N P IU Iwftw it mf TW#tl"fCMltM fM xaaww'ttue'wlJf j"4M"da&0P W*di (AUNITOF MINISTRY OF HUMAN RESOURCE DEVELOPMENT, GOVERNMENTOF INDIA FOR IMPLEMENTATION OF WORLD BANK ASSISTED PROJECTS IN TECHNICAL EDUCATION) By Hand No. NPIU/TEQIP-II/FIN/01 5th Jan., 2016 To Ms. Tara Beteille Task Team Leader The World Bank 70, Lodi Estate New Delhi-110 003 Sub.: Submission of Consolidated Audit Report of TEQIP-II for the Financial Year 2015-16 Sir, Kindly find enclosed the Consolidated Audit Report of TEQIP-1l for the Financial Year 2015- 16 for your information and necessary action please. ours ithfully, (N.S. Agnihotri) Consultant (Finance) End.: As above Copy to : 1. Director (lIT) Ministry of Human Resource Development Department of Higher Education Technical Section VII Shastri Bhawan, New Delhi 2. Audit Officer (AMG-IV) Office of the Director General of Audit (Central Expenditure) Indraprastha Estate, New Dehi-11 002 (N.S. Agnihotri) Consultant (Finance) gft Vr5M, -A# W, 187, *WT 16-1, V%TIq / Phone : 0091-120-2513921, 2513936, 2513946 AT,M-201301 ('ZoVo ) / Fax: 0091-120-2512485, 2513926 Ed. CIL House, 4th Floor, 18-A, Sector 16-A, / Web site : www.npiu.nic.in NOIDA-201301 (V.P.) t-*R / E-mail : npiuwb@hotmail.com ÿþCONTENTS OF THE CONSOLIDATION REPORT OF TECHNICAL EDUCATION QUALITY IMPROVEMENT PROGRAMME (TEQIP) PHASE-II FOR FINANCIAL YEAR 2015-16 S. No. CONTENT 1 Consolidation Report 2 Annexure A to Consolidation Report 3 Annexure B to Consolidation Report 4 Financial Management Report (FMR) 5 Dates of Audit Reports of CFIs and States 6 Key Observation of Auditors 7 Consolidated Utilisation Certificate 8 Annexure 1 to Consolidated Utilization Certificate 9 Annexure 2 to Consolidated Utilization Certificate 10 Consolidated Balance Sheet 11 Accounting Policies and Notes to Accounts 12 Consolidated Expenditure Statement of Activities Undertaken by IITs and IIMs G.R. Garg & Co. Chartered Accountants 777, MRM Chambers, D.B. Gupta Road Karol Bagh, New Delhi-110005 +91 11 23512307, 23617942 info@grgarg.co.in CONSOLIDATION - REPORT We have checked, within the scope of our assignment, the consolidation, for the year ended 31st March 2016, of the financial statements of the following 26 Centrally Funded Institutions (CFIs), 23 States and National Project Implementation Unit (NPIU), implementing Technical Education Quality Improvement Program Phase-II Project under World Bank Credit No. 4685-OIN, which includes the Balance Sheet as at 31st March, 2016, Statement of Income and Expenditure, Statement of Receipt and Payment, Statement of Source and Application of Funds and Reconciliation of Claims to Total Application of Funds for the year ended 31st March, 2016. These statements have been audited and reported upon by other auditors, appointed for the purpose. For the purpose of the consolidation, we have reviewed and relied upon the reports of the said auditors. S.No. CFI's STATES 1 Assam University, Silchar Andhra Pradesh 2 IIIEST, Shibpur & its COE Bihar 3 ISM, Dhanbad Chhattisgarh 4 MANIT, Bhopal Gujrat 5 MNIT, Jaipur Haryana 6 MNNIT, Allahabad Himachal Pradesh 7 NERIST, Itanagar Jharkhand 8 NIT, Agartala Karnataka 9 NIT, Calicut Kerala 10 NIT, Durgapur & its COE Madhya Pradesh 11 NIT, Hamirpur Maharashtra 12 NIT, Jalandhar NCT Delhi 13 NIT, Jamshedpur Odisha 14 NIT, Kurukshetra Punjab 15 NIT, Patna Rajasthan Page 1 of 6 NC D~tL Ar,~ G.R. Garg & Co. Chartered Accountants 16 NIT, Raipur Tamil Nadu 17 NIT, Rourkela Telangana 18 NIT, Silchar Tripura 19 NIT, Trichy UT-Chandigarh 20 NIT, Warangal & its COE UT-Puduchery 21 NITK, Surathkal Uttar Pradesh 22 NITTR, Chandigarh Uttarakhand 23 SLIET, Sangrur West Bengal 24 SVNIT, Surat & its COE 25 VNIT, Nagpur 26 Zakir Hussain College, Aligarh Except as otherwise stated hereunder, the financial statements of the Constituents above- mentioned, have been stated as drawn up as per the requirements of the Financial Management Manual of Technical Education Quality Improvement Programme Phase-II issued in December 2009 and its revised edition of November 2014 by Department of Higher Education, Ministry of Human Resource and Development, Government of India. Not required to carry out an audit of the individual financial statements, we do not express an audit opinion on the statements as consolidated; and observe as under: 1. Information in accordance with the individual financial statements audited by other Auditors has been considered for preparation of the Consolidated financial statements for the year 2015-16, comprising the Balance Sheet and schedules annexed thereto, Income & Expenditure Account, Receipts & Payments Account, Statement of Source and Application of Funds and Reconciliation of Claims to Total Application of Funds for the year ended on 31st March, 2016. 2. Information in accordance with the individual financial statements audited by other Auditors; and the reports and key observations issued by them have been considered for preparation of the under-mentioned Consolidated Reports on Annual Statutory Audit defined in Annex-X of the Financial Management Manual:- a. Expenditure Incurred by Implementing Entities (States/CFIs/NPIU), b. Date of Audit Report, and c. Key Observations of Auditor Page 2 of 6 Pj AG7 G.R. Garg & Co. Chartered Accountants 3. Expenditure disallowed of T 475.68*lakhs (including ineligible expenditure, outstanding bills and expenditure not claimed) has been reported in the Statement of Reconciliation of Claims to Total Application of Funds of following implementing units: S. No. STATES CFI's National Project Implementation Unit Name of State Amount Name of Amount NPIU Amount Disallowed CFI Disallowed Disallowed 1. Andhra 28.45 NIT, 34.06 NPIU 42.38 Pradesh Durgapur 2. Himachal 24.00 NIT, (1.99) Pradesh Hamirpur* 3. Jharkhand 0.14 MNIT, 9.24 Jaipur 4. Kerala 23.11 VNIT, 54.79 Nagpur 5. Punjab 47.06 6. Rajasthan 1.46 7. UT- 155.51 Chandigarh 8. NCT- Delhi 12.55 9. Telangana 45.23 10. Chattisgarh* (0.31) Total 337.20 96.10 42.38 *Total Expenditure disallowed includes a negative figure amounting to T (1.99) lakhs provided by NIT, Hamirpur and Total Expenditure not claimed amounting to T (0.31) lakhs provided by Chattisgarh. Page 3 of 6 G.R. Garg & Co. Chartered Accountants 4. Some Institutions / States have not provided figures for previous year in Receipt and Payment Account. Accordingly, figures of previous year have not been given in Consolidated Receipt and Payment Account prepared. 5. Amount of expenditure submitted in FMR by the respective State/Institutions/CFI have not been stated in audit reports of some of the State/Institutions/CFI. The same have been supplied and certified by management of NPIU for consolidation purposes. Further, even in cases where the information was available in the audit report, we observed differences in the FMR expenditure as stated by the auditor and as certified by management of NPIU. (Refer to Consolidated Report on Annual Statutory Audit relating to expenditure incurred by implementing entities for details) 6. Qualification of individual Auditors of States/CFI/NPIU are given in Annexure A and Emphasis of Matter, observations of auditors that are not qualification, mentioned in Audit report of individual auditors are given along with Key Observation Points of auditors. 7. Two centrally funded institutions have changed their accounting policies in Financial year 2015-16 namely, Zakir Husain College of Engineering & Technology which followed Capital approach for recognition of Grant till year 2014-15, has transferred total Grant received during the year in'Income & Expenditure Account' resulted in increase in excess of Income over Expenditure by f 250.00 Lakhs; and NIT, Calicut which charged depreciation on fixed assets acquired from the TEQIP Fund in the financial year 2014-15. However, depreciation charged in financial year 2014-15 amounting to T 2.06 Lakhs has been reversed and absorbed in the financial statement for the year 2015-16. This change in accounting policy has resulted in increase in income by Z 2.06 Lakhs. (Refer point no.17 of CFI for details). 