FINANCE DEPARTMENT

POLICY NOTE

DEMAND No.16

2013-2014

O. PANNEERSELVAM
Minister for Finance

©
Government of Tamil Nadu
2013
 INDEX

Sl.
Subject Page
No.

1. Introduction 1

2. Treasuries and Accounts

5
Department

3. Local Fund Audit Department 15

4. Co-operative Audit Department 34

5. Small Savings Department 40

6. Government Data Centre 47

7. Internal Audit and Statutory

55
Boards Audit Department
 POLICY NOTE

DEMAND NO.16

FINANCE DEPARTMENT

POLICY NOTE FOR THE YEAR

2013-2014

INTRODUCTION:

“Acquiring, gaining, saving and sharing treasure

Efficiency in these marks an able ruler”

Following these precepts of the Sage

Thiruvalluvar this Government, under the able
leadership of the Hon’ble Chief Minister with the
welfare of the people as its foremost priority,
mobilizes all possible resources in an appropriate
manner and protects them by according careful
attention to the formulation and implementation of
various schemes.
 2

2. After the assumption of office by the

Hon’ble Chief Minister, the finances of the State
have established new records with the total budget
size crossing Rs. One Lakh Crore for the first time
in the Revised Budget Estimate 2011–2012 and the
Revenue Receipts of the State crossing Rs.One
Lakh Crore in the financial year, 2012-2013. In the
Budget for 2013-2014, many achievements have
been recorded by the introduction of various new
schemes.

3. The Hon’ble Chief Minister, after

assuming office for the third time has released the
“Tamil Nadu Vision 2023” document on 22.03.2012
envisaging an investment of Rs. Fifteen Lakh Crore
for the infrastructure development of the State. For
the implementation of the above scheme, the Tamil
Nadu Infrastructure Development Board has been
established which has been functioning from
15.06.2012. A sum of Rs.2,000 Crore has been
provided in the Budget Estimate 2013-2014 for
the Tamil Nadu Infrastructure Development Fund.
 3

This fund will be utilized for financing upto

20 percent of the project cost of Public Private
Partnership projects requiring viability gap funding.

4. The main functions of Finance

Department are:

(i) Formulation of policies of the State

Government in respect of overall financial
management of the State and review of
the policies as and when the need arises.

(ii) Managing the public finances of the

Government of Tamil Nadu.

(iii) To prepare a statement of the Estimated

Revenue and Expenditure of the State to
be laid before the Legislature every year.

(iv) Custodian of the State Exchequer.

(v) Overall responsibility of balancing receipts

and payments and ensuring that debt
obligations are met.
 4

(vi) Critical scrutiny and evaluation of

expenditure proposals of various
Departments of the Government with
reference to needs, cost effectiveness,
budget provisions, financial procedure
etc., keeping in mind the importance of
balancing receipts and expenditure and
achieving the fiscal objectives of the
Government.

5. The following seven departments are

under the administrative control of Finance
Department:-
i. Treasuries and Accounts Department
ii. Local Fund Audit Department
iii. Co-operative Audit Department
iv. Small Savings Department
v. Government Data Centre
vi. Internal Audit and Statutory Boards
Audit Department
vii. Directorate of Pension
 5

6. The functions of the departments listed

above at serial No. (i) to (vi) are detailed in the
subsequent paragraphs. The functions of the
Directorate of Pension are included in the Policy
Note on Demand No.50. “Pension and Other
Retirement Benefits”.

TREASURIES AND ACCOUNTS

DEPARTMENT

7. Treasuries and Accounts Department

headed by the Commissioner of Treasuries and
Accounts is functioning under the administrative
control of the Finance Department with 3 Regional
Joint Directorates, 7 Pay and Accounts Offices,
2 Sub-Pay and Accounts Offices, 32 District
Treasuries, One Pension Pay Office, One Assistant
Superintendent of Stamps Office and
206 Sub-Treasuries are providing treasury related
services and 14 additional Sub-Treasuries are
under formation.
 6

8. Being “a target mission mode

department”, it implements various e-Governance
initiatives like Automated Treasury Bill Passing
System, e–pension and Integrated Financial and
Human Resources Management System. The main
functions of the department is for accounting
Government revenues and expenditure. This
department is also responsible for payment of
salary to all Government employees, disbursement
of pension to pensioners, disbursement of stamps
to vendors, and release of payments to implement
the various schemes of the Government.

9. During 2012-2013, 449 Accountants and

161 Junior Assistants / Junior Assistants (Security)
in total 610 candidates have been appointed in this
Department through Tamil Nadu Public Service
Commission. Also, 129 Junior Assistants and
491 Accountants in total 620 employees were
deputed for condensed foundational training
imparted by Civil Services Training Institute at three
centers viz., Vellore, Thoothukudi and
 7

Tiruchirappalli as a special case during 2012-2013.

Similarly, steps are being taken to impart training to
another 750 employees during 2013-2014.

Construction of Buildings / Formation of

Treasuries

10. Out of the 32 District Treasuries of the

Treasuries and Accounts Department, 29 are
functioning in Government Buildings and the
remaining 3 District Treasuries at Chennai,
Thoothukudi and Tiruppur are functioning in the
rental buildings. The construction of own building
for Thoothukudi District Treasury is in progress.
Out of 206 Sub-Treasuries, 154 Sub-Treasuries are
functioning in Government buildings and the
remaining 52 are in rental buildings. Construction of
own building for 14 Sub-Treasuries sanctioned
during 2012-2013 are under progress. In respect of
the remaining Sub-Treasuries, steps are being
taken to identify suitable land for creating
necessary infrastructure on a permanent basis.
 8

At present 206 Sub-Treasuries are functioning and

14 new Sub-Treasuries are under formation.

