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Report of the Comptroller and Auditor General of India

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Report of the Comptroller and Auditor General of India Report of the Comptroller and Auditor General of India for the year ended 31 March 2010 (Report No. 2) GOVERNMENT OF MIZORAM TABLE OF CONTENTS Paragraph Page Preface v Overview vii CHAPTER-I PERFORMANCE REVIEWS RURAL DEVELOPMENT DEPARTMENT Border Area Development Programme 1.1 1 FOOD, CIVIL SUPPLIES AND CONSUMER AFFAIRS DEPARTMENT Public Distribution System 1.2 29 CHAPTER-II AUDIT OF TRANSACTIONS Wasteful/Temporary Misappropriation/Avoidable/Diversion/Idle Expenditure PUBLIC WORKS DEPARTMENT Wasteful expenditure 2.1 59 INDUSTRIES DEPARTMENT Temporary misappropriation/non-accountal of Government money 2.2 61 PUBLIC WORKS DEPARTMENT Loss due to undue financial aid to contractors 2.3 62 DISTRICT COUNCILS AFFAIRS DEPARTMENT Undue financial benefit to contractor 2.4 63 SOCIAL WELFARE DEPARTMENT Grant of old age pension to ineligible beneficiaries 2.5 65 LAND REVENUE AND SETTLEMENT DEPARTMENT Avoidable expenditure 2.6 67 RURAL DEVELOPMENT DEPARTMENT Unauthorised diversion of Central assistance 2.7 68 DISTRICT COUNCILS AFFAIRS DEPARTMENT Unauthorised diversion of recurring grants 2.8 69 LAND REVENUE AND SETTLEMENT DEPARTMENT Drawal of funds before actual execution of project 2.9 70 ANIMAL HUSBANDRY AND VETERINARY DEPARTMENT Idle expenditure 2.10 72 Regularity issues and other points General Follow up of Audit Reports 2.11 74 Response to audit observations and compliance thereof by the 2.12 75 Executive Audit Report (Civil) (Report No. 2) for the year ended 31 March 2010 Paragraph Page CHAPTER-III INTEGRATED AUDIT Integrated Audit of Higher and Technical Education Department 3.1 77 CHAPTER-IV REVENUE RECEIPTS General Trend of revenue receipts 4.1 103 Details of tax revenue 4.1.2 103 Details of non-tax revenue 4.1.3 104 Variations between the budget estimates and the actuals 4.1.4 105 Cost of collection 4.1.5 105 Arrears in assessment 4.1.6 106 Analysis of arrears of revenue 4.1.7 106 Failure to enforce accountability and protect interest of the 4.1.8 107 Government Follow up on Audit Reports - summarised position 4.1.9 108 Audit committee meetings 4.1.10 108 Result of audit 4.1.11 108 TRANSACTION AUDIT INDUSTRIES DEPARTMENT Loss of revenue 4.2 109 Loss of revenue due to application of lower rate of royalty 4.3 111 Loss of revenue due to non-levy of royalty 4.4 113 ENVIRONMENT AND FOREST DEPARTMENT Loss of revenue due to application of lower rate of royalty 4.5 114 CHAPTER-V GOVERNMENT COMMERCIAL AND TRADING ACTIVITIES General Overview of State Public Sector Undertakings 5.1 117 AUDIT OF TRANSACTIONS POWER AND ELECTRICITY DEPARTMENT Execution of Serlui ‘B’ Hydro Project 5.2 129 INDUSTRIES DEPARTMENT ZORAM INDUSTRIAL DEVELOPMENT CORPORATION LIMITED Infructuous expenditure on setting up a call centre and 5.3 131 ITES Training Centre ii Table of Contents APPENDICES Appendix Page Statement showing details of execution of inadmissible works 1.1.1 135 Statement showing details of Block wise On-Going works completed within 1.1.2 141 Approved Outlay and with Cost-Over-Run during 2005-06 to 2009-10 Statement showing details of on-going (Incomplete) works during 2005-06 to 1.1.3 146 2009-10 Statement showing the Retailer-wise excess payment of transportation 1.2.1 155 charges for lifting of Rice from godowns to FPSs Statement showing details of pending bills of Rice and Wheat resubmitted to 1.2.2 159 FCI for reimbursement under Hill Transport Subsidy Scheme Statement showing the year-wise position of allocation of foodgrain (Rice, 1.2.3 160 Wheat, Sugar) and Kerosene Oil and their lifting during 2005-10 Statement showing Centre-wise position of stock shortage of Rice during 1.2.4 162 2005-06 to 2009-10 in Champhai and Aizawl district Statement showing Centre-wise position of stock shortage of Sugar during 1.2.5 165 2005-06 to 2009-10 in Champhai and Aizawl district Statement showing Centre-wise position of short remittance of sales proceed of 1.2.6 167 foodgrain during 2005-10 Statement showing interest due on mobilisation advance against three 2.1 169 contractors in respect of three different projects Statement showing outstanding Utilisation Certificates (UCs) against 3.1 171 grants-in-aid released to deficit colleges Statement showing splitting up of sanctions orders 3.2 172 Statement showing financial assistance granted by UGC under special scheme 3.3 173 for construction of Women Hostel Statement showing particulars of up to date paid-up capital, loans outstanding and Manpower as on 31 March 2010 in respect of Government 5.1 174 companies Statement showing equity/loans received out of budget, grants and subsidy received/receivable, guarantees received, waiver of dues, loans written off 5.2 175 and loans converted into equity during the year and guarantee commitment at the end of March 2010 Summarised financial results of Government companies for the latest year for 5.3 176 which accounts were finalised Statement shown on investments made by the State Government in working PSUs by way of equity, loans, grants and others during the period which the 5.4 177 accounts have not been finalised as on 31 March 2010 Statement showing operational performance of Power and Electricity 5.5 178 Department for the last three years ending 31 March 2010 Glossary of Abbreviations 181 iii PREFACE 1. This Report has been prepared for submission to the Governor under Article 151 of the Constitution. 