8. Three States namely Gujarat, Uttar Pradesh and Tripura have change their accounting policies in Financial Year 2015-16. This has resulted in net increase in Income over Expenditure in State of Gujarat by T 3560.16 Lakhs, in State of Uttar Pradesh by T 1538.51 Lakhs and in State of Tripura by Z 299.85 Lakhs (Refer Note No. 21 of States for detail). Page 4 of 6 G.R. Garg & Co. Chartered Accountants 9. Centre of Excellence (COE), established by NIT Durgapur, has charged depreciation amounting to T 8.37 Lakhs on the fixed assets. 10. Twelve constituents have treated grant as capital in nature and taken it directly to Capital Grant/Capital Reserve in Balance Sheet amounting to 11,370.24 Lakhs (refer Note no. 7 of CFI and 7 of States in Notes to Accounts). Further, five constituents have adopted 'Income Approaclf for accounting of government grant and have transferred an amount of T 2,348.68 lakhs to Income & Expenditure Account corresponding with the amount of expenses incurred by the respective constituents during the year out of total grant received for T 1,918.50 lakhs for the year (refer Note No. 8 of CFI and 8 of States in Notes to Accounts). One constituent has transferred only Z 25.00 Lakhs out of T 300.00 Lakhs of Grant received to 'Income & Expenditure' account and rest has been capitalized in the Balance Sheet, thereby neither following the Capital Approach nor the Income Approach in totality for treatment of Government Grants. (refer Note No. 9 of CFI in Notes to Accounts). Rest of the other Implementing Entities have treated grant as revenue in nature and transferred the entire amount of grant received during the year to Income and Expenditure Account. 11. Thirty implementing entities have capitalized Fixed Assets purchased during the year in Balance Sheet amounting to Z 19,908.26 lakhs and not charged to Income & Expenditure Account as recommended in Financial Management Manual, whereas the other Implementing Entities have charged the same to Income & Expenditure Account. (Refer note no. 10 of CFIs and 11 of States for details). 12. State of Gujarat had revised its Audited Financial Statements for the year 2014-15 after the issue of Consolidation Report for the year ended 31st March, 2015. In the Current year, the management has stated revised figures for the year 2014-15 having some typographical error. Accordingly, revised Audited figures for the financial year 2014-15 have been incorporated on the basis of revised financial statements provided for the said year. To this extent, the previous year figures do not match with the Consolidation report for the year ended 31st March, 2015. Page 5 of 6 G.R. Garg & Co. Chartered Accountants 13. In the course of checking the consolidation, we have also come across certain matters which are given in Annexure B. Based on the above and the consolidation procedures followed, we confirm that in the preparation of the attached consolidated statements, information has been duly incorporated as aforesaid and we have not come across anything that causes us to believe that these statements contain any material misstatements. For G. R. GARG & COMPANY, Chartered Accountants FFN- 000214N Place: New Delhi CA. URAV GAR Date: January 2, 2017 Partner) M. No. - 097327 Page 6 of 6 G.R. Garg & Co. Chartered Accountants 777, MRM Chambers, D.B. Gupta Road Karol Bagh, New Delhi - 110005 +91 11 23512307, 23617942 info@grgarg.co.in Annexure A to Consolidation Report Oualification of individual Auditors on Financial Statements for the year ended on 31st March, 2016 1. VNIT Nagpur a. We observe an instance of advance remaining unsettled for period of more than 12 months. The details are as under:- Sr. No. Name Date on which Amount Advance given. 1. (Dr. R. M. Patrikar) 09/03/2013 7,50,000.00 Following advance remain unsettled for a long period: Particulars Loans & Advances T Date since outstanding V. N. Mahalle 30,000.00 23/10/2015 Sunil Bhatt 50,000.00 30/04/2015 Grand Total 80,000.00 b. It is also observed that EPF compliances in respect of contractual employees are being undertaken by the Institute. c. It is observed that Fixed Assets register is being maintained but physical verification has not been carried out. It is suggested that physical verification of assets at regular intervals be carried out. d. Some amounts of advances have been paid in cash during the year. The details are as under:- Cash payments (Advances) Exceeding ? 20,000.00 Date Particulars Amount 23.04.2015 Jatin Bhatt (Rec. Adv.) 25,000.00 Anjali Junghare (Rec. Adv.) 35,000.00 D. R. Peshwe (Rec. Adv.) 50,000.00 23.04.2015 Anjali Junghare (Rec. Adv.) 25,000.00 A B Andhare (Rec. Adv.) 75,000.00 23.04.2015 OR Jaiswal(Rec. Adv.) 30,000.00 Page 1 of 16 / G.R. Garg & Co. Chartered Accountants 30.04.2015 Sunil Bhatt (Rec. Adv.) 50,000.00 Ashwin Kothari (Rec. Adv. COE) 35,000.00 08.05.2015 Ashwin Kothari (Rec. Adv. COE) 25,000.00 Ashwin Kothari (Rec. Adv. COE) 70,000.00 15.05.2015 H. M. Suryawansh (Rec. Adv.) 60,000.00 29.05.2015 R. K. Ingle (Rec. Adv.) 50,000.00 29.05.2015 K D Kulat (Rec. Adv. COE) 25,000.00 K D Kulat (Rec. Adv. COE) 35,000.00 03.06.2015 A B Andhare (Rec. Adv.) 150,000.00 Rashmi Uddanwadikar (Rec. Adv.) 150,000.00 17.07.2015 K N Dakhale (Rec. Adv.) 30,000.00 10.08.2015 R K Ingle (Rec. Adv.) 300,000.00 24.08.2015 G P Singh (Rec. Adv.) 100,000.00 23.10.2015 V B Borghatte (Rec. Adv.) 50,000.00 V N Mahalle (Rec. Adv.) 30,000.00 22.12.2015 G P Singh (Rec. Adv.) 150,000.00 S R Sarthe (Rec. Adv.) 100,000.00 31.12.2015 H M Suryawanshi (Rec. Adv.) 60,000.00 18.01.2016 V R Kalamkar (Rec. Adv.) 50,000.00 D R Peshwe (Rec. Adv.) 75,000.00 19.01.2016 D R Peshwe (Rec. Adv.) 250,000.00 10.02.2016 Sangeeta Gadwe (Rec. Adv.) 64,000.00 Swapnil P Wanjari (Rec. Adv.) 111,500.00 M S Ballal (Rec. Adv.) 150,000.00 19.02.2016 A B Andhare (Rec. Adv.) 83,000.00 Saugata Sinha (Rec. Adv.) 65,000.00 Atul R Ballal (Rec. Adv.) 25,000.00 29.02.2016 Jatin Bhtt (Rec. Adv.) 120,000.00 I L Muthreja (Rec. Adv.) 128,000.00 M M Mahajan (Rec. Adv.) 80,000.00 08.03.2016 Anjali Junghare (Rec. Adv.) 25,000.00 V B Borghate (Rec. Adv.) 110,000.00 28.03.2016 Hemant P Jawale (Rec. Adv.) 100,000.00 Page 2 of 16 é~ G.R. Garg & Co. Chartered Accountants Sameer Deshkar (Rec. Adv.) 25,000.00 P M Padole (Rec. Adv.) 200,000.00 P M Padole (Rec. Adv.) 376,000.00 31.03.2016 Anjali Junghare (Rec. Adv.) 55,000.00 Ravindra V Taiwade (Rec. Adv.) 55,000.00 Rajesh Khatirkar (Rec. Adv.) 50,000.00 e. Following advances are settled during the year which do not match with the advances given: Particulars Date of Settlement Advances paid Advances settled K D Kulat 29/05/2015 7,000.00 M V Aware 08/05/2015 12,000.00 15,000.00 We are informed that the matter has been resolved during the current year 2016-17. f. Scholarship / Stipend / Assistance are being paid to the students under the projects. The confirmation of receipts is maintained by the Institute (VNIT). g. Exercise for reconciling the expenditure heads, with that of individual records maintained by the concerned departments is taken up during the current year which resulted in reclassifying expenditures amongst various heads. 2. NIT TRICHY Included in the expenditure in Income & Expenditure account (Annexure- XX) towards stipend, seminars & workshop expenses Z 137.48 Lakhs is an application out of the grant received from NPIU and it should be classified as application of grant and reduced from capital grant. 3. NIT, Silchar In addition to the Audit Report on the project financial statements, our observations are as follows:- a. The financial management records system and controls that were examined during the course of review were found satisfactory and as per guideline issued by the implementing authority. b. It was observed from the statement of account that an amount of Z 15.11 Lakhs paid as Advance for conducting various Workshop/ Seminar etc. In our opinion extending of advance for conducting such type of activities shall be minimized as far as practicable. c. Physical stock Verification is being conducted by the institute which has been verified. Page 3 of 16 G.R. Garg & Co. Chartered Accountants 4. NIT CALICUT Since Separate set of books of accounts are not maintained for the project, the figures in the financial statements of TEQIP-II, NITC cannot be easily deduced (books of accounts are maintained for NITC, as a whole). Our audit opinion on the financial statements for the year ended 2015 was modified accordingly. Our opinion on the current period's financial statement is also modified because of the possible effect of this matter. 