Report of the Comptroller and Auditor General of India on Local
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REPORT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA ON LOCAL BODIES FOR THE YEAR ENDED MARCH 2015 GOVERNMENT OF GUJARAT REPORT NO. 3 OF 2016 www.cag.gov.in TABLE OF CONTENTS Paragraph Page Particulars number number Preface v Overview vii CHAPTER-I PANCHAYATS, RURAL HOUSING AND RURAL DEVELOPMENT DEPARTMENT An overview of the functioning, accountability mechanism and 1.1 1 financial reporting issues of Panchayati Raj Institutions CHAPTER-II PANCHAYATS, RURAL HOUSING AND RURAL DEVELOPMENT DEPARTMENT COMPLIANCE AUDIT Installation and Commissioning of Stand Alone Solar 2.1 15 Photovoltaic Street Lighting System by Panchayati Raj Institutions Social Audit under Mahatma Gandhi National Rural 2.2 28 Employment Guarantee Scheme Rules, 2011 in Gujarat CHAPTER-III URBAN DEVELPOMENT AND URBAN HOUSING DEPARTMENT An overview of the functioning, accountability mechanism 3.1 51 and financial reporting issues of Urban Local Bodies CHAPTER-IV URBAN DEVELPOMENT AND URBAN HOUSING DEPARTMENT PERFORMANCE AUDIT, INFORMATION TECHNOLOGY (IT) AUDIT AND COMPLIANCE AUDIT Implementation of Swarnim Jayanti Mukhya Mantri Shaheri 4.1 65 Vikas Yojana Information Technology (IT) Audit of Property Tax System in 4.2 102 Rajkot Municipal Corporation Avoidable expenditure and undue favour to the agencies of 4.3 108 ` 83.93 lakh Non-utilisation of Government assistance of ` 1.43 crore for 4.4 109 closure of Vadsar Landfill site iii APPENDICES Paragraph Page Appendix Subject reference number I Statement showing status of devolution of functions to 1.3 115 Panchayati Raj Institutions II Funds received and expenditure incurred in test-checked 2.1.3.1 116 districts III Physical Achievement of installation of SPV SLSs by 2.1.3.1 & 117 test-checked districts 2.1.4.1 IV Purchase of SPV SLSs from suppliers of sand, stone, 2.1.4.2 118 cement, etc. in test-checked GPs V Statement showing SPV SLSs purchased with batteries 2.1.4.2 119 of lower specification in test-checked GPs VI SPV SLSs purchased without warranty and with only 2.1.4.2 120 one year warranty for battery in test-checked GPs VII Statement showing the excess payment made in 2.1.4.2 122 purchase of SPV SLSs in test-checked GPs VIII Statement showing the expenditure incurred under core 2.2.4.3 123 activities by UNNATI IX Statement showing details of TRGs allotted with more than 10 GPs and appointed for more than two years 2.2.5.3 124 term in test-checked Talukas X Statement showing the name of talukas where SA 2.2.7.1 126 reports were not available XI Statement showing the details of GPs where SA Gram 2.2.7.3 128 Sabha was not attended by TRG XII Boards and Authorities under the Department 3.2.2 130 XIII Service level Benchmark in ULBs 3.9 131 XIV Statement showing allocation and release of funds 4.1.8.2 132 under different components of the SJMMSVY XV Statement showing cost overrun due to delay in commencement of WS projects and delay in finalisation 4.1.9.2 133 of the tenders of UD projects XVI Statement showing the status of completed UD projects 4.1.9.3 134 as of August 2015 XVII Statement showing the status of water supply in 4.1.9.4 135 159 ULBs XVIII Gap in generation of demand bill for the properties 4.2.6.5 137 XIX Avoidable expenditure and undue favour to the agencies 4.3 138 iv PREFACE This Report for the year ended 31 March 2015 has been prepared for submission to the Governor of the State of Gujarat. This Report relates to Audit of receipts and expenditure of the Local Bodies in Gujarat conducted under provisions of the Comptroller and Auditor General (Duties, Power and Conditions of Service) Act, 1971 and read with proviso of Gujarat Panchayat Act, 1993, Gujarat Provincial Municipal Corporations Act, 1949 and Gujarat Municipalities Act, 1963, as amended on 04 April 2011 which empowers the Comptroller and Auditor General of India to conduct Audit of the accounts of Panchayati Raj Institutions and Urban Local Bodies and submit such Audit Report to the State Government for its placement in the State Legislature. The instances mentioned in this Report are those, which came to notice in the course of test audit for the period 2014-15 as well as those, which came to notice in earlier years, but could not be reported in the previous Audit Reports; instances relating to the period subsequent to 2014-15 have also been included, wherever necessary. The Audit has been conducted in conformity with the Auditing Standards (March 2002) issued by the Comptroller and Auditor General of India. v vi OVERVIEW This Report contains four chapters. The first and the third chapter contain an overview of the functioning, accountability mechanism and financial reporting issues of Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) respectively. The second chapter contains two Compliance Audit paragraphs on PRIs. The fourth chapter contains one Performance Audit paragraph, one Information Technology Audit and two individual paragraphs on the Audit of financial transactions of ULBs. A synopsis of the findings contained in the Performance Audits and Compliance Audits are presented in this overview. 