EXTERNAL AUDIT REPORT OF ODRP PROJECT OF BERHAMPUR MUNICIPAL CORPORATION FOR THE FINANCIAL YEAR 2014-15 Audit by B.N.MISRA & CO CHARTERED ACCOUNTANTS S-29 MAITRI VIHAR PHASE-Il BHUBANESWAR-751223 E-mail- [email protected]Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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We have conducted audit of books of account of ODRP, Berhampur for the
financial year 2014-15 and also examined the annexed Balance Sheet as on 3 1st
March, 2015 and Receipts and Payments Account and Income and Expenditure
account for the Year ended on 3 1st March , 2015 of ODRP , BeMC,
Berhampur , Dist.- Ganjam , Odisha-760002attached to this report.In our
opinion and to the best of our information and according to the explanations
given to us, the said accounts, subject to audit observations attached to our
report, give a true and fair view.
Followings are our observations:-
1. Observations on Vouching
a. Followings are the observations found during the vouching of bank
payment vouchers during the period of audit.
Date Voucher Amount in RemarksNo Rs.
24/11/14 2811 1,10,112 Pre-paid to Public Procurement Grouptowards training fees of twoemployees on world bankprocurement policy on which TDS of
Rs11,011 have not been deducted.
09/01/15 3409 1,877 Telephone bill has not been depositedwith in due date of deposit for which
discount of Rs 98.60 not availed by theproject.Due date of deposit 29/12/2014Actual date of deposit 13/01/2015
03/03/15 3888 78,880 1% TDS has been deducted on Rs
78,880 i.e. Rs 788 , paid towardshiring charges of two number ofvehicle to Galaxy Tours and Travels
under sec 194C of income tax act
,1961.
However 2% TDS should have beendeducted instead of 1% as per section1941 because Vehicle falls underdefinition of Machinery as perincomeTax Act.
16/03/15 3949 71,80,120 An advance amount of 10% of thecontract amount was paid toConsultants Mukesh& Associates forthe consultancy work towards projectmanagement, Supervision and qualitycontrol in the PIU based in Berhampurand PMU based in Bhubaneswar.As per Section 194J of income tax act,1961, tax shall be deducted at thetime of credit of such sum to theaccount of the payee or at the time ofpayment thereof in cash or by issue ofa cheque or draft or by any othermode, whichever is earlier.However it is observed thatTDScompliance has not been madeat the time of payment of advance toConsultant Mukesh& Associates.
23/03/15 4087 19,800 Payment made to Sri Sisir KumarSwain for supplying , fitting and fixingof sign board including labour and T&P with fabrication , welding chargesetc.Bill is given by the Contractor in letterpad without mentioning VAT Regd.noand service tax regd no.
b. Voucher is not serially numbered as it was maintained in the BeMCCash Book.
c. Journal Register and Journal voucher are not maintained by theproject.
2. Advance to Staff Rs 30,000
Rs 30,000 paid to employee on 03.02.2014 towards travelling advances forattending training at New Delhi on 5/2/14 and 6/2/14 was still not adjustedat the end of audit period i.e. as on 31/03/2015.
3. Professional Tax Deducted on the salary of employee
Rs 600 and Rs 1500 deducted from salary on 07/01/2015 and 16/03/2015was not deposited as on 31/03/2015.
4.Service Tax
It has been observed that , PIU has paid service tax on various servicesreceived during the period of audit but input credit on the same was notavailed.
5. VAT Payable Rs 1,000
During the sale of tender paper , the project had collected Rs 1,000 on05/03/2015 towards VAT. The same had not been deposited till at theend of the year i.e. as on 31/03/2015.
6. Other observations on various clause of Project Appraisal Documents(PAD)
a. Staffing: As per clause no 14 under Financial ManagementDisbursement and procurement in annexue-2 Detailed ProjectDescription in Project Appraisal Documents (PAD ) issued by the WorldBank in connection to Odisha Disaster Recovery Project in the matter ofStaffing "At BeMC the post of a dedicated finance manager, who will beresponsible for maintaining clear and complete accounts thereof, needsto be sanctioned and hired/deputed."
However it observed that a dedicated finance managerhad not beenappointed during the period of audit. The Chief Financial Officer ofBeMC in addition to his own assignment has been in charge formaintaining clear and complete accounts. Steps should be taken toappoint such finance manager for this project work.
b. Accounting (Maintenance of Books of Accounts )- As per clause no
15Financial Management, Disbursement and procurement in annexue-2
Detailed Project Description in Project Appraisal Documents (PAD )issued by the World Bank in connection to Odisha Disaster Recovery
Project in the matter of accounting " BeMC needs to maintain separate
books of accounts for this project."
However the PIU is not maintaining the separate cash and bank book for
this project. The financial transactions of this project was maintained in
BeMC cash and bank book.
