public accounts committee (2012-14) … · seventieth report (legislative assembly of goa) ......

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PUBLIC ACCOUNTS COMMITTEE

(2012-14)

SEVENTIETH REPORT

(LEGISLATIVE ASSEMBLY OF GOA)

Report of the Public Accounts Committee on the Report of the Comptroller and

Auditor General of India for the year

2007-08

LAID ON THE TABLE OF THE HOUSE

ON 19TH

AUGUST, 2014

_________

GOA LEGISLATURE SECRETARIAT ASSEMBLY COMPLEX

PORVORIM – GOA

2


(2012-14)

SEVENTIETH REPORT

(LEGISLATIVE ASSEMBLY OF GOA)

Report of the Public Accounts Committee on the Report of the Comptroller and

Auditor General of India for the year

2007-08

LAID ON THE TABLE OF THE HOUSE

ON 19TH

AUGUST, 2014

__________

GOA LEGISLATURE SECRETARIAT ASSEMBLY COMPLEX

PORVORIM – GOA

3

(i)

INDEX

Sr. No. CONTENTS Pg. No.

1. Composition of the Committee (ii) & (iii)

2. Introduction (iv)

3. Report

Chapter I

Public Works Department 1

Revenue Department 5

Panchayati Raj Department 11

Chapter II

Excess Expenditure

Art & Culture Department 15

Audit paras from the Report of the Comptroller and

Auditor General of India for the year ended

31st March, 2008.

4. Appendix – I (Minutes of the meeting) 17

5. Appendix – II (Minutes of the meeting) 18

6. Appendix – III (Minutes of the meeting) 19

7. Appendix – IV (Minutes of the meeting) 21

8. Appendix – V (Minutes of the meeting) 22

9. Appendix – VI (Minutes of the meeting) 23

10. Appendix – VII (Minutes of the meeting) 24

11. Appendix – VIII (Minutes of the meeting) 25

12. Appendix – IX (Minutes of the meeting) 26

13. Appendix – X (Minutes of the meeting) 27

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14. Appendix – XI (Minutes of the meeting) 28

15. Appendix – XII (Minutes of the meeting) 29

16. Appendix – XIII (Minutes of the meeting) 30

(ii)

COMPOSITION OF THE


(2009 - 11)

CHAIRMAN

SHRI MANOHAR PARRIKAR

MEMBERS

SHRI FRANCIS D’SOUZA

SMT VICTORIA FERNANDES

SHRI FRANCISCO SILVEIRA

SHRI AGNELO FERNANDES

SHRI DAMODAR NAIK

SHRI PANDURANG DHAVALIKAR

GOA LEGISLATURE SECRETARIAT

SHRI N. B. SUBEDHAR, SECRETARY

SHRI UDAY BICHOLKAR, COMMITTEE OFFICER

SMT CELIZA FERNANDES, UNDER SECRETARY

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(iii)

COMPOSITION OF THE


(2012-2014)

CHAIRMAN

SHRI DIGAMBAR KAMAT

MEMBERS

SHRI ANTANASIO MONSERRATE

SHRI FRANCISCO PACHECO

SHRI NILESH CABRAL

SHRI KIRAN KANDOLKAR

SHRI GLENN TICLO

SHRI LAVOO MAMLEDAR


SHRI N. B. SUBEDHAR, SECRETARY,

SHRI UDAY BICHOLKAR, COMMITTEE OFFICER

SMT CELIZA FERNANDES, UNDER SECRETARY

6

(iv)

INTRODUCTION

I, the Chairman of the Public Accounts Committee (2012-14) of the

Sixth Legislative Assembly of the State of Goa having been authorised by the

Committee to submit the Report on its behalf, present this Seventieth Report of the

Committee on the Audit Paras reflected in the Report of the Comptroller and

Auditor General of India for the year 2007-08.

During its twelfth sittings of the Public Accounts Committee considered the

explanation of the Departments in respect of Memorandum of Important points on

paras reflected in the Reports of the Comptroller and Auditor General of India for

the year 2007-08.

The minutes of the meetings are at Appendix “I”, to “XII”. After careful

consideration, the Committee formulated its recommendations, which are embodied

in the Report. The draft report was considered and adopted by the Committee at its

meeting held on 11th

August, 2014. Minutes of the meeting are at Appendix XIII.

The Committee is grateful to Ms. Devika, Accountant General, Audit,

Porvorim, Shri. C. P. Ajitkumar, Sr. Audit Officer and Shri S. K. S. Nampoodiry

for their valuable guidance rendered to the Committee.

The Committee also places on record the cooperation extended to the

Committee by Shri N. B. Subhedar, Secretary, Shri Uday D. Bicholkar, Committee

Officer, Smt. Celiza Fernandes, Under Secretary, Smt. Nikita Baadkar, Section

Officer and all the concerned staff of the Legislature Secretariat and commends

their contribution towards the Report.

ASSEMBLY HALL SHRI DIGAMBAR KAMAT

PORVORIM, GOA CHAIRMAN

DATED: 11TH

AUGUST, 2014

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CHAPTER-I

PUBLIC WORKS DEPARTMENT

4.1.5 Irregular acceptance of tender and undue benefit to contractor

Water supply scheme work was revised from ` 2.20 crore to ` 8.42

crore after opening the technical bids and the work was finally awarded

for ` 11.78 crore. Work was awarded on the basis of offers received

after opening financial bids, which lacked transparency.

