particulars of audit and date of report

Total No. of Audit Paras

Total No. of Audit Paras where necessary improvement/corrective measure is required

Total No of Audit Paras where recovery of cash is proposed

Total No. of Audit Paras where recovery has been made

Total Amount of Recovery

Total No. of outstanding para where no action has been taken

No.& dated of compliance report

AG audit Report for the year 2014-15 has not been submitted by the ULB.

4. FINANCE A. Budgetary provisions and expenditure for the last three years:

Year 2011-12 (Rs.)

2012-13 (Rs.)

2013-14 (Rs.)

Final/Revised Budget Not Produced before us

Not Produced before us

27,22,65,607/- (As per Budget Statement for

the year 2014-15) Actual Expenditure Not Produced

before us 9,33,27,685/-

(As per Budget Statement for

the year 2014-15)

11,82,91,092/- (As per Budget Statement for the year 2015-16)

Financial Statements i.e. Audited Balance Sheet, Income & Expenditure Account and Receipts & Payments Account for the year 2011-12, 2012-13, 2013-14 and 2014-15 have not been produced before us for verification. Please see our Audit Requisition, in this regard, addressed to the Executive Officer (and copy forwarded to SPUR) dated 30.05.16, 01.06.2016, 03.06.16 and 09.06.2016.

Savings(+)/Excess (-) Not Ascertainable Not Ascertainable 15,39,74,515/-



B. Volume of transactions: Period Budgeted

amount for P.Y. 2014-

15

Budgeted Amount for P.Y. 2013-

14

Actual Amount for P.Y. 2013-

14

Actual Amount

of Current Period

(2014-15)

Cumulative for the current period

(2014-15)

Opening balance

- - 5,00,11,199 20,75,38,722 20,75,38,722

Receipts 33,61,58,664 34,94,80,564 30,32,51,720 22,95,21,878 22,95,21,878 Total 33,61,58,664 34,94,80,564 35,32,62,919 43,70,60,600 43,70,60,600 Net expenditure

33,57,04,329 27,22,65,607 11,82,91,092 20,03,47,687 20,03,47,687

Closing balance

- - 23,49,71,827 23,67,12,913 23,67,12,913

The above figures have been taken from Budget of Chapra Nagar Parishad for the year 2014-15, 2015-16 and 2016-17.

The Unit does not maintain Expenditure wise Ledger. Financial Statements i.e. Audited Balance Sheet, Income & Expenditure Account and Receipts & Payments Account for the year 2011-12, 2012-13, 2013-14 and 2014-15 have not been produced before us for verification. Please see our Audit Requisition, in this regard, addressed to the Executive Officer (and copy forwarded to SPUR) dated 30.05.16, 01.06.2016, 03.06.16 and 09.06.2016.

C. Bank Reconciliation Statements

Bank Reconciliation Statement has not been prepared by the Parishad for the difference in balances as on 31.03.2016 between Bank Statement and Bank Book. Un-reconciled balance between Bank Book and Bank Statement as on 31.03.15 has been shown below-

Bank Purpose Closing balance as per Bank

Book

Closing balance as per

Bank Statement

Un-reconciled

balance

PNB-97000105445258 NURLM Not provided

1,08,57,566/- Not ascertained

PNB-97000105465483 RSSP(SG) Pension

NIL NIL -

PNB-97000105465401 BRNP (BG) Pension

17,762/- 3,42,762/- 3,25,000/-

PNB-97000105465386 IGRBP (BG) Pension

85,775/- 2,85,775/- 2,00,000/-

PNB-97000105465438 IGRBA(SG) Pension

2,00,775/- 2,85,775/- 85,000/-

PNB-97000105465377 IGRBAP(BG) Pension

84,448/- 4,048/- 80,400/-

PNB-97000105465395 IGRNP (BG) Pension

NIL 2,84,775/- Not Ascertained



PNB-97000105465456 BRRNP (SG) Pension

1,228/- 1,228/- -

PNB-97000105465410 LBSSP (BG) Pension

3,255/- 3,03,255/- 3,00,000/-

PNB-97000105465474 LBSSP (SG) Pension

3,989/- 2,75,989/- 2,72,000/-

PNB-97000105465429 RSSP(BG) Pension

NIL NIL -

PNB-97000105465465 IGRNP(SG) Pension

NIL 26,919/- Not ascertained

PNB-97000105465447 IGRBAP(SG) Pension

11,80,544/- 11,80,544/- -

UCO-16340110001226 Old age Pension

NA 25,882/- Not ascertained

UBI-393902010010361 BRGF 3,38,055/- 3,44,872/- 6,817/- UCO-16340100002847 BRGF 8,49,8264/- 8,49,8264/- - CBI-3180364561 BRGF 1,20,7771/- 12,07,771/- - IDBI065104000073440 BRGF 7,78,4975/- 7,78,4975/- - BOI-449110110006688 Teachers

Salary 5,43,449/- 5,43,449/- -

UCO-16340110001332 Animal Census

2,211/- 2,211/- -

BOI-449110110017696 HUDCO 67,439/- 67,439/- - UCO-16340110000564 Night Shelter 8,50,639/- 8,50,639/- - Axis914010025351779 E-

Government 8,30,182/- 8,30,182/- -

UBI-393902010006085 NSDP 5,31,535/- 5,31,535/- - PNB097000100312805 NSDP 1,99,644/- 1,99,644/- - UCO-16340100003059 NSDP Not updated 6,58,594/- Not

ascertained BOI-449110100018188 Adm.

Building 3705754/- 3705754/- -

BOB- 12380100017501 Kabir Anthisithi

9,20,804/- 9,20,804/- -

UCO-16340110001202 Kabir Anthisithi

51,550/- 51,550/- -

BOI-449110100015744 Cost of Drain 4,06,523/- 4,06,523/- - Axis914010025190516 Slum

Infrastructure 1,60,64,363/- 1,60,64,363/- -

IDBI106510400061719 Nagarik Suvidha

1,85,82,314/- 1,85,82,314/- -

PNB097000105445230 13th Finance 4,70,12,015/- 4,70,12,015/- - PNB097000105445249 4th Finance 7,01,45,401/- 65,65,0748/- 44,94,653/- BOB- 12380100017830 4th Finance 3,44,80,672/- 3,44,80,672/- - PL-018(Treasury) 4th Finance 1,67,64,191/- 1,67,64,191/- - UCO-16340110001219 Municipal

Fund Not updated 1,76,645/- Not

ascertained PNB-97000105445221 Municipal

Fund Not provide 89,29,352/- Not

ascertained Allahabad Bank 9322121

Retirement Pension

183617.37 2,96,183/- 1,12,565.63

IOB-237801000000513 SPUR 15,82,017/- 14,94,199/- 87,818/-



Revenue Receipts Head of Accounts

Budgeted amount for P.Y. 2014-15

Budgeted Amount for P.Y. 2013-

14

Actual Amount for P.Y. 2013-14

Actual Amount of

Current Period (2014-

15)

Cumulative for the current period

(2014-15) Tax Revenue

3,50,09,500 2,95,49,874 1,22,27,867 1,58,07,529 1,58,07,529

Assigned Revenues & Compensations

1,90,00,000 26,17,46,216 1,45,25,248 2,61,86,847 2,61,86,847

Rental Income from Municipal Properties

1,52,61,239 1,53,02,484 1,03,38,335 67,70,928 67,70,928

Fees & User Charges

40,30,027 0 45,03,896 15,26,374 15,26,374

Sales & Hire Charges

2,50,000 0 2,85,432 4,66,506 4,66,506

Revenue Grants, Contributions and Subsidies

7,25,11,400 2,01,21,990 9,02,53,217 8,75,36,087 8,75,36,087

Interest Earned

12,00,000 0 18,37,160 74,43,890 74,43,890

Misc. Income

0 20,000 0 0 0

Extra Ordinary Income

0 2,27,40,000 0 0 0

Total 14,72,62,166 34,94,80,564 13,39,71,155 14,57,38,161 14,57,38,161

The above figures have been taken from Budget of Chapra Nagar Parishad for the year 2014-15, 2015-16 and 2016-17.

The unit maintains only Collection Register and due to non- maintenance of accounts head wise ledger of the revenue receipts, the required details could not be validated by us. Financial Statements i.e. Audited Balance Sheet, Income & Expenditure Account and Receipts & Payments Account for the year 2011-12, 2012-13, 2013-14 and 2014-15 have not been produced before us for verification. Please see our Audit Requisition, in this regard, addressed to the Executive Officer (and copy forwarded to SPUR) dated 30.05.16, 01.06.2016, 03.06.16 and 09.06.2016.

D. Status of implementation of Double Entry Accounting System



The ULB has not yet implemented the Double Entry Accounting system.

E. Status of Municipal Accounts Committee; if meeting is held Meeting of Municipal Accounts Committee has not been held during the year 2014-15.

