Civil

PREFACE
1 2
This Report has been prepared for submission to the Governor under Article 151 of the Constitution Chapters I and II of this Report respectively contain audit observations on matters arising from examination of Finance Accounts and Appropriation Accounts of the State Government for the Year ended 31 March 2006.
Chapter III deals with the findings of performance audit in various departments while Chapter IV deals with the findings of audit of transactions including Public Works, Irrigation, audit of Autonomous Bodies and departmentally run commercial undertakings. Chapter V deals with the comments on internal control mechanism existing in selected departments in the State.
The Report containing the observations arising out of audit of Statutory Corporations, Boards and Government Companies, the Report containing such observations on Revenue Receipts and the Report on 'Flood in Maharashtra - preparedness and response' are presented separately.
The cases mentioned in the Report are among those which came to notice in the course of test-audit of accounts during the year 2005-06 as well as those which had come to notice in earlier years but could not be dealt with in previous Reports; matters relating to the period subsequent to 2005-06 have also been included wherever necessary.
Overview
The report comprises five chapters; the first two contain observations on the Finance and Appropriation Accounts of the Government for the year 2005-06 and the remaining three chapters contain eight audit reviews of certain selected programmes and activities, including audit of the internal control mechanism in the Animal Husbandry Department and 30 paragraphs on audit of financial transactions of the various Government Departments and statutory corporations. The audit has been conducted in accordance with the Auditing Standards prescribed for the Indian Audit and Accounts Department. Audit samples have been drawn based on statistical sampling methods as well as on judgement basis. The specific audit methodology adopted for programmes and schemes has been mentioned in the reviews. The audit conclusions have been drawn and recommendations made taking into consideration the views of the Government. A summary of the financial position of the State and the audit comments on the performance of the Government in implementation of certain programmes and schemes as well as internal control mechanism in Animal Husbandry Department is given below:
Financial position of the State Government
During 2005-06, revenue receipts increased to Rs 48,438 crore at a growth rate of 18 per cent, as against revenue expenditure of Rs 52,280 crore which increased 2.4 per cent over the previous year. As a result, revenue deficit (Rs 3842 crore) reduced by about 62 per cent. The States own resources, comprising tax and non-tax revenue, contributed 81 per cent of the revenue receipts. Capital expenditure increased to Rs 10,078 crore in 2005-06, up by 28 per cent over 2004-05. Fiscal deficit in 2005-06 was Rs 17,631 crore, a decrease of 5 per cent over the previous year. The expenditure on salaries, pension and interest payments consumed Rs 19,780 crore i.e., 41 per cent of the total revenue receipts of the State. Fiscal liabilities increased from Rs 1,21,026 crore in 2004-05 to Rs 1,42,491 crore in 2005-06. As a ratio of GSDP these liabilities increased from 33 per cent in 2004-05 to 34 per cent in 2005-06. The Maharashtra Fiscal Responsibility and Budgetary Management Act was passed in April 2005 to provide transparency in fiscal management, but the relevant Rules were belatedly framed in February 2006. Government also framed the Medium term fiscal policy statement for the State in March 2006
Audit Report (Civil) for the year ended 31March 2006
as per the Twelfth Finance Commission recommendations but the same was made effective from the fiscal year 2006-07. During 2005-06, the overall savings of Rs 8,958.59 crore was the result of savings of Rs 10,115.58 crore in 222 cases of grants and appropriations, offset by excesses of Rs 1,156.99 crore in 34 cases of grants and appropriations. In order to remove the developmental backlogs in various regions by March 2006, allocations were to be made in nine sectors, as per directives of the Governor of Maharashtra. During 2002-05, against total allocation of Rs 5435 crore made for Vidarbha region, budget provision and expenditure was Rs 1,663 crore (31 per cent). Similarly, for Marathwada region, budget provision and expenditure was Rs 1,513 crore (44 per cent) against the total allocation of Rs 3,470 crore. As Governor's directives were not complied with, fresh directives were issued in March 2006, to liquidate the backlogs.
Sarva Shiksha Abhiyan
The objectives of the Sarva Shiksha Abhiyan (SSA) programme aimed at providing useful and relevant elementary education to all children in the age group of six to 14 by 2010. Implementation of SSA was delayed in the State, besides, the Maharashtra Prathamik Shikshan Parishad did not fully utilise the available funds of Rs 911.37 crore and had an unspent balance of Rs 95.86 crore as of March 2005. There was only a marginal improvement in the accessibility to schools. Only 37 per cent of Civil works relating to construction of classrooms, toilets and provision of drinking water facilities etc. could be completed despite availability of sufficient funds. Though the teacher to pupil ratio in the State as a whole was adequate, such ratio in single teacher schools, test checked, was found to be low. Out of 76,407 primary and upper primary schools, 6,480 were single teacher schools. According to survey conducted in March 2002, out of 1.75 crore of child population in the age group of six to 14 years in the State, 15.79 lakh children were identified to be out of school. As of November 2005, 1.06 lakh children continued to remain out of school. The objective of having all children in school or alternate school even by 2005 was not achieved. (Paragraph 3.1)
Valmiki Ambedkar Malin Basti Awas Yojana
Government of India introduced the Valmiki Ambedkar Malin Basti Awas Yojana in December 2001 with the objective of providing shelters or upgrading the existing shelters for people living below the poverty line and members of other weaker section in urban slums.
xii
Overview
Huge funds were lying with the Maharashtra Housing Area and Development Authority and its Regional Boards; beneficiaries were selected without observing the eligibility criteria. In Maharashtra preparation of Detailed Project Reports was injudicious, dwelling units were constructed without sanitary latrines and inflated utilisation certificates submitted to the Government of India. Beneficiaries were not conferred with pattas/titles of land though envisaged in the scheme. Large number of approved projects remained incomplete. The monitoring of the scheme was inadequate. (Paragraph 3.2)
Computerisation of Employment Exchanges in Maharashtra
A project of computerisation of the functions of the Employment Exchanges of the State was being implemented by the Directorate of Employment and Self Employment with the objective of improving the efficiency of the Employment Exchanges, networking of all Employment Exchanges and speedy collection of data from employers to provide them skilled manpower. An Oracle based applications package implemented in 36 units (1997-1999) by incurring an expenditure of Rs 2.06 crore was left incomplete. Before stabilising the Oracle based package, the Directorate switched over in 2001-02 to the development of a new DB2 based package named Rojgar Mitra. But the deficiencies continued in the new package also. No detailed System Requirement Specifications were prepared. Lack of adequate documentation led to lack of proper control over the development process and undue delays. There was lack of validation checks and data integrity. Lack of audit trails and security controls made the system vulnerable to unauthorised access and consequent changes to data. (Paragraph 3.3)
Information Technology Citizen's Service Centres)
review
of
SETU
(Integrated
With a view to the harness benefits of Information Technology (IT) for effective and transparent functioning of the Administration, Government started (August 2002) providing different services to citizens through an IT based project SETU connoting a Bridge for connecting Government with people. There was lack of uniformity in the software implemented in various centres which led to failure in consolidation and transmission of the data from root level to apex level. The system had no security policies / procedures exposing the system to potential risks of invalid inputs, processing, output and access by unauthorised users. (Paragraph 3.4)
xiii
Audit of grants-in-aid to educational institutions
Recognised aided schools and Arts, Science, Commerce and Law colleges are eligible for salary grants, non salary grants, building grants and other grants at the discretion of the sanctioning authority. The average annual expenditure of Rs 39.61 crore on grants-in-aid (GIA) to these institutions was incurred during 2001-2005. Review of release of GIA to non-government educational institutions indicated that assessment of GIA of Rs 1789.77 crore paid to 780 colleges was not completed for three to 10 years. Government released excess GIA of Rs 16.19 crore to 217 institutions as tuition fees recoverable were not adjusted. Grants were released to the colleges with poor enrolment. (Paragraph 3.5)
Functioning of Dr. Babasaheb Ambedkar Technological University
Dr. Babasaheb Ambedkar Technological University was established in 1989 with the objective of providing facilities of higher technical education and promoting economic development of the region. There was delay in preparation of annual accounts and huge unspent balances lying at the end of each year. The construction of the academic and administrative building, started in December 1999, had not been completed. Availability of hostels was not commensurate with the requirements resulting in overcrowding in the hostels. Job placement was poor due to lack of linkage with the industries. Despite shortages of teaching staff, the University continued to send many of its staff on deputation for higher studies. Extension service centres through which transfer of technology was envisaged were not established. A number of courses remained to be accredited by the All India Council for Technical Education (AICTE). Grants given by AICTE were either utilised after delays or were lying unutilised. There were shortfalls in the required number of meetings to be held by various statutory committees. (Paragraph 3.6)
Food Security, Subsidy and Management of Foodgrains
Food management of Government involves implementation of a well targeted Public Distribution System for ensuring availability of foodgrains to the public at affordable prices and for ensuring food security for the poor. The quality of foodgrains was not ensured while lifting the same from Food Corporation of India, excess payments were released to procurement agents and eligibility criteria were not followed in identification of beneficiaries under the Targeted Public Distribution System, Antyodaya Anna Yojana and Annapurna Scheme. The Vigilance Committees constituted for monitoring the distribution of foodgrains to the beneficiaries were either not formed or were ineffective. There were enormous differences between the number of ration
xiv
Overview
cards issued under Public Distribution System and to the below poverty line families identified as per Government of India norms through survey. (Paragraph 3.7)
Internal control mechanism in the Animal Husbandry Department
Internal control is a process designed to provide reasonable assurance to an organisation regarding the achievement of economy and efficiency of operations including performance goals. A review of internal controls in the Animal Husbandry Department showed non-working/absence of internal controls such as non-compliance with rules, manuals and codes relating to financial management, non-assessment of grants released to Zilla Parishads inadequate monitoring of the schemes implemented by the Department and ineffective internal audit arrangements. (Paragraph 5.1)
10
Transaction audit findings
Audit of financial transactions, subjected to test-check, in various departments of the Government and their field functionaries, showed instances of excess payment and wasteful expenditure etc. of over Rs 90.32 crore as mentioned below: Excess payments, wasteful and infructuous expenditure amounting to Rs 13.02 crore were noticed in the Finance Department (Rs 6.45 crore), Home Department (Rs 2.39 crore), Revenue and Forests Department (Rs 2.06 crore) and Social Justice, Cultural Affairs and Special Assistance Department (Rs 2.12 crore) Violations of contractual obligations, undue favours to contractors and avoidable expenditure amounting to Rs 38.99 crore were noticed in the Home Department (Rs 2.26 crore), Housing Department (Rs 3.45 crore), Medical Education and Drugs Department (Rs 0.31 crore) and Water Resources Department (Rs 32.97 crore). Idle investment/idle establishment/blocking of funds and unfruitful expenditure amounting to Rs 32.58 crore were noticed in the Housing Department (Rs 9.08 crore), Public Works Department (Rs 2.05 crore), Rural Development Department (Rs 0.51 crore), Tribal Development Department (Rs 17.67 crore), Water Resources Department (Rs 1.36 crore) and Water Supply and Sanitation Department (Rs 1.91 crore). Loan amounting to Rs 4.80 crore were not recovered from beneficiaries of Lok Awas Yojana by the Housing Department and payment of pension/family pension of Rs 92.85 lakh was made by the treasuries under the Finance Department, in contravention of the rules.
xv
Some of the important findings are as follows: Adoption of incorrect rates for payment of Transport Allowance to employees in Nagpur led to excess payment of Rs 6.45 crore. (Paragraph 4.1.1) Failure in enforcing the provisions of an agreement resulted in short recovery of shipping fees of Rs 1.59 crore and undue benefit of Rs 67.42 lakh to a licensee. (Paragraph 4.2.1) Independent work costing Rs 3.69 crore at a different location was allotted to a contractor as an extra item without inviting tenders, in violation of the manual provisions. (Paragraph 4.2.7) Non reduction in contract value as a result of design change resulted in excess payment of Rs 2.68 crore. (Paragraph 4.2.8) Construction of a bridge without acquiring land required for its approach roads resulted in unfruitful expenditure of Rs 2.05 crore. (Paragraph 4.3.3) Failure to construct a Head Regulator on Kulpa-Karanja distributory resulted in unfruitful expenditure of Rs 1.36 crore on construction of the Kotjambhora Minor and denial of irrigation benefit to the cultivators. (Paragraph 4.3.6)
xvi
Audit Report (Civil) for the year ended 31 March 2006
1.1
Introduction
The Finance Accounts of the Government of Maharashtra are laid out in nineteen statements, presenting receipts and expenditure, revenue as well as capital, in the Consolidated Fund, the Contingency Fund and the Public Account of the State of Maharashtra. The layout of the Finance Accounts is depicted in the box below: Box 1.1: Layout of Finance Accounts
Statement No.1 presents the summary of transactions of the State Government receipts and expenditure, revenue and capital, public debt receipts and disbursements etc. in the Consolidated Fund, the Contingency Fund and the Public Account of the State. Statement No.2 contains the summarised statement of capital outlay showing progressive expenditure to the end of 2005-06. Statement No.3 gives financial results of irrigation works, their revenue receipts, working expenses and maintenance charges, capital outlay, net profit or loss, etc. Statement No.4 indicates the summary of the debt position of the State which includes borrowing from internal debt, Government of India, other obligations and servicing of debt. Statement No.5 gives the summary of loans and advances given by the State Government during the year, repayments made, recoveries in arrears etc. Statement No.6 gives the summary of guarantees given by the Government for repayment of loans etc. raised by statutory corporations, local bodies and other institutions. Statement No. 7 gives the summary of cash balances and investments made out of such balances. Statement No.8 depicts the summary of balances under the Consolidated Fund, the Contingency Fund and the Public Account as on 31 March 2006. Statement No.9 shows the revenue and expenditure under different heads for the year 2005-06 as a percentage of total revenue/expenditure. Statement No.10 indicates the distribution between the charged and voted expenditure incurred during the year. Statement No.11 indicates the detailed account of revenue receipts by minor heads. Statement No.12 provides accounts of revenue expenditure by minor heads under NonPlan and Plan separately and capital expenditure major head-wise. Statement No.13 depicts the detailed capital expenditure incurred during and to the end of 2005-06. Statement No.14 shows the details of investment of the State Government in Statutory corporations, Government companies, other joint stock companies, co-operative banks and societies, etc. up to the end of 2005-06. Statement No.15 depicts the capital and other expenditure to the end of 2005-06 and the principal sources from which the funds were provided for that expenditure. Statement No.16 gives the detailed account of receipts, disbursements and balances under heads of account relating to Debt, Contingency Fund and Public Account. Statement No.17 presents a detailed account of debt and other interest bearing obligations of the Government of Maharashtra. Statement No.18 provides the detailed account of loans and advances given by the Government of Maharashtra, the amount of loan repaid during the year and the balance as on 31 March 2006. Statement No.19 gives the details of earmarked balances of reserve funds.
Chapter I Finances of the State Government
1.2
Trend of Finances with reference to previous year
Financial position of the State Government during the current year as compared to the previous year was as under: (Rupees in crore) 2004-05 41013 30606 4119 6288 2041 2041 43054 51999 46392 8978 2856 2751 9675 4654 5021 -61674 10033 18620 9642
1
Sr. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Major Aggregates Revenue Receipts (2+3+4) Tax Revenue (Net) Non-Tax Revenue Other Receipts Non-Debt Capital Receipts of which Recovery of Loans Total Receipts (1+5) Non-Plan Expenditure On Revenue Account of which Interest Payments On Capital Account On Loans disbursed Plan Expenditure On Revenue Account On Capital Account On Loans disbursed Total Expenditure (13+8) Revenue Deficit (9+14-1) Fiscal Deficit (17-1-5) Primary Deficit (19-10)
2005-06 48438 33540 5935 8963 551 551 48989 54588 47048 9347 3278 4262 12032 5232 6800 -66620 3842 17631 8284
1.3
Summary of Receipts and Disbursements
Table-1 summarises the finances of the Government for the year 2005-06, covering revenue receipts and expenditure, capital receipts and expenditure and public account receipts/disbursements as emerging from Statement-1 of the Finance Accounts and other detailed statements.
Higher rounding 3
Table-1: Summary of receipts and disbursements for the year 2005-06

(Rupees in crore)
2004-05 Receipts 2005-06 2004-05 Disbursements Non Plan 47048.15 21623.38 16791.89 7314.13 1318.75 2005-06 Plan 5231.70 73.12 3125.30 2000.58 32.70 Total 52279.85 21696.50 19917.19 9314.71 1351.45 Section-A: Revenue 41013.33 30605.76 4118.83 3595.02 2693.72 I Revenue receipts Tax revenue Non-tax revenue Share of Union Taxes/Duties Grants from Government of India 48438.29 33540.24 5935.05 4982.00* 3981.00 51046.66 22271.16 17548.71 10381.12 845.67 I Revenue expenditure General services Social services Economic services Grants-in-aid and Contributions
Section-B: Capital 2438.94 2040.94 II Opening Cash balance III Recoveries of Loans and Advances IV Public debt receipts V Appropriation from Contingency Fund VI Contingency Fund VII Public Account receipts VIII Closing Overdraft from RBI Total 2123.01 551.25 7876.98 2750.66 II Capital Outlay III Loans and Advances disbursed# IV Repayment of Public Debt# V Appropriation to Contingency Fund# VI Contingency Fund# VII Public Account disbursements# VIII Closing Cash Balance# Total 3277.99 6800.45 10078.44 4261.62
22188.84 300.00
19973.70 1050.00
10993.95 300.00
2056.71 1850.00
347.50 27991.38
1954.52 27145.89
404.52 20825.15
1288.57 24383.17
--
--
2123.01
5038.30
96320.93
101236.66
96320.93
101236.66
1.4
Audit Methodology
Audit observations on the Finance Accounts bring out the trends in the major fiscal aggregates of receipts and expenditure in the light of time series data (Appendix 1.2 to 1.5) and periodic comparisons.
* #
Includes Rs 260 crore pertaining to the year 2004-05, adjusted during the year 2005-06. Bifurcation of Plan and Non-Plan not available 4
The key indicators adopted for the purpose are: (i) Resources by volume and sources, (ii) Application of resources, (iii) Assets and Liabilities and (iv) Management of deficits. Audit observations also take into account the cumulative impact of resource mobilisation efforts, debt servicing and corrective fiscal measures. The overall financial performance of the State Government as a body corporate has been presented by the application of a set of ratios commonly adopted for the relational interpretation of fiscal aggregates. The reporting parameters are depicted in Box 1.2. Box 1. 2: Reporting Parameters
Fiscal aggregates like tax and non-tax revenue, revenue and capital expenditure, internal and external debt and revenue and fiscal deficits have been presented as percentage of the Gross State Domestic Product (GSDP) at current market prices. The New GSDP series with 1993-94 as base as published by the Director of Economics and Statistics of the State Government have been used. For tax revenues, non-tax revenues, revenue expenditure etc. buoyancy projections have also been provided for a further estimation of the range of fluctuations with reference to the base represented by GSDP. Some of the terms used here are explained in Appendix 1.1.
The accounts of the State Government are kept in three parts (i) Consolidated Fund, (ii) Contingency Fund and (iii) Public Account, as defined in Box 1.3. Box 1.3: State Government Funds and the Public Account
Consolidated Fund All revenues received by the State Government, all loans raised by issue of treasury bills, internal and external loans and all moneys received by the Government in repayment of loans form one consolidated fund entitled 'The Consolidated Fund of State' established under Article 266(1) of the Constitution of India. Contingency Fund The Contingency Fund of the State established under Article 267(2) of the Constitution is in the nature of an imprest placed at the disposal of the Governor to enable him to make advances to meet urgent unforeseen expenditure, pending authorisation by the Legislature. Approval of the Legislature for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund is subsequently obtained, whereupon the advances from the Contingency Fund are recouped to the Fund. Public Account Besides the normal receipts and expenditure of the Government which relate to the Consolidated Fund, certain other transactions enter the Government Accounts, in respect of which the Government acts more as a banker. Transactions relating to provident funds, small savings, other deposits, etc. are a few examples. The public moneys thus received are kept in the Public Account set up under Article 266(2) of the Constitution and the related disbursements are made from it.
State Finances by key Indicators

1.5 Resources by volumes and sources
Resources of the State Government consist of revenue receipts and capital receipts. Revenue receipts consist of tax revenues, non-tax revenues, States
5
share of union taxes and duties and grants-in-aid from the Government of India (GOI). Capital receipts comprise miscellaneous capital receipts such as proceeds from disinvestments, recoveries of loans and advances, debt receipts from internal sources (market loans, borrowings from financial institutions/commercial banks) and loans and advances from GOI as well as accruals from the Public Account. Table-2 shows that the total receipts of the State Government for the year 2005-06 were Rs 99,114 crore. Of these, revenue receipts were Rs 48,438 crore, constituting 49 per cent of the total receipts. The balance came from borrowings, receipts from the Contingency Fund and the Public Account. Table-2: Resources of Maharashtra (Rupees in crore)
I Revenue Receipts II Capital Receipts Miscellaneous Receipts Recovery of Loans and Advances Public Debt Receipts III Appropriation from Contingency Fund IV Contingency Fund V Public Account Receipts a. Small Savings, Provident Fund etc. b. Reserve Fund c. Deposits and Advances d. Suspense and Miscellaneous e. Remittances Total Receipts 48438 20525 -551 19974 1050 1955 27146 1794 5504 8371 (-) 905 12382 99114
1.5.1
Revenue Receipts
Statement-11 of the Finance Accounts details the revenue receipts of the Government. The revenue receipts consist of the State's own tax and non-tax revenues, Central tax transfers and grants-in-aid from GOI. Overall revenue receipts, their annual rate of growth, ratio of these receipts to GSDP and their buoyancies are indicated in Table-3. Table-3: Revenue Receipts - Basic Parameters
Revenue Receipts (RR) (Rupees in crore) Own Taxes (per cent) Non-Tax Revenue (per cent) Central Tax Transfers (per cent) Grants-in-aid (per cent) Rate of growth of RR (per cent) RR/GSDP (per cent) Revenue Buoyancy (ratio) Revenue Buoyancy with reference to State's own taxes (ratio) GSDP growth (per cent) 2001-02 30093 71.7 15.4 8.7 5.5 1.7 11.0 0.350 0.694 5.09 2002-03 31103 73.3 14.5 7.3 4.8 3.3 10.5 0.383 0.623 8.76 2003-04 34370 73.2 10.3 9.8 6.6 10.5 10.3 0.816 2.059 12.86 2004-05 41013 74.6 10.0 8.7 6.5 19.3 11.0 1.659 0.921 11.63 2005-06 48438 69.2 12.2 10.2 8.2 18.1 11.5 1.446 1.323 12.52
It represents the ratio of percentage growth of Revenue Receipts to percentage growth of the State's own taxes.
The revenue receipts of the State increased from Rs 30,093 crore in 2001-02 to Rs 48,438 crore in 2005-06. It grew by about 18 per cent (Rs 7,425 crore) over the previous year. Increase was mainly in Central Tax Transfer (Rs 1,387 crore), Grants-in-aid from the Central Government (Rs 1,287 crore), Stamps and Registration fees (Rs 1,149 crore), Interest Receipts (Rs 1,000 crore), Sales Tax (Rs 860 crore) and increase in State Excise (Rs 605 crore). During the five year period 2001-06, the State had a buoyant economy with an annual GSDP growth ranging between 5 to 13 per cent, it being 13 per cent during 2005-06. The revenue growth rate exceeded the GSDP growth rate during 2004-05 and 2005-06. While 81 per cent of the revenue during 2005-06 came from the State's own resources, Central tax transfers and Grants-in-aid together contributed only 19 per cent of the total revenue. The GOI grants of Rs 3,981 crore during 2005-06 included Non-Plan Grants (Rs 1,582 crore), Grants for State Plan Schemes (Rs 1,255 crore), Central Plan Grants (Rs 286 crore) and Grants for Centrally Sponsored Schemes (Rs 858 crore). Increase in GOI grants was Rs 1,287 crore over the previous year, which was mainly on account of Non-Plan Grants (Rs 1,012 crore) and Grants for Central Plan Schemes (Rs 200 crore).
REVENUE RECEIPTS FOR 2005-06 (Rupees in crore)
5935.05 (12 per cent)
4982.00 (11 per cent) .
3981.00 (8 per cent)
33540.24 (69 per cent )
Own Taxes Central Tax Transfers
Non-Tax Revenue Grants-in-aid
Sales Tax was the major contributor (59 per cent) of tax revenue followed by Stamps and Registration fees (16 per cent), State Excise (8 per cent) and Taxes on Vehicles (4 per cent). Non-tax revenue in nominal terms has however, steadily declined from Rs 4,655 crore in 2001-02 to Rs 3,549 crore in 2003-04. In 2004-05, it increased to Rs 4,119 crore and further increased to Rs 5,935 crore during 2005-06. In 2005-06, it increased by Rs 1,816 crore (44 per cent) over the previous year. The increase was due to significant increase in Interest Receipts (Rs 1,000 crore) mainly from public sector and other undertakings; Miscellaneous General Services (Rs 427 crore) on account of more receipts from State lotteries and guarantee fees; Power (Rs 169 crore) on account of receipts of arrears of lease money; and Non-ferrous Mining and Metallurgical
Industries (Rs 123 crore) on account of receipts under mineral, concession fees and royalties. The current levels of cost recovery in supply of goods and services by the Government are 0.17 per cent for Secondary Education, 0.37 per cent for University and Higher Education, 3.94 per cent for Technical Education, 6.20 per cent for Health and Family Welfare, 0.32 per cent for Water Supply and Sanitation, 21.07 per cent for Minor Irrigation and 38.03 per cent for Major and Medium Irrigation. In the Medium Term Fiscal Policy Statement, Government has emphasised (March 2006) the need for denovo review and rationalisation of the user charges. The arrears of revenue increased by 22 per cent from Rs 12,584 crore as of March 2005 to Rs 15,347 crore as of March 2006. Arrears mainly pertained to taxes on Sales, Trade etc. (Rs 15,227 crore). The arrears of revenue, however, do not reflect the position of total arrears, as information from all departments was not made available. The sources of receipts under different heads as well as GSDP during 2001-06 are indicated in Table-4. Table-4: Sources of Receipts Trends (Rupees in crore)
Year Revenue Receipts Capital Receipts Non-Debt Debt Receipts+ Receipts Contingency Fund Receipts Accruals in Public Account Total Receipts Gross State Domestic Product
2001-02 2002-03 2003-04 2004-05 2005-06
30093 31103 34370* 41013 48438
898 919 1332 2341 1601
8671 9759 22381 22189 19974
306 466 887 348 1955
42369 44867 24452 27991 27146
82337 87114 83422 93882 99114
271406 295191A 333145A 371878 A 418441B
1.6
1.6.1
Application of Resources
Trend of growth of total expenditure
Statement 12 of the Finance Accounts depicts the detailed revenue expenditure by minor heads and capital expenditure by major heads. The total expenditure of the State increased from Rs 41,289 crore in 2001-02 to Rs 66,620 crore in 2005-06. Total expenditure, its annual growth rate, the ratio of expenditure to the State GSDP and to revenue receipts and its buoyancy with respect to GSDP and revenue receipts are indicated in Table-5.
Including Appropriation from the Contingency Fund, Inter State Settlement and Recoveries of Loans and Advances. Based on Economic Survey of Maharashtra. * Lower rounding B Advance estimates as furnished by the Directorate of Economics and Statistics, Government of Maharashtra.
A
Table-5: Total Expenditure Basic Parameters

Total expenditure (TE)* (Rupees in crore) 0.3 11.0 Rate of growth (per cent) 15.2 15.5 TE/GSDP ratio (per cent) 72.8 67.8 RR /TE ratio (per cent) Buoyancy of Total Expenditure with reference to: 0.072 1.264 GSDP (ratio) 0.206 3.300 RR (ratio) 2001-02 41289 2002-03 45862 2003-04 52781 15.0 15.8 65.1 1.166 1.436 2004-05 61674 16.8 16.5 66.5 1.445 0.870 2005-06 66620 8.0 15.9 72.7 0.639 0.442
* Total expenditure includes revenue expenditure, capital expenditure and loans and advances.
The total expenditure in 2005-06 showed an increase of Rs 4,946 crore over that of the previous year. This was due to the increase in Plan capital expenditure by Rs 1,778 crore (mainly under Urban Development: Rs 875 crore and Rural Development: Rs 464 crore) and in loans and advances disbursed by Rs 1,511 crore (mainly under Co-operation Department: Rs 639 crore and Power projects: Rs 997 crore) as compared to the previous year. Consistent increase in total expenditure over the five year period 2001-06 was also reflected in the gradual increase in the percentage of total expenditure to GSDP upto 2004-05. However, during the current year, the percentage fell to 15.9.
Growth of Total Expenditure
70000 60000 50000 40000 30000 20000 10000 0 2001-02 2002-03 2003-04 2004-05 2005-06
3007 5388 (Rupees in crore)
61674 51046
66620
52781 41289 38282 45862 40474 42680

10101 10628 14340
52280
Total expenditure (TE) Revenue expenditure Capital expenditure and Loans and advances disbursed
In terms of the activities, total expenditure could be considered as being composed of expenditure on General Services including Interest Payments, Social and Economic Services, Grants-in-aid and Loans and Advances. The relative shares of these components in the total expenditure are indicated in Table-6.
Table-6: Components of Expenditure Relative Shares (in per cent)

General Services Interest payments Social Services Economic Services Grants-in-aid Loans and Advances 2001-02 27.4 15.6 34.6 21.0 1.3 0.1 2002-03 23.7 15.6 31.4 24.2 1.4 3.7 2003-04 21.9 15.8 30.8 26.1 1.8 3.6 2004-05 21.6 14.5 28.9 29.1 1.4 4.5 2005-06 18.7 14.0 31.8 27.1 2.0 6.4
Relative shares of expenditure 2005-06 (in percentage) 6.4 27.1 2 18.7 14
31.8
General Services Economic Services
Interest Payments Loans and Advances
Social Services
Grants-in-aid
There were inter-year variations between the various components. The shares of General Services, Interest Payments and Economic Services in total expenditure were reduced as compared to the previous year while the shares of Social Services, Grants-in-aid and Loans and Advances were increased. Of the total expenditure, the non-developmental expenditure during 2005-06 (General Services including Interest Payments) accounted for 33 per cent, the development expenditure (on Social Services and Economic Services) accounted for 59 per cent and loans and advances and grants-in-aid accounted for 8 per cent. 1.6.2 Incidence of Revenue Expenditure Revenue expenditure is incurred for maintaining the current level of services and payments and for past obligations and as such, it does not result in any addition to the State's infrastructure and service network. Revenue expenditure had the predominant share (78 per cent) in the total expenditure. The overall revenue expenditure, its rate of growth, ratio of revenue expenditure to GSDP and to revenue receipts and its buoyancy are indicated in Table-7.
10
Table-7: Revenue Expenditure Basic Parameters

Revenue Expenditure (RE) of which Non-Plan Revenue Expenditure 35401 (NPRE) Plan Revenue Expenditure (PRE) 2881 Rate of Growth of RE (per cent) 2.3 NPRE (per cent) 2.7 PRE (per cent) (-) 1.4 NPRE/GSDP (per cent) 13.0 NPRE as percentage of TE 85.7 NPRE as percentage of RR 117.6 Buoyancy of Revenue Expenditure with GSDP (ratio) 0.463 Revenue Receipts (ratio) 1.324 2001-02 38282 2002-03 40474 37230 3244 5.7 5.2 12.6 12.6 81.2 119.7 0.653 1.706 2003-04 42680 39135 3545 5.4 5.1 9.3 11.7 74.1 113.9 0.420 0.519
(Rupees in crore) 2004-05 2005-06 51046 52280 46392 4654 19.6 18.5 31.3 12.5 75.2 113.1 1.685 1.015 47048 5232 2.4 1.4 12.4 11.2 70.6 97.1 0.192 0.132
The revenue expenditure increased by 2.4 per cent from Rs 51,046 crore in 2004-05 to Rs 52,280 crore in 2005-06. The increase in revenue expenditure over the previous year was mainly due to increase in relief on account of natural calamities by Rs 1,114 crore (90 per cent). The revenue expenditure accounted for 78 per cent of the total expenditure during 2005-06. This was higher than the share of the revenue receipts (49 per cent) in the total receipts of the State Government. This led to a revenue deficit of Rs 3,842 crore. The ratio of revenue expenditure to revenue receipts decreased from 124.4 per cent in 2004-05 to 107.9 per cent in 2005-06. The revenue expenditure included non-developmental expenditure viz. Salaries (Rs 7,105 crore), Interest Payments (Rs 9,347 crore) and Pension (Rs 3,328 crore) which alone consumed 41 per cent of the revenue receipts of the State during the year. It has been observed that the NPRE at Rs 47,048 crore in 2005-06 was much higher than the Twelfth Finance Commission normative assessment of NPRE at Rs 36,228 crore for Maharashtra for the year 2005-06. 1.6.3 Committed Expenditure High salary expenditure Expenditure on salaries accounted for nearly 15 per cent of the revenue receipts during 2005-06 and posted an increase of 33 per cent over a period of five years. It ranged between 1.6 and 2 per cent of GSDP during the period from 2001-02 to 2005-06 as indicated in Table-8.
11
Table-8: Salary Expenditure

Heads Salary Expenditure As percentage of GSDP As percentage of RR 2001-02 5353 2.0 17.8 2002-03 5490 1.9 17.7 2003-04 5691 1.7 16.6
(Rupees in crore)
2004-05 6120 1.6 14.9 2005-06 7105 1.7 14.7
The salary expenditure grew at the rate of 16 per cent during 2005-06. Although the State Government made no projection for 2005-06 in growth of salary, for 2006-07 salary expenditure is projected to grow at 8 per cent. Pension payments Expenditure on pension accounted for nearly 7 per cent of the revenue receipts during 2005-06 and posted an increase of 29 per cent over a period of five years. It ranged between 0.8 and 1 per cent of GSDP during the period from 2001-02 to 2005-06 as indicated in Table-9. Table-9: Pension Expenditure (Rupees in crore)
Heads Pension Expenditure As percentage of GSDP As percentage of RR 2001-02 2589 1.0 8.6 2002-03 2526 0.9 8.1 2003-04 2636 0.8 7.7 2004-05 2872 0.8 7.0 2005-06 3328 0.8 6.9
The increase in pension payment of Rs 456 crore (16 per cent) over the previous year was mainly due to payment of more pension to State aided secondary schools as well as payment of death-cum-retirement gratuity and family pension as per new pension rules. In order to limit future pension liabilities Government has introduced contributory pension scheme for the new employees recruited after 1 November 2005. Interest Payments In absolute terms, Interest Payments increased by 45 per cent from Rs 6,429 crore in 2001-02 to Rs 9,347 crore in 2005-06, primarily due to continued reliance on borrowings for financing the fiscal deficit. Table-10: Interest Payments
Year Total Revenue Receipts Interest Payments* Percentage of Interest Payments with reference to Total Revenue Receipts Revenue Expenditure 21 23 24 22 19 17 18 20 18 18
2001-02 2002-03 2003-04 2004-05 2005-06
(Rupees in crore) 30093 6429 31103 7130 34370A 8335 41013 8978 48438 9347
Salary figures for the years 2001-02 to 2004-05 differ from those reported in the respective Audit Reports, due to adoption of the figures of Finance Accounts in this Report as against the figures furnished earlier by the State Government (which also included salary paid through grants-in-aid). Pension expenditure is as per the Finance Accounts of the respective years. * Rounded to the nearest whole number. A Lower rounding.
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It was observed that Interest Payments were between 21 and 24 per cent of revenue receipts during the period 2001-2006. They steadily rose from 21 per cent in 2001-02 to 24 per cent in 2003-04 but declined to 22 per cent in 200405 and 19 per cent in 2005-06. The Twelfth Finance Commission had projected (November 2004) Interest Payments of Rs 9274 crore for Maharashtra for the year 2005-06. Against this actual Interest Payments was Rs 9347 crore. During 2005-06, the State Government raised Rs 1,579 crore at the average interest rate of 8 per cent from the open market. Besides, it also borrowed Rs 17,910.85 crore from the National Small Savings Fund, the Life Insurance Corporation of India and other institutions and Rs 490.19 crore from GOI during the year. The increase in Interest Payment was Rs 369 crore over the previous year mainly because of increase of Rs 1,410 crore under interest on Special Security issued to National Small Savings Fund which was off set by decrease (Rs 1,201 crore) in interest on Central Government Loans. 1.6.4 Subsidies Though the finances of the State are under strain, the State Government has been paying subsidies to various Corporations. During the last five years, the State Government paid subsidies as under: Table-11: Subsidies
Year 2001-02 2002-03 2003-04 2004-05 2005-06 Amount (Rupees in crore) 1800 2009 975 3994 2885 Percentage increase (+)/ decrease (-) over previous year 284.0 11.6 (-) 51.4 309.6 (-) 27.7 Percentage of subsidy in total expenditure 4 4 2 6 4
During the current year, subsidies constituted about 4 per cent of the total expenditure; the major recipients were power companies (51 per cent), industries in backward areas (10 per cent) and the Transport Commissionerate for its establishment (10 per cent) and subsidy on food (4 per cent).
1.7
Expenditure by Allocative Priorities
1.7.1 The different levels of expenditure of a State under Plan expenditure, capital expenditure and developmental expenditure reflect its quality. The higher the ratio of these components to the total expenditure, the better is the quality of expenditure. Table-12 gives these ratios during 2001-2006. Table-12: Quality of expenditure (percentage of total expenditure)
Plan Expenditure Capital Expenditure Developmental Expenditure 2001-02 10.5 7.1 55.6 2002-03 11.0 8.3 57.7 2003-04 14.3 16.1 59.0 2004-05 16.4 13.3 60.6 2005-06 19.3 16.1 62.9
(Total expenditure does not include Loans and Advances).
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All the three components of quality of expenditure indicated inter-year variations. The share of Plan expenditure and developmental expenditure (expenditure on Economic and Social Services) was 5 per cent higher compared to the previous year. The share of capital expenditure increased from 13 per cent in 2004-05 to 16 per cent in 2005-06. Increase in capital expenditure was Rs 2,201 crore which was mainly on account of increase under Urban Development (Rs 875 crore), Rural Development (Rs 469 crore) and Transport (Rs 333 crore). 1.7.2 During the year, expenditure on Social Services (Rs 21,164 crore) accounted for 54 per cent of the developmental expenditure. Expenditure on Education, Health and Family Welfare and Water Supply and Sanitation constituted 76.51 per cent of the expenditure in the social sector as compared to 82.35 per cent in the previous year. This is because of increase (96 per cent) under Social Welfare and Nutrition over previous year. Table-13: Expenditure on Social Sector
Education, Sports, Art and Culture Health and Family Welfare Water Supply, Sanitation, Housing and Urban Development Total Total expenditure on Social sector 2001-02 9388 1835 1011 12234 14270 2002-03 8941 1752 1496 12189 14377 2003-04 9441 1925 1908 13274 16273
(Rupees in crore)
2004-05 10190 1984 2511 14685 17833 2005-06 10774 2215 3203 16192 21164
1.7.3 The expenditure on Economic Services (Rs 18,075 crore), accounted for 46 per cent of the developmental expenditure. Of this, Agriculture and Allied Activities, Irrigation and Flood Control, Energy and Transport consumed nearly 81 per cent of the expenditure. Table-14: Expenditure on Economic Sector
Agriculture and Allied Activities Irrigation and Flood Control Energy Transport Total Total expenditure on Economic sector 2001-02 2893 3053 1006 874 7826 8652 2002-03 2801 4325 1050 1519 9695 11122 2003-04 2808 6459 650 1296 11213 13751
(Rupees in crore)
2004-05 3776 6818 3466 971 15031 17926 2005-06 3058 7383 2555 1639 14635 18075
1.7.4
Financial Assistance to local bodies and other institutions
The quantum of assistance provided by way of grants and loans to local bodies and others during the five year period 2001-06 was as follows:
Includes notional interest of Rs 1523 crore on 14 irrigation projects handed over to Irrigation Development Corporations (SPVs).
14
Table-15: Financial Assistance

Educational Institutions (Aided Schools, Aided Colleges, Universities, etc.) Municipal Corporations and Municipalities Zilla Parishads and Other Panchayati Raj Institutions Development Agencies Hospitals and Other Charitable Institutions Other Institutions Total Assistance as per percentage of RE 2001-02 1483.20 612.50 3383.96 1277.55 232.49 3990.44 10980.14 29 2002-03 525.60 378.40 696.96 441.62 208.19 3007.78 5258.55 13 2003-04 6139.77 2136.39 5784.58 5.61 96.62 4353.06 18516.03 43
(Rupees in crore)
2004-05 2068.11 1852.32 6300.48 1766.17 256.10 8975.06 21218.24 42 2005-06 2200.13 1031.02 7472.84 2463.92 131.07 14088.71 27387.69 52
The assistance to local bodies and others during the year was 52 per cent of the revenue expenditure compared to 42 per cent in the previous year. 1.7.5 Delay in furnishing utilisation certificates Of the 72,882 utilisation certificates (UC) due in respect of grants and loans aggregating Rs 11,210.42 crore paid upto 2005-06, 67,220 UCs for an aggregate amount of Rs 9,781.98 crore were in arrears. Details of departmentwise break-up of outstanding UCs are given in Appendix 1.6. 1.7.6 Abstract of performance of the autonomous bodies The audit of accounts of 13 bodies in the State has been entrusted to the Comptroller and Auditor General of India. The status of entrustment of audit, rendering of accounts to Audit, issuance of Separate Audit Reports and their placement in the Legislature is indicated in Appendix 1.7. 1.7.7 Misappropriations, losses, defalcations, etc. The State Government reported 232 cases of misappropriation, defalcation, etc. involving Government money amounting to Rs 6.69 crore upto the period 31 July 2006, on which final action was pending. The department-wise break up of pending cases is given in Appendix 1.8. 1.7.8 Write-off of losses, etc. As reported to Audit, losses due to theft, fire, irrecoverable revenue, etc. amounting to Rs 14.94 crore in 582 cases, were written-off during 2005-06 by competent authorities. The relevant details are given in Appendix 1.9.
1.8
Assets and Liabilities
In the Government accounting system, comprehensive accounting of fixed assets like land and buildings owned by the Government is not done. The Government accounts, however, do capture the financial liabilities of the Government and the assets created out of the expenditure incurred. Appendix 1.2 gives an abstract of such liabilities and assets as on 31 March 2006, compared with the corresponding position on 31 March 2005. While the liabilities in this Appendix consist mainly of internal borrowings, loans and advances from the GOI, receipts from the Public Account and Reserve Funds, the assets comprise mainly the capital outlay and loans and advances given by
15
the State Government and cash balances. Appendix 1.2 shows that the liabilities grew by 17 per cent and the assets grew by 23 per cent over the previous year. The liabilities depicted in the Finance Accounts, however, do not include the pension and other retirement benefits payable to serving/retired State employees and guarantees/letters of comfort issued by the State Government. Appendix 1.5 depicts the time series data on State Government finances for the period 2001-2006. 1.8.1 Financial results of irrigation works The financial results of the six major irrigation projects of the Government with a capital outlay of Rs 662.22 crore at the end of March 2006, showed that revenue realised from these projects during 2005-06 (Rs 91.59 crore) was 13.83 per cent of the capital outlay. After considering the working and maintenance expenses (Rs 9.12 crore) and interest charges (Rs 65.24 crore), the schemes gained a net profit of Rs 17.23 crore during 2005-06. Fourteen other irrigation projects had been handed over to the five Irrigation Corporations created during 1996-98. 1.8.2 Incomplete projects As of 31 March 2006, there were 158 incomplete projects in which Rs 5,239.74 crore were blocked. Of these, 78 projects (expenditure: Rs 2,565.31 crore) were incomplete for less than five years, 63 projects (expenditure: Rs 2,523.06 crore) were incomplete for periods ranging from five to 10 years, three projects (expenditure: Rs 14.28 crore) were incomplete for periods ranging from 10 to 20 years and three projects (expenditure: Rs 71.41 crore) were incomplete for more than 20 years. Details in respect of 11 projects involving capital of Rs 65.68 crore are not available. This showed that the Government was spreading its resources thinly. Reasons for incomplete projects were paucity of funds, works abandoned by contractors, changes in sites/designs of the project(s), defective planning, etc. 1.8.3 Departmental Commercial Undertakings Activities of quasi-commercial nature are performed by Departmental undertakings of certain State Government departments. These undertakings are required to prepare annually, proforma accounts showing the results of financial operations so that the Government can assess the results of their working. As of March 2006, there were 49 such undertakings (42 Government Milk schemes, four Land Development by Bulldozer schemes, two Food and Civil Supplies schemes and one Saw Mill and Timber Depot) in the State. Out of the 42 Government Milk schemes (GMSs) in six regions, only 12 GMSs finalised their proforma accounts for 2005-06 by 31 July 2006 and the accounts of the balance 30 schemes were in arrears. In 12 GMSs, the Governments mean (average) capital as of 31 March 2006 was Rs 76.14 crore, with a turnover of Rs 119.91 crore. These 12 schemes suffered a net
16
loss of Rs 27.89 crore during the year. In the remaining 30 GMSs, the net loss of Rs 105.97 crore as per their latest finalised accounts had virtually wiped out nearly 37.44 per cent of the Governments capital of Rs 283.03 crore as on 31 March 2006. The accounts of Procurement, Distribution and Price Control schemes in Mumbai and the Thane Rationing Area and Procurement, Distribution and Price Control schemes in Mofussil Areas were in arrears for 2005-06. The accounts of four Land Development by Bulldozer schemes (Pune, Aurangabad, Amravati and Nagpur) were outstanding for seven to 11 years. Similarly, the accounts of the Allapali and Pedugundam Forest Range of Forest Divisions including saw mill and timber depots were outstanding since 1985-86. In addition, the State Government run printing presses had not compiled pro forma accounts since 1968-69 (from December 1968) though these were declared as commercial undertakings. The Comptroller and Auditor General of India has repeatedly commented about the arrears in preparation of accounts. Accountant General (Commercial Audit) reminded Principal Secretary (Finance) and the Secretary of the Departments concerned regularly in this matter. The department-wise position of arrears in preparation of pro forma accounts and the investment made by the Government are given in Appendix 1.10 and Appendix 1.11 respectively. The summarised financial statement of these undertakings is given in Appendix 1.12. 1.8.4 Investments and returns As of 31 March 2006, Government had invested Rs 31,917.62 crore in Statutory Corporations, Rural Banks, Joint Stock Companies and Cooperatives. The return on this investment was less than half per cent in the last five years while the Government paid interest at the average rate of 7 to 9 per cent on its borrowings during 2001-2006.
Table-16: Return on Investment
Year Investment at the end of the year Return Percentage of return Average rate of interest on Government borrowing (per cent) 9.38 8.91 8.76 7.97 7.09 Difference between interest rate and return 9.34 8.90 8.66 7.87 7.08
2001-02 2002-03 2003-04 2004-05 2005-06
(Rupees in crore) 11155.07 4.53 13781.40 1.87 19790.89 18.92 25829.74 26.73 31917.62 3.66
0.04 0.01 0.10 0.10 0.01
The increase in investments during 2005-06 was attributable to increased Capital Contributions to Maharashtra Krishna Valley Development Corporation (Rs 2,352 crore) and four other Irrigation Development Corporations (Rs 3,218 crore) as compared to the previous year.
17
As on 31 March 2006, 39 companies in which Government had invested Rs 936.72* crore (Share Capital: Rs 482.43 crore*, Loan: Rs 454.29 crore*) were incurring losses and their accumulated losses amounted to Rs 2,139.58 crore*. As on March 2006#, 7,981 societies with an aggregate investment of Rs 165.28 crore (Rs 116.38 crore by way of equity and Rs 48.90 crore by way of loan) had incurred losses and their accumulated losses (Rs 270.46 crore) had eroded 164 per cent of the investments made in these societies. Further, in most cases, Government orders sanctioning the loans did not specify the terms and conditions for these loans. 1.8.5 Loans and advances by State Government In addition to the investments in Co-operative societies, Corporations and Companies, Government has also been providing loans and advances to many of these institutions/organisations. The total outstanding loans and advances as on 31 March 2006 was Rs 15,363 crore (Table 17). Interest received against these loans advanced was 8.11 per cent during 2005-06 as against 2.75 per cent in the previous year. Increase in interest receipts was mainly under Power projects (Rs 862 crore). Table-17: Average Interest Received on Loans Advanced by the State Government (Rupees in crore)
Opening Balance Amount advanced during the year Amount repaid during the year Closing Balance Net addition Interest received Interest received as percentage of Loans advanced Average interest paid by the State (per cent) Difference between interest paid and received (per cent) 2001-02 8697 59 298 8458 -239 341 3.98 9.38 -5.40 2002-03 8458 1704 469 9693 1235 176 1.94 8.91 -6.97 2003-04 9522$ 1902 482 10942 1420 337 3.29 8.76 -5.47 2004-05 10942 2751 2041 11652 710 311 2.75 7.97 (-)5.22 2005-06 11652 4262 551 15363 3711 1095 8.11 7.09 1.02
1.8.6
Management of cash balances
To take care of any temporary mismatches in the flow of resources and the expenditure obligations, a mechanism of Ways and Means Advances (WMA) from the Reserve Bank of India (RBI) has been put in place. Though the WMA limit has been increased by RBI to Rs 905 crore from 1 April 2003, the State has been continuously dependent on RBI for cash management by using this mechanism for 21 days during the year. Resorting to overdraft, which is over and above the WMA limits, is all the more undesirable. The State used the overdraft facilities for 20 days on nine
* #
Provisional According to the information furnished by the Commissioner for Co-operation and Registrar of Co-operative Societies. $ Differs from previous years closing balance due to Pro forma corrections. Excludes notional interest accounted arising out of book adjustments. Loan advanced has been calculated as average of opening and closing balance. 18
occasions during the year as against 12 days on 12 occasions last year although it borrowed Rs 1,580 crore from the market on four occasions. Table-18: Ways and Means Advances and Overdrafts of the State (Rupees in crore)
2001-02 Ways and Means Advances Taken in the year 7739.88 Outstanding -Interest paid 33.99 Number of days 332+ Overdrafts Taken in the year 4691.87 Interest paid 7.04 Number of days 76 2002-03 7716.25 -34.46 301+ 6281.28 8.42 154 2003-04 7898.67 -29.20 168 1422.70 4.92 39 2004-05 2675.04 -8.47 68# 862.87 0.76 12# 2005-06 2386.62 -5.34 21# 1298.31 3.70 20#
1.9
1.9.1
Undischarged Liabilities
Fiscal Liabilities - Public Debt
The Constitution of India provides that a State may borrow, within the territory of India, upon the security of its Consolidated Fund, within such limits, as may from time to time, be fixed by the Act of its Legislature. Table-19 gives the fiscal liabilities of the State, its rate of growth, ratio of these liabilities to GSDP, to revenue receipts and to its own resources as also the buoyancy of fiscal liabilities with respect to these parameters. Table-19: Fiscal Liabilities Basic Parameters
2001-02 74209 Fiscal Liabilities (Rupees in crore) 18.12 Rate of Growth (per cent) Ratio of Fiscal Liabilities to 27.3 GSDP (per cent) 246.6 Revenue Receipts (per cent) 286.0 Own Resources (per cent) Buoyancy of Fiscal Liabilities with reference to : 3.563 GSDP (ratio) 10.184 Revenue Receipts (ratio) 7.400 Own Resources (ratio) 2002-03 85800 15.62 29.1 275.9 314.1 1.782 4.654 2.949 2003-04 104404 21.68 31.3 303.8 363.6 1.686 2.064 4.249 2004-05 121026 15.92 32.5 295.0 348.5 1.369 0.824 0.760 2005-06 142491 17.74 34.0B 294.1 360.9 1.417 0.980 1.296
Overall fiscal liabilities of the State increased from Rs 74,209 crore in 200102 to Rs 1,42,491 crore in 2005-06. The growth rate was 18 per cent during 2005-06 over the previous year. The ratio of fiscal liabilities to GSDP also increased from 27 per cent in 2001-02 to 34 per cent in 2005-06. These liabilities stood at three times the revenue receipts and three and a half times of the State's own resources as at the end of 2005-06.
+ #
Figures are taken from Reserve Bank of India State Finances 2002-03. As per Finance Accounts 2004-05. B Advance estimates as furnished by Directorate of Economics and Statistics, Government of Maharashtra
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The fiscal liabilities grew faster than the States GSDP. The buoyancy of these liabilities with respect to GSDP during the year was 1.417 indicating that for each one per cent increase in GSDP, fiscal liabilities grew by 1.42 per cent. Fiscal liabilities are considered sustainable if the average interest paid on these liabilities is lower than the rate of growth of GSDP. Maharashtra achieved this parameter from 2003-04 onwards as indicated in Table-20. Table-20: Debt Sustainability Interest Rate and GSDP Growth (in per cent)
Weighted Interest Rate GSDP Growth Interest spread 2001-02 9.38 5.09 (-)4.29 2002-03 8.91 8.76 (-)0.15 2003-04 8.76 12.86 4.10 2004-05 7.97 11.63 3.66 2005-06 7.09 12.52 5.43
Another important indicator of debt sustainability is the net availability of funds after repayment of principal and interest. Table-21 gives the position of the receipt and repayment of internal debt and other fiscal liabilities of the State over the last five years. The net availability of funds from the borrowings (public debt, loans and advances from the GOI and other debt receipts) varied from 20.4 per cent to 34.3 per cent during 2001-06. The net availability increased during 2005-06, compared to the previous year, due to less repayment during the current year. Table-21: Net Availability of Borrowed Funds
2001-02 Internal Debt Receipt Repayment (Principal+Interest) Net Funds Available Net Funds Available (per cent) Loans and Advances from GOI Receipt Repayment (Principal+Interest) Net Funds Available Net Funds Available (per cent) Other obligations Receipt Repayment (Principal+Interest) Net Funds Available
2
(Rupees in crore)
2003-04 21129 4466 16663 78.8 1252 10892 (-)9640 (-)769.9 12435 9582 2853 2004-05 20387 7178 13209 64.8 1802 11440 (-)9638 (-)534.8 15236 11164 4072 2005-06 19484 8604 10880 55.8 490 1381 (-) 891 (-)181.8 15302 13174 2128
2002-03 8797 3064 5733 65.1 962 4179 (-)3217 (-)334.4 10774 8981 1793
2335 2298 37 1.5 6337 4017 2320 36.6 11474 9002 2472
Excluding Ways and Means Advances and Overdrafts from Reserve Bank of India/ Government of India. 20
2001-02 Net Funds Available (per cent) Total liabilities Receipt Repayment (Principal+Interest) Net Funds Available Net Funds Available (per cent) 21.5 20146 15317 4829 23.9
2002-03 16.6 20533 16224 4309 20.9
2003-04 22.9 34816 24940 9876 28.3
2004-05 26.7 37425 29782 7643 20.4
2005-06 13.9 35276 23159 12117 34.3
The State Government raised market loans of Rs 1,580 crore during the year. The average rate of market borrowings during the year was 8 per cent whereas on 31 March 2006, 25 per cent of the existing market loans carried interest rate exceeding 10 per cent. Thus, the effective cost of borrowings on the past loans was much higher than the rate at which they were able to raise resources from the market at present. The maturity profile of market loans indicates that more than one-fourth (28 per cent) of the total market loans are repayable within the next five years while the remaining 72 per cent loans are to be repaid within five to 15 years. Repayment of GOI loans was reduced considerably during 2005-06. This was because of debt swapping (Rs 8,164 crore) during 2004-05 and consequent decrease in Interest Payment on GOI loans (Rs 1,201 crore). 1.9.2 Status of Guarantees Contingent liabilities Guarantees constitute contingent liabilities on the Consolidated Fund of the State. No explicit ceiling on giving guarantees upon the security of the Consolidated Fund of the State has been fixed. The State has resorted to giving guarantees for raising resources in a big way during the last five years. Table 22 indicates the status of guarantees. Table-22: Guarantees given by the Government of Maharashtra
(Rupees in crore) Year Maximum amount guaranteed Outstanding amount of guarantees 55381 62428 70126 60871 66239 Percentage of maximum amount guaranteed to total revenue receipt 113 121 239 195 179
2001-02 2002-03 2003-04 2004-05 2005-06
33974 37521 82228 80184 86725
During 2005-06, outstanding guarantees (Rs 66,239 crore) accounted for 137 per cent of the revenue receipts (Rs 48,438 crore). As per MTFP statement, the Government is committed (March 2006) to bring the percentage of outstanding guarantees to GSDP down to approximately 10 per cent. However, in 2005-06 outstanding guarantees was 15.83 per cent of the GSDP.
21
1.9.3
Off-Budget Borrowings
The borrowings of a State are governed under Article 293 of the Constitution of India. Though off-budget borrowings are not permissible under Article 293 (3), the State continued to undertake such off-budget borrowings as per the data furnished by the Finance Department. The Government created a number of Special Purpose Vehicles in the Irrigation, Road Development and Sales Tax sectors during 1997-1999 to raise off-budget borrowings by way of bonds from the market or on private placement basis. The payment of principal and interest on these bonds is normally guaranteed by the Government. The Government makes the budgetary provisions in the years of repayment of interest and principal of the bonds. The MTFRP agreed to (October 2002) by the Government with the GOI provided for reduction of off-budget borrowings. The Government had raised off-budget borrowings of Rs 6,883 crore during the period 2001-02 to 200405. During the year 2005-06, there was no off-budget borrowing.
1.10
Management of deficits
Fiscal Imbalances The deficit in the Government accounts represents the gap between its receipts and expenditure. The nature of deficit is an indicator of the prudence of the fiscal management of the Government. Further, the ways in which the deficit is financed and the resources raised are applied are important pointers to its fiscal health. The revenue deficit of the State which indicates the excess of its revenue expenditure over revenue receipts increased from Rs 8,189 crore in 2001-02 to Rs 10,033 crore in 2004-05 but decreased to Rs 3,842 crore in 2005-06. The fiscal deficit, which represents the total borrowing of the Government and its total resource gap, increased from Rs 10,898 crore in 2001-02 to Rs 18,620 crore in 2004-05 but decreased to Rs 17,631 crore in 2005-06. The State also had a primary deficit of Rs 4,469 crore in 2001-02 which increased to Rs 9,642 crore in 2004-05 but decreased to Rs 8,284 crore in 2005-06 as indicated in Table-23. The ratio of revenue deficit to fiscal deficit was 22 per cent during 2005-06 indicating that nearly one-fourth of the borrowed funds were used for current consumption. As a proportion of GSDP, the revenue deficit had reached 0.9 per cent and the fiscal deficit had reached 4.2 per cent in 2005-06. Table-23: Fiscal Imbalances Basic Parameters
Parameters Revenue deficit (Rupees in crore) Fiscal deficit (Rupees in crore) Primary deficit (Rupees in crore) RD/GSDP (per cent) FD/GSDP (per cent) PD/GSDP (per cent) RD/FD (per cent) 2001-02 8189 10898 4469 3.0 4.0 1.6 75.1 2002-03 9371 14290 7160 3.1 4.8 2.4 65.5 2003-04 8310 17929 9593 2.5 5.4 2.9 46.3 2004-05 10033 18620 9642 2.7 5.0 2.6 53.8 2005-06 3842 17631 8284 0.9 4.2 1.9 21.8
22
Revenue deficit sharply declined by Rs 6,191 crore mainly because of steep increase in revenue receipts (Rs 7,425 crore). Decline in revenue deficit (Rs 6,191 crore) has also resulted in decline in fiscal deficit. However, due to increase in capital expenditure and loans and advances disbursed (Rs 3,712 crore), decrease in fiscal deficit was marginal (Rs 989 crore). Persistent fiscal deficits indicated the deteriorating fiscal health of the State, propelling the State to pass the MFRBMA in the Legislature in April 2005.
Fiscal Imbalances
(Rupees in crore) 20000 15000 10000 5000 0

