1 Kayts Pradeshiya Sabha Jaffna District

Kayts Pradeshiya Sabha Jaffna District ------1. Financial Statements ------1.1 Presentation of Financial Statements ------The financial statements for the year 2018 had been presented to Audit on 15 March 2019 and the summary report of the Auditor General on the financial statements and the detailed management report had been forwarded to the Chairman of the Sabha on 03 August 2019 and 31 October 2019 respectively.

1.2 Qualified Opinion ------In my opinion, except for the effect of the matters described in the basis for qualified opinion section of this report, the financial statements give a true and fair view of the financial position of the Kayts Pradeshiya Sabha as at 31 December 2018 and its financial performance for the year then ended in accordance with Generally Accepted Accounting Principles.

1.3 Basis for Qualified Opinion ------(a) Accounting Deficiencies ------Audit Observation Recommendation Comment of the Accounting Officer ------Puliyankoodal land valued at Rs. Respective action Not replied. 1,200,000 had been shown in the should be taken in financial statements. However, it respect of had been brought to the accounts acquiring land. without being completed acquiring activities therefor, thus the value of the land had been overstated in the accounts.

(b) Lack of evidences for Audit ------

Audit Observation Recommendation Comments of the Accounting Officer ------Two transactions valued at Rs. Relevant evidences Action will be taken 79,124 could not be verified due should be in future. to non-submission of relevant submitted. documents.

Audit Observation Recommendation Comments of the Accounting Officer ------According to the fixed assets Value of the building Not replied. register, value of fish market, should be included Kayts was Rs. 633,600. However, in the financial it was Rs. 3,133,600 as per statements. financial statements, thus a difference of Rs. 2,500,600 had been incurred.

1.4 Non-compliances ------1.4.1 Non-compliances with Laws, Rules, Regulations and Management Decisions ------Reference to Laws, Rules, Non-compliances Recommendations Comments of the Regulations and Accounting Officer Management Decisions ------(a) National Audit Act No. 19 An annual performance Action should be An annual of 2018 report had not been taken in terms of performance report Sub section 16(2) presented along with the instructions of said will be presented along financial statements. Act. with the financial statements in future periods.

(b) Pradeshiya Sabhas Act No actions had been taken Action should be Action will be taken No. 15 of the year 1987 by the Revenue inspector taken in terms of by the Revenue Section 126(III) (f) in respect of 06 instructions of said inspector in respect of advertisements which had Act. 06 advertisements not been approved. which had not been approved.

(c) Pradeshiya Sabhas Assessment of properties Action should be Assessment activities (Financial and and recovery of taken in terms of of properties are being Administrative) Rule of assessment tax on instructions of said carried out by the the year 1988 property had not been Financial and Sabha. Section 32 of Chapter III made by the Sabha. Administrative Rule.

(d) Financial Regulations of No action had been taken Action should be Respective action will the Democratic Socialist in respect of retention taken as per be taken in respect of Republic of Sri Lanka money of Rs. 153,587 to instructions of said balance retention No. 571 be refunded to the financial regulations. money to be refunded contractor. to the contractor.

(e) Circular of Ministry of Fuel consumption had not Fuel consumption Four vehicles had been Public Administration been tested for 04 vehicles should be tested for repaired, this action is and Management of the Sabha. repaired vehicles. being taken to test fuel No. 30/2016 of 29 consumption therefor. December 2016

2. Financial Review ------2.1 Financial Results ------According to the financial statements presented, the revenue over recurrent expenditure of the Sabha for the year ended 31 December 2018 amounted to Rs. 3,565,468 as compared with the corresponding the revenue over recurrent expenditure of the preceding year amounted to Rs. 7,191,680.

2.2 Revenue Administration ------2.2.1 Estimated Revenue, Billed Revenue, Collected Revenue and Arrears of Revenue ------Information on the estimated revenue, billed revenue, collected revenue and arrears of revenue presented relating to the year under review and the preceding year is given below.