Automated Treasury Bill Passing System

(ATBPS)

11. Automated Treasury Bill Passing System

(ATBPS) is in the process of implementation in all
Pay and Accounts Offices, District Treasuries,
Sub-Treasuries in order to overcome the difficulties
faced in the Compilation of Accounts, Tracking of
Bills, Monitoring the Bill Processing System etc., in
the manual bill processing system. This system will
facilitate providing better services to the various
stakeholders like Drawing and Disbursing Officers,
Banks, Accountant General, etc., and help in
effective monitoring. For the implementation of this
system, all the Treasuries have been strengthened
with infrastructure facilities like providing of
computers and other peripherals, Local Area
Network (LAN) and TNSWAN connectivity,
establishment of modular office for improving
working condition.
 9

Web Payroll

12. The Web Payroll is proposed to be

implemented during 2013-2014 which would
facilitate establishment of Centralized Employees’
Database from which Management Information
System reports like Number Statement, Payroll
related reports etc. could be generated which will
serve as an effective tool in the Human Resources
Management System.
e-Payment

13. The facility of e-payment provides

numerous advantages to the Citizens as well as to
the Government. The key benefits are:
anytime-anywhere payment, getting immediate
acknowledgements for the payments, reduction in
collection procedure, receipt of daily e-scrolls for
both on line and manual payments, uploading of
receipt details into treasury accounts directly, auto
reconciliation, instant credit collection into
Government account and transparent accounting
 10

methods. This facility has been initially availed by

the Commercial Taxes Department and the
Transport Department which will also be extended
to other Departments also.

Regional Electronic Clearance System

(RECS)

14. The facility of Regional Electronic

Clearance System (RECS) which is currently
available in 9 districts will be extended to all
districts of Tamil Nadu in the financial year
2013-2014. Through Regional Electronic Clearance
System (RECS), it will be possible to reach the
beneficiaries who are having account in any core
banking enabled bank within the State/Region
directly and all the account holders at various bank
branches across the length and breadth of the
State/Region can be accessed directly without any
loss of time and energy.
 11

Corporate Internet Banking

15. The officers of the Treasury Department

through the Corporate Internet Banking facility are
able to verify the credit on the same day of
remittance made by the stamp vendors, which
facilitates the treasury to issue the stamps/stamp
papers immediately without waiting for the receipt
of original challan and Bank Statement scroll.

Government Servants Health Insurance

Scheme

16. The New Health Insurance

Scheme-2012 is being implemented from
01-07-2012 through United India Insurance
Company Limited, Chennai, a Public Sector
Undertaking. Under this Scheme, nearly 12 lakhs
employees and their eligible family members of
Government Departments, Local Bodies, Public
Sector Undertakings, Statutory Boards and State
Government Universities have been covered.
 12

17. To improve the coverage, 54 new

medical treatments and 7 additional surgical
procedures have been added in the Scheme for the
further block of 4 years from July 2012 onwards on
cashless basis and the amount of medical
assistance has been increased from Rs.2 Lakh to
Rs.4 Lakh.

18. Under the Scheme, initially 167 hospitals

were empanelled as per G.O.Ms.No.243, Finance
(Salaries) Department, dated 29-06-2012. Till now
635 hospitals have agreed to provide medical
assistance.

19. From the date of commencement of the

scheme (i.e. from 01-07-2012 to 04-05-2013)
30,168 beneficiaries have availed medical
assistance amounting to Rs.132.54 crores (Rupees
One Hundred and Thirty Two crores and Fifty Four
Lakhs Only).
 13

Integrated Financial and Human

Resources Management (IF&HRMS)

20. The Government had proposed to

implement Integrated Financial and Human
Resources Management System (IF&HRMS) for
the effective and efficient functioning of
Government by integrating management of both
Financial and Human Resources. To provide total
solution for Integrated Financial and Human
Resources Management System, M/s.Accenture
Services Private Limited, Chennai has been
appointed for offering consulting services and to
identify the System Integrator.

21. The Government have issued orders to

constitute a core committee (e-Governance Team)
consisting one Joint Director, one Chief Accounts
Officer and one Accounts Officer to monitor the
progress of the implementation of the Integrated
Financial and Human Resource Management
System. Accordingly, a committee has been
 14

constituted and the committee is continuously

monitoring the progress. The Consulting Agency
with the guidance of the core committee has
submitted the As-Is and To-Be Reports as per the
schedule and formulating proposal for selection of
the System Integrator.

22. On implementation of Integrated

Financial and Human Resource Management
System, all the 20,000 Drawing and Disbursement
Officers (D.D.Os.) throughout the State will be able
to submit the bills to the Treasury through online.
This Integrated Financial and Human Resource
Management System will take care of the Common
Payment Gateway Services by which the
Government can be benefited with the real time
collection and accounting of revenue. The citizens
will also enjoy the benefit of hassle free and
instantaneous services.

23. Under this scheme, the maintenance of

Service Register of the employees will be
 15

automated, by which the employee’s pay bill,

promotion, transfer, leave management etc., are
updated on real time basis. The Integrated
Financial and Human Resources Management
System will have security features like Biometric
authentication, Digital Signature Certificate etc.
After implementation, the Government will also be
able to know the real time fund position of the State
which will ensure robust management of Finance &
Human Resources.