5. AUDIT OBSERVATIONS I. PART–A

a. Leakage of own source revenue either due to wrong assessment or non-levy of property tax, mobile tower tax, rent on municipal properties, advertisement tax, fee etc As per the records made available during the audit, we observed delay in depositing the collected amount by the collection agents, which may result in loss of interest from bank. Details are given as follows (Consequence / Effect / Impact/ Cause/ Corrective Action / Recommendation/Auditee Comment has been narrated in point no. 22 of the Annexure – A):

MR No. Date of Collection Amount Date of deposit

Delay (days) From To From To

12383 12436 12.05.14 24.05.14 3,99,351/- 31/05/14 7-19 12437 12480 31.05.14 11.06.14 3,46,224/- 30/06/14 19-30 12588 12646 09.07.14 23.07.14 4,91,260/- 24/07/14 1-15 12647 12671 24.07.14 31.07.14 16,51,597/- 31/07/14 1-7 12672 12700 01.08.14 09.08.14 2,56,413/- 14/08/14 5-13 12701 12746 16.08.14 29.08.14 7,56,797/- 30/08/14 1-14 12747 12800 01.09.14 08.09.14 4,08,911/- 09/09/14 1-8 12801 12866 10.09.14 18.09.14 9,98,314/- 22/09/14 4-12 13006 13055 08.10.14 11.10.14 13,78,007/- 13/10/14 2-5 13056 13116 15.10.14 24.10.14 4,28,703/- 31/10/14 7-16 13117 13153 03.11.14 12.11.14 5,42,491/- 13/11/14 1-10 13154 13210 13.11.14 28.11.14 8,53,027/- 29/11/14 1-16 13211 13254 29.11.14 10.12.14 4,30,178/- 16/12/14 6-17 13255 13317 10.12.14 22.12.14 8,22,503/- 24/12/14 2-14 13318 13343 26.12.14 30.12.14 3,72,716/- 31/12/14 1-5 13344 13381 31.12.14 09.01.15 5,83,301/- 12/01/15 3-12 13382 13443 10.01.15 19.01.15 6,60,487/- 20/01/15 1-10

b. During the course of audit, we observed that some delays were made by the Tahasheeldar in depositing the cash to the cashier. Some of instances were given below:-

Date of collection Collected Amount

Date of Deposit to

Unit

MR No. issued by

unit

Delay (days) From To

08.08.14 18.09.14 51,123/- 23.09.14 12893 5-46 23.09.14 10.10.14 17,725/- 11.10.14 13045 1-18 29.09.14 20.10.14 18,788/- 08.11.14 13140 18-40 31.10.14 10.11.14 42,031/- 22.11.14 13189 12-22 11.11.14 15.11.14 60,895/- 22.11.14 13190 7-11



15.11.14 19.11.14 67,409/- 01.12.14 13219 12-16 20.11.14 01.12.14 50,197/- 01.12.14 13220 1-11 01.12.14 12.12.14 1,43,876/- 26.12.14 13338 14-25 12.12.14 02.01.15 71,457/- 22.01.15 13458 20-41 01.05.14 15.05.14 16,746/- 22.05.14 12420 7-21 15.05.14 23.05.14 21,249/- 23.05.14 12421 1-8 16.06.14 30.06.14 10,335/- 03.07.14 12509 3-17 21.09.14 26.09.14 22,106/- 30.09.14 13003 4-9 06.02.15 17.02.15 35,839/- 10.03.15 13687 23-32 21.02.15 25.02.15 31,525/- 10.03.15 13689 15-17 26.02.15 14.03.15 31,878/- 25.03.15 13766 11-27 03.01.15 10.01.15 13,811/- 16.01.15 13415 6-13 01.02.15 18.02.15 44,937/- 18.02.15 13165 1-17 19.02.15 26.02.15 40,286/- 27.02.15 13653 1-8 02.03.15 21.03.15 57,971/- 21.03.15 13736 1-19 11.05.14 18.05.14 36,918/- 09.06.14 12462 1-29 14.06.14 20.06.14 37,695/- 25.06.14 12512 5-11 02.09.14 09.09.14 45,960/- 10.09.14 12846 1-8 02.01.15 08.01.15 43,054/- 14.01.15 13408 6-12 10.02.15 19.02.15 49,929/- 25.02.15 13651 6-15 20.04.14 19.05.14 14,890/- 22.05.14 12418 3-32 24.05.14 01.06.14 17,155/- 21.06.14 12498 20-28 12.05.14 20.05.14 20,182/- 31.05.14 12442 11-19 17.06.14 01.07.14 31,784/- 09.07.14 12582 8-22 05.07.14 10.07.14 44,466/- 25.07.14 12640 15-20 19.07.14 30.07.14 31,608/- 04.08.14 12677 4-16 20.09.14 01.10.14 68,073/- 08.10.14 13028 7-18 14.11.14 10.12.14 40,370/- 16.12.14 13282 6-32

c. We verified the tax collection receipts of tahsheeldar and found

that the collected amount has been recorded in their daily collection register but we observed that some collection was not / shortly deposited to the unit. Details are given below:-

Date Tax MR no.

Name of Consumer

Holding No.

Amount as per

Tax MR

Amount as per

Register

Short Deposit

17.08.14 28306 Jogindra Prasad Singh

5/1556 1,550/- 1,520/- 30/-

10.09.14 28625 Bidyasagar Gupta

14/111 12,548/- 12,448/- 100/-

15.11.14 30161 Shakuntla Devi

- 1,257/- 257/- 1,000/-

04.01.15 32203 Raghubanshi mani

15/417 2,822/- 2,522/- 300/-

09.01.15 32228 Bhola Prasad 14/572 6,183/- 6,163/- 20/- 31.03.15 34487 Shivdasi

devi 14/563 5,398/- 3,598/- 1,800/-

16.02.15 330878 Rafrat Ara 8/196B 252/- Nil 252/-



d. The amount collected through money receipts has been deposited in the Bank. However, in few cases, the same collection was not written in the Accountants’ Cash Book. Thus, the same Cash Book is not showing the true financial position of the Parishad. Details are mentioned below:

Date Cash Book Page no.

Amount as per

Accountants’ Cash Book

Amount as per Money

Receipt

Head of Account

Difference

08.11.14 Not Posted - 104,652/- Shop Rent 1,04,652/- 08.11.14 Not Posted - 64,947/- Properties Tax 64,947/- 18.02.15 2 1,600/- 1,400/- Mutation Fees -200/- 12.02.15 3 4,05,149/- 4,05,153/- Properties Tax 4/- 20.02.15 4 48,845/- 49,045/- Properties Tax 200/- 28.02.15 5 200/- 400/- Mutation Fees 200/- 02.03.15 6 1,000/- 800/- Mutation Fees -200/- 19.03.15 10 2,200/- 1,800/- Mutation Fees -400/- 19.03.15 11 3,63,600/- 36,600/- Tin Ticket -3,27,000 21.03.15 11 Nil 400/- Mutation Fees 400/- 24.03.15 11 2,400/- 2,200/- Mutation Fees -200/- 30.03.15 Not posting - 1,01,039/- Properties Tax 1,01,039/- 30.03.15 Not posting - 200/- Mutation Fees 200/- 30.03.15 Not posting - 59,075/- Shop Rent 59,075/- 31.03.15 13 5,61,047/- 6,20,122/- Shop Rent 59,075/- 31.03.15 13 16,23,048/- 16,92,447/- Properties Tax 69,399/-

e. Excess payment against bill, lack of prudence in payment

against voucher, inefficiency in controls resulting loss to ULBs As per the documents provided before us, we have not observed such excess payment resulting loss to ULBs. However, we observed lack of prudence in payment against vouchers and inefficiency in controls which have been covered elsewhere in the Report.

Scheme No. Payment Date

Particulars Amount Paid

Remarks

21/2014-15 18.03.15 Paid to Bijay Kr. Singh for Construction of PCC Road

3,42,966/- IT has been deducted from bill @ 2.26% of Rs.1,072/- but it should be Rs. 8,588/-. So, there was a short deduction of Rs. 7,486/- from contractor’s bill.

SD has not been deducted from final bill.

30/2014-15 31.01.15 Paid to Ranjit Kr for Construction

2,44,589/- Excess expenditure of Rs. 5,000/- for preparation of Scheme



of PCC Road Board was not mentioned in the agreement.

SD has not been deducted from final bill.

13/2014-15 30.03.15 Paid to Rajeshwar Rai for construction of road and drain from route of Raju Srivastav to 300’- 0” length.

360,504/- As per Work Order, labour charges for carriage of materials were allowed for 65 no. of labours @ Rs. 157/- each. However, the bill has been charged for 108 no. labours @ Rs. 157/- and the same was paid to the contractor. So, the extra payment was Rs. 6,751/- (43x157).

f. During the verification of Fuel Register and Fuel Bill file, we

observed that payment has been made for fuel consumption more than as mentioned in the register. Instances are mentioned below:-

Month Fuel consumed as per register (in Ltr.)

Fuel Bill Paid (in Ltr.)

Difference (in Ltr.)

April'14 4,211 4,276 65 May'14 3,397 3,559 162 June'14 3,893 3,822 (71) July'14 4,128 4,128 - Aug'14 2,789 2,841 52 Sept'14 4,136 4,372 236 Oct'14 4,114 4,196 82

g. Report on findings of field survey of Property Tax of high value

properties Details of Property Tax collection are given as follows (Consequence, Effect, Impact, Cause, Corrective Action and Recommendation. Auditee Comment has been narrated in the Annexure – A): Holding No

CircleNo.

Ward

No.

Name Address Tax Amount

(Rs.)

