Report of the Comptroller and Auditor General of India (CIVIL) for the year ended 31 March 2011 GOVERNMENT OF ANDHRA PRADESH www.cag.gov.in Table of Contents Reference to Paragraph Page Preface v Chapter 1 – Introduction Overview of this Report 1.1 1 Profile of Audited entities 1.2 1 Office of the Accountant General (Civil Audit), Andhra Pradesh 1.3 2 Authority for audit 1.4 2 Planning and conduct of audit 1.5 2 Response of the departments to Audit findings 1.6 3 Significant Audit observations 1.7 4 Chapter 2 – Agriculture Department Functioning of Agriculture Department 2.1.2 12 Chapter 3 – Animal Husbandry and Fisheries Department Department profile 3.1 43 Unauthorised production and distribution of animal vaccines 3.2 44 Chapter 4 – Consumer Affairs, Food and Civil Supplies Department Department profile 4.1 46 Extra financial burden due to excess allotment of kerosene 4.2 46 Chapter 5 – Health, Medical and Family Welfare Department Department profile 5.1 49 Functioning of Blood banks 5.2 50 Functioning of Trauma Care Centres 5.3 54 Reference to Paragraph Page Functioning of equipment in Medical colleges 5.4 58 Fraudulent drawal of pay and allowances and advances 5.5 60 Chapter 6 – Home (Police) Department Department profile 6.1 63 Sub-optimal utilisation of Interceptor boats 6.2 63 Chapter 7 – Industries and Commerce (Handlooms and Textiles) Department Department profile 7.1 67 Implementation of Integrated Handloom Development Scheme 7.2 67 Chapter 8 – Labour, Employment, Training and Factories Department Department profile 8.1 77 Functioning of Rajiv Udyogasri Society 8.2 77 Chapter 9 – Municipal Administration and Urban Development Department Department profile 9.1 85 Functioning of Vijayawada, Guntur, Tenali, Mangalagiri Urban 9.2 85 Development Authority Chapter 10 – Planning Department Department profile 10.1 109 Constituency Development Programme 10.2 109 Chapter 11 – School Education Department Department profile 11.1 120 Implementation of ICT Policy 11.3 120 ȁ Reference to Paragraph Page Chapter 12 – Tribal Welfare Department Department profile 12.1 130 Road connectivity works in tribal areas 12.2 130 Chapter 13 – Youth Advancement, Tourism & Culture (Sports) Department Department profile 13.1 133 Unwarranted loan burden in construction of Sports Hostel 13.2 133 ȁ Appendices Reference to Paragraph Page 1.1 Year-wise break-up of outstanding Inspection Reports and 1.6 137 Paragraphs 1.2 Number of paragraphs where Explanatory Notes were not 1.6 137 received from Government for the years 2007-08 to 2009-10 (as of November 2011) 5.1 Blood banks in which blood was extracted from ineligible 5.2.2 138 donors 5.2 Details of funds released in respect of civil works, funds 5.3.2 140 placed at the disposal of APHMHIDC and expenditure incurred thereon, etc. 5.3 Details of funds released in respect of equipment, funds 5.3.3 141 placed at the disposal of APHMHIDC and expenditure incurred thereon, etc. 5.4 Details of staff prescribed for functioning of Trauma Care 5.3.4 141 Centres and number of personnel recruited in the hospitals 5.5 Pay and allowances fraudulently drawn 5.5 142 7.1 Funds released by GoI and its release by State Government 7.2.5.1 143 for clusters under IHDS 7.2 Funds released by GoI and its release by State Government 7.2.5.1 143 for groups under IHDS 9.1 Zone-wise anticipated investment (up to 2011) in respect 9.4.1 144 of VGTMUDA 9.2 Change of land use approved by VGTMUDA/ 9.5.2 145 Government though not permissible 9.3 Receipts of the Authority during the years 2006-07 to 9.8.1 145 2010-11 9.4 Details of funds parked in Short Term Deposits (STDs) 9.8.3 146 during the period 2006-07 to 2010-11 (VGTMUDA) 12.1 Status of road connectivity works in tribal areas taken up 12.2 147 with NABARD (RIDF-X) funding Glossary 149 ȁ Preface his Report has been prepared for submission to the Governor under Article 151 of the T Constitution. The Report consists of 13 chapters. Chapter-1 presents the profile of the audited entities, authority for audit, planning and conduct of audit and key audit findings. The 12 other chapters cover significant matters arising out of the compliance and performance audit of various departments including autonomous bodies. The cases mentioned in this Report are among those which came to notice in the course of test audit of accounts during the year 2010-11 as well as those which had come to notice in earlier years but could not be dealt with in previous Reports; matters relating to the period subsequent to 2010-11 have also been included wherever necessary. ȁ Chapter 1 - Introduction 1.1 Overview of this Report This Report of the Comptroller and Auditor General of India (CAG) relates to matters arising from performance audit of selected programmes and departments of the Government of Andhra Pradesh, compliance audit of transactions of its various departments, Central and State plan schemes and audit of autonomous bodies of the State. Performance