LOCAL FUND AUDIT

DEPARTMENT

24. The Local Fund Audit Department was

created based on the orders issued in
G.O.Ms.No.125, Finance Department, dated
10.02.1921 and entrusted with the task of statutory
audit of urban and rural local bodies, Universities,
Market Committees, Local Library Authorities and
other institutions in the State under the provisions
of the respective Acts governing the institutions.
 16

25. Currently the following institutions are

under the audit control of Local Fund Audit
Department:
Sl. Name of the Institutions Total
No No.
(i) Municipal Corporations 10
(ii) Municipalities 125
(iii) Town Panchayats 529
(iv) District Panchayats 31
(v) Panchayat Unions 385
(vi) Universities 23
(vii) Local Library Authorities 32
(viii) District Market Committees 22
(ix) Tamilnadu Agricultural Marketing
1
Board
(x) Agricultural Engineering Wings 2
(xi) Koyambedu Market committee 1
(xii) National Social Welfare Schemes 29
(xiii) Local Planning Authorities 26
(xiv) Village Panchayats (Test Audit
2506
Only )
(xv) Miscellaneous Institutions 9
 17

Scope of Local Fund Audit Department

26. The audit of Local Body Institutions are

being done by this Department through the
checking of accounts and conduct of propriety audit
on the income and expenditure of the auditee
institutions in order to ensure that the transactions
are as per Acts and Rules and Government orders
and the accounts represent a true and fair view of
the state of affairs of the Local Bodies. The audit
safeguards the interests of the tax payers’ money to
Local Bodies, assistance given by Government and
funding agencies to Local Bodies and further
ensures that the assistance given by the
Government and funding agencies is utilized for the
purpose for which it is given and for the benefit of
the community as a whole.

Test Audit of Village Panchayats

27. The test audit of 20% of the total Village

Panchayats is being done by this department.
 18

Accordingly, 2506 Village Panchayats are audited

by this department. In addition, test audit of 2% of
Village Panchayats based on the receipts, value of
works and specific complaints forwarded by
Commissioner of Rural Development is taken up by
this department.

Concurrent Audit of Urban Local Bodies,

Panchayat Raj Institutions and
Universities

28. The "Concurrent Audit System" is in

vogue in 10 Corporations, 12 Municipalities and 14
Universities with the audit units of this department.
The concurrent audit system was introduced in all
the 385 Panchayat Unions from the year
2000-2001. Audit Parties consisting of one
Inspector, one Deputy Inspector / one Assistant
Inspector for every three or four Panchayat Unions
with headquarters at select 116 Panchayat Union
Offices have been formed for this purpose.
 19

Implementation of Immediate Post Audit

System in all Corporations and selected
Municipalities

29. Immediate Post Audit is conducted in 10

Corporations and 12 Municipalities where
Concurrent Audit sections are functioning. Under
this system the payment vouchers are sent to Audit
immediately after payment is made and such
vouchers are audited immediately and the defects
noticed are communicated to administration. This
system facilitates the rectification of defects by the
administration then and there.

30. The audit objections noticed during the

Concurrent audit of these institutions are
communicated to the institutions concerned then
and there in the form of "Audit Slips" by the audit
parties, and after verifying the replies received, the
objections are admitted and the Audit Reports
comprising unsettled audit slips are issued. After
issue of Audit Reports, the replies furnished to the
 20

audit objections duly rectifying the defects are

verified by the audit parties with reference to the
connected records and registers and the objections
settled.
Annual Audit of Non-Concurrent Audit
Institutions

31. The audit of remaining Municipalities

(113) and Universities (9) and other local bodies
like Town Panchayats, District Panchayats, Market
Committees, Local Library Authorities, Local
Planning Authorities and Miscellaneous Institutions
are taken up annually on receipt of annual accounts
from the auditee institutions.

Audit of World Bank Funded Institutions

32. The World Bank Funded Institutions are

also audited by this Department. The audit of World
Bank Funded projects of Tamil Nadu Agriculture
University, Coimbatore has been entrusted to this
Department and the audit was completed upto
2011-2012.
 21

Status of Audit

33. The Audit of all the institutions have been

completed up to the year 2009-2010. The Audit
for the year 2010-2011 and 2011-2012 are in
progress and will be completed by 30.09.2013 and
31.03.2014 respectively.

Implementation of Accrual Based

Accounting System in Urban Local
Bodies

34. The Cash Based system of Accounting in

Urban Local Bodies was replaced by
implementing the Accrual Based system of
Accounting in Municipal Corporations and
Municipalities in two phases from the accounting
year 1999-2000 and 2000-2001. This system was
introduced in Town Panchayats with effect from
2002-2003.

35. The objective and scope of this

accounting system is to maintain the accounts on
Generally Accepted Accounting Principles with the
 22

preparation of Income & Expenditure Account to

know the financial operation during a year and
Balance sheet to know the true financial status of
Urban Local Bodies at a given period of time.

36. This system enables the Urban Local

Bodies to identify their Assets available with due
valuation methods and incorporated in accounts
through Asset Register. Because of the improved
method of accounting in Urban Local Bodies,
financial institutions and various funding agencies
have come forward to provide financial assistance
to Urban Local Bodies for the capital projects and
welfare schemes thereby the financial sources
available to Urban Local Bodies are strengthened.

