audit
TRANSCRIPT
Statutory Audit
CAG •Under the constitution of India (Art. 149-151) CAG is the authority for conducting audit of the accounts of the union, states and union territories.
•CAG’s functions are as follows-
•To audit all expenditure from the consolidated fund of India.
•To audit all transactions of the union and states relating to contingency fund.
•To audit all trading, manufacturing, profit and loss accounts and balance sheet kept in any department of the Union or State.
CAG•Therefore, the authority to
•To inspect any office of account under the control of Union or State.
•To require that any accounts which deal with or form the basis of transaction shall be placed before him.
•To put such questions or made observation as considered necessary, called for information.
Scope of AuditThe Audit of accounts and transactions of
the Union and the State Governments covers the following aspects:-
Audit of Expenditure Audit of Receipts Audit of Stores and Stock Certification Audit Audit of Government companies
Corporations Audit of Autonomous Bodies / Authorities Information Technology Audit
Sl. No.
Category of Reports No. of Reports
No. of Paras
No. of Reviews
Money Value (Rs. In crore)
1 Civil 5 60# 4 432.05@
2 Scientific Departments 1 11 2 15.40@
3 Autonomous Bodies 1 34 3 59.37@
4 Direct Taxes 2 963 3 3817.57
5 Indirect Taxes Customs Central Excise
11
252208
23
5862.898988.98
6 Defense Services Army and Ordnance Factories Air Force and Navy
1
1
32
18
3
0
82.93
86.94
7 Railways 2 92 5 1099.23
8 Commercial* 6 568 19 17018.64
Total 21 2238 44 37464.00
# includes 9 chapters @ Money value in r/o reviews is not include* In addition, Annual Accounts of 5 statutory Corporations and 1 Autonomous body
Wings on Audit No. of vouchers/ divisional accounts and other records audited during
2003-04
No. of Audit notes issued during
2003-04
Money value (Rs. In crores)
Civil 3204081 997 48.73
Autonomous Bodies 303782 265 20.76
Scientific Departments
29744 503 120.05
Defense Audit 142411 323 592.73
Railway Audit 1015901 3799 3934.61
Revenue Receipts – Indirect Taxes
2361288 1009 88.12
Telecommunication 14086 475 535.04
Total 7071293 7371 5339.04
Volume of WorkCentral Audit : 2003-04
Wings on Audit No. of units audited during 2003-04
No. of IRs issued during
2003-04
Money value (Rs. In crores)
Civil 3348 3543 9043.04
Autonomous Bodies
1519 1306 3105.26
Scientific Departments
373 354 10499.16
Defense Audit 1918 1415 9380.20
Railway Audit 6610 6229 2799.98
Indirect Taxes 4426 3529 7024.73
Direct Taxes 2759 3169 5486.19
Commercial 1743 1360 21249.87
Telecommunication 1137 1086 10711.87
Total 23833 21991 79300.30
Volume of WorkLocal Audit : 2003-04
Office of the Comptroller and Auditor General of IndiaDirection, Monitoring and Control
Audit of Union
Accounts
Audit of States’
Accounts
Accounts and
Entitlements States
International Relations
TrainingGovt. Accounting
Standards Advisory Board
Central Audit Officers (Civil,
Defense, P&T, Rly & Commercial
38
State Audit Offices (Civil)
38
Accounts and
Entitlements offices
26
National Academy of Audit & Acs & Regional
Trg. Institutes10
International Centre for Information Systems
and Audit 1
Civil Audit
State Revenue Receipts
State Commercial
Undertakings
State Autonomous Bodies and Authorities
State Local
Bodies
Civil Ministries & Depts Autonomous
Bodies and Authorities
External Affairs & Overseas
Establishments, Union Territories featuring in
the Union Budget
Defense Railways Post & Tele-communications
Central Commercial
undertakings
ORGANISATION
CAG
Deputy CAG (Railways)
PRINCIPAL DIRECTOR(ONE IN EACH
RAILWAYS)
DEPUTY DIRECTOR
AUDIT OFFICERS IN THE DIVISIONS/WORKSHOPS
Communications from Audit
•Specific Repots of importance and serious irregularities.
