audit

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).


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.


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.


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.


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


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


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


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


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

audit

Documents

audit of accounts

audit notes

civil audit account

volume of work local

control of union

union territories

money value rs

loss accounts