MUNICIPAL CORPORATION OF DELHI

INTERNAL AUDIT DEPARTMENT

CITY ZONE

No._________/IAD/CZ/2012 Dated:
_________________

Subject: Audit Report of Central Press Printing & Stationery Department (Town
Hall) for the period 15.09.2011 to 04.10.2012.

INTRODUCTION:

Test check & Physical Verification of accounts of C.P. & S Deptt. was conducted by
Zonal Audit Party (City Zone), comprising of Sh. Manoj Kumar Naresh, I.A.O., Sh. Pardeep
Rawat, Acctt., Sh. R.K.Yadav, Auditor, & Sh. Sandeep Kumar Auditor. The audit was
conducted during working days w.e.f. 04.10.2012 to . This was the test check &
Physical verification of accounts of the department w.e.f. 15.09.2011 to 04.10.2012.

Aims & Objectives

To print articles/stationery required for the day to day official work and to procure
stationery material required to be printed & its further issuance to other department as per
their requirement.

H.O.D./H.O.S./D.D.O’s/CASHIER

The following officials have served as HOD/HOO/DDO/Cashier during the period of Audit.

S.No H.O.D. Head of Office D.D.O. Cashier

1 Sh. , Sh.P.K.Gupta, Sh.P.K.Gupta, Sh. D.K.
Addl.Commissioner Director P & S Director P & S Chauhan

Budget Allocation and Expenditure for the year

Budget Year Expenditure upto year Excess/Saving

ending
Annexure ‘A’

Statutory Audit :

Statutory audit report was not produced.

Vacancy Statement:

S.No. Name of Post No. of Posts Filled Vacant

Sanctioned

Annexure ‘B’

Maintenance of Records:-

Inspite of observations made by the IAD in its earlier reports, the maintenance of
record of CP&S during the audit period i.e. 15.09.11 to 14.10.12 has not been found
satisfactory.
Old Audit Report:

There were 167 audit paras outstanding of C.P. & S Deptt. Efforts have not been
made by C.P. & S to settle these outsatanding paras. As a result of which no para has
been got settled till date. These 167 paras have been incorporated in the current audit
report as part-I (previous audit).
(A)
S.No. Year Total Para Para No. of settled Outstanding Paras
Paras Settled paras with Para No.
--- ---

Photostate of 1-A9 overleaf

(B) Details of Old Recovery.

S.No. Year Total old Amount Recovered Balance Recovery

Recovery Against paras
Para No. Amount (Amount in Rs.
Para-wise)
--- ---

Current Recovery (Audit period 15.09.2011 to 04.10.2012):

Part No. Total Recoveries Amount Balance

(In Rs.) recovered
Para No.2 17940/- Nil 17940/-
Para No.3 874/- Nil 874/-
Para No.4 1130.50 Nil 1130.50
Para No.7 4269/- Nil 4269/-
Para No.11 47437/- Nil 47437/-
Para No.12 87300/- Nil 87300/-
Para No. 18 31,38,047/- Nil 31,38,047/-

Total Rs. 32,96,997.50/- Nil 32,96,997.50/-

The Internal Audit report has been prepared on the basis of information furnished
and record made available by the office of Director (CP&S), Town Hall. The Internal Audit
Department of MCD disclaims any responsibility for any misinformation and/of non-
information on the part of auditee.

DCA(Internal Audit) IAO/ZAP/CZ

PART No. II (Current Audit)

The following record was requisitioned for Audit/Scrutiny on test check basis vide
the office Memo No. IAD/WZ/2011/01 dated 08.08.2011.

1. Purchase files with challan

2. Tender File Register/records
3. Earnest Money Register
4. Stock Book
5. T.E.Record
6. Indents
7. Temporary Advance Register
8. P.F. & S.Book with ECR
9. Property Register
10. Moveable Property Register
11. Imprest Register
12. Record of waste material
13. Job Register
14. OTA Register
15. Renewal of License
16. First-aid Box
17. Profit & Loss accounts
18. Depriciation of machines
19. Out side job Register
20. G-8 Books/Challans
21. Cash Book
22. Other relevant record related to audit.

