INSPECTION REPORT on the ACCOUNTS of the OFFICE of the BLOCK DEVELOPMENT OFFICER, SEDAPATTI PANCHAYAT UNION, MADURAI DISTRICT U/S

INSPECTION REPORT ON THE ACCOUNTS OF THE OFFICE OF THE BLOCK DEVELOPMENT OFFICER, SEDAPATTI PANCHAYAT UNION, MADURAI DISTRICT U/s. 20(1) OF CAG’s (DPC) ACT 1971.

Part I : INTRODUCTION OVERVIEW OF THE AUDITEE UNIT 1.1 Sedapatti Panchayat Union is in Madurai District and the population of the Panchayat Union as per 2011 census was 96,182. The Panchayat Union is administered by the council of elected representatives and assisted by Commissioner, at the level of Block Development Officer who is the executive head and responsible for implementing the decisions of the council. The Commissioner functions under the direct supervision of the Assistant Director/Panchayat Union/Project Director of the District Rural Development Agency/District Collector and under the overall control of the Commissioner of Rural Development & Panchayat Raj who is the Head of the Department for Panchayat Unions. 1.2 Budget/ Financial Performance. (in Rupees) Year Budget estimate Revised estimate Actual Expenditure Capital Revenue Capital Revenue Capital Revenue 2015-16 2016-17 Enclosed separately. Enclosed separately. 2017-18

1.3 Field of activities carried out by the auditee unit. The Village Panchayat renders basic services to the general public which include health care and sanitation, education, installation & maintenance of street lights, drinking water supply, provision of roads, solid waste management, sewerage disposal, burial/cremation grounds, parks, play grounds, markets, cycle/taxi stands and maintenance, issue of licences to trades/shops and collection of tax and non tax receipts, alongwith fees on granting Building approval.. Also performs, additional duties, as assigned by the AD (PU) and DRDA in relation to the Panchayat.

1.4 AUDIT OBJECTIVES To verify i) whether the funds sanctioned for implementing various Central and State Schemes were effectively utilised adhering to the time schedule, without any delay which could cost excess expenditure than sanctioned one. Further, to verify, whether there was any deviation in the design/structure/change of location, etc., for which the approval of the UE/AEE/EE/S was obtained in advance. ii) whether revenue collection mechanism is efficiently and effectively followed as per the provisions of the Acts, Rules & Regulations of the Government of India and Government of Tamil Nadu and resolutions adopted in the Council, without any hindrance; iii) whether proper planning of Schemes/Services was done for delivery of various essential citizen services and the same were rendered/discharged efficiently and effectively within the stipulated time, deficiencies/failure in this regard should be highlighted. To verify whether service level bench marks fixed for delivery of services is adhered to. iv) whether the completed Schemes were immediately brought into beneficiaries’ use, such as, usage of the facilities of VPSC, Noon-meal Centres, PDS, etc and any delay in functioning of VPSC, Noon-meal Centres, PDS, etc..would find a place in the DIR v) whether all the recommendations of the GramaSabha were brought to the Council for consideration and taking the proposal to the Government, for approval and sanction, through the AD (Panchayat)/DRDA concerned; vi) whether the registers, returns and allied records were maintained as per manual/guidelines and submitted periodically to higher officials without delay. 1.5 Audit Criteria The contents of the following Acts, Manuals, Resolutions of the Council and any other current Notifications, etc., on the subject, were used as criteria for audit findings: i. Budget and Accounting Manual ii. Tamil Nadu Town and Country Planning Act 1971 iii. Tamil Nadu Tender Transparency Act 1998 iv. Municipal Solid Waste (Management & Handling) Rules 2000 v. Ministry of Road, Transport and Highways specifications vi. Council resolutions 3