14290 10898 8189 9371 4469 8310 7160 17929 10033 9593 18620 9642 3842 8284 17631
2001-02
2002-03
2003-04
Fiscal deficit
2004-05
Primary deficit
2005-06
Revenue deficit
1.11
Fiscal Reforms Programme
The Maharashtra Fiscal Responsibility and Budgetary Management Act was passed in April 2005 to provide transparency in fiscal management by progressive elimination of revenue deficit, regulation of borrowing, ceiling on subsidies and guarantees. The Maharashtra Fiscal Responsibility and Budgetary Management Rules (MFRBMR) were, however, framed belatedly in February 2006. As per Rule 3 of MFRBMR, 2006, the State Government was to reduce (a) the revenue deficit by one per cent or more of the GSDP in the first year, 1.5 per cent or more in the first two years, 2 per cent or more in the first three years beginning from the financial year 2005-06 and the entire deficit by 2008-09 and (b) the fiscal deficit by an amount equivalent to 0.3 per cent or more of the GSDP at the end of each financial year beginning with the financial year 2005-06. Government has also framed the Medium Term Fiscal Policy statement for the State in March 2006 as per the Twelfth Finance Commission recommendations. However, the Government has stated that fiscal year 200607 will be the first year of the four year Fiscal Correction Path prepared for this purpose. Table 24 shows the percentage of reductions of revenue deficit and fiscal deficit with reference to GSDP in the year 2005-06 as compared to the previous year.
23
Table-24
Parameters Revenue deficit/GSDP Fiscal deficit/GSDP 2004-05 2.7 5.0 2005-06 (in per cent) 0.9 4.2 Reduction 1.8 0.8
The Government has been successful in achieving the reduction in the percentage of Revenue Deficit to GSDP and Fiscal Deficit to GSDP in the first year. The substantial reduction in deficits has been largely on account of increase in revenue receipts.
1.12
Fiscal Ratios
The finances of a State should be sustainable, flexible and non-vulnerable. Table-25 below presents a summarised position of Government finances over 2001-2006, with reference to certain key indicators that help to assess the adequacy and effectiveness of available resources and their applications, highlights areas of concern and captures its important facts. Table-25: Indicators of Fiscal Health (in per cent)
Fiscal Indicators 2001-02 I Resource Mobilisation Revenue Receipt/GSDP 11.0 Revenue Buoyancy 0.350 Own Tax/GSDP 7.8 II Expenditure Management Total Expenditure/GSDP 15.2 Total Expenditure/Revenue 137.2 Receipts Revenue Expenditure/Total 92.7 Expenditure Capital Expenditure/Total 7.1 Expenditure Developmental Expenditure/ 55.6 Total Expenditure Buoyancy of TE with RR 0.21 Buoyancy of RE with RR 1.326 III Management of Fiscal Imbalances Revenue deficit (Rs in crore) 8189 Fiscal deficit (Rs in crore) 10898 Primary Deficit (Rs in crore) 4469 Revenue Deficit/Fiscal Deficit 75.1 IV Management of Fiscal Liabilities Fiscal Liabilities/GSDP 27.3 Fiscal Liabilities/RR 246.6 Buoyancy of FL with RR 10.184 Buoyancy of FL with Own 7.400 Receipt Interest spread -4.29 Net Fund Available 23.9 2002-03 10.5 0.383 7.7 15.5 147.4 88.2 8.3 57.7 3.30 1.706 9371 14290 7160 65.5 29.1 275.9 4.654 2.949 -0.15 20.9 2003-04 10.3 0.816 7.6 15.8 153.5 80.8 16.1 59.0 1.44 0.519 8310 17929 9593 46.3 31.3 303.8 2.064 4.249 4.10 28.3 2004-05 11.0 1.659 8.2 16.5 150.3 82.7 12.7 58.0 0.87 1.015 10033 18620 9642 53.8 32.5 295.0 0.824 0.760 3.66 20.4 2005-06 11.5 1.446 8.0 15.9 137.5 78.4 15.1 58.9 0.44 0.132 3842 17631 8284 21.8 34.0 294.1 0.980 1.296 5.43 34.3
24
Fiscal Indicators 2001-02 V Other Fiscal Health Indicators Return on Investment 0.04 Balance from Current Revenue -6501 (Rs in crore) Financial Assets/Liabilities 0.6
2002-03 0.01 -7101 0.6
2003-04 0.10 -6203 0.6
2004-05 0.10 -7280 0.6
2005-06 0.01 -547.21 0.6
The ratio of own taxes to GSDP decreased from 8.2 per cent in 2004-05 to 8 per cent in 2005-06. The ratio of revenue receipts to GSDP increased from 11 per cent in 2004-05 to 11.5 per cent in 2005-06. Revenue expenditure was 78.4 per cent of the total expenditure during the year as against 82.7 per cent in 2004-05, leaving very little funds for capital formation. The ratio of development expenditure to total expenditure increased from 58.0 per cent in 2004-05 to 58.9 per cent in 2005-06.
1.13
Conclusion
The augmentation in State revenue receipts led to a significant improvement in revenue deficit but a substantial increase in capital expenditure and disbursement of loans and advances neutralised the impact of improved revenue receipts on fiscal deficit. As such only a marginal improvement was observed in fiscal deficit in 2005-06 over the previous year. The annual reduction targets in ratios of revenue deficit and fiscal deficit to GSDP laid down under the Rules framed under MFRBM Act for 2005-06 were successfully achieved during the year. The fiscal liabilities of the State have, however, consistently increased at the annual average rate of 23 per cent and stood at 34 per cent of the GSDP as on 31 March 2006. The revenue deficit, fiscal deficit and primary deficit as a result continued to remain at unsustainable levels during the period 2001-06 except in the year 2005-06 when sign of improvements noticed especially in revenue deficit due to improved revenue receipts on account of higher Central Tax Transfers and Grants-in-aid during the year. The continued prevalence of primary deficit relatively at higher levels resulted into an increasing debt - GSDP ratio which indicates State's inability to keep debt at sustainable levels. Although it is not uncommon for the State to borrow for creating and strengthening its social and economic infrastructure, but the State's high cost borrowing for investments, which yielded meagre returns indicated an implicit subsidy. Guarantees extended by the State to various institutions with accumulated losses had the inherent risk of invocation, which the State would have to honour. Thus, the State should either generate more revenues from out of its existing assets or provide funds from its current revenue for servicing its debt obligations. Long term fiscal stability can be achieved only through reducing the revenue/fiscal deficit by compressing non-developmental revenue expenditure in a medium term framework, prudential debt management and greater transparency in fiscal operations.
25
CHAPTER II ALLOCATIVE PRIORITIES AND APPROPRIATION

2.1 Introduction
The Appropriation Accounts prepared annually indicate capital and revenue expenditure on various specified services vis--vis those authorised by the Appropriation Act in respect of both charged and voted items of the budget. Audit of appropriations by the Comptroller and Auditor General of India seeks to ascertain whether the expenditure actually incurred under various grants is within the authorisation given under the Appropriation Act and that the expenditure required to be charged under the provisions of the Constitution is so charged. It also ascertains whether the expenditure so incurred is in conformity with the law, relevant rules, regulations and instructions. 2.2 Summary of Appropriation Accounts
The summarised position of actual expenditure during 2005-06 against 179 grants and 85 appropriations was as follows: (Rupees in crore)
Nature of expenditure
I. Revenue II. Capital III. Loans and Advances IV. Revenue Charged Total (Charged) Appropriation to Contingency Fund Grand Total V. Capital VI. Public Debt
Original grants/ appropriations

39889.86 11304.03 2302.71 53496.60 14103.57 8.33 2758.43 16870.33 1850.00 72216.93
Supplementary grants/ appropriation

9065.86 3525.52 3470.14 16061.52 526.75 1.85 3124.01 3652.61
Total
Actual expenditure
43318.31 13391.35 5038.47 61748.13 13621.92 10.77 5741.65 19374.34 1850.00 82972.47
Saving(-)/ Excess(+)
5637.41 1438.20 734.38 7809.99 1008.40 -0.59 140.79 1148.60 0.00 8958.59
Voted Total (Voted)
48955.72 14829.55 5772.85 69558.12 14630.32 10.18 5882.44 20522.94 1850.00 91931.06
19714.13
Note:-
The expenditure includes the recoveries adjusted as reduction of expenditure under revenue expenditure: Rs 4660.34 crore and capital expenditure: Rs 4100.56 crore.
The overall savings of Rs 8,958.59 crore was the net result of savings of Rs 10,115.58 crore in 222 cases of grants/appropriations offset by excess of Rs 1,156.99 crore in 34 cases of grants/appropriations. Detailed Appropriation Accounts were sent to the Controlling Officers and reasons for savings/excesses were called for, which were not received.
2.3 2.3.1
Fulfilment of Allocative Priorities Appropriation by Allocative Priorities
Analysis of savings with reference to allocative priorities shows that out of savings of Rs 8,958.59 crore, as much as 60 per cent occurred in six grants as mentioned below: (Rupees in crore)
Number and Name of the Original/ Total Grant Actual Grant Supplementary Expenditure F-2 Urban Development and Other Advance Services Revenue - Voted (O) 524.80 (S) 93.64 618.44 404.85 F-5 Capital Expenditure on Social Services Capital - Voted (O) 1589.34 (S) 184.17 1773.51 879.66 G-2 Other Fiscal and Miscellaneous Services Revenue - Voted (O) 4325.06 (S) -4325.06 826.13 L-3 Rural Developments Programmes Revenue - Voted (O) 922.84 (S) 334.80 1257.64 974.35 O-9 Capital Expenditure on Other Rural Development Programmes Capital - Voted (O) 468.68 (S) 335.65 804.33 463.76 V-3 Capital Expenditure on Social Services Capital - Voted (O) 58.75 (S) 299.17 357.92 181.15 Savings
213.59 893.85 3498.93 283.29 340.57 176.77
No specific reasons for savings were given under the above grants. In 22 cases, savings exceeded Rs 10 crore in each case and also by more than 20 per cent of the total provision (Appendix 2.1). Excess requiring regularisation 2.3.2 Excess over provision relating to previous years requiring regularisation
As per Article 205 of the Constitution of India, it is mandatory for the State Government to get the excess over a grant/appropriation regularised by the State Legislature. The excess expenditure amounting to Rs 9,946.72 crore for the years 2000-01 to 2004-05 was however, yet to be regularised. (Rupees in crore)
Year 2000-01 2001-02 2002-03 2003-04 2004-05 Total Number of grants/ appropriations 67 57 29 25 26 204 Amount of excess 2298.80 3682.45 2542.88 1015.24 407.35 9946.72 Reasons for excess Not received Not received Not received Not received Not received
28
Chapter II Allocation Priorities and Appropriation
2.3.3
Excess over regularisation
provisions
during
2005-06
requiring
The excess of Rs 1,097.16 crore under 19 grants and Rs 59.83 crore under 15 appropriations required regularisation (Appendix 2.2). 2.3.4 Original budget and supplementary provisions Supplementary provisions (Rs 19,714.13 crore) made during the year constituted 27.30 per cent of the original provision (Rs 72,216.93 crore) as against 32.49 per cent in the previous year. Unnecessary/excessive/inadequate supplementary provisions 2.3.5 Supplementary provisions of Rs 1,115.26 crore made in 38 cases of grants/appropriations during the year proved unnecessary in view of the aggregate saving of Rs 2,983.03 crore as detailed in Appendix 2.3. 2.3.6 In 54 cases, against the additional requirement of Rs 10,883.31 crore, supplementary grants and appropriations of Rs 13,760.02 crore were obtained, resulting in savings exceeding Rs 1 crore in each case, aggregating Rs 2,876.71 crore. Details of these are given in Appendix 2.4. 2.3.7 In nine cases, supplementary provision of Rs 1,264.30 crore proved insufficient by more than Rs 1 crore each, leaving an aggregate uncovered excess expenditure of Rs 544.74 crore (Appendix 2.5). 2.3.8 Excessive/unnecessary re-appropriation of funds Re-appropriation is transfer of funds within a grant from one unit of appropriation, where savings are anticipated, to another unit where additional funds are needed. Cases where the re-appropriation of funds proved injudicious in view of final excess/savings over grants by over Rs 1 crore are detailed in Appendix 2.6. 2.3.9 Anticipated savings not surrendered According to rules, spending departments were required to surrender the grants/appropriations or portions thereof to the Finance Department as and when savings were anticipated. At the close of the year 2005-06, there were however, 19 grants/appropriations in which savings occurred but no part of them had been surrendered by the concerned departments. The amount involved in these cases was Rs 404.97 crore (4 per cent of the total savings) (Appendix 2.7). Similarly, out of the total savings of Rs 2,615.04 crore under 39 other grants/appropriations, the amount of available savings of Rs 1 crore and above in each grant/appropriation not surrendered aggregated Rs 1,128.66 crore (11.16 per cent of the total savings). Details are given in Appendix 2.8. Thus in these cases, Government could not utilise the unspent funds for other activities where more funds could have been utilised. 2.3.10 Besides, in 40 cases, (surrender of funds in excess of Rs 10 crore), Rs 4,750.04 crore were surrendered on the last two days of March
29
2006, indicating inadequate financial control over expenditure. Details are given in Appendix 2.9. 2.3.11 In 31 grants/appropriations, the amounts surrendered were in excess of the actual savings, indicating inadequate budgetary control. As against the actual savings of Rs 743.91 crore, the amount surrendered was Rs 856.11 crore, resulting in excess surrender of Rs 112.20 crore. Details are given in Appendix 2.10. 2.4 Unreconciled expenditure
Departmental figures of expenditure should be reconciled with those of the Accountant General (Accounts and Entitlement) every month. The reconciliation however, remained in arrears in several departments. In respect of the Public Health and Revenue and Forests Departments, expenditure of Rs 53.47 crore pertaining to 2005-06 remained unreconciled till April 2006 as shown below :
Sr. No. 1. 2. Department Revenue and Forests Public Health Total Expenditure for 2005-06 not reconciled (Rupees in crore) 0.05 53.42 53.47 Grant and Major Head C-09 6245 R-01 2210
2.5
Budgetary Control
2.5.1 In eight cases, expenditure aggregating Rs 2,714.66 crore exceeded the approved provisions by Rs 25 lakh or more in each case and also by more than 10 per cent of the total provisions. Details are given in Appendix 2.11. 2.5.2 As per the Budget Manual, expenditure should not be incurred on a scheme/service without provision of funds. It was, however, noticed that expenditure of Rs 465.65 crore was incurred in 13 cases as detailed in Appendix 2.12, without any provision in the original estimates/supplementary demand and without any re-appropriation orders to this effect. 2.5.3 Government made allocations of Rs 26.85 crore for 414 works under Superintending Engineers of Public Works Circles, Kolhapur, Nagpur and Thane. There was no demand from the respective Divisions for any allocation to these works, as the works were already completed. The allocations were thus unnecessary. Further, a token provision of Rs 9.64 crore was included in the Appropriation Act 2005 for 705 new works in the same circles. This provision proved unnecessary as none of these works were taken up. 2.6 Advances from Contingency Fund
The Contingency Fund is in the nature of an imprest and its corpus is Rs 150 crore, which was temporarily raised to Rs 1,850 crore by issue of three
30
Chapter II Allocation Priorities and Appropriation
ordinances (11 August 2005, 14 October 2005 and 15 February 2006). The balance at the beginning of the year was Rs 45.48 crore with an unrecouped balance of Rs 104.52 crore. During 2005-06, advances drawn but not recouped to the Fund amounted to Rs 238.57 crore. The closing balance of the Fund as on 31 March 2006 was Rs 711.42 crore. The details of expenditure incurred by the Controlling officers from the advances sanctioned from the Contingency Fund were not sent by them and reconciliation was not done with the Accountant Generals books. During 2005-06, 102 sanctions were issued for withdrawal of Rs 1,127.80 crore from the Contingency Fund. A review of the operation of the Contingency Fund disclosed that (i) seven sanctions amounting to Rs 299.23 crore were increased to Rs 1,097.04 crore and (ii) one sanction amounting to Rs 4.78 lakh was subsequently cancelled. A few illustrative cases detailed in Appendix 2.13 show that advances from the Contingency Fund were obtained (for Rs 66.51 crore in six cases) though the expenditure was foreseeable.
PLANNING DEPARTMENT
2.7 Fulfilment of allocative priorities
Utilisation of funds mandated under Article 371(2) of the Constitution Under Article 371 (2) of the Constitution of India, separate Development Boards (Boards) for Vidarbha, Marathwada and the Rest of Maharashtra were constituted on 30 April 1994. The Governor, on the recommendations of the Boards and subject to the requirements of the State as a whole, directs the Government to allocate funds equitably for developmental expenditure over the areas of Development Board. After the establishment of the Boards, an Indicators and Backlog Committee (IBC), set up in November 1995, reported (July 1997) that Rs 14,006.77 crore (as of March 1994) were required for liquidating the backlog in development of nine sectors in the entire State. Based on further directives (December 2001) of the Governor, Government reworked the backlog for the nine sectors to Rs 9377.69 crore (Vidarbha Rs 4536.36 crore and Marathwada Rs 2,755.24 crore) as on 31 March 2002, which was to be removed by 2006. Actual funds released and spent under nine sectors vis--vis Governors directives were as under:
31
(Rupees in crore)
Vidarbha Sector-wise Allocation as Final Expenditure allocations per Budget during 2002-05 directives of provision Governor Irrigation 3919.79 1391.58 1391.58 Roads 501.98 85.62 85.62 General 13.58 0.00 0.00 Education Technical 93.44 10.34 10.34 Education Water Supply 0.00 0.00 0.00 Land 119.98 55.21 55.21 Development Veterinary 0.09 0.02 0.02 Services Health 156.64 16.12 16.12 Energisation of 629.09 103.69 103.69 Pumps Total 5434.59 1662.58 1662.58 Marathwada Percentage Allocation as Final Expenditure Percentage of of per Budget expenditure to expenditure directives of provision allocation to allocation Governor 35.50 2440.83 1293.18 1293.18 52.98 17.06 180.57 54.63 54.63 30.25 0.00 12.66 0.00 0.00 0.00 11.06 0.00 46.02 22.22 10.29 16.48 30.59 65.02 53.70 44.55 0.78 390.01 281.79 3469.91 09.28 39.56 18.50 0.04 15.04 82.48 1512.71 09.28 39.56 18.50 0.04 15.04 82.48 1512.71 14.27 73.67 41.53 5.13 3.86 29.27 43.60
It may be seen from the above that the expenditure as against the allocation was 30.59 per cent in Vidarbha Region and 43.60 per cent in Marathwada Region during 2002-05. As the Governors directives were not complied with by 2006, the Governor had to issue fresh directives (06 March 2006) to liquidate the backlog in irrigation sector by 2010 and in other sectors by 2009. It would be appropriate if suitable mechanism is put in place in the Government to allocate and to monitor the release and utilisation of the funds as per the Governors directives. These points were referred to the Principal Secretary to Government July 2006. Reply had not been received (October 2006). in
32
CHAPTER III PERFORMANCE REVIEWS

This chapter contains performance reviews on Sarva Shiksha Abhiyan (3.1), Valmiki Ambedkar Malin Basti Awas Yojana (3.2), Computerisation of Employment Exchanges in Maharashtra (3.3), Information Technology review of SETU (Integrated Citizen's Service Centers) (3.4), Audit of grants-in-aid to educational institutions (3.5), Functioning of Dr. Babasaheb Ambedkar Technological University (3.6) and Food Security, Subsidy and Management of Foodgrains (3.7).
SCHOOL EDUCATION DEPARTMENT

3.1
Highlights Sarva Shiksha Abhiyan, a programme aimed at Universal Elementary Education was launched in January 2001 to provide useful and relevant education for all children in the age group of 6 to 14 years by 2010. The objective was to have all children either in school, or in an education guarantee centre, or in an alternative schooling facility or back to a school camp, by 2003 (later modified as 2005). In Maharashtra, the programme was introduced from January 2002. Implementation of Sarva Shiksha Abhiyan in the State suffered due to under utilisation of funds, poor development of infrastructure in schools and inadequate monitoring of activities. More than one lakh children continued to remain out of school even after implementation of Sarva Shiksha Abhiyan. With the present pace of implementation, achievement of the objectives of the Sarva Shiksha Abhiyan appeared to be a remote possibility. During 2001-2005, only Rs 911.37 crore were available with Maharashtra Prathamik Shikshan Parishad against the approved outlay of Rs 2,155.87 crore; short release by Government of India and State Government was Rs 909 crore and Rs 335.50 crore respectively. Utilisation of available funds was poor during 2001-02 (nil) and 2002-03 (54 per cent). (Paragraph 3.1.6.2) As of March 2005, 370 out of 72,033 habitations did not have schooling facility. As of November 2005, 1.06 lakh children continued to remain out of school, out of 15.79 lakh identified in March 2002. (Paragraph 3.1.7.1) Despite availability of funds, only 37 per cent of civil works (construction of class rooms, toilets and provision of drinking water facilities) taken up could be completed as of March 2005, mainly due to land problem. (Paragraph 3.1.8.1)
Sarva Shiksha Abhiyan
Though the teacher to pupil ratio in the State as a whole was adequate, this ratio in single teacher schools was low. Out of 76,407 primary and upper primary schools, 6,480 were single teacher schools. (Paragraph 3.1.9) Supply of textbooks to 8.06 lakh children was delayed upto six months, affecting the quality of education. (Paragraph 3.1.11.2) In eight districts, 1.07 lakh disabled children were identified. However, 858 disabled children were provided aid and appliances out of 5,521 selected for this purpose. (Paragraph 3.1.12.1) The Governing Council and the Executive Committee did not monitor the implementation of Sarve Shiksha Abhiyan regularly. The Council never met during 2002-2005. (Paragraph 3.1.14.1) 3.1.1 Introduction Sarva Shiksha Abhiyan (SSA), a Centrally sponsored scheme, was launched in January 2001 with the primary objective of universalisation of elementary education for all children in the age group six to 14 years by 2010, with the active participation of the community. The SSA is designed to subsume all other major educational interventions by the Government. All existing schemes of elementary education of the Central Government are to converge with SSA from April 2002. In Maharashtra, the programme was introduced from January 2002. However, no expenditure was incurred during 2001-02. The objectives of the SSA are: to have all eligible children in schools, Education Guarantee Centres (EGC), alternate schools or Back to School camps by 2003 (since revised to 2005 in March 2005); to ensure that all children complete five years of primary schooling by 2007; to ensure that all children complete eight years of elementary schooling by 2010; to bridge regional, gender and social category gaps at primary stage by 2007 and at elementary education level by 2010 and universal retention by 2010. The objectives were sought to be achieved by enrolment of all out of school children, supplementing existing infrastructure such as buildings, teaching material, text books, etc. and quality improvement through training and research. 3.1.2 Organisational set-up At State level, State Project Director (SPD), Maharashtra Prathamik Shikshan Parishad (MPSP), Mumbai implemented the SSA in a mission mode with the
34
Chapter III - Performance Reviews
Chief Minister as Chairman of the Governing Council and the Chief Secretary as Chairperson of the Executive Committee. At District level, the District Project Office is headed by the Chief Executive Officer of Zilla Parishad (ZP) who implements the programme through District Education Officer (DEO) in the districts, Block Education Officer (BEO) in the block and the Panchayati Raj Institution and the Education Officers in the Municipal Corporations. At village level, Village Education Committee (VEC) consisting of Sarpanch of Gram Panchayat as Chairman, Headmaster of one of the Schools as Secretary and the Members1 assist the basic education system in securing the cooperation and participation of local community. 3.1.3 Audit objectives The audit objectives were to examine and assess whether: the components of the programme were need based and well designed; the funds were assessed carefully, provided timely and utilised efficiently as per the approved plan; the infrastructure provided to schools was adequate; the major interventions were carried out as per the norms fixed; the quality of educational standards has been effective as a result of implementation of SSA; the outreach of education for girls, SC/ST children and disabled children was optimum; a proper monitoring system was in place and was effective. 3.1.4 Audit criteria Audit criteria used to assess the performance of SSA were: Annual Work Plans, standards of output and benchmark of performances for each component of the scheme. Norms for appointment of teachers and facilities to be provided in schools. Standards of education including curricula, teaching-learning material, teachers training. Coverage of special focus groups and achievements. 3.1.5 Audit coverage The performance audit covered the period 2001-02 to 2004-05. It was conducted (April to October 2005) by a test check of records in the offices of the MPSP, School Education Department, Mantralaya, nine2 districts including eight Zilla Parishads (ZPs) and 28 Block Education Officers (BEO), Education Officers of 113 Municipal Corporations (MCs), and 162 schools under their jurisdiction. Mumbai District being capital district was selected
Five to 15 members consisting of parents of the students, Panchayat Members, teachers, members of women organisation, minorities, Non-Government organisation, etc. 2 Ahmednagar, Aurangabad, Jalgaon, Mumbai, Nagpur, Nanded, Nasik, Pune and Thane 3 Ahmednagar, Aurangabad, Jalgaon, Mira-Bhayandar, Mumbai, Nagpur, Nasik, Nanded, Pune, Pimpri-Chinchwad and Thane. 35
1
and eight out of the remaining 34 districts were selected through statistical random sampling method of probability proportional to size with replacement adopting total expenditure under SSA as the basis for selection. An entry conference was held in April 2005 with the Secretary, School Education Department and Project Director, MPSP. The audit objectives, the audit criteria and audit coverage were discussed in the meeting. The audit methodology included discussions with the Executives, scrutiny of records maintained in various offices, review of the documents published by the MPSP. Basic information was gathered by issuing questionnaire and audit queries to the selected field offices. The Social and Rural Research Institute (SRI), a specialist unit of Indian Market Research Bureau International (IMRB), was commissioned by Audit for assessing the impact of the SSA from the perspective of the beneficiaries and their parents. The sampling methodology design for the beneficiary assessment is given in Appendix 3.1. In Maharashtra, SRI covered a total of 351 primary sampling units (207 in urban areas and 144 in rural areas) in January 2006 for the assessment of SSA. A total of 39,820 households were listed, out of which 18,974 were found eligible. Of them, 6,695 households were covered for the study. Their findings have been incorporated in this report wherever found appropriate. The summaries of the findings of the survey are given in Appendix 3.2.
Audit findings
3.1.6 3.1.6.1 Financial Management Funding pattern
The assistance given by the Government of India (GOI) under SSA was on 85:15 sharing basis during Ninth Plan (2001-02), 75:25 during the Tenth Plan (2002-07) and would be 50:50 thereafter. The GOI was to release the assistance directly to MPSP. The State Government was to transfer its share to the MPSP within 30 days of the receipt of the GOI share. Funds were then to be transferred by MPSP to the ZPs and the MCs for implementation of the programme. The appraisal and approval of plans was to be completed in time to meet the proposed expenditure of the first six months out of the first instalment, which was to be released by 15 April. Further, the instalments were to be released only after transfer of States matching share to the MPSP and expenditure to the extent of at least 50 per cent of the available funds (Central and State) had been incurred. 3.1.6.2 Financial outlay and expenditure The year-wise details of the annual approved outlay, funds released by the GOI and State Government and expenditure incurred are given in the following table and the intervention-wise expenditure is given in Appendix 3.3.
36
(Rupees in crore)
Year Annual outlay approved by Project Approval Board GOI share 2001-02 2002-03 2003-04 2004-05 Total No expenditure was incurred during 2001-02 and only 54 per cent of available funds were utilised in 2002-03 88.82 323.41 573.58 641.54 1627.35 State Government share 15.67 107.81 191.19 213.85 528.52 Total 104.49 431.22 764.77 855.39 2155.87 Funds received by Maharashtra Prathamik Shikshan Parishad from GOI State Total Government 48.18 110.00 205.27 354.90 718.35 00.00 19.90 89.63 83.49 193.02 48.18 129.90 294.90 438.39 911.37 Expenditure out of funds available (percentage)
Nil (0) 96.71 (54) 333.64 (89) 385.16 (80) 815.51 (89)
GOI share of the approved outlay for SSA for 2001-02 was Rs 88.82 crore against which GOI released (July 2001-March 2002) Rs 48.18 crore. State Government introduced the scheme in the State only in January 2002 and did not make provision for its share (Rs 15.67 crore) in the budget for 2001-02. Consequently, GOI did not release the balance provision of Rs 40.64 crore for 2001-02 and permitted (May 2002) the State Government to utilise the unspent amount during 2002-03. As the Scheme was evolved on the recommendations of the State Education Ministers conference held in October 1998, the State Government was expected to be in readiness to implement the programme as and when launched by GOI. MPSP stated that the State Government did not make appropriate budget provision for SSA during 2001-02. The Project Approval Board (PAB) approved a total outlay of Rs 2,155.87 crore during the years 2001-2005. The MPSP, however, received only Rs 911.37 crore (42 per cent) from Central and State Governments. Thus, there was an overall shortfall of Rs 1,244.50 crore in release of funds during 2001-2005. Of the funds available, the MPSP utillised Rs 815.51 crore (89 per cent) and unspent balance of Rs 95.86 crore was lying with it.
There were delays ranging from two to five months in release of funds both by GOI and State Government
As per the scheme guidelines, GOI was to release the grants to meet the proposed expenditure of the first six months by 15 April. It was, however, seen that there were delays ranging from two to five months in release of funds by the GOI. The State Governments share was also released with delays up to five months. MPSP not only failed to mobilise resources but also failed to utilise available funds and thus lacked in providing expected impetus to the implementation of SSA in the State. 3.1.6.3 Unspent funds of existing schemes of elementary education All existing schemes of elementary education of the Central Government were to converge with SSA from the Tenth Five Year Plan. It was observed that as of November 2005, MPSP did not transfer the unspent amount of Rs 1.52 crore under District Primary Education Programme closed in June 2003 to the SSA fund.
37
3.1.6.4
SSA funds of Rs 148 crore were kept in fixed deposit in contravention of the scheme guidelines
Parking of funds
Under SSA, each entity was to open a savings bank account in any nationalised or scheduled bank at the district level and any nationalised or scheduled bank or post office at the block and village level. Scrutiny revealed (November 2005) that during 2002-2004, MPSP invested Rs 148 crore in fixed deposits and earned interest of Rs 7.21 crore. Parking of funds in term deposits was irregular. The MPSP, however, continued to park funds in fixed deposits and again parked Rs 3.29 crore between April and November 2005 in fixed deposits. In May 2001, MPSP instructed the ZPs to open savings bank accounts in District Central Co-operative Bank (DCC Bank). This order was withdrawn in September 2002 with directions to open savings bank accounts in State Bank of India for crediting SSA funds. Contrary to these directions, the schools under the ZP, Nanded continued to keep the scheme funds in Nanded DCC Bank. It was noticed that since September 2004, the school authorities could not utilise SSA funds to the extent of Rs 1.47 crore, as the DCC Bank was unable to honour withdrawals due to its poor financial condition. Thus, failure of the schools in adhering to the instructions affected implementation of various interventions under SSA and locking of funds. Scrutiny revealed that Brihanmumbai Municipal Corporation (BMC) did not open savings bank accounts in any nationalised banks as of October 2005 to deposit Rs 11.50 lakh received (2004-05) under the National Programme for Education of Girls at Elementary Level. Similarly Municipal Corporations Pimpri-Chinchwad and Pune and Zilla Parishad Ahmednagar received Rs 3.274 crore for civil works under SSA in 2003-05. The amounts were transferred to the Municipal Corporation Fund account, Primary education fund account and ZP cess account. 3.1.6.5 Submission of utilisation certificate
SSA funds of Rs 1.47 crore kept in Cooperative bank which failed to honour withdrawals
MPSP did not submit utilisation certificates for Rs 4.28 crore received for the preproject activity
MPSP was to submit utilisation certificates (UCs) of grants to the Central and State Governments within nine months of the close of the financial year. MPSP submitted the UCs for the year 2002-03 to GOI in October 2004 ie., after a delay of 10 months. However, the UCs for the amount of Rs 4.28 crore received during 2001-02 for the pre-project activity was not submitted. The school authorities were also required to submit utilisation certificates in respect of grants received to the concerned authorities within one month after the close of the financial year.
UCs for Rs 48.54 lakh were not received from 864 schools
Test-check of records of the two MCs5, seven blocks 6 and Inspector of schools, North Zone, Mumbai revealed that during 2002-2005 grants of Rs 3.64 crore and Rs 77.46 lakh were distributed respectively to 3,662
4 5
Pimpri-Chinchwad: Rs 1.56 crore; Pune: Rs 0.87 crore and ZP Ahmednagar : Rs 0.84 crore Aurangabad and Pimpri-Chinchwad 6 Bhokar, Kandhar, Khed, Nanded, Paithan, Pathardi and Shirur 38
Government and 1,265 private schools. Utilisation certificates from 1,831 Government schools for Rs 1.64 crore for the years 2002-05 and from 864 private schools for Rs 48.54 lakh for the year 2003-04 were not received. This indicated poor monitoring of implementation of the scheme. 3.1.7 3.1.7.1
As of March 2005, 370 habitations remained without access to schooling
Programme Implementation Profile of access of schooling and enrolment
As of 2002-03, total number of habitations in the State was 72033. Out of these, 3,281 habitations were without any schooling facility. During 20032005, Government did not open new primary schools. However, in most of the villages Vastishala (alternate schools) were opened. As of March 2005, 370 habitations (0.51 per cent of total habitations) were without access to schooling. MPSP stated (November 2005) that these habitations would be covered during 2005-06. Survey report of the SRI, however, revealed that 2.1 per cent of villages and 3.8 per cent of the urban blocks were without any schooling facility. As of November 2005, 1.06 lakh children were out of school, out of the15.79 lakh identified in March 2002.
Survey by SRI disclosed that about 28 children per 1000 out of school
Out of 1.75 crore children in the State in the age group of six to 14 years, 15.79 lakh children were identified in February and March 2001 as out of school. Of them, 14.43 lakh children were covered up to November 2004. The second survey conducted in December 2004, however, indicated 4.29 lakh children as out of school. MPSP stated (December 2005) that 3.23 lakh more children were covered in regular and alternate schools leaving only 1.06 lakh children out of school (0.63 per cent of 1.67 crore children population as of November 2005). Thus, the objective of SSA to have all the children to be enrolled by 2003 was not achieved by November 2005. Beneficiary survey by SRI, however, revealed that about 28 children per 1000 (2.8 per cent) in the age group of six to 14 years were out of school in Maharashtra. In rural areas, 36 out of 1000 children and 19 out of 1000 children in urban areas were out of school. In 162 schools test checked, it was noticed that the drop out rate of children was four per cent during 2001-02 when the implementation of SSA was not started in the State. However, the dropout rate increased to six per cent during the years 2002-2005. 3.1.7.2 Pre-project activities Approach of SSA is planning with habitation as a unit of planning and habitation plans formed the basis for formulating the district plans for implementation of SSA. GOI released (2001-02), Rs 4.28 crore for conducting pre-project activities for micro planning, house hold surveys, studies, community mobilisation, school based activities, etc. for identifying the focus areas for implementation of SSA in the State. MPSP, however, did only house hold survey. It, however, could not produce any records to indicate that State level perspective plans and other pre-project activities were conducted. As
Drop out rate of children, which was four per cent during 2001-02 increased to six per cent in 200405
39
such, Audit could not assess whether the results of pre-project activities were used for planning and implementation of SSA.
Major interventions under Sarva Shiksha Abhiyan

3.1.8 3.1.8.1
Despite availability of sufficient funds, completion of civil works was delayed; 705 works remained incomplete after spending Rs 10.41 crore
Civil works Delay in completion of works
SSA allowed expenditure on civil works up to a ceiling of 33 per cent of entire project cost. The civil works were to be executed through Village Education Committee (VEC). As against Rs 623 crore provided (2002-2005) for 54,658 civil works, 19,999 civil works were completed (2003-2005) after incurring an expenditure of Rs 309 crore. MPSP attributed (November 2005) the delay in completion of works to delay in approving the works by the State Government. Scrutiny revealed (November 2005) that 705 works in 31 blocks of seven7 districts, on which expenditure of Rs 10.41 crore was incurred during 2003-2005 remained incomplete for one to 15 months from the scheduled date of completion due to water scarcity, local problems of VECs and land problems. Further, in seven blocks, 42 works, on which expenditure of Rs 39.80 lakh was to be incurred, were either not started or stopped mainly due to land problem resulting in blocking of money. 3.1.8.2 Infrastructure facilities in the schools SSA stipulated provision of drinking water, toilets for boys and girls, boundary wall, play ground and black board etc., in the schools. It was, however, observed that a large number of schools did not have the basic facilities as detailed below:
Year
Total numbers of schools in State 74534*
Number of schools not having facilities (percentage in bracket) Boundary Play Girls Common Drinking Black wall ground toilets toilets water board
33946 25392 46751 41467 13924 4257 (6) (45) (34) (63) (56) (19) 34056 26212 46400 40453 14804 581 (1) 2003-04 77487 (44) (34) (60) (52) (19) 33602 24330 43187 36092 14835 3680 (5) 2004-05 76407* (44) (32) (57) (47) (19) * Figures are excluding Mumbai as the department did not furnish data in respect of Mumbai 2002-03 Infrastructure facilities in schools were inadequate
Poor infrastructure facilities in the schools adversely impacted the enrolment, retention and also quality of education to children. Beneficiary survey by SRI disclosed that about 3.4 per cent of primary schools, 3.5 per cent of upper primary schools and 5.2 per cent of high schools with upper primary sections were operating in Kuccha structures, which are basically not structurally stable and hence not suitable for running an
7
Ahmednagar, Jalgaon, Nagpur, Nanded, Nasik, Pune and Thane 40
institution like a school. In 25.3 per cent of primary schools, 12.6 per cent of upper primary schools and 12.5 per cent of high schools with upper primary sections, the structures were semi-Pucca. Interestingly, 0.4 per cent of primary schools and 0.9 per cent of upper primary schools did not have any building at all. Quality of education 3.1.9
The quality of education suffered due to deployment of the single teacher in the schools
Single teacher schools
The reports of MPSP on SSA for 2002-03 and 2003-04 indicated that the teacher to pupil ratio (TPR) in the State was 1:36. During 2004-05 the TPR was 1:37. The position was better than the prescribed norm of 1:40. Further, the SSA guidelines stipulate that the schools should have at least two teachers and no school should be with a single teacher. Scrutiny of records of MPSP, however, revealed that during 2002-03 and 2003-04 the number of single teacher schools were 8,735 and 7,441 respectively. During 2004-05, out of 76,407 primary and upper primary schools, 6,480 were single teacher schools. In eight8 test checked blocks and three9 test checked MCs it was noticed that the TPR ranged between 1:48 and 1:92 during 2002-03 and 2003-04, due to deployment of only one teacher in the schools. MPSP admitted (November 2005) that the quality of education in these schools suffered due to deployment of single teacher. As per the SRI report the TPR in primary schools, upper primary schools and in upper primary section of high schools were 1:41, 1:33 and 1:31 respectively. 3.1.10 3.1.10.1 Research and training Teachers training
Despite availability of funds, the targets for training of teachers were not achieved
SSA stipulated capacity building for teachers through 20 days in-service course for all teachers, 60 days refresher course for untrained teachers and 30 days orientation for freshly trained recruits. District Institute of Education and Training (DIET) were to conduct these courses at district level. Test-check revealed that in three10 BEOs, three11 MCs, ZP Nagpur and in Education Inspector, South Mumbai, out of 78,921 teachers targeted for training during 2002-05, only 51,097 teachers (65 per cent) were imparted training and 27,824 (35 per cent) teachers remained to be trained. It was further observed in three12 test checked ZPs, that out of Rs 58.09 lakh released by the CEOs to the DIETs for imparting training to teachers, Rs 28.45 lakh (49 per cent) were utilised and the balance of Rs 29.65 lakh remained unutilised with DIET. Thus, the targets for training of teachers were not achieved despite availability of funds.
8 9
Bhokar, Daund, Kamptee, Kandhar, Katol, Nanded, Trimbak and Umred Aurangabad, Mira-Bhayandar and Nasik 10 Chandwad, Khed and Palghar 11 Pimpri-Chinchwad, Pune and Mira-Bhayander 12 Aurangabad, Jalgaon and Pune. 41
3.1.10.2
Only 32 per cent of funds were utilised under research and evaluation
Utilisation of funds under research and evaluation
As per the guidelines of SSA research and evaluation activities have to be undertaken by the Department within the specified period and the research findings disseminated to facilitate quality improvement in teaching / learning. Against the provision of Rs 33 crore during 2002-05, only Rs 10.72 crore (32 per cent) was spent as of March 2005 towards conducting of seminars, workshops and exhibitions, etc., indicating meagre expenditure on research activities. 3.1.11 Procurement Provisions have been made for various grants under SSA to schools for procurement of teaching equipment, preparation of teaching learning material, assisting schools upgraded from EGS to primary schools to buy equipment and also in order to integrate disabled children with the mainstream education. 3.1.11.1 Supply of computers
Due to non-supply of educational software, students were deprived from computer education
To provide computer education to children in simplified manner, a computer laboratory consisting of five computers along with peripherals and education software was to be established in selected upper primary school. To establish 540 laboratories in all the districts, MPSP paid Rs 9.04 crore during the period March 2004 to March 2005 to the suppliers. The suppliers completed (September 2004) installation of 1,445 computers in 289 laboratories and supply order of educational software for these computers was placed in April 2005 by MPSP. Out of these, educational software was installed in 1,194 computers as of July 2005 leaving 251 computers without educational software. Further, supply order of educational software for 251 laboratories (1,255 computers installed in July 2005) had not been placed as of November 2005. Thus, due to delay in placing supply orders for educational software, the laboratories were not put to use depriving the students from computer education. Beneficiary survey by SRI disclosed that about 10.4 per cent of primary schools, 6.5 per cent of upper primary schools and 2.1 per cent of high schools with upper primary sections reported that no teaching learning material had been provided. 3.1.11.2 Supply of textbooks
Eight lakh students did not receive text books in time
Text books were to be provided free of cost to all girls and SC/ST boys of Standards I to VIII before commencement of the academic session. Scrutiny of the records of 19 blocks13, six MCs14 and Inspectors of schools (South and West Mumbai) revealed that during the year 2004-05, 6.02 lakh students received part consignment of text books three months after commencement of the session and 2.04 lakh students received the books more than three to six
13
Bhiwandi, Bhokar, Chandwad, Dahanu, Daund, Jamner, Kalwan, Kamptee, Kandhar, Kannad, Katol, Khed, Palghar, Rahuri, Raver, Shahapur, Trimbakeshwar, Umred and Wasai. 14 Ahmednagar, Aurangabad, Mira-Bhayandar, Pimpri-Chinchwad, Pune and Thane. 42
months after the commencement of session. The delay in supply of the text books might have affected the quality of education of the children. SRI survey revealed that while 84 per cent of primary schools, 91.3 per cent of upper primary schools and 91.7 per cent of high schools with upper primary sections reported that girl children were given free text books, about 86.3 per cent of primary schools, 90.4 per cent of upper primary schools and 92.7 per cent of high schools with upper primary sections reported that free text books are given to the SC and ST students in the schools. 3.1.12 3.1.12.1
Only 858 disabled children were provided aid and appliances out of 5,521 selected
Coverage of special focus groups Providing aid and appliances to the disabled children
SSA provided that every child with special needs, irrespective of kind, category and degree of disability should be provided education in appropriate environment. It was noticed in 1015 MCs in eight test checked districts that 1.07 lakh children were identified (2003-2005) as children with special needs (CWSN). Out of 51,738 CWSN present (March 2004 to February 2005) in various camps organised at district/sub-district level, 5,521 CWSN were selected for providing aid and appliances. However, the aid and appliances were provided to only 858 CWSN (16 per cent). MPSP attributed the failure to the Artificial Limbs Manufacturing Corporation of India for non-supply of sufficient number of appliances for the CWSN. 3.1.12.2 Construction of ramps To facilitate easy access to the CWSN in school premises, ramp with a slope of 1:12 feet with supporting structure was to be constructed. During test-check it was noticed that in 13 blocks16 and three MCs17, 151 ramps were constructed with the slope ranging between 1:6 and 1:9. Thus, due to steep slope of the ramps, disabled children were deprived from easy access in school premises, which rendered the expenditure of Rs 7.55 lakh on construction of these ramps unfruitful. Further, in seven blocks and three MCs grant of Rs 5.90 lakh was released to 125 schools for construction of ramps even though the classrooms were located at ground level. Though the schools did not have requirement of ramps, none of these schools returned the amounts to the BEOs and the MCs.
Due to ramps constructed with steep slope, disabled children were deprived from easy access to classrooms
15
Ahmednagar, Aurangabad, Jalgaon, Mira-Bhayandar, Nagpur, Nanded, Nashik, Pune, Pimpri-Chinchwad and Thane 16 Bhokar, Chandwad, Jamner, Kandhar, Kalwan, Kamptee, Kannad, Katol, Muktainagar, Parner, Pathardi, Rahuri and Trimbak 17 Ahmednagar, Mira - Bhayandar and Nanded
43
3.1.12.3
Due to delay in completion of model cluster schools, the objective of giving special facilities for girls for education at elementary level was not fully achieved
Model cluster schools for girls
One hundred sixty seven model cluster schools (MCS) for girls were to be constructed (38 in 2003-04 and 129 in 2004-05) initially in nine18 districts for which provision of one time grant upto a maximum of Rs 2 lakh for each school was payable to the Village Education Committee. It was, however, observed that as of March 2005, 56 MCS were constructed and 94 were stated to be in progress. Works for 17 MCS had not been commenced even though funds were available. MPSP attributed the reasons for non-commencement of the work to delay in according administrative approval, delay in finalisation of location of schools and delay in appointment of Engineers. Thus, the objective of giving special facilities for the girls for education at elementary level was not fully achieved. 3.1.13 3.1.13.1 Involvement of community leaders and Non-Government organisations Involvement of community leaders
Only 57 per cent of the community leaders were trained
SSA conceives a vibrant partnership with the community leaders and the NGOs in the area of capacity building, both in community and resource institutions. Under SSA, several activities such as research, evaluation and monitoring, mainstreaming out of school children, organising community for capacity development for planning and implementation and work in the sphere of disability among children are proposed to be done in partnership with NGOs. SSA also envisaged providing of training to at least four community leaders per village plus two per schools. In urban areas and in revenue villages covering a vast area, training to three community leaders per school was envisaged. Scrutiny revealed that against 8.18 lakh community leaders required to be trained, only 4.65 lakh (57 per cent) were trained in the State during 2002-2006. MPSP attributed the shortfall in training to the disinterest of some of the community leaders. It might have, however, affected the formation of Education committees in the schools. SRI observed that in about 61.9 per cent of schools the community members had been trained under SSA. SRI also observed that about 39.3 per cent of primary schools, 32.6 per cent of upper primary schools and 14.6 per cent of high schools with upper primary sections had education committees formed of the community members. 3.1.13.2 Inadequate involvement of Non-Government organisations
One hundred EGC of NGOs did not continue for the stipulated period depriving 1,615 children from education
Government introduced (October 2000) Mahatma Phule Education Guarantee Scheme (MPEGS) on the lines of Education Guarantee Centres (EGC) for involving NGOs under SSA for coverage of out of school children including child labourers. The MPEGS was to be implemented through registered NGOs who are supposed to continue the EGC for a minimum period of two years. In
18
Beed, Gadchiroli, Hingoli, Jalna, Nanded, Nandurbar, Nashik, Parbhani and Thane 44
eight19 sample blocks and three20 sample MCs it was seen (June-July 2005) that to cover 60,921 out of school identified (2002-2005) children, 1,182 EGCs were opened by the NGOs and 25,061 out of school children were enrolled as of March 2005. It was also observed that 100 EGC run by NGOs under MPEGS did not complete the stipulated period of two years. As a result, Rs 5.27 lakh paid to the NGOs were rendered unfruitful and 1,615 children were deprived from primary education. Thus, the objective of bringing the out of school children in the mainstream with the help of NGOs was not fully achieved. 3.1.14 3.1.14.1
Monitoring by Governing Council and Executive Committee was not adequate
Monitoring and Evaluation Inadequate monitoring and evaluation
The Governing Council was to meet at least twice in a year. However, during 2002-2005 no meetings were held. State level Executive Committee headed by the Chief Secretary was to meet once in three months. The committee, however, met 10 times during 2002-2005. In the State, work of monitoring of SSA had been entrusted to Shrimati Nathibai Damodar Thackersey (SNDT) Womens University, Mumbai, which was to submit the report to Maharashtra State Council of Educational Research and Training, Pune. The SNDT University had taken up the evaluation of the basic assessment survey of four districts during AugustSeptember 2004. The final report was not submitted as of November 2005. Similarly, an appraisal mission in the State constituted by GOI was to carry out appraisal in the initial years. Once adequate capacity had been built, this exercise was to be undertaken at the State level. It was, however, observed that the appraisal mission was not constituted as of November 2005. MPSP stated that such an appraisal mission had not been established so far in the State. As such there was no regular monitoring of SSA programme. The programme was thus deprived of the benefit of guidelines/directions and policy inputs from the Executive Committee and the Governing Council periodically. 3.1.14.2 Internal Audit
Appraisal mission had not been established so far in the State
The quantum of internal audit by MPSP during 20022004 was inadequate
Internal Audit is one of the important controls that examines the adequacy and effectiveness of other controls throughout the organisation. As per SSA guidelines, the State Project Director should introduce proper internal audit system to ensure proper utilisation of scheme funds. It was, however, observed that internal audit wing of MPSP conducted (2002-03) internal audit only in Mumbai and six21 districts (2003- 04). The MPSP stated (November 2005) that due to inadequate staff, Chartered Accountants were appointed as Internal Auditors who had completed the internal audit for 2004-05. The quantum of internal audit by MPSP during 2002-04 was not sufficient to assure that there
19 20
Bhokar, Daund, Kamptee, Kandhar, Katol, Nanded, Trimbak and Umred Municipal Corporations Nanded, Nasik and Pimpri-Chinchwad 21 Kolhapur, Raigad, Sangli, Satara, Sindhudurg and Thane 45
was no misutilisation including misappropriations of funds, if any, at the level of SSA implementing agencies. 3.1.15 Conclusion Implementation of SSA was delayed in the State and utilisation of scheme funds was very low in the initial two years. Against Project Approval Boards approved outlay of Rs 2,155.87 crore for 2001-2005, though MPSP received only Rs 911.37 crore (42 per cent of the approved outlay), it had an unspent balance of Rs 95.86 crore as of March 2005. Schooling facility was not available in 370 habitations. Despite availability of funds, only 37 per cent (20,000) of the targeted civil works were completed as of November 2005. About 1,500 schools did not have drinking water facility and 36,000 schools had no toilets. As of November 2005, more than one lakh children were out of school. Due to deployment of only one teacher in the schools, teacher pupil ratio (in the test checked units) ranged between 1:48 and 1:92 as against the norm of 1:40. Due to delayed supply of educational software, computers were not put to use and children were deprived of computer education. Aid and appliances were not provided to disabled children as required. Construction of ramp with steep slope affected easy access of the children with special needs in school premises. The Governing Council and the State Executive Committee did not adequately monitor the implementation of SSA, as a result the programme was denied their valuable inputs and directions. 3.1.16 Recommendations For successful implementation of the programme Government may consider the following: Release the funds as per the annual plans approved by the Project Approval Board; Speed up all the interventions of SSA so as to optimise utilisation of funds; Encourage community participation so as to achieve the target of cent per cent enrolment of out of school children; Complete all civil works on priority basis so as to provide basic facilities to the children and ensure providing aids and appliances for the disabled children and Ensure regular meeting of the Governing Council and the Executive Committee so as to provide necessary inputs for effective implementation of SSA. These points were reported to the Secretary to Government of Maharashtra in October 2005. Reply had not been received (October 2006).
46
HOUSING DEPARTMENT
3.2
<
VALMIKI AMBEDKAR MALIN BASTI AWAS YOJANA
Highlights Government of India introduced the Valmiki Ambedkar Malin Basti Awas Yojana in December 2001 with the objective of providing shelters or upgrading the existing shelters for people living below the poverty line and members of other weaker sections in urban slums. In Maharashtra identification of the beneficiaries was not done in accordance with the scheme guidelines, utilisation of funds was slow and only half of the approved dwelling units were completed. The Deputy Collector, Mumbai and the Latur Municipal Council selected 18,463 beneficiaries in violation of the selection criteria. (Paragraph 3.2.6) In Dhule, the beneficiaries did not take possession of 510 dwelling units, completed during 2003-2004 at a cost of Rs 2.04 crore, as the convenience of the beneficiaries was not ensured by the Municipal Corporation. (Paragraph 3.2.6.2) Though sanitary latrines were an integral part of the dwelling units to be constructed under the scheme, 13,539 dwelling units were constructed without sanitary latrines under three Regional Boards. (Paragraph 3.2.6.3) In Amravati and Pune regions, 23,047 beneficiaries were provided dwelling units but the title/patta of land was not conferred on them, though required under the scheme guidelines. (Paragraph 3.2.6.4) As of March 2006, programme funds of Rs 209.67 crore and Rs 1.66 crore were lying unutilised with the Maharashtra Housing Area and Development Authority and its Regional Boards. Interest earned on VAMBAY funds was not transferred to the scheme accounts. (Paragraphs 3.2.7 and 3.2.7.1) Scheme funds of Rs 4.86 crore kept in a deposit account were shown as utilised by the Regional Board, Nashik. (Paragraph 3.2.7.5) 3.2.1 Introduction In Maharashtra, more than one crore people (about one-fourth of the total urban population) were living in urban slums. Government of India (GOI) introduced a scheme called the Valmiki Ambedkar Malin Basti Awas Yojana (VAMBAY) in December 2001 for upgrading urban slums as a supplement to the National Slum Development Programme (NSDP). The primary objective
47
of VAMBAY was to provide shelters or upgrade the existing shelters for people living below the poverty line (BPL) and members of economically weaker sections who did not possess shelters in urban slums. The scheme also aimed to provide a healthy and enabling urban environment. The cost of the scheme was equally shared by the Central and the State Governments. In September 2002, Government of Maharashtra (GOM) decided to implement VAMBAY in 62 cities, each having a population of 50,000 or more, as per the 1991 census. They also decided (January and May 2004) to implement the scheme in 18 more cities, each having a population of 50,000 or more, as per the 2001 census. The main components of the scheme were construction and delivery of dwelling units (DUs) with sanitary latrines, upgradation of the existing DUs and construction of community toilets. 3.2.2 Organisational set-up VAMBAY was implemented by the Housing Department in the State. The Maharashtra Housing and Area Development Authority (MHADA) was the nodal agency for implementation of the scheme. The Mumbai Slum Improvement Board (MSIB) executed the scheme in Mumbai city. The respective Councils/ Corporations prepared the estimates and the detailed project reports (DPR) in respect of the areas under them and submitted them to the Chief Officers of six Regional Boards (RBs) of MHADA, who implemented the scheme in all other areas. A State Level Coordination Committee (SLCC), under the Chairmanship of the Principal Secretary, Housing Department, monitored the implementation of the scheme. The RBs or the beneficiaries themselves constructed the DUs and the community toilets were constructed by the Urban Local Bodies (ULBs). 3.2.3 Audit objectives The audit objectives were to assess whether: adequate information was available with the Government and the nodal agency for implementation of the scheme; identification of the beneficiaries was in accordance with the scheme guidelines and the norms fixed by GOM; the intended benefits as envisaged in the scheme could be provided to the targeted people; adequate funds were released by MHADA for smooth implementation of the scheme and their utilisation and the monitoring system for the scheme was in place and was effective. 3.2.4 Audit criteria The audit criteria adopted for arriving at the audit findings and conclusions were as under: procedure prescribed in the guidelines for preparation of estimates and submission of detailed project reports, census data on urban slum population; norms and procedure for identification of beneficiaries;
48
3.2.5
guidelines set for execution of the projects and distribution of the dwelling units to the selected beneficiaries; financial codes and rules as well as instructions from the Central and State Governments regarding utilisation and accounting of the scheme funds and prescribed mechanism for monitoring and co-ordination. Audit coverage and audit methodology
Performance audit of the scheme was conducted (April to June 2006) covering the period 2001-06, by test-check of records and collection of data in the Housing Department, MHADA and its five22 Regional Boards (out of six), the MSIB and 1723 out of 62 ULBs. In the entry conference (May 2006), audit objectives and audit criteria were discussed with the Principal Secretary, Housing Department, the Chief Engineer and the Finance Controller of MHADA. Exit conference was held (September 2006) with the Government to discuss the audit findings and their views were considered while finalising the review report.
Project implementation
There were various irregularities like selection of ineligible beneficiaries, non-provision of sanitary latrines on the DUs and title of land not conferred on the beneficiaries as discussed below: 3.2.6 Selection of beneficiaries The criteria stipulated for selection of the beneficiaries under the scheme were the appearance of the names of the slum dwellers in the voters' list of 1 January 1995 and staying in those slums. Also their names should be in the list of BPL families prepared for the Swarna Jayanti Shahari Rojgar Yojana. The list of eligible slum dwellers satisfying the above criteria was to be prepared by the ULBs and submitted for approval of the State Level Coordination Committee (SLCC) through the Regional Boards. However, the MHADA did not have the list of BPL and the voter list which were required for verifying the eligibility of the beneficiaries selected by the ULBs. In the 17 Councils/Corporations test checked, 32,558 beneficiaries were provided DUs. Scrutiny revealed irregularities in selection of beneficiaries in the following cases.
22 23
Amravati, Aurangabad, Konkan, Nashik and Pune. Municipal Corporations/Councils: Achalpur, Akola, Akot, Ambernath, Aurangabad, Dhule, Ichalkaranji, Kalyan, Kolhapur, Latur, Mumbai, Nashik, Panvel, Pune, Sangli, Solapur and Thane 49
Rs 38.73 crore was incurred on beneficiaries without any evidence of their BPL status and residential proof
In Mumbai, 6,455 heads of families from 129 slum pockets were selected and allotted houses between April 2003 and March 2006 on the basis of information orally collected by the Deputy Collector from the slum dwellers, without verifying the BPL list and the voter list mentioned above. An expenditure of Rs 38.73 crore was thus incurred on beneficiaries without any documentary evidence of them being BPL and staying in slums before 1 January 1995. In the Latur Municipal Council, the number of eligible occupiers of slums in existence prior to 1 January 1995 on Government and private land were 1,262 and 1,167 respectively. However, 14,437 beneficiaries were selected i.e., an excess of 12,008 beneficiaries were provided DUs in violation of the eligibility criteria during 2002-06. An expenditure of Rs 48.03 crore (12,008 x 40,000) was thus incurred on ineligible beneficiaries. 3.2.6.1 Preparation of Detailed Project Report The District Housing Committees24 (DHCs), were to formulate DPRs and prepare estimates in consultation with the Councils/Corporations. The DHCs were to submit the DPRs to the Regional Boards for onward submission to HUDCO through MHADA for sanction by the Ministry of Urban Development and Poverty Alleviation, GOI. It was observed that DPRs had not been prepared in respect of 12 out of 80 Councils/Corporations as of March 2006, mainly due to land problem. During exit conference the Government stated (September 2006) that action was being taken to include these Councils/Corporations under the new scheme, namely the Integrated Housing and Slum Development Programme introduced by GOI from December 2005. 3.2.6.2 Execution of works The DUs were constructed in the Council/Corporation areas by the RBs or the beneficiaries themselves and the toilet seats were constructed by the Councils/Corporations. The Housing Department, GOM approved (June 2003) 78 pre-qualified agencies and non-government organisations by inviting tenders for execution of VAMBAY works and the DHCs issued work orders to them for execution of the approved projects. The work of construction of the DUs was supervised by the Executive Engineers of the RBs and monitored by the Chief Engineer, MHADA. The work of construction of toilet seats executed by the ULBs was also supervised by the Chief Officers /Commissioners of the Councils/Corporations. The beneficiaries were to construct their houses under the guidance of the approved NGOs. The design of the house was to be decided by the beneficiaries themselves in the cases of houses constructed by them. In the cases of DUs constructed by prequalified
24
12,008 beneficiaries were provided with dwelling units in violation of eligibility criteria during 20022006
Under the Chairmanship of the District Collectors in respect of Councils and Commissioners in respect of Corporations, Executive Engineers of the RBs of MHADA and other elected members and officials of the districts. For Mumbai, the Housing Minister is the Chairman. 50
agencies/NGOs, the area of the houses was 225 sq ft and the design was technically approved by the RBs. The execution of the scheme revealed the following irregularities: In five25 Councils/Corporations under three RBs, 1,080 out of 2,960 DUs sanctioned during the period 2003-2005 were transferred by SLCC to other Councils/Corporations, reasons for which were not available on record. This indicated poor planning and unrealistic preparation of DPRs by the Councils/Corporations. Further, approval was accorded for construction of 510 toilet seats in 2004-05 in the Parli-Vaijnath Municipal Council. In July 2005, the SLCC decided to transfer 470 toilet seats to six other Councils/Corporations due to nonavailability of land. Work orders were issued (October 2005) to the executing agencies for completion of 470 toilet seats within six months. The works were not started as of 31 March 2006. Reasons for the same, called for in May 2006, had not been received as of August 2006. Similarly, out of 1,240 DUs and 138 toilet seats approved (June 2003) in the Thane Municipal Corporation, it was noticed (May 2006) that 810 DUs and 128 toilet seats could not be taken up due to non-availability of land. These were transferred (July 2005) to other Councils. These indicated lack of proper planning in preparing DPRs.
Slum dwellers' consent was not sought before relocating the slums; as a result 510 newly constructed DUs remained vacant
As per GOI guidelines, in cases of relocation of slums, the convenience of the slum dwellers so relocated was to be paramount and as far as possible, their consent was to be taken. It was, however, noticed (June 2006) that the work of relocating slums was taken up (2003) by the Dhule Municipal Corporation by constructing DUs under VAMBAY. This was done without seeking the convenience of the slum dwellers. Though the DUs were completed between March 2003 and March 2004 some slum dwellers did not take possession of the DUs. As a result, 510 out of 1,054 DUs were lying vacant (June 2006). Thus, the investment of Rs 2.04 crore on the DUs remained unfruitful. 3.2.6.3 Non-provision of sanitary latrines As per the guidelines, the unit cost of each house included the cost of a sanitary latrine, which formed an integral part of the DU. The Councils/Corporations, while submitting the DPRs, had given undertakings to HUDCO that the above infrastructural facilities would be provided. It was, however, noticed that 13,539 DUs in 13 Councils/Corporations under three26 RBs were constructed during 2002-05 without sanitary latrines, due to nonavailability of sewerage/drainage lines, the responsibility for which rested with the Councils/Corporations. Thus, the construction of DUs without sanitary latrines defeated the objective of providing a healthy urban environment.
13,539 DUs were constructed during 2002-2005 without sanitary latrines
25 26
Bhusaval, Dhule, Nashik, Mira-Bhayandar and Udgir Konkan, Mumbai and Pune 51
3.2.6.4
Titles/tenure of land had not been provided to 23,047 beneficiaries
Title of land
Provision of title/tenure of land in favour of the beneficiaries was a precondition for GOI subsidies under VAMBAY. However, the responsibility for providing land for the projects rested with GOM, MHADA, Councils and Corporations, either through regularisation in situ or by relocation. In the DPRs submitted by the Councils/Corporations to HUDCO through MHADA, the status/ownership of the land for the proposed DUs was shown as vested with GOM/MHADA/Councils/Corporations. It was also mentioned by the Councils/Corporations in their DPRs that the titles/tenure of the land would be provided to the beneficiaries while handing over the possession of the DUs to the beneficiaries. In the cases of DUs constructed under VAMBAY between October 2002 and March 2006, the titles/tenure of the land had not been provided to 23,047 beneficiaries by two27 RBs as of June 2006. Information from the remaining four RBs were awaited (August 2006).
Forty DUs were constructed by TMC on BMC land without the latter's permission
Further, the Thane Municipal Corporation (TMC) had constructed (August 2004) 40 DUs costing Rs 16 lakh under VAMBAY on the land owned by the Brihanmumbai Municipal Corporation (BMC) without obtaining their prior permission. Subsequently, BMC refused (November 2004) to give a no objection certificate and TMC could not issue occupation certificates to the beneficiaries. The beneficiaries, however, occupied the DUs. The construction of DUs without prior permission from BMC deprived the beneficiaries from the title of land. Besides, there was also a probability that these houses, being unauthorised, could be demolished some time in the future.
Financial Performance
3.2.7
Separate cash book was not maintained by MHADA for the VAMBAY scheme
Funding pattern
The scheme was to be funded by 50 per cent subsidy from GOI and 50 per cent loan from the Housing and Urban Development Corporation (HUDCO) or the States own resources. The Government of Maharashtra (GOM) decided to implement the scheme with its own resources instead of taking any loans from HUDCO. On receipt of proof of deposit of 50 per cent of the State's share from the nodal agency i.e., MHADA, GOI released its share of assistance to them. The GOI guidelines stipulated maintenance of separate accounts. It was observed that MHADA had maintained a separate bank account for the scheme, but had not maintained a separate cash book for it. The transactions under VAMBAY were being booked in the general cash book maintained for all its schemes. Consequently, the correctness of the unspent balances under VAMBAY from time to time could not be verified. Year-wise funds deposited by MHADA in the designated account of VAMBAY and Central share of assistance released, their distribution to the RBs including MSIB and expenditure during 2001-2006 were as follows:
27
Amravati and Pune Board 52
(Rupees in crore)
Year Release of funds by GOI MHADA on behalf of GOM Total funds available Year-wise distribution to regional boards (including MSIB) Balance with MHADA at the end of the year Year-wise expenditure incurred by the RBs, (including MSIB) up to 31.03.2006
2001-02 2002-03 2003-04 2004-05 2005-06 Total
12.64 49.66 121.92 37.77 221.99
12.64 49.65 25.01 164.98 34.31 286.59
12.64 74.93 147.72 357.34 313.57
Nil 1.88 77.28 115.85 104.30 299.31
12.64 73.05 70.44 241.49 209.27
NIL 1.88 67.65 121.07 107.05* 297.65
(* figures are yet to be reconciled)
It may be seen from the table that as of March 2006, balances of Rs 209.27 crore and Rs 1.66 crore were lying unspent with MHADA and the RBs respectively, which was due to non-commencement and non-completion of DUs and community toilets. The total release (by GOI and GOM) and total expenditure included Rs 120.70 crore and Rs 70.88 crore respectively for community toilets. 3.2.7.1
Interest earned on short term deposits amounting to Rs 8.50 crore was not accounted for in VAMBAY funds
Interest earned not credited to the scheme account
As per the GOI guidelines, interest earned on VAMBAY funds was to be utilised for the scheme. MHADA had invested VAMBAY funds amounting to Rs 205 crore in 15 short term deposits between March 2002 and December 2005 and earned interest of Rs 8.50 crore on them. The interest accrued was, however, neither accounted for as a part of VAMBAY's resources in the designated bank account nor the fact was intimated to GOI. 3.2.7.2 Non-transfer of Lok Awas Yojana balances to the VAMBAY fund
GOM decided (January 2004) to deposit unutilised funds under the Lok Awas Yojana28 (LAY) closed in January 2004 in a separate bank account. The amount was to be utilised for construction of DUs under VAMBAY. However, it was noticed that the balance of Rs 1.63 crore under LAY which remained unutilised as on March 2005 was retained by MHADA and was not deposited under the designated VAMBAY account as of August 2006. 3.2.7.3
Agency charges of Rs 3.04 crore was recovered contrary to GOI guidelines
Recovery of agency charges
Though the GOI guidelines did not provide for levy of agency charges, GOM allowed (September 2002) agency charges at the rate of five per cent on the expenditure incurred on VAMBAY works. This was, however, discontinued by GOM in October 2003. Scrutiny revealed that agency charges amounting to Rs 3.04 crore were charged by the Mumbai Slum Improvement Board and by two RBs at Nashik and Pune till December 2004. This resulted in reduction of
28
Lok Awas Yojana was a component of the National Slum Development Programme for providing houses for Scheduled Castes, Scheduled Tribes and weaker sections. 53
scheme funds to that extent. Similar information in respect of the remaining four RBs though called for was not furnished (August 2006). 3.2.7.4 Non-submission of utilisation certificates Utilisation certificates (UCs) for the funds released under VAMBAY were to be submitted by MHADA to GOI within 12 months from the date of release of the funds. As against Rs 184.21 crore released by GOI till 2004-05, UCs for Rs 126.45 crore were submitted and UCs for Rs 57.76 crore had not been submitted (August 2006). Consequently, GOI did not release the balance subsidy of Rs 65.26 crore for the schemes sanctioned during 2005-06. 3.2.7.5
MHADA sent inflated utilisation certificate to GOI
Submission of false utilisation certificate
The Chief Officer, Nashik Board, submitted (December 2003) a UC for Rs 11.24 crore released during 2001-02 under VAMBAY. However, it was seen that as of 31 December 2003, the expenditure incurred was only Rs 6.38 crore and the balance fund of Rs 4.86 crore had been kept in a deposit account. As a result, the UC sent by MHADA to GOI was also inflated to that extent. 3.2.8 Physical progress The year-wise DUs/community toilets approved by GOI and constructed during 2002-06 were as follows:
Dwelling Units Community toilets Approved during the year 597 3900 21380 4314 30191 Constructed during the year 597 3900 14813 -19310 Shortfall (percentage) --6567 (31) 4314 (100) 10881 (36)
Year
2002-03 2003-04 2004-05 2005-06 Total
Approved during Constructed Shortfall the year during the (percentage) year DUs Upgrada -tion 4989 0 4989 -17171 141 16137* 1034 (6) 46353 501 26030* 20323 (43) 33357 0 2733 30624 (92) 101870 642 49889 51981 (51) * figures inclusive of upgraded DUs
It may be seen from the table that out of 1,01,870 DUs and 642 DUs for upgradation, only 49,889 DUs (including 642 upgraded DUs) and 19130 community toilets were completed. Work of 8,108 DUs and 3,268 community toilets was in progress. 3.2.9 Monitoring A State Level Co-ordination Committee (SLCC) was constituted to monitor the proper implementation of VAMBAY as well as the quality of construction and to suggest changes or modifications for its efficient implementation. Though the SLCC was supposed to meet frequently, it met only twice (June 2004 and July 2005) to discuss the constraints in the implementation of VAMBAY. Construction of DUs was to be supervised by the Executive Engineers of the RBs. The RBs were to submit accounts and report on the progress of work and
54
the utilisation of funds to MHADA, which in turn was to submit reports of fund utilisation and progress of work to GOI. It was, however, noticed that adequate steps were not taken as only 49 per cent of the approved DUs and 64 per cent of the approved community toilets were completed as of 31 March 2006. 3.2.10 Evaluation The Government of Maharashtra appointed (July 2004) the Yashwantrao Chavan Academy of Development Administration (YASHADA), an autonomous body, to evaluate the proper implementation of VAMBAY, improvement in the living standards of the slum dwellers, environmental development, proper utilisation of funds and the quality of construction. The evaluation report was also to compare the impact of VAMBAY with reference to the living standards of the slum dwellers prior to the implementation of VAMBAY. The evaluation report, which was to be submitted within 30 days, had not been submitted till August 2006. 3.2.11 Conclusion Implementation of the scheme in the State was slow, as 41 per cent of the available funds remained unspent as of March 2006. As a result, a shortfall in construction of nearly 52,000 and 11,000 dwelling units and community toilets respectively was noticed. Selection of beneficiaries was made without adhering to the stipulated eligibility criteria. Irregularities such as nonprovision of sanitary latrines, issue of work orders without ascertaining availability of land and non-obtaining of the consent of the beneficiaries were noticed in the execution of works. The pattas/titles of land were not conferred on the beneficiaries, as required. There were irregularities in financial management, such as submission of inflated utilisation certificates and interest earned not being credited to the scheme funds. The overall implementation of the scheme was affected by lack of monitoring and its objectives remained largely unachieved. 3.2.12 Recommendations Government should ensure adherence to the eligibility criteria while selecting the beneficiaries. MHADA should speed up the execution of the approved works. While preparing the projects, availability of land and convenience of the beneficiaries should be ensured. Government should take necessary steps for conferring the title of lands/pattas on the beneficiaries, as envisaged in the GOI guidelines in a time bound manner. Government should ensure efficient management of scheme funds besides regular and effective monitoring of scheme implementation at all levels. The matter was referred to the Principal Secretary to the Government in August 2006. Reply had not been received (October 2006).
55
Employment and Self Employment Department