5. STATE OF GUJARAT 1. Education Dept., Govt of Gujarat vides Resolution No. TEQ-102010-2090(3)-S dtd. 28.09.2011 has given direction to frame four funds namely, Corpus Fund, Staff Development Fund, Maintenance Fund and Depreciation Fund. As per the Resolution, the said funds are required to be contributed by the Project Institutions from the specified sources subject to at least 0.5% of annual recurring expenditure in each fund. However, the Project Institution(s) has not made compliance to the said resolution in cases of Project Institution- GEC Patan, BVM VVNagar, In absence of adequate details, we are unable to comment thereupon and quantity its impact on the Financial Statements. 2. In case of Project Institution GEC Gandhi Nagar, A) State bank of India a/c No 32886855701 is subject to reconciliation and there is variance of Z 6,745 in the bank reconciliation. B) There is different of Z 2,635 outstanding balance of advance to professors as per Advance register maintained by the project institute and as per books of account of the project institute. The current assets are understated by the said amount. C) Project Institution has not reconciled expenses booked in the books of accounts with the Financial Monthly report Expenses as per Financial Monthly report exceeds the expenses claimed in books by 7 4.03 Lakhs. Thus the income over expenditure is overstated by said amount. D) Project Institution have not complied Provision of Income tax Act, 1961 regarding tax deducted at source under section 194C for the payment of T 2.67 Lakhs. In absence of adequate details, we are unable to comment thereupon and quantity its impact on the financial statements. 3. In case of Project Institution BVM VVNAGAR, as per the direction of SPFU, all the Institutes have to keep surplus funds in the form of fixed deposits with GSFS (Gujarat State Financial Service). However, the Institute has not deposited the transitional surplus fund with GSFS and has kept fund in the form of fixed deposit with Punjab National bank. 4. In case of project institution GEC Bhavnagar, Expense booked in FMR exceeds the expenditure booked in books of account by Z 20.57 Lakhs (Excluding the Expenditure booked on the basis of Page 4 of 16 G.R. Garg & Co. Chartered Accountants Utilization certificates of IIT-G,KCG and IPR-G). Hence Income over Expenditure is overstated by the said amount. 5. State Project Facilitation Unit has not complied with the Provisions of tax Deducted at Source (TDS) under Income- tax Act, 1961 on the total payment of T 3.78 Lakhs. In absence of adequate details, we are unable to comment thereupon and quantity its impact on the financial statements. 6. In case of Project Institution BVM, Project Institute have not complied with Provision Income Tax Act, 1961 regarding tax deducted at source under section 194C for payment of ? 2.82 Lakhs. In absence of adequate details, we are unable to comment thereupon and quantify its impact on the financial statements. 6. STATE OF WEST BENGAL Certain expenses amounting to ? 11.42 Lakhs (FY-2013-14 T 9.23 Lakhs and financial years 2012-13 T 2.20 Lakhs) paid to six number of research assistants of West Bengal University of Technology (WBUT) was not permissible. This has resulted in a difference of T 11.42 Lakhs with the unspent balance as per Financial statement and unspent balance as per utilization certificate. 7. STATE OF MAHARASHTRA a. Accounting Standard - 1 (AS-1) - Disclosure of Accounting Policies: The SPFU and Project Institutions are following the cash method of accounting, which is prescribed by NPIU. Thus, the institutions do not follow "Accrual" system of accounting. This is not in conformity with Accounting Standard 1, "Disclosure of Accounting Policies" issued by the Council of the Institute of Chartered Accountants of India which requires that books of account should be maintained on accrual basis. b. Accounting Standard - 6 (AS-6) - Depreciation Accounting: Para 20 to the Accounting Standard 6 (AS-6) states that: "The depreciable amount of a depreciable asset should be allocated on the systematic basis to each accounting period during the useful life of the asset" In the light of the above para 20, appropriate amount of depreciation was required to be charged on the fixed assets acquired under the TEQIP Grant. However, depreciation has not been charge on these assets, which is contrary to Accounting Standard - 6 "Depreciation Accounting". Page 5 of 16 G.R. Garg & Co. Chartered Accountants 8. UTTAR PRADESH S. No Name of the Institutions Audit Observation & Ineligible Expenditure 1. Hart court Butler i) During the course of our Audit, we observed that advance Technological given to staff is not settled during the year and further Institute, Kanpur advance is also given. It is suggested that the prior advance should be settled before next advance is granted. 2. Institute of Engineering and * It was observed that Cheque No. 98271 for Rupees 9000/- & Technology, M.J.P. Cheque No:- 82886/- for Rupees 1750/- reflecting in the bank Rohilkhand reconciliation statement from 2014-15, hence it is recommend University, Bareilly to adjust the same as it has become stale. * Cases where advance is not adjusted for more than 6 Months few of them are illustrated below;- Date Cheque No. Party Name Amount in ?. 13/04/2015 094949 Dr.Vinay 18500 Rishwal 14/04/2015 094951 Dr.Vinay 15000 Rishwal 12/06/2015 096461 M.S.Karuna 15000 05/11/2015 098287 M.S.Karuna 15000 * Payment made vide Cheque no. 97397-99 Taxi fare is claimed of Z 23280 but as per the guidelines where the train facility is available then the fare is limited to train fare. 3. Institute of Engineering & * We have observed that various advances have been given to Technology Lucknow staff since 2014 but they were pending adjustment till 31.03.2016 * FMR of the second half year was not made available to us and there was delay in its submission to SPFU also. * We have observed that project institutions are accepting TA Bills from some Experts/ Members without adequate supporting like bills in relation to the travel made. * Book of account including ledgers, vouchers were not kept properly it is suggested to arrange these in chronological order for proper verification. ' iPage 6 of 16 G.R. Garg & Co. Chartered Accountants 4. Bundelkhand Institute of * We have observed that project institutions are accepting TA Bills Engineering & technology, from some Experts/ Members without adequate supporting like Jhansi bills in relation to the travel made. * Difference in FMR and Ledger were observed, highlighted below:- Particulars Ledger FMR Differences Balance Balance (Ledger Bal- FMR Bal) R & D 0.40 0.125 0.275 Incremental operating 5.39 6.845 (1.455) coast Institutional reform 0.66 22.36 (22.076) Enhanced Interaction 0.52 0.032 0.488 with Industry Institutional 0.0809 0.232 (0.15) Management Capacity enhancement Teacher Research 21.18 10.823 10.357 5. Kamla Nehru Institute of * There were some cases where Advances are not adjusted for Technology, Sultanpur more than 6 months-. * Advance given to Anand Kumar Mishra of Z 6500 on 21/04/2015 and adjusted 31/03/2016.