vii. Scheme guidelines for various schemes issued by the respective Government at the time of sanctioning the schemes. viii. Government orders, executive instructions and circulars issued from time to time. ix. Notifications issued by the Governments, from time to time, and/or any other source of information relating to the functioning of the PUC 1.6 Scope of Audit The audit will focus on the a. the essential and important features, provision of basic amenities, services and development schemes to the Village and Block Panchayats were implemented by the Panchayat Union (taken care of all the Resolutions passed by the Grama Sabha and Council Resolutions) b. calculation of tax and non tax revenues and collected, without any arrears; c. budgetary control mechanism is in place for effective delivery of citizen service, within the sanctioned Estimate and in time and for any changes, whether proper justification with the approval of the competent authority was obtained; d. effective system of grievance redressal mechanism was in place The previous audit of this Panchayat Union was conducted from 12.12.13to 18.12.13 covering the period from 2008-2009 to 2012-2013. During the present audit, taken up from 16.04.2018 to 26.04.2018 activities and transactions pertaining to the period from 2013-2014 to 2017-2018 were test checked. 1.7 AUDIT METHODOLOGY The audit has been conducted in accordance with the applicable Audit Procedures and Auditing Standards of CAG and Local Bodies Manual. The methodology as detailed in these manuals was adopted wherever necessary while conducting audit. PART II- AUDIT FINDINGS: Enclosed. PART III: Follow up on findings outstanding from previous reports to be included under Part III. Year Paras outstanding Paras settled Paras pending Nil

PART IV BEST PRACTICES: Nil PART V Acknowledgement: An entry meeting for this compliance audit was held on 16.04.2018 during which council resolution files, property tax, assessment files, files relating to various Schemes, etc., and other connected records required for the audit were briefly explained to the Commissioner. Both the sides have agreed to fix 25.04.2018 as the last date for furnishing of the records and 26.04.2018 as the last date for furnishing the replies to the audit slips so as to facilitate fixing date of Exit meeting/discussion. The Audit acknowledges the co-operation extended by the Commissioner, Sedapatti Panchayat Union and staff in completing audit successfully. (Attention of the Commissioner may be invariably drawn to the difficulties faced in obtaining records/computer access and internet/intranet facilities). On completion of Audit, an exit meeting was held on 26.04.2018 with the Commissioner Sedapatti Panchayat Union in which the audit findings were explained, discussed and responses of the Commissioner were considered and appropriately incorporated in the draft inspection report. The following person(s) held the charge of the post of Commissioner during the period covered by audit. Sl. Name From To No. Shri/Smt./Selvi 1 G.Lakshmi 01.04.2013 06.04.2015 2 C.Murugan (i/c) 07.04.2015 19.04.2015 3 R.Fakkir Mohammed 20.04.2015 19.08.2015 4 C.Murugan 20.08.2015 12.04.2017 5 M.Asaik (i/c) 13.04.2017 16.04.2017 6 M.Asaik 17.04.2017 31.07.2017 7 M.Asaik (i/c) 01.08.2017 06.08.2017 8 K.Ilangovan 07.08.2017 20.12.2017 9 C.Karthikeyan 21.12.2017 16.04.2018 10 M.Asaik (i/c) 17.04.2018 Till Date

The local audit was conducted by the following officers: Sl. Name and Designation From To No. Shri/Smt./Selvi 1. V. Ayyavoo Sr. A.O 16.04.2018 26.04.2018 2. P. Ashokkumar A.A.O 16.04.2018 26.04.2018

Annexure List of annexure with case referencing to the para with source name has to be mentioned. Source (whether the Annexure annexure prepared Title Particulars Para listed No. by audit or auditee or from some other source)

Enclosed

SUMMARY OF OBJECTIONS

PARA NO. GIST OF OBSERVATION PART IIA 01 PROCUREMENT OF ACCESSORIES SET FOR 20 W LED STREET LIGHTS FOR THE YEAR 2015-16 – EXCESS EXPENDITURE OWING TO NON-ADOPTION OF PROCEDURE FOR PURCHASE OF GOODS AND GUIDELINES ISSUED BY THE GOVERNMENT OF TAMIL NADU – RS 24,77,325 (APPROX.) 02 PURCHASE OF WATER CHLORINATION TABLET – (A) EXCESS EXPENDITURE OWING TO NON-ADOPTION OF PROCEDURE FOR PURCHASE OF GOODS – RS15.75 LAKH (B) AVOIDABLE EXPENDITURE DUE TO PURCHASE AND USED IN NON-MONSOON PERIOD –RS 17.35 LAKH

PART IIB 03 UNDUE BENEFIT TO THE CONTRACTOR DUE TO INCLUSION OF GST IN THE ESTIMATE RS.2,89,366/- AMMA CEMENT -

04 (I) NON-RECEIPT OF ADMINISTRATIVE EXPENSES FROM AD (AUDIT) Rs. 1,45,582 (II) NON-CONDUCTING ANNUAL PHYSICAL VERIFICATION 05 NON-PAYMENT OF ELECTRICITY CHARGES TO TANGEDCO - RS.49,23,199/-