3.3
Highlights A project of computerisation of the functions of the Employment Exchanges was being implemented by the Directorate of Employment and Self Employment with the objectives of improving the efficiency of employment exchanges, networking of all employment exchanges and speedy collection of data to provide the job seekers opportunities and the employers with skilled manpower. Lack of various controls in the system has made the information derived from the system unreliable. Lack of audit trails and security controls made the system vulnerable to unauthorised access and consequent changes to data. An Oracle based applications package implemented in 36 units (1997-99) by incurring an expenditure of Rs 2.06 crore was left incomplete. The Directorate switched over in 2001-02 to the development of a new DB2 based package named Rojgar Mitra but the deficiencies of the old package on ORACLE continued in the new package also. (Paragraph 3.3.6.1) Lack of adequate documentation led to lack of proper control over the development process and undue delays. (Paragraph 3.3.6.2) Due to the absence of validation checks in the applications package to detect duplicate registration, multiple registration numbers were incorrectly allotted to candidates in 7,129 cases. (Paragraph 3.3.7.1) The dates of qualifications recorded at the time of registration should have been the dates when the relevant examinations were passed by the candidates. In 13,054 cases, the dates of qualifications of candidates were shown to be before the dates of passing the relevant examinations signifying lack of data integrity of the system. (Paragraph 3.3.7.1) The percentage of coverage of employers by the District Employment Exchanges in Mumbai and Thane were as low as 8.38 and 12.10 respectively. (Paragraph 3.3.7.2) Dates of registration of qualifications were changed in 117 instances in Mumbai employment exchange and in 310 instances in Thane employment exchange, without authorisation, signifying lack of adequate audit trails built into the system and security controls. (Paragraph 3.3.9.2)
Computerisation of Employment Exchanges in Maharashtra
56
3.3.1
Introduction
A project of computerisation of the functions of the Employment Exchanges (EEs) of Maharashtra was being implemented by the Directorate of Employment and Self Employment with the following objectives: improving the efficiency of the EEs; speedy collection of data from private employers to provide the job seekers opportunities and the employers with skilled manpower.
The activities of the EE units included registration of applicants seeking employment assistance, registration of vacancy notifications received from employers, selection and supply of suitable applicants for employers and preparation of employment statistics reports and employment market information. There were 45 Employment Exchanges (EEs) under the Directorate where 39.96 lakh job seekers were registered (as of March 2006), 0.52 lakh vacancies were notified by employers against which applications of 4.58 lakh candidates were submitted and 0.14 lakh candidates were placed (2005-06) in various jobs. A total of 0.26 lakh employers were registered with the EEs as of September 2005. For computerisation of the EEs, an Oracle based applications package was developed by National Informatics Centre, (NIC) Pune during 1997-98 and implemented in 36 EEs. Later, a DB2 based applications package namely Rojgar Mitra was taken up for development by NIC from 2001-02, which was implemented in all 45 units during October 2003 to July 2005, after porting data from the Oracle to the DB2 platform. Rojgar Mitra had five modules according to the functional requirements of the EEs viz., (i) Main (for registration and renewal of candidates), (ii) Submission29 (for vacancy order (VO) booking and preparation of candidates lists for submission to employers), (iii) Employment Market Information (EMI)30 (for employer registration and employment market information returns), (iv) Employment statistics (ES) and (v) User administration. 3.3.2 Organisational set-up The Directorate of Employment and Self Employment headed by the Commissioner, had six divisional offices headed by Deputy Directors and 45 Employment Exchange units (35 District Employment and Self Employment Guidance Centres), three additional Employment and Self Employment Guidance Centres, six University Employment and Self Employment Information and Guidance Bureaus and one Employment and Self Employment Guidance Centre for the Physically Handicapped (Special EE/PHP).
29 30
Submission is the process of supplying list of suitable candidates to the employers. EMI is the information about employers, their staff position, vacancies and employment trends. 57
The information technology (IT) needs of the Directorate were overseen by a core group of eight staff members headed by an Assistant Director at the Directorate. 3.3.3 Audit objectives The audit objectives were to evaluate: the efficiency and effectiveness of the system in achieving the stated objectives; the completeness and correctness of data captured in the system in respect of registration of candidates, vacancy order bookings and registration of employers; the generation of employment statistics and Employment Market Information and the adequacy of security controls to ensure the integrity of data. 3.3.4 Audit criteria The applications package developed and implemented for the EEs was evaluated with respect to the National Employment Service Manual. Planning of computerisation, methodology of development of the application packages, data management and monitoring were also examined keeping in view the best practices of IT governance. 3.3.5 Scope of audit and audit methodology Scrutiny of records and information furnished by the Directorate and nine31 test checked units in respect of the computerisation and the data available in the computerised system was done during December 2005 to April 2006. Structured Query Language (SQL) was used to export the data from the DB2 database system to the Interactive Data Extraction and Analysis (IDEA)32 package and the data analysis was done using the IDEA package. After completion of the IT Audit, an exit conference was held (June 2006) at NIC Pune with the Commissioner of Employment and Self Employment, the Assistant Directors/Employment Officers of the audited units and the Technical Director of NIC. The replies of the Directorate have been suitably incorporated in the report.
31
Employment Exchanges at Mumbai, Physically Handicapped Persons (PHP); Mumbai Suburban; Mumbai Technical; Mumbai University; Nagpur; Pimpri; Pune; Pune University and Thane 32 IDEA is a PC based File Interrogation Tool for use by auditors, accountants, investigators and IT staff. It analyses data in many ways and allows extraction, sampling and manipulation of data in order to identify errors, problems, specific issues and trends 58
Audit findings
3.3.6 3.3.6.1
While switching over to a new DB2 based Rojgar package the deficiencies of the old applications package continued
Planning and project implementation Incomplete development of applications packages under Oracle and DB2
The Oracle based applications package implemented during 1997-98 and 1998-99 (expenditure: Rs 2.06 crore) in 36 units was incomplete as the Statistical module and Submission module had not been developed. While switching over to a new DB2 based Rojgar Mitra applications package, the deficiencies of old package in respect of non-generation of statistical reports were continued. The new applications package was implemented in all the 45 units during October 2003 to July 2005 (expenditure: Rs 2.76 crore for hardware). Though Rojgar Mitra was to be completed by December 2004, the Rojgar Wahini module web site, Rojgar Mitra - self employment module, Rojgar Mitra - the web version module, the employment statistics and the employer market information modules were still under development as of May 2006. It was noticed that there was no clause in the MOU33 for claiming penalty charges for delay in completion. Thus, the employment exchanges relied on manual compilations defeating the objective of computerisation. The Commissioner stated (June 2006) that as designing of the Rojgar Wahini website was taken up on a priority basis, the development of modules such as Registration and Submission was delayed and modules for ES and EMI could not be completed. The delay in development of the applications package and non-enforcing of the time frame given in the MOU resulted in underutilisation of the hardware purchased for the system. 3.3.6.2 Lack of documentation on system development
The applications package was developed on an incremental approach basis and no detailed System Requirement Specifications were prepared
It was observed that the applications package was developed on an incremental approach basis and no detailed System Requirement Specifications (SRS) were prepared. The User requirement specifications were also not prepared. Besides, no technical documents relating to the process flow, data flow, data dictionary, database schema and coding convention were available with the Directorate. Lack of adequate documentation led to lack of proper control over the development process and undue delays. 3.3.7 Input controls and validation checks The system design must include validation checks to minimise data entry errors. While implementing the system, various controls have to be put in place to ensure correct and complete capture of data.
33
Memorandum of understanding entered into by the Commissioner, Employment and Self Employment with the NIC, Pune 59
3.3.7.1
Input controls
Analysis of the databases of candidates registrations revealed that input controls had not been provided and even the validation checks were not built into the applications package. The lacunae and discrepancies in respect of 11.27 lakh registrations in the test checked EEs bringing out deficiencies of input controls and validation checks are detailed below: Allotment of multiple registration numbers
3,257 candidates were allotted two or more registration numbers
In 7,129 cases duplicate/multiple registration numbers were incorrectly allotted in respect of 3,527 candidates. Consequently, the number of candidates enrolled was inflated. This could result in undue benefits to the candidates with duplicate registration numbers while sending names to employers. During the exit conference, the Directorate accepted (June 2006) the position and promised to provide proper validation in the system with the help of NIC. Inconsistency in the dates of registration and qualifications In 13,054 cases, the dates of registration of qualifications were shown to be before the dates when the candidates had passed the relevant examinations. In 8,083 cases, the dates of registration of additional qualifications fell even before the dates of initial registration. In 1,128 cases, the years of passing of the Higher Secondary Certificate examination were seen to be before the years of passing of the Secondary School Certificate examinations. The above irregularities/ discrepancies were likely to result in granting undue seniority benefits. During verification of the details of submissions for the month of December 2005, it was found that in 10 submissions to employers, undue benefits had been granted to 51 candidates. Unreasonable data in the database Dates of birth were recorded as future dates beyond 2006 in 62 cases. In 456 cases, the dates of birth recorded indicated that the candidates were registered before attaining the age of 14 years. Invalid years of passing of examination like 1, 2, 9, 1900, 1908, 1909, 2200 and 2995 were recorded in 4,675 cases. In 149 cases, the candidates heights were recorded as more than 270 centimeters. Incorrect validation control
There were irregularities and discrepancies in the registration data
Sixty physically handicapped candidates were wrongly shown as not-PH depriving them of the chances of being referred to potential employers
In the Special EE/PHP, Mumbai, catering to the physically handicapped candidates only, it was found that 60 candidates were treated as non-physically handicapped as the concerned records had a flag N against the PH category. Thus, these 60 candidates were likely to be deprived of being referred to potential employers.
60
In reply, the Special EE/ PHP stated (April 2006) that corrections would be made to the data and that NIC had agreed to provide a validation check which would take all candidates registered with this unit as PH by default. However, remedial action had not been taken (August 2006). 3.3.7.2 Incomplete database Information of placed candidates not entered The details of candidates placed with employers are required to be entered into the system and their names are to be transferred from live registers to dead registers. It was seen that the details of the candidates placed were not entered in the computerised system. Thus, statistics about the number of candidates in the live registers was not only inflated but posed a risk of submission of candidates who had already got a job depriving the other candidates. In reply, the EEs stated (March-April 2006) that the facility for recording placement entries was still to be implemented. Insignificant coverage of employers The District EEs are required to maintain databases covering all employers within their jurisdiction. The information about the number of employers received from the Employees State Insurance Corporation (ESIC) and the Directorate Employment and Self Employment (DESE) was as detailed below:
Area/ Sub regions of Employees' State Insurance Corporation As per information received from ESIC 2. 39552 11316 10965 4306 1896 Number of Employers As per Difference information (2 - 3) received from DESE 3. 4. 3314 1369 9012 5068 1602 36238 9947 1953 -762 294 Percentage of coverage (3/2 x 100) 5. 8.38 12.10 82.19 117.70 84.49
1. Mumbai Thane Pune (Dhule, Jalgaon, Kolhapur, Pune, Nasik, Sangli, Satara and Solapur) Nagpur (Akola, Amravati, Bhandara, Chandrapur, Gondia, Nagpur, Wardha and Yavatmal) Aurangabad (Aurangabad and Nanded) The coverage of employers of Mumbai and Thane was very low
It was noticed that Street surveys34 had also not been conducted since the last five years by the Mumbai unit for better coverage of the employers. The low coverage of employers indicated that EEs had not made adequate efforts to collect information about employers. In reply, the Assistant Directors in charge of the Mumbai and Thane Employment Exchanges accepted the audit observations and stated (April34
Street surveys are conducted by Employment Officers to collect employers data by visiting employers offices situated within their jurisdiction. 61
May 2006) that necessary steps were being taken to enlarge the employers databases. 3.3.8 Inadequate process control The process is to be test checked and it is to be ensured through various process controls that the resultant information is correct as per the manual provisions.
In 4,916 cases the due dates of renewal were shown to be between the years 2011 and 2085
A candidate has to renew his registration after a period of three years from the date of registration following a grace period of three months. Scrutiny of the database of the Thane EE revealed that amongst the 2,30,371 candidates on the live register, in 4,916 cases, the due dates of renewal were wrongly arrived at by the system between the years 2011 and 2085. In reply, EE, Thane stated (April 2006) that in 194 cases, project affected persons35 were given special benefit of 99 years validity for their registration for which renewal would not be necessary. In the rest of the cases, such facility had been given erroneously and remedial action would be taken through NIC. The reply is not acceptable as these 194 cases were not included in the 4,916 cases. The wrongly calculated due dates of renewal were as a result of faulty system. 3.3.9 Security controls Security controls ensure the safety and security of data from loss, theft or unauthorised modification. Weaknesses in these controls were observed as detailed below: 3.3.9.1 Access controls A generalised user ID and password known to all core users was used to access the data in all the test checked EEs. 3.3.9.2 Audit trail Various unauthorised modifications were not being recorded though the system had an inbuilt facility for the same. The Directorate agreed (June 2006) to take remedial action with the help of NIC. It was noticed during the scrutiny of the data for 2005-06 in respect of the Mumbai Suburban EE and the Thane EE that changes to dates of registration of qualifications were made in 117 instances in the Mumbai EE and in 310 instances in the Thane EE. Out of this, in the Thane EE, four cases related to cases of wrong entry of dates of qualification mentioned in para 3.3.7 earlier. Details of officials who made the changes had not been captured in the system and the reasons for making these changes were also not recorded. Thus, the
35
Project affected persons are persons displaced by developmental projects. 62
authentication and authorisation of the changes made to the database could not be ensured. In reply, EEs, Thane and Mumbai accepted the facts. Thus, lack of security controls made the system vulnerable to unauthorised changes of data. 3.3.9.3 Non-updation of antivirus It was noticed that the Antivirus version - 2004 installed in the computers of all the test checked units had not been updated. The Directorate agreed (June 2006) to take remedial action with the help of NIC. 3.3.10 Conclusion Lack of various controls in the system has made the information derived from the system unreliable. Lack of audit trails and security controls made the system vulnerable to unauthorised access and consequent changes to data. Delayed and incomplete roll out of modules for implementation led to incomplete databases and underperformance of the application itself. The databases were also incomplete as all the relevant data was not entered, specifically in cases of prospective employers leading to non-fulfilment of the objectives of the Employment Exchanges by restricting the opportunities available to the candidates. Further, lack of data integrity, reliability and incompleteness of data available with the Employment Exchanges led to inconsistent information being supplied to the Directorate of Employment and Self-employment and Director General Employment and Training for use in policy making as well as compilation of employment statistics. 3.3.11 Recommendations Comprehensive software should be rolled out within a stipulated time frame to ensure the following: Business Rules are comprehensively mapped. There are proper input and validation controls. The system security and audit trail should be strengthened for ensuring data security and integrity. The employers register maintained by the District Employment Exchange should be made up to date so that all the public and private sector employers are covered for the Employment Market Information as well as to ensure better employment opportunities for the job seekers. The matter was referred to the Principal Secretary to the Government in July 2006. Reply had not been received (October 2006).
63
General Administration Department and Revenue and Forests Department

3.4
Highlights Lack of uniformity in the software implemented in various centres rendered consolidation and transmission of the data from root level to apex level difficult. The system had no security policies/procedures exposing the system to potential risks of invalid inputs, processing, output and access by unauthorised users. SETU service provided to citizen was not at a low cost. Non-development of uniform software by State Level SETU Society resulted in failure to provide envisaged information at apex level. (Paragraph 3.4.6) Due to the absence of adequate input and validation control, cases of duplicate record and gaps in the database were noticed. (Paragraphs 3.4.7 and 3.4.8) Non-existence of adequate business continuity plans and change management system led to vulnerability to disasters. (Paragraphs 3.4.11 and 3.4.12) Citizens were charged more for issue of various certificates than the rates prescribed by Government, which led to excess collection of Rs 22.09 lakh from citizens by Collector, Thane. (Paragraph 3.4.13.1) Government did not pass on the benefit of lower rates of service charges to the citizens from the unspent balance of fees (Rs 12.96 lakh) with State Level SETU Society. (Paragraph 3.4.13.2) 3.4.1 Introduction With a view to harness the benefits of Information Technology (IT) for effective and transparent functioning of the administration, Government decided (August 2002) to provide different services to citizens through an IT based project SETU (Project) connoting a Bridge for connecting Government with people. The first phase of the project contemplated issue of various certificates, licenses and affidavits concerning the Revenue Department to citizens through a single window system. Remaining three phases of the project were to cover
Information Technology review of SETU (Integrated Citizens Service Centres)
64
similar activities of other departments inclusive of acceptance of government receipts, taxes etc. It was also to cater to the citizens requirement of facilities like Railways / Bus reservations, issue of passports, issue of election identity cards, etc. By May 2006, out of 35 Districts and 358 Talukas in the State, the project was in operation in 2736 District headquarters and 307 Talukas. 3.4.2 Organisational set-up Director of Information Technology (DIT) was to monitor the implementation of the Project in the State. At the District / Taluka level, existing staff of District Collector was to work at the back-end of the SETU IT system and maintain the basic record and authenticate the certificates issued through the system. District Level SETU Societies (DLSS) registered under the Societies Registration Act, 1860 were to engage software development agencies (Agencies) on the principle of Build-Operate-Transfer (BOT) for front-end manual activities such as issue of blank application forms, stamp papers, scrutiny of documents attached with the applications, ensuring availability of required information and generating receipt of applications through software. Procurement cost of hardware, counters, furniture, stationery, payment to staff, electricity bills and maintenance of hardware for SETU centers was also to be borne by the Agencies. The DLSS was to pay to the Agencies an agreed percentage of the fees levied for the services provided to citizens. All SETU centres were to be connected through Local / Wide Area Network to the District Control Room and the data was to be transmitted to the Mantralaya for display on the Government web-site. A State Level SETU Society (SLSS) was to guide and monitor the work of DLSS. Building for the SETU centers at district as well as taluka places was to be made available by Government on no cost basis. 3.4.3 Audit objectives The audit objectives were to evaluate: the completeness and correctness of data captured in the system; whether arrangements exist for ensuring business continuity and the efficiency and effectiveness of the system in achieving the stated objectives. 3.4.4 Scope and methodology of audit The audit of SETU IT system conducted between February 2006 and June 2006 involved scrutiny of records (including digital) and the SETU IT systems for the period August 2001 to May 2006 in seven37 out of 27 Districts
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Ahmadnagar, Akola, Amravati, Aurangabad, Bhandara, Buldhana, Beed, Dhule, Gondia, Hingoli, Jalgaon, Jalna, Kolhapur, Latur, Nagpur, Nanded, Nashik, Osmanabad, Parbhani, Pune, Ratnagiri, Sangli, Sindhudurg, Solapur, Thane, Wardha, Yavatmal 37 Collector Offices at Chandrapur, Jalgaon, Kolhapur, Nagpur, Nanded, Thane and Yavatmal 65
along with Taluka SETU centres. Computer Assisted Audit Techniques were used for data analysis and reporting.
Audit findings
3.4.5 Non-implementation of all the phases of SETU Government had resolved (August 2002) to implement the SETU project in four phases. However, no benchmarks/time limits were fixed for phase-wise implementation of project. As of June 2006, the SETU centres were providing the services envisaged in the first phase only. DIT stated (May 2006) that the integration of services of various departments in SETU centres was a matter of policy of the department concerned. This reply was not in conformity with the objectives of setting up of the SETU centres. 3.4.6
Centralised software for SETU system was not developed
Absence of uniformity in software
SLSS was to develop a common software for all SETU centres for facilitating consolidation and transmission of data available at Taluka and District levels to the official web site of the Government. It was, however, observed that different back-end software for databases were in use in various SETU centres.
SETU centre Collector, Chandrapur Collector, Jalgaon Collector, Kolhapur Collector, Nagpur Collector, Nanded Collector, Thane Collector, Yavatmal Front-end Access, Visual Basic Access, Visual Basic Access, Visual Basic Access, Visual Basic Access, Visual Basic Access, Visual Basic Access Back-end database and number of BOT agencies Access: 2, Access: 14, SQL:2 SQL: 1, Access: 1 Access: 1, SQL: 1 SQL: 1, Access: 10, DB-2: 1 SQL: 2, Access: 1 Access 2000: 2
DIT stated (May 2006) that development of a common software was under active consideration. 3.4.7 Input controls and validation checks The system lacked input controls as it did not ensure complete and correct collection of the required primary data in its database. Absence of various validation checks in the system design made the system vulnerable to data inaccuracies as is evident from cases cited below: 3.4.7.1 Incomplete database As data relating to certificates for caste, non-creamy layer, senior citizen, domicile certificates etc., was not being maintained, the system was unable to generate such certificates. Instead, these certificates were being word processed from the manually available data thus defeating the objective of the system (Kolhapur).
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3.4.7.2
The system accepted applications from persons below 18 years of age to execute affidavits
Inaccurate database In seven cases, applicants below 18 years of age had executed affidavits (Jalgaon). It was observed that nine duplicate token numbers were issued during June 2003 to October 2005 (Kolhapur). Out of 147 cases, in 31 cases the date of issue of certificate was earlier than the date of application (Kolhapur). The master table for castes contained duplicate data. In 55 out of 114 cases for same caste and category, different Caste_ID were noticed (Nanded). In domicile certificate table, out of 516 cases, in 90 cases the date of birth was not mentioned. In 23 cases it was shown as 31 December 1899 and in three cases it was shown as 3 January 1900 (Nanded).
Thus, in the absence of input and validation controls, the databases were incomplete and unreliable. 3.4.7.3
In SETU center at Kolhapur, 65,969 tokens from February 2003 to May 2006 for issue of certificates were generated, whereas actual number of certificates issued was 57,119
Incomplete generation of tokens
In SETU center at Kolhapur, the database indicated generation of 65,969 tokens from February 2003 to May 2006 for issue of certificates, whereas actual number of certificates issued, as per cashbook was 57,119. The receipt of Rs 0.89 lakh towards fees were, thus, was either not accounted for or was not collected. In SETU center at Kolhapur further, affidavits executed as per database were 81,445, whereas the cashbook indicated the number of affidavits issued as 77,055 which led to less realisation of Rs 0.44 lakh on account of SETU charges. Thus, in the absence of adequate input controls less realisation of Rs 1.33 lakh towards fees went unnoticed till it was pointed out in audit. 3.4.8 Processing controls There was no provision in the software for generating Token numbers for execution of affidavits (Nanded and Kolhapur). In 21,696 out of 37,242 cases, software allowed generation of Affidavits without photographs (Jalgaon). One hundred and eighty three gaps and 329 gaps were detected in the auto-generated fields respectively for tokens and certificates (Jalgaon and Nanded). Some cases of inadequate processing controls are detailed below:
Audit trail was also not available. Thus, the correctness in issue of affidavits and charges collected therefore could not be ensured.
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3.4.9
Logical access control
In the seven38 SETU centres, there was no documented password policy for the SETU application, databases and operating system. In Collectorates Chandrapur and Yavatmal it was seen that the BOT agencies had purchased readymade software and the password to the databases was not available with them nor the Department insisted upon it. In absence of password, access to the databases was not possible. In Collectorates Jalgaon, Kolhapur and Thane there was no password provided for user_ID to the application software and databases implemented by the BOT agencies. Hence the system was prone to risk of unauthorised access.
Thus, in the absence of logical access control, the data security could not be ensured. 3.4.10 Non-availability of source code Tender documents for operating SETU center on BOT basis envisaged that the source code of the application software would be the intellectual property of DLSS. However, none of the DLSS had collected the source code for the SETU system from the BOT agency. DIT stated (May 2006) that as the BOT agencies had developed the software at their own cost, taking possession of source code did not appear justified. This reply was contradictory to the terms of contract with the BOT agencies. 3.4.11 Business continuity and disaster recovery plan It was observed in seven38 SETU centres that documented business continuity and disaster recovery plans did not exist. The District Collectors also did not have the backup of data generated by the SETU agencies though it was envisaged in the contract with the agencies. DIT stated (May 2006) that the establishment of data centers at the State level was under consideration and also stated that the Collectors had the backup of the data. The reply of DIT was not acceptable in view of non-availability of backups with Collectors Chandrapur, Jalgaon, Nagpur, Nanded, Kolhapur and Yavatmal. 3.4.12
There was no policy for change management
Change management system
Records in seven38 Collectorates revealed that there was no documented policy for change management. The Collectors at Chandrapur, Kolhapur and Nagpur stated that the changes required in the application software were communicated verbally. DIT stated (May 2006) that changes in the software were done as and when some problem arose at the execution level.
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Chandrapur, Jalgaon, Kolhapur, Nagpur, Nanded, Thane and Yavatmal 68
3.4.13 3.4.13.1
SETU centres under Collector Thane unauthorisedly collected excess fees of Rs 22.09 lakh from citizens
Collection of fees Excess collection
Government had prescribed (September 2002) a fee of Rs 10 to be charged by BOT agencies for issue of caste certificates, income certificates, affidavits, solvency certificates, domicile certificates, senior citizen certificates etc. Similarly, maximum fees to be collected for issue of 7/1239 certificate from August 2004 was Rs 15 subject to actual expenditure incurred for issue of the certificate. It was, however, noticed that the charges levied for issue of various certificates varied from district to district as shown below:
District Chandrapur Jalgaon Thane Yavatmal Rate per certificate (Rupees) 15 20 23 to 29 19 Rate for issue of 7/12 certificate (Rupees) 15 10 17 15
This resulted in extra burden of Rs 13 to Rs 19 per certificate to each applicant in Thane district and consequent unauthorised collection of Rs 22.09 lakh from them during October 2004 to February 2006. Collector, Thane stated (July 2006) that as per the decision taken in the meeting held on 11 September 2003 (of the district level society) the rates were increased to Rs 25 per certificate. The reply was, however, not acceptable as there were no orders from Government for increasing the fees payable by citizens for availing of the services from SETU centres. 3.4.13.2
Unwarranted formation of SETU society
Unspent balance of fees with SLSS
Government approved (August 2002) formation of the SLSS and DLSS for providing services which the Government was providing through their own staff. The SETU societies were to charge Rs 10 per certificate to be issued to the citizens through the BOT agencies operating the SETU centres. The BOT agencies utilised Government buildings, infrastructure and the services of the Government staff for backend work and monitoring. The role of DLSS in maintaining the SETU system was, thus, reduced merely to collecting service charges from citizens. Government had also directed (August 2002) that 10 per cent of the collections made by the DLSS were to be transferred to SLSS. It was observed that the SLSS had Rs 12.96 lakh as of May 2006 towards the transfer of service charges by six40 Collectors to SLSS through DIT. As the SETU system was operated on the principle of BOT by private agencies, Government should have passed on the benefit of lower rates of
39
Village form No. 7 depicting the details of land, owner of the land, rate of land revenue and Village form No. 12 depicting the details of crops yielded by the farmer during the year. 40 Aurangabad, Chandrapur, Dhule, Jalagaon, Osmanabad and Yavatmal 69
service charges to the citizens. Government, thus, failed to ensure service to citizen at a low cost. 3.4.14 Conclusion Though the SETU project was launched in 2002, Government failed to implement all the phases of the SETU project. In the absence of a common software, consolidation and transmission of the data from SETU centres to Government was not possible. Incomplete modules and failure to enter all relevant data led to incomplete databases. IT security was deficient exposing the system to potential risks of unauthorised access and modifications. Due to non-observance of the provisions of tender agreement the business continuity could not be ensured. Failure to levy service charges at the rates approved by Government led to excess burden on the citizens in terms of certificate and village form fees. 3.4.15 Recommendations Single window service provided to citizens should be made available at a least cost and A comprehensive software should be rolled out within a stipulated time frame to cover: the requirements of all the phases of the project and adequate input, validation and access controls. The matter was referred to the Principal Secretary to the Government in August 2006. Reply has not been received (October 2006).
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HIGHER AND TECHNICAL EDUCATION DEPARTMENT AND SCHOOL EDUCATION DEPARTMENT

3.5
3.5.1
Audit of grants-in-aid to educational institutions

Introduction
Education plays an important role in the economic development of the nation. In Maharashtra education is made available free of cost for all students up to standard X and for girls up to standard XII. As of March 200441, there were 60,316 primary, 811 secondary schools and nine colleges42 run by the Government. Also 18,689 aided institutions (3,827 primary, 13,451 secondary and 1,411 colleges) imparted education to approximately 1.04 crore students in the State. Recognised aided schools and Arts, Science, Commerce and Law colleges are eligible for salary grants, non-salary grants, building grants and other grants (i.e., equipment, furniture, library, laboratory and workshop grants) at the discretion of the sanctioning authority. The average annual expenditure of Rs 3,961 crore on grants-in-aid to these institutions was 48 per cent of total expenditure of Rs 8,250 crore under education sector in the State. The Principal Secretary in Higher and Technical Education Department and the Secretary in Secondary Education Department oversee, monitor and review the implementation of the policies of the Government. The Directors of Primary, Secondary and Higher Education are the Chief Controlling Officers responsible for monitoring the school activities and improvement of academic excellence in the institutions. A test-check of records of the Directors of Primary, Secondary and Higher Education, Joint Directors of Higher Education, Education Officers of Zilla Parishads, schools run by Municipal councils, Municipal Corporations and Zilla Parishads covering the period 2001-02 to 2004-05 was conducted during March-May 2006. Further, 6,38343 schools and 608 colleges out of 7,278 schools and 1,411 colleges were checked from Mumbai and eight44 (out of the remaining 33) districts using statistical random sampling method on the basis of total expenditure under grants-in-aid to the educational institutions. This was conducted with a view to assess whether the budgeting and release of grants done after proper assessment; the grants were paid to the institutions in accordance with the norms set and utilised for the intended purpose and that the intended benefits of the grants were achieved by the institutions. An entry conference at the beginning and exit conference after completion of audit were
Information for the year ended March 2005 could not be supplied by the Department, as computerisation of data is under progress. 42 excluding the Medical Colleges, Engineering Colleges and Sports academies 43 Records of 6,383 schools and 608 colleges were checked at Director of Education, Joint Director of Education and Education Officers of Zilla Parishad offices. 44 Aurangabad, Jalgaon, Kolhapur, Nagpur, Nanded, Pune, Raigad and Yavatmal
41
71
held with the Principal Secretary, Higher and Technical Education Department. The Government accepted (August 2006) audit conclusion and the recommendations at the time of exit conference.
Audit findings
3.5.2.1 Financial management The Director Primary and Secondary Education released ad hoc grants through the Education Officer of Zilla Parishads to the schools. The Director of Higher Education release grants to the colleges through Joint Directors. The expenditure on grants-in-aid during the period of audit was as under: (Rupees in crore)
Year 2001-02 2002-03 2003-04 2004-05 Total Primary Education 310.72 345.53 378.79 420.30 1455.34 Secondary Education 2483.12 2783.20 2980.38 3279.51 11526.21 Higher Education 681.39 692.91 714.59 773.76 2862.65 Total 3475.23 3821.64 4073.76 4473.57 15844.20 State expenditure on education 8285.81 7669.35 8248.25 8797.24 33000.65
Percentage of total GIA to State expenditure on education was 48 per cent. It would be seen from the above that there was continuous increase in grants-inaid expenditure every year. 3.5.2.2
Grant of Rs 1,789.77 crore paid to 780 colleges remained unassessed for three to 10 years
Release of grants without assessment
As per Government Resolution of October 1979, ad hoc salary grants were payable to the colleges based on the estimated expenditure of the respective year. These grants are assessed by the Joint Director, Higher Education on the basis of the statements of annual audited accounts submitted by the colleges. In seven45 regions assessment of ad hoc grants by the Joint Directors in respect of all 780 colleges were in arrears for three to ten years. Ad hoc grants paid, (without assessment) to these colleges during last four years, were as under:
Name of the Joint Directors Office (Region) Aurangabad Jalgaon Kolhapur Mumbai Nagpur Nanded Pune Total Number of Colleges 75 71 132 177 146 56 123 780 Year upto which assessment carried out 2002-03 2001-02 2002-03 2002-03 2001-02 2001-02 1995-96 Grant released without assessment (Rupees in crore) 126.88 191.56 235.14 339.56 241.44 166.97 488.22 1789.77 Period 2003-2005 2002-2005 2003-2005 2003-2005 2002-2005 2002-2005 2001-2005
The grants of Rs 1,789.77 crore paid to 780 colleges thus, remained unassessed for three to 10 years.
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Aurangabad, Jalgaon, Kolhapur, Mumbai, Nagpur, Nanded and Pune 72
Non-assessment of grants and poor financial control resulted in blocking of Rs 16.19 crore
It was noticed that due to non-assessment of grants by five46 Joint Directors, there was blocking of funds amounting to Rs 16.19 crore in 217 colleges as of May 2006. In reply, the Government attributed (August 2006) manpower shortage as the reason for non-assessment and stated that the assessment will be completed by February 2007. 3.5.2.3 Excess payment of salary grant The excess salary grant paid during the previous years was to be reduced from the grant payable during the current year.
Excess salary grant of Rs 75.96 lakh paid to five colleges of Nagpur and Nanded regions
It was noticed that in five47 colleges of Nagpur and Nanded region excess salary grants amounting to Rs 75.96 lakh paid during the previous years (2002-03 to 2004-05) was added to the adhoc grant payable during the current year, instead of reducing the grants. This resulted in excess release of salary grants amounting to Rs 75.96 lakh. The Government stated (August 2006) that excess salary grant paid would be recovered by October 2006 after carrying out the assessment. 3.5.2.4 Number of students considered for calculating tuition fees recoverable
Excess salary grant of Rs 11.79 lakh released to three colleges due to consideration of less number of students for tuition fees
The salary grant admissible to the colleges should be reduced to the extent of tuition fee recoverable by the colleges from the students. However, the Department continued to release salary grant without considering the reduction of tuition fee recoverable. It was observed that in three colleges, the Administrative Officer had considered less number of students for calculating tuition fees recoverable than the number of under graduate students enrolled in the respective year. This resulted in excess release of salary grant of Rs 11.79 lakh as detailed below: (Rupees in lakh)
Year Number of Students enrolled 973 1699 261 287 781 4001 Students considered for assessment of tuition fee 478 1192 239 278 341 2528 Difference Excess salary grant paid @ Rs 800 P.M. per student 3.96 4.06 0.18 0.07 3.52 11.79
Name of the college
JM Patel College, Bhandara RM Patel College, Bhandara CJ Patel College, Tirora Total
2003-04 2004-05 2001-02 2001-02 2004-05
495 507 22 9 440 1473
Aurangabad (Rs 6.65 crore), Kolhapur (Rs 5.99 crore), Mumbai (Rs 0.93 crore), Nanded (Rs 2.38 crore) and Pune (Rs 0.24 crore) 47 Maharashtra Arts and Commerce College, Nilanga, Nutan Mahavidyalaya, Selu, Peoples College, Nanded, PP College of Education, Gondia and SN Mor College, Tumsar
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During discussion (August 2006) Government stated that the difference of students enrolled and students considered during assessment is due to inclusion of students enrolled in non- aided courses of the colleges. However, no details were furnished in support of the statement. 3.5.2.5
Unspent balance of grants-in-aid of Rs 7.06 crore were lying with the Zilla Parishads
Unspent funds lying with Zilla Parishads
Government in Rural Development Department notified (1991) that the unspent grants lying with the ZPs should be credited to Government account by the end of August every year, without waiting for completion of assessment. It was noticed that Rs 7.06 crore were lying with the 31 ZPs towards unspent balance of grants-in-aid to primary schools upto 1999-2000. The Director, Primary Education, however, continued to release the grants during the subsequent years without adjusting the unspent amount lying with the ZPs. Government agreed (August 2006) to ascertain the facts and intimate the position. 3.5.2.6 Excess expenditure on transport allowance
Transport allowance paid for entire vacation period resulting in excess payment of Rs 1.62 crore to 4,608 lecturers
As per orders issued by Government in December 1998 and reiterated in May 2003, the transport allowance (TA) was admissible proportionately to the number of days on which the teaching staff attend to their duty during the vacation period. In Mumbai region, the colleges had paid the TA for entire vacation period instead of paying proportionately to the duty days attended by the staff, resulting in excess payment of TA to 4,608 lecturers amounting to Rs 1.62 crore during 2001-02 to 2004-05. In reply, the Government accepted (August 2006) the omission and agreed to recover the excess payment. 3.5.2.7 Payment of non-salary grant to secondary schools As per Secondary Education Department Resolution ( November 1999), out of the total non-salary grant admissible to secondary schools, the educational institutions should spent 70 per cent for educational purposes48 and the balance (30 per cent) for administrative purposes49. In three50 districts, it was noticed that the amounts spent for educational purposes by the educational institutions was only 20 per cent and 80 per cent of the grants was spent for administrative purposes. As a result, grant of Rs 11.34 lakh for educational purposes was diverted for administrative purpose. In reply, Government agreed (August 2006) to ascertain the facts and intimate the position.
48 49
Non-salary grants of Rs 11.34 lakh meant for educational purpose were diverted for administrative purpose
Library books, laboratory equipment, furniture for classes, computer printing and stationery Electricity charges, office equipment, advertisement, telephone expenses, building maintenance and repairs, garden expenses etc. 50 Jalgaon, Kolhapur and Raigad 74
3.5.2.8
Unauthorised fee collected from students by two colleges
Unauthorised collection of fee by colleges
Government orders (1979) specified that no fee which was not authorised by the Government or the University should be collected from the students. It was observed that one college each in Nasik and Aurangabad collected fees like campus development fee, laboratory development fee, center fee, breakage fee and computer fee amounting to Rs 74.89 lakh unauthorisedly from the students during the period 2001-02 to 2004-05. Government stated (August 2006) that unauthorised fee collected would be verified and action to refund the fee to the students will be taken. 3.5.2.9 Reduction of tuition fee in assessment Government allowed (September 2003) transfer of an amount equal to 5 per cent of salary grant of previous year as non-salary grant from the tuition fee recoverable from the students. It was observed from the annual accounts statement of six51 colleges of Kolhapur region that the colleges had not transferred the tuition fees (equivalent to 5 per cent of salary grant) for non-salary expenditure. The assessing officers, however, wrongly showed tuition fee of Rs 17.95 lakh as transferred for non-salary expenditure in the assessment of salary grant for the years 2003-2004 and 2004-2005. The amounts were not reduced from the salary grant assessed. Assessment of non-salary grant was also pending. In reply the Government agreed (August 2006) to recover the excess nonsalary grant and intimate suitable action against erring officials. 3.5.2.10 Release of grants without receipt of audited statements
Grants of Rs 51.30 crore released to colleges without receipt of audited statements of grants paid during previous years
According to the instructions issued (October 1979) by the Director, Higher Education, the grants received by the colleges were required to be audited by the Chartered Accountants and the audited statements of the colleges should be submitted to the Joint Director by August every year. Grants were not payable to the college who fails to submit the audited statements of accounts within the stipulated dates. It was observed that 20 colleges in Jalgaon and 11 colleges in Nanded region did not submit the audited statement of accounts for periods ranging from one to four years. However, the Joint Directors continued to release the grants (Rs 51.30 crore) to these colleges during the years 2001-02 to 2004-05 (Appendix 3.4). In reply, the Government stated (August 2006) that in Nanded region responsibility will be fixed and for Jalgaon region detailed explanation will be called for.
51
DD Shinde Sarkar College, Kolhapur, Minalben Mehta College, Panchgani, Sangola Mahavidyalaya, Sangola, Shankarrao Mohite Mahavidyalaya, Akluj, Y C College (KMC), Kolhapur and YC College, Warna 75
3.5.2.11
Unproductive expenditure of Rs 11.45 lakh per annum incurred on pay and allowances of surplus teachers
Un-productive expenditure on surplus teachers
The Government ordered (August 2004) to accommodate the surplus teachers of Government aided primary and secondary schools against the existing vacancies in other aided schools. If sufficient posts were not vacant in aided schools, the surplus teachers should be adjusted against the vacant posts in ZP or Nagar Parishad schools. It was, further ordered (October 2004) that if the local bodies refused to accommodate the surplus teachers against the vacant posts, then the schools under those local bodies would not be eligible for payment of grant. Scrutiny of records of Director of Primary and Secondary Education, Pune revealed that 716 teachers (110 primary and 606 secondary school teachers) were declared surplus in the year 2004-05 by the Department and they could not be accommodated due to lack of vacancies and continued to remain in service. Their pay and allowances of Rs 7.45 crore paid during 2004-05 thus proved unproductive. It was, further noted that Education Officer, ZP, Jalgaon appointed 126 new teachers during the year 2004-05 without accommodating the 11 surplus teachers identified in the year 2004-05 resulting in nugatory expenditure on payment of salary of Rs 11.45 lakh per annum. In reply, the Government agreed (August 2006) to ascertain the facts and intimate the position. 3.5.2.12 Irregular payment of house rent allowance to staff
HRA of Rs 7.49 lakh paid to the staff provided with quarters
According to instructions (January 1999) issued by the Directorate of Higher Education, no house rent allowance (HRA) was admissible to the employees residing in quarters provided by the management. It was noticed that one educational institution at Pune (Ferguson College), provided quarters to 13 teachers and also paid HRA of Rs 7.49 lakh to them between the period 2001-02 and 2004-05. The Government accepted (August 2006) the omission and agreed to recover the amount. 3.5.3 3.5.3.1 Programme implementation Irregular release of grants to colleges with poor enrolment
Grants of Rs 3.63 crore were released to colleges with poor enrolment
No grant was payable to the colleges who failed to fulfill the condition of minimum enrolment of 40 students for Urban and 30 students for Tribal/Rural areas as per the Government norms (1979) to first year of degree course of each faculty. It was observed that in 22 colleges (Appendix 3.5) under the jurisdiction of four52 Joint Directors, the minimum enrolment during the period 1999-2000 to 2004-05 of students was below the norms fixed by the Government. The Department, however, continued to release the grant to these colleges resulting in irregular release of grants of Rs 3.63 crore. Of these, in
52
Jalgaon, Kolhapur, Mumbai and Nanded regions 76
five53 colleges of Dhule, Nanded, Parbhani and Solapur Districts, two to three lecturers each were appointed (salary: Rs 0.93 crore) for two to 14 students only by the colleges during the period 1999-2000 to 2004-05. In reply the Government stated (August 2006) that corrective action would be taken after obtaining clarification from the concerned colleges. 3.5.3.2 Poor performance of aided schools In order to improve the quality of secondary education, the Government issued (November 2003) orders for initiating action against teachers for inefficiency, for de-recognition of schools and curtailment of non-salary grant to those aided schools where Secondary School Certificate (SSC) examination results were below 30 per cent in three consecutive years. It was observed that the SSC result of 178 out of 13,451 secondary schools in the State ranged from 0 to 30 per cent during the three consecutive academic years (2003, 2004 and 2005). No action was, however, initiated as envisaged in the order, against these schools by the Director of Secondary Education. The Government agreed (August 2006) to ascertain the facts and intimate action proposed. 3.5.3.3
Grants of Rs 1.55 crore were released to two schools despite violation of school code provisions
Continued recognition to schools despite default
As per provision contained in the Secondary School Code, the recognition of school is subject to fulfillment of basic requirement by the school management, non-adherence of which may lead to de-recognition of schools. Deputy Director of Education, Nagpur had recommended (April 2003, March 2004, May 2005) to Director of Secondary Education, Pune de-recognition of Devdia High School, Nagpur as appointment of teachers was not made as per rules and the SSC examination result was below 20 per cent during last four academic years. The school was also running on the first floor of unauthorisedly constructed building, cash book was not properly maintained since 1998, audit of accounts not conducted since 1987-88 and Kallanmiya High School, Kamptee, Nagpur for claiming salary grants for more teachers than sanctioned posts and inadequate space for students. Director of Secondary Education, Pune, however, continued recognition of these schools. The Director also released the grant of Rs 66.27 lakh and Rs 88.89 lakh respectively to these schools during the period 2002-03 to 2004-05. The Government agreed (August 2006) to ascertain the facts and intimate the action proposed.
SB Zadbuke College, Barshi, Arts, Commerce and Science MV Kusumba Guru Budhiswami Mahavidyalaya, Purna, Degloor College, Degloor and Mamatatai Jamkar MV Parbhani
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3.5.3.4
677 students were deprived of the scholarship of Rs 2.39 lakh
Students deprived of merit scholarship
The scheme of open merit scholarship to the meritorious students of middle school and high school students is operated by the Government. The scholarship was awarded for three years based on the results of a competitive examination conducted every year by the Bureau of Maharashtra State Examination, Pune. The rate of scholarship was Rs 25 for middle and Rs 40 per month for high school students to be paid for 10 months every year. In Jalgaon District, 215 middle and 462 high school eligible students were deprived of the scholarship amounting to Rs 2.39 lakh though funds were available. The Government agreed (August 2006) to ascertain the facts and intimate the action proposed. 3.5.4 Monitoring and evaluation The Government neither prescribed any returns nor Management Information System (MIS) except monthly expenditure statement. However, the Department was publishing the information on important indicators of performance such as school-drop out rate, teacher-pupil ratio, pupil to school ratio, details of surplus staff, etc., every year. The approval/sanction to the staff and the sections are monitored by inspecting the schools and strength of students as on 1 August every year. Release of excess ad hoc grants to the colleges, release of grants without receipt of audited statements and arrears in assessment of ad hoc grants indicated poor financial monitoring. Further, the Department had not carried out any evaluation of performance of schools and colleges during the period covered by audit. The Government accepted (August 2006) that no monitoring system was in existence. They, however, stated that an on line monitoring system would be evolved. 3.5.5 Conclusion The review of release and utilisation of grants-in-aid to non-government educational institutions disclosed that grants were released without assessment and without considering the tuition fee collected resulting in huge amount of unspent grants lying with the institutions and the Zilla Parishads. Incorrect assessment of grants due to irregular adjustment of tuition fees, institutions having unauthorisedly collected laboratory development fee, campus development fee, centre fee etc., were also noticed. Release of grants to colleges with poor enrolment, continued recognition to schools despite default and students deprived of merit scholarship also came to light. The important indicators of performance could not be monitored due to non-maintenance of up to date statistical data.
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3.5.6
Recommendations Assessment of grants needs to be carried out regularly to release grants on need basis. Inspection of colleges should be carried out periodically to ensure proper utilisation of grants and adherence to other norms stipulated. Colleges with poor enrolment record at same station need to be clubbed to avoid nugatory expenditure on pay and allowances of lecturers. The Department should devise a Management Information System (MIS) on important parameters of the functioning of the institutions and closely monitor their working.
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Higher and Technical Education Department