- * Advances given to Pradeep Kumar of Z 130000 on 21/04/2015 and not adjusted till year end, it is suggested that advance given during the year should be adjusted in the same year: Difference in FMR and Ledger is enumerated below;- (Amount in 7 Lakhs) Particulars FMR Ledger Differences Balance Balance (Ledger- FMR) R & D 12.636 10.50 2.136 FSD 20.861 17.31 3.670 III 6.477 2.735 2.053 Page 7 of 16 G.R. Garg & Co. Chartered Accountants IOC 7.676 4.233 0.149 Procurement 420.998 428.08 3.877 Student 0.289 - 0.289 Support Institutional 8.00 0.971 7.0289 Reform TRS 14.351 30.10 3.232 Capacity - 0.621 0.163 Development 6. Madan Mohan Malviya These are some cases where Cheques were sent for collection University of Technology but not collected yet, which are reflected in BRS from precious Gorakhpur years it should be reversed due to the item of stale, few of them are illustrated below:- Date on which Cheque sent for Cheque Amount collection 06.08.2013 489091 1,50,000 06.08.2013 800649 1,000 25.09.2013 220926 1,000 25.09.2014 037675 1,000 18.08.2015 290907 42,808 * These are the some heads where we observed difference in FMR and Ledger- Particulars FMR Ledger Difference R&D 5.63 4.27 1.36 Student Support 1.09 1.99 (0.90) Procurement 92.94 91.56 1.38 FSD 12.25 20.45 (8.20) IOC 7.30 22.01 (14.71) Institutional Reform 42.19 16.93 25.26 Enhanced Interaction with 0.26 0.06 0.2 Industry Total 161.66 157.27 4.39 Page 8 of 16 G.R. Garg & Co. Chartered Accountants 9. STATE OF ANDHRA PRADESH I. That audit disallowance of expenditure of previous financial years were not reduced from FMR claim statement by the participating Institutions. II. Difference between expenditure as per Books of accounts and FMRs. The reason for difference were not explained nor any documentary evidence available for such difference. The details are given under RECONCILATION AS PER BOOKS OF ACCOUNTS AND FMR FOR THE FY 2015-16 (Z in Lakhs) S. No NAME OF THE INSTITUTIONS Expenditure as per Books FMR Diff A SC1.1 Participating Institution 1 Aditya Institute of Technology & Management, Tekkali, Srikakulam Dist. 134.01 134.01 - 2 JNTUA college of Engineering, Pulivendula, 3 Kadapa Dist. 244.06 243.69 0.37 Madanapalle Institute of Technology & science, 4 Madanapalle, Chittoor Dist. 74.69 74.15 0.54 Sree Vidyanikethan Engineering College, 5 A.Rangampet, Chittoor Dist 111.38 111.38 - Shri Vishnu Engineerng College for Women, Bhimavaram, W.G.Dist 124.65 124.65 - B SC1.2 Participating Institution 1 A.U.College of Engg., Visakhapatnam 255.79 249.11 6.68 2 GITAM Institute of Technology, Visakhapatnam 19.84 19.84 - 3 G.V.P.College of Engineering, Visakhapatnam 114.89 110.43 4.46 4 JNTU College of Engg., Kakinada 257.70 257.70 - 5 S.V.University College of Engg., Tirupati 211.93 211.93 - 6 V.R. Siddhartha Engg. College, Vijayawada 26.26 26.26 - C COE Institutions 86.96 86.15 0.81 1 A.U College of Engg. Visakhapatnam ' . Page 9 of 16 G.R. Garg & Co. Chartered Accountants 2 S.V.University College of engg. Tirupati 122.60 122.60 - D State Project Facilitation Unit, Andhra Pradesh 78.79 75.43 3.36 TOTAL 1,863.55 1,847.33 16.22 III. Attention is drawn to following Para i) We have conducted audit of each of the 11 Participating Institutions, 2 COEs and SPFU- Andhra Pradesh and have issued audit report for each individual Participating Institutions and SPFU- Andhra Pradesh. IV. The following institutions appointed V. Audit noted following expenses incurred in the Financial Year 2015-16 are ineligible to claim. Ineligible Expenditure 1. Ineligible expenditure for the financial year 2015-16 Audit noted some of the expenditure incurred by the Participating Institutions not eligible for claim under TEQIP Phase-II due to * Non availability of supporting documents * Non adherence to prescribed guidelines Institution wise ineligible expenditure for the financial year is given in Key Observation Points. 10. STATE OF RAJASTHAN 1. Accounting Standard -1 (AS-1) - Disclosure of Accounting Policies: The SPFU and project institutions are following the cash method of accounting, which is prescribed by NPIU. Thus the Project do not follow "Accrual" system of accounting. This is not in conformity with Accounting Standard-1, "Disclosure of Accounting Policies" issued by the Council of the Institute of Chartered Accountants of India which requires that books of account should be maintained on accrual basis. 2. Accounting Standard - 10(AS-10) - Accounting for Fixed Assets: The SPFU and Project institutions are treating the expenditure incurred on fixed assets as part of revenue expenditure and recording the same in "Revenue and Expenditure Account" along with other operational expenditures. Thus the Also at: Allahabad * Kolkata * Mumbai *Bangalore projects are not capitalizing the cost of fixed assets in balance Sheet. This is not in conformity with the accounting standards -10,"Accouting for Fixed Assets" issued by the Council of the Institute of Page 10 of 16 G.R. Garg & Co. Chartered Accountants 2 S.V.University College of engg. Tirupati 122.60 122.60 - D State Project Facilitation Unit, Andhra Pradesh 78.79 75.43 3.36 TOTAL 1,863.55 1,847.33 16.22 III. Attention is drawn to following Para i) We have conducted audit of each of the 11 Participating Institutions, 2 COEs and SPFU- Andhra Pradesh and have issued audit report for each individual Participating Institutions and SPFU- Andhra Pradesh. IV. The following institutions appointed V. Audit noted following expenses incurred in the Financial Year 2015-16 are ineligible to claim. Ineligible Expenditure 1. Ineligible expenditure for the financial year 2015-16 Audit noted some of the expenditure incurred by the Participating Institutions not eligible for claim under TEQIP Phase-II due to * Non availability of supporting documents * Non adherence to prescribed guidelines Institution wise ineligible expenditure for the financial year is given in Key Observation Points. 10. STATE OF RAJASTHAN 1. Accounting Standard - 1 (AS-1) - Disclosure of Accounting Policies: The SPFU and project institutions are following the cash method of accounting, which is prescribed by NPIU. Thus the Project do not follow "Accrual" system of accounting. This is not in conformity with Accounting Standard-1, "Disclosure of Accounting Policies" issued by the Council of the Institute of Chartered Accountants of India which requires that books of account should be maintained on accrual basis. 2. Accounting Standard - 10(AS-10) - Accounting for Fixed Assets: The SPFU and Project institutions are treating the expenditure incurred on fixed assets as part of revenue expenditure and recording the same in "Revenue and Expenditure Account" along with other operational expenditures. Thus the Also at: Allahabad * Kolkata * Mumbai *Bangalore projects are not capitalizing the cost of fixed assets in balance Sheet. This is not in conformity with the accounting standards -10,"Accouting for Fixed Assets" issued by the Council of the Institute of Page 10 of 16 G.R. Garg & Co. Chartered Accountants Chartered Accountants of India which requires that Fixed Assets Should be capitalized in the financial Statements. 3. Accounting Standard - 6(AS-6) - Depreciation accounting: Para 20 to the Accounting Standard 6 (AS-6) states that "The depreciable amount of a depreciable asset should be allocated on the systematic basis to each accounting period during the useful life of the asset" In the light of the above Para 20, appropriate amount of depreciation was required to be charge on the fixed assets acquired under the TEQIP grant. However, depreciation has not been charged on these assets, which is contrary to Accounting Standard - 6 "Depreciation Accounting". 4. Accounting Standard 12 (AS-12) - Accounting for Government Grants: Para 15 to the Accounting Standard 12 (AS-12) states that:"Government grants related to revenue should be recognized on a systematic basis in the Income & Expenditure statement over the periods necessary to match them with the related costs which they are intended to compensate. Such grants should either be shown separately under 'other income' or deducted in reporting the related expense" Attention is invited to Para No.5 & 8 of attached notes on accounts, forming part of the statements of sources and application of funds regarding, unreconciled amount shown under Suspense Account. Financial impact of the same is unascertained due to non availability of required information's. The SPFU and project institutions, in accordance with the guidelines prescribed by NPIU, are treating grants received as operational income and are recognizing full amount of grant in the Income and Expenditure Account on accrual basis. This is contrary to treatment prescribed under Accounting Standard - 12: "Accounting for Government Grants" Attention is invited to Para No.5 & 8 of attached notes on accounts, forming part of the statements of sources and application of funds regarding, un-reconciled amount shown under Suspense Account. Financial impact of the same is unascertained due to non availability of required information's. The SPFU and project institutions, in accordance with the guidelines prescribed by NPIU, are treating grants received as operational income and are recognizing full amount of grant in the Income and Expenditure Account on accrual basis. This is contrary to treatment prescribed under Accounting Standard - 12: "Accounting for Government Grants" Page 11 of 16 G.R. Garg & Co. Chartered Accountants 11. STATE OF TRIPURA: As per point 8 of Notes to Accounts of States, they follow income approach for Grant and treat the amount of expenditure as grant utilized. 