06 NON- RELEASE OF FINANCIAL ASSISTANCE UNDER MOOVALUR RAMAMIRTHAM AMAIYAR THIRUMANA UDAVI THITTAM 2015-16, 2016-17 AND 2017-18. 07 IMPLEMENTATION OF SINKING OF WELLS AND SAFETY MEASURES IN VILLAGE PANCHAYATS. 08 MGNREGS- SOCIAL AUDIT - MALLAPURAM AND SAPTUR VILLAGE PANCHAYAT - ACTION – TAKEN REPORT CALLED FOR 09 MALLAPURAM VILLAGE PANCHAYAT. I) NON INCREASE OF MONTHLY RENT FOR COMMERCIAL SHOPS NON-FIXING OF RENT AND COLLECTION OF RENT FROM POST- OFFICE FUNCTIONING IN PANCHAYAT BUILDING

10 INOPERATIVE ACCOUNT TO BE CLOSED

AUDIT FINDINGS

Part II –A

01. PROCUREMENT OF ACCESSORIES SET FOR 20 W LED STREET LIGHTS FOR THE YEAR 2015-16 – EXCESS EXPENDITURE OWING TO NON-ADOPTION OF PROCEDURE FOR PURCHASE OF GOODS AND GUIDELINES ISSUED BY THE GOVERNMENT OF TAMIL NADU – RS 24,77,325 (APPROX.) The District Collector Madurai District had placed supply order in his proceedings No. 1290/2015/D13 Dated 22.09.2016 with M/S KCP Engineers (P) Limited Coimbatore for supply of 25480 No. of 20 W LED street light fittings to 420 Village Panchayat in Madurai District at the rate of Rs 3744.00 per light inclusive of all taxes. Accordingly, 1943 No. of 20 W LED street light fittings were supplied to 31 Village Panchayats at Sedapatti Block Panchayat on 22.10. 2016 Vide Invoice No 11 dated 21.10.2016 and full amount was paid to the supplier Vide District Collector proceedings No. 2195/2015/D13 dated 13.03.2017. The Assistant Director (Village Panchayats) Madurai had issued urgency Memo in proceedings No. 2195/2015/A5 Dated 25.10.2016 to the Block Development Officer( BDO) (VP) to purchase the accessories set in order to fit the street lights at market rate under Village Panchayat Account No .I. The BDO (VP) had obtained quotation from 3 supplier to supply the following accessories at the rate noted against each.

Serial

Description Rs Rs Rs No Madurai Madurai Madurai Madurai Retail and and Retail Distribution Distribution Tirumangalam Tirumangalam Sri Rajalakshmi Rajalakshmi Sri SSV Foundation Foundation SSV Sales Corporation Corporation Sales 1 ½ ’’ GL ’ –B Grade street light bend pipe with 2 pieces of 1 800 920 850 Heavy duty post clamps set with 3’’ 3/8 Size bolt nuts 8

Serial

Description Rs Rs Rs No Maduari Maduari Madurai Retail and and Retail Distribution Distribution Tirumangalam Tirumangalam Sri Rajalakshmi Sri Rajalakshmi SSV Foundation Foundation SSV Sales Corporation Sales 8 SWG Zing coated Aliminum 2 earth road 8 meter length – 8 200 275 240 meter 25 mm GL Grade Straight Earth 3 Pipe with 3’’ Naga bolt nut with 250 280 250 washer set 2.5 Sqmm Three core insulated 4 430 600 575 copper wire with black sleeve Total 1680 2075 1915

As M/S Retail and Distribution Madurai quoted least rate @ Rs 1680, supply order was issued by the BDO (VP) to M/S Retail and Distribution Madurai for supply of the above 4 item of accessories for erection of LED bulb Vide BDO (VP) Proceedings No 1080 /2015/ T2 dated 09.11.2016. All the accessories noted above were supplied by the Retail and Distribution Madurai to 31 Village Panchayat and 1943 20 W LED blub were fitted at Sedapatti Block Panchayat Vide Certificate issued by the BDO (VP) dated 05.04.2017. Further it was observed from the file relating to the subject that supply order was placed with SRI Ganesha Traders Trichy for supply of 27047 No.of 20 W LED Street light fittings complete set ( @ Rs 3725 ) with 5 years warranty to 402 Village Panchayat at 13 Block Panchayat in Madurai District to replace the street lights for the year 2016- 17 @ Rs 4125 per set including accessories ( @ Rs 400 ) as prescribed below Vide District Collector Madurai proceedings No. 242/2017/D13 dated 05.01.2018. “ Complete set with 5 years warranty rate per 20 W LED fittings per unit for Rs 3725 + suitable clamp set with ISI marked G.I pipe 1.2 Mtr of 1 mm thick and 32 Dia along with completed Accessories set per unit for Rs 400.00 inclusive of all taxes and transportation charges”