audit, besides including compliance audit, also examines whether the objectives of the programme/activity/department are achieved economically, efficiently and effectively. On the other hand, Compliance audit refers to examination of the transactions relating to expenditure of the audited entities to ascertain whether the provisions of the Constitution of India, applicable laws, rules, regulations and various orders and instructions issued by the competent authorities are being complied with. The primary purpose of this Report is to bring to the notice of the State Legislature, significant results of audit. Auditing Standards require that the materiality level for reporting should be commensurate with the nature, volume and magnitude of transactions. The findings of audit are expected to enable the Executive to take corrective action, to frame appropriate policies as well as to issue directives that will lead to improved financial management of the organisations and contribute to better governance. This chapter, in addition to explaining the planning and extent of audit, provides a synopsis of the significant achievements and deficiencies in implementation of selected schemes, significant audit observations made during the audit of transactions and follow-up on previous Audit Reports. 1.2 Profile of Audited entities Government of Andhra Pradesh comprises of 34 departments at the Secretariat level headed by Chief Secretary/Special Chief Secretaries/ Principal Secretaries/Secretaries, who are assisted by Deputy Secretaries/Commissioners/ Engineers-in-Chief/ Chief Engineer/Principal Chief Conservator of Forest/Chief Conservator of Forest and subordinate officers under them which are audited by the Office of the Accountant General (Civil Audit), Andhra Pradesh. Audit Report (Civil) for the year ended 31 March 2011 1.3 Office of the Accountant General (Civil Audit), Andhra Pradesh Under the directions of the CAG, the Office of the Accountant General (Civil Audit), Andhra Pradesh conducts the audit of civil and works departments of Government of Andhra Pradesh and autonomous bodies thereunder. It also conducts audit of civil offices and autonomous institutions of Central Government located in the State. 1.4 Authority for audit The authority for audit by the CAG is derived from Articles 149 and 151 of the Constitution of India and the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971. Accountant General (Civil Audit) conducts audit of expenditure of the civil and works departments under Section 131 of the CAG's (DPC) Act and that of 17 Central autonomous bodies and 45 State autonomous bodies, under Sections 192 and 203 of that Act. In addition, there are 345 State autonomous bodies (SABs) which are substantially funded by the Government attracting audit under Section 144 of the CAG's (DPC) Act. For the conduct of superimposed audit under Section 14, the audited entities are required to submit their certified annual accounts to the Accountant General (Civil Audit). During 2010-11, only 68 of the 345 SABs had submitted their certified accounts. Again, out of 68 autonomous bodies which had submitted their accounts, 13 autonomous bodies had not submitted the primary auditor’s reports and, hence, their audit could not be taken up by the Accountant General (Civil Audit). The audits were conducted in accordance with the principles and methodologies as prescribed in the Auditing Standards and Regulations on Audit and Accounts, 2007. 1.5 Planning and conduct of audit The sectoral expenditure of the State Government during the current year (2010-11) and the previous year was as shown in the Chart 1.1. 1 Audit of (i) all transactions from the Consolidated Fund of the State, (ii) all transactions relating to Contingency Fund and Public Account and (iii) all trading, manufacturing, profit and loss accounts, balance sheets and other subsidiary accounts 2 Audit of the accounts of Corporations (not being Companies) established by or under law made by the State Legislature in accordance with the provisions of the respective legislations 3 Audit of accounts of any body or authority on the request of the Governor, on such terms and conditions as may be agreed upon between the CAG and the Government 4 Audit of all receipts and expenditure of a body/authority substantially financed by grants or loans from the Consolidated Fund of the State and all receipts and expenditure of any body or authority where the grants or loans to such body or authority from the Consolidated Fund of the State in a financial year is not less than ` one crore ȁʹ Chapter 1 - Introduction Chart-1.1 Sectoral expenditure of the State Government 35000 30000 25000 29751 20000 32924 29275 26396 26817 in crore) 15000 21483 ` ( 10000 5000 0 General Services Social Services Economic Services 2009-10 2010-11 Audit process commences with the assessment of risk of the deparrtment/organisation/ autonomous body/scheme, etc.