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For the Year Ended 31 March 2012 Government of Nagaland

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For the Year Ended 31 March 2012 Government of Nagaland REPORT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA FOR THE YEAR ENDED 31 MARCH 2012 GOVERNMENT OF NAGALAND Report No. 1 of 2013 http://www.saiindia.gov.in i TABLE OF CONTENTS Reference to Paragraph (s) Page (s) Preface v Executive Summary vii CHAPTER I – SOCIAL SECTOR Introduction 1.1 1 Planning and Conduct of Audit 1.2 2 RURAL DEVELOPMENT DEPARTMENT Performance Audit on Mahatma Gandhi National Rural 1.3 3 Employment Guarantee Scheme (MNREGS) in Nagaland HEALTH AND FAMILY WELFARE DEPARTMENT Fraudulent Drawal 1.4 54 Excess Expenditure 1.5 54 Suspected Fraudulent Drawal 1.6 56 Extra Avoidable Expenditure 1.7 57 SCHOOL EDUCATION DEPARTMENT Fraudulent Drawal 1.8 58 CHAPTER II – ECONOMIC SECTOR Introduction 2.1 61 Planning and Conduct of Audit 2.2 62 VETERINARY AND ANIMAL HUSBANDRY DEPARTMENT Integrated Audit of Veterinary and Animal Husbandry 2.3 62 Department AGRICULTURE, LAND RESOURCES, SOIL & WATER CONSERVATION AND NEPED Implementation of Watershed Development Programmes 2.4 101 in Nagaland PUBLIC HEALTH ENGINEERING DEPARTMENT Suspected misappropriation of stores 2.5 122 CHAPTER III – ECONOMIC SECTOR (PUBLIC SECTOR UNDERTAKINGS) Introduction 3.1 125 Audit Mandate 3.2 125 Investment in State PSUs 3.3 126 Budgetary outgo, grants/subsidies, guarantees and loans 3.4 127 Reconciliation with Finance Accounts 3.5 128 Performance of PSUs 3.6 129 Arrears in finalisation of Accounts 3.7 130 Accounts Comments and Internal Audit 3.8 131 INDUSTRIES AND COMMERCE DEPARTMENT Loss due to non filing of execution petition 3.9 131 CHAPTER IV – REVENUE SECTOR Trend of revenue receipts 4.1.1 133 Variation between the budget estimates and actuals 4.1.4 135 i Cost of collection 4.1.5 135 Analysis of arrears of revenue 4.1.6 136 Arrears in assessment 4.1.7 136 Evasion of Taxes 4.1.8 137 Response of the Departments/Government towards audit 4.1.9 137 Failure of the senior officials to enforce accountability and 4.1.10 137 protect the interest of the State Government Departmental Audit Committee Meetings 4.1.11 138 Response of the Departments to the draft audit paragraphs 4.1.12 139 Follow up on Audit Reports – summarised position 4.1.13 139 Compliance with the earlier Audit Reports 4.1.14 139 Analysis of mechanism for dealing with the issues raised 4.1.15 140 by Audit Position of Inspection Reports 4.1.16 140 Assurances given by the Departments/Government on the 4.1.17 141 issues highlighted in the Audit Reports Action taken on the recommendations accepted by the 4.1.18 141 Departments/Government Results of Audit 4.1.19 142 TAXATION DEPARTMENT Evasion of Tax 4.2 142 CHAPTER V – GENERAL SECTOR Introduction 5.1 145 Planning and Conduct of Audit 5.2 146 HOME (GENERAL ADMINISTRATION) DEPARTMENT Excess Payment 5.3 146 HOME (FIRE AND EMERGENCY SERVICES) DEPARTMENT Diversion of Funds 5.4 148 HOME DEPARTMENT Fraudulent Drawal 5.5 149 CHAPTER VI – FOLLOW UP OF AUDIT OBSERVATIONS Response of the departments to the recommendations of 6.1 151 the Public Accounts Committee (PAC) Monitoring 6.2 151 Oustanding Inspection Reports 6.3 151 Departmental Audit Committee Meetings 6.4 153 ii APPENDICES Appendix No. Page Fund flow statement in respect of DPC, Dimapur 1.1 (a) 155 Fund flow statement in respect of DPC, Mon 1.1 (b) 155 Fund flow statement in respect of DPC, Tuensang 1.1(c) 156 Fund flow statement in respect of DPC, Peren 1.1(d) 156 Statement showing the release of funds and expenditure in 1.2 157 respect of 71 VDBs under 9 Blocks in four test checked DPCs during -2007-12 Statement showing unexecuted works under four DPCs 1.3 (i) 160 Statement showing excess expenditure/short in execution/no 1.3 (ii) 164 use of material in the units of Projects under 4 DPCs Statement showing the diversion of projects under non- 1.3 (iii) 168 permissible category of works under 4 DPCs Statement showing the details of fraudulent drawal of Pay & 1.4 173 Allowances in respect of Chief Medical Officer, Zunheboto Comparison of rates and calculation of excess amount paid by 1.5 174 Health & Family Welfare Department Statement showing the details of fraudulent drawal of pay and 1.6 175 allowances in respect of DIS, Niuland Statement showing DDOs/projects/institutions taken up for 2.3.1 177 Joint Physical Verification Statement showing activities proposed in 11 th five year plan, 2.3.2 180 total agreed outlay in the annual plans, budget provision made and actual expenditure during 2007-12. Statement showing cattle delivered to beneficiaries of 2.3.3 181 Community Dairy Projects and Model Dairy Projects by suppliers and production of the projects Statement of works (under NABARD) stated to have carried 2.3.4 183 out by the EE, V&AH Division which were actually not carried out as