According to Rule 6 of MANUAL ON POLICIES AND PROCEDURES FOR PURCHASE OF GOODS 1) Purchase of goods up to a value of Rs 15,000/- (Rs Fifteen Thousand only) on each occasion may be made without inviting quotations/bids by the competent authority on the basis of a certificate to be recorded. 2 ) Purchase of goods costing above Rs.15,000/- (Rs. Fifteen Thousand only) and upto Rs.1,00,000/- (Rs. One lakh only) on each occasion may be made on the recommendations of a duly constituted Local Purchase Committee consisting of three members of an appropriate level as decided by the Head of Department. The committee will survey the market to ascertain the 37 reasonableness of rate, quality and specifications and identify the appropriate supplier. Before recommending placement of the purchase order the members of the committee will jointly record a certificate. 3) Subject to exceptions incorporated under paragraphs 6.13 (Limited Tender Enquiry) and 6.25 (Single Tender Enquiry), invitation to tenders by advertisement should be used for procurement of goods at estimated value of Rs.25 lakh (Rupees Twenty Five Lakhs only) and above. Advertisement (in the form of a Tender Notice) relating to ATI should be given in the Indian Trade Journal (ITJ) published by the Director General of Intelligence and Statistics, Kolkata and at least in one national daily having wide circulation. Further, an organization having its own web site is also to publish all its tender notices (relating to ATIs) on its own web site and provide a link with NIC web site. Additionally, for wider publicity, all Ministries / Departments should also publish their tender notices in the web site of Central Purchase Organization (e.g. DGS&D). Quotations received against the guidelines instead of inviting tenders through Advertisement for procurement of erection materials/ accessories In para 8 of the guidelines issued along with G.O (MS) No. 19 Rural Development & Panchayat Raj (SGS-3) Department dated 02.02.2016 for replacement of street lights with LED lights in Village Panchayats for the year 2015-16 it was stated that the Project Director ,District Rural Development Agency (DRDA) would be the tender inviting authority and the District Collector would be the tender accepting authority. As per para 9 of the guidelines, work order should be issued by the District Collector. Whereas , the AD( Panchayats ) Madurai had issued Memo to the BDO(VP) Sedapatti Panchayat Union for procurement of accessories at 10

market rate which is contrary to the guidelines issued by the Government. As the value of purchase of erection materials/ accessories exceeding Rs 25.00 lakh ( accessories for 1943 20W LED blub × Rs 1680 per set = Rs 32,64 240 ) , tenders through Advertisement should have been called for . However, it was observed from the files relating to the subject maintained in Sedapatti Panchayat Union that quotations were only obtained by the BDO (VP) instead of inviting tenders through advertisement and decided to procure the erection materials/ accessories . Accordingly, order was placed with M/S Retail and Distribution Madurai by the BDO (VP) Sedapatti Panchayat Union and an amount of Rs 32,64 240( 1943 set ×Rs 1680 per set) was remitted to the supplier by the 31 Village Panchayat towards supply of 1943 set of accessories for the year 2015-16 under Account No-I. Excess expenditure to local body –Rs 24,77,325 In the year 2016-17, tender was called for supply of 20 W LED street lights including all the accessories. The contractor had quoted Rs 405 per set of erection materials / accessories for 20 W LED blubs for the year 2016-17 and after negotiation, the rate for erection materials / accessories was fixed at Rs 400 per set . Had the department procured the erection materials / accessories by inviting tenders as stated in the guidelines as well as rule in force through advertisement for the year 2015-16 , as the value of the goods exceeds Rs 25,00,000, more competitors would have participated in the tender and procured at Rs 405 per set or lesser rate per set .This had resulted in an excess expenditure to the local body to the tune of Rs 24,77,325 (Rs 1,275 ( Rs 1,680 - Rs 405) × 1943 no. of set) for procurement of 1943 set of accessories for 1943 No .of 20 W LED street lights fittings for the year 2015-16. Unfruitful Expenditure- Rs 8,74,350 It was also observed from the reply to audit querries and during the visit of Athapatti Village Panchayat that out of 4 accessories supplied in the year 2015-16, 8 SWG ring coated Aliminum earth road 8 meter length (Rs. 200) and 25mm GL Grade straight earth Ripe with 3” Naga bolt nut with washer set were not fitted in the street light poles due to technical problems. Due to improper planning by the department, the materials procured at the cost of Rs. 450 per set (Rs. 200 + RS. 250) could not be used. Hence, it is construed in the Audit that the expenditure incurred to the tune of Rs. 8,74,350 (Rs. 450 X 1943 set) on procurement of earth road and pipe was unfruitful owe to the local bodies. 11

