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ANNUAL REVIEW REPORT ON THE WORKING OF TREASURIES IN THE STATE OF ANDHRA PRADESH FOR THE YEAR 2019-20 PRINCIPAL ACCOUNTANT GENERAL (A&E) ANDHRA PRADESH, HYDERABAD PREFACE The Treasuries are primarily responsible for preparation and correctness of initial and subsidiary accounts as well as ensuring regularity of financial transactions in accordance with applicable codes, manual and administrative procedures relating to such accounts and transactions. To ensure internal controls in financial reporting and compliance to rules and regulations in financial transactions inspection of District Treasuries is periodically undertaken under Section 10, 13 and 17 of CAG (DPC) Act, 1971 read with Regulations on Audit and Accounts 2007. This Annual Review Report on the working of Treasuries in the State of Andhra Pradesh for the year 2019-20 is prepared as required under Paragraph 20.17 of Manual of Standing Orders (A&E) Volume I. The Report includes deficiencies noticed during compilation of accounts and local inspections of treasuries conducted during 2019-20 for improving the functioning of treasuries. The review is intended to draw the attention of the State Government and Departmental Authorities to the delays in rendering of accounts, short comings in maintenance of initial accounts, other defects noticed during the course of compilation of accounts. I hope Government and Director of Treasuries and Accounts will take appropriate remedial measures to improve the functioning of Treasuries and Accounts Department by exercising effective internal controls. Principal Accountant General (A&E) (i) TABLE OF CONTENTS Page Sl.No Contents No. i) Highlights (iii) Part-1 ii) 1 Introduction Part-2 iii) 7 Defects noticed during compilation and verification of accounts Part-3 iv) Defects and other irregularities 12 noticed during inspection of treasuries (ii) (ii) HIGHLIGHTS SI. Para No Gist of Para No 634 inspection reports containing 2,410 paras were outstanding by 1 3.1.2 the end of 31-3-2020 54,730 items of vouchers amounting to 3171.46 Crore are wanting 2 2..1.2 from various Treasuries Delay in adjustment of advances on 1797 items of AC bills 3 2.2 amounting to 1207.13 Crore 4 Adverse balance under PD Accounts amounting to 14.16 crore 3.2.4 Misclassification under MH 8009 Regular GPF Account –351 items of 5 Class IV GPF, CPS, ZPPF debits amounting to 2.16 crore and 6902 2.5.3 items of credits amounting to 6.03 crore 6 Non-lapsing of Civil Deposits under‘B’Category - .1.99 crore 3.2.1 7 Unadjusted balances and irregularities in Contributory Pension 3.2.6(II) Scheme(CPS) – 9.55 crore 8 Excess payment of pensions amounting to 89.81 lakh was noticed 3.3.1 in Sub-Treasuries 9 Irregular payment of DA and HRA to the contract employees 17.66 3.5.4 lakh 10 Double drawal of EEL bills amounting to 14.84 lakh 3.3.2 11 Non deduction of Income Tax from pension arrears 14.24 lakh 3.3.7 12 Adverse balances in Class-IV GPF accounts 13.18 lakh 3.4.2 13 Non recovery of IT on rent paid to private buildings 11.45 lakh 3.5.5 (iii) Annual Review Report for the year 2019-20 PART – I INTRODUCTION Treasuries and Sub-treasuries in Andhra Pradesh function under the administrative control of the Director of Treasuries and Accounts (DTA), Andhra Pradesh, Ibrahimpatnam, Vijayawada under the Finance Department of the State Government of Andhra Pradesh. In addition to the treasuries, the following authorities also attend to treasury functions and/or render accounts to this office. Pay and Accounts Officer (PAO), Ibrahimpatnam. Pay and Accounts Officer (Andhra Pradesh Bhavan), New Delhi. 1.1 ORGANISATIONAL SET-UP The Treasuries and Accounts Department carved out of the Revenue Department on 1.4.1958, with the mandate of upholding financial propriety in State Public financial operations. The Department has two wings—Treasuries and Accounts. While the Treasuries operate at the district and below district levels, through District and Sub Treasuries located at the erstwhile Taluk level, Accounts Branches assist at the Heads of Departments level, in the capital region. Presently, there are 13 District Treasuries, AP State Capital Region Treasury, 196 Divisional Sub Treasuries and Sub Treasuries functioning in the field, whereas nearly 24 Accounts branches of 183 HODs are operating at the Headquarters. Figure 1 Districts of Andhra Pradesh Page 1 Annual Review Report for the year 2019-20 The hierarchical structure of the Department of Treasuries and Accounts is as follows Finance Department Pay and Accounts Director of Office, Treasuries and Ibrahimpatnam, Accounts (DTA) Andhra Pradesh District Treasuries APCRT (13) Sub Divisional Sub Treasuries Treasuries (52) (144) All the 52 Divisional Sub Treasuries and 144 Sub-Treasuries functioning in the State are Banking Treasuries (Details vide Annexure 1.1 and 1.2) 1.1.1 ROLE OF THE TREASURIES AND ACCOUNTS DEPARTMENT a. Expenditure regulation: Ensures economy in