GOVERNMENT OF ANDHRA PRADESH STATE AUDIT DEPARTMENT From To Sri.P.Sitarama

74 Pages·2017·2.01 MB·English

by  Naga Raju

File No.SAD-AUDT0VAUD(MA)/5/2017-SA(G)-STATE AUDIT-WG
GOVERNMENT OF ANDHRA PRADESH
STATE AUDIT DEPARTMENT
From To
Sri.P.Sitarama Rao, M.B.A, The Municipal Commissioner,
District Audit Officer, Bhimavaram Municipality,
State Audit, West Godavari District.
Eluru, West Godavari District.
Letter S.A. No. ______________ dated: - -2017
Sir,
Sub: - Audit – Audit Report on the Accounts of Bhimavaram Municipality for
the year 2015-16 – Audit Report Communicated – Reg.
Ref: - Rule 7 (1) of the Andhra Pradesh State Audit Rules 2000, issued with G.O
Ms. No. 130 Finance & Planning (FW-Administration-II) Department,
dated: 08-09-2000.
* * *
Kind attention is invited to the reference cited, I forward here with the Audit
Report on the Accounts of Bhimavaram Municipality for the year 2015-16 in
duplicate with reference to Rule 60 (b) of Schedule-II to the Andhra Pradesh
Municipalities Act, 1965 and request that one copy of the Audit Report may be
returned to Assistant Audit Officer, State Audit (M.P), Eluru together with replies in
triplicate dully approved by the council within 60 days from the date of receipt of the
Audit Report as per Rule 8 of State Audit Rules 2000.
Yours faithfully,

District Audit Officer,
State Audit, Eluru.
Encl: - Audit Report in Duplicate.
Copy to the Secretary to Government, Housing, Municipal Administration & Urban
Development Department, A.P. Hyderabad along with copy of Audit Report with
Reference to Rule 60 (b) of the Schedule – II to the A.P. Municipal Act 1965.
Copy to the Accountant General, A.P., Hyderabad along with copy of the Audit
Report.
Copy Submitted to the Director, State Audit, A.P. Hyderabad.
File No.SAD-AUDT0VAUD(MA)/5/2017-SA(G)-STATE AUDIT-WG
AUDIT REPORT ON THE ACCOUNTS OF BHIMAVARAM MUNICIPALITY
FOR THE YEAR 2015-16
Name of the Auditor :- A.V.R. Gangadhara Rao,
Assistant Audit Officers.
Time taken for audit :- 22-06-2016 to 29-06-2016, 08-07-2016.
03-04-2017 to 04-04-2017, 16-01-2017 to
17-01-2017, 23-01-2017 to 24-01-2017 and
30-01-2017 to 31-01-2017.
The office of the Chairman / Special Officer was held by the following persons
during the period under audit.
Sri Kotikalapudi Govinda Rao, From 01-04-2015 to 31-03-2016.
The office of the Commissioner was held by the following persons during the
year under audit.
Sri B.R Satyanarayana, 01-04-2015 to 02-09-2015.
Sri N.V Nageswara Rao (FAC), 03-09-2015 to 23-09-2015.
Sri. B.R Satyanarayana, 24-09-2015 to 10-02-2016.
Sri N.V Nageswara Rao (FAC), 11-03-2015 to 31-03-2016.
GENERAL FINANCIAL REVIEW:
The receipts and payments during the year were shown in the Receipts &
Payments statement together with the opening and closing balance. The opening
balance in the cash book was in agreement with the closing balance of the previous
year. The consolidated annual account was showing the closing balance of
Rs.76,97,74,177.48/- as on 31-03-2016. As verified from the cash book, the cash
book was not closed every month. The monthly abstract and yearly abstract was not
arrived at and not noted in the cash books. The reconciliation statements produced
were not tallying with the closing balance of the reconciliation statement and the
figures of the cash book and treasury pass book as on 31-03-2016. As such the
correctness of the closing balance of the cash book could not be certified in audit.
Immediately the reconciliation between cash book and pass book would need to be
made and produced to audit.
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DETAILS OF THE CLOSING BALANCES AS PER RECEIPTS AND PAYMENTS STATEMENT
AS ON 31-03-2016
Sl.
Details MGF CPF Total
No.
1 Cash in Hand 3166601.00 68304.00 3234905.00
2 Cash at STO Banks 533753778.35 232783094.13 766536872.48
Total 536920379.35 232851398.13 769771777.48
3 Cheque in Hand 2400.00 0.00 2400.00
Grand Total 536922779.35 232851398.13 769774177.48
DETAILS OF THE CONSOLIDATED CLOSING BALANCES AS PER CASH BOOKS AS ON
31.03.2016
Sl.
Details MGF CPF Total
No.