The Internal Audit report has been prepared on the basis of information furnished
and record made available by the office of Director (CP&S), Town Hall. The Internal Audit
Department of MCD disclaims any responsibility for any misinformation and/of non-
information on the part of auditee.

Para No. 1: Non production of Record.

Out of the above requisitioned record, items at S.No. 2, 3, 6, 11, 12, 14, 16, 17, &
18 were not produced & S.No.1 & 8 were partly produced to audit for scrutiny. Tender/
purchase files for the period 15.09.2011 to 04.10.2012 were requisitioned vide memo no.
IAD/ZAP/CZ/2012/07 dated 15.10.12, out of which only a few files produced to audit.
Reason for not producing the complete record as requisitioned may be explained to audit.
Either the record is not maintained or the production of the same appears to have been
avoided.

Para No. 2 : Discrepancies noticed as a result of Physical Verification of the Store of

Central Stationary Cell, Town Hall amounting to Rs.285 + 340 =
(Rs.625/-).

During the physical verification of Store, the items of store as tabulated below were
found short. The shortage comes to Rs. 625/- (approx.), which may be made good by way
of recovering the cost of articles shown against each item from the concerned official and
depositing the same in the Municipal Treasury through G.8/challan and intimate to audit.
Shortage of Stationary Items (General) 2012-13:

S.N. Name of Items Page Qty. as Qty.as Shortage Amount

No. Per S.B. Per actual
1 Ruled Register 100 15 13882 13877 05 85.00
pages
2 Ruled Register 200 30 9981 9977 04 108.00
pages
3 Noting Sheet pad 53 6256 6254 02 42.00
4 Pilot Pen .05 213 1680 1678 02 50.00

Total 285.00

Discrepancies noticed at Central Printing Press, Town Hall 2012-13 (Printed

Stationery).

S.N. Name of Items Page Qty. as Qty.as Shortage Amount

No. Per S.B. Per actual
1 Pay Bill Forms 155 1400 1200 200 80.00
2 Contingent Bill 185 56900 56700 200 50.00
Forms
3 Dak Book 245 285 283 02 50.00
4 Movement Register 324 85 83 02 160.00
Total 340.00

Para No. 3: Casting mistake for Rs.7/-

During the scrutiny of stock book maintained in the office of CP&S, CLZ, the
following mistakes in computing balances/casting have been noticed:-

S.No. Year Page Opening Issue Bal. as Bal. Shortage Amount

No. balance per should
S.B be
1 2012 99 83.046 0.432 82.110 82.114 .004 7.00
- 13
7.00

The shortage approximately comes to Rs.7/-, which may be made good by recovering
the cost of items as shown above from the concerned employee and depositing the amount
in municipal treasury under intimation to audit.

Para No.4: Irregularities noticed in the Stock Book of P&S, CLZ.

1. During the checking of stock book, it has been noticed that the date of receiving of
material to be printed and issued to job is not mentioned in the stock book.

2. Cuttings and overwriting is completely forbidden and must be avoided, if any

correction is necessary it should be authenticated by the responsible officer setting
his signature and date. Frequent cuttings/overwriting were found in the stock
books, which were not attested/authenticated by the responsible officer.

3. It has also been noticed that issuing of Ream/Papers for a job are entered in stock
book after completion of job, whereas such entries in the stock book must be made
immediately on its receipt and at the time of issuance for the job work.

The reason for these irregularities be explain to audit.

Para No.5: Discrepancies noticed in Cash Book.

Cash Book is one of the most important accounts record of the department. It should be
maintained strictly in accordance with the rules/regulation & in prescribed format. All the
monetary transactions should immediately be entered in the cash book as soon as they
occur. During the course of audit of CP&S Deptt. the following discrepencies have been
noticed in maintenance of the cash book:-

1. Cash Book should be maintained in the prescribed standard format but in the
CP&S deptt. the Cash Book is being maintained in an ordinary ruled register in
spite of the fact that there are so many cash books available in the CP&S deptt.
The matter was brought to the notice of the deptt. in the previous audit but the
deptt. has not paid any attention to it and the cash book is still being
maintained in an ordinary ruled register.
2. Datewise entries should be recorded in the cash book but instances came to notice
that the payment to the suppliers were not being made as per the date of release
from the HQ which can be seen from the photocopies of page no. 67 & 68 of the
cash book enclosed as annexure ____

3. Details of expenditure was not available in the cash book because the required
columns such as S.No., Date, Head of A/C, Particular of the expenditure, Name
of supplier(the person to whom payment made),voucher no., cheque no etc. had
not been opened.