Certification of Annual Accounts of Local

Bodies and Universities

37. Certification of accounts of local bodies

is a very important issue and internationally it is
accepted that accounts have no meaning without
 23

proper certification. Accordingly, the annual

accounts of urban local bodies are now certified by
the Officers of the Local Fund Audit Department as
per G.O.Ms.No.93, Finance (FC-IV) Department,
dated 28-03-2003, consequent on the
implementation of the Accrual Based Accounting
System in the Urban Local Bodies.

38. The audit certificate in respect of the

World Bank funded Tamil Nadu Irrigated Agriculture
Modernization and Water Bodies Restoration and
Management (IAMWARM) project which is being
implemented by Tamil Nadu Agricultural University,
Coimbatore is issued by this Department.

Procedure for Settlement of Objections

39. Taking follow up action on the Audit

Reports is one of the vital functions of this
department. The irregularities which are serious in
nature, noticed during the course of audit are
immediately taken to the notice of the Executive
 24

Authorities of the local bodies concerned. The

serious irregularities and losses pointed out in Audit
Reports are reported to Government and the Heads
of Administrative Departments concerned through
monthly periodicals and special reports for
necessary follow up action.

40. In the normal course, the replies to the

audit objections are verified and the objections
dropped. Further, the settlement of audit objections
is taken up by the Regional and District Level
Officers of this department through joint sittings
arranged by the concerned administrative
departments after getting replies to the audit
objections and settlement made on the spot.

41. The entry discussion and exit discussion

system has also been followed in respect of audit of
auditee institutions and this facilitates rectification of
defects pointed out in audit then and there. The
Government have issued detailed guidelines to be
 25

followed for entry and exit discussions for Urban

Local Bodies in G.O.Ms.No.83, Municipal
Administration and Water Supply department, dated
01.06.2009.

Formation of District High Level

Committees and State High Level
Committees

42. In respect of Panchayat Unions, District

High Level Committees have been formed headed
by the respective District Collectors and the State
High Level Committee is functioning under the
Chairmanship of the Commissioner of Rural
Development and Panchayat Raj. During the year
2012, District High Level Committee meetings
numbering 86 were held and decisions taken in
respect of 2482 audit objections by the District High
Level Committees.

43. As regards Town Panchayats, High

Level Committees have been constituted at
District level with the Collector as Chairman and at
 26

State level with the Director of Town Panchayats as

Chairman in G.O.Ms.No.1, Municipal Administration
and Water Supply (TP2) Department, dated:
04.01.2007. With the constitution of the High Level
Committees, the number of pending objections was
reduced considerably.

44. In respect of Municipalities and Municipal

Corporations other than Chennai Corporation,
District level High Level Committees headed by
Financial Advisor of the Commissionerate of
Municipal Administration and State High Level
Committee headed by Director of Municipal
Administration have been constituted in
G.O.Ms.No.65, Municipal Administration and Water
Supply Department, dated: 22.05.2007.

45. The joint Review Meetings of

Administration and Audit officials at Districts and at
State Level are conducted in respect of Urban
Local Bodies and Panchayat Raj Institutions to sort
out problems relating to Accounts and Audit at
 27

cutting edge level. Similarly in respect of exit

discussion and approval of Audit Report, not only
the executive authorities of auditee institutions but
also the higher officers of administration are
participating in this process and thereby the defects
pointed out in audit are corrected then and there.

Issue of Utilisation Certificates for

Grants

46. Audit certificates are issued by this

department for the utilisation of various grants
released by the State / Central Government, the
University Grants Commission and other Funding
Agencies in respect of Universities and other Local
Body Institutions which come under the audit
purview of this department. The Utilisation
Certificates are issued immediately on completion
of schemes and projects by the Local Body
institutions and Universities.
 28

Special Functions

47. Apart from the regular audit functions,

this department is also entrusted with the following

special functions:

i) Authorisation and disbursement of

Pensionary benefits to Local Body
Employees

The certification, sanction and payment of

retirement/death benefits to the employees
of local bodies viz: Municipalities, Town
Panchayats and Panchayat Unions are done
by the Director of Local Fund Audit. As on
31.03.2013, 33,372 pensioners are receiving
monthly pension through four nationalized
banks. The funds for the payment of
pension are released by the Heads of
Department concerned from out of the State
Finance Commission Devolution respective
pension funds maintained by this Directorate
 29

towards the payment of Monthly Pension

and Family Pension.

ii) Redressal of Local Body Pensioner’s

grievances

An Information Desk has been opened at the

Directorate of Local Fund Audit for redressal
of local body pensioners’ grievances and the
pensioners are able to get information
required by them regarding their pension
proposals and related matters without any
delay.

iii) Administration of Municipal Pensioner’s

Health and Family Security Fund
Schemes

The Health Fund Scheme and Family

Security Fund scheme applicable to
Government pensioners were extended to
Municipal Pensioners in G.O.Ms.No. 120,
Municipal Administration and Water Supply
Department, Dated 25-05-1999 with all the
concessions applicable to Government
 30

pensioners with effect from 01-08-1999.

These two schemes are administered by the
Director of Local Fund Audit. The details of
claims admitted and amount sanctioned
during 2012-2013 are as follows:-

Health Fund Family Security

Scheme Fund Scheme
No. of Amount No. of Amount
Claims (Rs. in Claims (Rs. in
Lakhs) Lakhs)
277 66.73 306 78.40

iv) Sanction of Interest on Provident Fund

Balances and Deposits of Local Body
Employees

The Provident Fund Deposits of Local Body

Employees and investments thereon were
taken over by Government from 1967. The
Director of Local Fund Audit is authorised to
sanction interest on the balance of Provident
Fund Deposits of local bodies. A sum of
Rs.12 crores was sanctioned by the
 31

Government during the year 2012-2013 and

the entire allotment has been utilized for
sanction of interest claims to the Local
Bodies.

v) Administration of Charitable Endowments

The Director of Local Fund Audit also

functions as the Treasurer of Charitable
Endowments with effect from 01.04.1952.
The Government authorizes acceptance of
the endowments and publishes the scheme
of administration of the endowment.