1 Cash in Hand 3166601.00 68304.00 3234905.00
2 Cash at STO Banks 533753778.35 232783094.13 766536872.48
Total 536920379.35 232851398.13 769771777.48
CLOSING BALANCES OF BANK ACCOUNTS AS ON 31-03-2016
(MUNICIPAL GENERAL FUND)
Cash Book
Sl. Name of the Bank Balance as
Bank Account No. Balance
No. Fund per Pass Book
(DEABAS)
General Fund State Bank of
1 844810203001 152088504.03 152228504.03
– 001 India
General Fund State Bank of
2 844810203002 235705835.50 235705835.50
– 002 India
TP State Bank of
3 10574719914 2905126.44 2905126.44
Development India
State Bank of
4 Water supply 10574719992 4495706.38 7001993.38
India Main
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Branch
State Bank of
Current
5 India Main 10574714406 4510889.00 4825625.00
Account
Branch
Central Bank
6 BPS of India Main 2016091634 5218088.00 5218088.00
Branch
State Bank of
7 Deposits India Main 30930932817 5321391.00 5428424.00
Branch
State Bank of
8 UPA Fund India Main 30946895606 649333.00 649333.00
Branch
State Bank of
9 CDP 844812022 864505.00 864505.00
India
AXIS Bank
10 Mee-Seva Limited 914020006274997 3485112.00 3485112.00
Chinamiram
State Bank of
11 Net Banking India Main 34632125339 9288.00 9288.00
Branch
Total 415253778.35 418321834.35
CLOSING BALANCES OF BANK ACCOUNTS AS ON 31-03-2016 (CAPITAL FUND)
Cash Book Bank Balance
Sl. Name of the
Bank Account No. Balance as per Pass
No. Fund
(DEABAS) Book
State Bank of
1 NSDP India, Main 10574720191 1906234.16 1906234.16
Branch
State Bank of
2 PF A/c 62002458638 5205759.88 5205759.88
Hyderabad
State Bank of
3 IDSMT India Main 10574719936 728214.48 728214.48
Branch
Oriental Bank
4 IDSMT 13512011020632 7830064.00 7830064.00
of Commerce
State Bank of
5 OAP 10574719969 152888.00 152888.00
India Main
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Branch
State Bank of
6 MPLADS India Main 10574720747 81949.47 81949.47
Branch
State Bank of
Parks & Play
7 India Market 30668341722 1730853.00 1730853.00
Grounds
Branch
8 12TH F.C Bank of India 864810100001435 1417767.14 1417767.14
Andhra Bank
9 CS A/c 4610011023390 1545562.00 1643562.00
Main Branch
Municipal Andhra Bank
10 101610011002815 641225.00 641225.00
Building Main Branch
Parks & Play Vijaya Bank
11 400401010012868 753171.00 753171.00
Grounds Main Branch
State of Bank
Rajeev Nagar
12 of India Main 30775339287 176124.00 176124.00
Bata
Branch
State Bank of
13 NFDP 62166789094 2878236.70 2878236.70
Hyderabad
Central Bank of
14 APUSP 2016048544 525440.30 525440.30
India
Oriental Bank
15 Non-Plan 13512011018195 26817071.00 26817821.00
of Commerce
State Bank of
16 Play Grounds 30592528941 5442793.00 7942793.00
India
State Bank of
17 13th F.C India Main 8448-102-03-003 74892745.00 74892745.00
Branch
IHHT
18 Andhra Bank 104310100038268 1970188.00 1970188.00
Account
14th Finance
19 SBI Main 8448-102-03-004 33886808.00 33886808.00
Commission
Total: 168583094.13 171181844.13
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(a) TAX REVENUE RAISED BY THE MUNICIPAL COUNCIL:-
The tax revenue consists of Property Tax, Water Tax and Advertisement Tax
etc., Tax on Property is the main source which constituted the bulk of revenue
receipts of Municipal Council during the year. An analysis of Tax Revenue for the
current year and the preceding two years is given below.
Collection Increase /
Sl. Decrease with
Nature of Tax 2013-14 2015-16 2015-16
No. ref. to previous
Rs. Rs. Rs.
years
1 Property tax 60114897 105393754 98856577 Decreased
2 Advertisement tax 1461202 1441295 1063079 Decreased
3 Vacant land tax 1190038 2091604 2513340 Increased
4 License fee 2394608 2630807 4405543 Increased
5 Leases 5569700 7741268 14383953 Increased
6 Entertainment tax 2328630 10152766 16769013 Increased
(b) REVENUE RECEIPTS AND ITS ANALYSIS:-
The source of Revenue Receipts during the year was through (1) Revenue
Raised by the Municipal Council (2) Receipts from the State Government towards
share of Entertainment Tax, M.V. Tax, Land Cess and Surcharge on Stamp Duty etc.,
(3) Grant-in-aid received from the Government. An analysis of Receipts under the
above heads during the year along with corresponding figures for the preceding 2
years is given below.
