AUDIT REPORT

OF
RDAGA
MUNI

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Table of Contents

1. f,ntroduction about Lohardaga Nagar parishad ..........3

2. Demographic Profile (Lohardaga Nagar parishad) ......3

3. ORGANIZATION STRUCTURE & LEGAL FRAMEWORK. .....,....4

4. Administration of ULB ......4

5. Internal Audit ..........5

6. Internal Audit Process: ..........7

7. Scope: ........ g

8. Details of Internal Audit Firm & audit Team ............ B

9. Finance Position of the Council ..... . g

9.1 Budgetary Provisions and Revenue expenditure for the last three years....9

9.2 Bank Reconciliation. ...... 10

10. Revenue receipts ........ 10

11. Revenue collected by the tax collecting agency & by ULB itself during the

period of April-16 to June-16 and April-17 to Iune-l7. ..... .......... LZ

L2. Status of Implementation of DEAS: ...... 13

13. Audit observations: .... 15

n Observations /Irregularities which has monetary Implications ........ 15

13.1 Leakage of own source fund: .......... 15

13.2 Lack of prudence/Excess payment against payment of vouchers and

inefficiency in controls resulting loss to ULB,s: ........... 15

13.3 Findings of filed survey of property Tax: ........ 16

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L4. Observations /Irregularities which have non-monetary Imptication, but
significant violation of Act, Rules & directive of uD & HD:- .... 18

14.1 Non-Maintenance of books of accounts, subsidiary registers: ......., 18

L4.2 lrregularity in procurement process: .. ,... 19

14.3 Non-compliance of Act & Rules, ...,.. 19

L4.4 Lack of Internal Control Measures...... . ..... Zt

14.5 Non-compliance of TDS, vAT and other retevant statute. ........22

14.5 Deficiency in Pay-Roll System ....... 25

15. Utilisation of Grant and report on Utilisation certificate ..,,.... 25

16. General Observations:- ...........27

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Introduction about Loha

The Civic administration in the lohardaga is under the the preview of Lohardaga Nagar
Parishad' Which is governed by the provisions of the Jharkhand Municipal Act,2011.
Lohardaga Nagar Parishad is one of the oldest nagar panchayat now parishad in Jharkhand
was established in lstJuly 1888. The obligatory functions of the corporation includes water
supply, solid waste management, storm water and road side drainage network, sewerage
system, street lighting, construction and maintenance of city roads and slum improvement.
The lohardaga is known for its richness in bauxite.

2. Demographic Profile (Lohardaga Nagar parishad)

Demographic Profile

Corporation Lohardaga Nagar Parishad

City Lohardaoa
State - Jharkhand
Municioal Area Sq km 35
Population Lakh 574LL

Population Density No./ sq km 1640

Literacy Rate o/o
85.37

Slum Population Households 13899

Slum as o/o of total
population o/o
24o/o

Nearest Airport Name &distance Ranchi (74 Kml

Nearest Railway Station Lohardaga Railway Station,Ranchi
Name & distance (74 Km)

Nearest Important Cities Name & distance Ranchi {74 kml

1 college,l computer education
institute, 10-15 government
schools for secondary and higher
Ed ucationa I Infrastructu re education & many private schools
Source: CRlSlL,

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3. ORGANIZATION STRUCTURE & LEGAT FRAMEWORK

Administration of ULB

Mr. Ganga Ram Thakur

From 07.07.2015 to till date

Executive Mr. Pawan Ekka

Officer From 07.05.2013 to till date

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5. Internal Audit

"Intemal Auditing is an independent, objective assurance and consulting activity

designed to add value and improve an organisation's operations. It hetps an
organisation accomplish its objectives by bringing a systematic, disciptined approach to
evaluate and improve the effectiveness of risk management, control, and governance
processes."

Internal Auditor has been appointed with an objective to review the working of Urban
Local bodies on continuous basis to see the compliance of Jharkhand Municipal Act,
lharkhand Municipal Accounts manual and related rules & regutations; to improve
efficiency in daily operations of ULB; to improve financial reliability and integrity; to
ensure that all documentation has been done properly, to improve internal controls in
ULB; to protect assets.

The golden principles that state the Code of Ethics for Internal Auditors in Government
are Integrity, objectivity, Competency, confidentiality and Independence.

