Audit

Statutory Audit CAG •Under the constitution of India (Art. 149-151) CAG is the authority for conducting audit of the accounts of the union, states and union territories. •CAG’s functions are as follows•To audit all expenditure from the consolidated fund of India. •To audit all transactions of the union and states relating to contingency fund. •To audit all trading, manufacturing, profit and loss accounts and balance sheet kept in any department of the Union or State.

CAG •Therefore, the authority to •To inspect any office of account under the control of Union or State. •To require that any accounts which deal with or form the basis of transaction shall be placed before him. •To put such questions observation as considered called for information.

or made necessary,

Scope of Audit

The Audit of accounts and transactions of the Union and the State Governments covers the following aspects: Audit of Expenditure  Audit of Receipts  Audit of Stores and Stock  Certification Audit  Audit of Government companies Corporations  Audit of Autonomous Bodies / Authorities  Information Technology Audit

Sl. No.

Category of Reports

60#

No. of Revi ews 4

Money Value (Rs. In crore) 432.05@

1

Civil

5

2

Scientific Departments

1

11

2

15.40@

3

Autonomous Bodies

1

34

3

59.37@

4

Direct Taxes

2

963

3

3817.57

5

Indirect Taxes 1 1

252 208

2 3

5862.89 8988.98

1

32

3

82.93

1

18

0

86.94

2

92

5

1099.23

6

568

19

17018.64

21

2238

44

37464.00

Customs

7

Central DefenseExcise Services Army and Ordnance Factories Air Force and Navy Railways

8

Commercial*

6

Total

No. of Repor ts

No. of Paras

# includes 9 chapters @ Money value in r/o reviews is not include In addition, Annual Accounts of 5 statutory Corporations and 1 Autonomous bod

Volume of Work Central Audit : 2003-04 Wings on Audit

No. of vouchers/ divisional accounts and other records audited during 2003-04

No. of Audit notes issued during 2003-04

Money value (Rs. In crores)

3204081

997

48.73

303782

265

20.76

Scientific Departments

29744

503

120.05

Defense Audit

142411

323

592.73

Railway Audit

1015901

3799

3934.61

Revenue Receipts – Indirect Taxes

2361288

1009

88.12

Telecommunication

14086

475

535.04

7071293

7371

5339.04

Civil Autonomous Bodies

Total

Volume of Work Local Audit : 2003-04 Wings on Audit

No. of units audited during 2003-04

No. of IRs issued during 2003-04

Money value (Rs. In crores)

Civil

3348

3543

9043.04

Autonomous Bodies Scientific Departments

1519

1306

3105.26

373

354

10499.16

Defense Audit

1918

1415

9380.20

Railway Audit

6610

6229

2799.98

Indirect Taxes

4426

3529

7024.73

Direct Taxes

2759

3169

5486.19

Commercial

1743

1360

21249.87

Telecommunication

1137

1086

10711.87

23833

21991

79300.30

Total

Office of the Comptroller and Auditor General of India Direction, Monitoring and Control Audit of Union Accounts Central Audit Officers (Civil, Defense, P&T, Rly & Commercial 38

Audit of States’ Accounts

Account s and Entitlem ents States

State Audit Offices (Civil) 38

Account s and Entitlem ents offices 26

Civil Audit

Civil Ministries & Depts Autonomous Bodies and Authorities

State Revenue Receipts

External Affairs & Overseas Establishments, Union Territories featuring in the

Defen se

Internati onal Relation s

Trainin g

National Academy of Audit & Acs & Regional Trg. Institutes 10 State Commerc ial Undertak ings Railway s

Govt. Accounting Standards Advisory Board International Centre for Information Systems and Audit 1

State Autonomo us Bodies and Authoritie s Post & Telecommunicat ions

State Local Bodie s Central Commerci al undertaki ngs

ORGANISATION CAG

Deputy CAG (Railways) PRINCIPAL DIRECTOR (ONE IN EACH RAILWAYS) DEPUTY DIRECTOR

AUDIT OFFICERS IN THE DIVISIONS/WORKSHOPS

Communications from Audit •Specific Repots of importance and serious irregularities. •Audit notes irregularities.

detailing

•Inspection Report.

minor

Audit Report {Railways} Financial Management 



Financial Results: The year 2002-03 ended with a net revenue of Rs. 3830.23 crore and a net surplus of Rs. 1115.40 crore after providing Rs. 2714.83 crore towards dividend payable to General Revenues. Passenger Earnings: The passenger earnings of Rs. 12575.44 crore during 2002-03 were less than the Budget Estimate (Rs.13450 crore) and Revised Estimate (Rs.12730 crore).

Audit Report {Railways} Financial Management 

Goods Earnings: The goods earnings of Rs.



26504.82 crore were more than Budget Estimate by Rs. 386.82 crore but fell short of the Revised Estimate by Rs. 153.18 crore. Unrealised Earnings: Unrealised earnings increased by Rs.73.43 crore from Rs.1985.18 crore at the end of March 2002 to Rs. 2058.61 crore at the end of March 2003.