Receipts
Sl.
Item of revenue 2013-14 2 0 1 5-16 2 0 1 5 -16
No.
Rs. Rs. Rs.
Revenue raised by Municipal Council
a) Tax Revenue 60114897 105393754 98856577
1
b) Non-tax revenue leases, fees
5569700 7741268 14383953
and rents etc
Total: 65684597 113135022 113240530
Receipts from Government
a) Entertainment tax 2328630 10152766 16769013
2. b) Surcharge on stamp duty - 53343220 46349060
c) P.T. - - -
d) Population Grant - - -
Total: 2328630 63495986 63118073
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(c) NON-TAX REVENUE OF THE MUNICIPAL COUNCIL:-

Building Rents, Leases of Markets, Slaughter Houses, Betterment Charges etc.,
form the non-tax revenue and constituted 10.06 percentage of revenue of the
municipal council. An analysis of the non-tax revenue under some principal heads
for the year and during the preceding 2 years is given here under.

Collection Increase /
Sl. Decrease with
Item of Revenue
No. 2013-14 2015-16 2015-16 ref. to previous
Rs. Rs. Rs. years
1 Slaughter House 45000 1901228 58000 Decreased
License fees (D&O
2 2394608 2630807 4405543 Increased
Trades)
3 Building license fee 7751714 20479080 12691012 Decreased
Lease of Market Rents
4 5569700 5840040 12304447 Increased
& Shop Room rents
5 Rent on Vacant land 261500 887335 1066588 Increased
6 Betterment Charges 646100 592295 728206 Increased
BUDGET:-
According to rule 8 of the rules relating to the preparation of the Budget
allotment and transfer of funds issued with G.O. Ms. No. 619, M.A., dated: 07-10-
1967, the budget should be submitted to Government through the District Collector
and the Director of Municipal Administration, for approval by 31st December of each
year. The date of submission of the Budget is not available to check whether the
Budget was submitted in time or not. Further, the Budget was also not furnished in
form-A, appended to the orders in which the above rules were issued.
In the absence of the approved budget it could not be verified whether the
expenditure is incurred as per the budget provision or not. The excess expenditure if
any incurred over the budget approval the same may be got ratified duly following
the procedure in vogue.
File No.SAD-AUDT0VAUD(MA)/5/2017-SA(G)-STATE AUDIT-WG
SCOPE OF AUDIT – NON – MAINTAINANCE OF VARIOUS VITAL AND IMPORTAT
RECORDS – SOPE OF AUDIT REDUCED – MISAPPROPRIATIONS, DEFALCATIONS,
IRREGULAR DRAWLS AND OTHER IRREGULARITIES COULD NOT POINTED OUT
NEEDS IMMEDIATE ACTION.
During the course of audit for the years from 01.04.2015 TO 31.03.2016 it is
noticed that certain vital and important records are not being maintained or partly
maintaining. In spite of several objections raised in the audit reports for the years
upto 31.03.2015 the Executive Authority is not devoted any interest and not taking
any effective steps to maintain the records mentioned hereunder. The non
maintenance and non production of records and irregular maintenance of the
registers without tallying with the account figures leads to all sorts of irregularities
such as misappropriations, defalcations and other major financial losses.
In the above circumstances there is every possibility and scope for
misappropriation, defalcations, and irregular drawls as the state of accounts
maintenance and keeping the records is quite pandemonium situation.
1. IRREGULAR MAINTENANCE OF CASH BOOK:
The cash book of the Municipality physically in a dilapidated condition, and
the entries recorded in the cash book is illegible and is not readable. Further the cash
book was not closed monthly and reconciled with the treasury figures duly certified
by the commissioner. The discrepancies between the cash books & pass books were
not being rectified from a long time. Further the cash book monthly receipt and
expenditure figures are not being tallying with the chitta and posting register
abstracts respectively.
2. IMPROPER PREPARATION OF ANNUAL ACCOUNT
The annual account are being prepared and sent to audit with tentative
figures even without closing the cash books. Further the subsidiary registers for
various receipt heads have not been closed and certified by the Executive
Authorities. D.C.B statements and grants statements could not be cross checked with
the concerned registers as those registers are not being closed and certified by the
commissioner. As such the figures shown in the annual accounts are not available
any subsidiary register and are not synchronized any way. In view of the above
position the annual account furnished cannot be said to be an abstract for the head
wise figures and there is no scope to verify the annual account with the concerned
subsidiary registers cash book, chitta and posting register. Hence the purpose of
preparing annual account is serving no purpose.