12. STATE OF CHHATISGARH: It is reported that fixed deposit forming part of Current Assets, Loans & Advances of ? 894.18 Lakhs (Part B 3 (c ), (d)) is subject to FDR balance confirmation from bank & also FDR are free from any charges. 13. STATE OF TELANGANA: 1. That audit disallowance of expenditure of previous financial years were not reduced from FMR claim statement by the Participating Institutions 2. Difference between in expenditure as per Books of accounts and FMRs. The reason for difference were explained nor any documentary evidence available for such difference. The details are given under:- S. NO. NAME OF THE INSTITUTIONS Expenditure as per (T in lakhs) Books FMR Diff A SC 1.1 Participating Institution 1 Anurag Engineering College 89.79 89.79 - 2 Aurora's Scientific Technological & Research Academy 12.09 12.39 0.30 3 Chaitanya Bharathi Institute of Technology 77.74 77.74 - 4 Gokaraju Rangaraju Inst of Engg & Tech 109.24 108.64 -0.60 5 Malla Reddy Engg College 118.65 118.65 - 6 Nizam Institute of Engg & Tech 27.30 30.54 3.24 7 Vasavi College of Engineering 111.85 111.85 - 8 VNR Vignana Jyothi Institute of Engg & Tech 66.14 66.14 9 University College of Eng, Kakatiya University 81.65 81.65 B SC 1.2 Participating Institution 1 JNTUH College of Engineering, Kukatpally, 181.07 181.07 - 2 JNTU Institute of Science & Technology 479.15 489.65 10.51 3 University College of Engg., Osmania University 148.84 156.72 7.88 4 University College of Technology, Osmania University 88.37 88.82 0.45 Page 12 of 16 '6 D A G.R. Garg & Co. Chartered Accountants 5 Sreenidhi Inst of Science & Tech., 39.10 39.02 -0.08 C SC 1.2.1 Participating Institution 1 JNTUH College of Engineering, Kukatpally, 58.16 58.16 - 2 University College of Technology, Osmania University 64.01 65.89 1.88 D SPFU - Telangana 46.63 29.08 -17.55 TOTAL 1,799.76 1,805.79 6.03 3. The balance outstanding expenses payable as on 31-03-2016is T 3.86 Lakhs including previous year Z 3.60 Lakhs and current year 7 0.25 Lakhs. ((In the Previous financial Year total ineligible expenditure on account of non-payment basis was T 21.11 Lakhs of which Z 17.51 Lakhs paid by the PI's during the current year considered as eligible for claim has been allowed and shown as a separate line as eligible expenditure in Utilization Certificate. 4. Audit noted following expenses incurred in the financial year 2015-16 are ineligible to claim Ineligible Expenditure 1. Ineligible expenditure for the financial year 2015-16 Audit noted some of the expenditure incurred by the Participating Institutions not eligible for claim under TEQIP Phase - II due to * Non availability of supporting documents: * Non adherence to prescribed guidelines Institution wise ineligible expenditure for the financial year is given under Annexure-1 & Annexure - 2 amounting to Z 44.98 Lakhs and Z 0.26 Lakhs respectively. 5. Previous year figures have been regrouped and reclassified to align current year financial statement Figures have been rounded off to nearest rupee. 14. STATE OF UTTARAKHAND BIPIN TRIPATHI KUMAON INSTITUTE OF TECHNOLOGY, DWARAHAT 1. It is observed that in the Financial Year 2015-2016, the grant has not been utilized for the purpose of skill development of students. 2. It is advisable that the Institution shall have a separate TAN for TEQIP project rather than using the College TAN for deduction of TDS. Also TDS has not been deducted on an amount paid as Honorarium to Expert. 3. The Institution shall switch from manual mode of accounting to Data entry system in Accounting software. 4. It is observed that the payments to Vendors are not as per the prescribed guidelines. ,t 7 Page 13 of 16 G.R. Garg & Co. Chartered Accountants G.B.PANT ENGINEERING COLLEGE GHURDAURI, PAURI 1) The Auditors were told that the TDS returns for respective quarters are filed by a Professional by whom the statements were not delivered to the Institution due to which auditors couldn't examine the returns. 2. It is advisable that the Institution shall have a separate TAN for TEQIP project rather than using the College TAN for deduction of TDS. 3 It is observed that TDS payable as on 1st April, 2015 is T1097/- out of which only Z 300/- has been deposited so far and for the rest of the balance no amount has been deposited which attracts interest and penalty. 4 Honorarium for Expert Lectures paid to Individuals have been accounted in Accounting head naming STAFF ADVANCE which is inappropriate. 5 It is also advisable for the Institution to have proper check on accounting system of TEQIP since the narrations w.r.t. entries passed in accounts are Improper. 6. In some cases TDS has been wrongly booked or not booked, which is considered as a default as per Income Tax Act, 1961. COLLEGE OF TECHNOLOGY, GBPUA&T, PANTNAGAR 1. One of the major issues that all expenses have been accounted as Direct expenses instead of Indirect expenses. 2. It is observed that opening balances in Tally. ERP 9 are different from that of Previous Year Audit Report. Therefore the Current Year Audit Report has been made on the basis of Tally data provided. 3. It is also observed that the TDS entries have not been properly booked. 4. There have been entries for which proper narrations have not been passed. 5. It is advisable that the Institution shall have a separate TAN for TEQIP project rather than using the College TAN for deduction of TDS. Also TDS returns were not provided for examination as we were told that the return is been filed through comptroller office the access to which is to authorized personnel. 6. Advances are given in excess of which the Budget was not provided for. Page 14 of 16 G.R. Garg & Co. Chartered Accountants COLLEGE OF TECHNOLOGY, GBPUA&T, PANTNAGAR (COE UNM 1. It was observed that there was a difference between opening balances of T 100.00/- in Books of Accounts. 2. The expenses for the current year are booked under Direct expenses instead of indirect expenses. 3. It is advisable to the Institution to pass separate entries for each payment instead of merging m one. 4. It is advisable that the Institution shall have a separate TAN for TEQIP project rather than using the College TAN for deduction of TDS. Also TDS returns were not provided for examination as we were told that the return is been filed through comptroller office the access to which is to authorized Personnel. COMMON OBSERVATION FOR ALL THE INSTITUTIONS. ADVANCES HAVE BEEN GIVEN TO STAFF WHICH ARE RICH IN AMOUNT THIS SHALL BE TAKEN INTO CONSIDERATION AS THIS MAY LEAD TO FRAUD AND DEFLCATION IN CASH. 15. STATE OF DELHI 1) The management has treated advances issued to faculty for the various faculty and staff development programs as expenditures on the date of the issue of the advance without proper adjustment/ settlement. This is against the principle of accounting specified by financial management Manual which has resulted in overstatement of expenditure by T12.55 Lakhs with a corresponding statement of current assets. Further, the above stated advances pending adjustment/ settlement are ineligible to be claimed in the year under audit.(Refer Note No.33 (3) of Notes to Accounts for details). 2) The SPFU and Project Institutions are following the cash method of accounting, which is prescribed by NPIU. Thus, the institutions do not follow "Accrual" system of accounting. This is not in conformity with Accounting Standard 1, "Disclosure of Accounting Policies" issued by the Council of the Institute of Chartered Accountants of India which requires that books of account should be maintained on accrual basis. 3) Total expenditure as per Financial Statement amounting to Z 209.95 lakhs includes T2.80 Lakhs related to Prior Period. However, the Prior period expenditure has not been disclosed separately in the statement of Income & Expenditures so as to highlight its impact on the Current Surplus or Deficit. Accordingly, to the extent of Z2.80 lakhs, the prior-period items are understated which is / 1 Page 15 of 16 G.R. Garg & Co. Chartered Accountants in contravention of provisions of AS-5 Net Profit or Loss for the period, Prior-period items and changes in Accounting policies issued by ICAI (refer Note No 33 (4) of Notes to Accounts). 