Remarks

335B 19 13 Dr. Santosh kr. Pandey

Bharat Milap chowk

3,134/- 14-15

335A 19 13 Shailendra ranjan shay

Bharat Milap chowk

1,725/- 14-15

335D 19 13 Kamal kishore singh

Bharat Milap chowk

2,960/- 14-15



299 19 16 Birendra pratap singh

Bharat Milap chowk

2,368/- 14-15

433 21 14 Shanti Kr. Gautam

Bhagwan Bazar

11,089/- 14-15

772A 21 13 Ajit Kr. Gupta

Bhagwan Bazar

12,934/- 14-15

863A 23 10 Ramesh Ch. Pandey

Kashi Bazar 15,243/- 14-15

714 & 715

21 12 Meera Kumari & Dr. Pradip Kumar

Bhagwan Bazar

25,917/- 14-15

1059 23 10 Krishna Thakur

Kashi Bazar 22,710/- 14-15

411IK

21 14 Manju Singh Bhagwan Bazar

13,564/- 14-15

692 21 13 Dr. Nabin Kumar

Ratan Para 19,420/- 14-15

847A 23 10 Triloki Prasad

Bikrama Singh Colony

17,532/- 14-15

433B & 435

21 14 Vinod Kr. Sahi

Bhagwan Bazar

44,622/- 14-15

859 23 10 M. Bharati Kashi Bazar 21,375/- 14-15 1057 23 10 Bharti Singh Kashi Bazar 22,374/- 14-15 168 21 14 Ram

Udayswar Sharma

Bhagwan Bazar

34,623/- 14-15

216 29 8 Hardan Prasad

Rupganj 2,068/- 14-15

625A 29 8 Bibi Horara Khatun

KarimChak 5,756/- 14-15

627 31 8 Jaggnath Prasad

Azad Road 2,496/- 14-15

295 30 8 Abdul Yahid Karim Chak 2,928/- 14-15 90 34 12 Ramabtar

Yadav Mouna Gola Road

13,676/- 14-15

612 32 12 Mishri Lal Sharma

Mohan Nagar

9,088/- 14-15

92 27 14 Bijinandan Prasad Gupta

Purani Gulhatti

6,270/- 14-15

50 27 13 Ram kumar Singh

Jabunia Paschim road

16,048/- 14-15

577A 26 13 Meera Singh Salempur 2,445/- 14-15 16 27 14 Laadli Devi Salempur

Kachari road 2,851/- 14-15

534A 26 13 Saroj Devi Salempur 3,475/- 14-15 349A 28 14 Sudama

Prasad Jaiswal

Sahebganj 5,571/- 14-15

1A 27 13 Sri gopal Singh

Municipal Chowk

13,695/- 14-15



43A, 43B

27 13 Smt. Pushpa Singh

Salempur 3,011/- 14-15

521D 26 13 Rajkumar Mishra

Lawbazar 2,166/- 14-15

550 26 13 Sonu kr. Lawbazar 6,888/- 14-15 649 28 14 Binita Rai Aryasamaj

path 2,447/- 14-15



II. PART-B a. Non-maintenance of books of accounts, subsidiary registers:

The unit has not maintained the following prescribed registers (Please find attached letter to the ULB regarding non-submission of the following documents):- 1. Journal Book 2. Ledger 3. Contra Voucher 4. Journal Voucher\ 5. Memorandum of Collection 6. Register of bills for payment 7. Register of Permanent Advance 8. Deposit Received Register 9. Summary Statement of Deposits adjusted 10. Demand Register 11. Bill of Invoice 12. Bill of Income 13. Summary Statement of bills raised 14. Register of notice fee, warrant fees, other fees 15. Register of refunds, Remissions and write offs 16. Statement of Outstanding liability for expenses 17. Documents control register, Stock Account of receipt,

Cheque Book. 18. Register of Immovable and Movable Property 19. Register of Land 20. Function wise Income Subsidiary Ledger 21. Function wise Expenditure Subsidiary Ledger 22. Asset Replacement Register 23. Register of Public Lighting System 24. Building Register 25. Status and Heritage Assets Register 26. Road and Street register 27. Bridges, Flyover, Subway and Causeway Register 28. Drains Register 29. Ponds and Lakes Register 30. Plant and Machinery Register 31. Vehicle Register 32. Office Equipment Register 33. Furniture and Fixture Register 34. Computer and Peripheral Register 35. Software Register Required at – Property Tax and other taxes 1. Summary Statement of bills raised 2. Summary statement of Demand Adjustment raised 3. Summary statement of refunds and remissions 4. Summary Statement of write-offs Documents required at – water Supply



1. Summary Statement of Demand raised on assessment 2. Summary statement of Head wise collection 3. Summary statement of refunds remissions 4. Summary statement of write- offs Documents required at – Rentals, Fees and Other Income 1. Summary Statement of Demand raised on assessment 2. Summary statement of Head wise collection 3. Summary statement of refunds 4. Summary statement of write- offs Documents required at- Public Works 1. Summary Statement of status of CWIP 2. Work Sheet 3. Deposit works register Documents required at – Stores 1. Material Receipt Note 2. Statement of Material Issues Other 1. Balance confirmation as on 31.03.15 2. BRS of all Bank Accounts (including dormant accounts) 3. Physical Verification report of cash and Stock 4. AG Audit Report for the financial year 14-15 Final Accounts for the year 2013-14 and 14-15 1. Audited Balance Sheet 2. Audited Income & Expenditure Account 3. Audited Receipts & Payments Account

b. Irregularity in Procurement Process: While verifying the applicable procurement rules and procedures, we have noticed the following irregularities regarding inefficiency in controls which may result in loss to ULB. Details are as follows (Consequence, Effect, Impact, Cause, Corrective Action and Recommendation. Auditee Comment has been narrated in point no. 82 of the Annexure – A):

Contract No.

Description Awarded Value (Rs.)

Name of Contractor

Completion date as per

contract

Actual completion

date

Remarks

57/14-15 Construction of Road and Drain from House of sabita Pandey to Raju Sharma’s House.

4,46,900/- Santosh Kumar

22.11.14 17.12.14 As per Schedule XLV- form no.61 “Bihar Public Work department” (Form No. – F-2) General Rule no. 11 of the Agreement with the Contractor, the amount of security money to be deposited by the tenderer whose tender is selected for acceptance shall be 10 % of the estimated value of work. Mode of deposit of Security money has remained silent in the Agreement. Further, neither such amount was received from the contractor nor the same amount was deducted from the bill.

As per the condition of contract Clause no. 2, if the work is not completed within stipulated time the contractor shall be liable to pay as compensation an amount equal to ½ % on the said estimated cost of the whole work



for everyday. The clause shall not exceed 10 % of the estimated cost of work as shown in the tender. However in this case, work was completed on 17.12.14 instead of 22.11.14. So there were a delay of 26 days, So, the contractor will be liable of maximum 10% of contract value of Rs.4,46,900/- i.e. (Rs. 44,690/-) but unit has not deducted such amount from the contractor’s bill.

TDS has been deducted @ 2.26% instead of 1%.

36/14-15 Construction of PCC road and Drrain from house of Md. Afroj to Kanya prathmic school via house of Bhola Quereshi at Nai Bazar

3,00,600/- Sri ramashankar Prasad

06.02.15 15.01.15 As per Schedule XLV- form no.61 “Bihar Public Work department” (Form No. – F-2) General Rule no. 11 of the Agreement with the Contractor, the amount of security money to be deposited by the tenderer whose tender is selected for acceptance shall be 10 % of the estimated value of work. Mode of deposit of Security money has remained silent in the Agreement. Further, neither such amount was received from the contractor nor the same amount was deducted from the bill.



As per term & condition of the Contract, interested contractor should submit a copy of Income Tax Return. But only a copy of PAN card has been submitted. In spite of the above, evaluation has been made and work was also awarded to the contractor.


21/14-15 Construction of PCC road from near north side of Rajendra Sharma to Mathiya via dr. Haque Tinmuhani of Rouza.

4,00,000/- Bijay Kumar Singh

03.02.15 19.01.15 Contractor has not submitted copy of Income Tax Return as stated in the NIT. However, the work was awarded to him.

Security Deposit has not been received from the contractor as stated in the Agreement.


30/14-15 Construction of PCC road and drain from house of Raghunath Makhiya to house of Bake Bihari at ward no. 16

334,000/- Sri Ramashankar Prasad


TDS has been deducted 2.26% instead of 1%

06/14-15 Construction of PCC road with both side drain from house of Ramji Prasad to house of Manish Sharma via

4,00,000/- Anil Rai 03.02.15 17.02.15 Contractor has not submitted copy of Income Tax Return as stated in the NIT. However, the work was awarded to him.

TDS has been deducted 2.26%



house of Knhaiya lal at Chicktoli.

instead of 1%. There have been delays of 14

days to complete the work, so, contractor has to pay LD @ 0.5% /day. However, the same has not been deducted from the Contractor’s Bill.

51/14-15 Improvement of road and drain from house of Pushpanjali Devi to Choti Maszid via house of Semjeyjama Bank employ at Aahiyana Choti Maszid Road.

334,000/- Sri Ranjeet kumar


TDS has been deducted @ 2.26% instead of 1%

There have been delays of 21 days so, contractor is liable to pay LD @ 0.5% /day but the same has not been deducted from the Contractor’s Bill.

04/14-15 Construction of PCC road and drain from house of Rafia Khan to Balmohan Yadav near house of Azimulla Sekhtoli

400,000/- Dharmendra Singh



There have been delays of 14 days so, contractor is liable to pay LD @ 0.5% /day but the same has not been deducted from the Contractor’s Bill.

16/14-15 Construction of PCC 4000,000/- Santosh 02.02.15 02.01.15 Contractor has not submitted



road and improvement of drain from house of Challan Rai to near house of Kedar Chowdhary via house of Deonath rai.

Kumar copy of Income Tax Return as stated in the NIT. However, the work was awarded to him.


VAT Registration certificate was also not submitted by the contractor as stated in the NIT, still the work has been awarded to the Contractor.

c. Non-compliance of directives by UD&HD, GOB Details are given in Annexure “A”.

d. Non-compliance of Act & Rules: As per PF Act, deposit of EPF of Employees should be made 15th of the following month. However, we observed that PF has been deducted from the salary of the employees but the same was not deposited in PF A/c. Details of PF deduction for the year 2014-15 was given below:- Employee Amount(Rs.) Office Staff 99,846/- Sanitation Staff 537,376/-

Total 637,222/- e. Lack of Internal Control Measures

Details are given in Annexure “A”.

f. Non-compliance of TDS, VAT and other relevant Statute: Details of delay in depositing TDS are mentioned below:

Month of Deduction

Amount Deduction

Due date of deposit

Amount Deposit

Actual Date of deposit

Delay in days

Remarks

April 4,294/- 07.05.14 4,294/- 11.04.15 339 The

Challan were not produced before us.