•Audit notes detailing minor irregularities.
•Inspection Report.
Audit Report {Railways}Financial Management
Financial Results: The year 2002-03 ended with a net revenue of Rs. 3830.23 crore and a net surplus of Rs. 1115.40 crore after providing Rs. 2714.83 crore towards dividend payable to General Revenues.
Passenger Earnings: The passenger earnings of Rs. 12575.44 crore during 2002-03 were less than the Budget Estimate (Rs.13450 crore) and Revised Estimate (Rs.12730 crore).
Audit Report {Railways}Financial Management
Goods Earnings: The goods earnings of Rs. 26504.82 crore were more than Budget Estimate by Rs. 386.82 crore but fell short of the Revised Estimate by Rs. 153.18 crore.
Unrealised Earnings: Unrealised earnings increased by Rs.73.43 crore from Rs.1985.18 crore at the end of March 2002 to Rs. 2058.61 crore at the end of March 2003.
Audit Report {Railways}Financial Management
Operating Ratio: Even though there was marginal improvement in the overall operating ratio of the Indian Railways from 96.02 per cent in 2001-02 to 92.34 per cent in 2002-03, Eastern North Eastern, Northeast Frontier, Southern Railways and Metro Railway Kolkata were still incurring losses.
Plan Expenditure: The Railways provided Rs. 9330 crore to be met from Central Government support and internal resources in the Budget Estimate, which was increased to Rs. 9435 crore in the Revised Estimate. The actual plan expenditure was only Rs. 8891.06 crore.
Audit Report {Railways}Financial Management
Funds generated through Extra-budgetary resources: During the year, Railways paid leasing charges of Rs. 3270.13 crore to IRFC and firms/ companies under ‘Build, operate, Lease and Transfer’ (BOLT) and ‘Own Your Wagons’ (OYW) schemes. On the other hand IRFC was required to invest only Rs.2516.97 crore during the year for acquisition of new rolling stock. Hence the net inflow of funds from these resources was a negative figure of Rs.753.16 crore.
Railway Funds: There was a sharp decline in the expenditure from the Depreciation Reserve Fund and Railway Safety fund when compared with the Budget Estimate.
Audit Report {Railways}Financial Management
Appropriation Accounts: Against the budget provision of Rs. 72281.88 crore, the Railways incurred the total expenditure of Rs. 69549.97 crore during 02-03. The Saving of Rs. 2731.91 crore was the net result of savings.
Audit Report {Railways}Financial Management
Appropriation Accounts: Against the budget provision of Rs. 72281.88 crore, the Railways incurred the total expenditure of Rs. 69549.97 crore during 02-03. The Saving of Rs. 2731.91 crore was the net result of savings.
Highlights of Audit Findings
1. Planning, approval and material modifications to the ongoing projects
2. Procurement, utilisation and maintenance of Track Machines over Indian Railways
3. Coal Movement on Indian Railways4. Manpower Management in Indian
Railways5. Functioning of Research, Design and
Standards Organisation (RDSO) Lucknow6. Non-revision of siding charges
Highlights of Audit Findings
1. Loss due to delay in revision of haulage charges
2. Excessive detention to wagons in Terminal Goods Station
3. Heavy detention to oil tank wagons at Railways’ fuelling installation
4. Erroneous despatch of wagons to Workshops
5. Non-recovery of hire charges for Rolling Stock and Motive Power from KRCL
6. Loss of traffic due to non-granting /delay in granting of stations to station rates
Highlights of Audit Findings
1. Sanction of an un-remunerative project2. Premature commissioning of
Bishrampur Traction sub-station3. Restoration of an uneconomic branch
line4. Non-utilisation of imported Meter
Gauge Wheel sets5. Wasteful expenditure on procurement
of a machine6. Avoidable procurement and inadequate
accounting of steel
Highlights of Audit Findings
1. Extra expenditure on procurement of Composite Brake Blocks
2. Extra expenditure due to delay in finalisation of improved design of PSC sleepers
3. Finalisation of tenders at higher rates for procurement of PSC sleepers
4. Extra expenditure due to non-counter offering the lowest rates
5. Licensing of Railway land
Highlights of Audit Findings
1. Irregular permission for use of Officers’ Club premises by catering contractor
2. Encroachment of Railway land of the closed sidings
3. Mismanagement of Railway land
Authorities InvolvedRailway Level
FA&CAO : Supervises the preparation
GM : Accepts and signs.