Source of 2018 2017 Revenue ------Estimated Billed Collected Total Estimated Billed Collected Total Revenue Revenue Revenue Arrears as Revenue Revenue Revenue Arrears as  at 31  at 31 December December ------Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rates and ------Taxes Rentals 2>921>300 - 2>233>867 8>000 3>625 - 2>677>922 6>266 License 451>650 - 448>762 - 423>400 - 322>999 - Fees Other 44>502>876 - 37>565>500 74>450 43>778>938 - 9>112>957 6>418>520 Revenue ------47>875>826 - 40>248>129 55>450 47>827>897 - 12>113>878 6>424>786 ======

 Billed revenue had not been presented to audit.

2.2.2 Performance in Collection of Revenue ------

Audit Observations Recommendations Comments of the Accounting Officer ------Collected revenue for the year 2017 was Billed revenue Action will be taken. Rs. 12,113,878. However, collected should be verified. revenue for the year 2018 was increased as Rs. 40,248,129, thus performance of revenue collection for the year 2018 had been increased by Rs. 28,134,521 as compared with the year 2017. However, revenue had not been billed by the Sabha.

3. Operating Review ------3.1 Performance ------The matters observed in respect of execution of activities that should be executed under Section 3 of the Pradeshiya Sabhas Act such as regularize and control over the matters of public health, public utility services and public thoroughfares and the comfort, convenience and welfare of the people are given below.

(a) By-Laws ------

Audit Observation Recommendation Comment of the Accounting Officer ------By-laws were required to be Meaningful actions Respective action is enacted for 30 main functions in should be taken to being taken. terms of section 126 of the enact by-laws for Pradeshiya Sabhas Act. implementing all However, by-laws had not been said functions. enacted by the Pradeshiya Sabha even as at 31 December 2018.

(b) Action Plan ------

Audit Observation Recommendation Comment of the Accounting Officer ------An annual action plan had An annual action An action plan should not been prepared in plan should be be prepared by

respect of activities to be prepared as per by- including all projects of implemented by the Sabha. laws. the Sabha.

Audit Observation Recommendation Comment of the Accounting Officer ------Fifteen activities had been Action should be Period extension had been started without being made taken to complete given to said works for cost estimates. However, said activities soon. acceptable reasons. delays were observed in performance of those activities.

(d) Solid Waste Management ------

Audit Observations Recommendations Comments of the Accounting Officer ------(i) Expense of Rs. 4,779,889 It should be certified Solid wastes are had been incurred for that solid waste segregated and disposing solid waste in the disposals had been collected. year 2018. However, solid segregated properly waste disposal activities had and collected. not been carried out by the Pradeshiya Sabha efficiently.

(ii) Covered vehicles had not Covered vehicles There were no been used for collecting should be used for covered vehicles in solid wastes and garbage had collection of solid the Sabha for using been collected in open wastes. solid waste disposal. vehicles, thus there were health issues to the public when they travel on roads and more garbage had been dumped on the roads by the vehicles.

(iii) Sanitary labourers who were Sanitary labourers Actions will be taken employed in solid waste should be subjected to to subject to medical activities had not been medical test annually. test in future periods. subjected to medical test by the Pradeshiya Sabha from time to time.

(e) Environmental Issues ------

Audit Observation Recommendation Comment of the Accounting Officer ------No actions had been taken to Actions should be Actions for preventing spray mosquito oil for taken to spray spread of mosquitos preventing spread of mosquito oil for will be taken when mosquitos and flees and to preventing spread of implementing dengu prevent bad smell in the area mosquitos and flees eradication activities. selected for disposing solid and to prevent bad wastes. smell.