In order to cater to the uncovered areas and increase in demand of

water in Sattari Taluka the Government sanctioned (January 2004)

augmentation of Dabose Water Supply Scheme for ` 15.21 crore. The

scheme aimed to supply an additional 10 million liters per day (MLD) water

over the existing 5 MLD capacity under the scheme. The work consisting of

“Designed, construction, erection, testing and commissioning of 10MLD

Water Treatment Plant, Head works, VT Pumps, pumping main” estimated

to cost ` 2.20 crore was tendered (September 2005) on turnkey lump sum

contract basis. Though four agencies purchased tender forms, only two

agencies (M/s. Laxmi Civil Engineering Services Pvt. Ltd. and M/s. SMS

Paryavaran Pvt. Ltd.) participated in tendering. Technical bids were opened

on 2 December, 2005 and necessary clarifications were issued to bring the

agencies on a common footing. Though the estimated amount did not

include the amount towards operation and maintenance of the plant, the

agencies were asked (1 March, 2006) to quote the amount towards operation

and maintenance cost of the plant for a period of five years, including cost of

consumables, electricity and manpower in modified Appendix B separately.

The Agencies were also directed to revise their financial offers, if required,

based on above clarifications and submit the same before 14 March, 2006.

The financial bids were opened on 14 March, 2006 and the offers

were as under:

Agency

Appendix A

Water treatment Plant

Appendix B

Operation and

maintenance

SMS Paryavaran Pvt. Ltd Not Quoted ` 5.45 crore

Laxmi Civil Engineering

Services Pvt. Ltd ` 6.66 crore ` 6.82 crore

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Though M/s. SMS Paryavaran Pvt. Ltd. had not filed tendered amount

pertaining to the cost of treatment plant in Appendix A that agency was

allowed to quote offer for Appendix A after opening of bids on 14th

March,

2006 and the agency quoted ` 6.45 crore which was ` 20 lakh less than the

only other quote. The total price bid quoted by them (Appendix A and B)

amounted to ` 11.91 crore. The agency was called for negotiations in which

they offered a total rebate of 2% and the lowest negotiated offer of ` 11.78

crore was approved (June, 2006) by Goa State Works Board (GSWB). The

work order was issued with stipulated date of completion as 7 March, 2007.

The agency has been paid an amount of ` 2.50 crore upto July 2007.

Audit scrutiny revealed that:

The estimated cost put to tender was ` 2.20 crore in September 2005

which was subsequently increased to ` 8.43 crore after opening the

technical bids and revised quotes were obtained from the two

agencies. Since the estimated cost put to tender and scope of work

were increased fresh public tenders should have been invited for the

entire work to obtain competitive rates. Further M/s. SMS Paryavaran

had not quoted their rate for the treatment plant in Appendix-A.

Instead of rejecting their offer, the agency was allowed to quote their

offer after opening the financial bids.

Thus, increasing the scope of the work to around four times of the

estimated cost after opening technical bids and obtaining financial

quotation from one agency after opening the financial bids vitiated the

guidelines, fairness and transparency in tendering process and denied

the Government an opportunity to get competitive offers. The

Department stated (August 2008) that due to the present trend of

steep increase in the market prices, there was no possibility of getting

lower offer in the event of re-tender and hence the lowest negotiated

offer was considered for acceptance. Further the Department stated

that M/s. SMS Paryavaran’s offer was considered only when the other

agency failed to respond to the request of the Department to lower

their offer to the amount of SMS Paryavaran and hence no

compromise on the tendering procedure had taken place.

The reply is not tenable as public tenders were required to be invited afresh

due to large scale variation in scope of work which resulted in an undue

advantage to the private agency.

Department in its written reply stated that during the tendering process

the scope of work was widened by including O&M of the plant for a period

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of five years including cost of consumables, electricity and manpower. The

intention of clubbing O&M component with the construction W.T.P. was

that since the contractor was to operate and maintain the plant for five years,

the Department would be able to get the most efficient design and execution

of plant at an economic price.

Accordingly, the Department was successful in awarding the work for

an amount of ` 11.78 crore which included construction of cost ` 6.33 and

O&M cost of ` 5.45. The additional scope of work in the form of O&M of

plant for five years has been an innovative concept and has proved to be

correct with partially completion of work on 26/6/2010 and successfully

commissioned.

In view above, the acceptance of tender cannot be termed as irregular

and benefiting the contractor. However, this Audit para has already been

dropped by the C & AG from the inspection report based on the submission

of compliance report by the division.

The Committee observed that the Department has not explained the

reasons for permitting M/s. SMS Paryavaran Pvt. Ltd. to quote for the water

treatment plant, for which they had not submitted any quote initially after

opening of the financial bid and the amount quoted by the other tenderer was

made public. This action was against the secrecy of the tendering system.

The Department should have discharged the tender and gone for re-

tendering.

Further, Department in its written reply stated that as per the PAC

instructions for working out the modalities regarding the release of payment

during Operation & Maintenance period case of lesser production of water

than the agency on 12th July and 25

th July, 2011 and following is the

outcome:

a) It was agreed that the plant was completed and was put to use

for few hours daily from 14th

March 2010 till 17th

February

2011.

b) It was agreed that full 10 MLD flow was available and the plant

is running at design flow since 17th

February 2011 and

laboratory tests are available for the same.

c) The date of O & M will be reckoned from 17th

February 2011

and payment of O&M will be made accordingly after the

performance test is carried out.

