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3 2 PROBLEMS AND SITUATION PREVAILING IN THE BEPC, BIHAR The Govt. of India vide letter no.D.O.17/1/201-SSA (DIS), Dated 8 Feb. 2012 Specifically pointed out that:- 1. It is also brought to your kind notice that the External Development Partners while calculating their share of eligible expenditure for the year 2010-2011 have disallowed the expenditure of Rs. 3354.91 crore reported by SSA Bihar from the Gross expenditure because of persistent long standing weaknesses in FM system under SSA in your state. 2. OTHER OBSERVATION :- (i) MANAGEMENT Letter not furnished. (ii) Procurement Audit Certificate was not in prescribed format. (iii) (a) Against the total available fund only 25%. Expenditure incurred. (b) Difference in the reported Expenditure and audited Expenditure. (iv) Difference in NPEGEL annual consolidated financial statement and utilization certificate. (v) In SSA difference in ANNUAL Financial Statement & utilization certificate. (vi) Difference in unspent balance of consolidated Annual Financial Statement and utilization certificate. (vii) Errors/Omission of earlier years Rs.32.85 crore.

4 (viii) ADVANCES (a) Increase of advances at alarming level due to non-adjustment. (b) Year wise/activity wise breakup of advances was not prepared. (ix) STALE CHEQUE Stale Cheque amountRs.44.33 crore. (ix) Fixed Assets does not indicate “Civil Construction Work”. 3. Auditors observations are as follows :- (A) Fixed Assets :- (i) Fixed Assets Register has not been maintained properly even in some district it is not maintained. (ii) Physical verification has not been carried out. (B) Bank Reconciliation Statements :- (i) Bank Reconciliation not prepared. (ii) Old outstanding entries require & reconciliation. (C) Advances:- At District officer, BRC, CRC & VSS subsidiary registers not maintained. (D) Liabilities for Expenses:- (i) Stale Cheque. 3

5 4 (ii) Non maintain once of inward bill register difficult to assess the liabilities. (iii) Provision of liability Audit fee of VSS Audit. (E) Compliance of special Audit report of DLO, Saran. (F) Due to pending reconciliation of the differences in accounts in the following cases, the possible impact on the accounts has not been ascertained :- (a) Money in transit Rs.328533377.69 (b) Term Deposit of Rs1374.00 lakh not reflected in books of accounts. (c) Inter fund transfer of schemes SSA/NPEGEL/KGBV. (d) Reconciliation of advances of Bihar Mahila Smakhya Society. (c) Misappropriation of Fund at Araria district. (G) Grants-in-Kinds :- Non-availability of utilization certificate. (H) Internal Audit system is not proper. (I) Adjustment of advances of VSS on the basis of utilization certificate submitted by VSS Audit. (J) Misappropriation of Fund at Motihari, DLO.

6 5 Banks do not provide the bank statement of back period. Outsource these works to Chartered Accountants. Other reasons which were not relevant. Shortage of manpower. It is backlog and not related to their posting period. Old records are not available. WHY WORK IS NOT DONE ? TAKEN THE VIEWS OF DLO’s ACCOUNTS PERSONNEL. AREA INDENTIFIED TO TAKE THE SUITABLE ACTION

7 6  Clear cut message has been given that preparation of BRS since pendency is the responsibility of Accounts personnel. Presently posted Accounts personnel will search the old documents.  Timely preparations of BRS safeguard the interest of the Accounts Personnel as in the case of A.O. of Aurangabad.  Fraudutant Actions are detected in time and it reveals the that person detected that fraud can not be the part of this activity.  DLO bankers for providing statement & details of transactions have been contacted from SLO and those banks do not co-operate stopped fund transfer from SLO. MAJOR ACTION INITIATED TO ELEMINATE THE MENTAL BARRIER & RESOURCE BARRIER TO COMPLY THE WORK  Time frame fixed to complete the BRS.  Proper follow up about works has been done.  Vigorously reviewed and who were not serious, asked explanations.  Those who were not knowing how to prepare the BRS proper support /guide provided from SLO.  Authorised DLO to have one DRG for accounting work.  Marking system has been introduced.

8 7 1. All accounts personnel have been imparted training on following issues. Difference between established organisation (Govt., Semi Govt. and Corporate Sector) and Project. For that defined the project. (1) What is Project ? GOT FULL SUPPORT FROM SPD It was not possible to comply all pending works at a time. As such areas identified to comply 1 st. Entire work have been broken into small activities. Areas identified for phased-wise solution are as follows:- 1.Motivation of Accounts personnel posted at SLO as well as DLO for realisation about their nature of duty and fixing priorities of work.

9 8 “A Temporary endeavor undertaken to achieve a particular aim.” (i) A Project has a temporary organization:-  Specific group of people working on the project full and part time have been start and finish. Brought to execute the project and will not exist as a team beyond it. Example:- People building the Channel Tunnel that links England & France were brought together for this epic project and team dispersed when it was completed. (ii) The Project itself is recurring and not a recurring activity.  Particular set of circumstances and problems before. (iii) There should be a well - defined objective for the Project.  What the project will deliver.  How the projects need to be integrated with other projects.  How to Prioritize the Project against other options and resource uses.

10 9

11 10 (iii) Implementation:- a) Making it happen. b) Carrying out the planned activities. c) Staying on Course. d) Identifying and resolving issues. e) Providing feedback on completion of milestones, progress of the overall project, future resource requirement and rises. -:0:-

12 3. ABOUT AUDIT 1. PROPER ATTENTION:- Personal Performance Report It is Personal performance report of Accounts Personnel sincerity, systematic, consistency and conclusion. 11 Provides dignity & recognization To get personal dignity and recognization. Minimize Service risk Clean/ Positive report of Audit minimize the service risk. Save Time Properly Conducted Audit Saves time which can be utilized in other works also.