3.6
3.6.1
Functioning of Dr. Babasaheb Ambedkar Technological University

Introduction
Government of Maharashtra established the Dr. Babasaheb Ambedkar Technological University (University) under a State Act of 1989 by upgrading an existing polytechnic with the objective of providing facilities of higher technical education and promoting economic development of the region. The University located at Lonere in Raigad District, is a unitary university, which does not provide affiliation. The Governor is the Chancellor of the University. The Vice Chancellor is the principal executive and academic officer of the University. The executive council, academic council, the planning and evaluation board, the finance committee and the board of studies are the authorities which deliberate and plan the policies of the University. There are Deans for each faculty, who are responsible for implementation of the academic policies approved by the academic councils. The Registrar is the Chief Administrative Officer of the University, whereas the Finance and Accounts Officer is responsible for supervision over the funds of the University and for preparation of the annual accounts. The University conducts eight54 diploma, seven55 undergraduate and six56 postgraduate courses along with doctoral programmes and a special course in water quality management. Fifteen per cent of the seats of the various courses are reserved for students belonging to the four57 districts of Konkan region. During 2005-06, 2,512 students had enrolled in the University. Audit of the University was conducted in February and March 2006 by testcheck of records for the period from 2001-02 to 2005-06 to assess whether the technical education imparted was accredited and culminated in effective linkages with the industry for job generation; the infrastructure was adequate; and the management of manpower was efficient. The results of the test-check are detailed in the succeeding paragraphs.
Chemical, Petrochemical, Polymer & Plastic, Instrumentation, Computer, Electrical, Electronics & Telecommunication, Information & Technology, each course has intake capacity of 40 students 55 Chemical, Computer, Electrical, Electronics & Telecommunication, Information & Technology, Mechanical each having intake capacity of 60 students and Petrochemical having capacity of 30 students 56 Chemical, Computer, Electronics & Telecommunication, Environmental, Thermal & Fluids each course has intake capacity of 18 students 57 Raigad, Ratnagiri , Sindhudurg and Thane
54
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Audit findings
3.6.2 3.6.2.1 Financial management Receipts and expenditure
The receipts and expenditure of the University during the period 2001-02 to 2005-06 are as detailed below: (Rupees in lakh) Receipts Expenditure
State Government grant Central Own Revenue Capital assistance58 receipts59 Recurring NonRecurring 2001-02 187.66 NIL 33.00 168.08 290.69 258.77 2002-03 150.20 560.82 NIL 154.18 320.70 177.91 2003-04 139.92 353.00 17.50 205.24 316.27 512.04 60 2004-05 158.82 940.00 203.49 357.81 1007.56 230.00 2005-06 202.08 NIL 300.0061 NA NA NA Note: figures not available for 2005-06 as accounts for the year are still not finalised as of July 2006. Year
3.6.2.2
Grants were released on ad hoc basis without verifying the accounts
Recurring grants
The State Government gives annual recurring grants for meeting the expenditure on salaries and office expenses of the University. The amount of grants is decided after adjustment of the Universitys own receipts. The grants are released by the Government in four instalments, based on the estimated recurring expenditure for the year. The first three instalments are to be paid as advance grant and the last instalment is to be paid on receipt of the audited statement of expenditure for the previous year. While releasing the final instalment, excess payments of grants, if any, made during the previous year, are to be adjusted. It was, however, noticed that grants were released without adhering to the procedure stated above. It was noticed that the annual accounts of the University for the years 2001-02 to 2004-05 showed excess of income over expenditure. University's accounts for the year ending on 31 March 2005 depicted excess income of Rs 5.03 crore. This indicated that grants were paid to the University in excess of requirement. 3.6.2.3 Preparation of accounts As per Section 70 of the Act, the annual accounts of the University were to be submitted to the Government before 15 August every year. It was, however, noticed that the accounts for the years 2001-02 to 2004-05 were prepared six to 20 months after the due date of submission of the accounts. As of July 2006, none of the accounts were submitted to the Government.
Preparation of accounts for the years 2001-02 to 2004-05 was delayed by six to 20 months
58 59
AICTE assistance directly paid to the University Various fees and interest receipts 60 & 61 Rs 200 lakh and Rs 300 lakh received from Technical Education Quality Improvement Programme assisted by World Bank
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The Registrar stated (July 2006) that the post of Finance Officer had been lying vacant from 1998 to December 2004 and the officer in charge could not prepare the accounts in time. The reply indicated that the University contravened the provisions of the University Act on preparation of the Accounts and submission of the same to the Government. Further, in the absence of timely preparation of accounts, it was not clear as to how the expenditure was monitored and the requirement of funds was assessed. 3.6.2.4
Assets worth Rs 13.65 crore of the Institute of Petrochemical Engineering were not reflected in the University's accounts
Depreciation Fund
Section 68 of the Act prescribed that a depreciation fund should be created out of the Universitys own funds with the prior sanction of the Government. It was observed that the University had created no such Fund. It was also seen that depreciation was not provided on the assets of the University. The assets of Rs 13.65 crore created62 during 1998-99, in setting up of the Institute of Petrochemical Engineering, were not reflected in the balance sheet of the University even after seven years. Hence, the balance sheet did not reflect a true and fair picture of the Universitys finances. The Registrar stated (February 2006) that the matter would be placed before the appropriate authorities and necessary steps would be taken accordingly. 3.6.3 Academic activities The University conducts eight diploma, seven undergraduate and six postgraduate courses along with doctoral programmes and a special course in water quality management. 3.6.3.1 Accreditation of courses
Accreditation of three out of seven undergraduate courses and three out of eight diploma courses were not granted by AICTE
The University was required to obtain accreditation for all its courses from the All India Council for Technical Education (AICTE), a statutory body of the Government of India. Four63 out of seven undergraduate courses were accredited in May 2003 by AICTE for three years. Similarly, five out of eight diploma courses were accredited in February 2005 for three years. Accreditation was not granted by AICTE for the remaining undergraduate and diploma courses due to high pupil teacher ratio (29 : 1 during 2005-06) than the prescribed norms (15 : 1), deficiencies in qualifications and experience of the faculty members and lack of space and equipment. It was also noticed that no accreditation was sought by the University for postgraduate courses and doctoral programmes. On this issue, the reply of the Registrar (June 2006) was silent about the steps taken by the University for obtaining accreditation for the post-graduate courses and doctoral programmes.
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Main building, workshop and boy's hostel Petrochemical, Chemical, Mechanical and Electrical. 82
3.6.3.2
Research and consultancy project
One of the indicators of the professional and technical competence of faculty members and the adequacy of infrastructure facilities available at a university to undertake project assignments is the number of consultancy projects received by it. It was observed that the University undertook only four consultancy projects costing Rs 1.20 lakh during the period 2001-02 to 200506. The University stated (July 2006) that the facilities were being improved and that they had planned to undertake more consultancy projects. 3.6.3.3
Job placement through campus and off-campus interviews during 2003-04 to 2005-06 ranged between eight and 23 per cent
Job placement
One of the standards of assessing the quality of technical education imparted by a university is the extent of job placements secured by the students after completing their studies. About 201 students i.e., 20 per cent succeeded in securing job placements through campus and off-campus interviews during 2003-04 to 2005-06. Of these 26 students got placement in the adjoining industrial areas. Thus, the objective of creating an effective linkage with the industry for employment generation was not fully achieved. 3.6.4 Transfer of technology
Regional extension centres were not established to make useful information based on research findings available to people in the rural areas
One of the objectives of establishing the University in the backward area of Raigad was to achieve transfer of technology for the upliftment of the region and to disseminate knowledge of technological advances to the local community, thereby creating awareness. The University Act prescribed establishment of extension of education services to make useful information based on the research findings available to the people in the rural areas. The University was to conduct demonstrations and training programmes for the benefit of students, extension workers and other rural people, through the regional extension centres and extension service units. It was noticed that no extension service centres and extension service units had, however, been set up since establishment of the University, thus defeating the objective of transfer of technology to the people in the rural areas. The Registrar stated (July 2006) that an extension centre was proposed to be established by the end of December 2006. 3.6.5 3.6.5.1 Infrastructure Delay in completion of new academic and administrative building
The construction of an academic and administrative building, started belatedly in December 1999, had not been completed
In the beginning (1989), the University ran only one course viz., petrochemical engineering and was housed in three old sheds. In December 1999, the work of Phase I of an academic and administrative building (estimated cost: Rs 19.49 crore) was started which was to be completed in 36 months i.e., by December 2002. The work was to be executed through a contractor under the supervision of the Building and Works Committee of the University. Government, however, released only Rs 65 lakh during the period 1999-2000 to 2001-02. As the work was not completed in time, the estimates had to be
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revised (November, 2003) to Rs 29.60 crore and the period of completion of work had to be extended to December 2006. Sixty five per cent of the work had been completed as of July 2006 after incurring an expenditure of Rs 20.07 crore (68 per cent of revised estimate). The Registrar stated (July 2006) that due to paucity of funds, the contractor could complete only 40 per cent of the work during the stipulated period of three years 1999-2002.
Photo showing Incomplete Administrative Building of the University
There was, however, nothing on record to show that the Registrar had taken any effective initiatives for the required funds and the Building and Works Committee had reviewed the progress of the work periodically. Thus, the project suffered from lack of planning and inadequate monitoring. 3.6.5.2
Computerised Numerical Control machines and computers and networking components worth Rs 1.49 crore, were not installed due to non completion of computer centre
Purchase of laboratory equipment
In order to upgrade the existing laboratory for Computer Aided Design/Computer Aided Manufacturing (CAD/CAM), the University purchased (between September 2005 and January 2006), Computerised Numerical Control (CNC) machines worth Rs 37 lakh under the Government of India scheme Technical Education Quality Improvement Programme. These machines were not tested and installed due to incomplete building works and non-availability of power supply. The warranty period for the machines was one year from the date of commissioning or 15 months from the date of supply of the machines, whichever was earlier. Similarly, computers and networking components worth Rs 1.12 crore purchased between December 2005 and March 2006 were lying idle as of July 2006 due to noncompletion of the work of the computer centre. Thus, machinery worth Rs 1.49 crore was lying idle for six to 10 months. The Registrar stated (June 2006) that these equipments were required as part of the curricula and that the purchases had been made in anticipation of completion of the building works and availability of high tension power connection, for which an application had been submitted (November 2004) to the Maharashtra State Electricity Board. The reply is not tenable as the date of completion of the building was revised as December 2006, which was known in November 2003 itself. The purchase of equipments should have been arranged in such a way that they should have been available by the time the construction of the building was completed. Further, the AICTE released (2000-01) Rs 14 lakh each for Modernisation of the University's Material Science and Metallurgical Laboratory and for Modernisation of the Mechanical Workshop. It was noticed that equipments
84
and instruments worth Rs 7.24 lakh for modernisation of the Material Science and Metallurgical Laboratory were procured in October 2004. The remaining purchases worth Rs 7.06 lakh were made only in March 2006 as the total cost of the machine exceeded the budget provision.
Cylindrical grinding machines and horizontal milling machines were not purchased despite availability of funds
It was noticed that under the programme Modernisation of the Mechanical Workshop, a cylindrical grinding machine and a horizontal milling machine (estimated cost: Rs 7 lakh) needed for conducting practical work by B Tech and M Tech students had not been purchased as of June 2006 though AICTE funds (Rs 7.44 lakh) were available. As a result, for practical work included in these courses, the students had to be sent to other institutions. The Registrar attributed (June 2006) the delays to re-tendering for supply of the machine and inadequate responses from vendors. The fact remains that the objective of modernisation of laboratory to enhance instructional facilities and to develop facilities for carrying out research, consultancy, training and extension activities for the neighbouring industries was not achieved due to delays in purchase of the equipment. 3.6.5.3 Inadequate hostel facilities
Hostel facilities were inadequate and there was overcrowding in the hostels
The University was envisaged as a residential university; but its hostel facilities were inadequate. It could provide only five hostels for boys with an intake capacity of 1,120 students, against which 1,455 students were housed. There were no designated hostels for girls. Two out of the existing five boys hostels were converted into girls hostels. Thus, the existing hostel accommodation was insufficient as 1,000 students still to be provided with hostel facility and there was overcrowding in the hostels. The Registrar attributed (June 2006) the shortfall in hostels to inadequate funds; but the fact remains that the University was not able to match the requirement of hostels with the number of students. 3.6.5.4 Non-availability of medical room
Medical facilities were not provided in the hostels
As per AICTE norms, there should be a medical room having an area of 50 sqm in each hostel. It was observed that no such rooms were provided in the hostel. The nearest public health centre was located at a distance of six kilometer (km) while the cottage hospital was at a distance of 12 km. The University stated (June 2006) that no post of medical officer had been sanctioned for the University even though the matter was repeatedly taken up with the Government. A temporary arrangement of a visiting doctor was made; but that could not be continued even for a year. Thus, the students were deprived of medical facilities. 3.6.6 Manpower management Adequate administrative, technical and professional staff was essential for effective functioning of the University. It was observed that the manpower available in the University was not commensurate with the requirement sanctioned by the Government.
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3.6.6.1
Vacancies of staff in various cadres ranged between 26 and 64 per cent
Vacancy
It was observed that vacancies in various cadres of staff ranged between 26 to 64 per cent as per details given below:
Staff Degree course Professor Assistant Professor Lecturers Non-teaching Teaching Non-teaching Post sanctioned by Government 11 23 61 120 47 59 Persons-inposition 4 17 43 79 32 39 Percentage of vacancies 64 26 30 34 32 34
Diploma course
In the four departments of electrical engineering, electronics and telecommunication, computer engineering and information technology, no professor had been recruited since the starting of the first three courses in 1995 and the information technology course in 2001. The University employed faculty on ad hoc basis for running these courses. The Registrar attributed (June 2006) the vacancies to the remoteness of its location. The reply cannot be justified as availability of regular qualified teaching faculty is one of the requirements for AICTE accreditation of the courses run by the University. Moreover, non-availability of regular faculty could also adversely affect the quality of education. Further, despite shortage of faculty the University continued to send the teachers on deputation, for higher education, as mentioned elsewhere. 3.6.6.2
Though the University was facing staff constraints, 50 to 100 per cent of faculty members were sent on deputation for higher studies
Training facilities for staff
As per AICTE norms, adequate leave training reserves had to be maintained before sponsoring teachers for staff development programmes. Under the Government of Indias Quality Improvement Programme (QIP), faculty members could be deputed for pursuing higher education programmes to other institutions. The duration of such deputation was 18 months in the case of post graduate courses and 36 months in the case of doctoral programmes. In four departments out of seven, 50 to 100 per cent of the faculty members was on deputation at any given time. During the years 2000-01 and 2005-06, eight out of 18 faculty members in the Department of Mechanical Engineering, two out of three faculty members in the Department of Computer Engineering, one out of two faculty members in the Department of Mathematics and the sole faculty member of the Department of Information Technology were sent on deputation under the QIP programme. The Registrar stated (March 2006) that no specific rules for deputation of faculty members were available with them but care would be taken in future. Since the University was already facing severe staff constraint, sending the faculty members on deputation does not appear to be appropriate.
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3.6.7
Internal Control Mechanism
Internal control in the University was to be achieved through the holding of prescribed meetings of five64 statutory committees of the University. The members of these committees invariably included the Vice-Chancellor as exofficio Chairman, the Director of Technical Education, Deans of the various faculties, teachers of the University and eminent scientists nominated by the Government. 3.6.7.1
There were shortfalls in the required number of meetings to be held by various statutory committees
Statutory Committee meetings
As per the Act, the various statutory committees of the University were required to conduct meetings on a regular basis. Scrutiny of records revealed that there were shortfalls in holding the prescribed number of meetings as shown below:
Norms as per Act 7 4 3 3 -2002-03 Actually held 8 4 1 7 Shortfall 2 3 -Norms as per Act 7 4 3 3 -2003-04 Actually held 6 6 11 Shortfall 1 3 3 -Norms as per Act 7 4 3 3 -2004-05 Actually held 5 3 2 12 Shortfall 2 1 3 1 --
Name of the committee
1. Executive Council 2. Academic Council 3. Planning & Evaluation Board. 4. Finance Committee 5. Board of studies
It would be seen from the above that the statutory committees did not meet regularly. 3.6.7.2 Inspections of hostels Scrutiny revealed that a Hostel Committee was constituted in July 2002 to inspect the hostels and assess the needs of the students as well as the adequacy of the amenities in the hostels. However, no physical inspections of any of the hostels had been conducted. Though the University stated that the Committee held regular meetings, there were no recorded minutes of such meetings and or any follow up action. 3.6.7.3
Annual report of the University had not been submitted to the Government as required
Annual Report
The University Act prescribed the preparation of an Annual Report on the performance of the University and its submission to the Government by 15 May every year. It was noticed (March 2006) that Annual Reports had not been prepared since inception of the University. The University prepared (July 2006) an Annual Report for 2005-06 on being pointed out by Audit, but the same had not been submitted to Government.
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Executive council, academic council, the planning and evaluation board, the finance committee and the board of studies 87
3.6.8
Conclusion
Delay in preparation of annual accounts, non-provision of depreciation on the assets and huge unspent balances lying at the end of each year indicated poor financial management. Poor job placement indicated lack of linkages with industries. Extension service centres for transfer of technology were not established. Grants given by AICTE were either not utilised or utilised belatedly. The construction of the academic and administrative building, started belatedly in December 1999, had not been completed. Despite being a residential university, availability of hostels was not commensurate with the requirements, resulting in overcrowding in the hostels. In spite of huge shortage of teaching staff, the University continued to send many of its staff on deputation for higher studies. 3.6.9 Recommendations timely preparation of annual accounts and regular submission of the same to Government; fulfilling the AICTE conditions for obtaining accreditation for all its courses; expediting establishment of extension centres for transfer of technology; expediting construction of buildings and providing other infrastructure facilities; staggering deputation of the faculty for higher studies so as not to hamper the academic programmes and regular meetings of the Statutory Committees for effective monitoring of various activities. The matter was referred to the Principal Secretary to the Government in August 2006. Reply had not been received (October 2006). The University should ensure:
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FOOD, CIVIL SUPPLIES AND CONSUMER PROTECTION DEPARTMENT

3.7
3.7.1
Food Security, Subsidy and Management of Foodgrains

Introduction
Food management involves implementation of a well targeted Public Distribution System (PDS) for ensuring availability of foodgrains to public at affordable prices and for ensuring food security for the poor. For proper functioning of the PDS, it is necessary to ensure that the foodgrains of proper quality are obtained and the food is made available at concessional rate only to eligible persons. In Maharashtra, wheat was lifted as per the allocations of Government of India (GOI) from the Food Corporation of India (FCI), whereas paddy was procured by the State under the Minimum Support Price (MSP) scheme. In the State, Targeted Public Distribution System (TPDS), Antyodaya Yojana (AYY), Annapurna Scheme are implemented for distribution of foodgrains. About 2.36 crore (24.35 per cent) of the State population are covered under the Schemes. The PDS is implemented under the administrative control of Food, Civil Supplies and Consumer Protection Department. The Supply Commissioner is responsible for the allotment of foodgrains to the districts on the basis of their demand and allocation received from GOI. In the districts the lifting, transportation, storage and distribution of foodgrains is entrusted to the District Supply Offices (DSOs). In Mumbai and Thane Rationing Area (MRA/TRA), the lifting, transportation, storage and distribution of foodgrains are co-ordinated by the Controller of Rationing. A test-check of records was conducted between August and October 2005, in the Food, Civil Supplies and Consumer Protection Department, offices of the Financial Adviser and Deputy Secretary (FA&DS), Supply Commissioner, Director of Civil Supplies (Warehousing and Movement) and Controller of Rationing and six DSO offices65 (18 blocks) and three regions in Mumbai rationing area (MRA), to assess the efficiency of procurement functions and ensuring quality of foodgrains and arrangements of distribution to ensure that all needy people have access to foodgrains. 3.7.2 Budget and expenditure The budget allocations and expenditure incurred under PDS and Annapurna Scheme for the period 2001-06 are as follows:
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Jalna, Nagpur, Osmanabad, Pune, Sindhudurg and Solapur 89
Year 2001-02 2002-03 2003-04 2004-05 2005-06 Total
Budget PDS Annapurna 1,955.30 0.50 2,076.32 0.15 2,524.61 8.78 2,771.86 5.00 1,485.73 0.00 10,813.82 14.43
Expenditure PDS Annapurna 1,080.61 0.12 1,282.36 0.15 1,249.08 1.26 2,689.52 2.78 1,556.16 7.78 7,857.63 12.09
(Rupees in crore) Saving PDS Annapurna 874.70 0.38 793.96 1,275.53 7.52 82.34 2.22 (-)70.43 (-)7.78 2,956.09 2.34
It may be seen from the above that there was under utilisation of funds in PDS and Annapurna Scheme, which was due to less lifting of wheat and rice. 3.7.3 Allotment, lifting and distribution of foodgrains The details of allotment, lifting and distribution of foodgrains under the PDS during the period 2001-2006 were as under:
(Quantity in lakh MT) Allotment by GOI Lifting by the State Distribution Wheat Rice Wheat Rice Wheat Rice 2001-02 7.74 9.23 7.84 4.43 8.53 5.18 2002-03 50.37 27.19 10.58 6.05 11.59 6.78 2003-04 48.34 26.10 13.22 7.10 13.41 7.20 2004-05 47.49 26.98 15.06 8.81 15.02 8.50 2005-06 35.96 18.43 14.63 8.69 14.63 8.91 Total 189.90 107.93 61.33 35.08 63.18 36.57 Note: The excess distribution of wheat and rice during 2001-04 was out of the previous stock. Year
It could be seen from above table that lifting of foodgrains compared to the allocation by GOI was only 32 per cent. 3.7.4
Advance payment of Rs 1.04 crore to FCI remained unadjusted
Lifting of foodgrains and hiring of godowns
The foodgrains (mainly wheat and rice) are lifted by the Department from FCI godowns by making advance payments for the quantity mentioned in the Delivery Order (DO). The advance payments are adjusted by FCI based on the quantities lifted by the State Department of Civil Supplies. The advance payments made to FCI during the period up to 2005-06 to the extent of Rs 1.04 crore remained unadjusted due to non-reconciliation of actual lifting of foodgrains with the advance payments made to FCI. 3.7.4.1 Non-utilisation of hired godowns Prior to July 2001, the foodgrains were transferred from FCI godowns to godowns of the State Government. From July 2001, the Controller of Rationing, Mumbai delivered foodgrains from FCI godowns to fair price shops directly. Eight godowns under the control of Controller of Rationing, Mumbai were lying unutilised, out of which two godowns were hired from private parties. During the period July 2001 to March 2006 the Controller of Rationing, paid rent of Rs 22.17 lakh on these hired godowns. The Department replied (August 2006) that two godowns were not dehired due to court cases. The Departments reply is silent on reasons for non-utilisation of the hired godown.
Avoidable expenditure of Rs 22.17 lakh was incurred on unutilised hired godown
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3.7.5
Procurement of foodgrains
In Maharashtra paddy is procured under MSP through two agencies viz., Maharashtra Co-operative Marketing Federation (MSCMF) and Tribal Development Corporation (TDC). The agents are responsible for testing and quality control of paddy. During 2001-06 paddy procured was 4,03,688 MT at a cost of Rs 219.60 crore. Wheat was lifted as per the allocations of GOI from the FCI. Following irregularities were noticed: 3.7.5.1 Non-testing of foodgrains To ensure the prescribed quality of foodgrains, PDS Control Order, 2001 provided for conducting joint inspection by FCI officials and Departments officials of foodgrains stored in FCI godowns before lifting of foodgrains. In Mumbai and Solapur Districts it was noticed that no such joint inspection was carried out during 2001-06. PDS Control Order also provided that FCI shall issue to the State Government sealed samples of the stock of foodgrains supplied to them for distribution. This was also not done in these districts. Further, the State Government issued (November 2004) directions that the moisture content in the paddy should be tested before procurement and paddy with moisture content beyond specified limit (17 per cent) should not be accepted. In Sindhudurg District, moisture content of the paddy could not be tested, as the moisture meter was not available. 3.7.5.2
Excess payment of Rs 7.95 crore due to shortages, custody and maintenance charges allowed in excess of the limits prescribed
Excess payment in procurement of paddy
As per the GOI directives (February 2001) one per cent shortage in procurement was permissible. It was seen that the State Government allowed (November 2003) two per cent shortages to MSCMF. During the period 20012006, the value of the actual shortages allowed in excess of 1 per cent was Rs 5.19 crore of which Rs 80 lakh was recovered from MSCMF. Thus, excess payment of Rs 4.39 crore was made to MSCMF. Further, custody and maintenance charges for the period of one month (two months from 2003-04 onwards) are payable to the procurement agents as fixed by the GOI. It was seen that the payments were released to the procurement agents by the Department in excess of limit prescribed. This resulted in excess payment of Rs 3.56 crore during 2001-2006. Thus, total excess payment made was Rs 7.95 crore due to non-compliance of the prescribed norms of procurement. 3.7.6 3.7.6.1 Distribution of foodgrains Fixation of higher retail price of wheat for below poverty line beneficiaries
BPL families were charged in excess by Rs 0.35 per kg of wheat sold
As per the instructions from the Government of India, the State Governments are required to fix the end retail price at Fair Price Shops levels at not more than 50 paise per kg over and above the Central Issue Price (CIP) for below poverty line (BPL) population. It was observed that the end retail price of wheat was fixed 85 paise per kg above the CIP from September 2001. This
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resulted in excess charging to the beneficiaries to the extent of 35 paise per kg and thus the State Government recovered Rs 153.5766 crore during the period from September 2001 to March 2006. The Department replied that the end prices at FPS for BPL families were increased due to non-availability of adequate budget provisions. The reasons are not correct, as the available budget provisions were not utilised fully by the Department. 3.7.7 Identification of beneficiaries Given the resource constraints of the Government and the large amount of subsidy involved, it is absolutely essential that selection of beneficiaries is done in a foolproof manner. The deficiencies noticed in the identification of beneficiaries is discussed below. 3.7.7.1
The BPL cards issued under PDS were higher than the identified BPL families
Targeted Public Distribution System (TDPS)
Under the TPDS, foodgrains are supplied to BPL families at specially subsidised prices. For distribution of foodgrains to BPL families, the threshold level of income was Rs 15,000 per annum. The total number of BPL cards issued by the State under PDS as on March 2006 was 73.26 lakh. The total number of BPL families in the State, as per the survey conducted by Rural Development Department (RDD) for Integrated Rural Development Project (IRDP) applying the criterion of family income below Rs 15,000 per annum was 65.34 lakh (including urban poor) as on March 2000. The difference in identified BPL families and number of BPL cards was on the higher side. 3.7.7.2 Antyodaya Anna Yojana Antyodaya Anna Yojana (AAY) was launched in May 2001 for the poorest of the poor. Under the scheme, foodgrains are supplied at rates lower than those applicable under TPDS.
Ineligible beneficiaries were selected under the scheme
As per the directives of the State Government, selection of the targeted number of beneficiaries for the scheme was to be made out of BPL beneficiaries, arranging them in the ascending order of the income and thus giving preference to those with lower income. The names of the beneficiaries were also required to be approved by Gram Sabha by inviting applications from the head of the BPL family after certification of details by the Gram Sevak concerned. There were 10.02 lakh beneficiaries identified under the scheme (May 2001). It was noticed in Mumbai (E region) and Solapur Districts that the procedure of arranging all BPL families in ascending order of income was not observed in respect of 4,540 families selected for AAY. Further, 561 above poverty line (APL) families were issued AAY cards at Sangola and Deogad blocks (Sindudurg District). Further, 29 beneficiaries at Deogad block who had been rejected by the Gram Sabha were selected and AAY cards were issued to
66
Quantity of wheat 43,73,629 M.T. x Re 0.35 92
them. In four blocks67, cards were issued to 2,372 beneficiaries though their names were not approved by the Municipality/Gram Sabha. 3.7.7.3 Annapurna Scheme Annapurna scheme was launched from April 2000 under which 10 kgs of foodgrains is to be supplied free of cost to destitute persons of the age 65 years or above, who are not in receipt of old age pension. As per the eligibility criteria of the scheme, photograph of beneficiary, proof regarding age, income and residence are required to be produced. The names of the applicants are required to be recommended by talathi/gramsevak and approved by tahsildar. In Mumbai region (G ward) 2,561 beneficiaries were selected without verification of whether they received any old age pension. Further, 388 beneficiaries in Mohol and Sangola blocks of Solapur District and Washi block of Osmanabad District were identified without proof of income, residence and age and photograph. Further, 202 beneficiaries were selected even without recommendation of talathi and approval of tahsildar. During 2004-06, in 17 districts 23,536.40 quintals of foodgrains was distributed to 49,825 beneficiaries even though they were entitled for 19,697 quintals of foodgrains resulting in issue of excess quantity of 3,839.40 quintals as detailed in Appendix 3.6. The additional outflow of subsidy due to issue of excess quantity of foodgrains was Rs 18.8168 lakh. As the foodgrains under the scheme are distributed free of cost possibility of misuse of foodgrains cannot be ruled out. 3.7.8
Ration cards issued were more than the projected population of the districts
Review of ration cards
Three types of ration cards were in circulation in the State. White cards were issued to families with annual income of rupees one lakh or more, saffron colour cards to families having annual income less than rupees one lakh but more than Rs 25,904 and yellow cards to families whose annual income was less than Rs 25,904. The number of persons covered by the ration cards (447.58 lakh) as on March 2003 in nine69 districts was more than the projected population (339.63 lakh) by 107.95 lakh. Considering that the figure of total population also consists of people who may not have applied for issue of cards, the difference is alarming. The Department has not compiled the information as regards to number of units covered under ration cards from April 2003 to March 2006. As per the PDS (Control) Order, 2001, the State Government has to get the lists of BPL and Antyodaya families reviewed every year for the purpose of
67 68
Baramati, Pandharpur, Solapur and 'D', 'E' and 'F' regions of Mumbai 3839.40 quintal of foodgrains x Rs 490 (average price of rice and wheat during the period) = Rs 18.81 lakh 69 Dhule, Hingoli, Jalgaon, Jalna, Mumbai, Nadurbar, Osmanabad, Pune and Satara (District having variation between card population and projected population upto 10 per cent have not been commented upon) 93
deletion of ineligible families and inclusion of eligible families. For this purpose, State Government issued instructions in January 2003. In five blocks of Osmanabad District, 1,063 BPL/AAY cards were cancelled only in February-July 2004 i.e., after a delay of 12 to 16 months. The belated cancellation of cards resulted in supply of essential commodities to ineligible cardholders in the intervening period. Out of 21 sample blocks selected in seven districts, it was noticed that the list of BPL/AAY families were not reviewed in respect of 14 blocks70 in six districts. In Mumbai (E region), the ration cards were not reviewed in 505 shops out of 978. 3.7.9
The fair price shops did not display the prices and samples of foodgrain stocked under PDS
Functioning of fair price shops
The success of the PDS depends considerably on efficient functioning of the fair price shops (FPSs). The PDS Control Order, 2001 stipulated that the licensee of FPSs shall display details such as list of beneficiaries, entitlement of essential commodities, scale of issue and authority for redressal of grievances. It was observed (September 2005) that in 14 shops in seven districts no information was displayed on the notice board and in 59 shops information was incomplete. In 29 shops, samples of foodgrains were not displayed though required under the order. The Department did not ensure compliance of the PDS control order through regular visit of FPSs by DSOs. 3.7.10 Monitoring With a view to ensuring proper functioning of the scheme, the PDS control order emphasised the need for adequate monitoring through different mechanisms such as inspection of shops, formation of vigilance committees, prescription of periodical returns, use of computerised system to monitor the functioning of PDS at FPS level, etc. 3.7.10.1 Inspection of fair price shops
Inspection of FPSs was neglected by various district authorities
Public Distribution System (Control) order, 2001 specifies that the State Government should ensure regular inspection of fair price shops by the designated authority not less than once in six months. Accordingly, the Department prescribed norms for inspection of shops by various authorities viz., Additional Collector, District Supply Officer, Tahsildar, Nayab Tahsildar, Supply Inspection Officer and Supply Inspector. In Solapur District, against 3,576 to 3,624 shops required to be inspected during 2000-05, targets fixed for inspection were between 2,300 and 3,480 shops; shortfall being three to 55 per cent. Even with reference to these low targets shortfall in achievement ranged between four and 58 per cent during 2000-05. The District Supply Officer, Solapur did not fix any targets for inspection by Nayab Tahsildar.
70
Baramati, Bhivapur, Bhokardan, Deogad, Ghansangvi, Jafrabad, Kamptee, Lohara, Malshiras, Mohol, Sangola, Tuljapur, Vengurle and Washi 94
In two blocks of Sindhudurg District, the shortfall in achieving the target ranged between 11 and 48 per cent. In Jalna, Osmanabad Districts and three blocks in Pune District, information relating to targets fixed and achievement there against was not available. Further, out of 12 shops inspected by Audit jointly with departmental officers in the three71 blocks of Sindhudurg District it was noticed that eight shops were not inspected by departmental officers during the last two to five years. Thus, the inspection of FPS was neglected by various district authorities. In absence of inspection, proper functioning of FPSs was not ensured. 3.7.10.2 Preparation and submission of returns The PDS Control Order, 2001 provided for a system of periodical (monthly) reporting from fair price shop to district authorities, from district authorities to State Government and from State Government to Central Government. These returns relate to vital data such as number of ration cards attached to FPS, opening stock with FPS, allocation for the month and quantity actually received and distributed etc. In 84 shops inspected in seven districts, 50 shops did not furnish such information to the district authorities. In the absence of returns from FPSs, the correctness of information furnished by district authorities to the State Government and from State Government to the Central Government was doubtful. Further, the State Government had not sent the prescribed returns under PDS to the Central Government since March 2004 (May 2006). 3.7.10.3
The vigilance committees either were not formed or were ineffective
Functioning of vigilance committees
To monitor the distribution of essential commodities under Public Distribution System, constitution of vigilance committees at village level, block level and district level was prescribed by the State Government in November 1999. It was envisaged that the committees would hold monthly meetings. District level vigilance committee was not formed in Nagpur District. No information was available in Osmanabad District as to the formation of district level vigilance committee. In eight72 out of 21 blocks in seven districts, vigilance committees were not constituted and in respect of two73 blocks no information was available regarding this constitution. Monthly meetings of vigilance committees were also not held as required. Non-constitution of vigilance committees at various levels and failure to hold regular meetings indicates lack of seriousness in ensuring proper functioning of the Public Distribution System. 3.7.11 Conclusion The Department did not ensure the quality of the foodgrain while lifting the same from FCI. Excess payments were released to procurement agents by
71 72
Devgad, Dodamarg, Vengurle Pune-Baramati, Mulshi and Purandar, OsmanabadLahara and Tuljapur NagpurKamptee, Nagpur, Bhivapur 73 Washi in Osmanabad District and E region in Mumbai 95
allowing shortage in procurement and custody and maintenance charges in excess of the limits stipulated. Deficiencies were noticed in identification of beneficiaries of PDS. The State Government did not undertake periodical review to weed out bogus cards and ineligible units. There was substantial difference between the number of BPL cards issued under PDS and BPL families identified through survey as per Government of India norms. The monitoring of the functioning of Fair Price Shops was inadequate. The Vigilance Committees to be constituted for monitoring the distribution of foodgrains to the beneficiaries were either not formed or were ineffective. 3.7.12 Recommendations Government should ensure proper testing of foodgrains before its lifting from the Food Corporation of India or procurement from the farmers; There is a need to ensure that the identification of PDS beneficiaries is done in a foolproof manner and the list of beneficiaries is reviewed at regular intervals to prevent leakage of subsidy to ineligible persons; Inspection of fair price shops by the various administrative authorities needs to be strengthened and Vigilance Committees should be constituted in the districts where they are not formed. The functioning of the existing Vigilance Committees should be streamlined. The updated review was reported to the Government/Department in June 2006. Reply had not been received (October 2006).
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CHAPTER IV
AUDIT OF TRANSACTIONS Audit of transactions of departments of the Government, their field functionaries as well as that of autonomous bodies brought out several instances of ineffective management of resources and failures in the observance of the norms of regularity, propriety and economy. These have been presented in the succeeding paragraphs under broad objective heads.
4.1
Excess payment and wasteful/infructuous expenditure
FINANCE DEPARTMENT
4.1.1 Excess payment of Transport Allowance
Adoption of incorrect rates for payment of Transport Allowance to employees in Nagpur led to excess payment of Rs 6.45 crore. According to the recommendations of the Fifth Pay Commission, transport allowance (TA) to employees, in order to compensate them for the cost incurred on account of commuting between the place of residence and place of duty, was payable with effect from 1 October 1998. Classification of cities prescribed for payment of city compensatory allowance was to be adopted for deciding the rate of TA payable to the employees. Scrutiny of records (February 2006) of 281 Drawing and Disbursing Officers (DDOs) in Nagpur revealed that the TA was paid (Upto March 2005) to three categories of employees at the monthly rates of Rs 800, Rs 400 and Rs 100 against the admissible monthly rates of Rs 400, Rs 200 and Rs 75 respectively. On this being pointed out (September 2005), Finance Department confirmed (October 2005) that Nagpur was classified as a B1 class city (up to March 2005) and, therefore, TA at the rate applicable to other places was payable to the employees posted at Nagpur upto March 2005. Classification of Nagpur city was changed as 'A' class city from 1 April 2005. Thus, adoption of incorrect rates for payment of TA led to excess payment of Rs 6.45 crore in
Commissioner of Police, Nagpur; Joint Commissioner of Sales Tax, Nagpur; District Collector, Nagpur; Joint Director of Industries, Nagpur; District Industries Centre, Nagpur; Director, Institute of Science, Nagpur; Deputy Director of Education, Nagpur; Assistant Director District Employment, Nagpur; Medical Superintendent, Daga Memorial Government Hospital, Nagpur; Dean, Indira Gandhi Memorial College (College side), Nagpur; Civil Surgeon, Government General Hospital, Government Medical College & Hospital (College side), Nagpur; Government Medical College and Hospital (Hospital side), Nagpur; Dean, Super Speciality Hospital, Nagpur; Zilla Parishad, Nagpur; Deputy Director, Regional Fisheries Department, Nagpur; Nagpur Municipal Corporation, Nagpur; Shivaji Science College, Nagpur; Assistant Director of Health Services, Nagpur; New English High School, Nagpur; District Social Welfare Officer, Nagpur; Divisional Commissioner, Nagpur; Principal, Dr. Ambedkar College (Senior Division), Nagpur; Sindhu Mahavidyalaya, Nagpur; Government Dental College and Hospital, Nagpur; Registrar, High Court, Nagpur Bench; SFS College, Nagpur and District and Session Court, Nagpur
122 Departments upto March 2005. The position is required to be reviewed in other offices. The matter was referred to the Secretary to Government (May 2006) who confirmed (August 2006) the excess payment.
HOME DEPARTMENT
4.1.2 Wasteful expenditure on computerisation programme
Faulty planning of a computerisation programme resulted in wasteful expenditure of Rs 2.39 crore on software, training and miscellaneous expenses. The State Excise Department appointed (July 1998) the Computer Maintenance Corporation (CMC) as a Turnkey Service Provider (TSP) for their computerisation programme. The objectives of the programme were to develop an Management Information System tool for better management and control, standardise procedures and provide timely data for vigilance against illegal activities. A High Power Committee of the Government approved (March 1999) the System Requirement Specifications (SRS) and the total project cost was fixed (August 1999) at Rs 11.72 crore. The project was proposed to be implemented in the entire State. The State Excise Application System (SEAS) software was certified (March 2000) by the Government for implementation and was installed in the Commissionerate, three divisional offices, 10 district offices and 75 manufacturing units between April 2000 and April 2003 at a cost of Rs 4.62 crore, including procurement of hardware and training. The Government, however, decided (April 2003) to stop the implementation of the programme as it did not serve the purpose of monitoring of issue of licenses and transport passes, one of the crucial revenue earning activities. It was, therefore, decided (June 2004) to implement a modified web based software on Build, Own Operate and Transfer (BOOT) basis and to utilise the hardware meant for SEAS as nodes and clients in the new State Excise Web Enabled Application System (SEWA). Thus the Department's Information Technology strategy suffered from faulty planning as well as poor implementation and monitoring. The Department failed to specify its requirements clearly in accordance with its objectives and approved an incomplete SRS leading to stoppage of the implementation of the SEAS, rendering the expenditure of Rs 2.39 crore (excluding expenditure of Rs 2.23 crore on site preparation and hardware procurement) wasteful.
2 Agriculture, Animal Husbandry, Dairy Development and Fisheries; Employment and Self-Employment; Higher and Technical Education; Home; Industries, Energy and Labour; Law and Judiciary; Medical, Education and Drugs; Public Health; Revenue and Forests; Rural Development and Water Conservation; Social Justice, Cultural Affairs and Special Assistance and Urban Development
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Chapter IV Audit of Transactions
The Commissioner of State Excise admitted (March 2003) that the project was not successful as it had been conceived and executed without proper leadership at the highest level at the Commissionerate. The Government stated (November 2005) that out of the total expenditure of Rs 4.62 crore, only an amount of Rs 0.79 crore incurred on software had been rendered wasteful. The reply is not tenable because by abandoning SEAS and moving towards a new system SEWA to be executed on BOOT basis, the entire expenditure incurred on software development, training, implementation and handholding and other expenses amounting to Rs 2.39 crore had been rendered wasteful. Besides, the implementation of computer programme had also been delayed.
REVENUE AND FORESTS DEPARTMENT

4.1.3 Extra expenditure on additional component
Delay in declaration of land acquisition award resulted in extra expenditure of Rs 1.04 crore on additional component of land compensation. According to the provisions of the Land Acquisition Act, 1894, as amended in 1984 (Act) and instructions issued by the Government from time to time, notification (under Section 6 of the Act) confirming the land acquisition should be published in the Government Gazette within 12 months from the date of publication of notification (under Section 4 of the Act) for acquisition of the land. The final award (under Section 11 of the Act) for land compensation should be declared within 24 months from the date of issue of notification confirming the land acquisition. The land compensation includes, in addition to market value of land, an amount calculated at the rate of 12 per cent per annum of the market value of the land acquired (additional component) from the date of notification of land acquisition to the date of declaration of award (maximum period: 36 months) excluding the period for which proceedings are stayed by an order of a court. Scrutiny of records (December 2004 and December 2005) of the Divisional Commissioner, Aurangabad and Special Land Acquisition Officer (SLAO) (Minor Irrigation Works), Nanded and subsequent information collected (April 2006) showed that in two cases of land acquisition for Lendi Project in Nanded District, additional component of land compensation was calculated for periods of 34 and 23 months exceeding the stipulated period of 36 months. Thus, due to delay in declaration of the land award, the Department had to incur an extra expenditure of Rs 1.04 crore on land compensation. SLAO stated that according to the instructions received (December 2001) from Irrigation Department to stop the process of land acquisition (due to paucity of funds), the land acquisition procedure was not completed within the
99
stipulated period and therefore, additional component for more than 36 months was awarded. The reply was not acceptable, as the provisions of the Act permit delay in declaration of award only if the land acquisition proceedings are stayed by an order of court. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.1.4
Excess payment of land compensation
Failure of Special Land Acquisition Officer, Krishna Khore, Jalna to take into account the advance payment of land compensation resulted in excess payment of Rs 63.59 lakh to landholders. According to Section 23 of the Land Acquisition Act, 1894 (as modified from time to time), in addition to market value of land, an amount calculated at the rate of 12 per cent per annum of the market value of the land acquired (additional component) is payable from the date of notification under Section 4 of the Act to the date of declaration of award or the date of taking possession of the land, whichever is earlier. Scrutiny of land award for Rs 6.50 crore declared (October 2004) by the Special Land Acquisition Officer, Krishna Khore, Jalna (SLAO) for acquisition of land and houses (market value Rs 3.81 crore) in Deola (Tahsil Partur, District Jalna) for the Lower Dudhana Project revealed (September 2005) that an advance payment of Rs 1.62 crore was made to 324 landholders in 1996. The additional component in these cases was, therefore, payable on the balance market value of land and houses (Rs 2.19 crore) from the date of publication of notification (10 May 2001) to the declaration of award (01 October 2004). However, the SLAO allowed additional component on Rs 3.81 crore without deducting the advance payment of Rs 1.62 crore, which led to excess payment of land compensation of Rs 63.59 lakh to 311 landholders. When the matter was reported (May 2006) to the Principal Secretary to the Government, the Principal Secretary stated (July 2006) that the payment of additional component on the advance payment was justified under Section 34 of the Act. This explanation was not, however, acceptable, as the provisions of Section 34 of the Act relate to payment of interest after declaration of award. Further, there was no financial propriety in allowing the additional component on the amount, which had already been paid to the landholders in 1996.
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REVENUE AND FORESTS AND MEDICAL EDUCATION AND DRUGS DEPARMENTS

4.1.5 Unauthorised payment of Incentive Allowance
Non-observance of Government orders resulted in unauthorised payment of Rs 37.90 lakh on account of Incentive Allowance. The scheme of granting of Incentive Allowance (IA) to employees working in tribal and inaccessible areas of the State has been in vogue in the Tribal Development Department for more than a decade. Government (General Administration Department) extended (August 2002) the scheme to all the employees having their headquarters in the tribal, naxalite affected and other sensitive areas declared from time to time. Government (Home Department) declared Ballarpur taluka (Chandrapur District) as Naxal affected area by an order of 7 December 2004. Hence, employees working in this taluka were eligible for this benefit from the date of the order only. Scrutiny (February 2005) of records of five3 Drawing and Disbursing Officers (DDO) in Ballarpur showed that the Conservator of Forests (Transport and Marketing), Ballarpur and Administrative Officer, Rural Hospital, Ballarpur irregularly paid IA amounting to Rs 37.90 lakh4 to their employees (234 numbers) from August 2002 to December 2004 (upto 6 December 2004). When the matter of irregular payment of IA was referred (December 2005) for clarification, Government (General Administration Department) confirmed (January 2006) that IA to employees of Ballarpur taluka was payable only from 07 December 2004. The matter was referred to the Secretary to the Government in May 2006. Reply had not been received (October 2006).
SOCIAL JUSTICE, CULTURAL AFFAIRS AND SPECIAL ASSISTANCE DEPARTMENT

4.1.6 Unauthorised expenditure
Land valued at Rs 2.12 crore was distributed to 258 ineligible beneficiaries under Karmaveer Dadasaheb Gaikwad Sabalikaran and Swabhiman yojana. Karmaveer Dadasaheb Gaikwad Sabalikaran (Strengthening of income source) and Swabhiman (Increasing self-respect) Yojana to provide permanent source of livelihood to below poverty line (BPL) landless scheduled castes and navbaudhas (beneficiaries) between the age group of 18 years and 60 years
Block Development Officer, Conservator of Forests (Transport and Marketing), Administrative Officer, Rural Hospital, Tahasildar and Sub-treasury Officer, Ballarpur 4 At the rate of Rs 100 to Rs 500 per month depending on the basic pay of the employee 101
3
was implemented from April 2004. It envisaged purchase and distribution of good cultivable land to beneficiaries at 50 per cent subsidy and 50 per cent interest free loan. District Committee headed by the District Collector and assisted by the Special District Social Welfare Officer (SDSWO) was to verify the documented record of caste, name in the BPL list and age proof of beneficiaries before approving distribution of land to them. Records of five5 SDSWOs showed (January June 2006) that 269.14 hectares of land purchased at the cost of Rs 2.12 crore was distributed (2005-06) to 258 beneficiaries. The persons were not eligible for allotment as they did not produce caste certificates (72 beneficiaries), BPL card (81 beneficiaries) and birth certificates (105 beneficiaries) to the District Committee. SDSWOs accepted the omissions and stated (January - June 2006) that upper age limit would be got relaxed from the Government and land distribution to the ineligible beneficiaries, if any, would be cancelled. The matter was referred to the Principal Secretary to Government in June 2006. Reply had not been received (October 2006).
4.2
Violation of contractual obligations, undue favour to contractors and avoidable expenditure
HOME DEPARTMENT Maharashtra Maritime Board

4.2.1 Undue favour to a licensee
Failure in enforcing the provisions of an agreement resulted in short recovery of shipping fees of Rs 1.59 crore and undue benefit of Rs 67.42 lakh to a licensee. The Government decided (November 2000) to enter into a Memorandum of Understanding with interested developers for developing its jetties and ports on a Build, Own, Operate, Share and Transfer basis. Accordingly, an agreement was entered into (March 2002) by the Maharashtra Maritime Board (MMB) with M/s Balaji Leasing and Industries Company Limited (licensee) for the development of a port at Dighi in Raigad District. The stipulated construction period was five years. As per the agreement, on commencement of commercial operations (after completion of development work), the licensee was to pay landing and shipping charges at the rate of Rs 3 per MT for cargo handled at the port to MMB. Since the agreement of March 2002 did not contain any clause for cargo handling before the completion of the construction of the port, MMB permitted (October 2002) the licensee to commence cargo handling from the
5
Akola, Amravati, Aurangabad, Nagpur and Osmanabad 102
existing jetty through another agreement. As per this agreement, the licensee was to pay cargo and vessel related charges to MMB, as per the scale of rates fixed by the Government in August 2001 (amended from time to time). The licensee was also to maintain the jetty in good condition, failing which MMB could carry out necessary maintenance and repair works at the licensees cost. Scrutiny (December 2005) revealed that the licensee handled 3.10 lakh MT of bauxite between October 2002 and April 2004, for which he paid shipping charges at Rs 3 per MT instead of the Government approved rate of Rs 30 per MT of bauxite, citing the provisions of the agreement of March 2002, even though the development of the port had not been completed. Though MMB directed (March 2003) the licensee to pay landing and shipping charges at Rs 30 per MT, the licensee requested MMB to charge the fees at Rs 3 per MT. MMB, therefore, offered (July 2004) the licensee the option of taking the jetty and two of their other properties on lease in order to avail of the concessional rate of Rs 3 per MT. The lease premium for the properties was to be decided by a Government recognised valuer. MMB also agreed to adjust Rs 67.42 lakh spent by the licensee on repairs and maintenance of the jetty from the lease premium payable by it. Accordingly, the jetty and the other properties were leased to the licensee at a cost of Rs 1.85 crore. The MMB also directed (September 2005) the licensee to pay shipping charges at the rate of Rs 30 per MT on 3.10 MT of bauxite handled at the port from October 2002 to April 2004. The differential amount of Rs 83.70 lakh was, however, not paid by the licensee as of July 2006. It was observed that the licensee made the final payment of the lease premium only on 30 May 2005. Thus, the entire goods handled upto April 2005 (instead of April 2004) were to be charged at Rs 30 per MT instead of Rs 3 per MT. This led to short recovery of landing and shipping fees of Rs 75.87 lakh on 2.81 MT of bauxite handled by the licensee from May 2004 to April 2005. Failure to enforce the provisions of the agreements entered into with the licensee not only resulted in short recovery of Rs 1.59 crore (Rs 83.70 lakh and Rs 75.87 lakh) but also in undue benefit of Rs 67.42 lakh to the licensee. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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HOUSING DEPARTMENT Maharashtra Housing and Area Development Authority

4.2.2 Unintended benefit extended to estate agents
Ten per cent discount on group booking to estate agents for sale of MHADA tenements at Sion, Mankhurd and Malwani, resulted in an unintended benefit of Rs 1.82 crore towards commission to these agents. Regulation 14 (A) of the Maharashtra Housing and Area Development (Estate Management, Sale, Transfer and Exchange of Tenements) Regulations, 1981 provided that if there was no adequate response and demand for tenements in any particular scheme, such tenements were to be disposed of on a 'first come first served' basis or in any other manner determined by the Maharashtra Housing and Area Development Authority (MHADA) from time to time. With a view to disposing of unsold tenements MHADA decided (January 2001) the following: Ten per cent discount may be allowed on sale prices for group bookings6 of tenements of 225 sq ft each in the housing projects at Sion, Mankhurd and Malwani. This discount was not admissible to the housing project at Powai. The services of estate agents may be engaged for the sale of unsold tenements in the housing project at Powai on commission basis. In respect of these four housing projects, interest should not be levied upto 90 days for payment of the cost of the tenements. In spite of MHADA's decision to engage the services of estate agents for the Powai project only, the Director of Marketing, Mumbai Housing and Area Development Board (Board) engaged the services of estate agents for the housing projects at Sion, Mankhurd and Malwani also from January 2001 onwards. This action was subsequently regularised by MHADA in May 2003. Scrutiny (February 2005) revealed that the Board did not give fresh advertisements for sale of tenements in the projects at Sion, Mankurd and Malwani with the concession of 10 per cent discount on group bookings and extended time limit for payment of the cost of tenements. Instead, they engaged the services of the estate agents for sale of the tenements in these projects along with discount. This resulted in unintended benefit to the estate agents to the extent of Rs 1.82 crore towards commission. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
The booking of tenements by any firm, company or co-operative housing society for 32 or more numbers is treated as group booking. 104
4.2.3
Loss due to arbitrary fixation of land cost
Arbitrary fixation of land cost while regularising encroachment of a commercial plot at Vile Parle resulted in a loss of Rs 92.78 lakh. According to the pricing policy of the Maharashtra Housing and Area Development Authority (MHADA), lease premium for any land belonging to it and reserved for commercial purpose was to be levied at the current market rate or double the residential rate, whichever was higher. Scrutiny (June 2005) of the records of the Joint Chief Officer, Land and Administration, Mumbai Housing and Area Development Board (Board), a unit of MHADA, revealed that the Cabinet-Sub-committee on Housing had considered (December 1997) a proposal to regularise 978 sqm of land in Vile Parle, Mumbai in the name of a private company as the land had already been encroached upon by them. The Sub-committee directed (January 1998) the Government to issue orders to regularise the land according to the rules of MHADA. The Chief Officer of the Board informed (January 1998) the Government that the cost of the land was Rs 33,897 per sqm and according to the prevailing policy of MHADA, penalty at 50 per cent of the cost was leviable for regularisation of the encroachment. Consequent on receipt (February 1998) of a representation from the company for reduction in the cost of the land, the Government directed (February 1998) the Deputy Director, Town Planning, Mumbai to communicate the prevailing cost of land in that area. The Deputy Director assessed the market rate as of February 1998 as Rs 40,000 per sqm and intimated the same to the Government in June 1998. Though the Housing Department proposed to charge this rate, the Minister for Housing overruled (July 1998) the same on the grounds that the encroachment was protected. He stated that there was a decline in the real estate prices in Mumbai and hence this allotment would be financially beneficial to the Board. He also stated that the rates communicated by the Town Planning Authority and the Chief Officer, Mumbai Board were unrealistic and unreasonable. He, therefore, decided (July 1998) to charge Rs 20,000 per sqm for the land and not to levy the penalty of 50 per cent of the market cost for regularisation of the encroachment. The Government communicated (November 1998) the decision to the Board, which allotted (July 1999) 978 sqm of land to the company and asked them to pay Rs 2.20 crore within 45 days as lease premium. The allottee did not pay the lease premium within the prescribed time limit and paid only Rs 10 lakh in September 2000. Since the lease premium was not paid despite repeated demands, the Board sealed the premises in November 2003. The allottee filed (November 2003) a suit in the High Court which, in its interim order dated 12 November 2003, directed the allottee to immediately deposit Rs 60 lakh. According to a decision arrived at a joint meeting held in October 2004 of the allottee and the Board officials, the Board issued (March 2005) a revised order allotting developable built-up area of 463.90 sqm to the company at the rate of Rs 20,000 per sqm.
105
The total amount payable by the company according to the revised order was Rs 1.04 crore. Considering Rs 10 lakh paid in September 2000 and 60 lakh deposited in November 2003, the balance amount payable by him was Rs 34 lakh. This amount, however, was not paid till March 2006. Further, there was no basis for reduction of land cost from Rs 40,000 to 20,000 except the representation of the company. The arbitrary reduction in the land cost resulted in loss of Rs 92.78 lakh to the Board. Besides, the amount of Rs 34 lakh due from the company had also not been recovered till March 2006. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.4
Loss due to arbitrary fixation of sale price of tenements
Non observance of prescribed procedure of publicity and arbitrary fixation of sale price resulted in a loss of Rs 70.41 lakh as interest on locked up capital and permissible profit. According to the Maharashtra Housing and Area Development (Estate Management, Sale, Transfer and Exchange of Tenements) Regulations, 1981 tenements had to be disposed of after giving proper notices and advertisements in the media. According to the pricing policy of Maharashtra Housing and Area Development Authority (MHADA) interest (at 16 per cent) on the capital invested and profit (at 25 per cent) on the project cost was to be charged, while fixing the sale price of tenements. The MHADA administratively approved (April 1990) the construction of a building with 15 shops and 28 commercial offices on a plot at Vikhroli belonging to the Mumbai Housing and Area Development Board (Board) for an estimated cost of Rs 1.14 crore. The Brihanmumbai Municipal Corporation (BMC), while approving (1990) the plan, changed the nature of 28 tenements from commercial offices to residential tenements and reserved eight tenements for their use. The work started in August 1993 and was completed in February 19977, after incurring an expenditure of Rs 1.72 crore (upto 2002), as per BMC's approved plan. Scrutiny (March 2003) of records of the Board revealed that the Board advertised (5, 6 and 9 September 2000) 20 tenements for sale, treating them as non-residential, at the rate of Rs 3,250 per sq ft and Rs 3,000 per sq ft for the first and second floor respectively. However, no response was received from the prospective buyers. The Board did not take any action for disposal of the tenements till it received (February 2001) an application for allotment of all the 20 tenements at residential rates, from a co-operative housing society (CHS). MHADA
The occupation certificate was received in August 1998 and water supply was released in January 2000 after complying with the Municipal Corporation of Greater Mumbai's various formalities. 106
7
decided (June 2001) to allot all the 20 tenements to the CHS at a rate of Rs 1,250 per sq ft after foregoing the interest on the capital invested on the project and the profit to be charged and forwarded a proposal regarding the same to the Government for approval. This decision was taken on the basis of information presented to it by the Board that there was no response even after three advertisements and that there were no prospective buyers. However, the Board had not mentioned the fact that these tenements had been advertised for sale of a higher rate treating those as non-residential units. The Government communicated (November 2001) its approval to take action as per the rules, provided it was beneficial to MHADA. Thereafter, the Board informed (September 2002) MHADA that they had failed to mention that these tenements had been advertised as non-residential and recommended that a fresh advertisement should be issued, showing them as residential tenements. In spite of this recommendation, MHADA reiterated its earlier decision to allot the 20 tenements to the CHS. Accordingly, all the 20 tenements were allotted in November 2002 to the CHS, without going in for any advertisements. Thus, the allotment of the tenements directly to the CHS without going through the prescribed procedure of publicity and the arbitrary fixation of their sale price, resulted in a loss of Rs 70.41 lakh to MHADA by way of foregoing the interest on locked up capital and permissible profit. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
MEDICAL EDUCATION AND DRUGS DEPARTMENT

4.2.5 Avoidable expenditure due to delay in payment of water charges
Avoidable expenditure of Rs 31.27 lakh as penal charges was incurred due to delay in payment of water charges, despite availability of funds by St. George Hospital. Water is supplied to St. George Hospital, Mumbai by Brihanmumbai Municipal Corporation (BMC) at charges leviable at the prescribed rates. Failure to pay water charges before the due date attracts penal charges at the rate of two per cent per month on the unpaid dues. In order to avoid payment of penal charges, the Government permitted (November 2001) the hospital to utilise the funds lying in their Personal Ledger Account (PLA) for payment of water charges and electricity charges, subject to subsequent recoupment from the regular grants. Audit scrutiny in January 2006 and further information collected in June 2006 revealed that the hospital had paid Rs 31.27 lakh towards penal charges due to delayed payment of water charges for the period from June 2002 to April 2006. The bills were paid between June 2003 and May 2006.
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The Superintendent, St. George Hospital stated (March 2006) that though adequate annual provisions were made initially, the Government had imposed drastic cuts in the annual grants during the last two financial years, which had resulted in a severe financial crunch. The hospital had, however, resorted to withdrawals from their PLA for settling the pending bills. The reply is not tenable as there were persistent delays in payment of water charges which ranged from one to 12 months. Failure to pay the water charges on time in spite of availability of sufficient funds in their PLA resulted in avoidable expenditure to the tune of Rs 31.27 lakh. The matter was referred to the Secretary to the Government in May 2006. Reply had not been received (October 2006).
WATER RESOURCES DEPARTMENT