May 1,85,850/- 07.06.14 1,85,850/- 11.04.15 308 June 9,202/- 07.07.14 9,202/- 11.04.15 278 July 26,161/- 07.08.14 26,161/- 11.04.15 247

August 80,097/- 07.09.14 80,097/- 11.04.15 216 September 21,671/- 07.10.14 21,671/- 11.04.15 186

October 68,077/- 07.11.14 68,077/- 11.04.15 155 November 32,478/- 07.12.14 32,478/- 11.04.15 125 December 1,21,025/- 07.01.15 1,21,025/- 11.04.15 94

January 1,40,130/- 07.02.15 1,40,130/- 11.04.15 63 February 6,879/- 07.03.15 6,879/- 11.04.15 35

March 1,86,210/- 07.04.15 1,86,210/- 11.04.15 4 Details of delay in depositing VAT

Month of Deduction

Amount Deduction

Due date of deposit

Amount Deposit

Actual Date of deposit

Delay in days

Remarks

April 9,500/- 25.05.14 9,500/- 21.03.15 300 The

Challan were not produced

before us.

May 4,11,175/- 25.06.14 4,11,175/- 21.03.15 269 June 20,360/- 25.07.14 20,360/- 21.03.15 239 July 57,878/- 25.08.14 57,878/- 21.03.15 208 August 1,77,207/- 25.09.14 1,77,207/- 21.03.15 177 September 48,212/- 25.10.14 48,212/- 21.03.15 147 October 1,50,615/- 25.11.14 1,50,615/- 21.03.15 116 November 71,853/- 25.12.14 71,853/- 21.03.15 86 December 3,92,635/- 25.01.15 3,92,635/- 21.03.15 55 January 2,91,399/- 25.02.15 2,91,399/- 21.03.15 24



g. Utilisation of Grant and report on missing Utilisation

Certificates: Utilization Certificate of the fund utilized for each grant during the year 2014-15 has not been prepared by the unit till date of audit. However, on verification of Grant Registers, we observed the following unutilized funds:

Scheme Name Opening Balance

Receipts Utilization Closing Balance

IGRBA (SG) Pension - 2,86,000/- 85,225/- 2,00,775/- BRNP (BG) Pension - 3,42,762/- 3,25,000/- 17,762/- Animal Census 2,125 /- 42 /- - 2,167 /- Teacher Salary 522,346 21,103/- - 543,449/- HUDCO 64,820/- 2,619/- - 67,439/- Nagar Subidha 22,022,457/- 817,187/- 4,257,330/- 18,582,314/- Night Shelter 817,607/- 33,032/- - 850,639/- Administrative Building

4,053,916/- 162,569/- 510,731/- 3,705,754/-

NSDP (UBI) 510,896/- 20,639/- - 5,31,535/- NSDP (PNB) 191,892/- 7,752/- - 199,644/- 13th Finance 40,997,680/- 22,653,672/- 16,639,337/- 4,70,12,015/- BRGF (CBI) 7,169,873/- 227,178/- 6,189,280/- 12,07,771/- BRGF (UCO) 8,168,266/- 329,998/- - 84,98,264/- BRGF (IDBI) 15,742,081/- 587,955/- 8,545,061/- 77,84,975/- BRGF (UBI) 3,31,481/- 6,574/- - 3,38,055/- Kabir Anthyesthi 28,44,021/- 915,817/- 27,95,288/- 9,64,550/- Slum Infrastructure 35,56,674/- 12,507,689/- - 1,60,64,363/- E Governance 8,30,000 /- 182 /- 8,30,182/- BRRNP (SG) Pension

- 15,93,694/- 15,92,466/- 1,228/-

LBSSP (SG) Pension - 30,02,314/- 29,98,325/- 3,989/- IGRBA(BG) Pension - 10,28,073/- 10,24,025/- 4,048/- IGRNP (BG) Pension - 2,85,000/- 2,85,000/- - IGRBP (BG) Pension - 2,86,000/- 2,86,000/- - IGRNP (SG) Pension - 2,85,000/- 2,85,000/- - LBSSP (BG) Pension - 3,03,255/- 3,00,000/- 3,255/- Cost of Drain 9,28,845/- 37,525/- 5,59,847/- 4,06,523/- Old Age Pension 55,44,912/- 4,68,00,243/- 1,45,29,850/- 3,78,15,305/- 4th Finance 10,42,79,641/- 7,11,18,455/- 5,40,07,832/- 12,13,90,264/- RSSP (SG) Pension - - - - RSSP (BG) Pension - - - - SPUR 29,17,875 /- 88,612/- 14,24,460/- 15,82,027/-

h. Physical verification of inventory stores:

No such physical verification of inventory, stores was conducted by the unit during our audit period.



i. Advances, their adjustment & recovery: Some advances remain unadjusted till date of audit. Details are given below:

Date of advance

taken

Name Designation Purpose Amount Cheque No.

13.07.13 Suryamohan Yadav

Law Assistant

High Court 5,000/- NA

15.01.14 Maqsood Hasan arif ansari

Head Clerk Repairing of JCB

60,000/- 283998

05.08.14 Dhruv Prasad Cashier Celebration of 15th Aug

10,000/- 443491

31.12.14 Dhruv Prasad Cashier Repairing of Head Office

100,000/- 665196

12.01.15 Dhruv Prasad Cashier Petty Cash 10,000/- 668860 10.02.15 Dhruv Prasad Cashier Registration of

Tractor 128,436/- 453694

j. Any other matters as may be prescribed in due course:

Details are given in Annexure “A”.

III. Part-C: General Observations General observations are mentioned elsewhere in the report.

For Roy Ghosh & Associates (Chartered Accountants) Firm’s Registration No.: 320094E (M. Das, Partner) Membership No: 066481 Tuesday, 9 August 2016



Annexure- A Audit Report in Details

SL. No

Audit Objective Criteria

Yes. No. NA

Condition Consequence. Effect. Impact

Corrective action. Recommendation

Cause Auditee’s Comment

1 Obtain audit report of AG. If not available, obtain the memo

BMA, 2007

Not Availabl

e

Could not check. Delay in compliance of AG audit observations.

Follow up with AG audit observations should be initiated.

Lack of Follow-up procedure.

AG auditors have not yet submitted the report.

2 Obtain the Audited Balance Sheet, Income & Expenditure and Receipts & Payments Account for the FY 2013-14 &14-15

BMA, 2007

NA Not Prepared

True & Fair position of the financial position of the unit cannot be assessed.

Should be prepared on timely basis.

Not yet implemented

Not Prepared

3 Municipal Fund shall be mandatorily present in the Balance Sheet

BMA, 2007

NA Not Prepared

--Do-- Should be prepared as per norms.

--Do-- Not Prepared

4 Every heads of expenditure should be re-categorised between Revenue and capital expenditure

BMA, 2007

NA Not Prepared --Do-- --Do-- --Do-- Not Prepared

5 Expenditure should not be made out of budget provision or revised budget estimate. Check sanction of expenditure made out of the budget approval

BMA, 2007

NA Due to want of financial statements it could not be assessed

Deviation of budgeted fund could not be assessed.

Ledgers should be maintained as per expenditure heads mentioned in the budget.

--Do-- Financial Statement not prepared.

6 Find for inter head adjustment done purposefully for keeping the expenditure within the budget.

BMA, 2007

NA Head wise ledger is not prepared.

--Do-- --Do-- --Do-- Not Prepared

7 Verify surplus money whether parked in the current account or savings account leading to loss of interest.

BMA, 2007

NA Income & expenditure account has not been provided

Chances of loss of interest income from surplus funds.

Surplus amount, if any should be deposited in interest bearing account on

No information of surplus

Government fund Maintained in treasury



timely basis to earn interest income from idle fund.

fund with the unit.

account.

8 Non-recognition of interest on FD in the books

BMA, 2007

NA No FD Register or related documents provided.

NA NA -- No FD exists.

8 Competitive rates have been obtained while investing the surplus fund. If surplus money invested in the security, immediately call the team leader

BMA, 2007

NA Documentary evidence not provided.


9 Obtain confirmation of Bank account and FD from Bank

BMA, 2007

NA No FD Register or related documents provided.


10 There will be numerous bank accounts either in the name of ULB or in the name of project.Scheme (custodian is ULB) or there may be a chance that some of the bank accounts were not brought in the books of accounts. Ensure the same

BMA, 2007

Yes Project Scheme wise Bank Book and Bank Pass Book produced.

Due to non availability of financial statements it cannot be verified whether all the bank accounts have been reflected or not.

Financial Statements should be prepared as per norms.

-- Bank Statement. Pass book has been provided.

11 Obtain Bank reconciliation Statement along with bank statement for all bank accounts along with dormant account.

BMA, 2007

NA Not prepared. Details are given in Report.

Chances of misappropriation of Fund

Bank Reconciliation Statement should be prepared on monthly basis.

Lack of Internal Control.

BRS is not Prepared.

12 Obtain the minutes of Municipal Accounts Committee meeting and thoroughly go

BMA, 2007

No Minutes of formation of Municipal

Non compliance of prescribed rules.

Should be formed immediately.

Lack of Supervisory Control.

Municipal Accounts Committee



through the same for obtaining the financial affairs of the municipality.

Accounts Committee meeting is not available

has not been formed during FY 14-15

13 Obtain the minutes of Municipal Finance Committee meeting and thoroughly go through the same for obtaining the financial affairs of the municipality.

BMA, 2007

No Municipal Finance Committee has not been formed during FY 14-15.


Should be formed immediately.

--Do-- Municipal Accounts. Finance Committee has not been formed during FY 14-15

14 Obtain the minutes of Empowered Steering committee meeting and thoroughly go through the same for obtaining the financial affairs of the municipality.

BMA, 2007

NA Particular minutes of Empowered Steering committee regarding financial affairs of the municipality not produced before us.

Activity of the Empowered Steering committee regarding financial affairs of the municipality cannot be verified.

Should be filed properly.

Lack of procedural Control.

Complied

15 Obtain asset register (movable and immovable) of the ULB and verify the same on selective basis with reference to its location and description.

BMA, 2007

NA Not prepared. Chances of misappropriation of Assets.

Asset register should be maintained immediately.


Assets register is not Prepared.