3.2 Management Inefficiencies ------Audit Observations Recommendations Comments of the Accounting Officer ------(a) Fixed deposit fund valued at Fund of the Sabha had A sum of Rs. Rs. 17,016,758 had been been received from the 20,843,957.58 had been deposited in the bank in order people, thus such fund in the fixed deposit. to generate interest revenue should be used for However, out of that, without being used for development of the others excluding a sum implementing development area. of Rs. 172,800.88 had work schemes of the area in been started before the year under review. 2015.

(b) Development works had been Action should be Cemetery tax will be carried out for 16 cemeteries in taken by the Sabha to recovered after taking the Sabha. However, cemetery recover cemetery tax action to fixing tax had not been recovered. for 16 cemeteries. boundaries.

(c) No action had been taken to Action should be Activities in respect of carry out assessment of rates taken to carry out assessment of and taxes. assessment of rates properties is being and taxes. carried out now.

(d) Reports to be prepared by the The reports to be Not replied. Local Government Assistant prepared by the Local had not been presented in due Government Assistant periods, thus main functions of should be presented on the Pradeshiya Sabha had not due periods. been completed.

(e) A citizen charter of the general As per mentioned in Services had been public had been displayed by citizen charter, delayed due to non- the Pradeshiya Sabha. services should be submission of required However, contrary to matters provided to the information and mention therein, services general public in due documents properly. provided to general public had periods. been delayed.

3.3 Human Resources Management ------

Audit Observations Recommendations Comments of the Accounting Officer ------The Sabha had not recruited and Staff should be Action will be taken to deployed human resources appointed in equal fill the vacancies. properly. As a result, it was manner to observed in audit that works to approved cadre. be completed by such 19 human resources had been delayed. 3.4 Assets Management ------3.4.1 Failure in carrying out Maintenance and Repairing ------

Audit Observation Recommendation Comment of the Accounting Officer ------No action had been taken Action should be Action had been taken to sell 04 to repair 06 vehicles being taken to repair vehicles by auction and action used by the Sabha for over vehicles which were could not be taken in respect of 02 years. repairable. other two land master which had not been registered

3.4.2 Assets not acquired ------

Audit Observations Recommendations Comments of the Accounting Officer ------(a) Ownership of 22 properties Action should be taken to Action will be taken to valued at Rs. 50,070,600 transfer ownership of the transfer ownership. had not been transferred to properties to the the Pradeshiya Sabha. Pradeshiya Sabha.

(b) Ownership of 22 vehicles Action should be taken to Action will be taken to issued to the Pradeshiya transfer ownership of the transfer ownership in

Sabha as a donation had not vehicles belonging to the future periods. been transferred to the Sabha. Sabha.

3.4.3 Idle Assets ------

Audit Observations Recommendations Comments of the Accounting Officer ------(a) Thevaratham boat Action should be taken Said boat had not been belonging to the Sabha to register the boat and registered up to now, thus had remained idle for 04 accelerate to sell it by action is being taken to years. auction. register said boat.

(b) Three stalls of new Action should be taken Action is being taken to rent market shopping complex to use new market out in shopping complex. belonging to the Sabha shopping complex had remained idle for the efficiently. last 10 years.

3.4.4 Annual Board of Survey ------

Audit Observations Recommendations Comments of the Accounting Officer ------(a) At annual store verification of the It should be certified Actions is being taken head office, a report on board of that annual stock to fix values for survey had been presented verification had been donated items. without verified actual stock value carried out properly. of 27 items.

(b) Respective actions had not been Respective actions Continuous actions are taken by the Sabha in respect of should be taken by being taken by the 442 displaced books valued at Rs. the Sabha in respect Sabha in respect of 46,198 of the General Library, of displaced books displaced books. Eluvaitivu. quickly.

4. Accountability and Good Governance ------4.1 Budgetary Control ------

Audit Observation Recommendation Comment of the Accounting Officer ------Recurrent expenditure such as travel expenses, Respective actions Not replied. repair of capital assets, grants, aid funds and should be taken to pensions including in the budget of the Sabha plan the budget had been saved more per cent from actual properly. expenditure, thus the budget was inefficient.