4. No Daily Income & Expenditure statement was available in the said cash book.
From the cash book it could not be ascertained that how much amount had
been released by the HQ under a particular head of A/c and how much was
being paid by the deptt to the suppliers etc.

5. The cash book must be balanced/closed on daily basis and should be initialed by
the person maintaining it and also by the DDO concerned but the same had not
been done for many years by any of the official.

6. The cash Book was not paged numbered.

7. Counter foil of deposit slips were not pasted and checked by DDO prior to issuance
of cheque from DDO’s account.

8. Monthly abstract of receipt & payment was not prepared.

Non-maintenance of cash book in accordance with the prescribed procedure be

explained to audit.

Para No: Irregularities in maintenance of Budget register

Budget register is maintained to record the expenditure incurred on various items of

expenditure under different heads of account. It should be maintained in prescribed
standard form to enable to keep watch over the progressive expenditure under different
heads of account. During the course of audit of the CP&S deptt., the following
irregularities were noticed in the maintenance of Budget Register:-

1. Budget Register was not page numbered and certificate to the effect that the
register contains pages 1 to____was not given and initialed by the official
maintaining it and by any superior.
2. It was not maintained in the prescribed standard form. The complete detail of
expenditure such as date, description of the expenditure, sanction/approval of
the authority, voucher/bill no etc. was not found.
3. Detail of Budget allocated under different heads of accounts from the HQ to the
Deptt. and also detail of subsequent allocations should be recorded in the
register for ready reference so as to keep a watch over the expenditure but the
required detail was not given in the register.
4. Entries made in the budget register were not initialed by the official maintaining
it and also by the DDO.

Non maintenance of the Budget Register in accordance with the prescribed

procedure be explained to audit.

Para No. : Irregularitties noticed in the Quotation files

The following irregularities noticed in the quotation files produced to audit

for scrutiny:-

Name of work:- Health Education on rabies under Pilot Project on prevention & control of
Human rabies through Hand Bills (1,00,000 nos) amounting to Rs. 99,225/-

Para No.8: Standard official procedure not adopted.

While auditing the record of purchase files in the office of CP&S, Town Hall, it has
been observed that the standard official procedure has not been adopted in initiating
proposals in many cases. For e.g. in case of purchase of 7500 diary covers, in the running
note of the department, committee members record their recommendations, whereas, in the
note only their observations should be recorded.

The reason for adopting such a procedure in all such cases be explained to audit.

Para No.9: Procurement of general items of statonery in violation of orders of

Commissioner.

While checking the files, it was found that Commissioner had directed to stop the
centralized distribution of stationery items from CP&S vide his orders dated 19.09.2008
and directed :

1. that no general stationery items will be procured/supplied by Central

Stationery branch hence forth. However, stationery will be issued till the
existing stocks lasts. General Stationery items will be procured/arranged by
the individual departments at their own level.
2. that only stationery items which are printed in Municipal Press (Printed
Stationery) such as standard forms, registers, file pads, noting sheets, file
cover etc. will be supplied by Central Stationery as usual.
3. Tenders floated so far in current financial year in respect of general
stationery items may allowed to be canceled and tenders pertaining to
different kinds of paper items required for printing in Municipal Press will be
processed as per practice.

An audit memo no.IAO/ZAP/CZ/2011/07 dt.30.9.2011 was issued to the

department to apprise audit with the facts of any further directions from Commissioner
regarding allowing of purchase of general stationery items by CP&S as the department has
continuously procured the items of stationery. Some of the items purchased by the
department after 19.09.2008 are mentioned below:-

1. Stapler Machine
 2. Pilot pen V5
3. Pilot pen 05
4. Stapler pin
5. Stapler pin no. 24/6
6. Duster
7. Shorthand book
8. Copier paper A3
9. Envelopes
10. Correction fluid white
11. Envelope commercial size
12. Envelope 7x5
13. Envelope 16x12
14. Envelop cloth 16x12
15. Ball pen
16. G-8 receipts
17. Birth & Death
18. Env.9x4 DOP
19. Env. 7
20. Plastic folder
21. Punching Machine
22. Stap. Machine no. 10
23. Stap.Machine 24/6.