expenditure in the State Government. Handles major share in the total State budget. b. Handles 40,000 Personal Deposit Account operations in the entire State. c. Pension Disbursement to nearly 3.60 lakh pensioners. d. Operation of Contributory Pension Scheme covering 1.80 lakh employees. e. Operations of Strong Room as a custodian of all Government departmental valuables. f. Acts as Fund Manager in respect of Class-IV GPF in the State. g. ZP/Municipal provincialized staff were brought under the purview of Treasuries. h. One lakh village/ward secretariat staff are brought under the Treasury fold. i. Upholds Financial Propriety for all financial operations in the State by following Financial Rules, Fundamental Rules, Treasury Rules, Statutory Rules and cadre management. j. Renders advisory support to State Government in respect of Public Finance Management and acts as Financial Advisor for HODs through the functioning of Account Branches. Page 2 Annual Review Report for the year 2019-20 1.1.2 POSITION OF TREASURY STAFF The Treasuries/Sub-treasuries including the Directorate of Treasuries and Accounts has total Men-in-Position of 2,291 against Sanctioned Strength of 3205 as on 31.3.2020. Cadre wise details are given below- Sanctioned Men in Designation strength position Director 1 1 Addl. Director 1 1 Joint Director 3 3 Dy.Director/CAO 17 12 DTOs 10 9 Asst.Director/AO 18 16 AAO/ATO 92 83 STOs 376 373 Junior Accounts Officer 82 82 Senior Accountant 1327 1112 Junior Accountant 618 325 U.D.Steno 2 0 L.D.Steno 2 0 Typists 58 7 Shroff 186 85 Drivers 1 0 Record Assistant 9 3 Daffedar 1 0 Office Sub-ordinate 394 177 Night watchmen 7 2 Total 3205 2291 1.1.3 INFORMATION REGARDING NUMBER OF PERSONS TRAINED IN CFMS Information regarding number of persons trained in CFMS is not available with this office. 1.1.4 STAFF POSITION VIS-A-VIS VOLUME OF WORK, NUMBER OF BILLS/STAFF There is a shortage of 914 officers/officials in the Treasury and Sub-Treasury including DTA establishment in the state of Andhra Pradesh. Page 3 Annual Review Report for the year 2019-20 1.2 COMPUTERIZATION 1.2.1 STATUS OF COMPUTERIZ ATION OF TREASURIES Vide GO Ms No.192, Dt:10.07.2016 and GO Ms No.203, Dt:21.10.2016, Finance Department has initiated the process for implementing the Comprehensive Financial Management System (CFMS), an SAP based ERP system for the Government of Andhra Pradesh (GoAP). The Comprehensive Financial Management System aimed at covering all processes relating to carrying out of financial transactions in Government offices i.e., both collection of receipts as well as expenditure including rendering of accounts to the AG and reports requirements to all stake holders. The CFMS being the key stake holder for the project deployed several key resources to act as the project core team on full time basis. The project primarily covers receipts, expenditure including PD accounts management, budget, Human Resources, accounting and reporting areas. The Government have launched receipts module w.e.f. 01.03.2018 and expenditure module w.e.f. 02.04.2018 as Phase I of the project. As a part of modernization, instead of replicating manual processes electronically, it is reengineered several business processes and implemented them in the system. The main objectives of CFMS are: Seamless workflow with flexibility at the head of the office level to define the maker/ checker/ approvers for their office No movement of paper bills across offices to treasuries (except M-books, for now) Integration of mandatory Aadhaar based approvals and digital signatures at all submission and approval levels Streamlined business processes to facilitate budget checks, FIFO based processing and payments Single source of truth for all transactions All offices (including non-DDO offices) as unique Organizational Units including the position to person, person to person, person to OU and OU to OU relationships/hierarchies Integration of all Autonomous Organizations seamlessly into the Structure along with the PD accounting process Transparency to the stakeholders like Citizens/Vendors to view real-time status of their data Page 4 Annual Review Report for the year 2019-20 Migration of Works & Forest Accounts and Capital Region PAOs and its sub-units (like AP Bhavan, Legislature) to the Treasury mode of accounting along with discontinuing the use of transitory accounts Integrated budget management activities for additionalities, re-appropriations, surrenders and distributions, along with a seamless integration between budgeting and expenditure Foundation for further rationalization and standardization of process 1.2.2 STATUS AFTER IMPLEMENTATION OF CFMS Paperless audit: Eliminated hard copies of bills in full. DDOs present bills electronically with digital signatures and the same are processed in Treasuries. Transparency at all levels: Any transaction can be tracked any time by all stakeholders, online in CFMS Portal.

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