Steps should be taken to maintain the books of account preferably in
Tally accounting software as maintained by OSDMA which is adequate
for recording financial transactions and forgenerating reports for
financial disclosure requirements.
c. Financial Reporting -As per clause no 19 under Financial Management ,
Disbursement and procurement in annexue-2 Detailed Project
Description in Project Appraisal Documents (PAD ) issued by the World
Bank in connection to Odisha Disaster Recovery Project in the matter of
financial reporting ,BeMC will submit separate quarterly IUFR providing
the financial progress against the project components, within 45 days
from the end of each calendar quarter. IUFRs will be prepared on the
basis of actual expenditure information received from the field divisions
and actual expenditure incurred at the PIU and reconciled with the bank
accounts. The form and content of the IFRs are under preparation and
will be agreed with GoO during negotiations.
It is observed that IUFR for the quarter for the financial year 2014-15
had not been submitted to world bank by PIU , ODRP Berhampur in
schedule time i.e. with in 45 days from the end of quarter.
lUFR for quarter ending Due Date of submission Actual Date ofsubmission
30th Sep'2014 15 1h Nov' 2014 04/07/2015
31 st Dec' 2014 1 5 th Feb' 2015 04/07/2015
31st Mar'2015 15th May'2015 IUFR for the period 1 'tJanuary 2015 to 16thMarch 2015 wassubmitted on
04/07/2015 and from
17/03/2015 to31/03/2015 was on18/11/2015.
It has been observed that expenditure incurred /advance paid for theperiod 17/03/2015 to 31/03/2015 in IUFR submitted to world bank is nil.However following expenditure /advance has been incurred/paid duringthe above period-
Date Nature of expenditure Amount in Rs23/03/2015 Telephone Expenses 1,174.0023/03/2015 Sign Board 19,800.0027/03/2015 Advertisement expenses 21,489.0027/03/2015 Advertisement expenses 1,78,200.0027/03/2015 Advertisement expenses 53,460.0027/03/2015 Advertisement expenses 27,027.00
Total 3,01,150.00
d. Banking arrangements: As per clause no 19 under FinancialManagement , Disbursement and procurement in annexue-2 DetailedProject Description in Project Appraisal Documents (PAD ) issued by theWorld Bank in connection to Odisha Disaster Recovery Project in thematter Banking arrangements of BeMC will also open a separate bankaccount to receive funds from H&UD as per thework plan requirements.
It is observed that a separate Saving Bankaccount in Bank of Baroda hadbeen opened by PIU ,ODRP Berhampur on 17/10/2014.
e. Internal Controls and Internal Audit: As per clause no 19 under FinancialManagement , Disbursement and procurement in annexue-2 DetailedProject Description in Project Appraisal Documents (PAD ) issued by theWorld Bank in connection to Odisha Disaster Recovery Project in thematter Internal Controls and Internal Audit " Since funds will betransferred to separate Bank accounts; reconciliation of bank book withthe bank statement will be an essential control mechanism in the
project."
e)
Bank reconciliation of bank book with the bank statement has beendone upto 31st March,2015. Bank Reconciliation Statement as on31.03.2015 is given below:-
Amount in Rs.Bank Reconciliation Statement as on 31.03.2015
Name of Bank:- Bank of BarodaBank Account No:-51300100001111
Bank Balance as per Bank Book as on 31.03.2015 19,05,80,201.00 Dr.Add Cheque issued but not presented in Bank
Date of Issue Cheque No To whom Amountissued
16/03/2015 000037 Bennett 1,78,200.00Colomen& Co
16/03/2015 000038 M/s Kasturi& 53,460.00Sons
16/03/2015 000039 H.T Media Ltd 27,027.0016/03/2015 000040 CBTD (income 3,626.00
Tax)Total 2,62,313.00 Dr.
Bank Balance as per Bank Statement as on 31.03.2015 19,08,42,514.00 Cr.
7 .Maintenance of other subsidiary Registers
PlU had not maintained following subsidiary register for the financial year2014-15 for internal reference.
a. Advance Register for Staff advance and outsiders.b. Security Deposit Registerc. Fixed Assets Registerd. Printing and Stationery Registere. Tax deduction Register i.e. TDS,WCT and Service Tax.f. Salary Registerg. Professional Tax Deduction Registerh. Journal registeri. Fixed assets Registerj. Vehicle Log Bookk. Telephone Log Book
Steps should be taken to maintain following subsidiary Register to have betterinternal controls.
4eMORA
ODISHA DISASTER RECOVERY PROGRAMME(A Project Funded by World Bank)
Berhampur Municipal Corporation, Berhampur, Ganjam District, Odisha-760002
Receipts & Payments Account for the year ended 31st March 2015
Receipts Amount Payments Amount
in Rs. in Rs.
To Opening Balance By Programme & Training Expenses
Cash in Hand - ILI -PPG Training Expenses 1,10,112.00
Cash at Bank - Workshop Expenses 42,080.00
To Grant from State Govt. 20,00,00,000.00 By Employees Cost
Salary & Allowances 11,53,344.00
To Bank interest 3,28,767.00
By Establishment Expenses
To Sale of Tender Paper 20,000.00 Advertisement Expenses 5,57,201.00
Travelling Expenses 1,26,307.00
To VAT Collected on Sale Repair & Maintenance 19,800.00
of Tender Paper 1,000.00 Telephone Charges 7,138.00