Audit Report {Railways} Financial Management 



Operating Ratio: Even though there was marginal improvement in the overall operating ratio of the Indian Railways from 96.02 per cent in 2001-02 to 92.34 per cent in 2002-03, Eastern North Eastern, Northeast Frontier, Southern Railways and Metro Railway Kolkata were still incurring losses. Plan Expenditure: The Railways provided Rs. 9330 crore to be met from Central Government support and internal resources in the Budget Estimate, which was increased to Rs. 9435 crore in the Revised

Audit Report {Railways} Financial Management 



Funds generated through Extrabudgetary resources: During the year, Railways paid leasing charges of Rs. 3270.13 crore to IRFC and firms/ companies under ‘Build, operate, Lease and Transfer’ (BOLT) and ‘Own Your Wagons’ (OYW) schemes. On the other hand IRFC was required to invest only Rs.2516.97 crore during the year for acquisition of new rolling stock. Hence the net inflow of funds from these resources was a negative figure of Rs.753.16 crore. Railway Funds: There was a sharp decline in the expenditure from the Depreciation

Audit Report {Railways} Financial Management 

Appropriation Accounts: Against the budget provision of Rs. 72281.88 crore, the Railways incurred the total expenditure of Rs. 69549.97 crore during 02-03. The Saving of Rs. 2731.91 crore was the net result of savings.

Audit Report {Railways} Financial Management 

Appropriation Accounts: Against the budget provision of Rs. 72281.88 crore, the Railways incurred the total expenditure of Rs. 69549.97 crore during 02-03. The Saving of Rs. 2731.91 crore was the net result of savings.

Highlights of Audit Findings 1.

2.

3. 4.

5.

Planning, approval and material modifications to the ongoing projects Procurement, utilisation and maintenance of Track Machines over Indian Railways Coal Movement on Indian Railways Manpower Management in Indian Railways Functioning of Research, Design and Standards Organisation (RDSO) Lucknow

Highlights of Audit Findings 1.

2.

3.

4.

5.

Loss due to delay in revision of haulage charges Excessive detention to wagons in Terminal Goods Station Heavy detention to oil tank wagons at Railways’ fuelling installation Erroneous despatch of wagons to Workshops Non-recovery of hire charges for Rolling Stock and Motive Power from KRCL

Highlights of Audit Findings 1. 2.

3.

4.

5.

6.

Sanction of an un-remunerative project Premature commissioning of Bishrampur Traction sub-station Restoration of an uneconomic branch line Non-utilisation of imported Meter Gauge Wheel sets Wasteful expenditure on procurement of a machine Avoidable procurement and inadequate accounting of steel

Highlights of Audit Findings 1.

2.

3.

4.

5.

Extra expenditure on procurement of Composite Brake Blocks Extra expenditure due to delay in finalisation of improved design of PSC sleepers Finalisation of tenders at higher rates for procurement of PSC sleepers Extra expenditure due to non-counter offering the lowest rates Licensing of Railway land

Highlights of Audit Findings 1.

2.

3.

Irregular permission for use of Officers’ Club premises by catering contractor Encroachment of Railway land of the closed sidings Mismanagement of Railway land

Authorities Involved Railway Level FA&CAO

: Supervises the preparation

GM

: Accepts and signs.

Principal Director of Audit : Verifies Railway Board Level Director (FB)

: Supervises the compilation

FC & CRB

: Accepts and signs.

Dy. CAG

: Verifies.

At national level CAG receives from Railway Board and public accounts committee examines on the behalf of parliament.

Object of Statutory Audit •Accountancy Audit- Check the accuracy, all payments are supported by relevant vouchers. •Appropriate audit- check that expenditure and receipts are properly classified. •Administrative audit- to check that expenditure is according prescribed rules

ACCOUNTS INSPECTION OF EXECUTIVE OFFICES Chapter 17 of A-1 WHY? VERIFY THE RECORDS KEPT EITH EXECS. •TO ENSURE THAT ALL RETURNS SENT TO ACCOUNTS ARE BASED ON CORRECT BASIC RECORDS. •IN ACCORDANCE WITH INSPECTION PROGRAMME. •DRAWN IN ADVANCE. (1712 of A-1) •INFORM THE EXEC.(1713 of A-1) •INFORMATION TO AUDIT

WHY ACCOUNTS INSPECTION

VERIFY DOCUMENTS IN SITU. ORIGINAL RECORDS KEPT IN EXEC. OFFICE. VERIFICATION OF SYSTEMS.

GUIDELINES FOR INSPECTION Para 1714 of A-1

•VERIFY THAT RETURNS SENT TO ACCOUNTS TALLY WITH THE BASIC RECORDS. •A TEST CHECK OF BASIC RECORDS. •REVIEW OF THE PROCEDURE.

Periodicity of Inspection Para 1704 of A-1

Material at site of works Stores as Imprest Tools & Plants years Material and Depot A category B category C category D category

Once a year Once in 2 years Once in 3 Once in 6 months Once in 1 year Once in 2 years Once in 1 year

Inspection of Divisional Offices Once in 2 years Engineering Department Once a year First Inspection of Construction office Within 3 months All subdivisions should be inspected at least once in 2 years.

Inspectorial Staff

Inspection of Stores Inspection of Station Inspection of Officers

ISA, SV TIA SO’s

INSPECTION REPORTS. •AFTER THE INSPECTION IS OVER. •INCLUDES ALL ITEMS WHICH HAVE NOT BEEN SATISFACTORILY BEEN EXPLAINED DURING INSPECTION. CONSISTS OF TWO PARTS •PART I •ITEMS OF MAJOR OBJECTIONS. •PART II •ITEMS OF MINOR OBJECTIONS

PART I PREPARED IN QUADRIPLATE

3 COPIES SENT TO THE EXEC. OFFICE SUPERIOR TO THE ONE INSPECTED

REPLY FORWARDED BY SUPERIOR TO ACCOUNTS OFFICE

ACCOUNTS OFFICE

2 COPIES SENT TO THE ACCOUNTS OFFICE INSPECTED

REPLY GIVEN BY THE OFFICE

PART II

PREPARED IN DUPLICATE

ONE COPY SENT TO THE EXECUTIVE OFFICE

REMARKS OF THE EXECUTIVE