Since nothing contrary has so far been shown to substantiate department’s action,
the department may explain this serious lapse of violating the orders of the authority or
otherwise show any directions/orders from Commissioner for the restarting of such
purchases, if any.

Para No.11 : Penalty not charged for delay in suppliers.(Recovery of Rs.47,437/-)

During the test check of purchase files of stationery it has been noticed that the
department is not levying any penalty for the late supply of goods in contravention to the
agreed upon terms and conditions.

The responsibility for the delay is sometimes of the department or on the part of the
contractor. But no penalty has been imposed where the delay is on the part of the
contractor.

Even the department’s contention that the supply has been taken in a phased
manner due to non availability of space does not hold good as the department itself has put
the condition to supply within the stipulated time. The penalty has never been invoked,
rather got waived off from the competent Authority even without getting any written request
from the contractor. Such an extension of undue favour to the contractor is causing
municipal loss. In some cases of delay in supply by the supplier a penalty upto Rs.47437/-
could be imposed at Annexure-‘C’.

The cases mentioned here are only illustrative, the reason for adopting the practice
of giving relaxation in every case which is causing loss of a considerable amount to MCD
may be explained to audit.

Para No.12 Irregularities found in the purchase of old dhotis - loss of Rs. 87,300/-.

The department of C P &S has purchased old dhotis in the following manner.

Period Quantity Rate Amount

2009-10 3900 45/- 175500/-
2010-11 2600 40 104000/-
2011-12(till 10.6.11) 3600 42 151200/-
On 30.08.2011 2500 34 85000/-

The details of purchases reveal that the department has divided the purchase into
small quantities to make peace meal purchases to avoid the necessity of obtaining the
sanction of higher authority with reference to the estimated value of the demand. This is in
contravention to Rule 148 of GFR. From the above table it becomes clear that when the
department purchased 2500 dhoties the rate/dhotis was quite l;ess as compared to the
earlier ones. This way the department has clearly incurred a loss of Rs.87,300/-which
could have been easily avoided. From the details of purchases it is also found that average
requirement of dhotis since past 2-3 years w.e.f. Aug. to March has been aprox 1600
whereas the department purchases 900 extra dhotis which may be actually not required so
the department has failed to adhere to the codal formalities & the responsibility for the loss
incurred may be fixed.

It has been further observed that in the stock books the whole material is
immediately internally distributed in one go immediately on its receipt.

The reason for all the above pointed irregularities be explained to audit.

Para No.13 Improper purchase of Master Paper.

During the test check of record, it is found that the department has splitted up the
quantity to be purchased in order to avoid sanction of higher authorities. It has been
noticed that the following year wise expenditure has been done on the purchases of master
paper.
Year Expenditure
2008-09 151011/-
2009-10 213893/-
2010-11 259980/-
2011-12 168525/-

The department has done expenditure on purchase of master paper almost twice or
thrice in a month which could have been easily clubbed under a single estimate. As per
GFR no.146 purchases of goods costing above Rs 15000/- only upto 100000/- only on each
occasion may be done on the recommendations of a duly constituted Local Purchases
Committee. This was not followed. The bulk purchase would certainly have been
economical. Some more discrepancies noticed were:

1. The department has not adhered to the prescribed rules of financial propriety and
obviously the department must have affected economy by carrying out bulk
purchase as per requirement.

2. It has also been noticed that the department has awarded the work to the same
three traders since 2008 to March 2010 which needs clarification.

3. It is observed that the department has internally distributed the whole supply in one
go & no proper casting as per requisition or issuance of material was seen, which is
not proper.

The reason for all the above mentioned irregularities be explained to audit.

Para No.14: Violation of terms & conditions in purchase of dusters.

