Audit of Accounts & Accounts Records for the year under SSA

As you are aware that the submission of Audit Reports for the year was badly delayed by some States/UTs. This has invited criticism by the External Development Partners / MOF as GOI could furnish a Consolidated Report on Audits for 22 States/UTs instead of 35 States/ UTs by the last date prescribed for the purpose.

Further a review of the audit reports for the year reveals that many observations of concern like, un-reconciled accounts or funds in transit, bank reconciliation in arrears or improper bank reconciliation, large outstanding utilization certificates advances being treated as expenditure, old outstanding advances or lack of proper follow up action have been repeated. Inadequate coverage of Procurement Process or insufficient mention of the same in audit report has also been noticed. Many reports do not cover information about audits of VECs or its equivalent.

MHRD has already sent a communication on 4 th June 2010 to all the State Project Directors in which the need for the timely completion of audit work for the year has been stressed. MHRD has also sent an Implementation Schedule for Audit to the SPDs OR 23 RD July 2010 for their convenience. It is believed that The Chartered Accountant has since been engaged and the Audit Work must be in progress in all the States/ UTs.

It is therefore, enjoined upon you all to ensure that the accounts for the year are properly maintained. The advances against which expenditure has been incurred during the year are adjusted in accounts by obtaining Expenditure Statements / UCs from the sub- district levels & other Agencies before the finalisation of accounts. Liability for the expenditure incurred on the Project upto 31 st March 2010 which have not been paid for should also be provided.

The annual financial statements are properly drawn in time and handed over to the Auditors well in time to do the needful in time. It may also be ensured that advances are not shown and certified by the Auditor as expenditure as has been done by some states in the Previous years. Advances should be shown as advances only.

Further the expenditure shown in the financial statements should be under the same activity heads, which are approved in the AWP&B and in which the Budget Provision exists. It may also be ensured that audit observations made by the auditor in the previous year are complied with and compliance there of is reported to the auditor during the current Audit. The Auditor will consider, verify the compliance and settle, the audit objections and record the settlement in the Audit Report. No objection which was taken in the Previous years should be repeated in the current year’s Audit Report.

It is also requested that the observations made by the auditors in the current year’s draft audit report are discussed with the auditors to ensure that only those objections which could not be settled during the discussion are included in the final Audit Report. Lastly you are requested to ensure that audit report complete in all respects, duly approved by the EC is submitted to Government of India by 31 st October 2010 positively.