16 Verify the procedure of disposal of asset (One disposal with highest value).

BMA, 2007

NA -- -- -- -- No assets were disposed off during 14-15.

17 Verify the procedure of BMA, NA -- -- -- -- No such



auctioning of junk asset or non-serviceable assets

2007 activities done in 14-15.

18 Verify whether all Loans are showing in the balance sheet.

BMA, 2007

Balance Sheet

has not been

produced.

Could not check -- Financial Statement should be prepared showing details of such.

Proper accounting principles not followed.

No loan has been taken by the unit and not repaid any loan taken earlier during 2014-15.

19 Verify repayment details of loan principal and interest to check whether there is any loss of interest

BMA, 2007

NA Could not check -- --Do-- -- --Do--

20 Process of Collection to be checked

BMA, 2007

Collection slips & cash book is provide

d.

Tax Collectors are depositing the collected amount to the municipality on regular intervals but delay has been observed in depositing the collected sum by the unit to the Bank.

Delay in depositing the collected amount may lead to loss of interest income.

Collected amount should be deposited by the unit to the bank immediately.

Lack of internal control.

Collected amount is deposited in Punjab National Bank Account of Executive Officer Nagar Parisad Chapra A/c no. 97000105445221

21(i)

Receipt of collection is issued BMA, 2007

Yes Carbon copies of collection slips are available for verification.

-- -- -- Available

21(ii)

Entry in the Collection Register GEN – 11

BMA, 2007

Yes Register of GEN-11 not Prepared

-- -- -- Available



but entry made in cashier cash book and available for verification.

21(iii)

Preparation of Memorandum of Collection GEN – 12

BMA, 2007

Yes Memorandum of GEN-12 not Prepared but entry made in cashier cash book and available for verification.

Non compliance of prescribed manual.

Should be prepared according to norms of BMA, 2007.

Lack of Supervisory control.

Available

21(iv)

Verification of memorandum of collection by the Clerk of the concerned Department

BMA, 2007

Yes Checked -- -- -- Complied

21(v)

Authorisation memorandum of collection by the Head of the Department

BMA, 2007


21(vi)

Remittance of money along with collection registers at the designated Municipal Collection Office

BMA, 2007


22 All sums received in Cash, Cheques, Demand Drafts shall be remitted into the Bank. Treasury Account(s) (other than Public Account) the next working day.

BMA, 2007

Yes All the sums received in cash, cheque & Demand Draft shall be remitted into PNB-5445221, but Delay has been observed in depositing the collected sum.

Delay in depositing the collected amount may lead to loss of interest income.

Collected amount should be deposited by the unit to the bank in next working day.


Accepted



23 Remittance into the Bank Treasury shall be made through Challans prepared in duplicate.

BMA, 2007

Yes Collected amount is deposited into Punjab National Bank a/c no. 5445221

-- -- -- Complied

24 The Challans shall be prepared by the Cashier and signed by the Chief Municipal Officer or any other officer authorised by him on this behalf.

BMA, 2007

Yes Challans are prepared by the Accountant and signed by the Executive Officers & Accountant

-- -- -- Complied

25 The original acknowledged by the Bank Treasury shall be filed in the Municipal Office by the Cashier.

BMA, 2007

Yes The original acknowledged by the Treasury is filed in the Municipal Office.

-- -- -- Complied

26 The Accounts Department shall prepare a Bank. Cash Receipt Voucher (Form GEN-4) for all collections made in Cash, Cheque, Demand Draft

BMA, 2007

No Bank, Cash Receipt Voucher (Form GEN-4) is not prepare but BTC-4 prepare.

Non compliance of prescribed manual.

Bank, Cash Receipt Voucher (Form GEN-4) for all collections made in Cash, Cheque, Demand Draft


Not maintained

27 The Accounts Department shall pass the entry for recording the collections based on the Summary of Daily Collection (Form GEN-13) received on a daily basis.

BMA, 2007

Yes Checked money receipts books with general cash book, found some mismatch.

-- -- -- Carbon Copy of Collection receipts along with Cashier Cash book & General Cash Book provided.



28 The Accounts Department shall maintain separate Subsidiary Ledger for each of the Major revenues in Form GEN – 34.

BMA, 2007

No Subsidiary Ledger for each of the Major revenues in Form GEN – 34 is not maintained but fund wise Bank book maintained by the unit.

Major revenues cannot be traced due to non maintaining of records according to prescribed norms.

Subsidiary Ledger for each of the Major revenues in Form GEN – 34 should be maintained.


Not Maintained

29 The Subsidiary Ledgers would provide function‐wise break‐up of abovementioned income earned, received by the Municipalities on a daily basis.

BMA, 2007

Not applicab

le

--Do-- --Do-- --Do-- --Do-- Not Maintained except Fund wise Bank Book.

30 Separate folios shall be maintained for each function within the Subsidiary Ledger for recording incomes in respect of each function.

BMA, 2007

Not applicab

le

--Do-- --Do-- --Do-- -- Not Maintained except Fund wise Bank Book.

31 When some income is earned, it will be first recorded in the Cash Book. Bank Book on the receipt side or in the journal from bills submitted by the concerned departments.

BMA, 2007

Yes When some income is earned, it is first recorded in the Receipt side of the Cash Book.

-- -- -- Complied

32 Thereafter the entry will be posted to the credit of the appropriate income account in the Main Ledger. Simultaneously, the amount will also be recorded in the folio for the concerned function in the Subsidiary -Ledger under

BMA, 2007

No Main Ledger & subsidiary Ledger is not prepared.

Head wise income cannot be traced due to non maintenance of proper accounting records.

Accounting should be done according to prescribed manual.


Not Maintained



the respective income column. 33 General ledger to subsidiary

ledger reconciliation is mandatory

BMA, 2007

No General Ledger &subsidiary Ledger is not prepared.

Non reconciliation leads to piling up of un-reconciled items.

--Do-- --Do-- Not Maintained

34 Updation of details regarding Cheques. Drafts deposited. The realisation. return of the Cheques. Drafts shall be followed up with the Bank by the designated person (who has deposited the Cheques).

BMA, 2007

Yes Cashier-Dhruv Prasad cheques and draft deposit into bank and the cashier is following up the same.

-- Cheque dishonured register should be maintained.

Lack of Internal control.

Not Maintained

35 The details of the realisation/non realisation of the Cheques. Drafts shall be communicated to the Accounts Department by the Collection Counter. Municipal Collection Office who have actually deposited the Cheques and co‐ordinating with the Bank, through a Statement on Status of Cheques Received, prepared in Form GEN‐10.

BMA, 2007

No Non realisation of cheques is traced by the cashier with the aid of bank deposit slip and bank statement. pass book but no such statement in Form in GEN-10 is made available for verification.

Non compliance of prescribed norms.

Statement on Status of Cheques Received should be prepared in Form GEN‐10.

--Do-- Complied

36 In respect of Cheques which have become dishonoured, the details shall be intimated to the Cashier. The Cashier shall prepare a Summary Statement of Cheques dishonoured in the same format as that of Summary of Daily Collection in Form

BMA, 2007

Summary statement

of cheques

dishonoured is not prepared

Due to non availability of Summary statement, cheques dishonoured of earlier period cannot be traced.

Chances of loss of revenue may exist.

Summary statement of cheques dishonoured in the same format as that of Summary of Daily Collection in Form GEN – 13 should be prepared.

--Do-- Dishonoured registered not maintained during the period of Audit.



GEN – 13. 37 The payments of the

Municipality may be done by Cash or drawing of Cheques or through Bill System.

BMA, 2007

Yes Verified from Cash book.

-- -- -- Petty Expenses made by cash, salary and other payments made by Cheques.

38 Whether Receipt of Claims Recorded in GEN – 14 , Bill Register

BMA, 2007

No GEN – 14, Bill Register is not maintained.

Delay in payment may arise.

Receipt of Claims should be recorded in GEN – 14


Bill Register is not maintained but bills are kept in Individual Files.

39 Verification at the Concerned Department - The Bill shall be stamped as ‘certified for payment’ and signed by the concerned authorities.

BMA, 2007

Yes No such procedure of Stamping for “Certified for payment” but bill is verified and passed by Executive Officer.

Chances of double payment may arise.

Bill should be stamped as ‘certified for payment’ and then payment should be released.


Done

40 Preparation of Payment Order - a Payment Order (Form GEN – 15) shall be prepared at the concerned department. The Bills, the Payment Order and the supporting for the Claim shall be sent to the Accounts Section.pre audit Section.

BMA, 2007

Payment order (Form

GEN-15) is not

prepared.

No such Payment Order (Form GEN - 15) is prepared by the unit. Payment order is given by Executive Officer after verifying the bill and

Due to non preparation of payment order, reconciliation of payments made by the unit may be affected.

Payment Order (Form GEN – 15) shall be prepared.

--Do-- Done in Note Sheet and approved by Executive Officer.



noting the details in the note sheet in the respective file.

41 After a satisfactory verification of the Payment Order and its supporting, the Payment Order shall be released for payment.

BMA, 2007

Payment order is not

prepared.

Accountant verifies the sanctioned bill and released for the payment.

--Do-- --Do-- -- Done by the Accountant.

42 On approval of payment, entry shall be updated in the Register of Bills for Payment maintained at Accounts Department (Form GEN‐14) and a Journal Voucher is prepared.

BMA, 2007

No Register for bills for payment is not maintained. Further, Journal Voucher is not prepared.


Register of Bills for Payment should be maintained and Journal Voucher should be prepared.


No bill register is maintained

43 A Cash and Bank Payment Voucher (Form GEN‐5) shall be prepared for payment and verified by the Accounts Department.

BMA, 2007

No Payment voucher not prepared by the unit.

--Do-- Cash and Bank Payment Voucher (Form GEN‐5) should be prepared for payment.

Lack of procedural Control.

No payment vouchers are maintained.