4) The assets acquired during the year amounting to T46.68 Lakhs have not been shown at a nominal value under the Fixed Assets which has resulted in non-compliance of provisions of AS- 12 Accounting for Government Grants issued by ICAI. For G. R. GARG & COMPANY, Chartered Accountants FRN - 000214N CA. AURAV GAR Place: New Delhi (Partner) Dated: January 2,2017 M.No. - 097327 Page 16 of 16 G.R. Garg & Co. Chartered Accountants 777, MRM Chambers, D.B. Gupta Road Karol Bagh, New Delhi - 110005 +91 11 23512307, 23617942 info@grgarg.co.in Annexure B to Consolidation Report Observations during Consolidation of Audited Financial Statements for the year ended on 31st March, 2016 A. CENTRALLY FUNDED INSTITUTIONS S.No. Name of Observations Constituent 1 NIT, Patna Expenditure on Academic Audit under Reform of T 7.92 Lakhs and Exp. On Remedial class under student support of Z 2.14 Lakhs have been clubbed under the head "Other" in Receipt & Payments. 2 Zakir Hussain a) Grant received from project authority under the project are reflected in the College of Income & Expenditure account. However in Financial Year 2014-15, the Engineering & management reflected the grant in Balance Sheet as Sources of Fund. Technology, Accordingly the management and auditor have re-casted previous year Aligarh figures. This has resulted in over statement of excess of Income over expenditure by T. 250.00 Lakhs. (refer note no . 17(a)) b) Stale cheques amounting to Z. 9.27 Lakhs has been clubbed under the head 'Other Receipts' of the "Receipt and Payment Account". 3. MANIT, Bhopal a) The Grant in Aid is clubbed under the head of Current Liabilities by the management. However, for the purpose of consolidation we have clubbed the same in 'Amount received from MHRD'. b) The investment is in the form of FDR and has been clubbed under 'Investment in FDR including interest'. c) The Management and auditors have provided cumulative figures up till 31stMarch, 2015 under the Previous Year column in the Statement of "Reconciliation of Claims to total Application of Funds". d) Stale cheque Payable of T 11.67 Lakhs has been clubbed under the head of "Administration" in "Receipt & Payment". A(,C Page 1 of 21 G.R. Garg & Co. Chartered Accountants e) Security Deposits (Net of Refund) of Z 0.40 Lakhs has been deducted from total Receipts in Statement of Sources & Application of Funds by the auditor. Accordingly, the above said amount has been deducted from Miscellaneous Receipts while consolidation. 5. Indian School of a) Item wise list of fixed assets has been provided along with audited financial Mines, Dhanbad statements. The same have been regrouped into various sub heads of fixed assets by us as per our limited technical understanding. b) Payment of outstanding liabilities of FY 2014-15 have been shown in 'Other payments' in Receipts & Payment Account and Statement of Sources and Application of Funds amounting to T 0.13 Lakhs. 6. NIT, Jamshedpur a) In absence of schedule of Fixed Assets, the same have grouped under various sub heads of FA according to the previous figures data available with us and schedule of procurement of assets of Current Financial Year. b) The management and auditors have provided cumulative figures up till 31st March, 2015 under the Previous Year column in the "Statement of Sources and Application of Funds". We have taken the previous figures from the audited Balance Sheet as at 31st March, 2015 available with us. c) The Management and auditors have provided cumulative figures up till 31stMarch, 2015 under the Previous Year column in the Statement of "Reconciliation of Claims to total Application of Funds". We have taken the previous figures from the audited Balance Sheet as at 31stMarch, 2015 available with us. 7. NIT, Kurukshetra a) FDR's have been treated as investment by the Management and Auditor. Accordingly, similar treatment has been done for consolidation. b) Loans & Advances of T 0.57 Lakhs and NIT main current a/c of Z 100.35 Lakhs had been clubbed in 'Advance recovered - other receipts' in Receipt & Payments. c) Fixed assets acquired during the year of T 74.46 Lakhs have been deducted from "Amount Received from NPIU" and added to sub-head "Capital Reserve" under the group 'Contribution from' in Balance Sheet. (Previous year - T 77.52 Lakhs) Page 2 of 21 G.R. Garg & Co. Chartered Accountants d) Excess of Income over Expenditure of T 14.93 lakhs (Previous year - Z 14.05 lakhs) has been shown as "Funds received directly by Project Implementing Authority through external assistance" in the Statement of Sources and Application of Funds by the Management and auditor. 8. VNIT, Nagpur a) FDR's amounting to Z 126.42 Lakhs are shown as investment by the management and the auditor. b) Expenses pertaining to earlier year to the tune of T 864.30 Lakhs have been debited to reserve fund by the management. However, the same has been taken as opening balance as on 01st April, 2015 of 'Excess of income over expenditure' during consolidation. c) Other recoveries of COE of Z 50.00 Lakhs and TEQIP-II of Z 341.98 Lakhs have been clubbed in 'Other advances recovered' in Receipts in "Receipts & Payment". 9. SVNIT, Surat a) FDRs have been treated as investment by the management & auditor. b) As there was no consolidation of regular TEQIP-II accounts and COE accounts at the management level, COE financials have been treated as a separate unit and incorporated accordingly. c) Internal revenue generation of Z 14.85 Lakhs has been clubbed with "Other income" in Income & Expenditure Account. d) PG Scholarship to Non- Gate Students of Z 19.08 lakhs has been clubbed with 'Academic Support / Scholarship' in Statements of Source & Application of funds account. 10. Assam University, a) Advances issued of Z 21.08 Lakhs and Fixed Deposit of Z 100 Lakhs have been Silcher shown as part of expenditure in Statement of Sources & Application of Funds. However, the same have not been claimed as expenditure in 'Statement of Reconciliation of Claims to Total Application of Funds'. b) Other income - Delegate Fees of Z 1.88 Lakhs has been clubbed under the head 'Other Receipts' as income in " Income & Expenditure". c) Amount received from Assam University of T 1.40 Lakhs and Delegate Fees of Z 1.88 Lakhs clubbed under the head other receipts as income in "Statement of Source & Application of Funds". Page 3 of 21 G.R. Garg & Co. Chartered Accountants 11. NIT, a) In absence of schedule of Fixed Assets, the same have grouped under various Agartala sub heads of FA according to the previous figures data available with us and schedule of procurement of assets of Current Financial Year. b) The Management and auditors have provided cumulative figures up till 31St March, 2015 under the Previous Year column in the statement of Sources and Application of Funds and Reconciliation of Claims of Total Application of Funds. We have taken the previous figures from the audited Balance Sheet as at 31st March, 2015 available with us. c) The Management and auditors have provided cumulative figures up till 31stMarch, 2015 under the Previous Year column in the Statement of "Reconciliation of Claims to total Application of Funds". We have taken the previous figures from the audited Balance Sheet as at 31stMarch, 2015 available with us. 12. MNIT, Jaipur a) The management has reflected Funds received of T 250.00 Lakhs as 'Funds received directly by project implementing authority through external assistance' in the Statement of Sources & Application of Funds. However, for consolidation purpose we have clubbed it in 'Funds from government through Budget'. b) The management and auditor has shown FDR deposit of T 500.00 Lakhs in 'Investments'. We have accordingly shown the same. c) 2 different Income & Expenditure accounts were annexed in the financial statement for the year 2015-16. We have incorporated Income & Expenditure which was audited and signed by the auditor. 