1 An overview of the functioning, accountability mechanism and financial reporting issues of Panchayati Raj Institutions A review of finances of PRIs revealed that the State Government had devolved 19 functions out of 29 functions to the PRIs as envisaged in the 11th Schedule of the Constitution. Though, the District Planning Committees (DPCs) were constituted in 23 districts, meetings of DPC were not held in any district. As on March 2015, 250 Utilisation Certificates (UCs) aggregating to` 173.83 crore due in respect of grants paid during the period 2001-15 were outstanding. Percentage of expenditure under social services to total expenditure had decreased from 70 per cent (2012-13) to 58 per cent (2014-15). Prescribed periodicity for constitution of State Finance Commission (SFC) was not maintained and the report of the 3rd SFC submitted in December 2013 was yet to be placed before the legislature due to pending Action Taken Reports (ATRs) on the report from the State Government Departments. The State Government had implemented only nine out of 27 accepted recommendations of First State Finance Commission and seven out of 20 accepted recommendations of Second State Finance Commission. As of March 2015, an unspent grant amount of ` 456.73 crore of Thirteenth Finance Commission (ThFC) was lying with the PRIs. Non-compliance of conditions stipulated by the ThFC resulted in loss of central assistance (General Performance Grant) of ` 672.63 crore as against the allocated grant for the period 2010-15. (Paragraph 1.1 to 1.11) 2 Installation and Commissioning of Stand Alone Solar Photovoltaic Street Lighting System by Panchayati Raj Institutions The State Government had executed the work of installation of Stand Alone Solar Photovoltaic (SPV) Street Lighting System (SLS) in the Gram Panchayats (GPs) under ThFC, Samras Yojana and Member of Parliament Local Area Development (MPLAD) schemes. Audit observed that clear information of number of Solar Street lights required and installed in the GPs was not maintained at the State/district/taluka levels. The work was executed in these schemes without carrying out a survey to assess number of street vii Audit Report on Local Bodies for the year ended 31 March 2015 lights required in the GPs, perspective plans were not prepared at any levels for covering every public place of GP area in a phased manner and specific targets were also not fixed under these schemes. As a result, Audit could not ascertain an overall picture of number of SPV SLSs installed against the total requirement in the GPs of the State. The State Government had not finalised till date the specifications of SPV SLSs which resulted in purchase of SPV SLSs with lower specifications in the test-checked GPs. Due to non-adoption of e-procurement process, excess expenditure was incurred on procurement of SPV SLSs with different specifications and SPV SLSs installed in test-checked GPs were without a warranty clause. The timely maintenance of installed SPV SLSs was not done by the GPs. Audit observed in test-checked GPs that due to non-maintenance and lower specifications, 514 out of 1,197 SPV SLS (43 per cent) installed at a cost of ` 1.23 crore were found non-functional within a period of six months to two years from the date of installation. Instances of SPV SLSs installed in the residential premises of private persons and GP members were noticed. Monitoring system was found deficient. (Paragraph 2.1.1 to 2.1.7) 3 Social Audit under Mahatma Gandhi National Rural Employment Guarantee Scheme Rules, 2011 in Gujarat Audit observed that an independent Social Audit (SA) Unit set-up in September 2014 was not functional due to non-recruitment of staff as of February 2016. State Government engaged an NGO UNNATI (February 2012-January 2015) to facilitate SAs in GPs. The SA reports prepared by UNNATI were found incomplete as the information of all GPs covered in SA could not be included due to non-submission of data by the GPs. The SA report of 2014-15 (Phase- II) had not been prepared by UNNATI. Shortfall in conducting One District One Panchayat (ODOPs) by District Programme Coordinator (DPCs) in the State ranged from 34 to 76 per cent during the period 2012-15. Performance of UNNATI in implementation of core activities was not satisfactory as utilisation of funds under core activities ranged from 36 to 57 per cent. Vacant posts of the Zonal Coordinators and the District Level Monitors (DLMs) hindered the process of SA, particularly the prompt and proper redressal of the grievances.