44 On verification of the Cash and Bank Payment Voucher, a Cheque shall be prepared.

BMA, 2007

NA Payment Voucher is not prepared. However, cheque is prepared by Accountant after proper verification.

Authentication and authorization of payments may become cumbersome.

--Do-- -- Cheque is prepared by Accountant.

45 The date of preparation of the Bank Payment Voucher shall be the date of the Cheque.

BMA, 2007

Yes Checked and found that payment certification and date of cheque

Chances of delay of payment may arise.

The date of preparation of the Bank Payment and date of the Cheque should be same day.

-- Mostly in same day.



issued is same in most of the cases.

46 The person preparing the Cheque shall mention the date of the Cheque.

BMA, 2007

Yes Accountant prepares the cheque and also mentions the date.

-- -- -- Complied

47 An entry of the Cheque prepared shall be made in the Cheque Issue Register, maintained in Form GEN‐16.

BMA, 2007

No Form GEN-16 not prepared but Cheque issue register is prepared by the unit.

-- -- -- Complied

48 Signing of the Cheque and cheque issue register

BMA, 2007

Yes Accountant & executive officer signing the cheque & cheque issue register.

--Do-- --Do-- --Do-- Complied

49 Recording of entry for payment BMA, 2007

Yes Recording of entry for payment is made in cash book.

-- -- -- Entry in Cheque issue registers first then entry made in Cash book.

50 Entry in Bank Book (Form GEN‐1B)

BMA, 2007

Yes Bank Book is maintained respective fund wise and also general cash book maintained by the unit but not in accordance with prescribed

Violation of norms as bank book is not being maintained in prescribed format (Form GEN-1B).

Bank Book should be maintained in Form GEN‐1B as per norms.

Lack of procedural control.

Bank Book is maintained respective fund wise and general cash/bank book maintained by the unit.



format. 51 Whether the supporting

documents such as invoices, bills, etc are stamped with ‘certified for payment’ and signed by the authorities of the concerned department;

BMA, 2007

No Stamp of “Certified for payment” have not been made on invoices although those are certified by concerned authority.

Chances of double presentation of same documents may arise if not stamped properly.

Supporting documents should be stamped with ‘certified for payment’

--Do-- Complied

52 Whether adequate budget appropriation provision is available under the particular head.

BMA, 2007

NA Major account head wise ledger as mentioned in the budget (Form BUD-4) is not prepared therefore we cannot verify the same.

Chances of diversion of funds and out of budget expenses may arise.

Major account head wise ledger as mentioned in the budget (Form BUD-4) should be maintained by the unit.


Scheme (fund) wise Bank book with bank statement. pass book submitted.

53 Whether evidence of entry into Purchase .Fixed Assets. Investments Register with folio and reference numbers are attached. available;

BMA, 2007

Yes No Assets register produced for verification.

Chances of mis-utilisation of assets may arise.



No assets register maintained.

54 A Work job Completion Certificate is received and a copy is attached with the payment voucher in the case of release of security or other caution deposits relating to construction or acquisition of fixed assets;

BMA, 2007

Yes Work job Completion Certificate is not prepared by the unit although we have found that the certification is done in measurement books and kept in

-- Work Job Completion Certificate should be prepared separately.

--Do-- Done in measurement book.



respective procurement (Yojana) files.

55 Whether a copy of the purchase order with update of items. Stocks received along with the reference to goods in good condition. Satisfactory condition as per specification receipt. Gate pass note, etc is attached with the payment voucher.

BMA, 2007

No Not Substantiated by documentary evidences.

Chances of receiving items in damaged condition and mis utilisations of stocks are high if documentary evidence is not maintained properly.

Proper documentation should be maintained.


Not maintained

56 Physical verification of the concerned Registers such as Fixed Assets. Stocks. Investments, etc. may also be carried out to ensure that the bills under ‘payment order’ are entered in the registers.

BMA, 2007

No Such type of register not produced before us.

Chances of mis-utilisation of assets may arise.



Not done in 14-15.

57 Internal Audit will be conducted in each Municipality by the firm of Chartered Accountants from the panel prepared by the Director of Local Bodies latest by end of March for the following financial year

BMAM, 14

No Not done. Lack of internal control cannot be traced.

Internal Audit should be conducted at least once in a year.

--Do-- No internal audit of the unit is done till 2013-14

58 Internal audit will be conducted on going basis throughout the year. The internal Auditor so appointed shall report directly to Empowered Standing

BMAM, 14

NA Not done. --Do-- --Do-- --Do-- --Do--



Committee with the copy to Chief Municipal Officer and Director of Local Bodies.

59 WhethertheQuarterlyFinancialStatementshavebeencompiledonthebasis of the actual entries in the books of accounts

BMAM, 14

No Not maintained. True & Fair position of the financial position of the unit cannot be assessed.



Not Prepared

60 Whethertheperiod-endandreconciliationproceduresprescribedhavebeen carried out.

BMAM, 14

No Not followed. Non reconciliation leads to piling up of un-reconciled items.

Period-end reconciliation should be carried out periodically.

--Do-- Not Done

61 Whether all grants from Government have been accounted at gross value with proper entries to various accounts

BMAM, 14

Yes Grants from government have been accounted at gross value in Cash book.

-- -- -- Complied

62 whether all transactions (incomes, expenditures, assets and liabilities)are correctly classified and stated insufficient detail

BMAM, 14

NA Since books of accounts are not maintained properly, we could not check it.


Should be prepared according to norms.


Financial statement is not prepared

63 Whetherallgrantssanctionedorreceivedbythemunicipalityduringtheyear, have been accounted properly Whether such deductions have been properly accounted

BMAM, 14

Yes Grants received during the year have been recorded at book value, however, no details were provided for deduction made out of such

-- -- -- Complied



grants by ULB. 64 Whether any deduction is made

out of such grants towards any dues of the ULB?

BMAM, 14

NA Documentary evidence not produced for verification

-- -- -- No such information is available with the management

65 Whether such deductions have been properly accounted

BMAM, 14

NA --Do-- -- -- -- --Do--

66 Whether any Special Funds have been created as per the provision of any statute and whether the Special Fund shave been utilized for the purposes for which they have been created

BMAM, 14

NA No such details made available for verification to check whether any special fund has been created.

-- -- -- No such fund has been created.

67 Inrespectofcontractsthatareinexistenceduringtheyear,whetherthereare any deviations from the –sanctioned plans and the estimates without the sanction of the competent authority;

BMAM, 14

No No such case observed

-- -- -- No such deviation is noticed.

68 Whether the ULB is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets

BMAM, 14

Fixed Assets register

not produced by the

unit

-- -- Asset register should be maintained immediately.


Assets register not maintained.

69 whether these fixed assets have been physically verified at reasonable intervals

BMAM, 14

No Periodical physical verification report is also not available for

Damaged, obsolete items cannot be traced.

Assets should be physically verified at reasonable intervals.

Lack of supervisory control.

Not conducted in 14-15.



verification. 70 whether any material

discrepancies were noticed on such verification and if so, whether the same has been properly dealt with in the books of account

BMAM, 14

NA --Do-- --Do-- --Do-- -- --Do--

71 Whether in case of leasehold property given by the ULB, lease rentals are collected regularly by the ULB and that the lease agreements are renewed after the expiry

BMAM, 14

Relevant

documents not provide

d.

In absence of proper documents verification could not be done.

-- -- -- Accepted

72 Whether physical verification has been conducted by the ULB at reasonable intervals in respect of stores

BMAM, 14

No Physical verification report not produced.

Damaged, obsolete items cannot be traced.

Stores should be physically verified at reasonable intervals.


Not conducted in 14-15.

73 Whether the procedures of physical verification of stores followed by the ULB are reasonable and adequate? If not, the inadequacies in such procedures should be reported

BMAM, 14

No No procedures of physical verification of stores have been produced for verification.

--Do-- --Do-- --Do-- --Do--

74 Whether any material discrepancies have been noticed on physical verification of stores as compared to book records, and if so, whether the same has been properly dealt with in the books of account;

BMAM, 14

NA Physical verification report not produced.

--Do-- --Do-- --Do-- --Do--

75 Whether proper procedures are in place to identify any unserviceable or damaged stores

BMAM, 14

No No procedure of identification of unserviceable or

--Do-- --Do-- --Do-- --Do--



and whether provision for the loss in this respect, if any, has been made in the accounts

damaged stores has been produced for verification.

76 Whetherthevaluationofstoresisinaccordancewiththeaccountingprinciples laid down intherules

BMAM, 14

No Not done. True & Fair position of the financial position of the unit cannot be assessed.

Valuation of stores in accordance with the accounting principles should be done.


All the store items purchased consumed as consumption during the period.

77 Whether the basis of valuation of stores is same as in the preceding year? If there is any deviation in the basis of valuation, the effect of such deviation, if material, should be reported

BMAM, 14

NA Valuation of stores is not done in previous year.

-- -- --Do-- NA

78 Whether the parties to whom loans or advances have been given by the ULB are repaying the principal amounts as stipulated and are also regular in payment of the interest?

BMAM, 14

NA NA -- -- -- No loans & advances have been disbursed by the unit.

79 Whether reasonable steps have been taken by the municipality for recovery of the principal and interest?

BMAM, 14

NA NA -- -- -- --Do--

80 Whether advances given to municipal employees and interest thereon are being regularlyrecovered

BMAM, 14

Yes In verification of staff advance register and found some of the advances are

May lead to loss of interest.

Advance should be adjusted immediately.


Accepted



remained unadjusted till date of audit. Stated in report.

81 Whetherthereexistsanadequateinternalcontrolprocedureforthepurchase of stores, including components, plant and machinery, equipment and other assets

BMAM, 14

Yes Purchase of stores including components, plant and machinery, equipment and other assets are being carried out through tendering procedure.

-- -- -- All the purchases are done through tendering.

82 Whether applicable procurement rules and procedures are being followed and if so, significant deviations should be identified and reported

BMAM, 14

Yes Irregularities observed are stated in report.