4.2.6 Unauthorised payment of mobilisation advance
Mobilisation advance of Rs 20.70 crore was given to a contractor in contravention of a contract condition. The work of construction of the earthen dam and appurtenant structures of the Arjun Medium Irrigation Project, Ratnagiri was awarded (July 2001) to a contractor for Rs 94.68 crore, with the stipulated period of completion being 60 months. Scrutiny (May 2005) of the records of the Executive Engineer, Ratnagiri Irrigation Division (South) showed that while approving (December 2000) the draft tender papers (DTP), the Chief Engineer, Konkan Region had deleted Clause No 16 of the draft contract regarding mobilisation advance (MA). The contractor requested (January 2002) for MA of Rs 22 crore on the ground that their dues amounting to approximately Rs 40 crore in respect of two ongoing works in other divisions were pending with the Government. With the intention of expediting the work, the Government sanctioned (March 2002) MA of Rs 14.20 crore (15 per cent of the accepted tender cost of Rs 94.68 crore) bearing interest of 15 per cent and recoverable in suitable instalments. The MA was paid on the contractor's running account bills between March 2002 and March 2004. Additional MA of Rs 6.59 crore was sanctioned (March 2005) by the Government on revision of the estimates based on the District Schedule Rates of 2003-04 and Rs 6.50 crore was paid in March 2005. Due to land acquisition and rehabilitation problems, the work was, however, started only in March 2005. The entire MA was recovered in March and April 2006, but interest amounting to Rs 7.88 crore had not been recovered till May 2006. As the clause regarding payment of Mobilisation Advance (MA) was deleted from the DTP, sanction of MA after finalisation of the tender vitiated the tender procedure and other tenderers were deprived of this benefit while
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quoting their offers. Thus, the selected contractor was given an undue benefit of MA. The Executive Engineer replied (October 2005) that the Government had sanctioned the MA. Due to land acquisition and rehabilitation problems, the work could not be started till March 2005 and recovery could not be made. He further stated (May 2006) that the MA was recovered in March/April 2006 and the request of the contractor for waiver of interest was under consideration. The reply is not tenable as the payment was made in contravention of the contract conditions. The intention of expediting the work had also not been achieved. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.7
Irregular allotment of work
Independent work costing Rs 3.69 crore at a different location was allotted to a contractor as an extra item without inviting tenders in violation of the manual provisions. The work of cement concrete lining of the seven km long Dahanu branch canal of the Surya bank canal of the Surya Irrigation Project was awarded to a contractor for Rs 1.65 crore on 7 February 2004. The work which was due for completion by 6 August 2004 was allowed extension upto 31 December 2005. The work had not been completed till May 2006. Scrutiny (January 2006) of the records of the Executive Engineer, Surya Canal Division I, Dahanu showed that the work of cement concrete lining of 18 km of distributory No 2 of the Surya right bank canal, which was unrelated to the work awarded to the contractor, was also allotted (November 2004) to the contractor at a cost of Rs 3.69 crore without calling for tenders, in clear violation of the provisions of the manual. The Executive Engineer stated (May 2006) that the work had been awarded to the same contractor, as it was part of the canal system handled by the same sub-division. The tendering process might have delayed the work and increased the cost as higher rates might have been quoted by tenderers. The Chief Engineer also approved this action. The reply is not tenable, as the work was not related to the original work awarded to the contractor. The work of cement concrete lining of distributory No. 2 of Surya right bank canal, awarded as an extra item, was not part of the original work of cement concrete lining of the Dahanu branch canal and was located at a different site. It should have been awarded after a regular tendering process as per the provision of the Maharashtra Public Works Manual. Thus, the award of work valued at Rs 3.69 crore was irregular. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
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4.2.8
Excess payment to a contractor
Non reduction in contract value as a result of design change resulted in excess payment of Rs 2.68 crore. Work of designing, planning and construction of intake well, approach channel, jack well, pump house, manufacturing and installation of pumping machinery including rising main and commissioning it for Varangaon Lift Irrigation Scheme was entrusted to a contractor on lump sum contract for Rs 93.33 crore for completion by July 2006. The contract was based on the departmental design for two rows of rising mains of mild steel (MS) pipes of 1.9 metres diameter and length 11,280 metres (5,550 metres in first stage and 5,730 metres in second stage). The contract stipulated that in case the offer is based on the contractors own design, all the designs and drawings would be got vetted from the Superintending Engineer, Central Designs Organisation (CDO), Nasik. The contract further stipulated that additional or the curtailed work would be regulated at the rates entered in the contract. Scrutiny (June 2002 and December 2005) of records of the Executive Engineer, Minor Irrigation Division, Jalgaon (EE) revealed that after acceptance (July 1999) of the tender, Chief Engineer, Tapi Irrigation Development Corporation, Jalgaon had approved (December 1999) contractors own designs for the rising main vetted (November 1999) by CDO. It contemplated a straighter alignment for laying of two rows of 8,640 metres rising main of MS pipes of diameter 1.84 metres. The reduction in length (by 2,640 metres) and diameter of the rising main, caused a corresponding reduction in the contract value by Rs 13.67 crore (cost of pipes not being provided), which necessitated proportionate reduction in the payment to be released to the contractor. This was, however, not done which led to violation of contractual provisions and extra payment of Rs 2.68 crore to the contractor based on the 3,401 metres rising main executed upto May 2005. EE stated (December 2005) that due to adoption of contractors design, there have been many changes, which led to various modifications resulting in more expenditure on some components of work as compared to the Departments estimate. The reply was not acceptable, as the contractor had made his offer after taking into consideration all the parameters stipulated in the tender. Since, the length and diameter of the rising main was reduced, department was bound to restrict the payments as per actual execution of the work. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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4.2.9
Extra payment to a contractor
Failure to regulate payments for work done as per the stipulations in the contracts led to extra contractual payment of Rs 1.80 crore to the contractor. The Executive Engineer, Mun Project Division, Khamgaon (EE) entrusted the work of construction of earthen dam from chainage 154 to 1,087 meter (M) including excavation of ridge cut from 0 to 720 M (Lendi Valley) of Utawali River Project (estimated cost: Rs 8.56 crore). The work was stipulated for completion by December 2005. During the pre-bid meeting, it was specifically clarified by the Assistant Chief Engineer, Irrigation Department, Amravati that the contractor should see in particular the quarry sites and satisfy himself about the quality and quantities of the material available as the rate quoted by him would be inclusive of all leads and lifts involved even if the materials are required to be brought from areas other than those specified in the quarry plans. The minutes of the meeting were also a part of the agreement. Scrutiny (December 2005 and June 2006) of records of EE showed that Superintending Engineer, Buldhana Irrigation Project Circle, Buldhana sanctioned (June 2004 and March 2005) three extra item rate lists8 for Rs 3.51 crore on account of charges for conveying sand and hearting material for construction of hearting and casing zones of embankment. As of April 2006, division paid Rs 76.66 lakh as extra lead charges for sand and other material required for the hearting zone. Similarly, for construction of the casing zone, the contractor was paid Rs 1.03 crore in addition to the tendered rate for bringing the required material from a longer lead. As the contractor was obliged to operate on other than specified quarries at his own cost even in case of non-availability of material in the specified quarries, payment of Rs 1.80 crore was beyond the contractual obligations. EE stated (June 2006) that due to non-availability of sand and the material required for hearting and casing zones in the specified areas, contractor had to bring the same from other borrow9 areas. This explanation was not acceptable as there was no provision in the contractual terms to compensate the contractor for material brought from quarries other than those specified in the contract. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
New item of work which crop up during execution of work for which there were no rates specified in the tender 9 borrow area includes quarry operations or usage of available material elsewhere 111
4.2.10
Avoidable payment to a contractor
Failure to challenge Arbitrators award by Godavari Marathwada Irrigation Development Corporation, Aurangabad led to avoidable payment of Rs 1.19 crore to a contractor. As per the provisions of the Arbitration and Conciliation Act, 1996 (Act) read with the Limitation Act, 1963 contractor's right to request for appointment of an Arbitrator for settlement of any dispute gets barred after three years from the date on which the claim is finally rejected. The provisions for redressal of disputes relating to works as incorporated in the tenders for three10 works (Works) of Kayadhu branch canal of Upper Penganga Project (UPP) were as under: In case the Executive Engineer (EE) did not give any decision on any dispute within 30 days, the contractor was to take up the matter within 30 days with the Superintending Engineer (SE), who was to give his decision within 60 days. If the contractor was dissatisfied with the SEs decision, he was to indicate his intentions to refer the dispute to arbitration within 30 days of the decision of the SE. Scrutiny of records of EE, UPP Division-VIII, Nanded showed (March 2006) that the EE paid Rs 1.19 crore in April 2005 to the contractor for the Works as per the award (AprilMay 2004) of an Arbitrator for extra lead charges for bringing material from other than stipulated quarries. The EE had rejected the contractor's claim of extra lead charges in July 1993. As per the terms of contract, the contractor should have approached the SE and sought arbitration on rejection of his claim by EE. This should have been done within a maximum period of 120 days from July 1993. Even under the provisions of the Limitation Act, 1963, he could have lodged the claim for arbitration by July 1996. The contractor, however, approached the SE only in January 2002 with additional11 claims for Rs 3.11 crore besides the claim for lead charges. The SE rejected the claims on 28 February 2002 stating that the dispute was barred under Limitation Act, 1963. The contractor approached the Chief Engineer (Special Projects), Irrigation Department, Aurangabad (CE) on 18 May 2002 seeking appointment of an Arbitrator for settlement of his claims. The CE neither allowed the request of the contractor for appointment of an arbitrator nor disallowed the claim and informed (29 May 2002) him that the EE had not taken a final decision. Thereafter, the contractor selected (June 2002) Chief Engineer, Water and Land Management Institute,
10
Construction of Kayadhu Branch Canal in Km 4 to 7, Construction of Kayadhu Branch Canal in Km 8 to 10 and Construction of aqueduct at chainage 7,860 11 Revised rates, Price escalation based on the revised rates, Reimbursement of loss and over heads, Payment for removal of weeds at works site, Payment for removal of silt, Reimbursement for idle charges for machinery, Reimbursement for idle charges for labourers and Payment of interest 112
Aurangabad as a sole Arbitrator, who declared (April/May 2004) the award for Rs 1.19 crore in favour of the contractor. As the claim was lodged after more than eight years from the date of rejection (July 1993) of the claim by the EE, the Senior Counsel of Godavari Marathwada Irrigation Development Corporation (GMIDC) and the Law and Judiciary Department advised (June-July 2004) to challenge the award. This was, however, not done and payment of Rs 1.19 crore was made (April 2005) to the contractor, which was avoidable. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.11
Undue favour to a contractor
Extra contractual benefit of Rs 83.09 lakh was given to a contractor due to sanction of work already covered by the agreement. Construction of a diversion canal for diverting water flow to Shirange nalla from coffer dam of Tillari Inter-State Irrigation Project was awarded to contractor A at 0.25 per cent below the estimated cost of Rs 1.23 crore. The work was completed (December 2002) at the cost of Rs 5.08 crore and final bills were paid in March 2005. Scrutiny of the final bills showed (August 2005) that the Superintending Engineer, Konkan Irrigation Circle, Ratnagiri (SE) had sanctioned (January 2004) Rs 83.09 lakh on account of an Extra Item Rate List (EIRL) for Extra cost for drilling and extra efforts required for excavation in hard rock though the extra item of work was covered by the item Excavation in all kinds of hard strata by blasting etc. Contractor A was, therefore, not eligible to any additional payment so far it related to excavation in hard rock. As the payment of Rs 83.09 lakh on EIRL was beyond the contractual obligations, it amounted to grant of undue favour to the contractor. SE admitted (May 2006) that the payment of Rs 83.09 lakh was beyond the contractual obligations and stated that the matter would be submitted to Government for ex post facto approval as an ex-gratia payment. Reply is not acceptable as the contract does not provide for such payment. The matter was referred to the Principal Secretary to the Government (June 2006). Reply had not been received (October 2006).
4.2.12
Extra contractual payment
Irregular sanction of Rs 59.88 lakh was accorded for de-watering during excavation of foundation for KT weir at Digras in Ahmednagar. The work of construction of Kolhapur Type (KT) weir at Digras in Ahmednagar District was entrusted (January 2002) to a contractor for Rs 1.98 crore (17.40 per cent above the estimated cost of Rs 1.69 crore). The contractor in his justification for the offer above the estimated cost of the work
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had mentioned (August 2001) that he had considered requirement of more dewatering than estimated by the Department. Scrutiny of records (March 2005) of Executive Engineer, Medium Project Division (EE) Ahmednagar and subsequent scrutiny revealed that though the rates for items of excavation for foundation were inclusive of cost of dewatering, the EE paid (August 2004) Rs 59.88 lakh to the contractor on Extra Item Rate Lists (EIRL). The Superintending Engineer and Administrator (SE), Command Area Development Authority, Ahmednagar had sanctioned (March and July 2004) the EIRL for de-watering during excavation on the plea that the provision for de-watering made in the estimate was inadequate. When the irregular payment of Rs 59.88 lakh was pointed out (September 2005), the SE stated (December 2005) that the EIRL was sanctioned as the estimated provision for de-watering during excavation was inadequate. This justification was not acceptable as the de-watering was a part of tender item, hence was not payable separately. Moreover, the contractor had submitted his offer considering the requirement of more de-watering than what had been estimated by the Department. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
4.2.13
Sales Tax recovered from the bills of a contractor under the Works Contract Act, 1985 was unauthorisedly refunded to him resulting in excess payment of Rs 52.12 lakh. The Maharashtra Act No. XIX of 1985, as amended in 1987, provides that the tendered rates quoted by the contractor should include all existing taxes leviable in respect of Works Contract. Hence, the contractor would not be entitled to any refund of taxes paid by or recovered from him. Scrutiny of the records of the Executive Engineer, Minor Irrigation Division, Wardha (EE) for construction of the earthen dam of Madan project (Under execution by a contractor at 11.50 per cent above the estimated cost of Rs 2.90 crore and scheduled for completion by June 2005) showed (June 2005) that the EE credited to Government account Rs 53.99 lakh upto February 2005 towards sales tax recovered from the contractors bills. Out of this amount, the EE had also refunded (July 2002 to September 2004) Rs 52.12 lakh to the contractor by debiting the work. The contractor offered higher than estimated cost considering the element of sales tax on Works Contract. The contractor was, therefore, not eligible for refund of the amount. Hence, excess payment of Rs 52.12 lakh was made by the EE to the contractor. The Executive Engineer stated (February 2006) that the amount paid to the contractor on account of tax deducted at source will be adjusted after all the
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transactions are reviewed and corrected suitably in the final bill. However, recovery had not been made in the final bill paid in August 2006. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.14
Avoidable expenditure
Use of colgrout masonry in place of uncoursed rubble masonry in construction of key walls, guide walls and divide walls of Anjani Medium Project led to avoidable expenditure of Rs 95.57 lakh. Work of construction of spillway and divide walls, key walls, guide walls etc. (Structures) of the Anjani Medium Project (District Jalgaon) was awarded to a contractor at 8.77 per cent above the estimated cost of Rs 5.94 crore for completion by February 2002 (extended upto December 2006). As per the schedule B of the tender, the structures were to be constructed in uncoursed rubble (UCR) masonry (estimated rate Rs 559.35 per cubic metre) while the spillway was to be constructed in colgrout masonry (estimated rate Rs 1008.60 per cubic metre). Scrutiny (October 2004 and September 2005) of records of the Executive Engineer, Jalgaon Medium Project Division, Jalgaon (EE) showed that the Chief Engineer (CE), Tapi Irrigation Development Corporation, Jalgoan had approved (October 1999) use of colgrout masonry for the structures also with a view to restrict the seepage of water. As the structures were to be provided down stream for protecting the spillway and the riverbanks, no storage of water behind them was possible. Consequently, there was no possibility of any direct seepage of water from the structures. The change was, therefore, injudicious in view of the higher cost of execution of colgrout masonry. As of October 2005, it contemplated additional burden of Rs 95.57 lakh on the work due to construction of left and right side guide walls (17,455.49 cubic metre) in colgrout as compared to the cost of uncoursed rubble masonry. The expenditure of Rs 95.57 lakh was avoidable. The EE confirmed (December 2005) that there was no necessity and propriety to provide colgrout masonry in guide walls, divide walls etc. in place of UCR masonry to restrict the seepage of water from dam. The CE, however, had not furnished any comments as of May 2006. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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4.3
Idle investment/idle establishment/blocking of funds and diversion/ misutilisation of funds
HOUSING DEPARMENT Maharashtra Housing and Area Development Authority

4.3.1 Blockage of funds on a commercial project
Improper planning of a commercial project and delay in finalising the land cost by Government resulted in blockage of Rs 6.35 crore. The Mumbai Housing and Area Development Board (Board), a unit of the Maharashtra Housing and Area Development Authority (MHADA), appointed (March 2000) a consultant for a project to construct a commercial complex at Bandra (West) in Mumbai. Accordingly, the Vice President and Chief Executive Officer (VP and CEO), MHADA requested the Collector, Mumbai Suburban District, to allot the required land to MHADA and accorded administrative approval of the project for Rs 147.02 crore under the advance contribution scheme12. Scrutiny of the records of the Executive Engineer, Housing Division, Bandra revealed (April 2005) that the plan for the project had been submitted (November 2000) to the Mumbai Metropolitan Regional Development Authority (MMRDA) even before according administrative approval to the scheme. A revised plan with a cloverleaf and an extension of a road through this plot, as suggested by MMRDA and the Maharashtra State Road Development Corporation, was submitted to MMRDA only in April 2005. The plan was not approved for want of clearance from the Environment Department and the Public Works Department. Besides, there was a proposed Metro railway to be passed through the plot. As such, the project was likely to require further revision. The architect was paid (between December 2000 and May 2002) fees of Rs 75.16 lakh and his claim for Rs 19.20 lakh was pending (May 2006). Meanwhile the Collector, Mumbai Suburban District raised (September 2004) a demand for Rs 79.24 crore based on the current market rate of the land. MHADA had already paid (February 2001 and May 2002) Rs 5.57 crore to the Government on ad hoc basis and requested (December 2004) the Collector to reduce the cost. The issue was pending with the Government. The approval of the plan of the project by the MMRDA was pending as the issue of title of the plot has not been settled as of August 2006.
12
Only seed capital was to be invested by the Board and the cost was to be collected from the prospective buyers according to the progress of the work. 116
Thus, improper planning of the project and the delay in finalising the cost of the land by the Revenue and Housing departments resulted in the delay of the project and blockage of Rs 6.35 crore incurred on it. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.3.2
Underutilisation of hostel building
The construction of a hostel building costing Rs 2.73 crore without proper justification resulted in its underutilisation. The Pune Housing and Area Development Board (Board), a unit of Maharashtra Housing and Area Development Authority (MHADA), could not obtain an occupation certificate for its administrative building from the Pune Municipal Corporation as the floor space index (FSI) consumed by it was in excess of the approved plan. The only option thus available to the Board to regularise the excess FSI, was to avail of the additional FSI permissible only for educational purposes. The Board, therefore, proposed (January 1996) to construct a multistoreyed hostel building for the Professional Development Centre (PDC), Pune by demolishing the existing old two storeyed building in the same layout where the administrative building of the Board was constructed. MHADA accorded (September 1996) the administrative approval (AA) for the work for Rs 82.07 lakh, which was revised (September 1998) to Rs 2.23 crore due to updation of the District Schedule of Rates and changes in the proposed building. The building consisting of 18 rooms with an intake capacity of 33 persons, three VIP suites, a residential quarter for the Director, an exhibition hall, a dining hall, a kitchen and a centre hall, completed in August 2002 at a cost of Rs 2.73 crore. Scrutiny (April 2006) of the records of the Executive Engineer of the Board and information collected from the Director, PDC disclosed that during the last three years the average annual occupancy of the hostel was only 232 against the available capacity of 4620 and training for only 42 days per year was conducted. The three VIP suites in the building were not at all utilised and the Director's quarters were not occupied except from February 2002 to June 2004. Thus, the building remained underutilised since its completion. Thus, the construction of the hostel building costing Rs 2.73 crore with the intention of regularising the extra FSI used in the administrative building and without proper justification resulted in its underutilisation. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
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PUBLIC WORKS DEPARTMENT

4.3.3 Unfruitful expenditure on construction of bridge
Construction of a bridge without acquiring land required for its approach roads resulted in unfruitful expenditure of Rs 2.05 crore. The work of construction of a major bridge between Mankule and Dherand on Revas-Poynad-Nagothane Road SH-86 was administratively approved (February 1999) for Rs 8.47 crore by the Public Works Department of the Government. While according the approval, it was stipulated that possession of the land required for the bridge and its approach roads should be taken before according the technical sanction. Despite this, the Chief Engineer, Mumbai region accorded (June 1999) the technical sanction for the work of the bridge at a cost of Rs 2.49 crore, without ensuring acquisition of land for the approach roads. He however, directed to take necessary action for acquisition of land in order to avoid idling of the bridge for want of approach roads. The Executive Engineer, Public Works Division, Alibag, District Raigad, awarded (October 2002) the work to a contractor for Rs 1.98 crore which was completed in February 2004 at a cost of Rs 2.05 crore. A test-check of records (December 2005) showed that though the land acquisition process had been initiated in March 1997 with the Land Acquisition Officer, Alibag, the land had not been acquired as of July 2006 due to opposition from the local paddy farmers. When the Executive Engineer suggested (June 2005) compulsory acquisition of the land, the Collector, Raigad intimated (August 2005) that the required land fell under the Coastal Regulatory Zone and prior permission of the Costal Regulatory Authority (CRA) was necessary for the same. The Executive Engineer sought the permission from CRA only in March 2006 and the same was awaited as of July 2006. Thus, the according of the technical sanction for the work by the Chief Engineer and its execution by the Executive Engineer without acquiring the land required for the approach roads, contrary to the Government's directive, resulted in idling of the bridge and rendering of the expenditure of Rs 2.05 crore on it unfruitful. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
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RURAL DEVELOPMENT AND WATER CONSERVATION DEPARTMENT

4.3.4 Unfruitful expenditure on an irrigation project
Failure to visualise the requirement of land for submergence led to unfruitful expenditure of Rs 51.01 lakh on diversion weir on Madeghat Nalla in Gondia District. Maharashtra Public Works Manual stipulates that no work should be commenced unless land required for the work is in the possession of the Department. Scrutiny of the records of the Executive Engineer, Minor Irrigation Division (local sector), Gondia (Division) showed (February 2003 and August 2005) that though an expenditure of Rs 51.01 lakh was incurred (upto March 2004) on Madeghat Nalla Project (project) in Gondia district to irrigate 177 hectares of land, there was no storage in the weir. The Division had considered only 0.21 hectares of land for submergence in the original estimates. However, in the revised estimates prepared in November 2004, 22.326 hectares of land was provided for storage of water. Though the Division provided (November 2004) Rs 33.58 lakh for acquisition of land in the revised estimates, the land had not been acquired as of May 2006. In the absence of land for submergence, storage was not possible. Thus, failure of the Division to correctly assess the area of land required for submergence and failure to acquire the required land resulted in unfruitful expenditure of Rs 51.01 lakh for over three years, besides denial of intended irrigation benefits to the beneficiaries. When this was pointed out, the Executive Engineer stated (December 2005) that the revised estimate was under scrutiny of the Superintending Engineer (SE), Local Sector Circle, Nagpur. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
TRIBAL DEVELOPMENT DEPARTMENT

4.3.5 Unfruitful expenditure on electric pump sets
crore was incurred on
Unfruitful expenditure of Rs 17.67 uncommissioned electric pump sets.
Government launched (1973) a scheme for supply of electric pump sets to tribal cultivators through the Commissioner, Tribal Development Department (TDD). The Tribal Development Corporation (TDC) was entrusted (July 1992) with the responsibility of installation of pump sets and arranging supply of electricity through the Maharashtra State Electricity Board (MSEB). The
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Project Officers (POs) of the Integrated Tribal Development Project (ITDP) were to ensure completeness of all the formalities and a committee under the chairmanship of the Additional Commissioner, TDD was to scrutinise the applications before sanctioning the release of the pump sets to the beneficiaries. Scrutiny of the records of the Commissioner, TDD, Nashik (November 2005) and information collected (June 2006) subsequently showed that the Department had purchased and supplied 16,815 electric pump sets between 1999-2000 and 2002-03. Of these, 11,867 pump sets costing Rs 17.67 crore were not commissioned as of May 2006. In 7,588 cases, MSEB did not sanction the demand notes for electric connections submitted by the Commissioner, TDD, in 3,912 cases the MSEB did not provide electricity supply to the beneficiaries even after fulfilling all the requirements and in the remaining 367 cases, pumps were lying with the TDC due to death of some beneficiaries and shifting of some of them. Though a similar comment was made in the Report of the Comptroller and Auditor General for the year ended 31 March 2000, the Department continued to supply the electric pump sets till the year 2002-03. The Public Accounts Committee (PAC), in their 13th Report of 2003-04, had recommended that all the electric pump sets should be made functional by March 2004 and a report was to be submitted to the PAC by April 2004. However, despite PAC recommendations 11,867 electric pump sets procured between 1999-2000 and 2002-03 remained uncommissioned, resulting in unfruitful expenditure of Rs 17.67 crore. The Commissioner replied (November 2005) that the Government had sanctioned Rs 35.43 crore during 2003-04 and 2004-05 to the MSEB to commission all the electric pump sets and also convened high level meetings13 (June 2004, July 2005 and October 2005) to expedite the matter. The reply is not tenable because the electric pump sets remained uncommissioned, despite recommendations of the PAC. The matter was referred to the Secretary to the Government in May 2006. Reply had not been received (October 2006).
13
meetings with Chief Engineer, Superintending Engineers, Divisional Engineers of MSEB and Additional Commissioners and Project Officers of TDD 120

4.3.6 Unfruitful expenditure
Failure to construct a Head Regulator valued at Rs 3.16 lakh on KulpaKaranja distributory resulted in unfruitful expenditure of Rs 1.36 crore on construction of Kotjambhora minor and denial of irrigation benefit to the cultivators. Construction of Kotjambhora (KJ) minor14, fed by KulpaKaranja (KK) distributory of right bank canal (RBC) of Bagh Itiadoh Interstate Irrigation Project (Project) to irrigate 330 hectares of land in the border district Gondia, was completed in March 2001 at the cost of Rs 1.36 crore. As the maintenance of KK distributory rested with Madhya Pradesh (MP) Government, their prior consent for the construction of head regulator (HR) to feed KJ minor was necessary. Scrutiny of the records of the Executive Engineer, Bagh Itiadoh Irrigation Division, Gondia (EE) showed (June 2005 and April 2006) that the Chief Engineer, Irrigation Department, Nagpur approached Government of MP only in March 2001 requesting them to permit construction of the HR on KK distributory for feeding the KJ minor. In February 2003, Government of MP conveyed their approval to construct the HR (estimated cost Rs 3.16 lakh) as per their plans and estimates with funds of Government of Maharashtra. The EE, however, did not commence the work as of April 2006. Consequently, the Department was unable to receive water from KK distributory and provide irrigation benefits to cultivators. Failure of the EE to synchronize the construction of the HR with the completion of minor in March 2001, thus resulted in unfruitful expenditure of Rs 1.36 crore for over five years. The EE stated (April 2006) that there was a delay in taking up the matter with Government of MP and further stated that due to paucity of funds, execution of HR could not be taken up. The contention of EE was not acceptable as he should have augmented the funds required for construction of HR looking to the existing investment of Rs 1.36 crore on the KJ minor. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
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Minor is a water carrying channel of size smaller than a distributory 121
WATER SUPPLY AND SANITATION DEPARTMENT Maharashtra Jeevan Pradhikaran

Inadequate planning, improper selection of an agency and lack of follow up of the system development life cycle resulted in unfruitful expenditure of Rs 31.69 lakh incurred on computerisation of accounts. The Maharashtra Jeevan Pradhikaran (MJP), an autonomous body of the Government of Maharashtra, initiated the development of an applications package (August 1998) for computerisation of accounts in its head office, circle offices and divisional offices to ensure speedy and accurate compilation of accounts. The Financial Advisor and Chief Accounts Officer (FA&CAO) of MJP entrusted the job of development in August 1998 and implementation of the applications package in January and June 2000 to M/s Unisol Informatics at a cost of Rs 2.40 lakh for development and Rs 34.58 lakh for implementation at 87 locations. The work of software development was however, taken up without proper documentation and without considering the various stages of system development such as preparation of detailed user requirements, choice of database system and technology architecture. Further, the package was developed and implemented between February 2000 and December 2001 without proper testing at 87 locations. As the package could not meet the users requirements, the software version was modified (July 2002) and implemented at four15 regions. It was, however, not implemented in two16 regions even after a lapse of four years due to various lacunae in the package. As such, out of Rs 36.98 lakh due to M/s Unisol Informatics, the FA&CAO made (August 1998 to January 2000) a part payment of Rs 31.69 lakh only. A status report obtained from 38 units revealed that utilisation of the package was stopped (four in 2000-01, 10 in 2001-02, 22 in 2002-03, one in 2003-04 and one in 2004-05) by the units because of an incomplete Running Account bill module, errors in carry forward of previous year balances, serial numbering of expenditure vouchers and receipts, non provision of capturing cheque numbers and returned cheques and non development of a module for annual accounts. As the MJP failed to take remedial action, the objective of speedy and accurate compilation of accounts at divisions, circles and central office could not be achieved even after eight years. Thus, inadequate planning, lack of user requirements documentation, acceptance testing, systematic approach and
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Konkan, Pune, Nashik and Aurangabad Amravati and Nagpur 122
follow up of the System Development Life Cycle resulted in rendering the expenditure of Rs 31.69 lakh unfruitful. The matter was referred to the Secretary to the Government in August 2005. Reply had not been received (October 2006).
4.3.8
Blocking of funds on purchase of DI pipes
Inaction on the part of Maharashtra Jeevan Pradhikaran to dispose of surplus DI pipes resulted in blocking of funds of Rs 1.59 crore. The work of Improvement to Distribution System for Nagpur City Stage-II, estimated to cost Rs 54.14 crore, awarded to various contractors between August 1993 and March 1998, was completed and handed over to the Nagpur Municipal Corporation in 1999-2000. Scrutiny of the records (February 2005) of the Executive Engineer (EE), Maharashtra Jeevan Pradhikaran (MJP), Works Division II, Nagpur showed that the Division had procured Ductile Iron (DI) pipes measuring 18,094.55 metres for the scheme and used 15,593.55 metres on its various works. The remaining DI pipes measuring 2,501metres, valued at Rs 1.59 crore could not be used as the area where the pipes were to be laid was busy with very heavy traffic making it technically unviable to lay the pipes. Scrutiny revealed that the DI pipes remained idle as of July 2006. The EE, MJP, Works Division II, Nagpur stated (July 2005) that DI pipes were declared as surplus in March 1999 and the position was intimated to the Superintending Engineer (SE), MJP Circle, Nagpur (June 1999 and February 2000) and the SE (CPDM), MJP, Navi Mumbai (August 2003 and August 2004). The reply is not tenable because no effective action was taken to dispose of the surplus DI pipes and possibility of deterioration of the DI pipes due to the passage of time could not be ruled out. Thus, lack of efforts in disposal of the surplus pipes resulted in idling of the same for over seven years and blocking of funds to the extent of Rs 1.59 crore. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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4.4
Regulatory issues and other points of interest

4.4.1 Non-recovery of loan component under Lok Awas Yojana
Loan instalments amounting to Rs 4.80 crore were not recovered from beneficiaries of Lok Awas Yojana. The Government decided (August 2000) to construct 50,000 houses under the Lok Awas Yojana (LAY), a component of the centrally sponsored National Slum Development Programme (NSDP). The Maharashtra Housing and Area Development Authority (MHADA) was the nodal agency for implementation of the scheme. Cost of each house is Rs 30,000, which included subsidy, loans and beneficiary contribution. The loan component of the scheme was to be raised by MHADA from HUDCO or other financial institutions. Scrutiny (May 2006) of the records of MHADA revealed that they could not obtain any loans from HUDCO or other financial institutions because Government guarantees could not be obtained. MHADA, therefore, provided loans amounting to Rs 6.49 crore to 7,263 beneficiaries during 2001-2006, for construction of houses under LAY. The amounts were however, debited to NSDP account instead of MHADA's account. As per the loan agreements executed by the Regional Boards of MHADA with the beneficiaries, the loan amounts together with interest, were to be recovered in monthly equated instalments within 10 years. It was, however, noticed that the Regional Boards had not taken any action for recovery of these loans. As a result, an amount of Rs 4.80 crore due for recovery from October 2001 to July 2006 remained unrecovered from the beneficiaries as of August 2006. Further, MHADA received (May 2003) Rs 9.48 crore from Social Welfare Department under LAY. As of March 2006, MHADA spent Rs 3.96 crore for payment of subsidy to backward class beneficiaries. The balance (Rs 5.52 crore) was lying with MHADA as of August 2006. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
FINANCE DEPARTMENT
4.4.2 Functioning of Treasuries
The major irregularities noticed during inspection of 33 treasuries by the Accountants General (Accounts and Entitlement) Mumbai and Nagpur during 2005-06 are brought out in the following paragraphs.
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Overpayment of pension Overpayment of pensionary benefits of Rs 66.69 lakh was made during 200506 on account of incorrect fixation of pension, incorrect calculation of Dearness relief, non-adjustment of provisional Death-cum-Retirement Gratuity etc. Irregular remittance of pension Every pensioner is required to submit life certificates every November, as prescribed under Rule 335 of the Maharashtra Treasury Rules, 1968, to the Treasury Officers (TOs)/ the Pay and Accounts Officer (PAO), Mumbai either directly or through the banks. The TOs/PAO, Mumbai have to watch the receipt of such certificates and should not make any payment unless the same is received. It was noticed that the TOs, Jalgaon, Kolhapur, Sangli and Solapur and the PAO, Mumbai did not ensure submission of life certificates and continued to remit pension aggregating to Rs 26.16 lakh to pensioners' account for periods ranging from seven to 75 months after their death. At the instance of Audit, the TOs and PAO, Mumbai recovered (June 2006) the amount. Reconciliation of deposit balances: As per Rule 528 of the Maharashtra Treasury Rules, 1968 (MTRs), Treasury Officers are required to reconcile the balances of deposit transactions with the balances appearing in the books of Accountant General (Accounts and Entitlement) I. It was observed that Treasury Officers, Kolhapur, Nandurbar, Nashik and Sindhudurg had not reconciled the balances under 8443 'Civil Deposits' for periods ranging from one to four years. Further, 1417 Treasury Officers had not reconciled the balances under 8336 Civil Deposits from 1 April 1985 onwards. Non-closure of inoperative Personal Deposits and Personal Ledger Accounts As per Rule 495 of MTRs and para 585(2) of the Maharashtra Treasury Manual (MTM), Personal Deposits (PD) and Personal Ledger Accounts (PLA) of the various designated offices of the Government (Administrators), which were not operated for more than three continuous accounting years, are to be closed and the balances in such PDs and PLAs are to be credited to the Government. It was noticed that 139 PDs and PLAs which were not operated for more than three years had not been closed and the balance of Rs 1.10 crore lying in them were not credited to the Government account. Non-reconciliation of Personal Deposits and Personal Ledger Accounts As per para 589 of MTM, Treasury Officers are required to obtain certificates of balances at the end of each year from the Administrators of PLAs. After obtaining such balance certificates, differences, if any, are required to be reconciled and the balance certificates after reconciliation with the treasuries
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Ahmednagar, Dhule, Jalgaon, Kolhapur, Nandurbar, Nasik, Pune, Ratnagiri, Raigad, Satara, Sindhudurg, Solapur, Sangli and Thane 125
are be forwarded to the Accountant General (Accounts and Entitlement)-I, Mumbai for confirmation of balances. It was noticed that the differences between the treasury balances and the Administrators' balances in 317 cases, the differences between treasury balances and sub-treasury balances in 356 cases and the differences between sub-treasury balances and Administrators' balances in 180 cases had not been reconciled. Besides, annual balance certificates had even not been submitted by 257 Administrators. Outstanding Non Payable Detailed Contingent bills As per the provisions contained in Chapter VI of the Pay and Accounts Office (PAO) Manual, the accounts of Abstract Contingent (AC) bills are to be compiled monthly by the PAO and the submission of Non Payable Detailed Contingent (NPDC) bills in respect of these AC bills are to be watched by maintaining an Objection Book register. It was, however, noticed that 1,728 items of AC bills amounting to Rs 179.51 crore between 1995 and 2005 were pending for want of NPDC bills from various Drawing and Disbursing Officers. These points were brought to the notice of the Principal Secretary to the Government in August 2006. Reply had not been received (October 2006).
4.4.3
Outstanding Inspection Reports, Departmental Audit Committee Meetings, Follow-up on Audit Reports and Action Taken Notes
Failure to enforce accountability and protect the interests of Government. Outstanding Inspection Reports The Accountant General (Audit) arranges to conduct periodical inspections of Government departments to test-check their transactions and verify the maintenance of important accounting and other records as per prescribed rules and procedures. These inspections are followed up with Inspection Reports (IRs) which are issued to the heads of the offices inspected with copies to the next higher authorities. Half yearly reports of pending IRs are sent to the Secretaries of the concerned departments to facilitate monitoring of action taken on the audit observations included in these IRs. The IRs issued up to December 2005, pertaining to 26 departments, disclosed that 26,520 paragraphs relating to 9,816 IRs were outstanding at the end of June 2006. Year-wise position of the outstanding IRs and paragraphs are detailed in the Appendix 4.1. Departmental Audit Committee Meeting In order to settle the outstanding audit observations contained in the IRs, Departmental Audit Committees have been constituted by the Government.
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During 2005-06, 1218 out of the 26 departments convened 31 Audit Committee meetings. Out of 14,617 paras outstanding against these 12 departments, 2,157 paras were discussed in the meetings and 897 paras were settled. For ensuring prompt compliance and early clearance of the outstanding paragraphs, it is recommended that the Government should address this issue seriously and ensure that an effective procedure is put in place for (a) taking action against the officials who fail to send replies to IRs/paragraphs as per the prescribed time schedule, (b) recovering losses/outstanding advances/ overpayments in a timebound manner and (c) revamping the system of responding to audit observations. Follow up on Audit Reports According to instructions issued by the Finance Department in March 1981, administrative departments were required to furnish Explanatory Memoranda (EMs) duly verified by Audit to the Maharashtra Legislature Secretariat in respect of paragraphs included in the Audit Reports, within one month of presenting the Audit Reports to the State Legislature. The administrative departments did not however, comply with these instructions. The position of outstanding EMs from 1999-2000 to 2004-05 was as below:
Audit Report 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 Total Date of tabling the Report 14 December 2001 29 April 2002 22 July 2003 8 July 2004 21 July 2005 18 April 2006 Number of Paragraphs and Reviews 55 43 51 48 48 39 284 Number of EMs received 43 35 34 16 8 2 138 Balance 12 8 17 32 40 37 146
In addition to the above, EMs in respect of 74 paras relating to the period prior to 1999-2000 were also outstanding. Department-wise details are given in Appendix 4.2. Action Taken Notes The Maharashtra Legislature Secretariat (MLS) Rules stipulate that Action Taken Notes (ATN) on the recommendations of the Public Accounts Committee (PAC) on those paragraphs of the Audit Reports that are discussed are required to be forwarded to the MLS duly verified by Audit. Likewise, ATNs indicating remedial/corrective action taken on the paras that are not discussed are also required to be forwarded to the PAC duly vetted by Audit. It was observed that there were inordinate delays and persistent failures on the
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Agriculture; Co-operation and Textiles; General Administration; Industries, Energy and Labour; Higher and Technical Education; Home; Public Health; Public Works; Rural Development and Water Conservation; School Education; Water Supply and Sanitation and Women and Child Welfare 127
part of a large number of departments in forwarding ATNs on audit paragraphs. Year-wise details of such paragraphs are indicated as follows:
Audit Report Total number of paras in the Audit Report 862 47 55 43 51 48 48 1154 Number of paras Discussed 151 -7 ----158 Not discussed 711 47 48 43 51 48 48 996 ATN awaited in respect of paras Discussed Not discussed 103 705 -47 6 48 -43 -51 -48 -48 109 990
1985-86 to 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 Total
The aforesaid point were brought to the notice of the Chief Secretary to the Government of Maharashtra in August 2006. Reply had not been received (October 2006).
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CHAPTER IV
AUDIT OF TRANSACTIONS Audit of transactions of departments of the Government, their field functionaries as well as that of autonomous bodies brought out several instances of ineffective management of resources and failures in the observance of the norms of regularity, propriety and economy. These have been presented in the succeeding paragraphs under broad objective heads.
4.1
Excess payment and wasteful/infructuous expenditure
FINANCE DEPARTMENT
4.1.1 Excess payment of Transport Allowance
Adoption of incorrect rates for payment of Transport Allowance to employees in Nagpur led to excess payment of Rs 6.45 crore. According to the recommendations of the Fifth Pay Commission, transport allowance (TA) to employees, in order to compensate them for the cost incurred on account of commuting between the place of residence and place of duty, was payable with effect from 1 October 1998. Classification of cities prescribed for payment of city compensatory allowance was to be adopted for deciding the rate of TA payable to the employees. Scrutiny of records (February 2006) of 281 Drawing and Disbursing Officers (DDOs) in Nagpur revealed that the TA was paid (Upto March 2005) to three categories of employees at the monthly rates of Rs 800, Rs 400 and Rs 100 against the admissible monthly rates of Rs 400, Rs 200 and Rs 75 respectively. On this being pointed out (September 2005), Finance Department confirmed (October 2005) that Nagpur was classified as a B1 class city (up to March 2005) and, therefore, TA at the rate applicable to other places was payable to the employees posted at Nagpur upto March 2005. Classification of Nagpur city was changed as 'A' class city from 1 April 2005. Thus, adoption of incorrect rates for payment of TA led to excess payment of Rs 6.45 crore in
Commissioner of Police, Nagpur; Joint Commissioner of Sales Tax, Nagpur; District Collector, Nagpur; Joint Director of Industries, Nagpur; District Industries Centre, Nagpur; Director, Institute of Science, Nagpur; Deputy Director of Education, Nagpur; Assistant Director District Employment, Nagpur; Medical Superintendent, Daga Memorial Government Hospital, Nagpur; Dean, Indira Gandhi Memorial College (College side), Nagpur; Civil Surgeon, Government General Hospital, Government Medical College & Hospital (College side), Nagpur; Government Medical College and Hospital (Hospital side), Nagpur; Dean, Super Speciality Hospital, Nagpur; Zilla Parishad, Nagpur; Deputy Director, Regional Fisheries Department, Nagpur; Nagpur Municipal Corporation, Nagpur; Shivaji Science College, Nagpur; Assistant Director of Health Services, Nagpur; New English High School, Nagpur; District Social Welfare Officer, Nagpur; Divisional Commissioner, Nagpur; Principal, Dr. Ambedkar College (Senior Division), Nagpur; Sindhu Mahavidyalaya, Nagpur; Government Dental College and Hospital, Nagpur; Registrar, High Court, Nagpur Bench; SFS College, Nagpur and District and Session Court, Nagpur
122 Departments upto March 2005. The position is required to be reviewed in other offices. The matter was referred to the Secretary to Government (May 2006) who confirmed (August 2006) the excess payment.
HOME DEPARTMENT
4.1.2 Wasteful expenditure on computerisation programme
Faulty planning of a computerisation programme resulted in wasteful expenditure of Rs 2.39 crore on software, training and miscellaneous expenses. The State Excise Department appointed (July 1998) the Computer Maintenance Corporation (CMC) as a Turnkey Service Provider (TSP) for their computerisation programme. The objectives of the programme were to develop an Management Information System tool for better management and control, standardise procedures and provide timely data for vigilance against illegal activities. A High Power Committee of the Government approved (March 1999) the System Requirement Specifications (SRS) and the total project cost was fixed (August 1999) at Rs 11.72 crore. The project was proposed to be implemented in the entire State. The State Excise Application System (SEAS) software was certified (March 2000) by the Government for implementation and was installed in the Commissionerate, three divisional offices, 10 district offices and 75 manufacturing units between April 2000 and April 2003 at a cost of Rs 4.62 crore, including procurement of hardware and training. The Government, however, decided (April 2003) to stop the implementation of the programme as it did not serve the purpose of monitoring of issue of licenses and transport passes, one of the crucial revenue earning activities. It was, therefore, decided (June 2004) to implement a modified web based software on Build, Own Operate and Transfer (BOOT) basis and to utilise the hardware meant for SEAS as nodes and clients in the new State Excise Web Enabled Application System (SEWA). Thus the Department's Information Technology strategy suffered from faulty planning as well as poor implementation and monitoring. The Department failed to specify its requirements clearly in accordance with its objectives and approved an incomplete SRS leading to stoppage of the implementation of the SEAS, rendering the expenditure of Rs 2.39 crore (excluding expenditure of Rs 2.23 crore on site preparation and hardware procurement) wasteful.
2 Agriculture, Animal Husbandry, Dairy Development and Fisheries; Employment and Self-Employment; Higher and Technical Education; Home; Industries, Energy and Labour; Law and Judiciary; Medical, Education and Drugs; Public Health; Revenue and Forests; Rural Development and Water Conservation; Social Justice, Cultural Affairs and Special Assistance and Urban Development
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The Commissioner of State Excise admitted (March 2003) that the project was not successful as it had been conceived and executed without proper leadership at the highest level at the Commissionerate. The Government stated (November 2005) that out of the total expenditure of Rs 4.62 crore, only an amount of Rs 0.79 crore incurred on software had been rendered wasteful. The reply is not tenable because by abandoning SEAS and moving towards a new system SEWA to be executed on BOOT basis, the entire expenditure incurred on software development, training, implementation and handholding and other expenses amounting to Rs 2.39 crore had been rendered wasteful. Besides, the implementation of computer programme had also been delayed.
REVENUE AND FORESTS DEPARTMENT

4.1.3 Extra expenditure on additional component
Delay in declaration of land acquisition award resulted in extra expenditure of Rs 1.04 crore on additional component of land compensation. According to the provisions of the Land Acquisition Act, 1894, as amended in 1984 (Act) and instructions issued by the Government from time to time, notification (under Section 6 of the Act) confirming the land acquisition should be published in the Government Gazette within 12 months from the date of publication of notification (under Section 4 of the Act) for acquisition of the land. The final award (under Section 11 of the Act) for land compensation should be declared within 24 months from the date of issue of notification confirming the land acquisition. The land compensation includes, in addition to market value of land, an amount calculated at the rate of 12 per cent per annum of the market value of the land acquired (additional component) from the date of notification of land acquisition to the date of declaration of award (maximum period: 36 months) excluding the period for which proceedings are stayed by an order of a court. Scrutiny of records (December 2004 and December 2005) of the Divisional Commissioner, Aurangabad and Special Land Acquisition Officer (SLAO) (Minor Irrigation Works), Nanded and subsequent information collected (April 2006) showed that in two cases of land acquisition for Lendi Project in Nanded District, additional component of land compensation was calculated for periods of 34 and 23 months exceeding the stipulated period of 36 months. Thus, due to delay in declaration of the land award, the Department had to incur an extra expenditure of Rs 1.04 crore on land compensation. SLAO stated that according to the instructions received (December 2001) from Irrigation Department to stop the process of land acquisition (due to paucity of funds), the land acquisition procedure was not completed within the
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stipulated period and therefore, additional component for more than 36 months was awarded. The reply was not acceptable, as the provisions of the Act permit delay in declaration of award only if the land acquisition proceedings are stayed by an order of court. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.1.4
Excess payment of land compensation
Failure of Special Land Acquisition Officer, Krishna Khore, Jalna to take into account the advance payment of land compensation resulted in excess payment of Rs 63.59 lakh to landholders. According to Section 23 of the Land Acquisition Act, 1894 (as modified from time to time), in addition to market value of land, an amount calculated at the rate of 12 per cent per annum of the market value of the land acquired (additional component) is payable from the date of notification under Section 4 of the Act to the date of declaration of award or the date of taking possession of the land, whichever is earlier. Scrutiny of land award for Rs 6.50 crore declared (October 2004) by the Special Land Acquisition Officer, Krishna Khore, Jalna (SLAO) for acquisition of land and houses (market value Rs 3.81 crore) in Deola (Tahsil Partur, District Jalna) for the Lower Dudhana Project revealed (September 2005) that an advance payment of Rs 1.62 crore was made to 324 landholders in 1996. The additional component in these cases was, therefore, payable on the balance market value of land and houses (Rs 2.19 crore) from the date of publication of notification (10 May 2001) to the declaration of award (01 October 2004). However, the SLAO allowed additional component on Rs 3.81 crore without deducting the advance payment of Rs 1.62 crore, which led to excess payment of land compensation of Rs 63.59 lakh to 311 landholders. When the matter was reported (May 2006) to the Principal Secretary to the Government, the Principal Secretary stated (July 2006) that the payment of additional component on the advance payment was justified under Section 34 of the Act. This explanation was not, however, acceptable, as the provisions of Section 34 of the Act relate to payment of interest after declaration of award. Further, there was no financial propriety in allowing the additional component on the amount, which had already been paid to the landholders in 1996.
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REVENUE AND FORESTS AND MEDICAL EDUCATION AND DRUGS DEPARMENTS

4.1.5 Unauthorised payment of Incentive Allowance
Non-observance of Government orders resulted in unauthorised payment of Rs 37.90 lakh on account of Incentive Allowance. The scheme of granting of Incentive Allowance (IA) to employees working in tribal and inaccessible areas of the State has been in vogue in the Tribal Development Department for more than a decade. Government (General Administration Department) extended (August 2002) the scheme to all the employees having their headquarters in the tribal, naxalite affected and other sensitive areas declared from time to time. Government (Home Department) declared Ballarpur taluka (Chandrapur District) as Naxal affected area by an order of 7 December 2004. Hence, employees working in this taluka were eligible for this benefit from the date of the order only. Scrutiny (February 2005) of records of five3 Drawing and Disbursing Officers (DDO) in Ballarpur showed that the Conservator of Forests (Transport and Marketing), Ballarpur and Administrative Officer, Rural Hospital, Ballarpur irregularly paid IA amounting to Rs 37.90 lakh4 to their employees (234 numbers) from August 2002 to December 2004 (upto 6 December 2004). When the matter of irregular payment of IA was referred (December 2005) for clarification, Government (General Administration Department) confirmed (January 2006) that IA to employees of Ballarpur taluka was payable only from 07 December 2004. The matter was referred to the Secretary to the Government in May 2006. Reply had not been received (October 2006).
SOCIAL JUSTICE, CULTURAL AFFAIRS AND SPECIAL ASSISTANCE DEPARTMENT

4.1.6 Unauthorised expenditure
Land valued at Rs 2.12 crore was distributed to 258 ineligible beneficiaries under Karmaveer Dadasaheb Gaikwad Sabalikaran and Swabhiman yojana. Karmaveer Dadasaheb Gaikwad Sabalikaran (Strengthening of income source) and Swabhiman (Increasing self-respect) Yojana to provide permanent source of livelihood to below poverty line (BPL) landless scheduled castes and navbaudhas (beneficiaries) between the age group of 18 years and 60 years
Block Development Officer, Conservator of Forests (Transport and Marketing), Administrative Officer, Rural Hospital, Tahasildar and Sub-treasury Officer, Ballarpur 4 At the rate of Rs 100 to Rs 500 per month depending on the basic pay of the employee 101
3
was implemented from April 2004. It envisaged purchase and distribution of good cultivable land to beneficiaries at 50 per cent subsidy and 50 per cent interest free loan. District Committee headed by the District Collector and assisted by the Special District Social Welfare Officer (SDSWO) was to verify the documented record of caste, name in the BPL list and age proof of beneficiaries before approving distribution of land to them. Records of five5 SDSWOs showed (January June 2006) that 269.14 hectares of land purchased at the cost of Rs 2.12 crore was distributed (2005-06) to 258 beneficiaries. The persons were not eligible for allotment as they did not produce caste certificates (72 beneficiaries), BPL card (81 beneficiaries) and birth certificates (105 beneficiaries) to the District Committee. SDSWOs accepted the omissions and stated (January - June 2006) that upper age limit would be got relaxed from the Government and land distribution to the ineligible beneficiaries, if any, would be cancelled. The matter was referred to the Principal Secretary to Government in June 2006. Reply had not been received (October 2006).
4.2
Violation of contractual obligations, undue favour to contractors and avoidable expenditure
HOME DEPARTMENT Maharashtra Maritime Board

4.2.1 Undue favour to a licensee
Failure in enforcing the provisions of an agreement resulted in short recovery of shipping fees of Rs 1.59 crore and undue benefit of Rs 67.42 lakh to a licensee. The Government decided (November 2000) to enter into a Memorandum of Understanding with interested developers for developing its jetties and ports on a Build, Own, Operate, Share and Transfer basis. Accordingly, an agreement was entered into (March 2002) by the Maharashtra Maritime Board (MMB) with M/s Balaji Leasing and Industries Company Limited (licensee) for the development of a port at Dighi in Raigad District. The stipulated construction period was five years. As per the agreement, on commencement of commercial operations (after completion of development work), the licensee was to pay landing and shipping charges at the rate of Rs 3 per MT for cargo handled at the port to MMB. Since the agreement of March 2002 did not contain any clause for cargo handling before the completion of the construction of the port, MMB permitted (October 2002) the licensee to commence cargo handling from the
5
Akola, Amravati, Aurangabad, Nagpur and Osmanabad 102
existing jetty through another agreement. As per this agreement, the licensee was to pay cargo and vessel related charges to MMB, as per the scale of rates fixed by the Government in August 2001 (amended from time to time). The licensee was also to maintain the jetty in good condition, failing which MMB could carry out necessary maintenance and repair works at the licensees cost. Scrutiny (December 2005) revealed that the licensee handled 3.10 lakh MT of bauxite between October 2002 and April 2004, for which he paid shipping charges at Rs 3 per MT instead of the Government approved rate of Rs 30 per MT of bauxite, citing the provisions of the agreement of March 2002, even though the development of the port had not been completed. Though MMB directed (March 2003) the licensee to pay landing and shipping charges at Rs 30 per MT, the licensee requested MMB to charge the fees at Rs 3 per MT. MMB, therefore, offered (July 2004) the licensee the option of taking the jetty and two of their other properties on lease in order to avail of the concessional rate of Rs 3 per MT. The lease premium for the properties was to be decided by a Government recognised valuer. MMB also agreed to adjust Rs 67.42 lakh spent by the licensee on repairs and maintenance of the jetty from the lease premium payable by it. Accordingly, the jetty and the other properties were leased to the licensee at a cost of Rs 1.85 crore. The MMB also directed (September 2005) the licensee to pay shipping charges at the rate of Rs 30 per MT on 3.10 MT of bauxite handled at the port from October 2002 to April 2004. The differential amount of Rs 83.70 lakh was, however, not paid by the licensee as of July 2006. It was observed that the licensee made the final payment of the lease premium only on 30 May 2005. Thus, the entire goods handled upto April 2005 (instead of April 2004) were to be charged at Rs 30 per MT instead of Rs 3 per MT. This led to short recovery of landing and shipping fees of Rs 75.87 lakh on 2.81 MT of bauxite handled by the licensee from May 2004 to April 2005. Failure to enforce the provisions of the agreements entered into with the licensee not only resulted in short recovery of Rs 1.59 crore (Rs 83.70 lakh and Rs 75.87 lakh) but also in undue benefit of Rs 67.42 lakh to the licensee. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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4.2.2 Unintended benefit extended to estate agents
Ten per cent discount on group booking to estate agents for sale of MHADA tenements at Sion, Mankhurd and Malwani, resulted in an unintended benefit of Rs 1.82 crore towards commission to these agents. Regulation 14 (A) of the Maharashtra Housing and Area Development (Estate Management, Sale, Transfer and Exchange of Tenements) Regulations, 1981 provided that if there was no adequate response and demand for tenements in any particular scheme, such tenements were to be disposed of on a 'first come first served' basis or in any other manner determined by the Maharashtra Housing and Area Development Authority (MHADA) from time to time. With a view to disposing of unsold tenements MHADA decided (January 2001) the following: Ten per cent discount may be allowed on sale prices for group bookings6 of tenements of 225 sq ft each in the housing projects at Sion, Mankhurd and Malwani. This discount was not admissible to the housing project at Powai. The services of estate agents may be engaged for the sale of unsold tenements in the housing project at Powai on commission basis. In respect of these four housing projects, interest should not be levied upto 90 days for payment of the cost of the tenements. In spite of MHADA's decision to engage the services of estate agents for the Powai project only, the Director of Marketing, Mumbai Housing and Area Development Board (Board) engaged the services of estate agents for the housing projects at Sion, Mankhurd and Malwani also from January 2001 onwards. This action was subsequently regularised by MHADA in May 2003. Scrutiny (February 2005) revealed that the Board did not give fresh advertisements for sale of tenements in the projects at Sion, Mankurd and Malwani with the concession of 10 per cent discount on group bookings and extended time limit for payment of the cost of tenements. Instead, they engaged the services of the estate agents for sale of the tenements in these projects along with discount. This resulted in unintended benefit to the estate agents to the extent of Rs 1.82 crore towards commission. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
The booking of tenements by any firm, company or co-operative housing society for 32 or more numbers is treated as group booking. 104
4.2.3
Loss due to arbitrary fixation of land cost
Arbitrary fixation of land cost while regularising encroachment of a commercial plot at Vile Parle resulted in a loss of Rs 92.78 lakh. According to the pricing policy of the Maharashtra Housing and Area Development Authority (MHADA), lease premium for any land belonging to it and reserved for commercial purpose was to be levied at the current market rate or double the residential rate, whichever was higher. Scrutiny (June 2005) of the records of the Joint Chief Officer, Land and Administration, Mumbai Housing and Area Development Board (Board), a unit of MHADA, revealed that the Cabinet-Sub-committee on Housing had considered (December 1997) a proposal to regularise 978 sqm of land in Vile Parle, Mumbai in the name of a private company as the land had already been encroached upon by them. The Sub-committee directed (January 1998) the Government to issue orders to regularise the land according to the rules of MHADA. The Chief Officer of the Board informed (January 1998) the Government that the cost of the land was Rs 33,897 per sqm and according to the prevailing policy of MHADA, penalty at 50 per cent of the cost was leviable for regularisation of the encroachment. Consequent on receipt (February 1998) of a representation from the company for reduction in the cost of the land, the Government directed (February 1998) the Deputy Director, Town Planning, Mumbai to communicate the prevailing cost of land in that area. The Deputy Director assessed the market rate as of February 1998 as Rs 40,000 per sqm and intimated the same to the Government in June 1998. Though the Housing Department proposed to charge this rate, the Minister for Housing overruled (July 1998) the same on the grounds that the encroachment was protected. He stated that there was a decline in the real estate prices in Mumbai and hence this allotment would be financially beneficial to the Board. He also stated that the rates communicated by the Town Planning Authority and the Chief Officer, Mumbai Board were unrealistic and unreasonable. He, therefore, decided (July 1998) to charge Rs 20,000 per sqm for the land and not to levy the penalty of 50 per cent of the market cost for regularisation of the encroachment. The Government communicated (November 1998) the decision to the Board, which allotted (July 1999) 978 sqm of land to the company and asked them to pay Rs 2.20 crore within 45 days as lease premium. The allottee did not pay the lease premium within the prescribed time limit and paid only Rs 10 lakh in September 2000. Since the lease premium was not paid despite repeated demands, the Board sealed the premises in November 2003. The allottee filed (November 2003) a suit in the High Court which, in its interim order dated 12 November 2003, directed the allottee to immediately deposit Rs 60 lakh. According to a decision arrived at a joint meeting held in October 2004 of the allottee and the Board officials, the Board issued (March 2005) a revised order allotting developable built-up area of 463.90 sqm to the company at the rate of Rs 20,000 per sqm.
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The total amount payable by the company according to the revised order was Rs 1.04 crore. Considering Rs 10 lakh paid in September 2000 and 60 lakh deposited in November 2003, the balance amount payable by him was Rs 34 lakh. This amount, however, was not paid till March 2006. Further, there was no basis for reduction of land cost from Rs 40,000 to 20,000 except the representation of the company. The arbitrary reduction in the land cost resulted in loss of Rs 92.78 lakh to the Board. Besides, the amount of Rs 34 lakh due from the company had also not been recovered till March 2006. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.4
Loss due to arbitrary fixation of sale price of tenements
Non observance of prescribed procedure of publicity and arbitrary fixation of sale price resulted in a loss of Rs 70.41 lakh as interest on locked up capital and permissible profit. According to the Maharashtra Housing and Area Development (Estate Management, Sale, Transfer and Exchange of Tenements) Regulations, 1981 tenements had to be disposed of after giving proper notices and advertisements in the media. According to the pricing policy of Maharashtra Housing and Area Development Authority (MHADA) interest (at 16 per cent) on the capital invested and profit (at 25 per cent) on the project cost was to be charged, while fixing the sale price of tenements. The MHADA administratively approved (April 1990) the construction of a building with 15 shops and 28 commercial offices on a plot at Vikhroli belonging to the Mumbai Housing and Area Development Board (Board) for an estimated cost of Rs 1.14 crore. The Brihanmumbai Municipal Corporation (BMC), while approving (1990) the plan, changed the nature of 28 tenements from commercial offices to residential tenements and reserved eight tenements for their use. The work started in August 1993 and was completed in February 19977, after incurring an expenditure of Rs 1.72 crore (upto 2002), as per BMC's approved plan. Scrutiny (March 2003) of records of the Board revealed that the Board advertised (5, 6 and 9 September 2000) 20 tenements for sale, treating them as non-residential, at the rate of Rs 3,250 per sq ft and Rs 3,000 per sq ft for the first and second floor respectively. However, no response was received from the prospective buyers. The Board did not take any action for disposal of the tenements till it received (February 2001) an application for allotment of all the 20 tenements at residential rates, from a co-operative housing society (CHS). MHADA
The occupation certificate was received in August 1998 and water supply was released in January 2000 after complying with the Municipal Corporation of Greater Mumbai's various formalities. 106
7
decided (June 2001) to allot all the 20 tenements to the CHS at a rate of Rs 1,250 per sq ft after foregoing the interest on the capital invested on the project and the profit to be charged and forwarded a proposal regarding the same to the Government for approval. This decision was taken on the basis of information presented to it by the Board that there was no response even after three advertisements and that there were no prospective buyers. However, the Board had not mentioned the fact that these tenements had been advertised for sale of a higher rate treating those as non-residential units. The Government communicated (November 2001) its approval to take action as per the rules, provided it was beneficial to MHADA. Thereafter, the Board informed (September 2002) MHADA that they had failed to mention that these tenements had been advertised as non-residential and recommended that a fresh advertisement should be issued, showing them as residential tenements. In spite of this recommendation, MHADA reiterated its earlier decision to allot the 20 tenements to the CHS. Accordingly, all the 20 tenements were allotted in November 2002 to the CHS, without going in for any advertisements. Thus, the allotment of the tenements directly to the CHS without going through the prescribed procedure of publicity and the arbitrary fixation of their sale price, resulted in a loss of Rs 70.41 lakh to MHADA by way of foregoing the interest on locked up capital and permissible profit. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
MEDICAL EDUCATION AND DRUGS DEPARTMENT

4.2.5 Avoidable expenditure due to delay in payment of water charges
Avoidable expenditure of Rs 31.27 lakh as penal charges was incurred due to delay in payment of water charges, despite availability of funds by St. George Hospital. Water is supplied to St. George Hospital, Mumbai by Brihanmumbai Municipal Corporation (BMC) at charges leviable at the prescribed rates. Failure to pay water charges before the due date attracts penal charges at the rate of two per cent per month on the unpaid dues. In order to avoid payment of penal charges, the Government permitted (November 2001) the hospital to utilise the funds lying in their Personal Ledger Account (PLA) for payment of water charges and electricity charges, subject to subsequent recoupment from the regular grants. Audit scrutiny in January 2006 and further information collected in June 2006 revealed that the hospital had paid Rs 31.27 lakh towards penal charges due to delayed payment of water charges for the period from June 2002 to April 2006. The bills were paid between June 2003 and May 2006.
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The Superintendent, St. George Hospital stated (March 2006) that though adequate annual provisions were made initially, the Government had imposed drastic cuts in the annual grants during the last two financial years, which had resulted in a severe financial crunch. The hospital had, however, resorted to withdrawals from their PLA for settling the pending bills. The reply is not tenable as there were persistent delays in payment of water charges which ranged from one to 12 months. Failure to pay the water charges on time in spite of availability of sufficient funds in their PLA resulted in avoidable expenditure to the tune of Rs 31.27 lakh. The matter was referred to the Secretary to the Government in May 2006. Reply had not been received (October 2006).