13. NIT, Calicut a) Prior-period Expense of T 0.67Lakhs and Prior Period Income reversed of T 0.14 Lakhs has been clubbed under 'Other Expense' in Income & Expenditure Account. b) We found 2 Income & Expenditure Accounts in the financial statements. We have incorporated figures of Income & Expenditures account which were audited and signed by the auditor. c) Prior Period Income, Registration Fees from Participants, Advance for expenses and Advance to NITC, Calicut refunded has been clubbed under Page 4 of 21 G.R. Garg & Co. Chartered Accountants 'other receipts' in Receipts & Payments. d) In current year, the management has reversed depreciation charged upto FY 14-15 amounting to Z 2.06 Lakhs in 'Income & Expenditure' account and consequently treated as Income of current year. 14. NIT, Hamirpur a) The Management had followed mercantile Basis of accounting during financial year 2014-15. However in absence of disclosure of accounting policies for financial year 2015-16, it has been presumed that there is continuation in the method of accounting. b) The management and auditor have added a figure of 7 1.99Lakhs (Advances to staff 7 1.98 Lakhs and TDS paid T 0.01 Lakhs) to the expenditure incurred as shown in statement of "Reconciliation of claims to Total application of Funds" resulting in increase in total eligible expenditure to the above stated amount. 15. NIT, Jalandhar a) Settlement of Advances for Expenses amounting to T. 7.19 Lakhs has been clubbed under the sub head "Other Advances Recovered" of main head "Other Receipts" in Receipt & Payment Account. b) In absence of schedule of Fixed Assets, the same have grouped under various sub heads of FA according to the previous figures data available with us and schedule of procurement of assets of Current Financial Year c) The management has stated Bank balances of T129.75 Lakhs inclusive fixed deposits. d) The management and auditors have not deducted Outstanding Bill of T 4.53 Lakhs while calculating Total Eligible Expenditure in 'Statement of Reconciliation of claims to Total Applications of Funds'. 17. NITTTR, a) TA Advance of Z 4.00 Lakhs and Imprest given to employees of T 3.86 Lakhs Chandigarh have been clubbed in the head of 'others' in Payment in "Receipt & Payment Account". b) Cumulative figures of 'Excess of expenditure over income' amounting to T 294.95 Lakhs has been reflected by the management under the head 'Work in Progress - Scheme work under implementation' (Previous year - T 104.56 Lakhs). Page 5 of 21 G.R. Garg & Co. Chartered Accountants 18. SLIET, Sangrur a) Academic Receipts of Z 6.24 Lakhs and Sponsorship of Z 0.55 Lakhs have been clubbed in 'Misc. Receipts' in the Statement of Source & Application of Funds. b) In absence of schedule of Fixed Assets, the same have grouped under various sub heads of FA according to the previous figures data available with us and schedule of procurement of assets of Current Financial Year. c) SLIET had not submitted statement of 'Reconciliation of Claims of Fund' for the year ended 31st March 2015. This year they have submitted the audited statement of containing current year figures, previous year figures and project to date figures. To this extent, the figures for the year ended on 31st March 2015 and project to date does not match with the figures stated in previous year consolidation report for the year ended 31st March 2015. d) Advances given (against TA / DA) amounting to Z 252.42 Lakhs (P.Y. Z 6.12 Lakhs) has been treated as part of expenditure in the 'Statement of Sources & Application of Fund'. 19. NIT, Raipur a) Participation fees received of Z 5.57 lakhs has been clubbed in 'Other Receipts' in Receipt & Payment account. b) Project fund representing Fixed Assets amounting to Z 237.92 Lakhs has been deducted from Excess of Income over Expenditure account and has been shown separately in the 'Sources of Funds' in Balance Sheet. The same has been clubbed by us in the Capital Reserve. (Previous year - T 105.84 Lakhs) 20. NIT, Warangal STDR Matured/ cancelled of ! 50.00 lakhs have been clubbed in 'Other Receipts' in COE Receipts & Payments account. 21. NIT, Trichy a) The management has reflected Funds received of ! 250.00 Lakhs as 'Funds received directly by project implementing authority through external assistance' in the Statement of Sources & Application of Funds. However, for consolidation purpose we have clubbed it in 'Funds from government through Budget'. b) Registration fee of ! .47 Lakhs has been shown in the head of 'Other receipts' in 'Receipts & Payments' account. Page 6 of 21 G.R. Garg & Co. Chartered Accountants 22. NIT, Silchar The management and auditor have shown Loan from Institutes of T 1.30 Lakhs in 'Investments' in Receipt & Payments. It has been clubbed in 'Other Payments' during consolidation. 23. SVNIT, Surat COE The management had stated Total Expenditure at Point- B of 'Statement of Reconciliation of Claims of Total Application of Fund' of T 23.55 Lakhs in the audited financial statements of the year 2014-15 instead of actual expenditure of T 220.38 Lakhs. They have re-casted the previous year figures in the said audited statement for the year 2015-16. To this extent, the previous year and project to date figures of the current year statement do not match with the previous years statements. 25. NIT, Durgapur a) Audited Financial statements were not made available for consolidation COE purposes for F.Y 2014-15. In current year, NIT Durgapur COE has submitted audited financial statements for the years ending 31st March 2015 and 31st March 2016 separately. To the extent of incorporation of Financial Statements of the Year 2014-15, the previous year figures do not tally with the consolidated figures of 2014-15 given in the last years consolidated report. b) Depreciation amounting to T 8.37 Lakhs has been charged on Fixed Assets. c) The Management and auditors have provided only the cumulative figures up till 31stMarch, 2015 and not the Previous Year figures in the Statement of "Reconciliation of Claims to total Application of Funds". Previous year figures have been taken from the Statement of Sources & Application of Funds. 26. NITK, Surathkal The management has stated cumulative figures up to 31.03.2015 in the previous year figure column in 'Income & Expenditure' account. We have incorporated the figures of previous year pertaining to FY 2014-15 form the Audited Financial Statement available with us. 27. NIT, Rourkela a) The management and auditor have shown FDR deposit of T 398.71 Lakhs in 'Investments' in Receipt & Payment account. b) Amount paid to NIT, Rourkela of Z 8.85 Lakhs has been shown in the head of 'Loans & Advance' of payment side under Receipt & Payment account. 28. NIT, Durgapur Loans taken during the year from NIT, Durgapur and NIT COE Durgapur of T 160.00 Lakhs have been clubbed under the head 'Misc. Receipts.' in the 'Statement of Source & Application of Funds' by the management. APage 7 of 21 G.R. Garg & Co. Chartered Accountants 29. NERIST, Itanagar a) Payment for Faculty & Staff Development of Z 9.36 Lakhs, Academic Support for weak students of Z .30 Lakhs and Operating Cost of T 6.44 Lakhs have been clubbed under the head of "Administration" in the 'Receipt & Payments'. B. STATES S.No. Name of Observations Constituents Andhra Pradesh a) Expenses payable as per balance sheet is Z 15.07 Lakhs but outstanding expenses deducted in Statement of Reconciliation of Claim to Total Application of Funds is Z 4.54 Lakhs. b) During consolidation of Receipt & Payment Account, 'Repayment of outstanding liability' of Z 7.59 Lakhs has been clubbed in "Others" under head "Other payments". c) Stale cheque amounting to Z0.25 lakhs has been clubbed under the head "Others" in Payments side in "Receipt & Payment Account". d) As per the explanation received from Management and auditor in the previous year, SPFU and Participating Institutions are following Accounting Policies as mentioned in Financial Management Manual and no separate schedule/ Annexure stating Accounting Policies or Notes to Accounts was prepared. As per Accounting Policies highlighted in Financial Management Manual all the Participating Institutes, States etc. are supposed to follow Cash system of Accounting. However, the Balance Sheet of State of Andhra Pradesh contains figure of Expenses Payable to the tune of Z.15.07 Lakhs (Previous Year Z 16.82 Lakhs) under the head Current Liabilities which is against the basic principle of Cash system of Accounting. 