Objectivity Competency Confidentiality lndependence

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a- fntegrity: Integrity
is expected in aspects of the internal audit work. The principles
of honesty and fairness are to be observed. The basic point that is raised here is that
his repoft should bring with it an air of trust, reliance and fairness.

b. Obiectivity: Professional competency and assessment of facts with utmost care is a

pre-requisite for a good internal auditor. An internal auditor should refrain from making
reckless and irresponsible statements or resofting to expressions without proper
evidence.

c. Competency: An internal auditor is expected to apply appropriate skill and

knowledge combined adequately with experience. An internal auditor should refrain
from undertaking works that are outside his scope or beyond the scope of his skill and
competence. Performance of the audit and preparation of the report require due
professional care by persons possessing adequate training, experience and competence
in auditing. The majority of staff development, however, results from on the job
training where auditors assist in the training of other, less experienced staff members.
Each auditor must be responsible for continuing his/her education in order to maintain
their proficiency. This involves keeping abreast of current developments in auditing
standards, procedures and techniques.

d. Confidentiality: The internal auditor should safeguard all information received by

him as most of them may be of confidential nature. There shall be no spill out of
possessed information unless there is a statutory, legal and professional requirement
to do so.

e. Independence: As the definition states, Internal audit is an independent appraisal

activity. We need to carefully note here that the word "independent" is important, even
though it gets neutralised by the fact that it is within an organisation. Independence
stands for an internal auditor being able to report on material facts and figures,
uninfluenced by any favour or frown.
It is to be understood that the International Auditing Guidelines relating to "Using the
work of an internal auditor" reads as follows "An internal audit function is part of the
entity and irrespective of the degree of its autonomy and objectivity cannot be the
prime criterion for independence".

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 Quarterly Interml oudit report of Lohordogo Nogar Porishod for the first Quor"ter of F.y.ZOl7-lB

6. Internal Audit Processr -

Appointment by
SUDA

Prepration of
Quarteriy lnternal
lnitial Kick off
audit report Meeting at ULB

Discussion &
Iraininng
Compliance of -!...}.|-
INTERNAL
Programme
Conducted for

-iti'
Monthly report
AUDIT' Audit Team
?*s'g$as

Reported Monthly
lnternalAudit Commencement &
Exeuction of Audit
Report to
on Daily Basis
MC/EO/SO & SUDA

Non-Compliance/
Observationsl
lrregularities Found

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7. Scope:

We have been appointed by SUDA as Internal Auditor of Lohardaga Nagar Parishad

vide Letter No. SUDA/AMRUT/INTERNAL AUDIT-109-2016/205 dt.L3/02/20L7 and
would be covering atl scope as mentioned in RFP.

8. Details of Internal Audit Firm & audit Team

The Internal Audit of Lohardaga Nagar Parishad covering the period O1* April,
2017 to 3oth June, 2OL7 was conducted by following Chartered Accountant Firm:

Name of Firm

- 2t/L68, Anand Nagar

M/s Borkar & Muzumdar - Om C.H.S,
- Anand Nagar Lane,
Chartered Accountants - Off Nehru Road,
- Vakola, Santacruz(E)
- Mumbai - 400 055

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Project Head I Mr. Pankaj Makkad

o Hukamaram Kumawat

Leader r Mr. Shubham Singhal

o ffir. Shailash Rai

Assista nt

9. Finance Position of the Council

9.1 Budgetary Provisions and Revenue expenditure for the last three years

Year 2017-18 2016-t7 2015-16

Budget not Budget Not

Final Revised Budget 25,4t,89,0001-
available Available
Financial not yet
Actual Expenditure finalized &
Not Applicablexx 3,96,26,2661-
uploaded at
UDHDX
Savings (+)/Excess (-)

x Actual Expenditure = Total Expenditure - Depreciation

x* Since this is first quarter of 2OL7-18 hence Actual Expenditure of the year cannot be
calculated.

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9.2 Bank Reconciliation

Auditors Observations

June-l7 not yet recorded by the double entry accountant, hence we unable to give
any comment on the bank reconciliation statements.

Recommendations

the ULB.
'p As an internal auditor, we will ensure all the monthly bank reconciliation
statements are prepared on timely basis and support & guidance will be provided
to the accountant of the council to prepare Bank Reconciliation Statements as per
lharkhand Municipal Accounting Manual.