3. M.D.R MAINTAINENCE - CERTAIN DEFECTS
M.D.R. is the crucial register in the Municipality which shows the major
resources such as Market leases, Shop rents and other revenues. But the said
register was not maintained properly duly tallying with account figures. The sales
register along with option files are not properly maintained to cross check the
File No.SAD-AUDT0VAUD(MA)/5/2017-SA(G)-STATE AUDIT-WG
demand collection and balance shown in the MDR. Nothing was mentioned
regarding the action initiated for recovery of balances shown at the end of the year
in respect of the leases.
4. DEMAND REGISTER OF PROPERTY TAX, WATER TAX, VLT & AGLT
The Demand registers for property tax, water tax, vacant land tax and AGLT
are not being maintained and postings for receipt were not shown in the registers.
Hence it could not be verified the demand and collection with reference to the
challan registers. Due to non maintenance of demand registers for the above receipt
heads it could not be verified the tax payers receipt in their account and the balances
to be recovered. In the above situation the outstanding bills could not be verified
physically. It paves way to the collection staff as well as others for defalcation of
various receipt amounts due to the Municipality which cannot be pointed out in
audit though it is a major financial irregularity.
As a result of the above non maintenance it is not possible to verify the
monthly lists for the new assessments in respect of property tax levied on new
buildings, form 6(c) in respect of vacant land tax. It is also not possible to cross check
the building application register with that of monthly lists to verify whether property
tax was correctly arrived at and affected as per the building approval.
Since taxation income is the major resource for the Municipality and there is
every scope for financial irregularity in this aspect, the executive authority of the
Municipality has not taken any affective step to track on the derailed situation
prevailing for a long time.
5. D & O TRADERS REGISTER
D & O trades demand register was not maintained duly recording the
additions and deletions. In the demand register it is noticed that demand was not
fixed for certain trades as notified in the notification issued by the Municipality in
respect of the D & O trades for which separate objection was raised. The collection
figures shown in the demand register is not tallying with the account figure.
6. BUILDING APPLICATION REGISTER
In town planning section the building application register was not properly
maintained for the financial years. Astonishingly register was maintained for the
calendar year instead of financial year. How the register serves the purpose in
tallying with the account figure. The monthly and yearly abstracts were not shown
and got certified by the commissioner. In the absence of the same the correctness of
the amounts shown in the annual account could not be verified with reference to the
building application register. Further a cross check with the property tax demand
register was also could not be exercised. The non maintenance and improper
maintenance of the said register may leads to misappropriations with fake challans
enclosed to the building applications as was happened in certain municipalities in the
previous years.
File No.SAD-AUDT0VAUD(MA)/5/2017-SA(G)-STATE AUDIT-WG
7. PROVIDENT FUND REGISTER
The provident fund register in the Municipality is in quite pandemonial state.
The abstract register for PF subscribers was not maintained properly. The opening
balances and closing balances were not shown in the register and it was stated
during the course of audit that OB CBs are not available from the previous years. The
receipt and expenditure for the years were also not properly posted and tallied with
the account figures. The final payments of the subscribers are not being paid with a
plea that the balances available at the credit of the subscribers could not be arrived
at. There is every chance for irregular drawls from the fund as the accounting system
totally derailed in this aspect. Hence it is high time to rectify the defects pointed out
and arrive at the correct balances at the credit of the subscribers besides taking
necessary action on the person responsible or non maintenance of the register.
8. DEPOSIT REGISTER
Deposit register in the Municipality has not been maintained properly though
the deposit register is an important register. The receipt figures for the current years
and expenditure was not posted in the register. The demand registers should carry
forward the earlier balances available duly adding the current years receipt and
payments and arrive at the closing balances at the end of the year. The abstract
should invariably shows receipt and expenditure figures of the year tallying with the
account figures. But refund of deposits to various deposit holders are being paid with
out pointing out the original credits of the payments. In the absence of the above
details the payments made could not be verified. There is every possibility for
misappropriations of deposit amounts if the payments made without verifying any
original credits.
As verified from the above register it is also noticed that the lapsed deposits
are not being transferred to the General fund and payments made without approval
of the council. Hence the register may be properly maintained and produced to
audit.
9. ADVANCE RECOVERABLE REGISTER
The Advance Recoverable Register is not maintaining in the Municipality. As
verified from the account various advances are being made to the staff namely
marriage advance, festival advance and other advances besides advances sanctioned
to staff for purchase of various materials such as chlorine cylinders, bleaching and
other PH material for the use of the Municipality. Further work advances are also
paid to the concerned Assistant Engineer for execution of the works taken up
departmentally, but the said advances are also not being adjusted against the works
executed. In the absence of the said register it could not be possible to verify the
advance adjustments and outstanding advances of the individuals. It is also noticed
that bills were presented to the Municipality for the advances taken by the persons
and the same is not passing and adjusting the same to the advances. Further the bills
presented by the persons are not fully reequipping, leaving the balances of the
advances taken.