The interest amount realised from the

Endowments is released to the institutions
concerned based on the requisitions
received from them. At present there are 4
Central Government Endowments worth
Rs.10.58 lakhs and 872 State Government
Endowments worth of Rs.17.16 Crores
respectively under the custody and control of
the Treasurer of Charitable Endowments.
 32

During the year 2012-2013, out of the

interest proceeds of endowments, a sum of
Rs.6.82 lakhs has been distributed to 266
Endowment institutions towards the award of
scholarships, prizes, medals, etc.

Capacity Building

48. To improve the quality of audit by

enhancing the skill among the Auditors, this
Department is now conducting various training
programmes to the staff of this Department as
detailed below:
i) Conducting in-service training to Auditors by
the Senior Officers of this Department.

ii) Training by Accountant General under

“Technical Guidance programme” has been
given to the staff to this department. The
second phase of training has also been
given by the staff of Accountant General to
this Department in the New Accrual
 33

Accounting System maintained in Urban

Local Bodies.

iii) To improve the quality of audit and to ensure

uniformity in communicating the audit
objections, serious irregularities noticed in
Audit were compiled and the audit formats in
respect of Urban Local Bodies and
Panchayat Raj Institutions were standarised
and training were given to auditors.

iv) Quality circles in the District Audit Offices

have been formed.

v) Accounts Cell in the Region to solve the

account related problems in respect of Urban
Local Bodies have been formed.

Audit Fees

49. This department is collecting 100% of

audit cost as audit fee from the Universities and
50% of audit cost as audit fee from the Municipal
Corporations and Municipalities and Market
 34

Committees. During the year 2012-2013, a sum of

Rs.1.91 Crore was collected as audit fees by this
Department.

CO-OPERATIVE AUDIT
DEPARTMENT

50. As per the recommendations of the

Santhanam Committee as well as Administrative
Reforms Commission, the Government separated
audit wing from the Co-operative Department and
formed a separate department called Department
of Co-operative Audit with effect from 17.06.1981 in
order to have an independent and impartial audit of
Co-operative Institutions. As per Section 80 of
Tamil Nadu Co-operative Societies Act 1983, the
main functions of the Co-operative Audit
Department is to conduct audit of all Co-operative
Societies functioning under the administrative
control of 14 Functional Registrars except the Multi
State Co-operatives and Milk Co-operatives.
 35

51. The Co-operative Societies under the

control of the following departments are coming
under the purview of the Co-operative Audit
Department:

Total
Sl.
Name of the Registrar Number of
No.
Societies

(i) Registrar of Co-operative 10,469

Societies

(ii) Commissioner of Handlooms 1,416

and Textiles

(iii) Commissioner of Industries and 330

Commerce

(iv) Chief Executive Officer, Tamil 553

Nadu Khadi and Village
Industries Board

(v) Chief Executive Officer, Palm 939

Products Development Board

(vi) Registrar of Co-operative 894

Societies (Housing)

(vii) Director of Fisheries 1,296

 36

Total
Sl.
Name of the Registrar Number of
No.
Societies

(viii) Director of Animal Husbandry 258

and Veterinary Services

(ix) Commissioner of Sugar 17

(x) Director of Agriculture (Oil 167

Seeds)

(xi) Director of Agro Engineering 213

and Service Co-operative
Societies

(xii) Director of Sericulture 24

(xiii) Director of Social Welfare & 123

Nutritious Meal Programme

(xiv) Director of Rural Development 43

and Panchayat Raj

Total 16,742

(Excluding liquidated societies)

 37

Scope of Co-operative Audit Department

52. The basic objective of the Co-operative

Audit relates to checking of the accounts of the
societies and to ensure that the Balance Sheet and
Profit and Loss Account have been drawn properly
and that they represent a true and fair picture of
the state of affairs of the societies. It is an
important tool in the hands of the members of the
societies and ensure that the operations are carried
out as per Acts, Rules and procedures. It is also
ensured that the assistance given by the
Government is utilized for the purpose for which it
is given and the benefit is derived by the members
and the community as a whole.

Concurrent Audit of Urban Banks and

Central Co-operative Banks

53. Hitherto, the statutory audit of Central

Co-operative Banks and all Urban Co-operative
Banks were conducted by the Auditors of the
department. As per the recommendation of the
 38

Prof. Vaidhyanathan Committee, the statutory Audit

of all Central Co-operative Banks and as per
recommendation of Reserve Bank of India, the
statutory Audit of Urban Co-operative Bank with
deposits above Rs.25 Crore, is entrusted to
Chartered Accountant from the year 2009 and 2010
respectively. The Departmental Auditors are
entrusted with the task of Concurrent Audit in these
Banks.

Statutory Audit

54. The statutory audit of small primary

societies is conducted under concurrent basis which
has to be completed within a period of 45 days.
Audit fee is levied for the period of audit from the
respective societies. A sum of Rs.1.90 crores has
been collected as audit fees during the year
2012-2013. The statutory audit of other bigger
societies having more transactions is being
conducted and the cost is levied under
Fundamental Rule 127 on the respective societies.
 39

A sum of Rs.9.25 crores has been collected as

Fundamental Rule Cost during the year 2012-2013.