10. Revenue receipts

The Municipal Corporation currently earns its revenues from the following services:

HoldingTaxr
- Holding Tax from Residential Building
- Holding Tax from Govt Building

Water Tar-
- Water Tax on Residential Buildings
- Water Tax from Commercial Building

OtherTaxes

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Rental lncome from Municipa! Propertiesr

- Rent from Market
- Rent From Town Hall

Fees & User Chargesr

Licensing fees for Shops
Fees for Grant of Permit :- Plan Sanction Fees
Fees for Certificate or Extract :- Birth & Death Certificate fees
Regularisation fees
Bowring License Fees
Trade License Charges

Fees for Grant of Permit

Fees for Certificate or Extract

Penalties and Fines

Other Fees:-
-House Connection for Water
-Building/Development Fees

User Charges
Septic Tank clearance charges
Burial ground charges
Supply of extra water/water tanker charges
Bus stand auction charges
Daily market auction charges
Other fees receipts

Service / Administrative Charges

lnterest Earned:-
lnterest from Bank Accounts

Sale & Hire Charees:-

-Sale of Forms & Publications

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11, Revenue collected by the tax collecting agency & by ULB itself during
the period of Aprit-16 to lune-16 and April-17 to lune-17.

a) Collected by tax collecting agency

April 2016 to June 2016 April 2017 to lune 2Ot7

Type of
Revenue
Target Achieved Efficiency Target Achieved i Efficiency
Property Not Not Not 11.t7 0/o
37,50,000 4,t9,OL2
Tax/SAF Available Available Available
Water Tax & Not Not Not
9,25,000 3,43,996 37.19o/o
Charges Available Available Available

Trade License
*Source: Details provided by the ULB & tax collection agency

Notes: -
Tax collecting agency appointed from the month of July-2015, hence
collecting showing from april-16 to June-17 collected by ulb itself during above
mentioned period which has not yet been provided by ULB.

Rs in Lakhs
40

35

30

25

20

15

10

0 II
Property tax

ITarget lAchieved
II Water Tax & Charges

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1?,, Status of Implementation of DEAS: -

Lz,L Accrual Based Double entry accounting system in ULB not yet finalised and
uploaded at UDHD site.

L2.2 During the course of our audit we observed that data entry in the tally not
updated timely basis by the ULB.

12.3 Direct Entrv Passed: - In case of payment made to Sparrow Softech Pvt. Ltd.
for commission of tax collection, direct entry passed by the double entry
accountant not through the journal voucher.

L2.4 Coding not assigned: -

As per Schedule I, 4.5 & 4.6 of Jharkhand Municipal Accounts Manual,

PARA
coding should have assigned in all the ledgers
- To achieving uniformity in the operations of ULB's across the Jharkhand.
- To facilitate the entry of transactions in a computerised environments.
- To act as a reference for the accounting transactions to be passed.
- To generate various MIS reports

In the tally (Accrual Based double entry system) DEAS code not assigned in
the above-mentioned cases by the double entry accountant: -

a. Suppliers

b. Contractors

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Recammendatians:-

We recommend that recording of data in Tally should be done in real time

system i.e. as and when transaction occurs.

As Jharkhand Government is moving towards more of digital accounting from

manual accounting, we would suggest regular transaction in tally should be
recorded on daily basis and copy of same should be taken and certified by
accounts officer on day end.

We would also recommend that assigned the DEAS code as per the Jharkhand
Municipal Accounting Manual in all the ledger.

We recommend that ABDES accountant to have complete knowledge of

Jharkhand municipal act and Jharkhand municipal account manual.

Segregation of duties: - Statutory compliances not regularly followed by the

ULB, hence we would recommend that activities and duties should be
segregated to a specific concern person with fixation of responsibility and
accountability.

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13. Audit obseryations: -

Part-A

:* _o_Er g I-v.'a!i.g n s /!rregql-,g_i !i e s wh ic h hasmo neta ry I m pl i cati o n s

13.1 Leakage of own source fund: -

Income is quite less as compared to general market rate.

Also said rate does not even matches with State prescribed rates.

State Rate is 200-3000/o of Rate being charged. And Market Rate is almost
500o/o of Rate being charged.

being made. Proper pre-planning for expenditure from said fund is not made.