The following irregularities have been noticed during the purchase of dusters from
U.R.Traders:-

1. The firm was to supply material by 17/03/2011, but on 30/03/2011, the firm
showed inability to meet the supply order of MCD as per specification.
2. Department gave extension upto 15/06/2011 to the firm to make the supplies
without imposing any penalty.
3. A show cause notice was served on 07/10/2011 to the firm for non supply of
goods.

Till date no supplies have been received but the department has not taken any
action as per terms & conditions i.e. forfeiture of EMD, blacklisting the contractors etc.
Moreover, As per term & condition of the agreement supplier is responsible for supply of
goods with in 60 days after receiving the Supply Order, otherwise the purchase of the said
goods can be done from local market on the risk & expenses of supplier without any
information.

The reason for not taking any strict action against the contractor be explained to
audit.
Para No.15: Inability shown in preparing noting sheets.

During scrutiny of purchase files it has been noticed that the department purchased
15,000 noting sheets from M/s Mahalaxmi Paper vide supply order no. 39 dt. 12/02/2008
on 23/04/2008. The printing press is meant for meeting the demand of the organization by
printing articles required for the day to day official work. It has been noticed that Printing
Press has been carrying out printing work of outside agencies whereas the printing of note
sheet would not have been a difficult task & would have been economical, if printed in Mpl.
press. The reason for not printing the same in Mpl. press be explained to audit.

Para No.16: Improper maintenance of stock book of job works.

While cross checking the record of Job Register 2011-12 & 2012-13 with paper
register (Stock Book 2011-12 & 2012-13) it has been seen that the no. of papers shown as
issued against job.no. has no mention of the year to which it pertains and in the absence of
accurate and complete record the cross checking was very difficult.

It is advised to enter properly the complete particulars of a job and should be

regularly checked by the officer in charge. The reason for improper maintenance of stock
book of job works be explained to audit.

Para No. 17 Irregularities noticed in accepting supplies from contractors.

In most of the purchase files , it has been noticed that the supply is received in a
phased manner whereas such a condition is not incorporated in the terms & conditions
framed by the deptt. in this regard and the department shows no objections to it, e.g. in
case of purchase of 15,000 nos. of Ruled Registers of 200 pages, supply was received from
M/S New India Press vide Supply Order no.28/P&S/PI/SO/2011-012/18 dated
23.05.2012 . The detail of datewise receipt of supply is as under:-

Date Quantity
27.06.2012 3560
03.07.2012 5280
18.07.2012 2660
03.08.2012 3500
Total 15000

As per the terms of NIT & Supply Order the material was to be supplied within a
period of 60 days i.e. upto 21.07.2012 whereas the supplier completed the supply on
03.08.2012 i.e. 13 days’ after the last date of supply. The deptt. may explain to audit the
reason for accepting the supply in phased manner and also not taking any action against
the defaulting supplier for not complying with the terms & conditions of the tender.

Para No : Irregularities in maintenance of Imprest Register

Imprest register is maintained to record the expenditure incurred on various items of

expenditure in the nature of contingent expenditure. It should be maintained in
prescribed standard form to enable to keep watch over the progressive expenditure under a
particular head. During the course of audit of the CP&S deptt., the following irregularities
were noticed in the maintenance of Imprest Register:-

5. The Imprest Register was not page numbered and certificate to the effect that
the register contains pages 1 to____was not given and initialed by the official
maintaining it and by any superior.
6. It was not maintained in the prescribed standard form. The complete detail of
expenditure such as date, description of the expenditure i.e. sanction/approval
of the authority etc. was not found.
7. The register should be maintained yearwise but the imprest register produced to
audit started w.e.f. 1.4.2010 to the date of current audit i.e. 04.10.2012.
8. The Imprest Register was not written legibly and the maintenance was poor.
9. The controlling authority was required to exercise check over the maintenance of
Imprest register and should satisfy himself that the register was being
 maintained properly, charges were necessary and not excessive and the sanction
obtained was adequate. But the above mentioned exercise was not found done
by the concerned authority.
10. Entries made in the Imprest Register were not initialled by the official
maintaining it and also by any superior officer.
11. Voucher no and date vide which the amount of imprest/expenditure recouped
was not mentioned in the said register.