Principal Director of Audit : Verifies
Railway Board Level
Director (FB) : Supervises the compilation
FC & CRB : Accepts and signs.
Dy. CAG : Verifies.
At national level CAG receives from Railway Board and public accounts committee examines on the behalf of parliament.
Object of Statutory Audit
•Accountancy Audit- Check the accuracy, all payments are supported by relevant vouchers.
•Appropriate audit- check that expenditure and receipts are properly classified.
•Administrative audit- to check that expenditure is according prescribed rules
ACCOUNTS INSPECTION OF EXECUTIVE OFFICES
Chapter 17 of A-1
WHY?
VERIFY THE RECORDS KEPT EITH EXECS.
•TO ENSURE THAT ALL RETURNS SENT TO ACCOUNTS ARE BASED ON CORRECT BASIC RECORDS.
•IN ACCORDANCE WITH INSPECTION PROGRAMME.
•DRAWN IN ADVANCE. (1712 of A-1)
•INFORM THE EXEC.(1713 of A-1)
•INFORMATION TO AUDIT
WHY ACCOUNTS INSPECTION
VERIFY DOCUMENTS IN SITU.ORIGINAL RECORDS KEPT IN EXEC. OFFICE.VERIFICATION OF SYSTEMS.
GUIDELINES FOR INSPECTION
Para 1714 of A-1
•VERIFY THAT RETURNS SENT TO ACCOUNTS TALLY WITH THE BASIC RECORDS.
•A TEST CHECK OF BASIC RECORDS.
•REVIEW OF THE PROCEDURE.
Periodicity of InspectionPara 1704 of A-1
Material at site of works Once a yearStores as Imprest Once in 2 yearsTools & Plants Once in 3 yearsMaterial and Depot
A category Once in 6 monthsB category Once in 1 yearC category Once in 2 yearsD category Once in 1 year
Inspection of Divisional Offices Once in 2 yearsEngineering Department Once a yearFirst Inspection of Construction office Within 3 monthsAll subdivisions should be inspected at least once in 2 years.
Inspectorial Staff
Inspection of Stores ISA, SVInspection of Station TIAInspection of Officers SO’s
INSPECTION REPORTS.
•AFTER THE INSPECTION IS OVER.
•INCLUDES ALL ITEMS WHICH HAVE NOT BEEN SATISFACTORILY BEEN EXPLAINED DURING INSPECTION.
CONSISTS OF TWO PARTS
•PART I
•ITEMS OF MAJOR OBJECTIONS.
•PART II
•ITEMS OF MINOR OBJECTIONS
3 COPIES SENT TO THE EXEC. OFFICESUPERIOR TO THEONE INSPECTED
2 COPIES SENT TOTHE ACCOUNTS OFFICE
INSPECTED
REPLY GIVEN BY THE OFFICE
REPLY FORWARDEDBY SUPERIOR TO
ACCOUNTS OFFICE
PREPARED IN QUADRIPLATE
PART I
ACCOUNTS OFFICE
PART II
PREPARED IN DUPLICATE
ONE COPY SENT TO THE EXECUTIVE OFFICE
REMARKS OF THEEXECUTIVE