May lead to loss of revenue.

Applicable procurement rules should be followed.


As per grant order.

83 Whetherthemunicipalityisregularindepositingstatutoryduesincludingtax deducted at source, service tax, VAT, works contract tax, cess payable to the government etc., and if not, the nature and cause of such delay and the amount not deposited

BMAM, 14

No Irregularities observed are stated in report.

Penal provisions may attract u/s 201 (1A).

Should be deposited on timely basis.

Lack of knowledge.

Details Provided

84 Whether the municipality is regular in remittance of pension and leave encashment contributions or any other

BMAM, 14

No Retirement dues or benefit not paid regular basis

--Do-- --Do-- Lack of internal control.

Details Provided



amounts which the municipality is liable to remit towards the retirement dues of its employees, including employees on deputation;

85 Whether any personal expenses have been charged to the municipality’s accounts; if so, the details thereof

BMAM, 14

No Financial statement is not yet provided. No such case is found in Cash book.


-- -- No such case exists.

86 WhethertheBankReconciliationstatementshavebeenproperlypreparedfor all the bank accounts of the ULB and the remedial action s including all correcting entries have been taken on timely basis

BMAM, 14

No Bank Reconciliation Statement has not been prepared for any of the bank accounts.

Non reconciliation leads to piling up of un-reconciled items.

Bank reconciliation should be carried out monthly.


BRS is not prepared

87 Whether the year-end and reconciliation procedures prescribed have been carried out as per the rules

BMAM, 14

No No such procedures carried out during the year.

--Do-- Reconciliation should be carried out as per norms.

--Do-- Not Followed

88 Whether all the expenditure incurred by the Municipality are authorized by appropriate provision in the sanctioned budget, whether made originally or subsequently and are in all cases such as are authorized by law

BMAM, 14

NA Due to absence of proper financial statements it could not be assessed.


Ledgers should be maintained as per expenditure heads mentioned in the budget.

Proper accountingprinciples not followed.

Financial statement not prepared

89 Whether all revenue has been properly assessed, accounted for, collected and recovery action taken on timely basis

BMAM, 14

Yes Irregularities observed are stated in report.

-- -- -- Collection register & Cash book is provided for



verification. 90 whether all sums due to and

received by the Municipality have been brought to account within the prescribed time limits and are in all cases such as are authorized by law

BMAM, 14

NA Collection done by Tasheelder is recorded in Cashier’s collection book, thereafter it is recorded in Accountant’s cash book. No other entries made by the ULB.


Accounting should be done as per norms.

Non maintenance of accrual basis of accounting.

Accounting is done on cash basis.

91 Whether in respect of all bills for charges on account of all works and other expenditure, proper certificates have been furnished in support of the demand that no deviation has been made for the sanctioned plans and the estimates without the sanction of the competent authority;

BMAM, 14

Yes Verified through measurement book.

-- -- -- Complied

92 whether the amounts received as specific grants have been utilized for the purposes as stated in the grant sanction order

BMAM, 14

No No Utilization certificate produced for the period 14-15,so we are unable to comment.


Utilization Certificate should b prepared timely basis.


It will be regularized next audit.

93 Write-Off of Material Whether the pilfered. damaged

material in the Stores of the Municipality be written-off and adjustment entry has been made

BMAM, 14

NA In absence of proper documentation i.e. registers with

-- -- -- No such case during the period.



in the books of Accounts back-up papers, there was no scope for verification i.r.o. damaged materials.

94 Unpaid Salaries Whether the unpaid salary to

the employees recorded in the Unpaid Salary Register maintained in Form ES-4.

BMAM, 14

NA Unpaid Salary Register ES-4 not maintained by the unit.

Financial Statement not Prepared by the unit, so Unpaid Salary could not be assessed.

Unpaid Salary Register should be maintained in Form ES-4.


Salary paid up to January 2016.

Whether salary Unpaid for specified period has been deposited in the Bank Account

BMAM, 14

No Unpaid Salary for specified period has been kept in the Bank Account

-- -- -- Agreed

In case Cheques issued to the employees have not been en cashed for three months or such other period as may be prescribed by the Government. applicable Acts, such Cheques shall be cancelled

BMAM, 14

NA BRS not prepared by the unit

Bank Reconciliation Statement not Prepared by the unit so could not comment this matter.

BRS should be prepared timely basis


It will be produced next audit

95 Payments Otherwise Than From Pay Bill

Whether approved Payment Order along with the supporting documents send to the Accounts Department for employee related payments such as leave travel

BMAM, 14

Yes Payment is being made against the order.

-- -- -- Maintained in respective employees file.



concession, bonus & ex-gratia, overtime, medical reimbursement, hospitalization claim, suspension allowance, gratuity, leave salary, house rent reimbursement etc.

Whether the Accounts Department updated the Function wise Expenditure Subsidiary Ledger maintained in Form GEN-35.

BMAM, 14

No Fund wise Bank Book prepared.


Function wise Expenditure Subsidiary Ledger should be maintained in Form GEN-35


Subsidiary ledger is not maintained for this kind of expenditure but fund wise bank book is maintained.

96 Provident Fund Whether Provident Fund

Subscription of Regular employees shall be paid to Central Provident Fund every month and Provident Fund Subscription of Employees on deputation shall be deposited with the relevant authority every month.

BMAM, 14

No It has been observed that EPF amount of the employee’s contribution for the period under audit not deposited into Central Provident Fund.

Violation of Act. Provident Fund Subscription of Regular employees shall be paid to Central Provident Fund on monthly basis.

Lack of knowledge.

It will be regularised as early as possible.

97 Health and Sanitation Whether reconciliation carried

out by the Accounts Officer and the Head of the Health Function in respect of the amount collected under the various heads based on the balances

BMAM, 14

NA No such documents provided for reconciliation.

-- -- -- No such cases.



standing in the Functional Income Subsidiary Ledger (Form GEN-34) in respect of Fees & User Charges and Sale & Hire Charges relating to Health Function maintained at the Accounts Department and the Collection Register (Form GEN–11) maintained at the Health Department;

Whether the Accounts Officer shall ensure budget availability with respect to the expenditure incurred at the time of accruing of the expenditure

BMAM, 14

No Related documents under Form- GEN 34 were not produced.

Chances of diversion of funds and out of budget expenses may arise.

Prescribed documents should be maintained.

Lack of procedural delay.

Budget not provided.

Whether the Accounts Officer ensure that all the bills, invoices were journalized before release of the payments

BMAM, 14

No Under single entry system, there is no scope for passing any journals.

Truth & fairness of the financial statement cannot be ascertained from single entry accounting system.

Proper system should be implemented to convert the accounting procedure from single entry system to double entry system.

Proper accountingprinciples not followed.

No Journal passed during the period

98 CASH FLOW STATEMENT Cash Flow statement is

prepared to assess the ability of the Municipality to g e n e r a t e cash and cash equivalents and the needs of the Municipality to utilise those Cash Flows

BMAM, 14

No Cash flow statement is not prepared to assess the ability of municipality to generate cash.

Ability of the Municipality to g e n e r a t e cash and cash equivalents cannot be assessed.

Cash flow statement should be prepared on monthly basis.


Not Available

99 Whether Statement on BMA No Statement of Whether any Statement on Proper Not prepared



Contingent Liabilities have been prepared which represent a claim against the Municipality which is contingent on the happening of a future uncertain event, the financial implications of which may or may not be ascertainable at the end of an accounting period.

M, 14 contingent liability not provided.

claim against the Municipality which is contingent on the happening of a future uncertain event, the financial implications of which cannot be ascertained at the end of an accounting period.

Contingent Liabilities should be prepared on yearly basis.

accountingprinciples not followed.

100 The Municipality will prepare a Subsidy Report on Water Supply, Electricity Distribution, Scavenging, transporting & disposal of wastes, Street lighting, Hospitals and Schools

BMAM, 14

No In absence of subsidy report, these matters could not be checked.

Amount of subsidy paid by the unit cannot be ascertained.

Subsidy Report on Water Supply, Electricity Distribution, Scavenging, transporting & disposal of wastes, Street lighting, Hospitals and Schools should be prepared.

-- No subsidy report prepared during the period.

101 Whether details of honorarium paid to Councillors and Mayor has been prepared and disclosed in Balance Sheet

BMAM, 14

No Verified from Cash Book.

Disclosure of financial affairs is affected.

The unit should prepare Balance Sheet and disclose the same.


Paid but not disclosed as Balance Sheet is not prepared.

102 Whether amount of refunds, remissions and write-offs made during the year has been

BMAM, 14

No Only refund of security deposit to contractors


The unit should prepare respective ledgers regarding

-- No such case except refund of Security



prepared after completion of guarantee period and refund of EMD to unsuccessful bidders verified.

such items. Deposit to Contractors.

103 Amount of unutilised amount in the Public Deposit Account of the Municipality

BMAM, 14

No No such case noticed from the books of accounts kept at the unit.

Chances of lying of unutilised amount in the Public Deposit Account may arise if proper documents are not maintained.

The unit should prepare separate ledger for Public Deposit.

-- No such amount in the Public Deposit Account of the Municipality during the period.

104 Amount of lapsed grants.fund BMAM, 14

NA No such cases observed from the documents made available for verification.

-- -- -- No such case during 14-15.

105 Percentage of properties defaulting on property tax both in terms of number and value in comparison to total properties and income earned

BMAM, 14

-- Arrear of Property Tax upto 31.03.2015 is Rs. 86,65,922/-. Recovery proceedings have been initiated.

Chances of loss of revenue may arise and percentage of properties defaulting on property tax cannot be ascertained from the books maintained by the unit.

Effective recovery proceedings should be initiated and proper documents and follow up should be implemented regarding recovery of the arrear.

Lack of follow up.

Details of year end arrear are prepared by Tax Daroga.

