Report of the Comptroller and Auditor General of India on General & Social Sector and Public Sector Undertakings for the year ended 31 March 2019 GOVERNMENT OF MAHARASHTRA Report No. 3 of the year 2020 TABLE OF CONTENTS Reference Paragraph Page No. Preface vii PART-A (GENERAL AND SOCIAL SECTOR) CHAPTER I INTRODUCTION About this Report 1.1 1 Audited Entity Profile 1.2 1 Authority for Audit 1.3 2 Organisational Structure of the Offices of the Principal 1.4 2 Accountant General (Audit)-I, Mumbai and the Accountant General (Audit)-II, Nagpur Planning and Conduct of Audit 1.5 3 Significant Audit Observations 1.6 3 Responsiveness of Government to Audit 1.7 6 CHAPTER II AUDIT OF TRANSACTIONS Soil and Water Conservation Department 2.1 9 Implementation of Jalyukta Shivar Abhiyan Urban Development Department Mapping of underground utility services 2.2 19 Medical Education and Drugs Department Strengthening/upgradation of State Government 2.3 27 Medical Colleges for starting post graduate courses and creating post graduate seats Urban Development Department 2.4 38 Non-recovery of premium as per the lease agreement Urban Development Department Loss of revenue due to non-recovery of development 2.5 40 charges at enhanced rate Housing Department 2.6 42 Loss on purchase of land Housing Department 2.7 44 Undue benefit to a developer Tribal Development Department 2.8 46 Idle expenditure Tribal Development Department Blocking of funds under the scheme of supply of Oil 2.9 48 pumps and HDPE pipes to Tribal farmers Social Justice and Special Assistance Department 2.10 50 Irregular construction Public Health Department 2.11 52 Idle expenditure on establishment of Trauma Care Centre Higher and Technical Education Department Irregular release of excess amount of grant-in-aid to the 2.12 53 non-government technical institutes Report No. 3 (General & Social Sector and Public Sector Undertakings) for the year ended 31 March 2019 PART-B (PUBLIC SECTOR UNDERTAKINGS) Overview 55 INTRODUCTION Functioning of State Public Sector Undertakings General 1-2 59 Accountability framework 3-4 60 Submission of accounts by PSUs 5-6 61 Investment by Government of Maharashtra in State 7-9 62 Public Sector Undertakings CHAPTER – III Functioning of State Power Sector Undertakings 3.1.1-3.1.24 65 CHAPTER – IV Compliance Audit Paragraphs relating to State Power Sector Undertakings Energy Department (Industries, Energy and Labour) Maharashtra State Electricity Distribution Company Limited 4.1 83 Low tension billing Maharashtra State Electricity Transmission Company Limited 4.2 92 Short recovery of operation and maintenance charges CHAPTER – V Functioning of State Public Sector Undertakings 5.1.1-5.1.30 93 (other than Power Sector) CHAPTER – VI Compliance Audit Paragraphs relating to State Public Sector Undertakings (other than Power Sector) Social Justice and Special Assistance Department Vasantrao Naik Vimukta Jatis and Nomadic Tribes 6.1 113 Development Corporation Limited Violation of Government decision Statutory Corporation Home Department (Transport and Ports) Maharashtra State Road Transport Corporation Avoidable extra expenditure due to flawed tender 6.2 114 evaluation Loss of revenue 6.3 116 iv Table of Contents Reference APPENDICES Appendix Page No. Department wise outstanding Inspection Reports/ 1.1 119 paragraphs issued up to December 2018 but outstanding as on 30 June 2019 Statement showing number of reviews/paragraphs in 1.2 122 respect of which Government Explanatory Memoranda had not been received Department-wise position of PAC recommendations on 1.3 123 which Action Taken Notes were awaited Status of groundwater level in 58 selected villages pre 2.1.1 124 and post implementation of the Abhiyan Statement showing diversion of funds sanctioned under 2.3.1 127 faculty component Non-starting of new PG course/increase PG seats due to 2.3.2 128 delay in obtaining MoHFW permission Request for item-wise funds not sent 2.3.3 129 Statement showing excess release of grants 2.12.1 130 Statement showing position of equity and outstanding 3.1.1 131 loans relating to State Power Sector Undertakings as on 31 March 2019. Summarised financial results of Power Sector 3.1.2 132 Undertakings for the latest year for which accounts were finalised. Statement showing State Government funds infused in 3.1.3 133 the two Power Sector Undertakings since inception till 31 March 2019. Statement showing position of equity and outstanding 5.1.1 134 loans relating to State PSUs (other than Power Sector) as on 31 March 2019. Statement showing difference between Finance 5.1.2 140 Accounts of Government of Maharashtra and Accounts of the State PSUs (other than Power Sector) in respect of balances of Equity, Loans and Guarantee as on 31 March 2019. Statement showing position of State Government 5.1.3 143 investment in working State PSUs (other than Power Sector) accounts of which are in arrears. Summarised financial results of State PSUs (other than 5.1.4 144 Power Sector) for the latest year for which accounts were finalised. Statement showing State Government funds infused in 5.1.5 149 State PSUs (other than Power Sector). v Preface This Report for the year ended 31 March 2019 has been prepared for submission to the Governor of the State of Maharashtra under Article 151 of the Constitution of India. Part A of this Report relates to audit of the General & Social Sector of the Government Departments and Part B relates to audit of the Public Sector Undertakings of Government of Maharashtra conducted under the provisions of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971 and Regulations on Audit and Accounts, 2007 issued thereunder by the Comptroller and Auditor General of India. This Report is required to be placed before the State Legislature under Article 151 (2) of the Constitution of India. The instances mentioned in this Report are those, which came to notice in the course of test audit for the period 2018-19 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 2018-19 have also been included, wherever necessary. The audit has been conducted in conformity with the Auditing Standards issued by the Comptroller and Auditor General of India. vii PART-A GENERAL AND SOCIAL SECTOR CHAPTER - I Page INTRODUCTION 1 to 7 CHAPTER I INTRODUCTION 1.1 About this Report This Report of the Comptroller and Auditor General of India (C&AG) relates to matters arising from Compliance audit of Government Departments and Autonomous Bodies falling under General and Social Sector and Public Sector Undertakings (PSUs) of the Government of Maharashtra (GoM). Compliance Audit refers to examination of the expenditure of the audited entities to ascertain whether the provisions of the Constitution of India, applicable laws, rules, regulations and various orders and instructions issued by the competent authorities are being complied with. The primary purpose of this Report is to bring to the notice of the State Legislature, important results of audit. Auditing Standards require that the materiality level for reporting should be commensurate with the nature, volume and magnitude of transactions. The findings of audit are expected to enable the Executive to take corrective actions as also to frame policies and directives that will lead to improved operational efficiency and financial management of the organisations thus, contributing to better governance. This chapter, in addition to explaining the planning and extent of audit, provides a synopsis of the significant deficiencies in working of selected schemes/projects, significant audit observations made during the audit of transactions and follow-up on previous Audit Reports. Chapter II contains observations emanating from compliance audit in Government Departments, and on Autonomous Bodies. 1.2 Audited Entity Profile The Departments in the General and Social Sector in the State at the Secretariat level are headed by Additional Chief Secretaries/Principal Secretaries/Secretaries and assisted by Directors/Commissioners and subordinate officers. A summary of the State Government’s fiscal transactions during 2018-19 vis-a-vis the previous year is given in Table 1.1. Report No. 3 (General & Social Sector and Public Sector Undertakings) for the year ended 31 March 2019 Table 1.1: Summary of Fiscal operations during 2018-19 (``` in crore) 2017-18 Receipts 2018-19 2017-18 Disbursements 2018-19 Section-A: Revenue Total 243654 Revenue receipts 278996 241571 Revenue expenditure 267022 167932 Tax revenue 187436 78535 General services 84765 16242 Non-tax revenue 15844 93054 Social services 109391 Share of Union 37219 42054 54189 Economic services 52759 Taxes/Duties Grants from Grants-in-aid and 22261 33662 15793 20107 Government of India Contributions Section B: Capital and Others Miscellaneous Capital 0 0 26842 Capital Outlay 35049 Receipts Recoveries of Loans Loans and Advances 1778 1604 979 1545 and Advances disbursed Repayment of Public 48075 Public debt receipts$ 26025$ 15782 25116$# Debt$ Appropriation from Appropriation to 0 1528 0 3528 Contingency fund Contingency fund 0 Contingency Fund 3528 0 Contingency Fund 1528 Public Account Public Account 81877 90665 70491 89758 Receipts Disbursements Opening Cash Balance Closing Cash Balance 27853 a) Sinking Fund 33971 33971 a) Sinking Fund 34488 40897 b) Cash balance 54498 54498 b) Cash balance 32781 444134 Total 490815 444134 Total 490815 #Lower Rounding $Excluding ways and means advances ( Receipt: nil and Disbursement: nil ) Source: Finance Accounts of respective years 1.3 Authority for Audit The authority for audit by the C&AG is derived from Articles 149 and 151 of the Constitution of India and the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971. The C&AG conducts audit of expenditure of the Departments of GoM under the provisions of the C&AG’s (DPC) Act, 1971 and Regulations on Audit and Accounts, 2007 issued by the C&AG.