Special Reports

55. When serious defects are noticed during

the audit, they are brought to the notice of the
authorities concerned by submitting a Special
Report with full facts of the case. During the year
2012-2013, 242 special reports were received
involving an amount of Rs.21.55 Crores.

Training to improve the quality of Audit

56. To improve the quality of audit and skills

among the auditors, the department is conducting
various types of training programmes and also
conducting refresher classes every year, containing
all the basic principles, instructions and guidelines
to guide the auditors while conducting the audit in
various types of Co-operative Societies. During the
year 2012-2013, 9 training programmes were
conducted in which 269 officers were trained.
 40

SMALL SAVINGS DEPARTMENT

57. Small Savings is an important tool in the

hands of the individuals to invest their surplus funds
in schemes which are highly secure and which also
give a reasonable rate of return. These schemes
are formulated by the Ministry of Finance,
Government of India and implemented in Post
offices. Government of India is sanctioning 50% of
the monthly net Small Savings Collections as loan
to the State Government at the interest rate of 9.5%
w.e.f. 01.12.2011 for development of infrastructure
to the State.

Small Savings Schemes

58. Various Small Savings Schemes are in

vogue to suit the requirement of different sections
of the society are tabulated below:
 41

Rate of interest w.e.f.

Rate of interest from
Rate of interest upto

Revised rate of

01.04.2013 (%)
30.11.2011 (%)

31.03.2012 (%)

01.04.2012 (%)

interest w.e.f.
01.12.2011 to
Sl.
Scheme
No.

(i) Post Office 3.50 4.0 4.0 4.0

Savings
Account
(POSA)
Time Deposit
Post Office 6.25 7.7 8.2 8.2
Time Deposit
(POTD)-1 year
Post Office 6.50 7.8 8.3 8.2
Time Deposit
(ii) (POTD)-2 years
Post Office 7.25 8.0 8.4 8.3
Time Deposit
(POTD)-3 years
Post Office 7.50 8.3 8.5 8.4
Time Deposit
(POTD)-5 years
(iii) Post Office 7.50 8.0 8.4 8.3
Recurring
Deposit
Scheme
(PORD)
(iv) Senior Citizen 9.00 9.0 9.3 9.2
Savings
Scheme
(SCSS)
( 5 years)
 42

Rate of interest w.e.f.

Rate of interest from
Rate of interest upto

Revised rate of

01.04.2013 (%)
30.11.2011 (%)

31.03.2012 (%)

01.04.2012 (%)

interest w.e.f.
01.12.2011 to
Sl.
Scheme
No.

(v) Post Office 8.00 + 5% 8.2 8.5 8.4

Monthly Income Bonus (No (No bonus) (No
Scheme bonus) (5 years) bonus)
(POMIS) ( 6 years)
( 5 years) (5 years)

(vi) National 8.00 8.4 8.6 8.5

Savings (6 Years) (5 Years) (5 Years) (5 Years)
Certificate
(NSC-VIII
issue)
(vii) 10 Year New 8.7 8.9 8.8
National Scheme
Savings
Certificate
(NSC - IX
issue)
(viii) Public 8.00 8.6 8.8 8.7
Provident Fund (maximum (maximum (maximum (maximum
(PPF) (15 of of Rs.1 of Rs.1 of Rs.1
years) Rs.70000/- lakh in a lakh in a lakh in a
in a Financial Financial Financial
Financial year) year) year)
year)
(ix) Kisan Vikas Discontinued w.e.f. 01.12.2011
Patra (KVP)
 43

Collection Details

59. The Small Savings Collections made in

the last eight years are as follows:

(Rs. in crores)
Sl.
Year Target Gross Net
No.

(i) 2005-2006 5000 12455.75 5594.13

(ii) 2006-2007 5700 10158.54 2637.25

(iii) 2007-2008 * -- 7791.11 -965.98

(iv) 2008-2009 -- 8486.64 -1216.73

(v) 2009-2010 -- 12113.39 1539.39

(vi) 2010-2011 -- 13414.56 516.32

(vii) 2011-2012 -- 10607.50 -2100.74

(viii) 2012-2013 -- 9797.05 -1506.83

* (The Government of Tamil Nadu has not fixed target

under Small Savings from the year 2007-2008)
 44

60. The Director of Small savings plays a

vital role in encouraging the collection under Small
Savings Schemes and to set right the grievances of
investors and agents in Tamil Nadu. The District
Collectors are playing a vital role in the Districts and
the Commissioner of Corporation of Chennai is
playing a vital role in respect of Chennai city.

Agency System and commission of

Government of India and incentive
amount of State Government.