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d) It was agreed that variable component will be 80% of chemical

and power cost which will be worked out by aggregating per

annum cost divided by design flow X365 days. this cost will

then be converted into per month/per MLD cost and added with

fixed cost of 20% of chemical and power and 100% manpower

cost. The payment would be made on pro-rata basis based on

actual quantum of water produced.

Subsequently the Performance Test has been carried out successfully

on 29th July 2011 and 10

th October 2011 by RITES in terms of Quality of

Water and Quantity of Water. The Quantity of out flow is reported as 10.72

MLD and 10.78 MLD respectively on the said days. The various parameters

such as pH, turbidity, hardness etc., were found to be within the norms

specified by Indian Standards for drinking water.

Commissioning of Water Treatment Plant 17/02/2011

Start of Trial Run Period 17/02/2011

End of Trial run Period 16/05/2011

Start Date of O&M Period 17/05/2011

End Date of O&M Period 16/05/2016

O&M Amount as per Contract (for 60 months) ` 545 lakh

O&M Amount per Month ` 9.09 lakh

Amount paid upto April 2012 (for 11 months) ` 41.45 lakh

** Payment is made on Pro-rata Basis as per the actual production of treated

water. The payment is effected under Maintenance Budget Head.

During the oral evidence before the Committee the Officials of the

Department sought to clarify that although 4 agencies had purchased the

tender forms, only 2 agencies actually submitted their quotes of these M/s.

Paryavaran Private Limited had omitted to quote for cost of a Treatment

Plant under Appendix “A” while M/s. Laxmi Civil Engineering Service

Private Limited had quoted for the total project. However, the Department

sought clarification from SMS Paryavaran Private Limited for not quoting

under Appendix “A”.

They also informed that the other tenderer did not raised any objection

to the clarification submitted by SMS Paryavaran Private Limited during

opening as well as during the negotiations carried out on 24/04/2006. It was

further informed that M/s. Laxmi Civil Engineering Service Private Limited

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was called for negotiations inspite of their higher offer but expressed their

inability to reduce their offer beyond a half percent discount.

The Committee feels that the Department has grossly erred in the

tendering process wherein it has accepted the additional quote for

Appendix “A” from M/s SMS Paryavaran Private Limited for the cost of

treatment plant. The Committee further feels that the quote of SMS

Paryavaran Private Limited should not have been considered after

opening of the tenders as it was not complete in all respects. The process

of re-tendering should have been resorted to, even at the perceived risk of

an increase in tender amount.

The Committee strongly recommends that the tendering procedures

should be conducted in a transparent manner and strictly as laid down in

the CPWD Work Manual and in future such lapses should be strictly

viewed and action against concerned official would be initiated.

However, considering that the representative of the Government has

assured the Committee that the plant is running successfully and is

drawing more than the targeted 10 MLD, a written warning may be issued

to the concerned officials against repetition of such actions concerning

tenders in future and para may be dropped.

REVENUE DEPARTMENT

4.1.7 Unfruitful expenditure of ` 3.18 crore on re-survey loss of interest

of ` 31.31 lakh and non recovery of mobilization advance of ` 70.54 lakh.

Non-conduct of pilot study before undertaking the project of re-

survey of the State resulted in abandonment of project after incurring

expenditure of ` 3.18 crore. Non-observance of codal provisions while

releasing mobilization advance also resulted in loss of interest of ` 31.31

lakh and non-recovery of balance advance amount of ` 70.54 lakh.

The Government proposed to conduct re-survey of cadastral maps in

Goa to incorporate changes made in the past thirty years. The re-survey was

to be conducted under a centrally sponsored scheme for strengthening of

Revenue Administration and updating of Land Records. The Government of

India suggested (November 2002) that the State Government may take up

the work on a pilot project basis for few villages and on the basis of

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experience gained from the pilot project, the same could be extended to

cover more areas. The Government however tendered and awarded (October

2003) the re-survey work for the entire State to M/s. Theovel Surveys,

Bangalore at a cost of ` 7.88 crore. The Government also paid 15% interest

free mobilization advance (` 1.18 crore) to the contractor, contrary to the

provisions of CPWD Manual which restricts the amount of mobilization

advance upto 10% of the contract value at 10% simple interest.

After the work had been executed up to 28% (September 2005), the

Government instructed (October 2005) the agency to stop the work as it was

found that the cadastral maps created by re-survey did not match with the

existing table sheets upon super-imposition and could not be used for any

legally valid purpose. The payment made to agency up to March 2006 on the

work was ` 3.18 crore. Besides, the mobilization advance of ` 70.54 lakh

was yet to be recovered from the contractor. Further no interest was charged

on the mobilization advance resulting in a loss of ` 31.31 lakh to

Government upto December 2007 calculated at the rate of 10% per annum.

The contract is yet to be terminated (January 2008).

The Department stated (March 2008) that Goa is too small to be

considered for financial assistance on taluka basis and the State is treated as

one district on the basis of which pattern for assistance under the

Government of India scheme is considered. However the fact remains that

had the scheme been implemented on a pilot basis in a few villages, the

unfruitful expenditure could have been reduced.

Further the Department stated that 15% mobilization advance was

granted as the 50% cost of the surveying machinery to be procured works

out to 15% of the total contract value. The reply is not tenable as the grant of

15% mobilization advance was against codal provisions.