L3.2 Lack of prudence/Excess payment against payment of vouchers and

inefficiency in controls resulting loss to ULB,s: -

Observations: -

As observed, Voucher as prescribed by Jharkhand Municipal Manual is not being

prepared for passing any payment. Payment is directly being passed on basis of
Invoice submitted by the party.

Also, no penalty is being charged for delay in deliverables by the party. proper
check regarding its exact date of completion is not kept resulting in loss to ULB.

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13.3 Findings of filed survey of property Tax: -

Currently process followed by the tax collecting agency (Sparrow

softech Pvt Limited) for property tax: -

Following process has been followed presently by the tax collecting agency for
collection of property tax.

Self Assessment form issued by the tax collecting

agency for declaration of the requied information
for assess the property tax.

lnformation declare by the tax payer (Self

Assessment)

Demand Raised by the tax Collecting Agency on

tbhe basis of informaiton provided by the tax
payer/assessee.

Au d ito rs O bse rv oti on s/ F i n d i n g s

As per Scope of Tax Collecting Agency

water users/ Advertisement Hoardings as per self-assessment form

provided/approved by individual ULB's.

Enter and update the application software system in respect of assessment.

Updating of digitalised software demand on current basis.

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 Q,om..fy Int"r"lol ordit r-Po"t of Lohor{ogo Nogo" Po.i"hod fo th" fi"rf Qo"t"l. { F.y.?ol7-lg i

Where property owner refuses to co-operate with engaged agency for correct
assessment flag the digitization system accordingly.

Indicate reason why the assessment and/or collection could not be done
indicating specific reason with dates of visit and follow ups.

0bservution on Altove

agency.

pressure of revenue collection.

should also be taken care of and timely complied.

Re co m m e n d o ti o n s/S u g ge sti o n s :

Terms of agreement can be fulfilled.

Also List of defaulters should be shared with corporation on regutar basis

along with details of steps taken for recovery.

We would recommend that a committee should be formed by ULB for regular

monitoring of Defaulters and their current status.

Also, the team should focus on physical verification of properties and

comparison of same with SAF form submitted by Assesse.

such ream should be headed by Head of corporation or revenue dept. And

should include person from Tax collecting agency, engineer for proper
verification of property and such other person as corporation thinks fit.

Notes! - Due to some practical issues all the 20 properties not yet covered
for physical verification. so, we will provide the same in a separate
conclusive report as an addendum to the main report on the 2O high value
properties.

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 Part-B

14. Observations /Imegularities which have non-monetary Implication, but

significant violation of Act, Rules & directive of uD & HD: -

L4.1 Non-Maintenance of books of accounts, subsidiary registers: -

Jharkhand Municipal Accounting Manual has not been followed.

that have to be maintained by the ULB in prescribed formats but the same
has not maintained or maintained improperly: -

Sr, Whether
No Name of the Form Form Number Maintained
or not
1 Receipt GEN-8 No

2 Receipt Register GEN-9 Yes

3 Statement on Status of Cheques Received GEN-10 Yes

4 Collection Register GEN-11 Yes

5 Summary of Daily Collection GEN-12 Yes

6 Register of Bills for Payment GEN-13 Yes

7 Payment Order GEN-14 Yes

I Cheque Issue Register GEN-15 Yes

I Register of Advance GEN-16 Yes

10 Register of Permanent Advance GEN-17 Yes

11 Deposit Register GEN-18 No

12 Summary Statement of Deposits Adjusted GEN-19 Yes
13 Demand Register GEN-20 No
14 Bill for Municipal Dues GEN-21 No
15 Summary Statement of Bills Raised GEN-22 No

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16 Register of Notice Fee, Warrant Fee, Other Fees GEN-23 No
Summary Statement of Notice Fee, Warrant
17
GEN.24 No
Fee, Other Fees
18 Register of Refunds, Remissions and Write-offs GEN-25 No
Summary Statement of Refunds and
19 GEN-26 No
Remissions
20 Summary Statement of Write-Offs GEN-27 No
21 Statement of OutstanOing t_iaOiiity for fxpenses GEN-28 No
Documents Control Register/Stock Account of
22 GEN-29 No
ReceipVCheque Book
23 Register of Immovable Holding GEN.3O No
24 Register of Movable Holding GEN-31 No
25 Register of Land GEN-32 No
26 Function-wise Income Subsidiary Ledger GEN-33 No
27 Function-wise Expense Subsidiary Ledger GEN-34 No
28 Asset Replacement Register GEN-35 No
29 Register of Public Lighting System GEN-36 No

L4,2 lrregularity in procurement process:

'/ Procurement committee approval not attached: -
During the verification of the payment files we have observed that in some of
the cases procurement committed approval not made available in the payments
files. Which is already reported in the monthly reports.