61. Agents are appointed throughout the

State for mobilization of savings. They play a vital
role in Small Savings promotion and collection. At
present 31,574 number of agents are functioning in
Tamil Nadu. The Government of India pay as
Commission and the State Government pay as
incentive to agents at the following revised rate
w.e.f. 01.12.2011 as indicated below:-
 45

Total Number of
Govt. of India
Commission State

agents
Sl. Type of Government
Savings
incentive

30.11.11

01.12.11
No. Agents Products
(upto

up to

w.e.f
31.03.2012)

a. Standardised Post 7884 1% 0.5 % 0.5 %

Agency Office
System Monthly
(SAS) Income
Scheme
(POMIS)/
National
Savings
Certificate
(NSC)/
Post
Office
Time
Deposit
1,2,3,5
Year
(POTD)
Mahila Post 23082 4% 4% 2%
b. Pradhan Office
Kshetriya Recurring
Bachat Deposit
Yojana Scheme
(MPKBY) (PORD )
c. Authorised Public 608 1% Nil Nil
Agents Provident
Public Fund
Provident (PPF)
Fund
Scheme
(PPF)
 46

Total Number of
Govt. of India
Commission State

agents
Sl. Type of Government
Savings
incentive

30.11.11

01.12.11
No. Agents Products
(upto

up to

w.e.f
31.03.2012)

d. Senior Senior - 0.5% Nil Nil

Citizens’ Citizens’
Savings Savings
Schemes Schemes
(SCSS) (SCSS)
TOTAL 31,574

62. Though the Government of India has

ordered certain restrictions for the payment of
Incentive to the agents w.e.f. 01.12.2011, the
Government of Tamil Nadu has ordered for the
payment of incentive to the agents till 31.03.2012
without any change as paid earlier. The
Government of Tamil Nadu have not sanctioned
incentive to agents w.e.f. from 01.04.2012. The
Government provide funds only to clear pending
incentive claims.
 47

Publicity

63. In order to create awareness among the

public, High Definition short films with small savings
advertisements are being screened in Districts.
Action has been taken for the spontaneous, willing
participation of public under Small Savings.

GOVERNMENT DATA CENTRE

64. A Central Budget Data Processing Centre

was established in 1971 with the objective of
ensuring a more meaningful analysis of financial data
and better budgeting through analysis of the
accounts of the State using electronic data
processing equipment. It was also the main intention
of the Government to utilize the electronic data
processing facilities in due course to form the
nucleus of a Management Information System for
Government. Hence, established a full-fledged
Government Data Centre in 1972. For administrative
 48

convenience both the above Centres were merged

and the Government Data Centre was established in
1975. This centre now deals with the following
functions:

(i) Processing of results for the

examinations conducted by the
Directorate of Government
Examinations
(ii) Teachers’ Provident Fund
(iii) Contributory Pension Scheme
(iv) Tamil Nadu Nutritious Meal and
Integrated Child Development
Employees General Provident Fund

Examination Works

65. All the data processing work relating to the

examinations conducted by the Director of
Government Examinations were entrusted to
Government Data Centre by an order of the
Government in G.O.(1D)No.324, School Education
Department, dated 15.10.2010.
 49

66. Government Data Centre has been

processing the results of various examinations
conducted by the Director of Government
Examinations with utmost care and accuracy. The
following is the list of examinations for which such
processing work is done by Government Data
Centre:

a) Higher Secondary Examination

b) Secondary School Leaving Certificate
Examination
c) Eighth Standard School Leaving Certificate
Examination
d) Rural Talent Search Examination
e) Diploma in Teacher Training Examination
f) National Talent Search Examination
g) National Means cum Merit Scholarship
Examination
h) Technical Examination

67. Every year, Government Data Centre is

processing the examination work with utmost care
and maintaining confidentiality for nearly 25 lakhs
 50

candidates. The works undertaken by the

Government Data Centre for the previous Academic
year are as follows:
SPECIAL
MARCH SUPPLE- OCTOBER
EXAMINATION TOTAL
(2012) MENTARY (2012)
(2012)

HSE 8,23,208 97,032 50,597 9,70,837

SSLC 11,46,340 1,25,104 72,909 13,44,353
ESSLC 11,469 - - 11,469
RURAL TALENT 28,875 - - 28,875
SEARCH
EXAMINATION
DIPLOMA IN 90,653 - - 90,653
TEACHER
TRAINING
EXAMINATION
NATIONAL 21,608 - - 21,608
TALENT
SEARCH
EXAMINATION
NATIONAL 59,542 - - 59,542
MEANS CUM
MERIT
SCHOLARSHIP
EXAMINATION
TECHNICAL 15,671 - - 15,671
EXAMINATION

GRAND TOTAL 21,97,366 2,22,136 1,23,506 25,43,008

 51

68. As per the Hon’ble Chief Minister’s

110 Announcement, introduction of additional
security feature such as photograph in the
certificates issued to the candidates of SSLC/HSC
from March 2012 onwards has been successfully
implemented by the Government Data Centre.

Teachers Provident Fund

69. The Government in G.O.(Ms.) No. 38,

Finance (Allowances) Department, dated
23.01.1992, has entrusted the work of
computerization of the Teachers Provident Fund
accounts in respect of Panchayat Union Schools /
Municipal Schools / Government Aided
Schools / Collegiate Education / Government
Aided Technical Institutions to Government Data
Centre. Initially, accounts slips were issued to the
Teachers of Panchayat Union Schools,
authenticated by the Assistant Elementary
Educational Officers concerned through the
Director of Elementary Education.
 52

70. In G.O.(Ms).No.509, Finance (CA)

Department, dated 15.10.2009, the Government
has permitted the Commissioner, Government
Data Centre to issue authenticated account slips
for Teachers Provided Fund in respect of
Panchayat Union Schools teachers from the year
2007-2008 onwards. The authenticated account
slips for the year 2007-2008 have been issued
through the Director of Elementary Education. The
Internal Audit has been undertaking the audit to
issue account slips for the year 2008-2009,
2009-2010 and 2010-2011 are under progress.

Contributory Pension Scheme

71. The Government, in G.O. (MS).No. 201.

Finance (Pension) Department, dated 21.05.2009,
has entrusted the work of assigning Index
Numbers for Contributory Pension Scheme and
maintaining the Contributory Pension Fund
accounts under Contributory Pension Scheme to
 53

Government Data Centre for the following

employees.