The Department in its written reply stated that the work of re-survey is

very much beneficial to the public in general and Government organizations

in the State of Goa. The maps of re-survey are of multifold use for the

development of the State. There were certain technical problems in the

initial stages of the project. However, the Department with assistance of the

surveying agency had arrived to an acceptable solution after which the

survey work was resumed back. The ground survey has been completed in

eight talukas and is in progress in remaining four talukas. The Department

has already commenced issuance of re-survey maps of Tiswadi Taluka and

the updated maps of other talukas will be issued in phases as and when the

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maps are generated. Till date the Department has issued approximately 70

re-survey maps to the public and revenue generation has been started.

Besides requests have also been received from Departments like Police,

PWD for re-survey maps. Therefore, the expenditure incurred on the project

of resurvey cannot be considered as unfruitful considering its usage to the

public and Government Departments.

As regard to release of 15% mobilization advance it is submitted that

the Department does not award works as per CPWD manual and therefore

unaware of the procedures followed under the CPWD manual. The matter of

releasing mobilization advance of 15% was referred to the Government and

after receiving approval from the Government mobilization advance was

released to the agency against the Bank guarantee of equivalent amount. The

issue of imposing interest on mobilization advance was not considered by

the Government. The mobilization advance released is being recovered from

the running bills of the surveying agency @ 15% of each bill amount. Till

date, an amount of ` 97.83 lakh has been recovered out of the total amount

of ` 118.00 lakh paid to the agency. The balance amount of ` 20.17 lakh

will be recovered from the subsequent running bills of the agency.

The Committee observed that the reply given by the Department does

not award work as per CPWD manual is not acceptable. While awarding the

work by the Government Departments, the CPWD manual is followed for

guidance, this practice is followed by all the Departments. While sanctioning

the mobilization advance, the Department failed to incorporate the condition

that the same would bear interest. It is this failure that resulted in non

recovery of interest amounting to ` 31.31 lakh and extending under benefit

to the contractor.

Further, Department has stated that they had received comments from

the Directorate of Settlement and Land Records, Panaji, that the project of

resurvey was stopped in the year 2005 following the receipt of Minutes of

Meeting issued by Joint Secretary (Budget)wherein it is recorded that the

then Hon’ble Chief Minister had directed the work of re-survey to be

stopped due to its potential for misuse in the public domain including

unauthorized claimants and also because it did not meet the requirements of

the Department.

Further, the then Chief Secretary informed that the survey works

would be carried out through the National Remote Sensing Agency (NSRA)

and a scheme was to be prepared accordingly. Based on these instructions,

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the then Director issued “stop work letter” to M/s. Theovel Surveys till the

discrepancies noticed in the resurvey work are rectified.

In the year 2007, the Government constituted an empowered

Committee under the Chairmanship of Minister for Revenue which

comprises of Secretary (Revenue), Directorate of Settlement & Land

Records, Panaji, Jt. Secretary (Finance) as Member and Under Secretary

(Revenue) as Member Secretary. The Committee after detailed deliberations

submitted to the Government to reconsider the decision of stopping the re-

survey work and recommend that the re-survey work to be resumed as it

would be in the interest of the State of Goa. The Government considered the

recommendations of the Committee and the work of re-survey was resumed

back in May 2008.

Department in its further reply stated that the Directorate of

Settlement and Land Records, Panaji-Goa has completed ground survey

work of resurvey project in the State of Goa in all 12 talukas and

accordingly resurvey maps of Tiswadi and Bardez talukas are available for

issuance to general public. The resurvey maps of Ponda and Mormugao

talukas will be shortly ready for issuance to public. The process of map

preparation in respect of remaining talukas is in progress which is likely to

be completed by December, 2013.

The Committee strongly recommends the urgent completion of the

re-survey exercise in order that the benefit of the exercise may be availed

both by the public and the Government at the earliest.

6.9 Non-realization of revenue due to delay in fixation of minimum

price of land.

Failure of the Department to fix minimum land price resulted in under

valuation of the land and consequent short levy of stamp duty and

registration fees.

It was mentioned in paragraph 6.6.6 of the Comptroller and Auditor

General of India’s Audit Report 1999-2000 that minimum price of land for

levy of stamp duty and registration fees had not been fixed by the

Department despite lapsed of eight years. The Public Accounts Committee

in its 62nd

Report (2008) recommended that the Department should take up

the matter with the Government and impress upon them the urgency of

fixing the minimum price of land, which, by its absence is causing loss of

15

revenue to the exchequer. In exercise of the powers conferred under Rule

4(4) (b) of Goa Stamp (Determination of true market value of property) rules

2003, the Department notified (June 2003) an interim statement of taluka-

wise minimum land rates (base value) depending upon the settlement zone

and area involved and called for objections and suggestions to the said rates.

The Department received 69 suggestions and objections from the public and

a cabinet note was prepared for approval of the minimum price of land but

was deferred twice between August 2003 and September 2004 for which no

specific reason was available on records. Subsequently (between April 2005

and January 2006), it was decided that the categorization of land be linked to

the ‘Regional Plan 2011’. However, as the ‘Regional Plan 2011’ was not

finalized, the adoption of minimum rate was kept in abeyance. The matter

was referred to cabinet in February, 2008. The Cabinet decided that the

Department should examine the details and refer the matter to next cabinet

meeting. The Department has not yet taken a decision whether the draft rates

already notified should first be adopted or a district level Committee be

appointed for finalization of the final land rate.