L4.3 Non-compliance of Act & Rules.

Interest received on the grant fund will include in the grant fund of the ULB.
while same is covered under revenue income of the uLB. No information
provided by the council regarding the same.

We have covered all payments related to contractor works, purchase bills,

salary, Security Deposit refund of all kind of works related deposits, all kind of
consultancy fees according to the rules of Jharkhand Municipal Accounting Rules
and Manual

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Auditors Observation/ Fact: -

During the verification of payment files for the current month we observed that
budget balance detail were not incorporated in the payment files.

Pnovrsroru as pee Jxlnrnnno Muxrcrpel Acr, 2O1l: -

Any expenditure related to any contract shall be made by Executive Officer (EO)/
Municipal Commissioner only if such expenditure is approved in Budget Estimate
subject to some case as mentioned in Section 101 of the Jharkhand Municipal Act,
2011. Such cases are as below.

r Refund of taxes and other money which are authorized by this Act,

o Repayment of moneys belonging to contractors or other persons and held in

deposit and all money collected by the municipality or credited to the Municipal
Fund by mistake,

o Temporary payment for works urgently required by the State Government in the
public interest,

o Expenses incurred by the municipality on special measures on the outbreak of

dangerous diseases, natural or technological hazards or in any other emergent
case,

Sums payable as compensation under this Act or the rules or the regulations
made thereunder

Suggestion & Recommendation: -

We have recommended that before approving any expenditure/payment need to

first verify by the Executive officer, whether it is within the budget i.e. budget
balance available for the same or not.
And further also need to mention in the NOTE SHEET which was mentioned by the
accountant.

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14.4 Lack of Internal Control Measures

regularise its day to day function.

corporation.

Our Suggestion & Support

Internal Audit is continuously available for support in strengthening internal

control within the corporation.

After involvement of internal auditors, internal checks & control have improved
but continuous support from Corporation is required for proper internal control
measures.

We would suggest following recommendation to strengthen the prevailing process

r Regular meeting with Tax collecting agency (weekly or fortnightly)

o Issues in tax collection and defaulters should be discussed and probable

solution should be evaluated.

o Revenue leakage if any should be thoroughly checked and proper action

should be taken as required.

r Few penalties and action should be taken against defaulters so that

example can be set for other defaulters.

Regular check on revenue collection and target should be kept.

Focus should not be restricted to Holding tax, other revenue like form
Water user charges, rental income, municipal licence etc.

Frequent checks and review should be done by Corporation on collection by

agency or by Tax officers.

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o TimelY deposit of Tax collected should be thoroughly checked. Since this

leads to interest loss and also increases chance of fraud &
misrepresentation.

. Dual level control should be kept for collection made by corporation

themselves. Cash collection and demand raising should not be under one
hand.

Internal Audit is continuously supporting the Corporation for proper channel

implementation. Internal Auditor has made sequence channel as per which file is
provide support to the council management for improve the internal control system;

14.5 Non-compliance of TDS, vAT and other relevant statute

Statement of government dues payable: -

During the scrutinization of sales tax payable account, we observed that

Rs.11,70,988/- showing dues payable as on 30th lune ZOLI.

No details have been provided to us regarding the sales tax payable. Therefore, we
are unable to express opinion on the same.

, TDS from Contractors: -

During the scrutinization of TDS from Contractors account, we observed that
Rs.4,23,528/- showing dues payable as on 30th June 20L7 as per tally provided to us
by the council.

No details have been provided to us regarding the TDS from contractor payable.
Therefore, we are unable to express opinion on the same.
'r Non-deduction of TDS: -

Provision: -

As per section 201 of the Income tax Act 1961, interest shall be levied at !o/o for
every month or part of the month on the amount of such tax from the date on
which such tax was deductible to the date on which such tax is deducted.