106 Number of municipal hospital BMA NA As explained by -- -- -- No hospital is



beds, dispensaries and other medical facilities per1000 citizens in the municipal area

M, 14 the management, no hospital is maintained by the municipality.

maintained by the municipality.

107 Details about the various health programs undertaken by the Municipality from its own resources and the section of the population being benefited

BMAM, 14

NA No documentary evidence has been produced to us.

-- -- -- No such case.

108 Percentage of connections, category-wise, defaulting on payment of water supply charges both in terms of number and value in comparison with the total number of connections and demand raised together with the remedial measures taken

BMAM, 14

No In absence of records, this matter could not be checked.

May arise chances of loss of revenue.

Proper internal control should be implemented and records should be maintained.


Water Tax Collection not separately made, it is clubbed with property tax.

109 Details about the water purification and water distributed and billed in terms of quantity

BMAM, 14

Yes Water tax has been clubbed with the property tax but no records made available to us regarding water purification.

Control over water purification and water distributed and billed in terms of quantity is affected.

Proper records should be maintained.

--Do-- --Do--

110 Number of lamp-posts erected and the areas in which they are erected (the expenditures incurred in respect of the street lighting shall be given in the Subsidy Report)

BMAM, 14

NA No documentary evidence has been produced to us.

-- -- -- No subsidy report prepared during 14-15.

111 Age analysis of receivables and BMA NA Could not be Chances of lying Detailed records Proper Cash Book



Payables M, 14 checked from the books maintained by the unit.

of receivables and payables for a long time may arise which may lead to loss of revenue and double payment.

should be maintained regarding receivables and payables.

accounting principles not followed.

maintained on cash basis.

112 Expenditures of the Transferred Institutions directly met by the parent departments

BMAM, 14

NA No such case noticed from the records made available to us.

-- -- -- No such case.

113 Whether compliance including explanations relating to qualifications mentioned by the Auditors, stating clearly the facts of the matter and the steps taken in respect of those qualifications of audit report has been submitted

BMAM, 14

NA Due to non receipt of audit report from the AG, question of compliance does not arise.

-- -- Lack of information.

AG auditors have not yet submitted the report.

114 Empowered Standing Committee for Finance shall prepare an Action Taken Report providing details of the action taken by the Municipality in respect of the qualifications made in the Audit Certificate and the Chief Municipal Officer’s Report

BMAM, 14

NA Due to non receipt of audit report from the AG, question does not arise.

-- -- Lack of procedural control.

--Do--

115 On preparation of Financial Statements, the Accounts Department shall compute and present various Financial Ratios as mentioned in Table 27.8

BMAM, 14

No As financial statements have not been prepared, there is no scope of ratio

Analysis of financial activities could not be performed and thereafter

Preparation of Financial Statements should be implemented, the Accounts

--Do-- Financial Statement is not prepared.



analysis. remedial measure could not be adopted in absence of Financial Statements.

Department should compute and present various Financial Ratios

116 The Municipal Executive Officer shall within four months of the close of a year, cause to prepare a financial Statement containing Income Expenditure, Receipt Payment Accounts and Balance sheet along with the Schedules

BMAM, 14

No Even after expiry of more than 15 months from the close of 14-15, the unit has not prepared financial statement.



--Do-- Financial Statement is not prepared.

117 The financial Statement prepared shall be placed by the Municipal Executive Officer before the Empowered Standing Committee which after examination of the same, shall adopt and remit them to the Auditor

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- --Do--

118 Municipal Accounts as contained in the financial Statement, including the Accounts of Special Funds, if any, and the Balance sheet shall be examined and Audited by Director Local Fund Audit or his equivalent authority or an Auditor appointed by the Urban Development & Housing Department from the panel of

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- --Do--



professional Chartered Accountants prepared in that behalf by the UD & HD. This Audit is called Statutory or Financial Statement Audit

119 The above Auditor should submit the Audit report not later than 30th day of September each year to the Chief Municipal Officer

BMAM, 14

NA No audit report was provided for verification.

Lack of internal control cannot be traced.

The unit should first of all prepare the financial statements and then should place the same to the auditors and obtain report from them in schedule time.

--Do-- No audit conducted till 2013-14.

120 Chief Municipal Commissioner shall place the Audited Financial Statement, the Balance sheet and the Audit Report and his comments before the Empowered Standing Committee which, after the examination thereof, shall place them before the Municipality with its comments,

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- --Do--

121 The Chief Municipal Officer shall after the adoption of the Financial Statement including the Balance sheet and the Audit Report forward the same to the State Government together with the report of the action taken thereon by the Municipality and shall also send copies thereof to the Auditors and the C& A G

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- --Do--



122 Internal Audit will be conducted in each Municipality by the firm of Chartered Accountants from the panel prepared by the Director of Local Bodies latest by end of March for the following financial year .It will be conducted ongoing basis throughout the year

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- No internal audit conducted till 2013-14.

123 Whether the postings for the entries in the books of original entry have been correctly made in the respective ledger accounts

BMAM, 14

No Ledgers Accounts have not been prepared by the ULB. We observed some discrepancies in cash book which was stated above in report.

Chances of mis appropriation of accounting entries may arise.

Respective ledgers should be maintained.


Necessary action has been taken.

124 Whether all the books of accounts and supplementary registers that are prescribed in the Accounts Manual. other applicable regulations have been properly maintained by the ULB

BMAM, 14

No Prescribed registers have not been maintained by the unit except mentioned herein.

Non compliance of norms.

Prescribed registers, documents, records as stated in the Accounts manual should be strictly followed.


Cash Book, Bank Book, Bank Statements, Collection Register, maintained.

125 Whether the Municipality has appointed an Auditor to conduct Special Audit pertaining to the specified item or series of items requiring thorough examination

BMAM, 14

No Not conducted. -- -- -- No.



126 Depreciation shall be charged by Straight Line Method (SLM) on all fixed assets (except land) over estimated useful life.

BMAM, 14

No No depreciation treatment has been done.

Assets will show higher value than carrying cost. net realisable value.

Depreciation should be charged as per norms.

Non maintenance of accrual basis of accounting.

Books have been prepared on cash basis.

127 All assets costing less than Rs.5,000 shall be depreciated at 100% in the year of Purchase.

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- --Do--

128 Fully depreciated assets shall be carried at a Book value of Re. 1.-

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- --Do--

129 Depreciation shall be provided at full rates for assets, which are purchased, constructed before October 1 of an Accounting Year. Depreciation shall be provided at half the rates for assets, which are purchased constructed on or after October 1 of an Accounting Year

BMAM, 14

NA --Do-- --Do-- --Do-- --Do-- --Do--

130 Report and quantify all major Own revenue losses and opportunities lost or missed including in the area of Property Tax, Mobile Transmission Towers Tax, Rental of Municipal properties, Advertisement Taxes, Fees, Sari at etc;

BMAM, 14

-- Due to lack of proper records regarding collection of arrear of property tax & water connection charges, it is not ascertainable.

Loss of revenue may arise due to lack of internal control.

Proper records should be maintained.


No such case during the period.

131 Check on audit trail of all collection of Taxes and Non Taxes either through staff or outsourced agency and report of any lapses in controls, if any

BMAM, 14

- It is the set practice of the collecting Tasheelder to submit their

Unauthorised holding of government fund.

The unit should ensure that the collection agents submit their collection on daily

--Do-- Carbon copy of collection slips & collection cash book



and also advise recommendations to strengthen the prevailing processes

collection on irregular intervals.

basis. provided.

132 Report in a separate chapter on implementation of SAS of Property Tax in the ULB; internal auditor should witness some assessment procedures to check any in-consistencies in assessment. At least 20 high value properties in the city .town (irrespective of the fact that SAS is received or not) must be surveyed and checked in each quarter and reported variations, if any, in PTRs and Actual as per internal audits

BMAM, 14

Yes Checked and details is provided in report.

Due amounts from owners and occupiers may result in loss of revenue.

Recovery procedure should be implemented to recover the due amounts.

--Do-- Details provided

133 Vouch on all payments above Rs. 10,000 and report on adequacy and appropriateness of its documentation, approvals, compliance of procedures etc.

BMAM, 14

Yes Complied. -- -- -- --

134 Report on Procurement made including through E-Tendering and E-Auction indicating exceptions, if any and whether a register is kept for all Procurements with value above Rs. 15,000.-

BMAM, 14

Yes Tender Register and Yojna Files has been maintained.

Loss of Government Fund

Proper initiative should be adopted to cut down the irregularities pointed out.

-- Complied

135 Internal auditor shall also report on presence or absence of a system of issuance of utilisation

BMAM, 14

Yes Utilization certificate has not been prepared

-- Utilization Certificate should be prepared timely

Lack of internal control

Complied as per norms.



certificate for the different schemes for any utilisation made during the reporting period; Where there is no system for issuance of U.Cs, the Internal Audit report shall prepare Utilisation Certificate for various schemes.grants as per the guidelines of such scheme available on the UD&HD website

during the year 2014-15

basis

136 The Codification Structure and Chart of Accounts is being followed by the Municipality are based on the guidelines provided in the NMAM, adjusted for the specific needs. requirements

BMAM, 14

No Not yet implemented.

Non maintenance may leads to cumbersome of accounting heads.

Should be implemented at earliest.

Not yet implemented

--

137 The unit has maintained General Registers and Forms as mentioned in Table 5.1 of the Bihar Municipal Accounting Manual – 14

BMAM, 14

No --Do-- --Do-- --Do-- Lack of procedural control.

--

138 The closing balance of Cash as per the Cashier’s Cash Book shall be verified daily with the physical Cash balance at all the Municipal Collection Offices by the Accounts Officer or any person designated for the purpose and must be signed by the person verifying the Cash.

BMAM, 14

Yes Done accordingly.

-- -- -- --



139 Cash in chest should be insured for theft, fire, etc.

BMAM, 14

No Not yet done. Chances of Theft and loss of cash is at high.

Insurance of Cash in Chest and Cash in transit should be done.


--