Non maintenance of the Imprest Register in accordance with the prescribed

procedure be explained to audit.

Para No. Irregularities in the maintenance of G.8. books.

The head of the office shall maintain the register of G.8 reciepts wherein all the G.8 Books
received from the HQ and further its subsequent issue to the officials of the deptt. Should
be recorded. But during the audit it came to notice that no stock register was being
maintained by the deptt.

The G.8. books should be issued to the official against the proper requisition approved by
the competent authority and it should be ensured that the official does not have more than
one G.8 book at a time and second book should not be issued to the particular official
before the old one is fully utilised and returned. But during the course of audit it was
observed that two no. of G.8 books 022100 to022200 and 022201 to 022300 had been
issued before the complete utilisation of the previous one i.e. G.8 no 99201 to
99300( period 21.10.11 to 08.08.2012) as 2 nos. of G.8 receipts no. 99299 & 99300 in
the said G.8 book were found blank/unused.

Deptt may explain to the audit, the reason for (i)leaving the G.8.receipts no. 99299 and
99300 blank (ii) issuance of two G.8 book simultaneouly before the complete utilisation of
the previous one and (iii) non maintenance of Stock Register of G.8 books.

Para No.18: Non recovery of dues amounting to Rs.4,39,180/- from out side
agencies.

During the checking of ledger pertaining to the job of printing undertaken by

Municipal Press for outside agency, it was noticed that the payment amounting to
Rs.4,39,180/- (As per Annexure- ) is still to be recovered from outside agencies whose
printing jobs were done by the Municipal Press till date. Director, Central Printing &
Stationery is requested to look into the matter personally and take suitable action for
speedy recovery of the pending amounts under intimation to audit. Efforts may be made to
obtain the printing charges in advance from outside agency instead at granting them credit.

General Observation

1 Memo No. 5/IAD/ZAP/CZ/2011 dated 19.09.2011 was issued and the department
furnished the reply. But the para can be settled only on production of original
budget slips.
2 It has also been noticed that original G-8 receipt were retained in the G-8 books and
not issued to the concerned suppliers whereas, it should be immediately provided to
the depositor.
3 Cutting & over writings in the record should be avoided.

INTERNAL AUDIT OFFICER

Para No. 4: SPLITTING UP OF WORK:

It came to the notice of audit that the department had splitted up the work of
Dev./ Stngth of the roads by providing dense carpet in Ward no. C-86 into four nos. of
works as mentioned below and also awarded all the works to the same agency under
the Unit Rate Method.

Sr. No. Work No./Date Name of Agency Nature of work. NIT/URM

No.

1. 05/13.4.2011 M/S Radhey Shyam Dev/Sth of Lal Kuan road from 20

Shop no.1779 to 6360 Naya Bans
By pdg. Dense carpet in ward c-86

2. 06/13.4.2011 -do- Dev/Sth of Lal Kuan road from 21

Shop no.2882 to 1916 Naya Bans
By pdg. Dense carpet .

3. 07/ 13.4.2011 -do- Dev/Sth of Lal Kuan road from 22

Shop no.1415 to1623 Naya Bans
By pdg. Dense carpet .
4. 320/15.3.2011 -do- Dev/Sth of Lal Kuan road from 18
Shop no.3377 to 2883 Naya Bans
By pdg. Dense carpet .

As per guidelines of CVC and provision of GFR/CPWD manual, splitting of work

is strictly prohibited. Splitting up of work retract healthy competition and and participation of
big contractors having modern technology /sophisticated infrastructure in tendering process
which ultimately leads to poor quality of work.

Commissioner vides his orders dated 27.8.2008 instructed the E-in-C to personally
look into the matter and ensure no work is allowed to split in any Division of Engineering
Department.

The above mentioned works were of similar nature and also pertained the same ward
so it could be taken up as one work. It was clear that the department avoided the necessity of
obtaining the approval/sanction of the higher authority.

In this regard, an audit memo vide no 11/IAD/ZAP/CZ/2013 was issued on

15.01.2013, but not replied.

The reason for the above mentioned irregularities and non compliance of the
instructions of the Commissioner may be explained to audit.

CITY ZONE