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Consequences bv the council: -

In the following cases TDS should have been deducted @5olo under section 194H of
the Income Tax Act 1961, but no TDS deducted by the ULB on commission paid
(On tax Collection).

TDS should
Note Sheet Name of Contractor Amount Paid have been
deducted
20L70606/A6/LDH/L48
Sparrow softech Pvt. ltd 3,22,680 L6,134
20170606/06/LDH/ 149
Sparrow softech Pvt. ltd 6,44t 322
20L7A5r2105/LHD/0s2
Sparrow softech Pvt. ltd 3,29,LzL 16,576

Total 6,58,242 33,032

Note: - Same is already reported in the monthly reports and as per tally data provided to
us by the ULB, yet no TDS deducted for the same.

Labour cess payable: -

During the scrutinization of Labour cess payable account, we observed that
Rs'5,68,955/- showing dues payable as on 30thJune 2OL7 as pertally data provided
to us by the ULB.

No details have been provided to us regarding the TDS payable. Therefore, we are
unable to express opinion on the same.

Consequences for delay in payment: - If any employer fails to pay any amount
of cess payable under Section 3 of The Building and other construction workers
"Welfare Cess Rules, 1998" within the time specified in the order assessment, such
employer shall to pay interest on the amount to be paid at the rate of 2o/o every
month or part of a month comprised in the period from the date on which such
payment is due till such amount is actually paid.

Royalty payablei - During the scrutinization of royalty payable account,

we
observed that Rs.13 ,37,4381- showing dues payable as on 30th lune 2017 as per tally
data provided to us by the ULB.

No details have been provided to us regarding the TDS payable. Therefore we are
unable to express opinion on the same.

Eorforstfutuzum[ar (Priv ate at C onfide ntiat Pqe ?3 of 28

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 Qrorterlylnternol oudit rcPort of tohadoga Nogor Parishod for the first euorter of F.y.zO7T-tg i

Applicability of the professionat tax: - Professional rax is a tax tevied by rhe various
State Governments of India on salaried individuals, working in government or non-
government entities, or in practice of any profession, including Chartered Accountants,
Doctors, Lawyers etc. or carry out some form of business. This form of tax is in practice
for a long time and States were conferred the power of levelling the Tax under Clause
(2) of Article 276. The rate at which Professional tax is charged is based on the Income
Slabs set by the respective State Governments. However, the maximum professional Tax
that can be levied by any State till date is Rs 25OO/-. The total amount of
professional tax paid during the year is allowed as Deduction under the Income Tax Act.

Plofessional Tax Slabs of the Jharkhand state

Monthly salary Professional Tax Levied (p.M.)
to Rs,25000/-
Up Nil
Rs. 25,001/- to Rs.41,666/- Rs.100
Rs.4L,667 I - to Rs.66,666/- Rs,150
Rs,66,666/- to Rs,83,333/- Rs.175
Rs.83333 or Above xRs.20B

*Professional tax is payable @Rs.2O8 for first 11 months and Rs.212 in the last month

Transactions by the ULB: - As observed and according to information and explanation

provided to us, professional tax is not deducted from the salary of the employees which
covered under the above-mentioned slab of salary.

contribution of provident fund by the ULB (In tally also same is not available).

ESIC (Employee's State Insurance Corporation):- During the verification we

obserued that neither ESIC deducted from salary nor its own contribution has been
made with respect to ESIC.

No information provided to us regarding the same also by the ULB during our audit
period.

TDS challans and TDS returns (Form 2Oe & Form 24Q) not made available to us for
verification by the ULB.

$orfrgtr{fuluzum[ar (khtate &,Confdentiaf Poge 24 of 28

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i Qnrterly Internol oudif repod of lohodogo Nogar Porishod fon the firsr eorten of F.y.zgl7-lg
i

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t+.0 Pefi cryqgy_111|ly_-}g{ sEle4
During the verification, we observed that many of the statutory deduction not
deducted by the council. Same is mentioned under "Non-Compliance of TDS and
other relevant Statute".