2. Chapters - I, II, III, IV and V of this Report deals with the findings of performance audit, audit of transactions and integrated audit in various Departments including the Public Works Department, Revenue Receipts, audit of Government Companies, Statutory Corporations of the State Government for the year 2009-2010. 3. The cases mentioned in the Report are among those which came to notice in the course of test audit of accounts during the year 2009-10 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 2009-10 have also been included wherever necessary. 4. The audit has been conducted in conformity with the Auditing Standards issued by the Comptroller and Auditor General of India. OVERVIEW OVERVIEW This Report contains 16 Audit Paragraphs (excluding three general paragraphs) and two Performance Reviews and one Integrated Audit. According to the existing arrangements, copies of the draft audit paragraphs, draft performance reviews and draft Integrated Audit were sent to the concerned Secretary to the State Government by the Accountant General (Audit) with a request to furnish replies within six weeks. The Secretaries were also reminded for replies. Besides, a discussion was also arranged with the Chief Secretary to the State Government on the issues raised in the draft audit paragraphs, draft performance reviews etc., for effective inclusion of the views/comments of the Government in the Audit Report. Despite such efforts, replies were not received in respect of four audit paragraphs from the concerned Principal Secretaries/Secretaries to the State Government. 1. Performance Review Border Area Development Programme The Border Area Development Programme was initially started during the seventh Five-Year Plan with the main objectives of balanced development of border areas and also to meet the development needs of the people living in remote and inaccessible areas situated near the international borders. The programme was revamped in the Eighth Five Plan and further extended to those States having an international border with Bangladesh. During the ninth Five-Year Plan, the programme has been further extended to the states, which have an international border with Myanmar. The main objective of the Border Area Development Programme of speedy development of border area was not achieved to the desired extent due to inherent deficiency in planning and implementation of the programme. Diversion of substantial funds towards ineligible works/schemes and delays in release of funds adversely impacted the coverage of a number of critical sectors of the programme. Disproportionate allocation of funds to the border blocks deprived the border villages of an equitable share of the development programmes. Schemes were approved without giving priority for completion of on-going works/schemes on time with specific time schedule for completion which resulted in non completion of works/schemes. Delay in completion of works/schemes resulted in large scale cost over-runs. Quality of infrastructure created remain unverified with reference to technical estimates and designs due to non maintenance of the MBs. Besides, non-maintenance of assets is bound to prove detrimental to the life span of the assets already created under the programme. Monitoring, internal control/internal audit systems was inadequate leading to major irregularities and improprieties in drawal and utilisation of available funds. (Paragraph 1.1) Audit Report (Civil) (Report No. 2) for the year ended 31 March 2010 Public Distribution System Public Distribution System (PDS) is one of the most important functions of the State Government which helps in providing food security to a large number of consumers. The performance of PDS in the State with reference to the provision of PDS (Control) order, 2001 revealed that the State Government had made no efforts to evolve a well defined criteria for identifying BPL and AAY beneficiaries. The excessive issue of Family Ration Cards with inflated population has an adverse impact on the distribution of foodgrain to the PDS beneficiaries in the State. Effective distribution of timely allotted foodgrain to all consumers in the State at prescribed quantity and rates were not achieved due to misappropriation of a major portion of the foodgrain at the field level. There was inadequate/ improper maintenance of godowns causing substantial storage losses of foodgrain.
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