4.2.6 Unauthorised payment of mobilisation advance
Mobilisation advance of Rs 20.70 crore was given to a contractor in contravention of a contract condition. The work of construction of the earthen dam and appurtenant structures of the Arjun Medium Irrigation Project, Ratnagiri was awarded (July 2001) to a contractor for Rs 94.68 crore, with the stipulated period of completion being 60 months. Scrutiny (May 2005) of the records of the Executive Engineer, Ratnagiri Irrigation Division (South) showed that while approving (December 2000) the draft tender papers (DTP), the Chief Engineer, Konkan Region had deleted Clause No 16 of the draft contract regarding mobilisation advance (MA). The contractor requested (January 2002) for MA of Rs 22 crore on the ground that their dues amounting to approximately Rs 40 crore in respect of two ongoing works in other divisions were pending with the Government. With the intention of expediting the work, the Government sanctioned (March 2002) MA of Rs 14.20 crore (15 per cent of the accepted tender cost of Rs 94.68 crore) bearing interest of 15 per cent and recoverable in suitable instalments. The MA was paid on the contractor's running account bills between March 2002 and March 2004. Additional MA of Rs 6.59 crore was sanctioned (March 2005) by the Government on revision of the estimates based on the District Schedule Rates of 2003-04 and Rs 6.50 crore was paid in March 2005. Due to land acquisition and rehabilitation problems, the work was, however, started only in March 2005. The entire MA was recovered in March and April 2006, but interest amounting to Rs 7.88 crore had not been recovered till May 2006. As the clause regarding payment of Mobilisation Advance (MA) was deleted from the DTP, sanction of MA after finalisation of the tender vitiated the tender procedure and other tenderers were deprived of this benefit while
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quoting their offers. Thus, the selected contractor was given an undue benefit of MA. The Executive Engineer replied (October 2005) that the Government had sanctioned the MA. Due to land acquisition and rehabilitation problems, the work could not be started till March 2005 and recovery could not be made. He further stated (May 2006) that the MA was recovered in March/April 2006 and the request of the contractor for waiver of interest was under consideration. The reply is not tenable as the payment was made in contravention of the contract conditions. The intention of expediting the work had also not been achieved. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.7
Irregular allotment of work
Independent work costing Rs 3.69 crore at a different location was allotted to a contractor as an extra item without inviting tenders in violation of the manual provisions. The work of cement concrete lining of the seven km long Dahanu branch canal of the Surya bank canal of the Surya Irrigation Project was awarded to a contractor for Rs 1.65 crore on 7 February 2004. The work which was due for completion by 6 August 2004 was allowed extension upto 31 December 2005. The work had not been completed till May 2006. Scrutiny (January 2006) of the records of the Executive Engineer, Surya Canal Division I, Dahanu showed that the work of cement concrete lining of 18 km of distributory No 2 of the Surya right bank canal, which was unrelated to the work awarded to the contractor, was also allotted (November 2004) to the contractor at a cost of Rs 3.69 crore without calling for tenders, in clear violation of the provisions of the manual. The Executive Engineer stated (May 2006) that the work had been awarded to the same contractor, as it was part of the canal system handled by the same sub-division. The tendering process might have delayed the work and increased the cost as higher rates might have been quoted by tenderers. The Chief Engineer also approved this action. The reply is not tenable, as the work was not related to the original work awarded to the contractor. The work of cement concrete lining of distributory No. 2 of Surya right bank canal, awarded as an extra item, was not part of the original work of cement concrete lining of the Dahanu branch canal and was located at a different site. It should have been awarded after a regular tendering process as per the provision of the Maharashtra Public Works Manual. Thus, the award of work valued at Rs 3.69 crore was irregular. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
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4.2.8
Non reduction in contract value as a result of design change resulted in excess payment of Rs 2.68 crore. Work of designing, planning and construction of intake well, approach channel, jack well, pump house, manufacturing and installation of pumping machinery including rising main and commissioning it for Varangaon Lift Irrigation Scheme was entrusted to a contractor on lump sum contract for Rs 93.33 crore for completion by July 2006. The contract was based on the departmental design for two rows of rising mains of mild steel (MS) pipes of 1.9 metres diameter and length 11,280 metres (5,550 metres in first stage and 5,730 metres in second stage). The contract stipulated that in case the offer is based on the contractors own design, all the designs and drawings would be got vetted from the Superintending Engineer, Central Designs Organisation (CDO), Nasik. The contract further stipulated that additional or the curtailed work would be regulated at the rates entered in the contract. Scrutiny (June 2002 and December 2005) of records of the Executive Engineer, Minor Irrigation Division, Jalgaon (EE) revealed that after acceptance (July 1999) of the tender, Chief Engineer, Tapi Irrigation Development Corporation, Jalgaon had approved (December 1999) contractors own designs for the rising main vetted (November 1999) by CDO. It contemplated a straighter alignment for laying of two rows of 8,640 metres rising main of MS pipes of diameter 1.84 metres. The reduction in length (by 2,640 metres) and diameter of the rising main, caused a corresponding reduction in the contract value by Rs 13.67 crore (cost of pipes not being provided), which necessitated proportionate reduction in the payment to be released to the contractor. This was, however, not done which led to violation of contractual provisions and extra payment of Rs 2.68 crore to the contractor based on the 3,401 metres rising main executed upto May 2005. EE stated (December 2005) that due to adoption of contractors design, there have been many changes, which led to various modifications resulting in more expenditure on some components of work as compared to the Departments estimate. The reply was not acceptable, as the contractor had made his offer after taking into consideration all the parameters stipulated in the tender. Since, the length and diameter of the rising main was reduced, department was bound to restrict the payments as per actual execution of the work. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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4.2.9
Extra payment to a contractor
Failure to regulate payments for work done as per the stipulations in the contracts led to extra contractual payment of Rs 1.80 crore to the contractor. The Executive Engineer, Mun Project Division, Khamgaon (EE) entrusted the work of construction of earthen dam from chainage 154 to 1,087 meter (M) including excavation of ridge cut from 0 to 720 M (Lendi Valley) of Utawali River Project (estimated cost: Rs 8.56 crore). The work was stipulated for completion by December 2005. During the pre-bid meeting, it was specifically clarified by the Assistant Chief Engineer, Irrigation Department, Amravati that the contractor should see in particular the quarry sites and satisfy himself about the quality and quantities of the material available as the rate quoted by him would be inclusive of all leads and lifts involved even if the materials are required to be brought from areas other than those specified in the quarry plans. The minutes of the meeting were also a part of the agreement. Scrutiny (December 2005 and June 2006) of records of EE showed that Superintending Engineer, Buldhana Irrigation Project Circle, Buldhana sanctioned (June 2004 and March 2005) three extra item rate lists8 for Rs 3.51 crore on account of charges for conveying sand and hearting material for construction of hearting and casing zones of embankment. As of April 2006, division paid Rs 76.66 lakh as extra lead charges for sand and other material required for the hearting zone. Similarly, for construction of the casing zone, the contractor was paid Rs 1.03 crore in addition to the tendered rate for bringing the required material from a longer lead. As the contractor was obliged to operate on other than specified quarries at his own cost even in case of non-availability of material in the specified quarries, payment of Rs 1.80 crore was beyond the contractual obligations. EE stated (June 2006) that due to non-availability of sand and the material required for hearting and casing zones in the specified areas, contractor had to bring the same from other borrow9 areas. This explanation was not acceptable as there was no provision in the contractual terms to compensate the contractor for material brought from quarries other than those specified in the contract. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
New item of work which crop up during execution of work for which there were no rates specified in the tender 9 borrow area includes quarry operations or usage of available material elsewhere 111
4.2.10
Avoidable payment to a contractor
Failure to challenge Arbitrators award by Godavari Marathwada Irrigation Development Corporation, Aurangabad led to avoidable payment of Rs 1.19 crore to a contractor. As per the provisions of the Arbitration and Conciliation Act, 1996 (Act) read with the Limitation Act, 1963 contractor's right to request for appointment of an Arbitrator for settlement of any dispute gets barred after three years from the date on which the claim is finally rejected. The provisions for redressal of disputes relating to works as incorporated in the tenders for three10 works (Works) of Kayadhu branch canal of Upper Penganga Project (UPP) were as under: In case the Executive Engineer (EE) did not give any decision on any dispute within 30 days, the contractor was to take up the matter within 30 days with the Superintending Engineer (SE), who was to give his decision within 60 days. If the contractor was dissatisfied with the SEs decision, he was to indicate his intentions to refer the dispute to arbitration within 30 days of the decision of the SE. Scrutiny of records of EE, UPP Division-VIII, Nanded showed (March 2006) that the EE paid Rs 1.19 crore in April 2005 to the contractor for the Works as per the award (AprilMay 2004) of an Arbitrator for extra lead charges for bringing material from other than stipulated quarries. The EE had rejected the contractor's claim of extra lead charges in July 1993. As per the terms of contract, the contractor should have approached the SE and sought arbitration on rejection of his claim by EE. This should have been done within a maximum period of 120 days from July 1993. Even under the provisions of the Limitation Act, 1963, he could have lodged the claim for arbitration by July 1996. The contractor, however, approached the SE only in January 2002 with additional11 claims for Rs 3.11 crore besides the claim for lead charges. The SE rejected the claims on 28 February 2002 stating that the dispute was barred under Limitation Act, 1963. The contractor approached the Chief Engineer (Special Projects), Irrigation Department, Aurangabad (CE) on 18 May 2002 seeking appointment of an Arbitrator for settlement of his claims. The CE neither allowed the request of the contractor for appointment of an arbitrator nor disallowed the claim and informed (29 May 2002) him that the EE had not taken a final decision. Thereafter, the contractor selected (June 2002) Chief Engineer, Water and Land Management Institute,
10
Construction of Kayadhu Branch Canal in Km 4 to 7, Construction of Kayadhu Branch Canal in Km 8 to 10 and Construction of aqueduct at chainage 7,860 11 Revised rates, Price escalation based on the revised rates, Reimbursement of loss and over heads, Payment for removal of weeds at works site, Payment for removal of silt, Reimbursement for idle charges for machinery, Reimbursement for idle charges for labourers and Payment of interest 112
Aurangabad as a sole Arbitrator, who declared (April/May 2004) the award for Rs 1.19 crore in favour of the contractor. As the claim was lodged after more than eight years from the date of rejection (July 1993) of the claim by the EE, the Senior Counsel of Godavari Marathwada Irrigation Development Corporation (GMIDC) and the Law and Judiciary Department advised (June-July 2004) to challenge the award. This was, however, not done and payment of Rs 1.19 crore was made (April 2005) to the contractor, which was avoidable. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.11
Undue favour to a contractor
Extra contractual benefit of Rs 83.09 lakh was given to a contractor due to sanction of work already covered by the agreement. Construction of a diversion canal for diverting water flow to Shirange nalla from coffer dam of Tillari Inter-State Irrigation Project was awarded to contractor A at 0.25 per cent below the estimated cost of Rs 1.23 crore. The work was completed (December 2002) at the cost of Rs 5.08 crore and final bills were paid in March 2005. Scrutiny of the final bills showed (August 2005) that the Superintending Engineer, Konkan Irrigation Circle, Ratnagiri (SE) had sanctioned (January 2004) Rs 83.09 lakh on account of an Extra Item Rate List (EIRL) for Extra cost for drilling and extra efforts required for excavation in hard rock though the extra item of work was covered by the item Excavation in all kinds of hard strata by blasting etc. Contractor A was, therefore, not eligible to any additional payment so far it related to excavation in hard rock. As the payment of Rs 83.09 lakh on EIRL was beyond the contractual obligations, it amounted to grant of undue favour to the contractor. SE admitted (May 2006) that the payment of Rs 83.09 lakh was beyond the contractual obligations and stated that the matter would be submitted to Government for ex post facto approval as an ex-gratia payment. Reply is not acceptable as the contract does not provide for such payment. The matter was referred to the Principal Secretary to the Government (June 2006). Reply had not been received (October 2006).
4.2.12
Extra contractual payment
Irregular sanction of Rs 59.88 lakh was accorded for de-watering during excavation of foundation for KT weir at Digras in Ahmednagar. The work of construction of Kolhapur Type (KT) weir at Digras in Ahmednagar District was entrusted (January 2002) to a contractor for Rs 1.98 crore (17.40 per cent above the estimated cost of Rs 1.69 crore). The contractor in his justification for the offer above the estimated cost of the work
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had mentioned (August 2001) that he had considered requirement of more dewatering than estimated by the Department. Scrutiny of records (March 2005) of Executive Engineer, Medium Project Division (EE) Ahmednagar and subsequent scrutiny revealed that though the rates for items of excavation for foundation were inclusive of cost of dewatering, the EE paid (August 2004) Rs 59.88 lakh to the contractor on Extra Item Rate Lists (EIRL). The Superintending Engineer and Administrator (SE), Command Area Development Authority, Ahmednagar had sanctioned (March and July 2004) the EIRL for de-watering during excavation on the plea that the provision for de-watering made in the estimate was inadequate. When the irregular payment of Rs 59.88 lakh was pointed out (September 2005), the SE stated (December 2005) that the EIRL was sanctioned as the estimated provision for de-watering during excavation was inadequate. This justification was not acceptable as the de-watering was a part of tender item, hence was not payable separately. Moreover, the contractor had submitted his offer considering the requirement of more de-watering than what had been estimated by the Department. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
4.2.13
Sales Tax recovered from the bills of a contractor under the Works Contract Act, 1985 was unauthorisedly refunded to him resulting in excess payment of Rs 52.12 lakh. The Maharashtra Act No. XIX of 1985, as amended in 1987, provides that the tendered rates quoted by the contractor should include all existing taxes leviable in respect of Works Contract. Hence, the contractor would not be entitled to any refund of taxes paid by or recovered from him. Scrutiny of the records of the Executive Engineer, Minor Irrigation Division, Wardha (EE) for construction of the earthen dam of Madan project (Under execution by a contractor at 11.50 per cent above the estimated cost of Rs 2.90 crore and scheduled for completion by June 2005) showed (June 2005) that the EE credited to Government account Rs 53.99 lakh upto February 2005 towards sales tax recovered from the contractors bills. Out of this amount, the EE had also refunded (July 2002 to September 2004) Rs 52.12 lakh to the contractor by debiting the work. The contractor offered higher than estimated cost considering the element of sales tax on Works Contract. The contractor was, therefore, not eligible for refund of the amount. Hence, excess payment of Rs 52.12 lakh was made by the EE to the contractor. The Executive Engineer stated (February 2006) that the amount paid to the contractor on account of tax deducted at source will be adjusted after all the
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transactions are reviewed and corrected suitably in the final bill. However, recovery had not been made in the final bill paid in August 2006. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.2.14
Avoidable expenditure
Use of colgrout masonry in place of uncoursed rubble masonry in construction of key walls, guide walls and divide walls of Anjani Medium Project led to avoidable expenditure of Rs 95.57 lakh. Work of construction of spillway and divide walls, key walls, guide walls etc. (Structures) of the Anjani Medium Project (District Jalgaon) was awarded to a contractor at 8.77 per cent above the estimated cost of Rs 5.94 crore for completion by February 2002 (extended upto December 2006). As per the schedule B of the tender, the structures were to be constructed in uncoursed rubble (UCR) masonry (estimated rate Rs 559.35 per cubic metre) while the spillway was to be constructed in colgrout masonry (estimated rate Rs 1008.60 per cubic metre). Scrutiny (October 2004 and September 2005) of records of the Executive Engineer, Jalgaon Medium Project Division, Jalgaon (EE) showed that the Chief Engineer (CE), Tapi Irrigation Development Corporation, Jalgoan had approved (October 1999) use of colgrout masonry for the structures also with a view to restrict the seepage of water. As the structures were to be provided down stream for protecting the spillway and the riverbanks, no storage of water behind them was possible. Consequently, there was no possibility of any direct seepage of water from the structures. The change was, therefore, injudicious in view of the higher cost of execution of colgrout masonry. As of October 2005, it contemplated additional burden of Rs 95.57 lakh on the work due to construction of left and right side guide walls (17,455.49 cubic metre) in colgrout as compared to the cost of uncoursed rubble masonry. The expenditure of Rs 95.57 lakh was avoidable. The EE confirmed (December 2005) that there was no necessity and propriety to provide colgrout masonry in guide walls, divide walls etc. in place of UCR masonry to restrict the seepage of water from dam. The CE, however, had not furnished any comments as of May 2006. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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4.3
Idle investment/idle establishment/blocking of funds and diversion/ misutilisation of funds
HOUSING DEPARMENT Maharashtra Housing and Area Development Authority

4.3.1 Blockage of funds on a commercial project
Improper planning of a commercial project and delay in finalising the land cost by Government resulted in blockage of Rs 6.35 crore. The Mumbai Housing and Area Development Board (Board), a unit of the Maharashtra Housing and Area Development Authority (MHADA), appointed (March 2000) a consultant for a project to construct a commercial complex at Bandra (West) in Mumbai. Accordingly, the Vice President and Chief Executive Officer (VP and CEO), MHADA requested the Collector, Mumbai Suburban District, to allot the required land to MHADA and accorded administrative approval of the project for Rs 147.02 crore under the advance contribution scheme12. Scrutiny of the records of the Executive Engineer, Housing Division, Bandra revealed (April 2005) that the plan for the project had been submitted (November 2000) to the Mumbai Metropolitan Regional Development Authority (MMRDA) even before according administrative approval to the scheme. A revised plan with a cloverleaf and an extension of a road through this plot, as suggested by MMRDA and the Maharashtra State Road Development Corporation, was submitted to MMRDA only in April 2005. The plan was not approved for want of clearance from the Environment Department and the Public Works Department. Besides, there was a proposed Metro railway to be passed through the plot. As such, the project was likely to require further revision. The architect was paid (between December 2000 and May 2002) fees of Rs 75.16 lakh and his claim for Rs 19.20 lakh was pending (May 2006). Meanwhile the Collector, Mumbai Suburban District raised (September 2004) a demand for Rs 79.24 crore based on the current market rate of the land. MHADA had already paid (February 2001 and May 2002) Rs 5.57 crore to the Government on ad hoc basis and requested (December 2004) the Collector to reduce the cost. The issue was pending with the Government. The approval of the plan of the project by the MMRDA was pending as the issue of title of the plot has not been settled as of August 2006.
12
Only seed capital was to be invested by the Board and the cost was to be collected from the prospective buyers according to the progress of the work. 116
Thus, improper planning of the project and the delay in finalising the cost of the land by the Revenue and Housing departments resulted in the delay of the project and blockage of Rs 6.35 crore incurred on it. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
4.3.2
Underutilisation of hostel building
The construction of a hostel building costing Rs 2.73 crore without proper justification resulted in its underutilisation. The Pune Housing and Area Development Board (Board), a unit of Maharashtra Housing and Area Development Authority (MHADA), could not obtain an occupation certificate for its administrative building from the Pune Municipal Corporation as the floor space index (FSI) consumed by it was in excess of the approved plan. The only option thus available to the Board to regularise the excess FSI, was to avail of the additional FSI permissible only for educational purposes. The Board, therefore, proposed (January 1996) to construct a multistoreyed hostel building for the Professional Development Centre (PDC), Pune by demolishing the existing old two storeyed building in the same layout where the administrative building of the Board was constructed. MHADA accorded (September 1996) the administrative approval (AA) for the work for Rs 82.07 lakh, which was revised (September 1998) to Rs 2.23 crore due to updation of the District Schedule of Rates and changes in the proposed building. The building consisting of 18 rooms with an intake capacity of 33 persons, three VIP suites, a residential quarter for the Director, an exhibition hall, a dining hall, a kitchen and a centre hall, completed in August 2002 at a cost of Rs 2.73 crore. Scrutiny (April 2006) of the records of the Executive Engineer of the Board and information collected from the Director, PDC disclosed that during the last three years the average annual occupancy of the hostel was only 232 against the available capacity of 4620 and training for only 42 days per year was conducted. The three VIP suites in the building were not at all utilised and the Director's quarters were not occupied except from February 2002 to June 2004. Thus, the building remained underutilised since its completion. Thus, the construction of the hostel building costing Rs 2.73 crore with the intention of regularising the extra FSI used in the administrative building and without proper justification resulted in its underutilisation. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
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PUBLIC WORKS DEPARTMENT

4.3.3 Unfruitful expenditure on construction of bridge
Construction of a bridge without acquiring land required for its approach roads resulted in unfruitful expenditure of Rs 2.05 crore. The work of construction of a major bridge between Mankule and Dherand on Revas-Poynad-Nagothane Road SH-86 was administratively approved (February 1999) for Rs 8.47 crore by the Public Works Department of the Government. While according the approval, it was stipulated that possession of the land required for the bridge and its approach roads should be taken before according the technical sanction. Despite this, the Chief Engineer, Mumbai region accorded (June 1999) the technical sanction for the work of the bridge at a cost of Rs 2.49 crore, without ensuring acquisition of land for the approach roads. He however, directed to take necessary action for acquisition of land in order to avoid idling of the bridge for want of approach roads. The Executive Engineer, Public Works Division, Alibag, District Raigad, awarded (October 2002) the work to a contractor for Rs 1.98 crore which was completed in February 2004 at a cost of Rs 2.05 crore. A test-check of records (December 2005) showed that though the land acquisition process had been initiated in March 1997 with the Land Acquisition Officer, Alibag, the land had not been acquired as of July 2006 due to opposition from the local paddy farmers. When the Executive Engineer suggested (June 2005) compulsory acquisition of the land, the Collector, Raigad intimated (August 2005) that the required land fell under the Coastal Regulatory Zone and prior permission of the Costal Regulatory Authority (CRA) was necessary for the same. The Executive Engineer sought the permission from CRA only in March 2006 and the same was awaited as of July 2006. Thus, the according of the technical sanction for the work by the Chief Engineer and its execution by the Executive Engineer without acquiring the land required for the approach roads, contrary to the Government's directive, resulted in idling of the bridge and rendering of the expenditure of Rs 2.05 crore on it unfruitful. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
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RURAL DEVELOPMENT AND WATER CONSERVATION DEPARTMENT

4.3.4 Unfruitful expenditure on an irrigation project
Failure to visualise the requirement of land for submergence led to unfruitful expenditure of Rs 51.01 lakh on diversion weir on Madeghat Nalla in Gondia District. Maharashtra Public Works Manual stipulates that no work should be commenced unless land required for the work is in the possession of the Department. Scrutiny of the records of the Executive Engineer, Minor Irrigation Division (local sector), Gondia (Division) showed (February 2003 and August 2005) that though an expenditure of Rs 51.01 lakh was incurred (upto March 2004) on Madeghat Nalla Project (project) in Gondia district to irrigate 177 hectares of land, there was no storage in the weir. The Division had considered only 0.21 hectares of land for submergence in the original estimates. However, in the revised estimates prepared in November 2004, 22.326 hectares of land was provided for storage of water. Though the Division provided (November 2004) Rs 33.58 lakh for acquisition of land in the revised estimates, the land had not been acquired as of May 2006. In the absence of land for submergence, storage was not possible. Thus, failure of the Division to correctly assess the area of land required for submergence and failure to acquire the required land resulted in unfruitful expenditure of Rs 51.01 lakh for over three years, besides denial of intended irrigation benefits to the beneficiaries. When this was pointed out, the Executive Engineer stated (December 2005) that the revised estimate was under scrutiny of the Superintending Engineer (SE), Local Sector Circle, Nagpur. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
TRIBAL DEVELOPMENT DEPARTMENT

4.3.5 Unfruitful expenditure on electric pump sets
crore was incurred on
Unfruitful expenditure of Rs 17.67 uncommissioned electric pump sets.
Government launched (1973) a scheme for supply of electric pump sets to tribal cultivators through the Commissioner, Tribal Development Department (TDD). The Tribal Development Corporation (TDC) was entrusted (July 1992) with the responsibility of installation of pump sets and arranging supply of electricity through the Maharashtra State Electricity Board (MSEB). The
119
Project Officers (POs) of the Integrated Tribal Development Project (ITDP) were to ensure completeness of all the formalities and a committee under the chairmanship of the Additional Commissioner, TDD was to scrutinise the applications before sanctioning the release of the pump sets to the beneficiaries. Scrutiny of the records of the Commissioner, TDD, Nashik (November 2005) and information collected (June 2006) subsequently showed that the Department had purchased and supplied 16,815 electric pump sets between 1999-2000 and 2002-03. Of these, 11,867 pump sets costing Rs 17.67 crore were not commissioned as of May 2006. In 7,588 cases, MSEB did not sanction the demand notes for electric connections submitted by the Commissioner, TDD, in 3,912 cases the MSEB did not provide electricity supply to the beneficiaries even after fulfilling all the requirements and in the remaining 367 cases, pumps were lying with the TDC due to death of some beneficiaries and shifting of some of them. Though a similar comment was made in the Report of the Comptroller and Auditor General for the year ended 31 March 2000, the Department continued to supply the electric pump sets till the year 2002-03. The Public Accounts Committee (PAC), in their 13th Report of 2003-04, had recommended that all the electric pump sets should be made functional by March 2004 and a report was to be submitted to the PAC by April 2004. However, despite PAC recommendations 11,867 electric pump sets procured between 1999-2000 and 2002-03 remained uncommissioned, resulting in unfruitful expenditure of Rs 17.67 crore. The Commissioner replied (November 2005) that the Government had sanctioned Rs 35.43 crore during 2003-04 and 2004-05 to the MSEB to commission all the electric pump sets and also convened high level meetings13 (June 2004, July 2005 and October 2005) to expedite the matter. The reply is not tenable because the electric pump sets remained uncommissioned, despite recommendations of the PAC. The matter was referred to the Secretary to the Government in May 2006. Reply had not been received (October 2006).
13
meetings with Chief Engineer, Superintending Engineers, Divisional Engineers of MSEB and Additional Commissioners and Project Officers of TDD 120

Failure to construct a Head Regulator valued at Rs 3.16 lakh on KulpaKaranja distributory resulted in unfruitful expenditure of Rs 1.36 crore on construction of Kotjambhora minor and denial of irrigation benefit to the cultivators. Construction of Kotjambhora (KJ) minor14, fed by KulpaKaranja (KK) distributory of right bank canal (RBC) of Bagh Itiadoh Interstate Irrigation Project (Project) to irrigate 330 hectares of land in the border district Gondia, was completed in March 2001 at the cost of Rs 1.36 crore. As the maintenance of KK distributory rested with Madhya Pradesh (MP) Government, their prior consent for the construction of head regulator (HR) to feed KJ minor was necessary. Scrutiny of the records of the Executive Engineer, Bagh Itiadoh Irrigation Division, Gondia (EE) showed (June 2005 and April 2006) that the Chief Engineer, Irrigation Department, Nagpur approached Government of MP only in March 2001 requesting them to permit construction of the HR on KK distributory for feeding the KJ minor. In February 2003, Government of MP conveyed their approval to construct the HR (estimated cost Rs 3.16 lakh) as per their plans and estimates with funds of Government of Maharashtra. The EE, however, did not commence the work as of April 2006. Consequently, the Department was unable to receive water from KK distributory and provide irrigation benefits to cultivators. Failure of the EE to synchronize the construction of the HR with the completion of minor in March 2001, thus resulted in unfruitful expenditure of Rs 1.36 crore for over five years. The EE stated (April 2006) that there was a delay in taking up the matter with Government of MP and further stated that due to paucity of funds, execution of HR could not be taken up. The contention of EE was not acceptable as he should have augmented the funds required for construction of HR looking to the existing investment of Rs 1.36 crore on the KJ minor. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
14
Minor is a water carrying channel of size smaller than a distributory 121
WATER SUPPLY AND SANITATION DEPARTMENT Maharashtra Jeevan Pradhikaran

Inadequate planning, improper selection of an agency and lack of follow up of the system development life cycle resulted in unfruitful expenditure of Rs 31.69 lakh incurred on computerisation of accounts. The Maharashtra Jeevan Pradhikaran (MJP), an autonomous body of the Government of Maharashtra, initiated the development of an applications package (August 1998) for computerisation of accounts in its head office, circle offices and divisional offices to ensure speedy and accurate compilation of accounts. The Financial Advisor and Chief Accounts Officer (FA&CAO) of MJP entrusted the job of development in August 1998 and implementation of the applications package in January and June 2000 to M/s Unisol Informatics at a cost of Rs 2.40 lakh for development and Rs 34.58 lakh for implementation at 87 locations. The work of software development was however, taken up without proper documentation and without considering the various stages of system development such as preparation of detailed user requirements, choice of database system and technology architecture. Further, the package was developed and implemented between February 2000 and December 2001 without proper testing at 87 locations. As the package could not meet the users requirements, the software version was modified (July 2002) and implemented at four15 regions. It was, however, not implemented in two16 regions even after a lapse of four years due to various lacunae in the package. As such, out of Rs 36.98 lakh due to M/s Unisol Informatics, the FA&CAO made (August 1998 to January 2000) a part payment of Rs 31.69 lakh only. A status report obtained from 38 units revealed that utilisation of the package was stopped (four in 2000-01, 10 in 2001-02, 22 in 2002-03, one in 2003-04 and one in 2004-05) by the units because of an incomplete Running Account bill module, errors in carry forward of previous year balances, serial numbering of expenditure vouchers and receipts, non provision of capturing cheque numbers and returned cheques and non development of a module for annual accounts. As the MJP failed to take remedial action, the objective of speedy and accurate compilation of accounts at divisions, circles and central office could not be achieved even after eight years. Thus, inadequate planning, lack of user requirements documentation, acceptance testing, systematic approach and
15 16
Konkan, Pune, Nashik and Aurangabad Amravati and Nagpur 122
follow up of the System Development Life Cycle resulted in rendering the expenditure of Rs 31.69 lakh unfruitful. The matter was referred to the Secretary to the Government in August 2005. Reply had not been received (October 2006).
4.3.8
Blocking of funds on purchase of DI pipes
Inaction on the part of Maharashtra Jeevan Pradhikaran to dispose of surplus DI pipes resulted in blocking of funds of Rs 1.59 crore. The work of Improvement to Distribution System for Nagpur City Stage-II, estimated to cost Rs 54.14 crore, awarded to various contractors between August 1993 and March 1998, was completed and handed over to the Nagpur Municipal Corporation in 1999-2000. Scrutiny of the records (February 2005) of the Executive Engineer (EE), Maharashtra Jeevan Pradhikaran (MJP), Works Division II, Nagpur showed that the Division had procured Ductile Iron (DI) pipes measuring 18,094.55 metres for the scheme and used 15,593.55 metres on its various works. The remaining DI pipes measuring 2,501metres, valued at Rs 1.59 crore could not be used as the area where the pipes were to be laid was busy with very heavy traffic making it technically unviable to lay the pipes. Scrutiny revealed that the DI pipes remained idle as of July 2006. The EE, MJP, Works Division II, Nagpur stated (July 2005) that DI pipes were declared as surplus in March 1999 and the position was intimated to the Superintending Engineer (SE), MJP Circle, Nagpur (June 1999 and February 2000) and the SE (CPDM), MJP, Navi Mumbai (August 2003 and August 2004). The reply is not tenable because no effective action was taken to dispose of the surplus DI pipes and possibility of deterioration of the DI pipes due to the passage of time could not be ruled out. Thus, lack of efforts in disposal of the surplus pipes resulted in idling of the same for over seven years and blocking of funds to the extent of Rs 1.59 crore. The matter was referred to the Principal Secretary to the Government in May 2006. Reply had not been received (October 2006).
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4.4
Regulatory issues and other points of interest

4.4.1 Non-recovery of loan component under Lok Awas Yojana
Loan instalments amounting to Rs 4.80 crore were not recovered from beneficiaries of Lok Awas Yojana. The Government decided (August 2000) to construct 50,000 houses under the Lok Awas Yojana (LAY), a component of the centrally sponsored National Slum Development Programme (NSDP). The Maharashtra Housing and Area Development Authority (MHADA) was the nodal agency for implementation of the scheme. Cost of each house is Rs 30,000, which included subsidy, loans and beneficiary contribution. The loan component of the scheme was to be raised by MHADA from HUDCO or other financial institutions. Scrutiny (May 2006) of the records of MHADA revealed that they could not obtain any loans from HUDCO or other financial institutions because Government guarantees could not be obtained. MHADA, therefore, provided loans amounting to Rs 6.49 crore to 7,263 beneficiaries during 2001-2006, for construction of houses under LAY. The amounts were however, debited to NSDP account instead of MHADA's account. As per the loan agreements executed by the Regional Boards of MHADA with the beneficiaries, the loan amounts together with interest, were to be recovered in monthly equated instalments within 10 years. It was, however, noticed that the Regional Boards had not taken any action for recovery of these loans. As a result, an amount of Rs 4.80 crore due for recovery from October 2001 to July 2006 remained unrecovered from the beneficiaries as of August 2006. Further, MHADA received (May 2003) Rs 9.48 crore from Social Welfare Department under LAY. As of March 2006, MHADA spent Rs 3.96 crore for payment of subsidy to backward class beneficiaries. The balance (Rs 5.52 crore) was lying with MHADA as of August 2006. The matter was referred to the Principal Secretary to the Government in June 2006. Reply had not been received (October 2006).
FINANCE DEPARTMENT
4.4.2 Functioning of Treasuries
The major irregularities noticed during inspection of 33 treasuries by the Accountants General (Accounts and Entitlement) Mumbai and Nagpur during 2005-06 are brought out in the following paragraphs.
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Overpayment of pension Overpayment of pensionary benefits of Rs 66.69 lakh was made during 200506 on account of incorrect fixation of pension, incorrect calculation of Dearness relief, non-adjustment of provisional Death-cum-Retirement Gratuity etc. Irregular remittance of pension Every pensioner is required to submit life certificates every November, as prescribed under Rule 335 of the Maharashtra Treasury Rules, 1968, to the Treasury Officers (TOs)/ the Pay and Accounts Officer (PAO), Mumbai either directly or through the banks. The TOs/PAO, Mumbai have to watch the receipt of such certificates and should not make any payment unless the same is received. It was noticed that the TOs, Jalgaon, Kolhapur, Sangli and Solapur and the PAO, Mumbai did not ensure submission of life certificates and continued to remit pension aggregating to Rs 26.16 lakh to pensioners' account for periods ranging from seven to 75 months after their death. At the instance of Audit, the TOs and PAO, Mumbai recovered (June 2006) the amount. Reconciliation of deposit balances: As per Rule 528 of the Maharashtra Treasury Rules, 1968 (MTRs), Treasury Officers are required to reconcile the balances of deposit transactions with the balances appearing in the books of Accountant General (Accounts and Entitlement) I. It was observed that Treasury Officers, Kolhapur, Nandurbar, Nashik and Sindhudurg had not reconciled the balances under 8443 'Civil Deposits' for periods ranging from one to four years. Further, 1417 Treasury Officers had not reconciled the balances under 8336 Civil Deposits from 1 April 1985 onwards. Non-closure of inoperative Personal Deposits and Personal Ledger Accounts As per Rule 495 of MTRs and para 585(2) of the Maharashtra Treasury Manual (MTM), Personal Deposits (PD) and Personal Ledger Accounts (PLA) of the various designated offices of the Government (Administrators), which were not operated for more than three continuous accounting years, are to be closed and the balances in such PDs and PLAs are to be credited to the Government. It was noticed that 139 PDs and PLAs which were not operated for more than three years had not been closed and the balance of Rs 1.10 crore lying in them were not credited to the Government account. Non-reconciliation of Personal Deposits and Personal Ledger Accounts As per para 589 of MTM, Treasury Officers are required to obtain certificates of balances at the end of each year from the Administrators of PLAs. After obtaining such balance certificates, differences, if any, are required to be reconciled and the balance certificates after reconciliation with the treasuries
17
Ahmednagar, Dhule, Jalgaon, Kolhapur, Nandurbar, Nasik, Pune, Ratnagiri, Raigad, Satara, Sindhudurg, Solapur, Sangli and Thane 125
are be forwarded to the Accountant General (Accounts and Entitlement)-I, Mumbai for confirmation of balances. It was noticed that the differences between the treasury balances and the Administrators' balances in 317 cases, the differences between treasury balances and sub-treasury balances in 356 cases and the differences between sub-treasury balances and Administrators' balances in 180 cases had not been reconciled. Besides, annual balance certificates had even not been submitted by 257 Administrators. Outstanding Non Payable Detailed Contingent bills As per the provisions contained in Chapter VI of the Pay and Accounts Office (PAO) Manual, the accounts of Abstract Contingent (AC) bills are to be compiled monthly by the PAO and the submission of Non Payable Detailed Contingent (NPDC) bills in respect of these AC bills are to be watched by maintaining an Objection Book register. It was, however, noticed that 1,728 items of AC bills amounting to Rs 179.51 crore between 1995 and 2005 were pending for want of NPDC bills from various Drawing and Disbursing Officers. These points were brought to the notice of the Principal Secretary to the Government in August 2006. Reply had not been received (October 2006).
4.4.3
Outstanding Inspection Reports, Departmental Audit Committee Meetings, Follow-up on Audit Reports and Action Taken Notes
Failure to enforce accountability and protect the interests of Government. Outstanding Inspection Reports The Accountant General (Audit) arranges to conduct periodical inspections of Government departments to test-check their transactions and verify the maintenance of important accounting and other records as per prescribed rules and procedures. These inspections are followed up with Inspection Reports (IRs) which are issued to the heads of the offices inspected with copies to the next higher authorities. Half yearly reports of pending IRs are sent to the Secretaries of the concerned departments to facilitate monitoring of action taken on the audit observations included in these IRs. The IRs issued up to December 2005, pertaining to 26 departments, disclosed that 26,520 paragraphs relating to 9,816 IRs were outstanding at the end of June 2006. Year-wise position of the outstanding IRs and paragraphs are detailed in the Appendix 4.1. Departmental Audit Committee Meeting In order to settle the outstanding audit observations contained in the IRs, Departmental Audit Committees have been constituted by the Government.
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During 2005-06, 1218 out of the 26 departments convened 31 Audit Committee meetings. Out of 14,617 paras outstanding against these 12 departments, 2,157 paras were discussed in the meetings and 897 paras were settled. For ensuring prompt compliance and early clearance of the outstanding paragraphs, it is recommended that the Government should address this issue seriously and ensure that an effective procedure is put in place for (a) taking action against the officials who fail to send replies to IRs/paragraphs as per the prescribed time schedule, (b) recovering losses/outstanding advances/ overpayments in a timebound manner and (c) revamping the system of responding to audit observations. Follow up on Audit Reports According to instructions issued by the Finance Department in March 1981, administrative departments were required to furnish Explanatory Memoranda (EMs) duly verified by Audit to the Maharashtra Legislature Secretariat in respect of paragraphs included in the Audit Reports, within one month of presenting the Audit Reports to the State Legislature. The administrative departments did not however, comply with these instructions. The position of outstanding EMs from 1999-2000 to 2004-05 was as below:
Audit Report 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 Total Date of tabling the Report 14 December 2001 29 April 2002 22 July 2003 8 July 2004 21 July 2005 18 April 2006 Number of Paragraphs and Reviews 55 43 51 48 48 39 284 Number of EMs received 43 35 34 16 8 2 138 Balance 12 8 17 32 40 37 146
In addition to the above, EMs in respect of 74 paras relating to the period prior to 1999-2000 were also outstanding. Department-wise details are given in Appendix 4.2. Action Taken Notes The Maharashtra Legislature Secretariat (MLS) Rules stipulate that Action Taken Notes (ATN) on the recommendations of the Public Accounts Committee (PAC) on those paragraphs of the Audit Reports that are discussed are required to be forwarded to the MLS duly verified by Audit. Likewise, ATNs indicating remedial/corrective action taken on the paras that are not discussed are also required to be forwarded to the PAC duly vetted by Audit. It was observed that there were inordinate delays and persistent failures on the
18
Agriculture; Co-operation and Textiles; General Administration; Industries, Energy and Labour; Higher and Technical Education; Home; Public Health; Public Works; Rural Development and Water Conservation; School Education; Water Supply and Sanitation and Women and Child Welfare 127
part of a large number of departments in forwarding ATNs on audit paragraphs. Year-wise details of such paragraphs are indicated as follows:
Audit Report Total number of paras in the Audit Report 862 47 55 43 51 48 48 1154 Number of paras Discussed 151 -7 ----158 Not discussed 711 47 48 43 51 48 48 996 ATN awaited in respect of paras Discussed Not discussed 103 705 -47 6 48 -43 -51 -48 -48 109 990
1985-86 to 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 Total
The aforesaid point were brought to the notice of the Chief Secretary to the Government of Maharashtra in August 2006. Reply had not been received (October 2006).
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CHAPTER V
INTERNAL CONTROL MECHANISM IN GOVERNMENT DEPARTMENT
ANIMAL HUSBANDRY DEPARTMENT

5.1 Internal control mechanism in the Animal Husbandry Department
Highlights Internal control is a process designed to provide reasonable assurance to an organisation regarding the achievement of economy and efficiency of operations including performance goals. A built-in internal control system and adherence to codes and manuals minimise the risk of errors and irregularities and help to protect resources against loss due to waste, abuse and mismanagement. An evaluation of internal controls in the Animal Husbandry Department during the period 2001-2006 disclosed weaknesses in internal controls such as non-compliance with the financial codes; non-assessment of grants released to the Zilla Parishads; inadequate monitoring of schemes implemented by the department and ineffective internal audit arrangements. Large savings under Plan schemes and persistent excess expenditure under Non-Plan schemes indicated that budgetary control was deficient. (Paragraph 5.1.5.1) Assessment of the grants released to the Zilla Parishads was not made. As of March 2006, excess grants of Rs 9.45 crore were paid to 21 Zilla Parishads. This showed poor expenditure control in the Department. (Paragraph 5.1.5.2) Recovery of loans from poultry co-operative societies was not monitored properly. During 2001-06, only Rs 37 lakh had been recovered out of Rs 61.44 crore due for recovery. (Paragraph 5.1.5.8) Sero-monitoring of the vaccinated animals essential to assess and verify the efficacy of the vaccination programme and also the quality of the vaccines was not planned and carried out. (Paragraph 5.1.6.1) The nodal agent for implementation of Fodder Development Programme was not yet decided by the Government, following reorganisation of the Department in May 2004. (Paragraph 5.1.6.3) Large number of vacancies in the supervisory cadre adversely affected the proper monitoring of schemes. There were significant shortfalls in inspections by the supervisory cadre. (Paragraphs 5.1.7.2 and 5.1.7.5)
Staff strength of Internal Audit Wing of the Department was inadequate. Only 13 per cent of units were audited during 2005-06. A total of 11,415 internal audit paras were pending settlement as of March 2005. (Paragraphs 5.1.8.1 to 5.1.8.3) 5.1.1 Introduction Internal control system, an integral part of an organisation's operations, provides an excellent tool for managers to ensure efficient, effective and economic utilisation of resources. It also ensures that financial interests and resources are safeguarded and reliable information is available to the administration. Internal auditors as an independent entity, examine and evaluate the level of compliance to the departmental rules and procedures and provide independent assurance to the management of the adequacy or otherwise of the existing internal control. Main objectives of the Animal Husbandry Department (Department) are health care and improvement of livestock and poultry. The activities include treatment of animals, vaccinations, castration and artificial insemination at veterinary polyclinics, dispensaries and hospitals. 5.1.2 Organisational set-up The Secretary to the Government of Maharashtra (GOM) in the Agriculture, Animal Husbandry, Dairy Development and Fisheries Department is the head of the Department. The Commissioner of Animal Husbandry implements the programmes of the Animal Husbandry Department. He is assisted by the Assistant Director, Finance. For administrative and technical supervision and for coordination and control of developmental schemes, he is assisted by various subject matter specialists and Regional Joint Commissioners (RJC) at the regional level, District Deputy Commissioners (DDC) at the district level and District Animal Husbandry Officers (DAHO) at the Zilla Parishad (ZP) level. The implementation of the artificial insemination programme and the work of preservation and development of indigenous cows and buffaloes is looked after by the Maharashtra Livestock Development Board (MLDB)1, which was established (April 2002) under the National Project for Cattle and Buffalo Breeding (NPCBB). MLDB is headed by a Chief Executive Officer. The various schemes of the Department are administered through a network of Veterinary Polyclinics, Artificial Insemination Centres and Mini Veterinary Polyclinics, as detailed in the Appendix 5.1. 5.1.3 Audit objective The audit objective was to assess whether the internal controls of the Department were adequate to safeguard its resources and ensure compliance with rules and regulations. Accordingly, an attempt was made to assess whether:
1
Includes three frozen semen laboratories, seven cattle breeding farms and two bull rearing centres 130
Chapter V Internal Control Mechanism in Government Department
5.1.4
the financial controls were adequate; the operational controls were effective; the organisational controls were sufficient and the Internal Audit system was effective. Audit coverage and methodology
A review on the internal control mechanism of the Department for the period 2001-02 to 2005-06 was conducted (March to June 2006) by test-check of records in eight districts2 (out of 35) and the Secretariat; the Commissionerate; the offices of the Joint Commissioners of the Institute of Veterinary Biological Products (IVBP), Pune; the Disease Investigation Section (DIS), Pune; Deputy Commissioner, Integrated Sample Survey Scheme(ISS), Pune; Quality Control, Mumbai; Principal, State Level Training Centre, Pune; Assistant Commissioner, Feed Analysis Laboratory, Pune; 10 out of 19 divisional level offices; 24 out of 116 district level offices and 26 out of 1,548 taluka level offices (details of these offices are given in the Appendix 5.1). The results of the review are discussed in the succeeding paragraphs. 5.1.5 5.1.5.1 Financial controls Preparation of budget estimates Financial controls in the Department were weak as discussed below: The budget estimates and expenditure figures for the period from 2001-02 to 2005-06 were as under: (Rupees in crore)
Year Budget Provision 2001-02 2002-03 2003-04 2004-05 2005-06 Total 156.24 160.92 171.51 181.66 183.41 Non Plan Final ExpendiGrant ture 155.60 167.32 172.58 185.72 201.16 882.38 178.93 169.23 170.87 182.97 205.04 907.04 Percentage of Excess (+)/ Saving(-) (+)15.00 (+) 1.14 (-) 0.99 (-) 1.48 (+) 1.93 Budget Provision 13.53 14.33 18.84 28.49 44.93 Final Grant 13.79 6.67 9.17 29.76 46.79 106.18 Plan Expendi -ture 16.36 5.93 2.19 24.95 35.78 85.21 Percentage of Excess(+)/ Saving(-) (+)18.61 (-) 11.16 (-) 76.11 (-) 16.17 (-) 23.53
During the period 2001-06, against the total final grant of Rs 988.56 crore (Plan: Rs 106.18 crore and Non-Plan: Rs 882.38 crore), the actual expenditure was Rs 992.25 crore (Plan: Rs 85.21 crore and Non-Plan: Rs 907.04 crore).
There were huge savings under Plan schemes
The budget estimates were prepared by the Commissioner after obtaining necessary inputs from the field functionaries. The estimates were submitted to the Finance Department within the stipulated dates. It was, however, noticed that there was excess expenditure (1.14 to 15 per cent) during the years 200102, 2002-03 and 2005-06 under Non-Plan. On the other hand, there were huge savings (11.16 to 76.11 per cent) under Plan schemes during the years 200203 to 2005-06.
2
Akola, Aurangabad, Dhule, Gadchiroli, Latur, Mumbai, Pune and Thane 131
5.1.5.2
Assessment of grants released to the Zilla Parishads (ZPs)
According to Government orders, the grants released to the ZPs were required to be assessed by the respective departments, by checking the correctness of expenditure and by verifying the utilisation certificates. The RJCs were responsible for assessment of the grants released to the ZPs.
Assessment of grant released to the ZPs was in arrears
During the period 2001-2005, grants of Rs 325.72 crore were released to the 33 ZPs by the Department. It was seen that grants paid to 16 ZPs in 2002-03, 29 ZPs in 2003-04 and 33 ZPs in 2004-05 were not assessed as of March 2006. Consequently, it could not be ascertained whether any amount remained unspent with the ZPs and grants diverted for other purposes. It was also observed that a total amount of Rs 9.45 crore was recoverable from 21 ZPs for which assessment of grants had been made as of March 2006. 5.1.5.3 Rush of expenditure In two test checked units, 64 to 100 per cent of the Plan expenditure was incurred only in the last quarter of the financial year. The Department attributed this to procedural delays involved in finalising the lists of beneficiaries, submitting of proposals to committees of ZP and Government and processing the rate contracts for medicines, vaccines, machinery and equipment. The fact, however, remains that no periodical monitoring of expenditure was done to avoid rush of expenditure in the two units. 5.1.5.4 Drawal of funds to avoid lapse of appropriation The Bombay Financial Rules prohibit the drawal of money from the treasury just to avoid lapse of budget grants. In six3 units in four districts test checked, Rs 0.03 crore to Rs 2.90 crore remained undisbursed at the end of the financial years 2001-02 to 2005-06. The amounts were drawn in the month of March and payments were made between May and November, i.e., after delays ranging from two to seven months. The amounts were drawn to avoid lapse of appropriation, in contravention of the codal provisions. 5.1.5.5 Surprise verification of cash As per Rule 55 of the Bombay Financial Rules, 1959 surprise verification of cash balances was required to be done once in a month to ensure that the balances in the cash books were physically available and no money had been misappropriated, even temporarily. It was however, observed that 104 DDOs in six districts, out of the 54 DDOs in eight districts test checked, did not conduct surprise verification of cash balances, between April 2001 and March 2006 for periods ranging from 10 to 60 months.
In two units, there was rush of expenditure in the last quarter of the year
In six units, amount ranging from Rs 0.3 crore to Rs 2.90 crore were drawn from the treasury to avoid lapse of funds
In 10 units, surprise verification of cash balances was not carried out regularly
Commissionerate, Joint Commissioner IVBP; Joint Commissioner. DIS; Deputy Commissioner Gadchiroli, DAHO Latur and District Polyclinic Bhiwandi (Thane) 4 Commissioner, Pune; Veterinary Polyclinic, Pune; Central Hatchery, (Aurangabad); Mini Polyclinic, Balapur (Akola); DDC, Veterinary Polyclinic and Artificial Insemination Centre, (Gadchiroli); RJC, Goregaon (Mumbai); Veterinary Polyclinic and DDC (Akola) 132
5.1.5.6
Security bond for handling cash
It was observed that in four units in three5 districts, securities in the form of cash or bonds from the personnel handling cash had not been obtained. 5.1.5.7 Submission of detailed contingent bills As per the Maharashtra Treasury Rules, 1968 and instructions issued by the Government from time to time, detailed contingent (DC) bills in respect of amounts drawn on abstract contingent (AC) bills were to be submitted to the Accountant General (A&E) within one month from the date of their drawal. DC bills had not been submitted as of June 2006 in respect of five AC bills (amounting to Rs 11.37 lakh) drawn by the Joint Commissioner DIS, Pune between December 2005 and March 2006. 5.1.5.8 Monitoring of poultry co-operative societies Financial assistance amounting to Rs 48.51 crore was given between 1986 and 2006 to 73 poultry co-operative societies through the Department in the form of loans, share capital and subsidy. However, no guidelines had been issued by the Department for maintenance of records like loan registers and recovery registers and calculation of interest. In December 2002 monitoring committees were formed under the chairmanship of the Chief Executive Officers of ZPs to carry out inspections, effect recoveries of loans and evaluate the working of the societies. Meetings were to be conducted every quarter. Out of four6 districts test checked no meetings were held in one district (Dhule) and shortfalls in holding of meetings in three districts ranged from 25 to 100 per cent during the period 2003-06.
An amount of Rs 61.07 crore was outstanding for recovery as of March 2006 from 73 poultry co-operative societies
As of March 2006, Rs 61.07 crore (inclusive of interest and penal interest) was outstanding for recovery. The rate of recovery of the amounts due during the years 2001-02 to 2005-06 ranged from 0.43 to 1.63 per cent only. During 2005-06, recovery of Rs 37.12 lakh was made against Rs 61.44 crore due. Thus, management of loans to the poultry societies was poor. 5.1.5.9 Maintenance of important registers/records With a view to watch the actual receipts against the bills submitted to the treasury and also to avoid submission of fraudulent claims, the drawing and disbursing officers (DDOs) of the Department were required to review the register of bills every month. In nine units in four7 districts, no such review of the bill registers had been carried out. As per a provision contained in the Maharashtra Contingent Expenditure Rules, 1965 physical verification of dead stock articles was required to be carried out in June every year and a certificate to that effect was to be recorded
5 6
Gadchiroli, Mumbai and Pune Aurangabad, Dhule, Latur and Pune 7 Akola (District Veterinary Polyclinic), Gadchiroli (DDC and District Veterinary Polyclinic), Mumbai (RJC) and Pune (Commissionerate, DDC, Feed Analysis Laboratory, District Veterinary Polyclinic and ISS) 133
in the register by the head of office. This had not been done for periods ranging from one to four years in 13 units in five8 districts. 5.1.6 Operational controls The Department carried out its functions through a network of veterinary service outlets viz., Veterinary Polyclinics, Veterinary Clinics and Mobile Veterinary Clinics. These institutions also implemented the artificial insemination programme. The auxiliary services rendered by the Department included testing and analysis of samples collected and received by the Disease Investigation Section (DIS) and Regional Disease Investigation Laboratories (RDIL) for prevention of diseases; production of vaccines by the Institute of Veterinary Biological Products; production of frozen semen in laboratories; maintenance of cattle breeding farms and conducting of in-service orientation courses in the State Level Training Centre. Operational controls were found to be inadequate as discussed below: 5.1.6.1
Sero-monitoring had not been done for vaccinations carried out
Assessment of efficacy of vaccinations
Sero-monitoring9 was essential to assess and verify the efficacy of the vaccination programme and also the quality of the vaccines. It was, however, noticed that the sero-monitoring of the Control of Foot and Mouth Disease was carried out only during 2005-06. The sero-monitoring for the Control of Peste des Petites Ruminant Disease was not yet planned due to nonavailability of kits required for this purpose and shortage of staff. Consequently, the vaccination programmes had been running without any assessment of their impact for all these years of implementation. 5.1.6.2 Fodder management Under a Centrally sponsored scheme, mini kits of seeds were distributed to the selected farmers to grow fodder as demonstration plots. It was noticed that Rs 2 lakh were provided by the Government of India (GOI) in January 2001 for carrying out a survey and assessment of the existing area and production of various types of fodder crops. The amount remained unutilised as of June 2006. 5.1.6.3 Overseeing fodder development at the district level
Fodder management had not received due attention in the Department
Assessment of the requirement and availability of fodder and conducting of extension activities to propagate the benefits of a balanced diet consisting of feed and green and dry fodder was an important function of the Department. During reorganisation of the Department in May 2004 two posts of Assistant Fodder Development Officers (AFDO) were withdrawn and these were lying vacant as of June 2006. There was only one post of Fodder Development Officer at the regional level. As there were no AFDOs at the district level to guide the farmers, effectiveness of the scheme of distribution of mini kits for
Akola, Aurangabad, Gadchiroli, Mumbai and Pune. Sero-monitoring is collection of serum from the animals vaccinated to check the immunity level.
9 8
134
demonstration plots would be adversely affected. Consequent on reorganisation of the Department the issue whether the Animal Husbandry Department, the Agriculture Department or the Forest Department would be the nodal agent for the development of fodder was not decided by the Government as of August 2006. Thus, the function of fodder management did not receive due attention in the Department. 5.1.6.4 Deficiency in procurement system The Department procures medicines, liquid nitrogen and nitrogen containers. Since procurement of the material was a time consuming process, it was essential that action was taken in advance for finalisation of the rate contracts for the material. It was observed that there was no rate contract for medicines, liquid nitrogen etc. As a result, delivery of animal health services particularly the artificial insemination programme was affected. 5.1.6.5 Assessment of training needs Refresher courses for Livestock Development Officers (LDOs), Assistant Livestock Development Officers (ALDOs) and Livestock Supervisors (LSS) conducted by the Training Centre at Pune were essential for maintaining and improving competence in the field. During the period 2002-03 to 2005-06, 35 to 59 per cent of the officers and the supervisors nominated for the training did not attend the same. The Department could not ensure imparting training to all the selected officers. 5.1.6.6
The scheme of distribution of milch animals was not monitored properly
Monitoring the scheme of distribution of milch animals
Under the scheme Distribution of milch animals, two milch animals, (three from February 2003) were distributed to below poverty line families with 50 per cent subsidy. The animals were to be maintained for a minimum period of three years. They were to be insured and the first instalment of the insurance policy was to be borne by the Government. In case the subsidy had been misutilised by the beneficiaries, criminal proceedings were to be initiated against them. The LDO (Extension) was to maintain the beneficiary registers and submit quarterly reports of the status of the milch animals to the DAHOs. Out of the seven districts test checked, no such quarterly reports were sent by the LDOs (extension) to the DAHOs, except in the District of Pune. In Akola, the status of the animals distributed to the beneficiaries was verified in February 2006 at the instance of the Collector. The verification revealed that 15 animals were sold by the beneficiaries in two talukas (Akot and Balapur) out of the 225 livestock distributed in the District between 2002-03 and 2004-05. It was also observed that out of 12 LDOs (extension) test checked, beneficiary registers were not maintained by LDO (extension) at Murtizapur in Akola District and Latur in Latur District. As a result, in Akola eight beneficiaries who had sold the milch animals given to them in 2005 were again selected for the year 2006, instead of initiating action against the beneficiaries for misutilisation of subsidy.
135
The above irregularities indicated weak operational controls of the Department. 5.1.6.7
No performance indicators had been disseminated to the field agencies to evaluate the peformance of schemes and field functionaries
Performance indicators
Although quality standards were available for various activities of the Department like sero-monitoring for vaccinations; production levels for milch animals distributed and hatching percentage; fertility levels and production levels for programmes of genetic improvement, it was seen that the Commissionerate had not prepared and communicated to the field functionaries any such performance indicators. As such, no indicator was available to the supervisory officers to evaluate the performance of schemes and field functionaries. 5.1.7 Organisational controls The organisational controls, such as manpower management, monitoring of the programmes and carrying out administrative inspection, were rendered weak due to the factors discussed below: 5.1.7.1 Definition of duties and responsibilities The duties and responsibilities of any post were to be clearly defined for efficient discharge of the work by the person holding the post. However, the job description of the posts were not available in any of the offices test checked except in the Commissionerate. Even in the Commissionerate, job charts had not been revised on reorganisation of the Department in May 2004. The duty contents available did not mention the responsibilities with regard to the maintenance of important registers/records. 5.1.7.2 Manpower management The men in position vis-a-vis sanctioned strength as of March 2006 was as follows:
Name of the Post Sanctioned strength 2 12 52 335 2330 1163 Men in position as of March 2006 Nil 5 47 186 1673 853 Shortfall 2 7 5 149 657 310 Percentage of vacancies 100 58 10 45 28 27
Additional Commissioner Joint Commissioner Deputy Commissioner Assistant Commissioner (LDOs) Live Stock Development Officers (A&B Group) Live Stock Supervisors
It may be seen from above that there were large number of vacancies. The LDOs were the field technical personnel and the vacancy position in this cadre was very high (657) with potential implications for delivery of services being adversely affected. In this cadre, 170 posts remained vacant for two to seven years.
136
Large-scale vacancies existed which adversely affected the organisational control
Holding of additional charges was the norm in the Department. Posts crucial for providing guidance, direction, control and coordination like those of RJC and DDC were held as additional charges. Additional charges were held even by officers posted in distant districts. Further, additional charges were also held for periods over six months adversely affecting organisational controls. It was noticed that 79 Livestock Supervisors (LSS) were required for enumeration of major livestock products under the Integrated Sample Survey Scheme, as per GOI norms. However, the sanctioned strength of LSSs was 36 in the State, against which there were only 29 on the roll. The Commissioner stated (May 2006) that this aspect would be looked into whenever the review of reorganisation of the Department would be taken up. 5.1.7.3 Transfers Forty two officers were kept on compulsory waiting for periods ranging from 36 to 184 days due to issue of erroneous/conflicting transfer orders by the Government. All India Co-ordinated Research Project on Foot and Mouth Diseases - Pune Centre, is a recognised Regional Centre run by the State Government with 75 per cent assistance from the Indian Council of Agriculture Research (ICAR). The scientists working in the Disease Investigation Section of this centre were to be transferred after obtaining the prior approval of the ICAR in order to ensure continuity and smooth execution of the project works. Scientists were, however, transferred by the State Government in January 2002 and December 2004 within two or three years, without the approval of ICAR. 5.1.7.4 Monitoring of programme of genetic improvement of livestock
The momentum in implementation of the schemes was not achieved even after formation of MLDB
The Maharashtra Livestock Development Board (MLDB), Akola was established in April 2002 to implement the National Project for Cattle and Buffaloes Breeding with 100 per cent assistance from GOI. Its main objective was to implement the artificial insemination (AI) programme and improvisation of livestock breeding programme by fixing districtwise targets of AI, follow up of AI work, maintaining the quality of frozen semen doses and modernisation of frozen semen laboratories. The post of the Chief Executive Officer of MLDB was not held independently since inception and the full complement of technical staff was not posted to assist him, which resulted in reduced control over the organisation and its operations. The executive committee of the MLDB was to meet at least six times in a year but it had not met during the year 2004-05 and had met only four times during the year 2005-06. GOI sanctioned Rs 17.20 crore in 2003-04 and Rs 17.18 crore in 2004-05 for implementation of the MLDB project. GOI released Rs 8.60 crore to the MLDB in September 2003. Detailed work plans with physical targets and micro-level planning were to be submitted within six weeks of the release of
137
the amount. Further release of funds was subject to achievement of physical and financial progress and submission of audited accounts, quarterly progress reports and annual progress reports through the State Government. A microlevel plan had been submitted to GOI, in May 2004, after a delay of six months. Of the Rs 8.60 crore released, MLDB spent only Rs 5.18 crore during 2004-05 and 2005-06. Due to slow implementation of scheme, the balance amount was not released by GOI. Thus, the improper functioning of the MLDA adversely affected the implementation of the AI programme in the State. The achievement rate of the AI programme had fallen by 17.2 per cent between 2001-02 and 2004-05, in spite of reduction in targets by 7.1 per cent. 5.1.7.5
Inspections were not carried out in accordance with the norms fixed by the Government
Administrative Inspections
Government of Maharashtra fixed (January 2004) norms for carrying out technical and administrative inspections annually by the designated officers to oversee the activities under various programmes. The shortfalls were as detailed below: Inspection by Regional Joint Commissioners The Regional Joint Commissioners (RJCs) were required to carry out the administrative inspection of 12 State sector units every year. Of the four RJCs test checked, RJCs Mumbai and Latur had not carried out administrative inspections during the years 2004-05 and 2005-06. The shortfall in carrying out of inspections by all the four RJCs ranged between 28 and 92 per cent. Inspection of Zilla Parishads The Government resolution (January 2004) provided for both administrative and technical inspections of the ZPs once in a year by the District Deputy Commissioner (DDC). In the seven DDCs test checked, it was observed that technical and administrative inspections were carried out only in three districts in 2004-05 and in one district in the year 2005-06. In Pune District, the DDC stated (May 2006) that in order to conduct the administrative inspections, prior permission of the Rural Development Department was required, the DAHO being in the local sector. The reply was silent regarding obtaining the permission. Inspection of State sector units The DDCs were required to conduct annual inspections of all the units under their jurisdiction. In the seven offices of the DDCs test checked, it was observed that the shortfall in respect of administrative inspection of the State sector units ranged between 22 and 100 per cent during the period 2001-2006. Inspection of farms and institutions The Assistant Commissioners of Regional Disease Investigation Laboratories (RDIL) were required to visit the farms and institutions to ascertain the status
138
There was huge shortfall between target and achievement in visits to be paid to farms and institution by the RDIL
of livestock by carrying out spot tests for disease surveillance. The shortfall in achievement of the targeted visits during the period from 2001-02 to 2005-06 ranged between 29 and 94 per cent. Consequently, there was a huge shortfall ranging between 62 and 98 per cent in the achievement of targets for spot tests to be carried out for various diseases. The shortfall was attributed (May and June 2006) by the Assistant Director, RDIL to shortage of staff. 5.1.7.6 Low achievement against targets Targets and achievements under various schemes during the period from 2001-02 to 2004-05 were as follows:
Activity
Treatment of cases Artificial Insemination done(in lakh) No.of calves born Vaccination done Castration done
2001-02 Target Achieve -ment 150.36 96.04 32.62 19.60 12.36 451.34 12.40 6.42 339.36 8.09
Target
2002-03 Achievement 118.59 91.00 34.25 19.48 6.96 297.24 8.15
Target
2003-04 Achievement 113.91 94.36 34.25 19.17 12.98 401.07 10.22 6.79 301.63 8.55
2004-05 Target Achievement 111.71 96.51 30.13 16.29 10.04 389.94 10.09 6.63 357.90 8.10
12.94 394.23 10.50
The achievement against targets was low in spite of reducing the targets for the subsequent years
There was consistent low achievement against targets despite the downward revision of targets between 2001-02 and 2004-05 indicating inefficient implementation of programmes due to weak organisational and operational controls. 5.1.8 Internal audit Internal audit was to be conducted by the Department to examine and evaluate the level of compliance with Departmental rules and procedures so as to provide reasonable assurance to the management on the adequacy of the internal control system of the Department. It was noticed that the internal audit mechanism in the Department was inadequate and ineffective as discussed below. 5.1.8.1 Shortfalls in internal audit The Assistant Director, Accounts was the head of the Internal Audit Wing (IAW). It was observed that the auditable units (28210) were not categorised according to their transactions and importance and fixed the periodicity of these units. As such, the Department was required to conduct the internal audit of all the units every year with only three audit parties11 each comprising three members. It was observed that out of total 282 units only 38 units (13 per cent) were audited during 2005-06. Unless additional staffs are earmarked for the purpose, internal audit would continue to be in arrears. The Audit Officer of IAW stated (May 2006) that a proposal for additional staff for the wing submitted to the Deficiency Committee of the Department was still pending.
10
Commissionerate (1), State level (6), Regional level (19), Disrtict level (61) and Taluka level (195) 11 Supervised by one Audit Officer. Each party consisted of one Supervisor, one Senior Clerk and one Junior clerk. 139
5.1.8.2
The number of paras outstanding for more than three years was very high
Pendency of Inspection Reports
Internal audit loses its efficacy unless the deficiencies pointed out are promptly attended to. As of March 2005, 11415 paragraphs in 472 internal audit inspection reports (IRs) were outstanding, of which 10889 paragraphs in 315 IRs were pending for more than three years, as shown as under:
Year in which Inspection Report issued Prior to 2000-01 2000-01 2001-02 2002-03 Total Number of Inspection Reports 130 121 40 24 315 Number of pending paragraphs 8690 619 404 1176 10889
This indicated that sufficient initiative had not been taken by the Department to rectify the mistakes and deficiencies pointed out in Internal Audit. 5.1.8.3 Inspection Reports Accountant General (IRs) of the Principal
As of March 2006, out of 302 IRs paragraphs issued by the Principal Accountant General (Audit), 181 paragraphs were outstanding. The age-wise position of pending IR paragraphs was as follows:
Pending for above five years above four years above three years above two years below two years Total Number of Paragraphs 73 22 11 43 32 181
The above pendency indicated lack of proper response to Audit by the various units and inadequate follow up by IAW. 5.1.9 Conclusion Budgetary and expenditure controls were not adequate in the Department. There was excess expenditure under Non-Plan schemes and large savings under Plan schemes. Assessment of grants released to the Zilla Parishads was not carried out. Recovery of loans from poultry co-operative societies was not monitored properly. The strength of the Internal Audit Wing of the Department was inadequate. Coverage of units was only 13 per cent during 2005-06. Sero-monitoring of animals to verify the efficacy of vaccination programme was not done. The Government did not decide the nodal agent for implementation of the fodder development programme and there was no supervisory officer at district level to guide the farmers. Beneficiary registers were not maintained to enable follow up by the Department on the animals distributed to them. There were shortages of manpower in the supervisory cadres and the posts were held as additional charges, adversely affecting the monitoring of schemes.
140
5.1.10
Recommendations streamline the budgetary control and avoid curtailment of Plan expenditure. Financial controls should also be strengthened; ensure that the grants released to the Zilla Parishads are assessed in time to avoid release of excess grants persistently; ensure that the monitoring mechanism for recovery of the loans given to the poultry co-operative societies is strengthened; strengthen the Internal Audit Wing and draw up audit plan so as to cover all units with in a time frame. Timely corrective action suggested in internal audit reports should be ensured; decide the nodal agent for fodder development and ensure inspection by all supervisory cadres for better monitoring of the activities.
Government should:
The matter was referred to the Principal Secretary to the Government in July 2006. Reply had not been received (October 2006).
Mumbai, The
(MALASHRI PRASAD) Principal Accountant General (Audit)-I, Maharashtra
Countersigned
New Delhi, The
(VIJAYENDRA N. KAUL) Comptroller and Auditor General of India
141
APPENDIX 1.1 (Reference: Paragraph 1.4; Page 5) List of terms used in the Chapter - I and basis for their calculation Terms Buoyancy of a parameter Buoyancy of a parameter (X) with respect to another parameter (Y) Rate of Growth (ROG) Share shift/Shift rate of a parameter Basis for calculation Rate of Growth of the parameter GSDP Growth Rate of Growth of the parameter (X) Rate of Growth of the parameter (Y) [(Current year Amount/Previous year Amount)1]*100 Trend of percentage shares, over a period of 5 years, of the parameter in Revenue or Expenditure as the case may be Social Services + Economic Services Interest Payment / [(Amount of previous year's Fiscal Liabilities + Current year's Fiscal Liabilities)/2]*100 GSDP growth - Weighted Interest rates Interest Received [(Opening balance + Closing balance of Loans and Advances)/2]*100 Revenue Receipt - Revenue Expenditure Revenue Expenditure + Capital Expenditure + Net Loans and Advances - Revenue Receipts Miscellaneous Capital Receipts Fiscal Deficit - Interest Payments Revenue Receipts minus all Plan grants and Non-Plan Revenue Expenditure excluding debits under 2048-Appropriation for Reduction or Avoidance of Debt
Development Expenditure Weighted Interest Rate (Average interest paid by the State) Interest spread Interest received as per cent to Loans Advanced Revenue Deficit Fiscal Deficit
Primary Deficit Balance from Current Revenue (BCR)
APPENDIX 1.2 (Reference : Paragraph 1.4; Page 4) Summarised financial position of the Government of Maharashtra as on 31 March 2006
(Rupees in crore) As on 31.03.2005 LIABILITIES (Rupees in crore) As on 31.03.2006
70895.10 18566.47 25.38 2225.86 50077.39 -8482.34 190.19 1261.03 6834.81 10.08 186.23 -45.48 8183.93 11950.65 21514.83* 3880.90 1537.89 126491.12
As on 31.03.2005
Internal Debt Market Loans bearing interest Market Loans not bearing interest Loans from LIC Loans from other institutions Ways and Means Advances/Overdrafts from Reserve Bank of India Loans and Advances from Central Government Pre 1984-85 Loans Non-Plan Loans Loans for State Plan Schemes Loans for Central Plan Schemes Loans for Centrally Sponsored Plan Schemes Ways and Means Advances Contingency Fund Small Savings, Provident funds etc. Deposits Reserve Funds Suspense and Miscellaneous Balances Remittances TOTAL
ASSETS
88847.39* 19715.97 22.68 2530.94 66577.80 -8447.04 137.08 1116.10 6987.41 9.25 197.20 --
711.42* 8770.73 13375.34 23050.54* 3270.23 1360.69 147833.38