02. PURCHASE OF WATER CHLORINATION TABLET – (A) EXCESS EXPENDITURE OWING TO NON-ADOPTION OF PROCEDURE FOR PURCHASE OF GOODS – RS15.75 LAKH (B) AVOIDABLE EXPENDITURE DUE TO PURCHASE AND USED IN NON-MONSOON PERIOD –RS 17.35 LAKH The Director of Rural Development and Panchayat Raj instructed, in proceeding No. 38920/2012/PRI-4-1 dated 22.12.2015 and No.38920/2015/PRI4-1 dated 16.06.2016, all the Project Director, District Rural Development Agencies to take personal attention on the following points in order to ensure the protected drinking water in rural areas due to North East Monsoon I. All the public/private wells and bore wells were to be chlorinated at 2 PPM level II. Sumps need to be cleaned with bleaching powder to be applied regularly and proper chlorination to be done. III. Any repair in pipe lines should be attended immediately. IV. Even the water provided by the Village for other than drinking purpose should be chlorinated , since the unclean water used for bathing and hand washing vessels can also cause diarrhea Based on the above instructions issued by the DRD Chennai, the District Collector Madurai District had accorded permission to procure the Chlorine tablets from M/S Siva Agencies Pudukkottai at the rate of Rs 1298 per Kg and Rs 1400 to use in the OHTs Vide in letter number A3/ 1024 /2016 dated 16 08.2016 and A4/1962/2016 dated 16.12.2016 respectively. Accordingly, 930 Kg of Chlorine tablets at the rate of Rs 1297.80 per Kg and 1240 Kg of Chlorine tablets at the rate of Rs 1399.65 per Kg contains Sodium Di Chloro Isocyanurate were procured in October 2016 and January 2017 respectively to the total value of Rs 29,42,520 under General fund of the Sedapatti Panchayat Union from M/S Siva Agencies Pudukkottai and supplied to the village panchayats for purification of water in all OHTs in 31 Village panchayats as detailed below.

Quantity of Rate adopted for Voucher Number Amount Chlorine Tablet in payment per kg and Date Rs Kg Rs

165 / 06.10.2016 930 1297.80 1206954

258/ 03.01.2017 1240 1399.65 1735566

Total 2170 2942520

should also publish their tender notices in the web site of Central Purchase Organization (e.g. DGS&D). Quotations received instead of inviting tenders through Advertisement As the value of purchase exceeding Rs 25.00 lakh, the District Collector who is Inspector of Panchayat should invite tenders through Advertisement . However, it was observed from the files relating to the subject maintained in Sedapatti Panchayat Union that quotations were only obtained by the District Collector in the capacity of Inspector of Panchayat instead of inviting tenders through advertisement and decided to procure the entire Quantity of Chlorine tablet from M/S Siva Agencies Pudukkottai to use the Chlorine tablets in the OHT of all Village Panchayats at Madurai district. Accordingly, orders were placed with M/S Siva Agencies Pudukkottai and procured the Chlorine tablets under General Fund of the Union and distributed to Village panchayats to use in OHTs for water purification. Excess expenditure to local body –Rs 15,75,420 It was further seen from the list of Manufacturer and suppliers available in the web site that the Chlorine tablets contains the same specification (Sodium Di chloroisocyanurate with 60 % Chlorine) is available in the market at Rs 500 per Kg / Rs 630 per kg ( Rs 600 + Rs 30 VAT ) . Had the department procured the Chlorine tablets by inviting tenders through advertisement as the value of the goods exceeds Rs 25,00,000, more competitors could had been participated in the tender and can be procured at lesser rate than Rs 1297.80 and Rs 1399.65 per kg . Due to non procurement by inviting tenders, the local body had paid extra amount to the tune of Rs 15,75,420 as detailed below . Rate adopted Rate Total Voucher Quantity of Excess for payment available at excess Number and Chlorine per Kg per kg market payment Date Tablet in Kg Rs Rs Rs Rs 165 / 930 1297.80 630 667.80 6,21,054 6.10.2016 258/ 1240 1399.65 630 769.65 9,54,366 03.01.2017 Total 2170 15,75,420