Audit scrutiny at various Sub-Registrars’ offices between August

2006 and May 2008 revealed that in 35 instruments of sale deed of land

executed between 2004 and 2008, the consideration of the land was fixed at

much below the interim rates published by the Department in June, 2003,

resulting in undervaluation of land and resultant short levy of stamp duty

and registration fee amounting to ` 1.77 crore. As the cost of land has

further increased the exact current revenue foregone due to undervaluation

of land could not be quantified.

After the matter was brought to notice, the Government stated (July

2008) that the matter is under consideration of the Government and has

decided to appoint officials for preparation of annual statement of rates of

land and the file is under submission for examining and vetting of Law

Department.

The Department in its further written reply stated that the matter

regarding fixation of land price was taken up by the Revenue Department

since 1998. However, due to change in Government, and examining the

matter with discussion, meeting, legal opinion, financial concurrence and

Cabinet approval, it was delayed. The Government vide order No. 28/1/97-

RD(4231) dated 17/06/2003, published in the Official Gazette, Series I No.

12, dated 19/06/2003, the interim statement of minimum land rates in

exercise of powers conferred under Rule 4(a)(b) of the Goa Stamp

(Determination of True Market Value of Property) Rules, 2003 for

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information of public likely to be affected inviting therein objection and

suggestion of the public within 15 days of the publication of the above

Order. Subsequently, 69 representations were received from the public

concerned with the request to increase/reduce the rate of land and short

listing the said objections/suggestions with approval of Government, legal

opinion and further approval of the Cabinet, in pursuance of sub rule (1) of

Rule 4 of the Goa Stamp (Determination of True Market Value of Property)

Rules 2003, Notification was issued and published in Official Gazette dated

27/08/2008 there by appointing the officers to assist the Collector of the

respective districts for the purpose of said sub-rule (1) of rule 4 of the Goa

Stamp Rules, 2003. Further, after consideration of objections and

suggestions received from the public in the said interim statement of

minimum land rates, Government vide Order No. 28/1/97-RD (4231) dated

09th January, 2009 published the interim statement of rates showing average

rates of land which shall remain in force till the coming into force of the

annual statement of rates in terms of sub-rule (3) of Rule 4 of the said rules

in the Official Gazette, Series I No. 45, dated 5th February, 2009. Since the

Government appointed the officers to help the Collectors of the respective

districts for the purpose of said sub-rule (1) of rule 4 of the said Rules vide

Notification No. 28/1/97-RD (4231) dated 27/08/2008, the concerned

Collectors are examining the matter and the same is under consideration,

since then all the valuation of the land and realization of revenue is done as

per the fixation of minimum price of land in relation to Order No. 28/0/97-

RD (4231) dated 9th

January, 2009.

The Committee recommends that the Department urgently reports

on the base rates fixed for land and the Committee may be kept appraised.

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PANCHAYATI RAJ AND COMMUNITY DEVELOPMENT

DEPARTMENT

4.2.1 Sanction of grant of ` 3.23 crore to 23 non-entitled Village

Panchayats and depriving grants-in-aid to other 44 entitled Village

Panchayats.

Grants amounting to ` 3.23 crore were sanctioned to 23 VPs

which were not entitled for developmental grants as per the income

criteria prescribed in the rules. No grants were sanctioned to 44 VPs

which were entitled to get the grants.

In pursuance of Sub Section-(1) of Section 160 of the Goa Panchayat

Raj Act 1994, the Government releases grant-in-aid to the Village

Panchayats (VPs) for various purposes under the terms and conditions

prescribed by Government from time to time. The VPs whose annual income

from all sources inclusive of taxes, fees, octroi, rents, fines, sale proceeds,

bank interest, matching grants, etc., is less than ` five lakh only are entitled

to the grants-in-aid for development works. The Director of Panchayats had

sanctioned grants-in-aid totaling ` 7.82 crore for various developmental

works to 71 VPs in the State during the year 2006-07.

A scrutiny (November 2007) of records of Director of Panchayats

revealed that the Department sanctioned grants totaling ` 3.23 crore to 23

V.Ps whose annual income was above Rs. five lakh. Of these 23 V.Ps the

Shiroda V.P alone was sanctioned grants-in-aid to the tune of ` 94.00 lakh

which constituted 12% of the totals grants sanctioned by the Government to

all the VPs. Whereas no grants was sanctioned to 44 V.Ps whose annual

income was less than ` five lakh.

This disparity in sanctioning grants-in-aid indicated that grants were

sanctioned arbitrarily and not based on any laid down criteria with a view to

achieve overall development. The arbitrary allotment of grants-in-aid

disregarding the eligibility criteria has resulted in release of inadmissible

grants to the tune of ` 3.23 crore and depriving grants to 44 V.Ps whose

annual income was less than ` five lakh.

The Department stated(September 2008) that while computing the

income of the Panchayats the grants released under octroi and matching

grants were not taken into consideration resulting in understatement of

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annual income. The reply is not tenable as annual income excluding octroi

and matching grants in respect of 16 out of 23 Panchayats was more than ` five lakh. The Department agreed to include the octroi and matching grants

under annual income for determination of the eligibility of the Panchayats

for receiving the grants.

The Department in its written reply stated that the computation of

annual income of the Panchayats is now being carried out taking into

account all the eligible income heads of the Panchayat.

The Committee observed that the Department has agreed to the Audit

findings, however, in future grants may be provided, strictly on the basis of

the approved criteria of the Government.