As on 31.03.2006
60096.78 25829.74 34267.04 11652.14 3828.52 7206.39 617.23 13.23 2123.01 3.85 (-) 203.22 (-) 52.06 24.16 0.43 1048.42 1301.43 52605.96 10033.33 0.02 (-) 0.08 42572.69 126491.12
Gross Capital Outlay on Fixed Assets Investments in shares of Companies, Corporations etc. Other Capital Outlay Loans and Advances Loans for Power Projects Other Development Loans Loans to Government servants Advances Cash Cash in Treasuries Deposits with Reserve Bank Local remittances Departmental Cash Balance Permanent Advances Cash Balance Investments Investment of earmarked balances Deficit on Government Accounts (i) Revenue Deficit of the Current Year (ii) Pro forma correction (iii) Other adjustments Accumulated deficit upto 31 March 2005 TOTAL
70175.22 31917.62 38257.60 15362.51 5210.29 9446.46 705.76 12.45 5038.30 4.05 (-) 128.43 125.85 8.16 0.43 3209.72 1818.52 57244.90 3841.56 -797.38 52605.96 147833.38
Lower rounding 144
Appendices
APPENDIX 1.3
(Reference: Paragraph 1.4; Page 4) Abstract of Receipts and Disbursements for the year 2005-06
(Rupees in crore) (Rupees in crore) Disbursements
Receipts 2004-05 (1) 41013.33 30605.76 4118.83 I. (2) Revenue receipts Tax revenue Non-tax revenue States share of Union Taxes (3) 2005-06 (4) 48438.29 33540.24 5935.05 2004-05 (5) (6) Section-A : Revenue 51046.66 I. Revenue expenditure 22271.16 General services 17548.71 Social services 10184.16 Education, Sports, Art and Culture 1890.85 Health and Family Welfare 2490.53 Water Supply, Sanitation, Housing and Urban Development 28.36 Information and Broadcasting 1301.91 Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes 221.64 Labour and Labour Welfare 1398.83 Social Welfare and Nutrition 32.43 10381.121 3492.03 2234.22 39.99 815.43 2982.96 303.90 219.58 9.04 283.97 845.67 10033.33
II
NonPlan (7)
Plan (8)
Total (9) 52279.85 21696.50 19917.19 10761.83 2124.03 2301.52
2005-06 (10) 52279.85
47048.15 5231.70 21623.38 73.12 16791.89 3125.30 10238.08 523.75 1611.90 1547.18 512.13 754.34
3595.02
4982.00
22.06 830.45
0.39 822.35
22.45 1652.80
570.31
Non-Plan grants
1582.00
231.76 2282.88*
41.17 466.43
272.93 2749.31* 32.32 9314.71 2732.22 2017.92 21.23 1318.37 1993.13 457.90 554.40 13.00 206.54 1351.45 --
1265.36
Grants for State Plan Scheme Grants for Central and Centrally sponsored Plan Schemes
1255.33
858.05
1143.67
Others Economic Services Agriculture and Allied Activities Rural Development Special Areas Programmes Irrigation and Flood Control Energy Industry and Minerals Transport Science, Technology and Environment General Economic Services Grants-in-aid and Contributions Revenue Surplus carried over to Section B
27.58 4.74 7314.13 2000.58 2263.96 468.26 1470.77 0.21 1154.34 1736.13 168.62 435.67 -84.43 1318.75 547.15 21.02 164.03 257.00 289.28 118.73 13.00 122.11 32.70
Revenue deficit carried over to Section B
3841.56
--
II
Lower rounding Higher rounding 145
(1) 2438.94
III.
(2) Opening Cash balance including Permanent Advances and Cash Balance Investment Miscellaneous Capital receipts
(3)
APPENDIX 1.3 (Contd.) (5) (6) Section B III. Opening Overdraft 2123.01 -from RBI (4)
(7)
(8)
(9)
(10) --
--
IV.
--
7876.98 48.02 283.89 5.89 93.64 20.74
IV
Capital Outlay General Services Social Services Education, Sports, Art and Culture Health and Family Welfare Water Supply, Sanitation, Housing and Urban Development Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes Social Welfare and Nutrition Others Economic Services Agriculture and Allied Activities Rural Development Special Area Programme Irrigation and Flood Control Energy Industry and Minerals Transport General Economic Services Science Technology and Environment Loans and Advances disbursed For Power Projects To Government Servants To Others Revenue deficit brought down
3277.99 6800.45 18.90 51.84 (-) 1.81 1249.00 -12.30 -0.01 90.50 901.621
10078.44 70.74 1247.19 12.30 90.50 901.63
10078.44
119.16
--
207.82
207.82
3.421 41.04 7545.07 283.54 --6002.86 482.63 2.04 751.88 22.07 0.05 2040.94 1090.13 107.11 843.70 VI. V. Recoveries of Loans and Advances From Power Projects From Government Servants From others Revenue surplus brought down 551.25 272.49 118.12 160.64 -2750.66 657.24 143.26 1950.16 10033.33 VI
V
(-) 1.82
2.96
1.14 33.80 8760.51 325.87 463.76 42.61 6064.321 562.19 129.74 1084.83 87.15 0.04 4261.62 1654.26 206.64 2400.72 3841.56
-33.80 3260.90 5499.61 130.52 195.35 --463.76 42.61
2904.71 3159.61 --138.57 87.10 -562.19 129.74 946.26 0.05 0.04
Higher rounding
146
Appendices
APPENDIX 1.3 (Concld.)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
22188.84 20387.16
VII.
1801.68
Public Debt receipts External debt Internal debt 19483.51 other than Ways and Means Advances and Overdraft + Net transactions under Ways and Means Advances including Overdraft Loans and 490.19 Advances from Central Government Appropriation from Contingency Fund Contingency Fund Public Account receipts Small Savings 1793.85 and Provident Funds Reserve Funds 5503.83 Suspense and (-) 905.05 Miscellaneous Remittances 12382.33 Deposits and 8370.93 Advances Closing Overdraft from Reserve Bank of India Inter State Settlement
19973.70 --
10993.95 VII. 1611.15*
Repayment of Public Debt External debt Internal debt other than Ways and Means Advances and Overdraft Net transactions under Ways and Means Advances including Overdraft Repayment of Loans and Advances to Central Government Appropriation to Contingency Fund Contingency Fund Public Account disbursements Small Savings and Provident Funds Reserve Funds Suspense and Miscellaneous Remittances Deposits and Advances Cash Balance at end -Cash in Treasuries -Local Remittances -Deposits with Reserve Bank -Departmental Cash Balance -Permanent Advances -Cash Balance Investment -Investment of earmarked balances Total
2056.71 1531.22
9382.80
525.49
300.00
VIII.
1050.00
300.00
VIII.
1850.00
347.50 27991.38 1684.36 6461.36 1201.43 11178.34 7465.89 --
IX. X.
1954.52 27145.89
404.52 20825.15 1189.27 3126.82 (-) 67.88 10708.95 5867.99
IX. X.
1288.57 24383.17 1207.04 3968.12 (-) 296.98 12559.53 6945.46 5038.30
XI.
--
2123.01
XI.
3.85 -XII.
4.05 125.85 (-) 128.43 8.16 0.43 3209.72 1818.52 52798.37
--
(-) 52.06 (-) 203.22 24.16 0.43 1048.42 1301.43
55307.60
Total
52798.37
55307.60
*
A
+ Lower rounding Represents receipt Rs 3684.93 crore and disbursement Rs 3684.93 crore Represents receipts Rs 3537.91 crore and disbursement Rs 3537.91 crore
147
APPENDIX 1.4
(Reference: Paragraph 1.4; Page 4)
Sources and Application of funds
(Rupees in crore)
2004-05
2005-06 Sources 1 2 3 4 Revenue receipts Recoveries of Loans and Advances Increase in Public debt other than overdraft Net receipts from Public account Increase in Small Savings and Provident Funds Increase in Deposits and Advances Increase in Reserve funds Net effect of Remittances Net effect of Suspense and Miscellaneous transactions 5 6 Adjustment closed to Government Accounts Decrease in closing cash balance Total Application 1 2 3 4 5 Revenue expenditure Capital expenditure Lending for development and other purposes Net effect of contingency fund transactions Increase in closing cash balance Total Explanatory notes for Appendix 1.2, 1.3 and 1.4 1.
2. The abridged accounts in the foregoing statements have to be read with comments and explanations in the Finance Accounts. Government accounts being mainly on cash basis, the deficit on Government account, as shown in Appendix 1.2, indicates the position on cash basis, as opposed to accrual basis in commercial accounting. Consequently, items payable or receivable or items like depreciation or variation in stock figures etc, do not figure in the accounts. Suspense and Miscellaneous balances include cheques issued but not paid, payments made on behalf of the State and other pending settlement etc. There was a difference of Rs 1.12 crore (debit) between the figures reflected in the accounts and that intimated by the RBI under Deposit with Reserve Bank. The difference is under reconciliation (August 2006).
41013.33 2040.94 11194.89 7166.15 495.09 1597.91 3334.54 469.39 1269.22 0.08 315.93 61731.32 51046.66 7876.98 2750.66 57.02 -61731.32
48438.29 551.25 17916.99 2760.11 586.80 1425.47 1535.71 (-) 177.20 (-) 610.67 (-) 797.38 -68869.26 52279.85 10078.44 4261.62 (-) 665.94 2915.29 68869.26
3. 4.
148
Appendices
APPENDIX 1.5 (Reference : Paragraph 1.4; Page 4) Time series data on State Government Finances
(1) Part A. Receipts 1. Revenue Receipts (i) Tax Revenue Taxes on Agricultural Income Taxes on Sales, Trade, etc. State Excise Taxes on Vehicles Stamps and Registration fees Land Revenue Other Taxes (ii) Non-tax Revenue (iii) States share of Union taxes and duties (iv) Grants-in-aid from GOI 2. Miscelleneous Capital Receipts 3. Total revenue and Non-debt capital receipts (1 + 2) 4. Recoveries of Loans and Advances 5. Public Debt Receipts Internal Debt (excluding Ways and Means Advances and Overdrafts) Net transactions under Ways and Means Advances and Overdraft Loans and Advances from Government of India$ 6. Appropriation from Contingency Fund 7. Inter State settlement 8. Total receipts in the Consolidated Fund (3+4+5+6+7) 9. Contingency Fund Receipts 10. Public Accounts receipts 11. Total receipts of the State (8+9+10) Part B. Expenditure/Disbursement 12. Revenue expenditure (Per cent of 15) Plan Non-Plan General Services (incl. Interests payments) Social Services Economic Services Grants-in-aid and Contribution 13. Capital Expenditure (Per cent of 15) Plan Non-Plan General Services Social Services Economic Services
* Higher rounding
1
2001-02 (2) 30092.95 21287.64(71) 0.16(00) 12131.38(57) 1787.26(08) 947.79(04) 2442.67(12) 260.46(01) 3717.92(18) 4655.08(15) 2468.76(08) 1681.47(06) -30092.95 298.09 8671.33 2334.73 -6336.60 600.00 -39662.37 305.45 42368.85 82336.67 38281.52(93) 2881.03(08) 35400.49(92) 17730.54(46) 14136.81(37) 5875.71(16) 538.46(01) 2947.88(07) 1475.39(50) 1472.49(50) 38.15(01) 133.11(05) 2776.62(94)
Lower rounding
2002-03 (3) 31103.05 22799.46(73) -13488.34(59) 1938.68(9) 941.23(4) 2823.11(12) 386.41(2) 3221.69(14) 4517.47(15) 2279.96(7) 1506.16(5) -31103.05 469.16 9758.42 8796.64 -961.78 450.00 -41780.63 465.80 44867.16 87113.59 40474.30(88) 3244.41(8) 37229.89(92) 17946.81(44) 14217.83(35) 7635.77(19) 673.89(2) 3683.68(8) 1645.08(45) 2038.60(55) 39.38(1) 159.28(4) 3485.02(95)
2003-04 (4) 34370.52 25162.16(73) -15325.95(61) 2324.42(9) 1205.97(5) 3354.06(13) 360.49(2) 2591.27(10) 3548.94(10) 3389.49(10) 2269.93(7) -34370.52 482.16 22381.11 21128.70 -1252.41 850.00 -58083.79 886.85 24452.02 83422.66 42680.06*(81) 3544.70(8) 39135.36(92) 19820.08(46) 15990.32(38) 5883.00(14) 986.66(2) 8199.14(15) 3735.08(46) 4464.06(54) 48.63(1) 282.56(3) 7867.95(96)
2004-05 (5)
(Rupees in crore) 2005-06 (6) 48438.29 33540.24(69) -19676.73(59) 2823.85(8) 1309.11(4) 5265.86(16) 428.97(1) 4035.72(12) 5935.05(12) 4982.00(11) 3981.00(8) -48438.29 551.25 19973.70 19483.51 -490.19 1050.00 -70013.24 1954.52 27145.89 99113.65 52279.85(78) 5231.70(10) 47048.15(90) 21696.50(41) 19917.19(38) 9314.71(18) 1351.45(3) 10078.44(16) 6800.45(67) 3277.99(33) 70.74(1) 1247.19(12) 8760.51(87)
41013.33 30605.76(75) -18816.72(62) 2218.87(7) 1177.15(4) 4116.49(13) 360.72(1) 3915.81(13) 4118.83(10) 3595.02(9) 2693.72(6) -41013.33 2040.94 22188.84 20387.16 -1801.68 300.00 -65543.11 347.50 27991.38 93881.99 51046.66(83) 4654.10(9) 46392.56(91) 22271.16(44) 17548.71(34) 10381.12(20) 845.67(2) 7876.98(13) 5021.31(64) 2855.67(36) 48.02(1) 283.89(3) 7545.07(96)
$ Includes Ways and Means Advances from GOI
149
APPENDIX 1.5 (Concld.)

(1)
14. Disbursement of Loans and Advances (Per cent of 15) 15. Total (12+13+14) 16. Repayments of Public Debt Internal Debt (excluding Ways and Means Advances and Overdrafts) Net transactions under Ways and Means Advances and Overdrafts Loans and Advances from Government of India$ 17. Appropriation to Contingency Fund 18. Total disbursement out of Consolidated Fund (15+16+17) 19. Contingency Fund disbursements 20. Public Account disbursements 21. Total disbursement by the State (18+19+20) Part C. Deficits 22. Revenue Deficit(-)/Surplus (+) (1-12) 23. Fiscal Deficit (3+4-15) 24. Primary Deficit (23-25) Part D. Other data 25. Interest Payments (included in revenue expenditure) 26. Arrears of Revenue (Percentage of Tax and non-tax Revenue Receipts) 27. Financial Assistance to local bodies etc. 28. Ways and Means Advances/Overdraft availed (days) 29. Interest on WMA/Overdraft 30. Gross State Domestic Product (GSDP) 31. Outstanding Debt (year end) 32. Outstanding guarantees (year end)A 33. Maximum amount guaranteed (year end) 34. Number of incomplete projects 35. Capital blocked in incomplete projects
(2) 59.39(00) 41288.79 1190.80 229.89 -960.91 250.00 42729.59 615.80 39760.53 83105.92 (-)8188.57 10897.75 4468.67 6429.08 5140.68(20) 10980.14 107/76 41.03 271406 45651.50 1534.96 33974.20 117 3258.16
(3) 1704.08(4) 45862.06 1355.31 233.22 -1122.09 450.00 47667.37 486.85 38221.87 86376.09 (-)9371.25 14289.85 7160.10 7129.75 5879.01(22) 5258.55 171/154 42.88 295191c 54054.61 2453.50 37521.19 133 3829.26
(4) 1901.99(4) 52781.19 8253.17 410.92 -7842.25 850.00 61884.36 897.50 19637.06 82418.92 (-)8309.54 17928.51 9593.03 8335.48 6866.45(24) 18516.03 168/39 34.12 333145c 68182.55 70125.72 82228.45 146 4224.89
(5) 2750.66(4) 61674.30 10993.95 1611.15 -9382.80 300.00 72968.25 404.52 20825.15 94197.92 (-)10033.33 18620.03 9641.47 8978.56 12584.30(36) 21218.24 68/12 9.23 371878c 79377.44 60870.90 80183.53 153 4826.19
(6) 4261.62(6) 66619.91 2056.71 1531.22 -525.49 1850.00 70526.62 1288.57 24383.17 96198.36 (-)3841.56 17630.37 8283.13 9347.24 15347.47(39) 27387.69 21/20 9.04 418441D 97294.43 66238.82 86725.14 158 5239.74
Note: Figures in brackets represent percentages (rounded) to total of each subheading
$ c
Includes Ways and Means Advances from GOI Based ib Economic Survey of Maharashtra D Advance estimates as furnished by Directorate of Economics and Statistics, Government of Maharashtra
A
As per Finance Accounts of respective year
150
Appendices
APPENDIX 1.6 (Reference: Paragraph 1.7.5; Page 15) Statement showing department-wise breakup of outstanding Utilisation Certificates (Grants) Department Number of Amount certificates (Rupees in crore) 6569 651.85 Agriculture, Animal Husbandry, Dairy Development and Fisheries Co-operation and Textiles 1635 96.28 Employment and Self-employment 3 1.90 Environment 1 0.09 Finance 105 38.00 Food, Civil Supplies and Consumer Protection 14 0.05 General Administration 37 0.92 Higher and Technical Education 706 418.49 Home 442 187.67 Housing 25 0.50 Industries, Energy and Labour 65 55.82 Irrigation 13 0.12 Law and Judiciary 215 1.24 Medical Education and Drugs 158 12.81 Planning 4833 657.71 Public Health 2731 343.05 Public Works 166 35.68 Revenue and Forests 3301 391.76 Rural Development and Water Conservation 3217 882.19 School Education 6756 2088.37 Social Justice, Cultural Affairs, Sports and Special Assistance 28046 840.73 Tribal Development 1348 266.83 Urban Development 427 424.73 Water Supply and Sanitation 1699 1678.88 Women and Child Development 1154 144.08 Total 63666 9219.75 Department-wise break up of outstanding Utilisation certificates (Loans) 68 10.67 Agriculture, Animal Husbandry, Dairy Development and Fisheries Co-operation and Textiles 359 86.43 General Administration 56 2.37 Housing 67 0.91 Industries, Energy and Labour 1421 23.53 Revenue and Forests 483 289.88 Rural Development and Water Conservation 34 3.13 Social Justice, Cultural Affairs, Sports and Special Assistance 586 31.87 Tribal Development 65 0.11 Urban Development 415 113.33 Total 3554 562.23 Grand total (Grants + Loans) 67220 9781.98
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
1 2 3 4 5 6 7 8 9
151
APPENDIX 1.7 (Reference: Paragraph 1.7.6; Page 15) Sr. No. Name of body Statement showing performance of the autonomous bodies Period of Year upto Period upto Placement Delay in entrustment which which of SAR in submission of accounts Separate the accounts were Audit Legislature rendered Report is issued (3) (4) (5) (6) (7) 01.04.2003 to 31.03.2008 2003-04 2000-01 1998-99 16.12.2003 2003-04 Annual accounts of all units received between March 2005 to December 2005 1996-97 to 1998-99 Annual accounts received in April 2003 2004-05 Adopted accounts received in second week of March 2006 2004-05 Accounts adopted in third week of May 2006 2004-05 Adopted accounts received on 28.08.2005 2002-03 Accounts received in August 2004 Period of delay
(1) 1
(2) Maharashtra Housing and Area Development Authority, Mumbai Slum Rehabilitation Authority, Mumbai Maharashtra State Khadi and Village Industries Board, Mumbai Maharashtra Jeevan Pradhikaran, Mumbai Mumbai Metropolitan Region Development Authority, Mumbai Maharashtra State Commission for Women, Mumbai Maharashtra Maritime Board, Mumbai
(8) Delay for about one year six months
2.
18.10.1996 to 31.03.2003
1996-97 to 1998-99
--
--
Delay for about one year
3.
01.04.2002 to 31.03.2007
2004-05
2003-04
2002-03 30.06.2005
Delay for about nine months
4.
01.04.2002 to 31.03.2007
2004-05
2003-04
2002-03 December 2005
Delay for about eleven months
5.
01.04.2004 to 31.03.2009
2004-05
2004-05
No provision for placement
Delay for about two months
6.
01.04.2003 to 31.03.2008
2001-02 and 2002-03
2001-02 and 2002-03
No provision for placement
Two years delay for 2001-02 and one year delay for 2002-03 Delay for about five months
7.
01.04.2001 to 31.03.2006
2004-05
2003-04
1996-97 to 2003-04 13.04.2006
2004-05 Adopted accounts received on 18.11.2005
152
Appendices
(1) 8.
(2) Maharashtra Krishna Valley Development Corporation, Pune Konkan Irrigation Development Corporation, Thane
(3) 01.04.2001 to 31.03.2006
APPENDIX 1.7 (Concld.) (4) (5) 2004-05 2003-04
(6)
(7) 2004-05 Accounts adopted on 17.01.2006 2003-04 and 2004-05 Accounts adopted in July 2005 and January 2006 2004-05 Accounts received on 26 July 2006 2003-04 Accounts received on 9 May 2005 2004-05 Accounts still not received
(8) Delay for about seven months
2002-03 21.07.2005
9.
01.04.2003 to 31.03.2008
2003-04 and 2004-05
2002-03
2002-03 17.03.2005
One year delay for 2003-04 and seven months delay for 2004-05 Delay for over one year
10.
Vidharbha Irrigation Development Corporation, Nagpur Tapi Irrigation Development Corporation, Jalgaon
01.04.2003 to 31.03.2007
2004-05
2002-03
Not placed
11.
01.04.2003 to 31.03.2008
2003-04
2003-04
Not placed
Over 10 months delay for 2003-04 accounts and over two years delay for 2004-05 accounts Delay for over one year.
12.
Godavari Marathwada Irrigation Development Corporation, Aurangabad Maharashtra Pollution Control Board, Mumbai
01.04.2004 to 31.03.2009
2004-05
2003-04
Not placed
2004-05 Accounts received on 13 July 2006
13.
01.04.2003 to 31.03.2007
--
--
--
2003-04 to 2004-05 Audit entrusted with effect from 01.03.2003 Accounts awaited
--
153
APPENDIX 1.8 (Reference: Paragraph 1.7.7; Page 15) Statement showing cases of misappropriation reported upto March 2006 and pending finalisation as on 31 July 2006 Sr. No. Name of Department Reported Reported upto during March 2002 2002-03 Cases Amo- Cases Amounts unts 3 4 5 6 Reported during 2003-04 Cases Amounts 7 8 Reported Reported Total during during 2004-05 2005-06 Cases Amo- Cases Amo- Cases Amounts unts unts 9 10 11 12 13 14 (Rupees in lakh)
Agriculture, Animal Husbandry, Dairy Development and Fisheries Finance Food, Civil Supplies and Consumer Protection General Administration Housing Higher and Technical Education Home Irrigation
64
44.88
0.20
65
45.08
2 3
7 10
125.26 27.80
3.05
1 -
40.08 -
8 165.34 11 30.85
4 5 6 7 8
2 2 2 15 3
1.35 0.61 1.18 19.13 3.11
1 -
29.65 -
2 2
1.59 0.43
2 2 3 17 5
1.35 0.61 30.83 20.72 3.54
154
Appendices
1 9 10 11 12 13 14 15 16
2 Law and Judiciary Medical Education and Drugs Public Health Public Works Revenue and Forests Rural Development and Water Conservation School Education Social Justice, Cultural Affairs, and Special Assistance TOTAL
3 3 3 13 1 70 17 2 8
APPENDIX 1.8 (Concld.) 5 6 7 8 2 27.82 -
9 -
10 -
1.01 7.17 23.15 1.08 22.75 200.69 2.56 84.64
11 12 13 (Rupees in lakh) 3 3 15 1 70
14 1.01 7.17 50.97 1.08 22.75
17 200.69 2 8 2.56 84.64
222
566.37
60.72
42.10
232 669.19 ie Rs 6.69 crore
155
APPENDIX 1.9 (Reference: Paragraph 1.7.8; Page 15) Write off of losses, etc., during 2005-06 Sr. No. Department Losses, irrecoverable revenues, advances etc. written-off Number of cases 1 2 3 4 Co-operation, Marketing and Textiles Food, Civil Supplies and Consumer Protection Higher and Technical Education Industries, Energy and Labour Total 1 572 2 7 582 Amount (Rupees in lakh) 1486 5.72 1.40 0.48 1493.60 i.e. 14.94 crore
156
Appendices APPENDIX 1.10 (Reference: Paragraph 1.8.3; Page 17) Departmentally managed Commercial and Quasi-Commercial Undertakings whose Pro forma Accounts are in arrears for more than one year Number of accounts in arrears Agriculture, Animal Husbandry, Dairy Development and Fisheries Department Greater Mumbai Milk Scheme, Worli 2005-06 1 Mother Dairy, Kurla 2005-06 1 Aarey Milk Scheme, Goregaon 2005-06 1 Milk Transport Scheme, Worli 2005-06 1 Agriculture Scheme, Mumbai 2005-06 1 Unit Scheme, Mumbai 2005-06 1 Electricity Scheme, Mumbai 2005-06 1 Cattle Feed Scheme, Mumbai 2005-06 1 Water Supply Scheme, Mumbai 2005-06 1 Dairy Project, Dapchari 2005-06 1 Government Milk Scheme, Mahad 2005-06 1 Government Milk Chilling Centre, Saralgaon 2005-06 1 Cattle Breeding and Rearing Farm, Palghar 2005-06 1 Government Milk Distribution Depot, Gove-Bhiwandi 2005-06 1 Government Milk Scheme, Pune 2005-06 1 Government Milk Schme, Miraj 2005-06 1 Government Milk Scheme, Satara 2005-06 1 Government Milk Schme, Nagpur 2005-06 1 Government Milk Scheme, Wardha 2005-06 1 Government Milk Scheme, Chandarapur 2005-06 1 Government Milk Scheme, Gondia 2005-06 1 Government Milk Scheme, Aurangabad 2005-06 1 Government Milk Scheme, Udgir 2005-06 1 Government Milk Scheme, Beed 2005-06 1 Government Milk Scheme, Nanded 2005-06 1 Government Milk Scheme, Bhoom 2005-06 1 Government Milk Scheme, Parbhani 2005-06 1 Government Milk Scheme, Amravati 2005-06 1 Government Milk Scheme, Yavatmal 2005-06 1 Government Milk Scheme, Nandura 2005-06 1 Land Development by Bulldozer Scheme, Pune 1995-96 11 Land Development by Bulldozer Scheme, Aurangabad 1999-00 7 Land Development by Bulldozer Scheme, Amravati 1996-97 10 Land Development by Bulldozer Scheme, Nagpur 1997-98 9 Food and Civil Supplies Department Procurement, Distribution and Price Control Scheme 2005-06 1 in Mumbai and Thane Rationing Area Procurement, Distribution and Price Control Scheme 2005-06 1 in Mofussil Area Revenue and Forest Department Allapalli and Pengundam Forest Range of Forest 1985-86 21 Divisions including Saw Mills and Timber Depot. Name of scheme Arrears since Remarks
157
APPENDIX 1.11 (Reference: Paragraph 1.8.3; Page 17) Summarised statement of finalisation of accounts and the Government investment thereon in departmentally managed commercial and quasi-commercial undertakings Sr. Department Number of Account not finalised Account Investment Remarks No. under(Name of finalised as per last takings undertakings) upto accounts under the (Rupees in Departcrore) ment (1) (2) (3) (4) (5) (6) (7) (A) Agriculture, 42 Government Milk Animal Scheme Husbandry, Dairy Development and Fisheries Mumbai Region 1 Greater Mumbai Milk 2004-05 9.97 Scheme, Worli 2 Mother Dairy, Kurla 2004-05 15.95 3 Aarey Milk Scheme, 2004-05 13.25 Goregaon 4 Milk Transport 2004-05 3.28 Scheme, Worli 5 Agriculture Scheme, 2004-05 2.91 Mumbai 6 Unit Scheme, Mumbai 2004-05 11.14 7 Electricity Scheme, 2004-05 5.75 Mumbai 8 9 10 11 12 13 14 15 16 17 18 Cattle Feed Scheme, Mumbai Water Supply, Mumbai Dairy Project, Dapchari Government Milk Scheme, Chiplun Government Milk Scheme, Mahad Government Milk Scheme, Ratnagiri Government Milk Scheme, Khopoli Government Milk Scheme, Kankavali Government Milk Chilling Centre, Saralgaon Cattle Breeding and Rearing Farm, Palghar Government Milk Distribution Depot, Gove-Bhiwandi 2004-05 2004-05 2004-05 2005-06 2004-05* 2005-06 2005-06 2005-06 2004-05* 2004-05* 2004-05* 0.11 13.94 13.58 0.64 0.91$ 7.23 1.55 2.24 0.25 0.01 0.42
158
Appendices
(1)
19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
(2)
(3)
APPENDIX 1.11 (Contd.) (4) (5)

Pune Region Government Milk Scheme, Pune Governemnt Milk Scheme, Solapur Government Milk Schme, Miraj Government Milk Scheme, Mahabaleshwar Government Milk Scheme, Satara Nagpur region Government Milk Schme, Nagpur Government Milk Scheme, Wardha Government Milk Scheme, Chandarapur Government Milk Scheme, Gondia Aurangabad region Government Milk Scheme, Aurangabad Government Milk Scheme, Udgir Government Milk Scheme, Beed Government Milk Scheme, Nanded Government Milk Scheme, Bhoom Government Milk Scheme, Parbhani Nashik Region Government Milk Scheme, Nashik Government Milk Scheme, Dhule Government Milk Scheme, Chalisgaon Government Milk Scheme, Ahmednagar Government Milk Scheme, Wani Amravati Region Government Milk Scheme, Amravati Government Milk Scheme, Akola Government Milk Scheme, Yavatmal Government Milk Scheme, Nandura 2004-05* 2005-06 2004-05* 2005-06 2004-05* 2004-05* 2004-05* 2004-05* 2004-05 2004-05* 2004-05* 2004-05* 2004-05 2004-05* 2004-05* 2005-06 2005-06 2005-06 2005-06 2005-06 2004-05 2005-06 2004-05* 2004-05*
(6)
9.16 1.08 0.31 0.87 7.56 0.12 2.59 0.96 6.30 3.00 10.50 31.39 12.32 5.57 0.17 3.07 19.24 1.41 20.00 0.69 3.10 23.64 2.95 1.29
(7)
159
(1)
(B)
(2)
Agriculture, Animal Husbandry, Dairy Development and Fisheries
(3)
4
APPENDIX 1.11 (Concld.) (4) (5)

Land Development by Bulldozer Scheme
(6)
(7)
43 44 45 46 47 Food, Civil Supplies and Consumer Protection Department 2
48
49
Revenue and Forest Department
Land Development by Bulldozer Scheme, Pune Land Development by Bulldozer Scheme, Aurangabad Land Development by Bulldozer Scheme, Amravati Land Development by Bulldozer Scheme, Nagpur Procurement, Distribution and Price Control Scheme in Mumbai and Thane Rationing Area Procurement, Distribution and Price Control Scheme in Mumbai and Thane Rationing Area Allapalli and Pengundum Forest Range of Forest Division including Saw Mills and Timber Depot
1994-95 1998-99 1995-96 1996-97 2004-05
4.00 21.93 0.01 2.18 416.49 Investment denotes the closing Government Capital. Investment denotes the closing Government Capital.
2004-05
363.59
Note:
* $
Last years figures Rupees in lakh
160
APPENDIX 1.12 (Reference: Paragraph 1.8.3;Page 17)
Summarised Financial Statement of Departmentally Managed Commercial Quasi-Commercial Undertakings

Sl. No. Particulars of the undertaking Year of commencement of activities Period of accounts Government Capital (Mean Capital) Block assets at depreciated cost Depreciation provided during the year Turnover Net Profit (+) / Net Loss (-) Interest on Mean capital Total return (9 + 10) Percentage of return on Mean capital
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8) ( Rupees in lakh )
(9)
(10)
(11)
(12)
(In per cent)
AGRICULTURE, ANIMAL HUSBANDRY, DAIRY DEVELOPMENT AND FISHERIES DEPARTMENT

161 1 2 3 4 5 6 7 8
Government Milk Scheme - Mumbai Region

Greater Mumbai Milk Scheme, Worli Mother Dairy, Kurla Central Dairy, Goregaon Milk Transport Scheme, Worli Agriculture Scheme, Mumbai Unit Scheme, Mumbai Electricity Scheme, Mumbai Cattle Feed Scheme, Mumbai 1947 1975 1950 1951 1950 1950 1950 1950 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 489.39 1529.39 2109.45 344.42 275.72 1150.53 459.70 30.16 1073.63 928.77 526.08 145.36 284.20 867.35 15.40 21.29 46.93 40.90 35.53 40.65 4.82 31.73 1.82 0.56 14385.70 6451.95 6071.79 931.16 20.35 243.70 266.18 82.73 -224.30 -887.44 -598.26 -119.51 -62.41 164.66 -172.95 53.49 51.39 160.59 221.49 36.16 28.95 120.81 48.31 3.61 -172.92 -726.86 -376.76 -83.35 -33.46 285.46 -124.65 57.10 24.81 189.31
Appendix 1.12 (Contd.)
(1) 9 10 11 12 13 14 162 15 16 17 18
(2) Water Supply Scheme, Mumbai Dairy Project, Dapchari Government Milk Scheme, Chiplun Government Milk Scheme, Mahad Government Milk Scheme, Ratnagiri Government Milk Scheme, Khopoli Government Milk Scheme, Kankavali Government Milk Chilling Centre, Saralgaon Cattle Breeding and Rearing Farm, Palghar Government Milk Distribution Depot, Gove-Bhiwandi Pune Region Government Milk Scheme, Pune Governemnt Milk Scheme, Solapur Government Milk Schme, Miraj Government Milk Scheme, Mahabaleshwar
(3) 1950 1960 1966 1966 1966 1966 1966 1979 1979 1987
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
2004-05 2004-05 2005-06 2004-05 2005-06 2005-06 2005-06 2004-05 2004-05 2004-05
1293.80 1053.12 163.55 126.90 110.67 156.24 294.91 34.09 362.90 17.96
465.27 611.64 69.59 93.49 63.05 178.21 257.16 15.94 64.73 35.92
10.14 21.42 3.90 2.03 2.05 9.90 16.49 1.05 1.48 2.03
3.96 7.87 286.40 48.90 126.52 1372.24 154.87 20.42 52.11 578.08
-62.07 -731.01 -110.20 -70.90 -113.06 3.65 -150.36 -19.88 -51.26 34.88
135.85 110.46 17.17 13.32 11.62 16.40 30.97 3.58 19.05 1.89
73.78 -620.55 -93.03 -57.58 -101.44 20.05 -119.39 -16.30 -32.21 36.77
5.70 12.83 204.73
19 20 21 22
1950 1960 1961 1962
2004-05 2005-06 2004-05 2005-06
1555.17 185.16 6482.32 145.29
423.48 67.86 523.24 45.02
23.28 5.22 29.77 1.88
11302.79 412.11 1779.68 424.82
-131.83 -201.35 -3228.75 -56.77
163.29 19.44 680.65 15.26
31.46 -181.91 -2548.10 -41.51
2.02 -
Appendix 1.12 (Contd.)
(1) 23
(2) Government Milk Scheme, Satara Nagpur Region
(3) 1979
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
2004-05
1482.14
326.84
9.98
577.61
-347.53
155.52
-192.01
24 25 26 27 163
Government Milk Schme, Nagpur Government Milk Scheme, Wardha Government Milk Scheme, Chandarapur Government Milk Scheme, Gondia Aurangabad Region
1958 1976 1979 1979
2004-05 2004-05 2004-05 2004-05
807.56 297.31 107.16 711.52
153.97 40.31 144.82 116.28
26.13 1.82 12.42 2.72
2302.57 115.94 1335.70 2225.84
-514.00 -140.49 -104.60 -195.63
84.79 31.22 11.25 74.71
-429.21 -109.27 -93.35 -120.92
28 29 30 31 32 33
Government Milk Scheme, Aurangabad Government Milk Scheme, Udgir Government Milk Scheme, Beed Government Milk Scheme, Nanded Government Milk Scheme, Bhoom Government Milk Scheme, Parbhani Nashik Region
1962 1971 1978 1977 1978 1979
2004-05 2004-05 2004-05 2004-05 2004-05 2004-05
520.77 1525.51 3197.39 616.43 783.10 164.86
310.87 640.43 601.02 101.13 128.73 74.51
11.32 27.35 16.98 3.78 26.23 2.15
549.34 560.62 2113.93 628.78 1536.10 10.85
-316.97 -690.53 -778.87 -397.39 -292.08 -231.24
54.68 160.18 335.73 64.72 82.23 17.31
-262.29 -530.35 -443.14 -332.67 -209.85 -213.93
34 35 36
Government Milk Scheme, Nashik Government Milk Scheme, Dhule Government Milk Scheme,Chalisgaon
1960 1962 1969
2005-06 2005-06 2005-06
188.04 1564.61 136.39
71.26 332.16 5.34
4.54 14.46 0.56
375.01 1226.47 232.18
-217.53 -476.34 -66.67
19.74 164.28 17.12
-197.79 -312.06 -49.55
Appendix 1.12 (Concld.)
(1) 37 38
(2) Government Milk Scheme, Ahmednagar Government Milk Scheme, Wani
(3) 1969 1978
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
2005-06 2005-06
2606.92 43.44
213.18 13.29
11.15 0.26
5411.71 128.55
-637.32 -46.88
273.73 4.56
-363.59 -42.32
Amravati Region
39 40 41 42 43 44 45 46 164 Government Milk Scheme, Amravati Government Milk Scheme, Akola Government Milk Scheme, Yavatmal Government Milk Scheme, Nandura LDBS Pune LDBS Aurangabad LDBS Amravati LDBS Nagpur 1962 1962 2000 1978 1944 1960 1965 1996 2004-05 2005-06 2004-05 2004-05 1994-95 1998-99 1995-96 1996-97 210.28 2018.32 354.22 209.38 144.26 32.99 2.82 2.17 169.13 597.65 252.62 75.13 77.47 1.05 0.41 0.23 6.18 24.74 2.25 2.44 4.52 511.68 1840.57 235.52 0.00 46.75 2.02 1.8 1.81 -124.08 -716.23 -170.82 -185.22 (-)72.83 (-)23.42 (-)4.46 0.21 22.08 211.92 37.19 21.99 18.75 4.78 0.4 0.32 -102.00 -504.31 -133.63 -163.23 (-)54.08 (-)18.64 (-)4.06 (-)0.53 -
FOOD, CIVIL SUPPLIES AND CONSUMER PROTECTION DEPARTMENT

47 48 Procurement Distribution and Price Control Scheme MRA/TRA Procurement Distribution and Price Control Scheme MOFFUSIL Allapalli and Pengundam Forest Range of Forest Divisions including Saw Mills and Timber Depot. 1959 1957 2004-05 2004-05 45644.97 30096.52 118.44 539.27 13.16 54.12 15545.48 101631.86 (-)3497.99 1961.38 5898.77 2980.05 2400.78 4941.43 5.3 16.4
REVENUE AND FOREST DEPARTMENT

49 1926 1985-86 1857.85 15.27 9.27 826.24 383.32 170.74 554.06 29.82
Appendices
APPENDIX 2.1 (Reference: Paragraph 2.3.1 ; Page 28) Statement of various grants/appropriations where saving was more than Rs 10 crore each and more than 20 per cent of the total provision Sr. Description of the grant/appropriation (Rupees in crore) No Total grant/ Saving Percentage appropriation (1) (2) (3) (4) (5) 1 A-2 Elections 62.30 18.96 30 (Revenue - Voted) 2 B-4 Secretariat and Other General Services 51.22 27.14 53 (Revenue - Charged) 3 B-9 Capital Expenditure on Economic 287.94 136.08 47 Services (Capital - Voted) 4 C-4 Secretariat and Other General Services 48.88 20.18 41 (Revenue - Voted) 5 D-6 Fisheries 154.36 70.59 46 (Revenue - Voted) 6 D-9 Capital Expenditure on Animal 21.23 20.53 97 Husbandry (Revenue - Voted) 7 D-12 Internal Debt of the State Government 87.26 55.13 63 (Loans and Advances - Charged) 8 F-2 Urban Development and Other 618.44 213.59 35 Advance Services (Revenue - Voted) 9 F-5 Capital Expenditure on Social Services 1773.51 893.85 50 (Capital - Voted) 10 G-2 Other Fiscal and Miscellaneous 4325.06 3498.93 81 Services (Revenue - Voted) 11 G-5 Treasury and Accounts Administration 105.38 31.67 30 (Revenue - Voted) 12 I-7 Loans to Government Servants, etc. 45.68 14.84 33 (Loans and Advances - Voted) 13 L-3 Rural Development Programmes 1257.64 283.29 23 (Revenue - Voted) 14 L-7 Capital Expenditure on Rural 128.58 36.78 29 Development (Capital - Voted) 15 L-8 Capital Expenditure on Regional 71.82 20.40 28 Imbalance (Capital - Voted) 16 M-2 Food 259.53 53.45 21 (Revenue - Voted) 17 N-1 Secretariat and Other Social Services 60.75 33.39 55 (Revenue - Voted)
165
Appendix 2.1 (Concld.) (1) 18 19 20 21 22 O-1 O-9 V-2 V-3 ZC-1 (2) District Administration (Revenue - Voted) Capital Expenditure on Other Rural Development Programmes (Capital - Voted) Co-operation (Revenue - Voted) Capital Expenditure on Social Services (Capital - Voted) Parliament/State/Union Territory Legislatures (Revenue - Voted) (3) 66.50 804.33 369.11 357.92 56.18 (4) 57.31 340.57 90.39 176.77 14.47 (5) 86 42 24 49 26
166
Appendices
APPENDIX 2.2 (Reference: Paragraph 2.3.3 ; Page 29) Excess over grants/appropriations requiring regularisation Sr. No. Number Name of the grant/ appropriation Total grant or appropriation ( (4) 820216000 972162000 146000000 2000653000 8481275000 88886000 2519000 19287293000 7165475000 71198000 147054000 202000 209000000 282293000 Actual expenditure Rupees (5) 824122868 990518360 147281448 2021709422 8549098166 138572988 2602852 23688100992 7370901979 71200702 150594120 385515 213980772 435875852 Amount of excess ) (6) 3906868 18356360 1281448 21056422 67823166 49686988 83852 4400807992 205426979 2702 3540120 183515 4980772 153582852
(1) (2) (3) Grants Revenue/Capital 1 A-5 Social Services 2 B-5 Jails 3 C-5 Other Social Services 4 D-2A Relief on Account of Natural Calamities 5 D-3 Agriculture Services 6 F-3 Secretariat and Other Social Services 7 K-5 Social Security and Welfare 8 K-6 Energy 9 L-2 District Administration 10 L-4 Secretariat- Economic Services 11 M-3 Secretariat and Other Economic Services 12 O-2 Social Security and Welfare 13 O-4 Other Rural Development Programmes 14 O-7 Secretariat- Economic Services
15 16 17 18 19
Q-2 Administrative Services T-4 Secretariat Social Services W-4 Art and Culture Y-4 Minor Irrigation M-4 Capital Expenditure on Food Total Grants Appropriation Revenue/Capital 20 A-1 Governor and Council Ministers 21 B-1 Police Administration 22 C-3 Interest Payment 23 C-5 Other Social Services 24 C-7 Forest 25 D-3 Agriculture Services 26 I-3 Irrigation, Power and Other Economic Services 27 L-1 Interest Payment 28 Q-1 Interest Payment 29 S-1 Medical and Public Health 30 T-1 Interest Payment 31 U-1 Interest Payment 32 V-2 Co-operation 33 ZC-1 Parliament/State/Union Territory Legislature 34 F-5 Capital Expenditure on Social Services Total-Appropriation Grand total Grand total (Rupees in crore)
2212000 19644000 2656175000 115808000 27323098000 69791163000 50269000 7050000 6033000 1510000 565000 10875000 -2193047000 94241000 100000 28959000 10790000 11660000 4623000 80000000 2499722000 72290885000 7229.09
2431985 19661464 2686577792 119491348 33329609954 80762718579 50287770 17402768 16965733 1845062 577625 11000618 2036373 2703422721 130235848 345600 29065255 16021295 12372765 6467454 99997285 3098044172 83860762751 8386.08
219985 17464 30402792 3683348 6006511954 10971555579 18770 10352768 10932733 335062 12625 125618 2036373 510375721 35994848 245600 106255 5231295 712765 1844454 19997285 598322172 11569877751 1156.99
167
Appendix - 2.3
(Reference : Paragraph 2.3.5 ; page 29)
Statement of various grants/appropriations where supplementary provision proved unnecessary.

