TABLE OF CONTENTS Paragraph Page Preface - v Overview - vii CHAPTER-I PERFORMANCE REVIEW (CIVIL) DEPARTMENT OF EDUCATION (SCHOOLS) Elementary Education 1.1 1 CHAPTER-II AUDIT OF TRANSACTIONS (CIVIL) Fraud/misappropriation/embezzlement/losses MINORITIES AND OTHER BACKWARD CLASSES DEPARTMENT Loss to the Government 2.1 39 Violation of contractual obligations, undue benefit to contractors, unavoidable/unfruitful expenditure etc. IRRIGATION AND FLOOD CONTROL DEPARTMENT Loss to Government 2.2 40 PUBLIC HEALTH ENGINEERING DEPARTMENT Undue benefit to the contractor 2.3 41 Undue financial benefit to the contractor 2.4 42 POWER DEPARTMENT Recovery of interest and security deposit at the instance of Audit 2.5 43 PUBLIC WORKS DEPARTMENT Avoidable Expenditure 2.6 44 Others/regularities issues etc. PUBLIC WORKS DEPARTMENT Recovery at the instance of Audit 2.7 45 GENERAL Follow up on Audit Reports 2.8.1 46 Action taken on recommendation of Public Accounts Committee 2.8.2 47 Response to audit observations and compliance thereof 2.8.3 47 i Audit Report for the year ended 31 March 2011 Paragraph Page CHAPTER-III CHIEF CONTROLLING OFFICER BASED AUDIT DEPARTMENT OF HORTICULTURE AND SOIL CONSERVATION Chief Controlling Officer based Audit of Department of 3.1 49 Horticulture and Soil Conservation CHAPTER-IV REVENUE RECEIPTS Trend of revenue receipts 4.1 75 Response of the Departments/Government towards audit 4.2 82 Analysis of the mechanism for dealing with the issues raised by 4.3 85 Audit Audit planning 4.4 87 Results of audit 4.5 87 PERFORMANCE REVIEWS (REVENUE) TAXATION DEPARTMENT Performance Audit on “Declaration forms in Inter State Trade and 4.6 88 Commerce” TRANSPORT DEPARTMENT Performance Audit on “Computerisation in Motor Vehicle 4.7 105 Department” AUDIT OF TRANSACTIONS (REVENUE) HOME DEPARTMENT Non-realisation of cost of armed guards from banks 4.8 122 TAXATION DEPARTMENT Incorrect allowance of ITC 4.9 123 TRANSPORT DEPARTMENT Non-realisation of permit fees and fines 4.10 124 Non-recovery of Professional Tax 4.11 125 CHAPTER-V GOVERNMENT COMMERCIAL AND TRADING ACTIVITIES Overview of Government Companies and Statutory Corporations 5.1 127 ii Table of contents Paragraph Page PERFORMANCE REVIEW (COMMERCIAL) POWER (ELECTRICITY) DEPARTMENT Performance Audit Report on Power Distribution Activities of 5.2 136 Electricity Department, Government of Manipur APPENDICES 1.1 Statement of Budget Allocation for Elementary Education 165 1.2 (Table A) SSA Fund Position during the period from 2006-11 165 (Table B) Statement showing delay in release of SSA fund 165 (Table C) Fund meant for “Management Cost” diverted for 166 unauthorized Civil Works (Table D) Multiple Bank Accounts Operated by District Project Officer, 166 SSA Bishnupur 1.3 (Chart A) District wise shortage of Upper Primary Schools 166 (Chart B) Pupil-to-Teacher Ratio (District wise) 167 (Chart C) Schools where Pupil-to-Teacher ratio is more than 40 167 (District wise) (Chart D) Zero Enrollment Schools (District wise) 167 (Chart E) Teachers posted in ZERO enrollment schools (District wise) 168 (Chart F) Schools where Teachers Outnumber students (District wise) 168 (Chart G) Teachers Outnumber Students (District wise) 168 (Chart H) Schools without teachers (District wise) 169 (Chart I) Enrolment in schools without teachers (District wise) 169 1.3 (A) (Table A) Teachers posted in schools where there was no enrolment 170 (Table B) Enrolment in Teacher-less schools 171 (Table C) Schools where teachers outnumber students 172 Statement showing quality of text books procured for distribution under 1.4 172 SSA during the period from 2006-07 to 2010-11 (Table A) Statement showing ACRs sanctioned and executed in schools 1.5 173 visited/schools which reported (Table B) Statement showing completed ACRs in schools visited/which 175 reported Statement showing Audit’s findings on computer facilities provided to 1.6 176 schools Categories of trainings required to be conducted as per Intervention No. 1.7 177 11 – Para 1.9.10 of the Framework for Implementation - 2008 iii Audit Report for the year ended 31 March 2011 Page 1.7 (A) Teachers trained during period covered by review 177 1.8 Findings of joint inspection of slides with officials of SSA 178 1.9 Statement showing huge stock balance 178 1.10 Statement showing implementation of Mid-Day-Meal at school level 179 Gross irregularities in serving Mid-Day-Meal as stated by Headmasters 1.10 (A) 184 of Ukhrul district 1.11 Statement showing excess projection and lifting of foodgrains 184 Chart showing attendance in schools visited in Imphal East, Bishnupur 1.12 185 and Ukhrul districts (Table A) Quantity of foodgrains for which transportation cost claimed 185 (Table B) Statement showing details of payment made to transporters of 185 1.13 foodgrains (Table C) Statement showing admissible cost for transportation of 186 MDM foodgrains (Table A) Statement showing lifting of foodgrains by valley districts for 187 September to December 2009 1.14 (Table B) Statement showing cooking cost released to valley districts 188 for September to December 2009 (Table C) Attendance of schools visited in valley districts 189 Statement showing calculation of interest for the advance paid as on 2.1 189 30 November 2010 @ 12 per cent per annum 3.1 Statement showing utilization of excess mandays 189 3.2 Extra expenditure on construction of water harvesting structures 190 3.3 Statement showing excess payment to the firm 190 Statement showing particulars of up to date paid-up capital, loans 5.1 outstanding and Manpower as on 31 March 2011 in respect of 191 Government companies and Statutory corporations Summarized financial results of Government companies and Statutory 5.2 193 corporations for the latest year for which accounts were finalized Statement showing Investment made by State Government in PSUs 5.3 195 whose accounts are in arrears 5.4 Distribution network planned vis-à-vis achievement 197 5.5 Excess payment of Excise duty and Central Sales tax (RGGVY) 198 5.6 Interest on outstanding mobilization advance (APDRP) 199 5.7 Excess payment of excise duty and central sales tax (APDRP) 199 5.8 Source-wise purchase of power and their cost 199 5.9 Theft cases detected, assessment made and amount realized 200 iv 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 deal with the findings of performance audit and audit of transactions in various departments including the Public Works Department, Revenue Receipts, audit of Government Companies and Statutory Corporations of the State Government for the year 2010-11. 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 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. 4. The audit has been conducted in conformity with the Auditing Standards issued by the Comptroller and Auditor General of India. v OVERVIEW This Report includes five chapters containing five performance reviews, including Chief Controlling Officer based Audit of Horticulture and Soil Conservation Department, 11 (excluding general paragraphs) paragraphs dealing with the results of audit of selected schemes, programmes, financial transactions of the Government and its commercial and trading activities. Copies of the performance reviews and paragraphs were sent to the Administrative Heads of the Departments concerned by the Accountant General for furnishing replies within six weeks. All the five reviews were discussed with the concerned Principal Secretaries/Commissioners/Secretaries and other departmental officers. In respect of eight audit paragraphs reply of the Government/Department was received and in three audit paragraphs, replies had not been furnished by the Government/Department. Performance review (Civil) Department of Education (Schools) 1.1 Elementary Education The Government of India had formulated the National Education Policy in the year 1986 and Right to Education Act in 2009 which inter alia mandated Universal Elementary Education (UEE) of good quality for children in the age group of 6-14 years. Sarva Shiksha Abhiyan (SSA) was implemented in Manipur in March 2004 to ensure that all children in the age group 6 to 14 years have access to education. This was boosted with Mid Day Meal (MDM) scheme implemented in February 2009 in all primary and upper primary schools (Government and Aided schools). The performance audit of the programme/scheme revealed that SSA was being implemented without proper planning and without carrying out household survey and pre-project activities. There were short release of fund, delay in release of fund and diversion of fund in implementation of SSA. Teachers were posted in school with zero enrolment and there were schools with no posting of teachers. Under MDM, despite a trend of low attendance, foodgrains consumption for 100 per cent attendance was reported. Civil works taken up both under SSA and MDM suffered from many deficiencies/irregularities due to which there were infrastructure gaps. Contract management was weak both under these schemes with loopholes in the contract clauses. (Paragraph 1.1) vii Audit Report for the year ended 31 March 2011 Audit of Transactions (Civil) Irregularities in tender processing by ignoring the lowest bidder, non- maintenance of transparency and lack of strict economy led to a loss of ` 14.80 lakh. (Paragraph 2.1) Due to erroneous calculation of rate for piling 8280 RM of 50 cm diameter bore pile on higher side, the Government suffered loss of ` 2.69 crore. (Paragraph 2.2) Exemption of interest on mobilization advance paid to a firm engaged in a Sewerage Project led to undue benefit of ` 52.15 lakh.