Further Department in its written reply stated as follows:

1. The grant-in aid under this scheme as on 2007-08 was given to the

Panchayats where annual income is less then ` 5.00 lakh. The

criteria to be followed and amount of grants to be sanctioned to the

Panchayats for the items/work was as follows:

(i) Panchayats whose annual income does not exceed ` 5.00 lakh

sanction of 100% of the project cost.

(ii) Panchayats whose annual income does exceed ` 5.00 lakh but not

exceed ` 7.00 lakh sanction of 75% of the project cost.

(iii) Panchayats whose annual income does not exceed ` 7.00 lakh but

not exceed ` 10.00 lakh sanction of 50% of the project cost.

(iv) Panchayats whose annual income exceeds ` 10.00 lakh shall not be

entitled to any grants from the Government.

However, while considering the sanction of grant-in-aid backwardness of

the area and ST/SC/OBC population in the said Panchayat was also taken

into consideration.

2. While considering the proposals for grant-in-aid the 23 Village

Panchayats including Village Panchayat Shiroda were released grants

amounting to ` 323.00 lakh (i.e. an average of ` 14.00 lakh to each

Panchayat) and other 40 weaker Village Panchayats were released a total of

` 365.00 lakh i.e. an average of ` 7.71 lakh to each Panchayat. All these

grants were released to them after scrutiny of the proposals submitted to this

Directorate and after taking into consideration need and priority of the

works.

19

3. It is further submitted that due to reduce budgetary provision for the

year 2006-07, it was not possible to the Department to consider the grant of

all the Panchayats. However, care is now being taken by the Directorate to

release the grants to all the eligible Village Panchayats taking into

consideration the priority of the works.

4. Further, as regards to depriving grant-in-aid to the entitled Panchayat,

it is submitted that while computing the income of the Panchayats, the

income by way of releasing matching grants and the grants in lieu of octroi

for the year 2006-07 were not taken into consideration Consequently, the

income of the Panchayats were computed on a lower side resulting in the

release of grants for sanctioned developmental grants amounting to ` 30.74

lakh to 25 Panchayats.

5. Some of the Village Panchayats were sanctioned grants in excess of

eligibility percentage of the project costs due to wrong computation of

income of the Panchayats. As a result, grants were released to the Village

Panchayats. Nevertheless it is stated that grants were actually released for

taking up basic infrastructural works in rural areas and funds were spent for

the purpose of such developmental works only.

6. It is stated that the terms and conditions for the sanction of grant-in-

aid has since been amended in 2009 as under :-

(i) Panchayats whose annual income does not exceed ` 15.00 lakh

shall be sanctioned grants upto 100% of the project cost annually for at least

one item of work on an application submitted by the Panchayat under clause

3.

7. It shall be ensured that due care will taken in future to accurately

compute the income of the Panchayats and grants under this scheme will be

sanctioned based upon the income of the Panchayats keeping in view the

eligibility, priority and need of the works.

The Committee recommends that there should be a scrutiny of every

proposal for grant by a Panchayat with special stress on proposed

utilization of the grant. This utilization should be subsequently verified

and certified as to the quantum of development versus the total amount of

grant utilized. This should further be used as a benchmark for disbursal of

future grants. It is noticed that some Panchayats have been allotted a

20

lion’s share of available grants and no proper documentations of purpose

the grant is being utilized for, is submitted.

It is strongly recommended that machinery be set in place to push

Panchayats to increase their own revenue through proper recoveries of

taxes, fines and interests. The Committee unanimously is of the opinion

that compliance by Panchayats with regard to recoveries and revenue

collections should be a major criteria for disbursal of grant-in-aid. It

further recommends that there should be an upper limit for grant for each

Panchayat, which should be linked to its income generating

capacity/opportunity, and proven efforts to achieve the same.

21

CHAPTER-II

EXCESS EXPENDITURE

ART & CULTURE

Para 2.3.2

(i) Excess over provisions during 2007-08 requiring regularizations:

The excess of `2.57 lakh under one grant during the year requires

regularization under Article 205 of the Constitution. Details are given below:

(Amount in `) Sr.

No.

No. and name of

Grants/appropriation

Total grants

appropriation

Actual

expenditure

Excess

Capital (Voted)

1. 43- Art &Culture 5,80,02,000 5,82,59,094 2,57,094

The Committee desires that the excess expenditure needs to be regularized.

The Department in its written reply stated that the excess is due to

centage charges booked by the PWD over and above the allotment in March

supplementary account.

The Department in its further written reply states that an amount of

`5,00,000,00/- was provided in the B.E. 2007-08 under Demand No. 43

Directorate of Art & Culture under Major Head 4202 Capital outlay on

Education, Sports, Art & Culture. An additional amount of ` 80,02,000/-

was also provided by way of supplementary Demand for the said year.

The Total grants of `5,80,02,000/- was placed at the disposal of PWD as

follows:

Sr. No. Works Division Amount in `

1. Executive Engineer, PWD Work Div-I, Panaji 2,77,04,330/-

2. Executive Engineer, PWD Work Div-XVI,

Ponda

30, 57,670/-

3. Executive Engineer, PWD Work Div-XXII,

Fatorda

2,72,40,000/-

Total 5,80,02,000/-

22

At the end of the financial year i.e. on 31st March, 2008 after

confirming the expenditure with the PWD the Department had surrendered

`9,97,000/- to the Finance Department the total grant appeared on

appropriations Account is ` 5,70,05,000/- i.e. original grant of

`5,00,000,00/- plus supplementary grant of ` 80, 02,000/- minus surrender

of `9,97,000/-.