13 12 2. STEPS TO GET THE AUDIT SUCESSFULY- Mental Preparedness & signed Mentally prepared to face the Audit Team – It is possible when. Updation of Cash Book & its physical verification of Cash Cash book is up to date and properly signed by the competent Authority, Physical cash balance is verified. Cash & Bank Certificate Cash /Bank Certificate is obtained. Vouchers enclosures to be Systematically arranged All Vouchers and enclosures are arranged in systematic way Day to Day basis. All Financial Statements to be Ready Other financial statement i.e. Trial balance BRS advances requires to be ready.

14 13 Proper Sitting arrangements Make proper sitting arrangements nearest to you and provide stationery items. 3. BEHAVIOURAL APPROACH OF ACCOUNTS PEOPLE- Informal Talk Mentally prepared to face the Audit Team – It is possible when. Introduce to DPO & DEO When Auditor reach Introduce to DPO & DEO. Provide Stationary Items Provide required Paper/ Documents/ Books of Accounts. Clarify the Points Clarify all the points which are raised by Auditor during the course of Audit. Coordinate with all components Coordinate with all components to provide necessary Files/ Documents. If other component not respond positively then make specific report to DPO.

15 14 4. CONTINEOUS MONITORING & FOLLOW UP whatever ordered earlier, complied or not? If not why? It gives a message that we are serious about our given order whether it is being done or not? In case personnel not performed then Disciplinary action like explanation and circulate to overall Districts. It gives sense of responsibility. THREE MEMBERS TEAM CONSTITUTED AT SLO FOR MONITORING (a) Md. Ashfaque Ali (Sr. Auditor)- Who used to do the work and guide the District Accounts Personnel. (b) Smt. Priya Singh – Continuous in touch with District Accounts Personnel to know the progress of work. Whether it will be completed in the Schedule time or not. (c) Sri Rupesh Kumar Mishra, Asstt. Accountant – Who assisted Md. Ashfaque Ali (Sr. Auditor).

16 15 5. All Audit Observations can ‘t be complied in time then the priorities of work has been fixed as per pressure of Govt. of India & Executive committee:- A lot of steps were taken by the ex Financial Controller for preparation of BRS at DPO office. BRC of all banks can be prepared. Extra manpower in the form of SRG put on but intended objectives were not achieved. Some hardcore officer and Staffs who were not in view that the wok is impossible. They tried to demoralise the working force. Kept them away from mainstream and neither involved in the work nor aggravated them.

17 16 RESULTANT EFFECT OF THESE ACTIVITIES ARE:- Sl. No. Status SSA NPEGEL KGBV. 1. Upto August, 2012 25 22 22 2. Upto 3103.2012 11 08 11 3. Pending Since March, 2011 02 02 01. Total Districts 38 32 34. 4. SLO (Oct., 2012) 01 01 01. Bank Reconciliation Statement In the District where posted Accounts personnel where in less no. have completed the work first. It gives clear cut signal that the manpower is not the problem willpower is essential. Not a single Accounts personal raised question about shortage of manpower and backlog work.

18 17 Md. ASHFAQUE ALI – SR. AUDITOR, SRI RUPESH KUMAR MISHRA & SMT PRIYA SINHA – ASSTT. ACCOUNTANT AND DLO ACCOUNTS PERSONNEL COMPLETED THE FOLLOWING WORKS:- (a) Md. Ashfaque Ali (Sr. Auditor)- Who used to do the work and guide the District Accounts Personnel. (b) Smt. Priya Singh – Continuous in touch with District Accounts Personnel to know the progress of work. Whether it will be completed in the Schedule time or not. (c) Sri Rupesh Kumar Mishra, Asstt. Accountant – Who assisted Md. Ashfaque Ali (Sr. Auditor).

19 18 (iv) Statement of District- wise, Year-wise and Age-wise & Head-wise Advances from 2001-02 to 2010-11. (v) Statement of Liabilities District-wise, Year-wise & Head-wise since inception of SSA Project. (vi) District-wise, Year-wise details of Assets. (vii) Partial Reconciliation of Errors and omission reflected in the balance sheet amounting to Rs. 32.85 crores. (viii) Stale cheques amounting of Rs 49.48 crores.(Partially) (ix) Classification of Civil Work Expenditure. (i) Transfer of funds from DPO to BRCs, CRCs and VSSs through electronic fund transfer system. (ii) Bank Reconciliation Statement. (iii) Preparation of Balance Sheet of all DPOs. Since inception of SSA Project. WORK COMPLETED AS PER PRIORITIES

20 19 FUTURE STRATEGY TO IMPROVE THE QUALITY OF MAINTAINANCE OF ACCOUNTING AS WELL AS AUDIT WORK 1.Fortnightly Concurrent Audit System will be implement. In place of so many Audit firm only three firm’s for 3 zone shall be appointed.  RFP is invited which is under process of finalization. 2.Customization and synchronization of Tally System will be done by M/s Tally Solution Pvt. Ltd. The Technology advantage of Tally.ERP 9 as below:-  Fixed Charter of Account Head  No back date entry by DLO  Data Reliability – Data can’t be changed  Data Security  Tally Audit  Tally Vault  User Defined Security Levels  Rapid Implementation  Unlimited Multi-User Support  Internal Backup/ Restore  Import/Export of Data  Web Enabled  Protocol Support  Graphical analysis of Data, etc

21 20 3. Clear cut instruction has been given to the district to maintain SSA-RTE, NPEGEL & KGBV SB A/c in one Bank and close the other Bank Accounts after the Bank Reconciliation. Result is positive and it will reflect in the Books of Accounts Financial Year 2012-13 Entire rectification is not possible at once. It will take at least 3 to 4 years. -:0:-



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