The excess expenditure incurred due to purchase at higher rate than the market rate has to be got regularized under the orders of the competent authority under intimation to Audit Avoidable expenditure on purchase of chlorine tablets in non- Monsoon period – Rs 17,35,566 The District Collector Madurai District had issued orders in August 2016 and December 2016 to purchase the chlorine tablets and to use in the OHTs to ensure the protected drinking water in rural areas due to Monsoon . Normally, the South West Monsoon starts from June and end with September and North East Monsoon starts from October and end with December every year. The District Collector Madurai had ordered to purchase chlorine tablets and supplied the chlorine tablets to Village Panchayats on 06.10.2016 and 03.01.2017. Chlorine tablets were purchased in first week of October 2016 and first week of January 2017 . There was no Monsoon from January to May . The intended purpose of purchase of chlorine tablets is to provide the protected water to rural people during raining seasons. Whereas, the chorine tablets were purchased and used during the non-raining seasons ie. from January to May which have not served the intended purpose. So the expenditure incurred to the tune of Rs 17,35,566 for purchase of chlorine tablets in January 2017 is avoidable one to the Sedapatti Panchayat Union. When this was pointed out, it was replied that as per the instructions issued by the District Collector Madurai, chlorine tablets was purchased and payment was made under LP account No.1 of the Union. Reply is not acceptable because as per the procedure stated in th manual for procurement of goods, tenders should have been called for through advertisement as the value of the chlorine tablet exceeds Rs. 25.00 lakh. The reason for non following of the tender transparent Act and provision under the furnished to audit. Justification for avoidable expenditure is awaited.

Part II –B

03. UNDUE BENEFIT TO THE CONTRACTOR DUE TO INCLUSION OF GST IN THE ESTIMATE RS.2,89,366/- The Scheme of Goods and Service Tax (GST) was introduced with effect from 01.07.2017. Before implementation of GST, the procedure of recovery of sales tax at the rate of 2 per cent for civil works, and 5 per cent for water supply and electrical works, was enforced from the payment made to the contractor on completion of work. Other recoveries like IT and LWF shall continue to be recovered. On a test check of four estimates and payment vouchers, it was noticed that the provision of GST at rate of 12 per cent (SGST 6% + CGST 6%) was included in the estimate as lump sum provision as well as in the value of work done and the GST amount was deducted from the final bill made to the contractors for subsequent remittance into relevant head of account, as detailed in the annexure. Instead of recovery from the amount due to contractor, towards GST, the department had included the GST amount in the value of work done and deducted the GST from the bill, which is not correct. Thus, the incorrect practice of providing GST in the estimate and value of work done had resulted in an undue benefit of Rs.2,89,366 to the contractors as detailed in the annexure. (This is illustrative cases only). All similar cases may be reexamined and suitable action may be taken under intimation to audit. This is pointed out for necessary action. It was replied that the matter would be referred to the DRDA, Madurai and detailed reply sent. Final reply is awaited.