Out of the total allotment of ` 5,80,02,000/- expenditure incurred for

the financial year 2007-08 was ` 5,82,59,000/- which resulted in excess of

`2,57,000/-.

The said excess is due to booking of expenditure on centage charges

over and above the allotment made by this Department to the PWD in their

supplementary account.

As per C.P.W.D. guidelines 7.25% of the amount spent on the work is

required to be transferred on pro-rata basis as centage charges i.e. to the head

controlled by the Public Works Department.

The amount was placed at the disposal of Works Divisions of Public

Work Department is inclusive of Centage charges. The P.W.D. however

utilized the entire amount placed at their disposal on incurring works

expenditure living no amount for carrying adjustment towards Centage

charges. Which resulted in excess over amount provided in the Budget

Estimate.

The Committee recommends that the excess amount be regularized.

23

APPENDIX - I

MINUTES OF THE MEETING OF THE PUBLIC ACCOUNTS COMMITTEE

HELD ON 26/05/2011 AT 11 00 AM

A meeting of the Public Accounts Committee was held on 26/05/2011 at

11 00 am in the Public Accounts Committee room in the Assembly Complex,

Porvorim, Goa, wherein the representatives of the Government Departments have

been examined in relation to the Audit paras reflected in the Comptroller and

Auditor General of India Reports 2007-2008.

2. Following were present:

CHAIRMAN

Shri Manohar Parrikar

MEMBER

1. Shri Francis D’Souza

2. Smt Victoria Fernandes


1. Shri N.B. Subhedar, Secretary Legislature

2. Shri Uday Bicholkar, Committee Officer

3. Smt. Celiza Fernandes, Under Secretary

AUDIT DEPARTMENT

1. Smt. Devika, Accountant General (Audit)

2. Shri S.K.S. Nampoodiry Sr. Audit Officer

3. The Committee examined Secretary Industries, Managing Director, Industrial

Development Corporation and Assistant Director of Industries and Commerce on

the para pertaining to Industrial Development Corporation.

4. Verbatim proceedings were kept.

5. The Committee adjourned its sitting at 12.45 noon.

24

APPENDIX - II


HELD ON 27/05/2011 AT 11 00 AM







CHAIRMAN


MEMBER


2. Smt Victoria Fernandes





AUDIT DEPARTMENT


2. Shri C. P. Ajitkumar, Sr. Audit Officer.

3. The Committee examined Secretary PWD, Chief Engineer, PWD and

Executive Engineer, PWD on the para pertaining to PWD.

4. The Committee examined Secretary, Revenue and the Under Secretary

Revenue on the paras pertaining to Revenue Department.

5. The Committee examined Secretary, Panchayat and Director, Panchayat

examined the para pertaining to Panchayati Raj.


25

7 The Committee adjourned its sitting at 12.45 noon.

APPENDIX - III


HELD ON 20/06/2011 AT 11 30 AM





Auditor General of India Reports 2006-2007 and 2007-2008.


CHAIRMAN


MEMBER


2. Shri Pandurang Dhavalikar

3. Shri Damodar Naik





AUDIT DEPARTMENT


2. Audit Officer

3. The Committee examined Secretary, Education and the Director, Education

on the para pertaining to Education Department.

4. The Committee examined Secretary Housing and Managing Director,

Housing on the para pertaining to Housing.

5. The Committee examined Secretary Town and Country Planning, Chief

Town Planner, Town and Country Planning examined the para pertaining to Town

and Country Planning Department.

26

6. The Committee examined Secretary PWD, Chief Engineer, PWD and

Executive Engineer PWD on the para pertaining to PWD.

7. The Committee examined Secretary, Revenue and the Land Survey Officer

on the paras pertaining to Revenue Department.

8. The Committee examined Secretary, Panchayat Director, Panchayat and Dy.

Director, Panchayat on the para pertaining to Panchayati Raj.

9. The Committee examined Secretary Industries, Managing Director,

Industrial Development Corporation, Director, Industries and Assistant Director of

Industries and Commerce on the para pertaining to Industrial Development

Corporation.


11. The Committee adjourned its sitting at 1.13 pm.

27

APPENDIX - IV


HELD ON 06/07/2011 AT 11 30 AM







CHAIRMAN


MEMBERS







3. The Committee examined Managing Director, Housing on the para

pertaining to Housing.

4. The Committee examined Secretary Industries and Managing Director,

Industrial Development Corporation on the para pertaining to Industrial

Development Corporation.



28

APPENDIX - V


HELD ON 07/07/2011 AT 11 30 AM







CHAIRMAN


MEMBERS







3. The Committee examined Education, Secretary, Director of Education and

Chairman of Goa Education Board on the para pertaining to Education.



29

APPENDIX - VI


HELD ON 11/07/2011 AT 11 30 AM







CHAIRMAN


MEMBERS







AUDIT DEPARTMENT


2. Shri C. P. Ajitkumar Sr. Audit Officer

3 The Committee examined Managing Director, Housing Deputy Conservator

Forest, Forest Department and Chief Town Planner on the para pertaining to

Housing.

5. The Committee examined Secretary, Town and Country Planning and Chief

Town Planner on the para pertaining to Town and Country Planning Department.

6. The Committee examined Director of Panchayats on the para pertaining to

Panchayati Raj.