(i) Teachers of Panchayat Union Schools

(ii) Teachers of Aided Schools / Institutions

(iii) Non-Teaching Staff of panchayat Union

Schools

(iv) Municipal Corporation and Municipal

Employees

(v) Non-Provincialised Employees of Town

Panchayats

(vi) Non-Provinicialised Employees of

Panchayat Unions

72. Government Data Centre has so far

allotted 88023 Index Numbers under Contributory
Pension Scheme to the employees.

73. As per orders issued in G.O.(Ms.) No.

42, Finance (CA) Department, dated 17.02.2012,
the Drawing Officers concerned should maintain
 54

separate ledgers for each and every subscriber

and these ledgers should be verified and certified
by the Local Fund Audit Department. Based on the
Audit certificates, the maintaining of Accounts of
Contributory Pension Scheme and computerization
(online) of the accounts will be done with the
co-ordination of the coordinating officers being
appointed by the Department concerned in every
districts.

General Provident Fund for the Tamil

Nadu Nutritious Meal and Integrated
Child Development Services Employees

74. The Government in G.O.(Ms.)No.108,

Social Welfare and Nutritious Meal Programme
Department, dated 19.04.2010, has entrusted the
work of maintaining the General Provident Fund for
the Tamil Nadu Nutritious Meal and Integrated
Child Development Service Employees to the
Government Data Centre. At present, the number
of subscribers of General Provident Fund of
 55

Nutritious Meal Programme and Integrated Child

Development Service are 2,04,914.

75. The applications for assigning new

account numbers are received through online with
the coordination of National Informatics Centre.
So far, the online data entry work for 1,80,515
applications have been completed. Out of this, the
data relating to 87,201 subscribers have been
verified by the concerned Drawing and Disbursing
Officers.

INTERNAL AUDIT AND

STATUTORY BOARDS AUDIT
DEPARTMENT
76. The Internal Audit and Statutory Boards
Audit Department was created from the Local Fund
Audit Department in the year 1969 and it has been
entrusted with the Internal Audit functions of the
Government Departments in addition to the audit of
 56

various statutory Boards and other Non Statutory

audit.

77. The following Boards and Institutions are

coming under the purview of the Internal Audit and
Statutory Boards Audit Department.

Statutory Audit

Year of
Sl.
Name of the Institution completion
No.
of Audit

Tamil Nadu Khadi & Village

(i) 2010-2011
Industries Board

Tamil Nadu Slum Clearance

(ii) 2011-2012
Board

(iii) Tamil Nadu Housing Board 2011-2012

Chennai Metropolitan
(iv) 2011-2012
Development Authority

(v) Tamil Nadu Wakf Board 2010-2011

(vi) Tamil Nadu Labour Welfare Board 2011-2012

 57

78. The audit of the above institutions in

Sl.No (i) - (iv) are conducted annually on concurrent
basis and paras of serious nature are brought to the
notice of the Government and Public Undertaking
Committee.

Non Statutory Audit

79. The departmental audit is conducted in

the following non-statutory institutions by this
department.
No. of
Sl.
Name of the Institution. Centre/
No.
Institutions
Puratchi Thalaivar MGR 97,316
(i)
Nutritious Meal Programme
(ii) Agriculture Extension Centres 874
(iii) Weights and Measures 302
Institutions receiving Grants- 724
in-Aid of Recurring grant of
(iv) above Rs.0.20 lakhs and Non-
Recurring grant of above
Rs.1.20 lakhs p.a.
 58

Special Audit

80. This Department is conducting special

audits of Government departments as per the
specific orders of Government and the reports of
such audit are submitted to the Government.
Accordingly, this department is conducting the audit
of 14 Government departments by deputing
persons in the cadre of Assistant Director/Inspector
to supervise the audit functions of the respective
Department. Wherever no Internal Audit staff are
available, this Department is conducting the audit of
the following departments.

a) Secretariat Departments

b) Tamil Nadu Labour Offices under the

control of the Commissioner of Labour

c) Office of the Commissioner of

Disciplinary Proceedings

d) Directorate of Vigilance and

Anti-Corruption
 59

e) Annual audit of the Hon’ble Chief

Ministers’ Public Relief Fund both at
Secretariat and District levels.

f) Verification and certification of the

Teachers Provident Fund account as well
as Contributory Pension Scheme in
respect of the institutions for which audit
is entrusted to this department

g) Audit of accounts of Contributory Pension

scheme in respect of Aided Schools,
Aided Colleges and Department for the
Welfare of the differently abled as per
G.O.Ms.No.53, Finance (L.F.)
Department, Dated 27.02.2013

Audit Certificate

81. This Department is certifying the

entitlement of grants to grants-in-aid institutions,
besides certifying pension and Provident Fund
closure proposals of employees of some of the
auditable institutions.
 60

Follow up Action on the Department

Audit

82. An abstract of the serious irregularities

noticed in the audit of Government Departments
are forwarded to the District Officers, Heads of
Departments and Secretaries to Government of the
respective departments for necessary follow up
action.

Audit Fees

83. The entire expenditure on salary of the

audit staff in Statutory Boards Audit and 1.5% of the
net receipt of the Wakf institution in Wakf Audit, is
collected as the audit fee for the audit conducted by
this Department and remitted into Government
Account.

O. PANNEERSELVAM
Minister for Finance.