ANNEXURE Provision made in the estimate and amount Estimate Sl.No Name of the work included in the value in Rs of work done towards GST (12 %) Providing new bore well with pipeline and motor to 1. previously existing OHT Rs.4,00,000 Rs.41,532 Kanniyampatti Village @ Perungamanallur Panchayat Providing Paver block Pavement from Panchayat 2. office to AD Colony Street @ Rs.9,50,000 Rs.1,00,491 Periyakattalai Village Panchayat Providing New bore well with pipeline and to the existing 3. Rs.4,00,000 Rs.42,272 OHT Vandapuli Village @ Vandapuli Panchayat Providing Paver block 4. pavement in Burial Ground in Rs.9,90,000 Rs.1,05,071 Periyakattalai

Total Rs.2,89,366

A.A.O/LBII

04. AMMA CEMENT - (i) NON-RECEIPT OF ADMINISTRATIVE EXPENSES FROM AD (AUDIT) Rs. 1,45,582 (ii) NON-CONDUCTING ANNUAL PHYSICAL VERIFICATION Government in G.O.Ms. No: 188 Industries (MID-2) Department launched a new scheme called “AMMA CEMENT SUPPLY SCHEME” for supply of cement to lower and middle income groups at concessional rates of Rs. 190/- per bag to the public in order to mitigate the hardship faced by them subject to the following conditions. The scheme shall cover entire State, Block level, Town Panchayat. The houses constructed under the CMSPGHS and IAY schemes also avail the benefit under the scheme. It is seen from the guidelines that the non-recurring and recurring costs shall be initially met from the General Fund of the concerned Panchayat Union and the cost shall be adjusted after the receipt of funds under the head “admin expenses” from TANCEM at the rate of Rs.3.50 per bag. It is seen from the records that 78,825 number of cement bags were issued to the beneficiaries. Out of Rs. 2,75,887 to be reimbursed from AD(Audit) as seen from the proposal submitted to the AD(Audit) Madurai an amount of Rs. 1,30,305/- was received from TANCEM, through the Assistant Director (Audit) Madurai district and the balance amount of Rs. 1,45,582 is to be reimbursed from AD(Audit)Madurai and credit the same into Local Fund Account No. I of the Union. However, balance Admin Charges were not received from the TANCEM till date. (ii) NON-CONDUCT OF ANNUAL PHYSICAL VERIFICATION As per the article 139 of Tamilnadu financial code, Physical verification should be conducted at the end of every financial year by an officer other than in charge of the stores and a certificate of verification should be recorded in the Stock Register. However, on a verification of stock register it was noticed that annual physical verification was not done by the authorities concerned. It was replied that the matter would be referred to the Assistant Director (Audit) Madurai and action would be taken to conduct annual physical verification. Final reply is awaited.

05. NON-PAYMENT OF ELECTRICITY CHARGES TO TANGEDCO - RS.49,23,199/- On a scrutiny of Demand, Collection and balance statement upto the year 2017-2018, in respect of 31 Village Panchayats, relating to payment of electricity charges, it is noticed that huge amount to the tune of Rs.49,23,199/- is pending payment to the Tamilnadu Electricity Board towards Electricity Charges. As the delay in payment of Electricity Charges would attract penalty, action may be taken to pay the E.B charges without any delay to avoid Belated Payment surcharge (BPSC) Action taken in this regard may be reported to audit It was replied that action would be taken to pay the electricity charges to TANGEDCO and detailed reply would be sent. 19

06. NON-RELEASE OF FINANCIAL ASSISTANCE UNDER MOOVALUR RAMAMIRTHAM AMAIYAR THIRUMANA UDAVI THITTAM 2015-16, 2016-17 AND 2017-18. Government in G.O.Ms.No.49 Social Welfare and Nutritious Meal Programme Department dated 26.07.2011, issued revised guidelines for implementation of Moovalur Ramamirtham Ammiayar Marriage Assistance Scheme for the welfare of the Poor Women. The important guidelines for the implementation of the Scheme are as follows: The women beneficiary should have attained the age of 18 years and should not be married at the time of the submission of the application. (2) Financial Assistance of Rs.25,000/- and Rs.50,000/- be sanctioned for those who have passed 10th standard and diploma/degree holders respectively. In addition to this, Eight gram gold coin should be issued. (3) The application should be received 40 days before the date of marriage. On verification of Moovalur Ramamirtham Ammaiyar Marriage Assistance Scheme records, it was noticed that out of 389 applications received from the eligible beneficiaries during the year 2015-16, financial assistance were released to 328 beneficiaries alone leaving 61 beneficiaries, even after completion of the marriage. During the year 2016-17, financial assistance was released to 112 beneficiaries out of 317 eligible applicants and financial assistance was not released to remaining 205 eligible applicants. In respect of the year 2017-18, financial assistance was not released to all the 192 eligible beneficiaries. The main objective of the scheme is that by utilizing the financial assistance of the government, the marriage activities of the bride should have been taken up. Due to non-release of financial assistance under the scheme of Moovalur Ramamirtham Amaiyar Thirumana Udavi Thittam, the poor beneficiaries were deprived of the benefit intended by the Government of Tamil Nadu. The circumstances under which the financial assistance was not released to the eligible beneficiaries during the financial year itself may be stated to audit. It was replied that the matter would be referred to the DSWO, Madurai for release of financial assistance and detailed reply would be sent. 20