30


APPENDIX - VII


HELD ON 12/07/2011 AT 12 00 NOON


12 00 noon in the Public Accounts Committee room in the Assembly Complex,





CHAIRMAN


MEMBERS


2. Smt. Victoria Fernandes





AUDIT DEPARTMENT


2. Shri S. K. S. Nampoodiry Sr. Audit Officer

3. The Committee examined Secretary, Industries, Director of Industries,

Managing Director, Industrial Development Corporation and Ex- Secretary

GSIA on the para pertaining to Industrial Development Corporation.



31

APPENDIX - VIII


HELD ON 4/08/2011 AT 11 30 NOON


11 30 noon in the Public Accounts Committee room in the Assembly Complex,





CHAIRMAN


MEMBERS



3. Shri. Deepak Dhavalikar

4. Shri. Damodar Naik


1. Shri Yuvraj Naik, Joint Secretary, Legislature


AUDIT DEPARTMENT


2. Shri C. P. Ajitkumar Sr. Audit Officer

3. The Committee examined Secretary, Mines, Director of Mines on the para

pertaining to Mines Department.

4. The Committee examined Secretary, Industries, Director of Industries,

Managing Director, Industrial Development Corporation on the para pertaining to

Industrial Development Corporation.



32

APPENDIX - IX


HELD ON 24/08/2011 AT 12 30 PM


12 30 pm in the Public Accounts Committee room in the Assembly Complex,



Auditor General of India Reports 2005-06, 2006-07, 2007-08 and 2009-2010.


CHAIRMAN


MEMBERS





1. Shri N. B. Subhedar, Secretary, Legislature



3. The Committee examined Secretary, Mines, Director of Mines on the para


4. The Committee also examined Principal Secretary, Panchayat, Director of

Panchayat, Managing Director, Block Development Officer, Pernem and Bardez on

the para pertaining to Panchayat.



33

APPENDIX - X


HELD ON 29/08/2011 AT 11 30 AM





Auditor General of India Reports 2005-06, 2006-07, 2007-08 and 2009-2010.


CHAIRMAN


MEMBERS








3. The Committee examined Secretary, Mines, Director of Mines and Sr. Dy.

TM of Marmugao Port Trust on the para pertaining to Mines Department.

4. The Committee examined Block Development Officer, Bardez on the para

pertaining to Panchayat.

5. The Committee examined Director of Health and Joint Secretary of

Administrative Reforms Department and Managing Director of Goa State

Infrastructure Development Corporation on the para pertaining to Health.



34

APPENDIX - XI


HELD ON 12/09/2011 & 13/09/2011 AT 11 30 AM

A meeting of the Public Accounts Committee was held on 12/09/2011 and

continued on 13/09/2011 at 11 30 am in the Public Accounts Committee room in the

Assembly Complex, Porvorim, Goa, wherein the representatives of the Government

Departments have been examined in relation to the Audit paras reflected in the

Comptroller and Auditor General of India Reports 2005-06, 2006-07, 2007-08 and

2009-2010.


CHAIRMAN


MEMBERS

1. Shri Agnel Fernandes



AUDIT DEPARTMENT

1. Ms. Devika, Accountant General

2. Shri. C. P. Ajitkumar, Sr. Audit Officer





3. The Committee examined the representatives of Mine owners on the para


4. The Committee examined Chief Secretary, Principal Secretary of Health,

Director of Health and Joint Secretary of Administrative Reforms

Department on the para pertaining to Health.

5. The Committee examined Director of Panchayat and Block Development

Officer, Bardez on the para pertaining to Panchayat.


35

7. The Committee adjourned its sitting at 12.20 pm on 13th

September, 2011.

APPENDIX XII


HELD ON 1st August, 2014 at 3.00 pm.

A meeting of the Public Accounts Committee was held on 1/08/2014 at 3.00

pm in the Public Accounts Committee room in the Assembly Complex, Porvorim,

Goa, to finalized the Reports for the years 2006-07, 2007-08, 2008-09 and 2009-10.


CHAIRMAN

Shri Digambar Kamat

MEMBERS

1. Shri Nilesh Cabral

2. Shri. Kiran Kandolkar

3. Shri Glenn Ticlo

4. Shri Lavoo Mamledar





3. A copy of the minutes of the meeting held on 19/11/2013 was circulated to the

members of the Committee.

4. The Chairman briefed the members about the Reports to be finalized during

the meeting.

5 Verbatim proceedings were kept.


36

APPENDIX XIII


HELD ON 11th

August, 2014 at 4.00 pm.


4.00 pm in the Public Accounts Committee room in the Assembly Complex,

Porvorim, Goa, to adopt of the draft 69th

, 70th

, 71st and 72

nd Reports of the Public

Accounts Committee on the para reflected in the Comptroller and Auditor General

of India for the years 2006-07, 2007-08, 2008-09 and 2009-10.


CHAIRMAN

Shri Digambar Kamat

MEMBERS

1. Shri Nilesh Cabral

2. Shri. Kiran Kandolkar

3. Shri Glenn Ticlo

4. Shri Lavoo Mamledar





3. A copy of the minutes of the meeting held on 1/08/2014 was circulated to the

members of the Committee.

4. The draft 69th

, 70th

, 71st and 72

nd Reports of the Public Accounts Committee

on the para reflected in the Comptroller and Auditor General of India for

the years 2006-07, 2007-08, 2008-09 and 2009-10 was adopted.

5 Verbatim proceedings were kept.


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