( Rupees in crore )
Sr. No 1 I 1 2 3 4 5 6 7 8 9 10 11 12 13
14 15 16 17 18
Number and Name of the Grants/Appropriation 2 GRANTS. B-4 Secretariat and Other General Services C-1 Revenue and District Administration C-4 Secretariat and Other General Services D-5 Dairy Development D-9 Capital Expenditure on Animal Husbandry F-2 Urban Development and Other Advance Services F-5 Capital Expenditure on Social Services G-1 Sales Tax Administration G-5 Treasury and Accounts Administration H-4 Secretariat and Other Economic Services I-4 Secretariat Economic Services J-1 Administration of Justice K-1 Other Taxes and Duties on Commodities and Services K-4 labour and Employment K-9 Capital Expenditure on Economic and Social services L-7 Capital Expenditure on Rural Development M-2 Food N-1 Secretariat and Other Social Services
Original provision 3 13.58 483.71 31.62 838.22 19.23 524.79 1589.34 161.50 105.11 20.77 5.83 261.91 15.09
Supplementary provision 4 0.67 49.13 17.26 12.61 2.00 93.64 184.17 9.59 0.27 0.02 0.52 10.77 0.48
Total Grant/ Appropriation 5 14.25 532.84 48.88 850.83 21.23 618.43 1773.51 171.09 105.38 20.79 6.35 272.68 15.57
Actual Expenditure 6 13.44 465.60 28.70 715.95 0.70 404.84 879.66 149.67 73.71 18.10 5.76 261.51 14.90
Saving 7 0.81 67.24 20.18 134.88 20.53 213.59 893.85 21.42 31.67 2.69 0.59 11.17 0.67
49.44 7.40 121.10 258.03 29.4
2.20 2.59 7.48 1.50 31.35
51.64 9.99 128.58 259.53 60.75
49.39 6.76 91.80 206.08 27.36
2.25 3.23 36.78 53.45 33.39
168
Appendices
1 19 20
2 O-1 O-9
3 District Administration Capital Expenditure on Other Rural Development programmers Medical and Public Health Secretariat Social Services Loans to government Servant, etc. Secretariat - Social Services Interest Payment Secretariat - Social Services Social Security and Nutrition Water Supply and Sanitation Parliament/State/Uni on Territory Legislatures
4 13.01 468.68
Appendix 2.3 (Concld.) 5 53.49 335.65
6 66.5 804.33
7 9.19 463.76
8 57.31 340.57
21 22 23 24 25 26 27 28 29
R-1 R-2 T-9 U-3 W-1 W-6 X-1 Y-2 ZC-1
1553.53 2.56 1.85 0.73 44.14 8.07 622.76 1604.43 48.90 8904.73 313.54 22.84 414.16 8696.35 11.02 0.03
47.14 0.10 0.07 0.01 0.39 0.51 23.99 156.26 7.28 1051.14 11.68 1.84 5.95 3.69 4.68 0.20
1600.67 2.66 1.92 0.74 44.53 8.58 646.75 1760.69 56.18 9955.87 325.22 24.68 420.11 8700.04 15.70 0.23
1482.22 2.55 1.74 0.71 43.31 7.83 619.00 1560.69 41.71 7646.64 303.87 19.48 360.92 8353.77 10.12 0.02
118.45 0.11 0.18 0.03 1.22 0.75 27.75 200.00 14.47 2309.23 21.35 5.20 59.19 346.27 5.58 0.21
II 30 31 32 33 34 35
36 37 38
Total APPROPRIATION C-1 Revenue and District Administration D-1 Interest Payment E-1 Interest Payment G-3 Interest Payment and Debt Service G-6 Pension and Other Retirement Benefits H-8 Capital Expenditure on Public Works, Administrative and Functional Buildings K-7 Industries O-3 Rural Employment O-7 Secretariat Economic Services Total Grand Total
51.00 1417.79 1.19 10927.92 19832.65
8.01 27.99 0.08 64.12 1115.26
59.01 1445.78 1.27 10992.04 20947.91
50.70 1218.28 1.08 10318.24 17964.88
8.31 227.50 0.19 673.80 2983.03
169
APPENDIX 2.4 (Reference: Paragraph 2.3.6; Page 29) Statement of cases where supplementary provision resulted in saving exceeding Rs 1 crore in each case (Rupees in crore)
Sr. No. Number Name of the grant/ appropriation Original provision Supplemen -tary provision Total Expenditure Saving
(1) I
(2) GRANTS
(3)
(4)
(5)
(6)
(7)
(8)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
A-2 Elections A-4 Secretariat and Miscellaneous General Services A-6 Information and Publicity A-7 Civil Aviation B-1 Police Administration B-3 Transport Administration B-7 Economic Services B-9 Capital Expenditure on Economic Services C-2 Stamps and Registration C-6 Natural Calamities C-7 Forest C-9 Capital Expenditure on Other administrative Services and Other Social Services C-10 Capital Expenditure on Economic Services D-4 Animal Husbandry D-6 Fisheries E-2 General Education E-3 Secretariat and Other Social Services G-6 Pension and Other Retirement Benefits H-3 Housing H-5 Roads and Bridges H-6 Public Works and Administrative and Functional Buildings H-7 Capital Expenditure on Social Services and Economic Services H-8 Capital Expenditure on Public Works, Administrative and Functional Buildings H-9 Capital Outlay on Removal of Regional Imbalance I-3 Irrigation, Power and Other Economic Services I-5 Capital Expenditure On Irrigation K-3 Stationery and Printing K-7 Industries
17.55 68.16 21.97 5.00 2329.78 257.67 81.75 130.30 41.39 393.11 282.08 3.36 8.78 219.42 25.34 8968.96 72.10 3067.25 97.65 1102.9 804.12 149.70 62.13 384.08 934.21 4977.76 80.64 120.67
44.76 49.30 1.70 45.00 91.29 123.50 10.61 157.64 61.78 2214.88 90.30 6.00 9.06 32.36 129.02 421.87 33.54 381.24 90.38 659.37 49.41 413.21 106.34 22.21 277.28 1717.95 8.32 355.21
62.31 117.46 23.67 50.00 2421.07 381.17 92.36 287.94 103.17 2607.99 372.38 9.36 17.84 251.78 154.36 9390.83 105.64 3448.49 188.03 1762.27 853.53 562.91 168.47 406.29 1211.49 6695.71 88.96 475.88
43.35 97.94 22.40 48.46 2358.85 361.69 83.28 151.86 96.25 2561.61 343.46 7.21 15.86 240.10 83.77 9246.49 97.53 3320.56 156.78 1670.66 837.12 465.59 140.41 387.74 1188.13 6478.62 87.02 396.99
18.96 19.52 1.27 1.54 62.22 19.48 9.08 136.08 6.92 46.38 28.92 2.15 1.98 11.68 70.59 144.34 8.11 127.93 31.25 91.61 16.41 97.32 28.06 18.55 23.36 217.09 1.94 78.89
170
Appendices
Appedix 2.4 (Concld.)
(1) 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47
(2) (3) K-11 Capital Expenditure on Power Projects L-3 Rural Development Programmes L-5 Compensation and Assignments N-2 Art and Culture N-3 Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes N-4 Capital Expenditure on Social Services O-3 Rural Employment O-8 Census, Survey and Statistics Q-3 Housing R-3 Capital Expenditure on Social Services S-1 Medical and Public Health T-5 Revenue Expenditure on Tribal Area Development Sub-plan T-6 Capital Outlay on Tribal Area Development Sub-plan V-2 Co-operation V-3 Capital Expenditure on Social Services V-5 Capital Expenditure on Economic Services W-2 General Education W-3 Technical Education W-7 Revenue Expenditure on Removal of Regional Imbalance Total
APPROPRIATIONS
(4) 620.91 922.84 150.33 27.62 1426.91 184.49 575.05 14.09 261.90 11.06 486.62 709.08 119.85 127.55 58.75 410.17 1009.95 367.76 5.65 32198.41 5.78 7.75 19.34 266.20 0.10 47.04 79.07 425.28 32623.69
(5) 1215.50 334.80 160.97 12.93 240.82 77.64 418.00 7.88 56.32 19.77 81.02 110.65 169.40 241.56 299.17 2246.18 118.53 76.41 16.42 13507.50 3.00 8.64 67.92 121.17 1.62 21.01 29.16 252.52 13760.02
(6) 1836.41 1257.64 311.30 40.55 1667.73 262.13 993.05 21.97 318.22 30.83 567.64 819.73 289.25 369.11 357.92 2656.35 1128.48 444.17 22.07 45705.91 8.78 16.39 87.26 387.37 1.72 68.05 108.23 677.80 46383.71 13760.02 2876.71 10883.31
(7) 1754.26 974.35 297.87 33.58 1528.22 231.13 978.36 20.21 267.33 29.15 558.37 709.84 274.92 278.72 181.15 2232.89 1123.73 441.32 19.61 42924.74 7.74 10.74 32.13 368.66 0.66 58.98 103.35 582.26 43507.00
(8) 82.15 283.29 13.43 6.97 139.51 31.00 14.69 1.76 50.89 1.68 9.27 109.89 14.33 90.39 176.77 423.46 4.75 2.85 2.46 2781.17 1.04 5.65 55.13 18.71 1.06 9.07 4.88 95.54 2876.71
II
1 2 3 4 5 6 7
A-3 Public Service Commission C-4 Secretariat and Other General Services D-12 Internal Debt of the State Government I-1 Interest Payments I-5 Capital Expenditure on Irrigation J-1 Administration of Justice V-1 Interest Payment Total Grand Total (i) Supplementary grants/appropriations (ii) Savings (iii) Actual requirements (i)-(ii)
171
APPENDIX 2.5 (Reference: Paragraph 2.3.7 ;Page 29)
Statement of various grants/appropriations where supplementary provision proved insufficient by more than Rs 1 crore each (Rupees in crore)
Sr. No. Number and name of the Grants and Appropriations Original Supplementary Total Grant/ Appropriation Actual Expenditure Excess
1 2 3 4 5 6 7
I Grants Jails Agriculture Services Secretariat And Other Social Services K-6 Energy L-2 District Administration O-7 Secretariat Economic Services W-4 Art and Culture
B-5 D-3 F-3
89.53 814.04 8.50 836.33 663.66 13.23 213.02 2638.31
7.68 34.09 0.39 1092.4 52.89 15.00 52.60 1255.05
97.21 848.13 8.89 1928.73 716.55 28.23 256.62 3884.36
99.05 854.91 13.86 2368.81 737.09 43.59 268.66 4385.97
1.84 6.78 4.97 440.08 20.54 15.36 3.04 492.61
Total II Appropriations 8 9 C-3 L-1 Interest Payments Interest Payments Total Grand Total
0.06 210.59 210.65 2848.96
0.54 8.71 9.25 1264.30
0.60 219.30 219.90 4104.26
1.69 270.34 272.03 4658.00
1.09 51.04 52.13 544.74
172
Appendices
Sr. No. (1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
APPENDIX 2.6 (Reference: Paragraph 2.3.8 ; Page 29) Cases where re-appropriation of funds proved excessive or insufficient over grant by over Rs 1 crore (Rupees in crore) Grant Title of Grant/Appropriation Head of Account Re-approExcess (+)/ No. priation Savings (-) (2) (3) (4) (5) (6) A-1 Governor and Council of Ministers 2013-108(00)(01) (-)1.51 (+)1.05 C-1 Revenue and District Administration 2053-094-(01) (-)9.81 (+)2.22 C-1 Revenue and District Administration 2029-797-(00)(01) (+)11.35 (-)21.04 C-2 Stamps and Registration 2030-02-102-(00)(01) (+)3.92 (-)6.23 C-3 Interest Payments 2049-01-101(02)(01) (-)0.02 (+)1.67 C-5 Other Social Services 2235-02-104-(00)(03) (-)0.01 (+)2.10 C-7 Forest 2406-01-101(01) (-)8.26 (+)1.13 C-7 Forest 2406-01-101(02)(01) & (+)6.77 (-)2.40 (02)(02) C-7 Forest 2406-105-(01) (-)0.27 (+)1.20 C-7 Forest 2406-01-101-(03)(01)& (-)1.24 (+)2.07 (11)(01) D-1 Interest Payments 2049-03-104(01) (-)0.73 (+)2.49 D-2A Relief on Account of Natural 2245-02-101(00)(02) (-)0.06 (+)2.17 Calamities D-3 Agriculture Services 2401-800(00)(03) (-)0.05 (+)26.26 D-3 Agriculture Services 2401-114-(00)(06) (-)1.13 (+)3.17 D-3 Agriculture Services 2415-120(00)(04)&(09) (-)1.46 (+)1.22 D-3 Agriculture Services 2401-113(00)(06) (+)3.19 (-)7.53 D-5 Dairy Development 2404-102(04)(01) (+)6.30 (-)8.00 D-5 Dairy Development 2404--204(02) (-)33.73 (+)7.98 D-5 Dairy Development 2404--201(03) (+)0.11 (-)4.14 D-5 Dairy Development 2404--201(01) (-)3.63 (+)1.51 D-5 Dairy Development 2404-203(02) (-)4.36 (+)1.34 D-5 Dairy Development 2404-208(02) (-)5.34 (+)1.56 D-5 Dairy Development 2404--218(02) (-)9.10 (+)3.49 D-5 Dairy Development 2404-102(01)(01) (+)0.55 (-)1.22 D-5 Dairy Development 2404-229(02) (+)0.66 (-)2.82 D-5 Dairy Development 2404-232(02) (+)2.16 (-)2.53 D-5 Dairy Development 2404-229(01) (+)9.09 (-)5.38 D-5 Dairy Development 2404--221(02) (+)2.36 (-)1.21 D-5 Dairy Development 2404-223(02) (+)6.89 (-)3.73 D-5 Dairy Development 2404--227(02) (+)8.35 (-)1.68 D-5 Dairy Development 2404-201(04) (+)16.65 (-)12.11 D-5 Dairy Development 2404-206(02) (+)3.31 (-)2.18 F-3 Secretariat and Other Social Services 2230-02-101(02)(01) (-)0.07 (+)5.09 F-4 Compensation and Assignment 3604-102-(01)(01) (-)14.00 (+)2.00 F-4 Compensation and Assignment 3604-200(00)(08) (-)21.39 (+)6.15 G-2 Other Fiscal and Miscellaneous 2047-800(03)(02) (-)2.00 (+)3.74 services H-3 Housing 2216-80-001(00)(01) (+)27.23 (-)33.79 H-5 Roads and Bridges 3054-04-800(03)(02) (+)1.11 (-)3.00
173
(1) 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64
(2) H-5 H-8 H-8 K-7 L-1 L-2 L-3 L-7 M-4 M-4 N-3 N-3 N-3 N-3 N-3 N-3 N-4 O-9 O-9 R-1 R-1 R-1 R-1 R-1 R-1 R-1
Appendix 2.6 (Contd.) (3) (4) Roads and Bridges 3054-80(00)(01) Capital Expenditure on Public 4210-01-110Works, Administrative and 1(a),(00)(01),(00)(02)& Functional Building (00)(03) Capital Expenditure on Public 4225-03Works, Administrative and (00)(01),(00)(02,(00)(0 Functional Building 3) Industries 2852-80-102(00)(09) Interest Payment 2049-104-(01)(01) District Administration 2053-093-(05)(01) Rural Development Programme 2702-191(03)(01) Capital Expenditure on Rural 4702-800-(06)(01)(a) Development Capital Expenditure on Food 4408-101(02)(01) Capital Expenditure on Food 4408-101-(02)(02) Welfare of Scheduled 2235-02-104-(08)(02) Caste,Scheduled Tribes and Other Backward Classes Welfare of Scheduled 2225-01-793-(01)(04) Caste,Scheduled Tribes and Other Backward Classes Welfare of Scheduled 2225-03-277-(03)(02) Caste,Scheduled Tribes and Other Backward Classes Welfare of Scheduled 2235-02-104-(08)(01) Caste,Scheduled Tribes and Other Backward Classes Welfare of Scheduled 2235-02-104-(08)(03) Caste,Scheduled Tribes and Other Backward Classes Welfare of Scheduled 2235-02-104-(08)(07) Caste,Scheduled Tribes and Other Backward Classes Capital Expenditure on Social 4225-01-277-(01)(01) Services Capital Expenditure on Other Rural 4515-102(00)(01) Development Programmes Capital Expenditure on Other Rural 4515-102-(00)(02) Development Programmes Medical and Public Health 2210-01-001(01)(01) Medical and Public Health Medical and Public Health Medical and Public Health Medical and Public Health Medical and Public Health Medical and Public Health 2210-06-010(01)(02) 2210-06-101(01)(33) 2211-103(01)(10) 2210-01110(05)(01)&(06)(09) 2210-01110(01)(01)&(06)(01) 2210-06-001(01)(06)
(5) (+)12.48 (-)1.52 (-)1.55 (-)4.96 (-)19.92 (-)46.88 (+)2.78 (+)17.64 (-)616.85 (-)629.45 (-)44.57 (-)3.00 (+)5.51 (-)1.98 (-)2.78 (+)10.86 (-)5.00 (-)10.10 (-)5.86 (+)0.81 (-)2.01 (+)1.41 (+)0.78 (+)2.41 (-)1.78 (+)15.84
(6) (-)35.98 (+)6.21 (+)2.11 (+)4.57 (+)71.36 (+)2.56 (-)1.16 (-)5.19 (+)42.46 (+)40.18 (+)1.84 (+)1.43 (-)8.14 (+)4.93 (+)5.54 (-)6.91 (+)1.52 (+)3.66 (+)5.20 (-)1.30 (+)1.23 (-)7.35 (-)1.26 (-)1.30 (+)27.86 (-)3.34
174
Appendices
(1) 65 66 67 68 69 70 71 72 73
(2) R-1 T-5 T-5 T-5 T-5 T-5 T-5 Y-4 ZC-1
Appendix 2.6 (Contd.) (3) (4) Medical and Public Health 2211-102(01)(02) Revenue Expenditure on Tribal Area 2202-02-796Development Sub-Plan 110(00)(02) Revenue Expenditure on Tribal Area 2202-01-796Development Sub-Plan 103(00)(01) Revenue Expenditure on Tribal Area 2215-01-796Development Sub-Plan 102(04)(01) Revenue Expenditure on Tribal Area 2215-01-796Development Sub-Plan 102(03)(02) Revenue Expenditure on Tribal Area 2210-06-796Development Sub-Plan 101(00)(01) Revenue Expenditure on Tribal Area 2702-01-796Development Sub-Plan 800(00)(02) Minor Irigation 2702-02-005(01)(01) Parliament/State/Union Territory 2011-103-(00)(02) Legislatures
(5) (+)1.45 (+)1.21 (-)0.59 (-)3.32 (-)1.20 (-)1.13 (+)7.50 (-)1.17 (+)0.07
(6) (-)1.39 (-)2.41 (+)1.16 (+)16.62 (+)1.95 (+)2.74 (-)1.46 (+)1.53 (-)1.19
175
APPENDIX 2.7
(Reference: Paragraph 2.3.9; page 29)
Statement of various grants/appropriations in which savings occurred but no part of which had been surrendered (Rupees in crore)
Sr.No I 1 2 3 4 5 6 7 8 9 10 11 12 II 13 14 15 16 17 18 19 Number and name of grant/appropriation Grant C-2 Stamps and Registration G-6 Pension and Other Retirement Benefits H-3 Housing H-5 Roads and Bridges H-11 Loans to Government Servants, etc. L-8 Capital Expenditure on Regional Imbalance O-5 Hill Areas Q-4 Secretariat Economic Services Q-6 Loans to Governments Servants R-2 Secretariat Social Services R-3 Capital Expenditure on Social Services ZA-3 Capital Expenditure on Social Services Total Appropriation B-2 State Excise C-8 Other Economics Services G-6 Pension and Other Retirement Benefits H-8 Capital Expenditure on Public Works, Administrative and Functional Building I-5 Capital Expenditure on Irrigation K-6 Energy L-5 Compensation and Assignments Total Grand Total Savings 6.92 127.93 31.25 91.61 0.15 20.40 0.10 0.10 0.15 0.11 1.68 1.00 281.40 0.02 0.03 5.58 0.21 1.06 100.00 16.67 123.57 404.97
176
Appendices APPENDIX 2.8 (Reference: Paragraph 2.3.9; Page 29) Details of saving of Rs 1 crore and above not surrendered Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 A-2 B-3 B-3 B-4 B-9 B-10 C-1 C-6 C-7 D-4 D-5 D-6 D-9 D-10 D-11 E-1 H-6 H-7 H-9 J-1 K-1 K-7 L-5 L-7 N-3 N-4 O-1 O-3 O-3 O-9 O-10 R-1 T-5 T-6 V-2 V-5 W-3 W-7 ZC-1Total Number and name of grant/ appropriation Elections Transport Administration Transport Administration (Charged) Secretariat and Other General Services (Charged) Capital Expenditure on Economic Services Loans for Housing Revenue and District Administration (Charged) Natural Calamities Forest Animal Husbandry Dairy Development Fisheries Capital Expenditure on Animal Husbandry Capital Expenditure on Dairy Development Capital Expenditure on Fisheries Interest Payment (Charged) Public Works and Administrative and Functional Buildings Capital Expenditure on Social Services and Economic Services Capital Outlay on Removal of Regional Imbalance Administration of Justice (Charged) Other Taxes and Duties on Commodities and Services (Charged) Industries (Charged) Compensation and Assignments Capital Expenditure on Rural Development Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes Capital Expenditure on Social Services District Administration Rural Employment Rural Employment (Charged) Capital Expenditure on Other Rural Development Programmes Capital Expenditure on Hill Areas Medical and Public Health Revenue Expenditure on Tribal Area Development Sub-Plan Capital Outlay on Tribal Area Development Subplan Co-operation Capital Expenditure on Economic Services Technical Education Revenue Expenditure on Removal of Regional Imbalance Parliament/State/Union Territory Legislatures Saving 18.96 19.48 157.03 27.14 136.08 10.94 21.35 46.38 28.92 11.68 134.88 70.59 20.53 3.42 8.94 59.19 16.40 97.32 18.55 9.07 48.67 8.31 13.43 36.78 139.51 31.00 57.31 14.69 227.50 340.57 4.12 118.45 109.89 14.33 90.39 423.46 2.85 2.46 14.47 2615.04 Surrender 17.09 15.58 31.43 13.51 96.11 8.67 0.08 16.90 16.08 4.60 96.78 58.85 18.51 1.88 6.54 14.98 0.25 95.72 17.54 5.55 5.99 0.83 9.44 15.99 124.49 6.95 1.50 7.61 0.01 133.40 3.03 80.23 96.75 12.83 58.89 383.80 1.15 0.99 5.85 1486.38 (Rupees in crore) Saving which remained to be surrendered 1.87 3.90 125.60 13.63 39.97 2.27 21.27 29.48 12.84 7.08 38.10 11.74 2.02 1.54 2.40 44.21 16.15 1.60 1.01 3.52 42.68 7.48 3.99 20.79 15.02 24.05 55.81 7.08 227.49 207.17 1.09 38.22 13.14 1.50 31.50 39.66 1.70 1.47 8.62 1128.66
177
APPENDIX 2.9
(Reference: Paragraph 2.3.10 ; Page30 )
Sr. No. (1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Cases of surrender of funds in excess of Rs 10 crore on 30 and 31 March 2006 (Rupees in crore) Grant Amount of Major Head No. surrender (2) A02 A04 B01 B03 B03 B04 B09 B09 C06 D03 E01 E02 F02 F04 F05 G01 G05 J01 K07 K11 L03 L03 L10 M02 M04 N01 N03 N03 O09 Q03 R01 R01 T02 T05 V02 V03 V05 V05 X01 Y02 Total (3) 2015 2052 2055 2041 3056 2045 4070 5055 2245 2401 2049 2202 2217 3604 4217 2040 2054 2014 2852 6801 2505 2515 7615 2408 4408 2216 2225 2235 4515 2216 2210 2211 2225 2225 2425 4425 6425 6851 2236 2215 Elections Secretariat - General Services Police Taxes on Vehicles Inland Water Transport Other Taxes and Duties on Commodities and Services Capital Outlay on other Administrative Services Capital Outlay on Road Transport Relief on account of Natural Calamities Crop Husbandry Interest Payments General Education Urban Development Compensation and Assignments to Local Bodies and Panchayati Raj Institutions Capital Outlay on Urban Development Taxes on Sales, Trade etc. Treasury and Accounts Administration Administration of Justice Industries Loans for Power Projects Rural Employment Other Rural Development Programmes Miscellaneous Loans Food Storage and Warehousing Capital Outlay on Food Storage and Warehousing Housing Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes Social Security and Welfare Capital Outlay on Other Rural Development Programmes Housing Medical and Public Health Family Welfare Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes Co-operation Capital Outlay on Co-operation Loans for Co-operation Loans for Village and Small Industries Nutrition Water Supply and Sanitation (4) 14.85 17.27 99.65 34.25 12.76 14.04 43.00 53.07 17.56 19.89 14.98 98.99 211.35 39.87 879.89 18.93 31.65 28.40 81.27 80.16 42.24 202.98 35.30 53.81 1246.58 33.22 66.57 57.92 133.40 69.73 34.38 45.84 14.36 72.71 42.43 168.93 236.02 145.50 44.96 191.33 4750.04
178
Appendices
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
APPENDIX 2.10 (Reference: Paragraph 2.3.11; Page 30) Details of surrender in excess of actual savings in the grants/appropriations involving substantial amounts (Rupees in crore) Number and name of grant/appropriation Amount Actual surrendered savings A-1 Governor and Council of Ministers 5.03 3.53 A-6 Information and Publicity 1.43 1.27 A-8 Loans to Government Servants, etc 0.69 0.33 B-1 Police Administration 104.68 62.22 B-2 State Excise 1.84 1.79 C-1 Revenue and District Administration 70.06 67.24 C-6 Natural Calamities (Charged) 0.67 0.64 C-10 Capital Expenditure on Economic Services 2.01 1.98 C-11 Internal Debt of the State Government (Charged) 0.08 0.06 D-1 Interest Payment 7.69 5.20 F-4 Compensation and Assignments 39.87 34.28 F-8 Loans to Government Servants, etc. 0.80 0.31 G-3 Interest Payment and Debt Servicing (Charged) 347.44 346.27 G-7 Social Security and Welfare 0.45 0.02 G-9 Loans to Government Servants, etc. 0.39 0.18 H-6 Public Works and Administration and Functional 0.11 0.05 Building (Charged) J-1 Administration of Justice 22.84 11.17 K-3 Stationary and Printing 2.24 1.94 K-7 Industries 82.98 78.89 K-12 Loans to Government Servant, etc 2.36 2.24 N-1 Secretariat and other Social Services 34.07 33.39 O-12 Loans to Government Servant, etc 0.14 0.08 Q-3 Housing 69.73 50.89 S-1 Medical and Public Health 9.75 9.27 S-3 Secretariat Social Services 0.28 0.27 S-4 Loans to Government Servant, etc 1.08 1.03 V-6 Loans to Government Servant, etc 0.95 0.91 X-1 Social Security and Nutrition 45.60 27.75 X-2 Secretariat -Social Services 0.02 0.01 Y-5 Secretariat-Economic Services 0.06 0.05 Y-7 Capital expenditure and Economic and Social 0.77 0.65 Services Total 856.11 743.91
179
APPENDIX 2.11 (Reference: Paragraph 2.5.1; Page 30) Statement of various grants/appropriations where expenditure exceeded the approved provision by Rs 25 lakh or more and also by more than 10 per cent of the total provision Sr. No. 1 2 3 4 5 6 7 8 B-1 C-3 F-3 K-6 L-1 O-7 Q-1 U-1 Total Number and name of grant/appropriation Police Administration (Revenue-Charged) Interest Payment (Revenue -Charged) Secretariat and Other Social Services (Revenue-Voted) Energy (Revenue-Voted) Interest Payment (Revenue-Charged) Secretariat -Economic Services (Revenue-Voted) Interest Payment (Revenue- Charged) Interest Payment (Revenue- Charged) Total grant/ appropriation 0.70 0.61 8.89 1928.73 219.30 28.23 9.42 1.08 2196.96 (Rupees in crore) Amount of Actual excess/ expenditure (Percentage) 1.74 1.04 (149) 1.70 1.09 (179) 13.86 4.97 (56) 2368.81 270.34 43.59 13.02 1.60 2714.66 440.08 (23) 51.04 (23) 15.36 (54) 3.60 (38) 0.52 (48) 517.70
180
Appendices
APPENDIX 2.12 (Reference: Paragraph 2.5.2 ; Page 30) Statement of cases where expenditure was incurred without any provision of funds (Rupees in crore) Expenditure 4.98 0.20 0.11 0.41 0.34 0.20 0.08 441.34 0.23 0.10 0.54 17.09 0.03 465.65
Sr. No. Grant Number Head of Account Revenue and Forests Department 1 C-1 2029-797(00)(01) 2 C-4 2075-800(01)(01) Agriculture, Animal Husbandry, Dairy Development and Fisheries Department 3 D-6 3606-502 Urban Development Department 4 F-2 2217-80-191(00)(14) Public Works Department 5 H-7 5054-04-800(05)(01) Irrigation Department 6 I-3 2701-80-800(04) 7 I-5 4801-01-052 Industries, Energy and Labour Department 8 K-6 3606-502 Social Justice, Cultural Affairs and Special Assistance Department 9 N-3 2225-01-277(04)(19) 10 N-4 4235-02-190(00)(01) Planning Department 11 O-4 2515-102(00)(01) 12 O-7 3451-090(03)(41) Co-operation and Textiles Department 13 V-2 2851-110(02)(05) Total
181
APPENDIX 2.13 (Reference: Paragraph 2.6 ; Page 31) Cases of drawal from Contingency Fund where the expenditure was not such as could not have been foreseen Sr. No. Sanction Number and Date Department/ Grant Number/ Major Head Revenue and Forests Rural Development and Water Conservation Co-operation and Textile Home Public Works Women and Child Development Purpose for which drawn Amount sanctioned (Rupees in crore) 23.33 2.00
1. 2.
CNF-11.05/44/Budget - 4 dated 18.10.2005 CNF-11.06/90/Budget 16 dated 06.03.2006
Execution of working plan Watershed development in Marathwada
3. 4. 5. 6.
CNF-11.05/86/Budget-12 dated 01.03.2006 CNF-11.05/65/Budget-10 dated 12.01.2006 CNF-11.05/58/Budget-11 dated 02.12.2005 CNF-11.05/47/Budget-5 dated 29.10.2005
Waving of interest on loan given to formers for horticulture Purchase of uniforms material IRDP roads in Amravati Under Integrated Child Development Services Schemes, Bhaubeej Bhet to Anganwadi Workers and Anganwadi Helpers
14.86 5.12 15.00 6.20
Total
66.51
182
Appendices
Appendix 3.1 (Reference: Paragraph 3.1.5; Page 36) Sampling Plan (Design) Sampling Methodology A stratified multi-stage design has been adopted for the survey. The first stage units (FSU) were the villages in the rural sector and Urban Frame Survey (UFS) blocks in the urban sector. The ultimate stage units (USU) were households in both the sectors. In the case of large villages/blocks requiring hamletgroup (hg)/sub-block (sb) formation, one intermediate stage was the selection of two hamlet groups/subblocks from each FSU. Selection of Primary Sampling Units Primary sampling units, across the strata (two basic strata: rural and urban in each district) were selected in the following manner. Rural Units: - The villages for each district were selected through Probability Proportion to Size With Replacement (PPS) from the sampling frames. Urban Units: - The list of blocks for each district was then selected through Simple Random Sampling Without Replacement (SRSWOR) from the sampling frames. Sampling Design: Rural Sampling Selection of hamlet groups The first task was to ascertain the exact boundaries of the PSU, by discussing the layout of the village with the key informants of the village. After identifying the boundaries and layout of the village, if the population of the village was found be more than 600, it was divided into suitable number of hamlet groups. The number of hamlet groups formed, based on the population of the village, was as follows: Village Population Number of hamlet groups formed Less than 600 1 600 - 1199 3 1200 - 1799 5 1800 - 2399 6 and so on. The hamlet groups thus formed had more or less an equal population size (i.e., the population across hamlet stays more or less same). Sampling Design: Urban Sampling Selection of sub-blocks The first task was to ascertain the exact boundaries of the UFS Block as per the NSS Maps. After identifying the boundaries and layout of the block, if the population of the block was found be more than 600, it was divided into suitable number of hamlet groups. Else, the entire block was listed. The number of sub-blocks framed, based on the population of the village, was as follows: PSU Population Number of sub-blocks formed Less than 600 1 600 - 1199 3 1200 - 1799 5 1800 - 2399 6 and so on. The sub-blocks thus, formed had more or less equals the population. Preference was given to sub-blocks having slum areas. If there were more than one-slum sub-blocks, then the second sub-blocks was selected on a random basis. In a case where there was some slum clusters in the selected UFS (which incidentally was not a slum UFS), a minimum of 50 per cent of the household interviews were conducted in these clusters (subject to the availability of eligible households). Sampling Plan (Design) Sampling Design: Sampling of Schools The government schools (with primary/upper primary sections) in the selected UFS blocks/ villages were identified. However, if there were no sufficient number in such areas, then the schools that were accessed by the children living in the selected UFS block/villages were selected through random sampling.
183
Appendix 3.2 (Reference: Paragraph 3.1.5 ; Page 36) Summary of findings of SRI School survey Among the schools covered in Maharashtra, 45 per cent were primary schools, 38.5 per cent were upper primary schools, 16.1 per cent were high schools with upper primary sections and 0.5 per cent were Education Guarantee Schools. Of all the schools covered, 13 per cent of primary schools, 9.1 per cent of upper primary schools and 2.1 per cent of high schools with upper primary sections were exclusively for boys, 11.2 per cent of primary schools, 12.2 per cent of upper primary schools and 7.3 per cent of high schools with upper primary sections were exclusively of girls and 75.8 per cent of primary schools, 78.7 per cent of upper primary schools and 90.6 per cent of high schools with upper primary sections were co-educational. Average attendance of the enrolled children Average attendance in primary schools amongst males was found to be 78.4 per cent and amongst females the attendance was 75.7 per cent. In upper primary schools the attendance among males was 78.3 per cent and amongst females the attendance was 79.3 per cent. The attendance in high schools with upper primary section reported for males was 81 per cent and amongst females it was 86.8 per cent. In EGS, the attendance amongst males was 87.3 per cent and amongst female was 85 per cent Type of the school building Majority of the primary schools had pucca buildings in the State. 3.4 per cent of the primary schools were observed having a kutcha building, 25.3 per cent had a semi-pucca building, 0.4 per cent had no building and another 71 per cent had a pucca building. Among the upper primary schools, 83 per cent of the schools had a pucca building, 12.6 per cent had semipucca building, 0.9 per cent had no building and 3.5 per cent had kutcha building. Amongst the high schools with a upper primary section, 82.3 per cent had pucca buildings, 12.5 per cent had semi-pucca building whereas 5.2 per cent had a kutcha building. Schools facilities In 65.8 per cent of the primary schools, 67.4 per cent of the upper primary schools, 65.6 per cent of the high schools with upper primary section and 66.7 per cent of the Education Guarantee Schools had compound walls. Designated playgrounds were present in 75.5 per cent of the primary schools, 70.4 per cent of the upper primary schools, 81.3 per cent of the high schools with upper primary section and 100 per cent of the Education Guarantee Schools. Toilets were present in 79.9 per cent of the primary schools, 93.5 per cent of the upper primary schools, 91.7 per cent of the high schools with upper primary section and 100 per cent of Education Guarantee Schools. Separate toilets for teacher were present in 50.2 per cent of the primary schools, 66.5 per cent of the upper primary schools, 77.1 per cent of the high schools with upper primary section and 100 per cent of Education Guarantee Schools. Drinking water supply was present among 82.5 per cent of the primary schools, 92.6 per cent of the upper primary schools, 97.9 per cent of the high schools with upper primary section and 100 per cent of the Education Guarantee Schools. Electricity connection was present in 77.3 per cent of the primary schools, 87 per cent of the upper primary schools, 96.9 per cent of the high schools with upper primary section and 100 per cent of the Education Guarantee Schools. Verandah was present among 78.1 per cent of the primary schools, 77.8 per cent of upper primary schools, 87.5 per cent of the high school with upper primary section and 33.3 per cent of the Education Guarantee Schools.
184
Appendices
Appendix 3.2 (Contd.) Grants and schemes under SSA Among those schools covered under the study, 88.2 per cent of primary schools, 93.9 per cent of upper primary schools and 100 per cent of high schools with upper primary sections in urban areas and 96.6 per cent of primary schools, 96.4 per cent of upper primary schools and 90.5 per cent of high schools with upper primary sections in rural areas reported received grants / aid under SSA. Out of the schools covered in the state, 98.1 per cent of the primary schools, 97 per cent of the upper primary schools and 93.8 per cent of the high schools with upper primary sections were aided. It was found that 91.8 per cent of primary schools, 94.8 per cent of upper primary schools and 95.8 per cent of high schools with upper primary section received SSA grants. School Grant of Rs 2,000 was found to be received by 75.3 per cent primary schools, 83 per cent of upper primary schools, 84.8 per cent of high schools with upper primary section and 100 per cent of the Education Guarantee Schools. Teachers grant of Rs 500 per year was received by 76.9 per cent of primary schools, 89 per cent of upper primary schools, 83.7 per cent of the high schools with upper primary section and 100 per cent of the Education Guarantee Schools. Two per cent of primary schools and 3.2 per cent of upper primary schools had received grants for disabled children. School committee It was found that about 39.3 per cent of primary schools, 32.6 per cent of upper primary schools, 14.6 per cent of high school with upper primary section and 0.5 per cent of Education Guarantee Schools reported having such committees. Joint bank account between Head Master and Committee In about 34.5 per cent of primary schools, 26.9 per cent of upper primary schools, 12.5 per cent of high school with upper primary section and 0.5 per cent of Education Guarantee Schools had joint bank accounts with the headmaster. Mid-day meal With regard to the schemes operated under SSA it was found that the mid-day meal scheme, free text books for girls and SC/ST were implemented the most. The mid-day-meal scheme were reported as implemented in 91.1 per cent of the primary schools, 88.3 per cent of upper primary schools, 81.3 per cent of the high school with upper primary section and 100 per cent of the Education Guarantee Schools. Free text books for girls and SC/ST students Free text books for girls were reported to given in 84 per cent of primary schools, 91.3 per cent of upper primary schools, 91.7 per cent of high schools with upper primary section and 100 per cent of the Education Guarantee Schools. Free text books for SC/ST students were given in 86.3 per cent of primary schools, 90.4 per cent of upper primary schools, 92.7 per cent of high school with upper primary section and 100 per cent of the Education Guarantee Schools. Activities undertaken under SSA Survey found that department undertook almost all the activities under SSA. Repairing of existing structures was most commonly undertaken by 35.3 per cent of the primary schools, 40 per cent of the upper primary schools and 27.1 per cent of high schools with upper primary section.
185
Appendix 3.2 (Contd.) About 23.8 per cent of primary schools, 23.5 per cent of upper primary schools and 13.5 per cent of high schools with upper primary sections reported constructing new buildings for the schools. About 35.3 per cent of primary schools, 40.0 per cent of upper primary schools and 27.1 per cent of the high schools with upper primary sections reported utilising funds for repairing existing structures. Adding to the safety and security of the schools environment, about 7.7 per cent of primary schools, 5.4 per cent of upper primary schools and 2.5 per cent of high schools with upper primary sections undertook construction of compound walls. Repairs in compound walls were undertaken in about 8.2 per cent of primary schools, 8.4 per cent of primary schools and 2.2 per cent of high schools with upper primary sections. Installation of gates was taken up in 8.9 per cent of primary schools, 6.4 per cent of upper primary schools and 2.2 per cent of high schools with upper primary sections utilising SSA funds. About 10.5 per cent of primary schools, 9.4 per cent of upper primary schools and 4.0 per cent of high schools with upper primary sections reported utilising funds from SSA to construct water supply installation in the schools. The construction of toilets was implemented in 11.7 per cent of primary schools, 9.9 per cent of upper primary schools and 2.8 per cent of high schools with upper primary section. The construction of girls toilets was implemented in 10.2 per cent of the primary schools, 8.9 per cent of the upper primary schools and 3 per cent of the high school with upper primary sections. About 11.7 per cent of primary schools, 7.2 per cent of upper primary schools and 3.7 per cent of high schools with upper primary sections utilised SSA funds to construct a library and 0.5 per cent of upper primary schools and 0.2 per cent of high schools with upper primary sections constructed staff rooms for the teachers. Among the upper primary schools, 9.5 per cent of primary schools, 7.4 per cent of upper primary schools and 3.3 per cent of high schools with upper primary section reported constructing separate room for the headmaster, which is one of the provisions under SSA for upper primary schools. Apart from civil works, many schools have also reported utilising the funds under SSA to create facilities for better learning environment for the children. Some of these were Library Books (21.6 per cent in primary schools, 17.9 per cent in upper primary schools and 6.7 per cent in high schools with upper primary sections), computers (20.9 per cent in primary schools, 15.9 per cent in upper primary schools and 6.4 per cent in high schools with upper primary sections), black boards (9.4 per cent in primary schools, 9.9 per cent in upper primary schools and 2.8 per cent in high schools with upper primary sections) and electric fitting (4,5 per cent in primary schools, 4.9 per cent in upper primary schools and 2.3 per cent in high schools with upper primary sections). Teaching aids Blackboards, chalk and dusters and posters/globes/maps, etc. were most commonly used as teaching aids. 99.6 per cent of the primary schools, 98.3 per cent of the upper primary schools, 97.9 per cent of the high schools with upper primary section and 100 per cent of the Education Guarantee Schools reported blackboard usage.
186
Appendices
Appendix 3.2 (Concld.) Household survey Out of school children' The study estimates 1.76 crore children in the age group 6 to 14 of which there were 96.65 lakh boys, 79.54 lakh girls. Of the boys, 2.90 lakh were reportedly out-of school. Among girls, 2.06 lakh were observed to be out-of-school. Thus, the proportion of those outof-school was higher among boys (30 per thousand boys) compared to girls (26 per thousand girls). The estimated proportion of children who were out-of-school was highest among ST (65 per thousand) followed by SC (50 per thousand), BC/OBC (16 per thousand) and General category (21 per thousand). Children with mental disability and multiple disability were the worst sufferers as 100 per cent children were out-of-school followed by visual disabled (768 per thousand). A large proportion of the heads of the households (19.6 per cent) were involved in agriculture labour. While 14.2 per cent were salaried private employees, some of the other reported key occupations were casual or other forms of labour (13.8 per cent) and small skilled labour (10.1 per cent). With regard to the education of the heads of the households, it emerged that about 10.4 per cent of them were illiterates, with about 9.2 per cent reporting being literate but not completing primary schooling. About 0.9 per cent of the households had children below the age of 15 years as earning members. Coverage of SSA When a village or an urban area does not have primary schools within a radius of one Km it is defined as not covered by a primary school and hence not covered by SSA. Reasons for non-enrollment and non-attendance Affordability was the main reason reported by parents for not enrolling their children in schools. Apart from that some of the other important reasons cited were dont like to go to schools and existing disability in the child. Willingness to go to school At an aggregate, 54.7 per cent of the children currently out-of-school do not want to go to school again.
187
Appendix 3.3 (Reference: Paragraph 3.1.6.2; Page 36) Statement showing intervention-wise expenditure during 2002-03 to 2004-05 Item/ units Expenditure Expenditure Expenditure during 2002-2003 during 2003-04 during 2004-05 Free Text Book to Focus Group Children 3965.77 6178.26 4786.90 Repair and maintenance grant to school 1914.63 2750.42 3252.18 TLE 40.00 35.03 86.10 School grants 895.30 1189.93 1969.53 Teacher grant 1108.96 1595.10 1749.83 Teacher training (Primary/ Upper) 224.51 937.26 1957.47 Training of community leaders 32.63 19.15 72.45 Intervention for disabled children 32.17 2215.13 807.26 Research, evaluation, supervision and monitoring 131.70 94.78 586.32 Management and MIS 104.14 1027.59 1404.09 Innovative activity 72.59 1664.96 826.43 Block Resource Centre 158.21 263.05 594.13 Cluster Resource Centre 352.82 785.20 Interventions for out of school children 513.92 1987.52 1764.46 Civil Works 40.96 13142.40 17676.46 NPEGEL 0.00 15.35 264.73 Total 9671.41 33363.91 38252.46
188
Appendices
APPENDIX 3.4
(Reference: Paragraph 3.5.2.10; Page 75 )
Irregular release of grants without receipt of audited statements Sr Name of College Grants Released (Rupees in crore) No. 2001-02 2002-03 2003-04 2004-05 Jalgaon 1 SSP Arts, SBTTS Com and SGRP Science --2.94 3.08 3.27 College Dhule 2 Arts, Commerce and Science College 0.53 0.65 0.74 0.67 Warangaon 3 Arts, Commerce and Science College --0.58 0.97 0.80 Yaval 4 Dhanaji Nana MV Faizpur ----1.76 1.97 5 Arts ,Commerce and Science College ----0.90 0.98 Raver 6 Muktabai Arts and commerce MV ------0.45 Muktanagar 7 Kisan MV Parola ------1.26 8 Pratap College Amalner --3.31 3.27 3.47 9 Rukmanibai Arts College Amalner ----0.24 0.25 10 Arts and Science college Nagaon ------0.57 11 Arts College Navalnagar -----0.23 12 Arts and Science college Songir --0.003 0.45 0.27 13 SSVPS Arts and commerce MV -0.61 0.46 0.48 Dhondaicha 14 Uttamrao Patil Arts and Science college --0.28 0.20 0.44 Dahivel 15 A M Patil Arts,Commerce and Science ------0.83 College Pimpalner 16 G T Patil MV Nandurbar ------2.67 17 JES Arts,Commerce and Science College ------1.19 Nandurbar 18 TES Arts,Commerce and Science College ------0.76 Nandurbar 19 Law College Nandurbar ------0.05 20 Arts College Khapar ------0.32 Total Nanded 21 Shivaji Mahavidyalaya Renapur -0.39 0.40 0.47 22 Nagnath Arts and commerce college --0.41 --Aundha Nagnagth 23 Sushiladevi Deshmukh M V Latur ---0.50 0.60 24 25 26 27 28 29 30 Sushiladevi Deshmukh Commerce M V Latur Azad Mahavidyalaya Ausa Law College Nanded Vyankatesh Deshmukh M V Babhulgaon Totaliwal Arts Commerce College Songaon Shri Kumsraswami M V Ausa Madhavrao Patil M V Palam Total Grand Total 189 -------0.53 ------------9.17 0.49 0.86 0.42 0.33 0.29 ----15.36 0.51 0.96 0.39 0.42 0.41 1.08 0.47 26.25
Total 9.29 2.59 2.35 3.73 1.88 0.45 1.26 10.05 0.49 0.57 0.23 0.72 1.55 0.92 0.83 2.67 1.19 0.76 0.05 0.32 41.90 1.26 0.41 1.10 1.00 1.82 0.81 0.75 0.70 1.08 0.47 9.40 51.30
APPENDIX 3.5
(reference: paragraph 3.5.3.1; page 76 )
Grants released to colleges with poor enrolment

Sr. No. Name of College Faculty Year Number of students I 1 S B Zadbuke College Barshi Commerce 2000-01 2001-02 2002-03 2003-04 2004-05 2000-01 99-00 99-00 2001-02 2001-02 2002-03 2001-02 2001-02 2002-03 2001-02 2001-02 1999-00 2000-01 2001-02 2000-01 2001-02 2001-02 2002-03 2000-01 2000-01 2001-02 2002-03 2001-02 2000-01 2001-02 2000-01 2001-02 2001-02 2002-03 2003-04 2 2 4 3 8 29 39 12 22 38 25 40 03 20 17 32 21 16 22 164 4 19 22 6 4 6 13 20 5 12 15 38 9 9 14 II 1 2 1 1 2 14 23 18 10 12 20 12 01 17 12 17 19 21 13 -3 1 3 1 4 1 8 1 -1 13 11 7 6 9 III 2 1 2 2 1 11 18 6 07 02 4 09 00 11 07 12 18 12 19 1 -2 6 0 5 2 3 3 1 3 8 11 2 8 7 2 No of lecturers employed Total Expenditure on Pay and allowances of lecturers (@ Rs.5 lakh per annum) Rs 2.5 Lakh X 2 Lecturers X 5 Years = Rs 25 Lakh
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
K N Bhise College Kurdwadi C B Kedgi College Akkalkot C B Kedgi College Akkalkot TES Arts, Com & Science MV Nandurbar JES Arts, Com& Science MV Nandurbar Arts, Com& Science MV Navapur Uttar Maharashtra college of com Jalgaon Arts, Com& Science MV Kusumba Arts, Com& Science MV Muktainagar Arts, Com& Science MV Akkalkuwa Arts, Com& ScienceMV Taloda Pattngrao Kadam Arts and Science College Pen Vasantrao Naik Mahavidyalaya, Nanded Sant Gadge Maharaj Mahavidyalaya, Nanded Shri Shivaji College,Kandhar Guru Budhiswami Mahavidyalaya, Purna Sharachandra Kala Vanijya Mahavidyalaya, Naigaon Degloor College, Degloor
Commerce Science Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Commerce Science
3 10 2 3 4 3 4 3 3 3 6 3 3 3 2 3 3 3 12
Rs 7.5 Lakh Rs 25 Lakh Rs 5 Lakh Rs 7.5 Lakh Rs 10 Lakh Rs 7.5 Lakh Rs 10 Lakh Rs 7.5 Lakh Rs 7.5 Lakh Rs 7.5 Lakh Rs 15 lakh Rs 2.5 lakh X 3 Lecturers X 3 Years = Rs 22.5 lakh 15 lakh 15 lakh 5 lakh 22.5 lakh 7.5 lakh 15 lakh 60 lakh
20 21 22
Mamaltai Jamkar MV, Parbhani 22 COLLEGES Total
Commerce
22.5 lakh 362.50 lakh
190
Appendices
Appendix 3.6 (Reference: Paragraph 3.7.7.3; Page 93) Statement showing excess quantity foodgrains distributed in districts during 2004-05 and 2005-06 Sr. Name of Number of Number of Quantity Quantity Excess No. district beneficiaries months in eligible for actually distribution which distribution distributed excess at the rate (In distribution of 10 kg per quintals) made person per month 1. Raigad 2500 2 500.00 582.00 82.00 2. Jalgaon 2300 5 1150.00 1155.00 5.00 3. Dhule 2500 6 1500.00 1991.60 491.60 4. Nandurbar 2645 2 529.00 546.00 17.00 5. Ahmednagar 3500 4 1400.00 1992.80 592.80 6. Pune (R) 1500 2 300.00 352.00 52.00 Pune (U) 1500 1 150.00 177.00 27.00 7. Satara 3100 1 310.00 332.00 22.00 8 Sangli 2200 1 220.00 234.00 14.00 9. Jalna 2700 7 1890.00 2240.80 350.80 10. Parbhani 3000 8 2400.00 2815.90 415.90 11. Latur 2500 2 500.00 711.00 211.00 12. Amravati 500 3 1500.00 1620.00 120.00 13. Yavatmal 500 3 1500.00 1610.00 110.00 14. Washim 340 2 680.00 780.00 100.00 15. Nagpur (R) 2400 1 240.00 334.00 94.00 Nagpur (U) 6500 4 2600.00 3110.00 510.00 16. Wardha 6000 6 1800.00 2378.30 578.30 17. Gadchiroli 2640 2 528.00 574.00 46.00 Total 48825 19697.00 23536.40 3839.40
191
APPENDIX 4.1
(Reference: Paragraph 4.4.3; Page 126)
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Statement showing outstanding Inspection Reports and Paragraphs issued upto December 2005 but outstanding as on 30.06.2006. Name of the Department 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 IRs Paras IRs Paras IRs Paras IRs Paras IRs Paras IRs Paras Agriculture, Animal Husbandry, Dairy 217 308 70 91 68 134 107 206 138 356 90 295 Development and Fisheries Co-operation and Textiles 166 284 79 115 65 153 85 182 72 161 39 85 Employment and Self-Employment 1 2 0 0 0 0 0 0 3 6 1 2 Environment 0 0 2 2 0 0 0 0 0 0 0 0 Finance 4 6 1 1 5 6 7 14 10 25 7 11 Food, Civil Supplies and Consumer Protection 0 0 1 1 0 0 2 7 5 6 1 4 General Administration 8 10 3 3 9 11 11 17 10 21 9 27 Higher and Technical Education 287 621 46 102 79 126 82 183 155 527 93 499 Home 120 201 30 43 46 103 36 100 98 229 77 259 Housing 7 11 0 0 0 0 1 1 5 16 0 0 Industries, Energy and Labour 15 23 13 25 10 28 32 66 21 51 13 34 Irrigation 395 869 93 294 74 200 78 199 123 422 125 485 Law and Judiciary 8 11 9 11 13 16 31 46 19 35 13 38 Maharashtra Legislature Secretariat 0 0 0 0 0 0 0 0 0 0 1 11 Medical Education and Drugs 65 100 16 45 23 53 25 93 34 120 18 91 Planning 0 0 0 0 0 0 0 0 3 9 2 7 Public Health 39 49 21 31 34 71 40 95 103 291 80 291 Public Works 152 316 47 130 49 162 56 219 113 284 98 451 Revenue and Forests 708 1390 87 252 161 477 198 681 305 1044 258 955 Rural Development and Water Conservation 744 1218 123 288 205 601 805 2896 288 1147 425 1684 School Education 6 7 4 5 7 9 20 39 28 60 15 55 Social Justice, Culture Affiars and Special 81 122 42 73 48 102 30 64 61 178 43 158 Assistance Tribal Development 21 32 19 30 28 58 17 46 33 92 33 146 Urban Development 6 23 2 38 4 21 12 176 15 124 21 206 Water Supply and Sanitation 2 2 7 11 5 9 1 4 5 24 0 0 Women and Child Welfare 44 62 40 60 51 80 42 84 70 152 84 190 Total 3096 5667 755 1651 984 2420 1718 5418 1717 5380 1546 5984
Total IRs Paras 690 1390 506 5 2 34 9 50 742 407 13 104 888 93 1 181 5 317 515 1717 2590 80 305 151 60 20 331 9816 980 10 2 63 18 89 2058 935 28 227 2469 157 11 502 16 828 1562 4799 7834 175 697 404 588 50 628 26520
192
Appendices
APPENDIX 4.2
(Reference: Paragraph 4.4.3 ; Page 127)
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Statement showing number of paragraphs/reviews in respect of which Government explanatory memoranda (UORs) had not been received Name of Department upto 1999 2000 2001 2002 2003 2004 Total 1998-99 -2000 -01 -02 -03 -04 -05 Agriculture, Animal Husbandry, 6 3 -4 6 2 3 24 Dairy Development and Fisheries Co-operation and Textiles 1 1 1 1 -1 2 7 Finance --------Food, Civil Supplies and Consumer -----1 1 2 Protection General Administration 1 ------1 Home ---1 -2 1 4 Housing 12 -1 3 7 4 6 33 Higher and Technical Education -----1 -1 Industry, Energy and Labour --1 -1 2 -4 Medical Education & Drugs 1 2 -1 3 3 -10 Planning 2 -----2 4 Public Health 4 1 -1 1 2 1 10 Public Works --1 --1 2 4 Revenue and Forests 8 1 --2 1 4 16 Rural Development and Water 20 --1 3 1 2 27 Conservation Social Justice, Cultural Affairs and 5 1 -3 -2 -11 Special Assistance Tribal Development -1 ----1 2 Urban Development 4 ---3 3 2 12 Water Supply and Sanitation --3 -2 -2 7 Water Resources 5 2 1 2 3 13 8 34 Women and Child Welfare 5 ---1 1 -7 Total 74 12 8 17 32 40 37 220
193
Appendix 5.1 (Reference: Paragraphs 5.1.2 and 5.1.4, Page 130 and 131) Internal control in the Animal Husbandry Department Detailed network of the Animal Husbandry Department which implemented the various schemes (reference para 5.1.2 ) (1) Schemes in the State sector are administered by the Department of Animal Husbandry through a network of 28 District Veterinary Polyclinics, 670 Grade I & II Veterinary Dispensaries, 27 District Artificial Insemination Centres, 172 Mini Veterinary Polyclinics, four Central Hatcheries, one Duck Breeding Farm and six Poultry Training Centre. (2) Schemes in the local sector are administered by the Zilla Parishads through a network of 3381 Grade I & II Veterinary Dispensaries, 368 Grade I & II Key Village Units and 16 Poultry Development Blocks B. (1) Details of units selected for audit as referred to in para 5.1.5 10 out of 19 Divisional level offices Regional Joint Commissioners at Aurangabad, Latur, Mumbai and Pune, Assistant Commissioner, Regional Disease Investigation Laboratories at Akola, Aurangabad and Pune. (2) 24 out of 116 district level offices Assistant Commissioner, Central Hatcheries Aurangabad and Pune and Livestock Development Officer, Duck Breeding Farm, Wadsa (Gadchiroli), District Dy. Commissioners, District Animal Husbandry Officers and Assistant Commissioners and District Veterinary Polyclinics of Akola, Aurangabad, Dhule, Gadchiroli, Latur, Pune and Thane, Assistant. Commissioner Intensive Poultry Development Block, Akola, Poultry Training Centre, Latur and Pune (3) 26 out of 1548 taluka level offices Veterinary Mini Polyclinics, Akot, Armori, Badlapur, Ballarpur, Baramati, Bhor, Chamorshi, Gangapur, Nilanga, Paithan, Sakri, Shahapur, Shirpur and Udgir and Livestock Development Officers, Grade I Dispensary (ZP) Armori, Akot, Ausa, Balapur, Gangapur, Khanapur , Murud, Mulshi, Paithan,, Shirpur, Arvi and Wadsa.
A.
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PREFACE

Financial position of the State Government

Audit Report (Civil) for the year ended 31March 2006

Sarva Shiksha Abhiyan

Valmiki Ambedkar Malin Basti Awas Yojana

Computerisation of Employment Exchanges in Maharashtra

Information Technology Citizen's Service Centres)

Audit Report (Civil) for the year ended 31March 2006

Audit of grants-in-aid to educational institutions

Functioning of Dr. Babasaheb Ambedkar Technological University

Food Security, Subsidy and Management of Foodgrains

Internal control mechanism in the Animal Husbandry Department

Transaction audit findings

Audit Report (Civil) for the year ended 31March 2006

Audit Report (Civil) for the year ended 31 March 2006

Chapter I Finances of the State Government

Trend of Finances with reference to previous year

Summary of Receipts and Disbursements

Audit Report (Civil) for the year ended 31 March 2006

Table-1: Summary of receipts and disbursements for the year 2005-06

Chapter I Finances of the State Government

State Finances by key Indicators

Audit Report (Civil) for the year ended 31 March 2006

Chapter I Finances of the State Government

5935.05 (12 per cent)

4982.00 (11 per cent) .

3981.00 (8 per cent)

33540.24 (69 per cent )

Own Taxes Central Tax Transfers

Non-Tax Revenue Grants-in-aid

Audit Report (Civil) for the year ended 31 March 2006

2001-02 2002-03 2003-04 2004-05 2005-06

30093 31103 34370* 41013 48438

898 919 1332 2341 1601

8671 9759 22381 22189 19974

306 466 887 348 1955

42369 44867 24452 27991 27146

82337 87114 83422 93882 99114

271406 295191A 333145A 371878 A 418441B

Chapter I Finances of the State Government

Table-5: Total Expenditure Basic Parameters

52781 41289 38282 45862 40474 42680

Audit Report (Civil) for the year ended 31 March 2006

Table-6: Components of Expenditure Relative Shares (in per cent)

Relative shares of expenditure 2005-06 (in percentage) 6.4 27.1 2 18.7 14

General Services Economic Services

Interest Payments Loans and Advances

Chapter I Finances of the State Government

Table-7: Revenue Expenditure Basic Parameters

Audit Report (Civil) for the year ended 31 March 2006

Table-8: Salary Expenditure

2001-02 2002-03 2003-04 2004-05 2005-06

Chapter I Finances of the State Government

Expenditure by Allocative Priorities

(Total expenditure does not include Loans and Advances).

Audit Report (Civil) for the year ended 31 March 2006

Financial Assistance to local bodies and other institutions

Chapter I Finances of the State Government

Table-15: Financial Assistance

Assets and Liabilities

Audit Report (Civil) for the year ended 31 March 2006

Chapter I Finances of the State Government

2001-02 2002-03 2003-04 2004-05 2005-06