07. IMPLEMENTATION OF SINKING OF WELLS AND SAFETY MEASURES IN VILLAGE PANCHAYATS. Tamilnadu Panchayats (Regulation of Sinking of wells and safety measures) Rules 2015, was notified in the Tamilnadu Gazette on 18th February 2015, where in it was notified that every Village Panchayat President should grant Permit for sinking, deepening or rehabilitation of a well and also give certificate of Registration in Form F to carry out the business of Sinking, deepening or rehabilitation of wells, by collecting a fee of Rs. 5000/- and Rs. 15000/- respectively and should keep all the details in the Form A to F, as detailed below, as per the Gazette notification. Form A : Application for grant of permit. Form B : Permit for sinking well. Form C : Register of grant of Permit for Sinking of wells. Form D : Monthly report of grant of Permit for the respective month. Form E : Application for Certificate of Registration. Form F : Certificate of Registration. When the details of permit granted and fees realized through sinking of Borewells from the year 2015 to 2018 in 31 Village Panchayats under the control of PUC Sedapatti, it was replied that no permission was granted and fees realised for sinking of borewells and instruction would be issued to village panchayat to grant permission.

08. MGNREGS- SOCIAL AUDIT - MALLAPURAM AND SAPTUR VILLAGE PANCHAYAT - ACTION – TAKEN REPORT CALLED FOR The works taken up under the scheme of MGNREGS was audited by the Social Audit Team and the Social Audit Report was placed in the Grama Sabha for approval. The objections raised by the Social Audit Team of PUC Sedapatti for the year 2014-2015, 2015-2016, 2016-2017 in respect of the Village Panchayats namely Mallapuram and Saptur are detailed below. S. Name of the Village Number of Observations raised No Panchayat 2014-2015 2015-2016 2016-2017 Not received Not received 1 Mallapuram 16 paras from Social from Social Audit Audit

2 Saptur Not available 16 paras 13 paras

In this connection, the details of action taken if any to rectify the detects along with connected records may be produced to audit. It was replied that action would be taken to rectify the defects pointed out in Social Audit Report. Final reply is awaited.

09. MALLAPURAM VILLAGE PANCHAYAT. I) NON INCREASE OF MONTHLY RENT FOR COMMERCIAL SHOPS II) NON-FIXING OF RENT AND COLLECTION OF RENT FROM POST- OFFICE FUNCTIONING IN PANCHAYAT BUILDING Six shops were constructed in Mallapuram Village panchayat in Panchayat land. Out of which, five shops were leased on monthly rent at the rate of Rs. 400/- per month. The year in which the shops were constructed were not available on record. An amount of Rs.24,000/- was realized as non-tax revenue to the Village Panchayat. According to the existing rules, the monthly rent should have been increased by five present at the end of every year till third year. Rent control agreement should have been executed between the Village Panchayat and the lessee initially for a period of 11 months and subsequently renewed. However, it was seen from the records that the monthly rent was not increased every year by five percent, and rent control agreement was also not executed till date. Further, one shop was allotted to Postal Department from the year 2012 and no rent was fixed and collected from Postal Department . Hence, action may be taken to fix the monthly rent and raise demand to fetch a significant revenue to the Village Panchayat. It was replied that action would be taken to increase the monthly rent and action would be taken to fix rent for the buildings occupied by Postal Department.

10. INOPERATIVE ACCOUNT TO BE CLOSED It was seen from the cash book and bank pass book that twenty three savings bank accounts maintained for implementation of various Central and State government schemes in PUC Sedapatti were not in operation for more than five years. Interest amount alone is being credited by the concerned bank, which resulted in accumulation of amount in the savings bank account. As the savings bank account is no longer necessary, action may be taken to close the in-operative savings bank account and surrender the unutilised scheme funds, under intimation to audit. It was replied that action would be taken to close the in-operative SB account and detailed reply would be sent.

For Sr. Deputy Accountant General/SS II