15. utilisation of Grant and report on utilisation certificate

A. Details of capital grant received & Utilised during the month of April to June-l7.

Received Utilised
During During Closing
Sr Name of the Opening Balance as UC
No. Grant Balance the April the April
to June- to June- on 30th Submitted
L7 t7 luner2OLl
1 SJSRY 4,54L,769 4,541,768
t3th Finance
2 23,100,000 23,100,000
Commision
3 14th Finance 25,278,3L2 25,278,312
Total 52,920,090 52,920r090
Source: Tally data provided by ULA

Grant received from State Government: -

Received
During Utilised Closing
Sr Name of the Opening During the Balance as uc
No. Grant Balance the April
to June- April to on 30th Submitted
t7 June-17 Juner2O17

il7
il--
1 Salary Grant 1,672,799 L,672,799
il2
itr
Other Specific
2 18,481,317 t8,481,3L7
Purpose Grants
3 Road Grant 21,606,583 21,606,593

i t-;
;l
4
Development
Grant
30,1 16,663 30,116,663

rfotrstghuzumfar
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 Internal oudit Porishod for the first of F.Y.2017-18

Sewerage &
5 10,157,83 1 10,157,931
Drainaqe Grant
City
6 Development 40,731,450 40,737,45O
Grant
Water Supply
7
Grant Grant 1,002,031 1,002,031
Special Fund
B 7,422,089 7,422,499
Utilised Grant
Grant from
9 Other Govt 8,L77,747 8,L77,747
Aoencv

Total 139,369,510 139,368,510

Source: Tally data providd by ULB

Synopsis of grant
1,500.00
1,393.59
1,400.00
1,200.oo
-c 1,000.00
!
) l!
800.00

r
: 600.00
529.20
t
400,oo
200.00

Other Government
Central Government State Government
agencies
I Opening Balance 529.20 1,393.69 852.09
I Received During Year
I Utilised
During Year
e Qlg5ing Balance 529.20 1,393.69 852.09

-uc: Opening Balance : Received During Year r Utilised e f,l6si1g Balance

During Year
-UC

Observotions:-

No utilization certificate issued forthe Financial Year 2016-L7 for any of the grant
utilised by the ULB.

As we observed there is no grant received & utilised during the period of April-17 to
June-17 (Data provided by the ULB - Tally).

cBorfrgrstfrluzwnfar Srhtate &,Confidentiat 26 of 28

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Part-C

!6. General Observations: -

F Administrative Approval have not been attached in manv files

As observed during course of audit Admin approval for many has not been
provided in the file.
a Due to same we are having difficulty in approving the file.
o Proper approval in specified format should be taken and attached for
initiating any work.
. Same was also reported in the monthly reports of the council.

) Service contract of emplovee not attached in salarv files

In multiple case of salary payment to permanent employee, service book of

employees is not provided for verification.
Also in case of contractual employees, contract terms are not being provided
to internal auditors for verification.
Salary being material part of organisation's expenditure must have proper
record.

) log book not maintain bv the council

During verification of files of Petrol, Diesel & Lubricant it's observed that log
book is not maintained by the ULB to have track record on movement of
vehicle and consumption of fuel.
Proper internal control measure should be adopted for the same.

} Tendencv not to comoare measurement book with BOQ & Agreement

o As found in many cases, Engineering dept. doesn't compare quantity as

approved in MV book with that of BOQ. The same is approved on just
comparing Gross Value with Agreement value.
. We would suggest to provide training to Engineer issues at
regular basis.

(Borfrgr{frluzurndar Qrhtate {,Confitentiat 27 of 28

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Qnrterly Intenrol oudit rcpolt of lohardoso Nomr Porishod for the first Quorter of F.Y.2OI7-18

F Suspense account havins credit balance of Rs.1.16.500/-

r During the scrutinization of tally data provided to us by the ULB, we observed

that suspense account showing credit balance of Rs.1,16,500/-.

. We would suggest that clear the suspense account at the same time after due
diligence.

Pavment beins made before verification and confirmation of lnternalAuditors: -

Even after multiple reminder payment is regularly being made without being
verified by the internal auditor due to which payment is being done with
mistakes in file and non-compliance of proper tax and statuary laws.

For effective working proper hierarchy which includes internal audit also should
be followed as the purpose of same is also to focus on concurrent growth of
Council as a whole. Same is already communicate in monthly reports also with
detail,

For Borkar & Muzumdar

[harreredAccountants

W
4,A9
CA Pankaj Makkad
Authorised Signatory

cBorfrgrstfuluzwnfdr (Prht ate €, C onfi.[entiaf PoEe 28 ol 28

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