SARVA SHIKSHA ABHIYAN Uttar Pradesh

INTERNAL AUDIT

INTERNAL AUDIT

The term Audit has been derived from the

Greek word Audire that means to hear.

Representatives of the kings used to hear

about the expenditure of the royal money.

Audit Started for the first time in Egypt.

Kautilya has also written that the king should

appoint some loyal, shrewd and experienced

people to monitor the expenditure of the State.

Types of AuditTypes of Audit

Statutory AuditStatutory Audit

Internal AuditInternal Audit

Performance AuditPerformance Audit

Technical AuditTechnical Audit

Principles behind Internal Principles behind Internal Audit in Government SectorAudit in Government Sector

Strengthening of financial systemStrengthening of financial system Mid term appraisal of schemesMid term appraisal of schemes Imparting information about the latest GOs Imparting information about the latest GOs

to the concerned offices.to the concerned offices. Suggestions to improve and update the Suggestions to improve and update the

records prior to Statutory Audit so that records prior to Statutory Audit so that there are less objections in the report of there are less objections in the report of Statutory Audit.Statutory Audit.

Internal Auditor should work as friend Internal Auditor should work as friend philosopher and guide. philosopher and guide.

Internal Audit in Uttar Pradesh In 1960 in some of the departments Internal Audit

wings were established. FCs of the departments were directed to send quarterly reports regarding the financial discipline.

In 2000 a post of State Internal Auditor was created in the finance department. It was made mandatory for every department to have a unit of Internal Auditors.

In the beginning of every financial year a schedule of Audit Calendar is to be sent to Director, Internal Audit as well as to Finance Department.

The government has also constituted committees at different level.

At directorate level a sub committee has been constituted under the chairmanship of Director which has following members:

Finance Controller Member Additional Project Director

Member Senior Accounts Officer (Audit) Member

Secretary Apart from it an Internal Audit Committee

formed at Govt. level under Chairmanship of Principal Secretary/Secretary. This committee has full powers to settle the Audit paras/ observations made during the internal audit.

Financial Activities and their monitoring under

SSA is being done efficiently and according to

the manual on Financial management &

Procurement. To ensure proper maintenance

of financial records, Internal Audit Programme

is being implemented. Main points covered

under Internal Audit of SSA are as follows:-

1. Ensuring that the funds remitted from SPO to

DPO are being remitted/ transferred to lower

level like BRC, CRC and VEC etc. within due

time

2. Ensuring that the expenditure incurred by the DPO for different activities are within the provision of the particular head and according to the norms of manual on financial management & Procurement ( FM&P) .

3. Ensuring that the purchase procedure laid down in the manual is being followed by BRC, CRC, VECs etc. for each and every type of procurement.

4. Ensuring that the payment for salaries are being done according to rules / procedures Where there are cases of irregular payment under salaries, the excess payment has been recovered from the person concerned and credited the same in SSA account.

5. Ensuring that proper books of accounts as required under FM & P manual are being maintained at BRC, CRC, VECs etc. In those cases where it is not being maintained properly, efforts are being made to ensure that all these books of accounts are maintained.

6. Procedural mistakes which have come into the light during Internal Audit are informed to the concerned so that they can be rectified and not repeated again in future.

Following documents are provided to the Following documents are provided to the Internal Audit team.Internal Audit team.

1.1.Cash book ( SSA, NPEGEL & KGBV).Cash book ( SSA, NPEGEL & KGBV).

2.2.Ledger ( SSA, NPEGEL & KGBV).Ledger ( SSA, NPEGEL & KGBV).

3.3.Cheque issue register .Cheque issue register .

4.4.Bank reconciliation statement.Bank reconciliation statement.

5.5.Pass book / Bank statement.Pass book / Bank statement.

6.6.Utilization Certificate.Utilization Certificate.

7.7.Physical verification report..Physical verification report..

8.8.Dead stock register.Dead stock register.

9.9.Stationary / Consumable register.Stationary / Consumable register.

10.10.Salary registerSalary register

11.11. Payment Voucher.Payment Voucher.

12.12. T.A. Bill/Medical reimbursement register.T.A. Bill/Medical reimbursement register.

13.13. Service book/Personal file of Re-deployed Service book/Personal file of Re-deployed Employee.Employee.

14.14. Logbook of Vehicle/ Generator.Logbook of Vehicle/ Generator.

15.15. Grant register.Grant register.

16.16. Electricity/Telephone register.Electricity/Telephone register.

17.17. Tender /Quotation file.Tender /Quotation file.

18.18. Fund Transfer File.Fund Transfer File.

19.19. Proceedings of purchase committee.Proceedings of purchase committee.

20.20. Advance register.Advance register.

21.21. Audit objection register.Audit objection register.

22.22. Asset registerAsset register

Audit reports are presented in the following Audit reports are presented in the following format:format:

PART-1(A)PART-1(A) In this part following informations are In this part following informations are

provided;provided; Name of DDO, Designation & Period of work Name of DDO, Designation & Period of work

and his tenure.and his tenure. Period for which Internal Audit has been Period for which Internal Audit has been

conductedconducted Name & Designation of the members of Name & Designation of the members of

Internal Audit team.Internal Audit team. Period of internal audit.Period of internal audit.

PART-2(A)PART-2(A)

In this part cases of serious/important

matters related to irregularities,

objections, misuse of Govt. money,

excess payment etc. which normally have

to be included in yearly Audit Report are

shown.

PART-2(B)PART-2(B)

In this part General financial irregularities

found during internal audit are included.

PART-3 In this part other objections in short are

mentioned and the documents which have not been produced during the course of internal audit have been mentioned mandatorily.

After the completion of internal audit the audit report is sent to the concerned districts for compliance. After the compliance is received the report is put up before the sub committee.

Paras unsettled up to sub committee level are then referred to the committee at Government level.

S.No Total No of Units No of units Covered in

internal Audit

Period Cover

Units not

Covered

1. State Project Office- 1 - 2009-10

01

2. District Project Offices-71 37 2009-10

34

3. BRCs- 880 217 2009-10

663

4. URCs- 09 09 2009-10

NIL

5. NPRC/CRCs- 8249 97 2009-10

8152

6. VECs- 92311 3092 2009.10

89219

7. DIETs- 71 38 2009-10

33

8. KGBV- 454 120 2009-10

334

Total 102046 3610 2009-10

98436

Status of coverage of internal audit work during the year 2009-10

Remarks- Recovery action to be taken on the reports of internal audits covered during 2009-10 as per following -

S.No Particulars No of Paras Amount to

be

recovered

1. Excess payment 109 3812907

2. Excess payment against

allotment

04 7893

3. Losses due to Mathematical

error

04 256820

4. Misappropriation 03 149583

5. Cases of process violation 421 72589025

6. others 62 1577468

Total 603 78393696

Recoveries and penalties imposed

on the basis of internal audit are

more than those by the statutory

audit.