confirmed by the Joint Verification Team during spot verification. Results of joint physical verification of beneficiaries under 2.3.5 185 Entrepreneur Development Results of joint physical verification of State Farms, Disease 2.3.6 186 Diagnostic Laboratories, Hospitals, Dispensaries and Stockman Centres/Veterinary Outposts/Veterinary Health Centres. Statement showing details of Fully Vouched Contingent Bills 2.3.7 189 drawn in March 2012 Analysis of Completion certificates issued, work orders 2.3.8 192 iii attached with FVC, date of issue of NIT and date of actual completion as per MBs. Statement showing delay in release of fund at various levels 2.4.1 193 under WDPSCA implemented by DSWC Statement showing details of payment made without execution 2.4.2 194 of work under NWDPRA Statement showing unexecuted items of works under IWMP 2.4.3 196 Statement showing particulars of up to date paid-up capital, 3.1 197 loans outstanding and Manpower as on 31 st March 2012 in respect of Government Companies Statement showing grants and subsidy received/receivables, 3.2 199 guarantees received, waiver of dues, loans written off and loans converted into equity during the year and guarantee commitment at the end of March, 2012 Summarised financial results of Government Companies for 3.3 201 the latest year for which accounts are finalised Details of work sanctioned under SPA during 2010-11 for 5.1 203 construction of fire stations, etc. Statement showing the details of fraudulent drawal of ration 5.2 204 allowance iv Preface 1. This Report has been prepared for submission to the Governor of Nagaland under Article 151 of the Constitution. 2. The Report deals with the findings of performance reviews and audit of transactions in various departments. 3. The Report also contains the observations arising out of audit of Statutory Corporations and Government Companies and revenue receipts. 4. The cases mentioned in the Report are among those which came to notice in the course of test audit of accounts during the year 2011-12, as well as those which had come to notice in earlier years, but could not be dealt with in previous Audit Reports. Matters relating to the period subsequent to 2011-12 have also been included, wherever necessary. 5. Audit observations on matters arising from the examination of Finance Accounts and Appropriation Accounts of the State Government for the year ended 31 March 2012 are included in a separate report on State Finances. 6. The Audits have been conducted in conformity with the Auditing Standards issued by the Comptroller and Auditor General of India. EXECUTIVE SUMMARY This Report contains 11 audit paragraphs, two Performance Audits – Implementation of ‘Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in Nagaland and ‘Implementation of Watershed Development Programmes in Nagaland’ and Integrated Audit of Veterinary and Animal Husbandry Department. According to the existing arrangements, copies of the draft audit paragraphs and draft performance audits were sent to the Secretary of the Department concerned by the Accountant General (Audit) with a request to furnish replies within six weeks. Replies were not received from the Departments concerned in respect of three audit paragraphs. Chapter-I Social Sector Performance Audit Performance Audit on Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in Nagaland Mahatma Gandhi National Rural Employment Guarantee Scheme aimed to enhance livelihood security of rural households by providing at least 100 days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work. However, performance of the MGNREGA in the State for the last five years could not achieve guaranteed wage employment due to improper planning made in the perspective plan. The Department also randomly issued job cards and as a result job cards were misused. Several instances of un- executed projects, execution of non-permissible projects and diversion of projects outside the Perspective plan had defeated the purpose for which the scheme was designed. Implementation of convergence programmes in the State was not encouraging as the public was not aware of the schemes and were not executed according to the approved action plan. Absence of monitoring mechanism in the State also adversely affected the implementation of scheme. Mandatory inspections by State level, district level and block level were not carried out. Auxiliary objectives were not achieved due to the execution of low prioritised works. (Paragraph 1.3) Transaction Audit Paragraphs Failure of the Drawing & Disbursing Officer and Treasury Officer to exercise statutory checks envisaged in Receipts and Payments Rules resulted in fraudulent drawal of ` 30.65 lakh. (Paragraph 1.4) The Executive Engineer, Medical Engineering Division, Kohima incurred an excess expenditure of ` 1.32 crore due to non-acceptance of the lowest bid.
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