2. Gujarat a) Corpus Fund, Maintenance fund, Depreciation fund & Staff development fund are shown in "Funds received directly by project Implementing authority through external assistance" in Statement of Sources & Application of Funds. b) Stale Cheques, GTU Fees payable Account & Retention Money amounting to 7 5.49 Lakhs are shown in "Other Receipts" in Receipts and Payments Account. Page 8 of 21 G.R. Garg & Co. Chartered Accountants c) As schedule of Current Liabilities is not given in audited financial statements, the same has been clubbed under head "Current Liabilities" under sub head "Others" of Z9.40 Lakhs (P.Y. T 4.15 Lakhs). d) Amount of Funds lying unspent as on 31/03/2016 with IIT-GN, IPR-GN and KCG-GN amounting to T703.55 Lakhs (P.Y. T 843.83 Lakhs) has been treated as part of Eligible expenditure in the Statement of Reconciliation of Claims to Total Application of Funds. e) Investments (Corpus fund, SDF, Depreciation fund, Maintenance fund, GSFS FD & Advance returned by professors) of Z2061.03 Lakhs is included in Head "Other receipts if any" under sub head "Other Advances" in Receipt & Payment Account. f) Expenditure related to programme to the tune of T327.62 lakhs (P.Y. T 181.23 Lakhs) has been clubbed in "Others" in Statement of Sources and Application of Funds. g) Payments (Advance to professors, GSFS FD, Payment to Debtors & Payment to creditors) of Z 2746.82 Lakhs is included in head 'other payments' under sub head 'others' in Receipt & Payment Account. h) New sub head (Depreciation Fund & Maintenance Fund) has been created under head "Amount Received From" Schedule. i) Attention is drawn to note no .21 of Notes to Accounts of states regarding Change in Accounting Policy for treatment of Grants in aids. j) Attention is drawn to note no 21 of Notes to Accounts of states regarding Change in Accounting Policy for treatment of Fixed Assets. 3. Tamil Nadu Loans & advances as on 01.04.2015 and 31.03.2016 amounting to T 87.85 Lakhs & Z 90.69Lakhs respectively have been taken as opening & closing balance in Receipt & payment Account by the management. Accordingly same treatment has been done in Consolidated Financial Statements. 4. UT-Puducherry a) In audited Receipt & Payment Account, Temporary advances of T 22.07 Lakhs are shown in Receipts. This has been disclosed under head "Other Receipt" under sub head "Other Advances" in consolidated financial statements. Page 9 of 21 G.R. Garg & Co. Chartered Accountants b) There is receipt as well as payment of 7 1.07 Lakhs by the name "Thiru .P Devandiran "in Receipt & Payment Account. Same has been clubbed under 'Other receipts' and 'Other Payments' respectively. c) Funds transferred to Project Institutions & Funds received for Institutions of T 225.00 Lakhs have been shown in receipt and in payment respectively in audited Receipt and Payment Account. To this extent, grant received in Receipt & Payment Account is in excess of grant received as per Utilisation Certificate. 5. Madhya Pradesh a) In absence of bifurcation of Fixed Assets, the same has been shown under the sub category of 'Others" in Fixed Assets Schedule. b) Funds transferred to Project Institutions & Funds received for Institutions of' 565.49 Lakhs (Previous Year '897.51 Lakhs) have been shown in Expenditure and in Income respectively in audited Income & Expenditure Account. To this extent, grant received in Income & Expenditure Account is in excess of grant received as per Statement of Sources and application of Funds and Utilisation Certificate. Similar treatment has been done in Receipts & Payment Account. c) Current liabilities of Z27.08 Lakhs have been shown in "Others", as no schedule is available in audited statements. d) FDR of Z 311.94 Lakhs has been shown in Loans & Advances in the Audited Balance Sheet as at 31st March 2016, hence during consolidation it has been clubbed in Schedule of Loans & Advances in Balance Sheet. e) Negative figure of Reforms of Z 0.53 Lakhs has been considered as part of Total Expenditure in Income & Expenditure Account and Receipt & Payment Account by the Management. This figure has been reduced from total expenditure. 6. Uttarakhand a) Following items have been clubbed in "Other Receipts" in Consolidated Statement of Sources & Application of Funds:- T (in Lakhs) Refund of Advance 0.04 Security deposit/ EMD 0.27 Refund of advance 49.01 Page 10 of 21 G.R. Garg & Co. Chartered Accountants b) Advances given of Z48.44 Lakhs has been treated as expenditure by the management and auditor in Statement of Sources & Application of Funds. c) Security deposit/EMD of Z0.36 Lakhs has been treated as receipts by the management and auditor in Statement of Sources and Application of Funds. d) Refund of advance of Z4.90 Lakhs has been treated as receipts by the management and auditor in Statement of Sources and Application of Funds. e) Refund of EMD of Z1.05 Lakhs has been treated as expenditure by the management and auditor in Statement of Sources and Application of Funds and clubbed in "Others" during Consolidation. f) Advance to Staff of T 48.44 Lakhs and Z 1.05 Lakhs security refund on payment side of receipt & payment account has been clubbed under "others" under other payments head. g) 'Civil Work - Work under Implementation of Z 12.69 Lakhs" is shown as addition in Fixed assets on the face of Balance Sheet. This amount has been shown in Balance sheet under the head "Work in Progress - Scheme work under Implementation". h) There is prior period adjustment entry in Grant Received in Current year, as COE grant received of T278 Lakhs during last year was not recorded in financial statements of the year 2014-15. Also the profit of COE of Z2.37 Lakhs was not recorded in financial statements of year 2014-15, adjustment has been done during current year. i) Prior period adjustment entry of Z 278 Lakhs has been clubbed under Schedule of Grant Received in the Balance Sheet by inserting a separate line item. j) A separate line item has been created for "Transfer from grants upto previous year" amounting to T 20.28 Lakhs in Excess of Income over expenditure Schedule of Balance sheet. k) During P.Y.2014-15, expenditure shown in "Reconciliation of Claims to total application of Funds" was T 484.79 Lakhs but during current year the expenditure for the F.Y.2014-15 is shown as Z 483.11 Lakhs. The difference is Z 1.68 Lakhs which is the amount of 'Security refund" which was shown as expenditure in previous year. Page 11 of 21 G.R. Garg & Co. Chartered Accountants 1) The management has stated figures of the year 2013-14 in the previous year column pertaining to year 2014-15 in Income and Expenditure Account. This seemingly being a typographical error, figures for the year 2014-15 have been incorporated from the Audited Income and Expenditure Account for the year ended 31st March, 2015 available with us. 7. Karnataka a) Funds (Internal Revenue Generation) of T 1778.74 Lakhs is shown in Schedule 2 "Contribution from" under Sources of Funds in Balance Sheet. b) Funds (Internal Revenue Generation) of T 1753.70 Lakhs is clubbed in Schedule of "Bank Balance" by the Management in Schedule-5 under Application of Funds in Balance Sheet. c) Management Account of T 204.06 Lakhs is shown under "Current Liabilities" in Schedule 8 under Application of Funds in Balance Sheet. d) Loans and advances of Z 48.79 Lakhs is shown in "Others" under head Loans and advances, as schedule of bifurcation of this amount is not available in audited Balance Sheet. e) Amount of Z 324.95 Lakhs received from Management Account have been clubbed in "Other Advances" under "Other Receipts" in Receipt & Payment Account. f) Amount of Z 789.43 Lakhs received from Funds (Internal Revenue Generation) have been clubbed in "Other Receipts" in Receipt & Payment Account. 8. West Bengal There is negative figure of "Advance to vendors for expenses (net)" of Z 0.40 Lakhs in Receipt side of Receipt & Payment Account. This has been clubbed under the head "Other Advance" in Receipts. 9. Odisha a) Expenditure incurred on Library Modernization amounting to T 1.71 Lakhs has been clubbed with Books/LR/Minor items in Income & Expenditure account & Sources and Application of Funds. In Receipt and payment A/c this expenditure has been clubbed in procurement of assets. b) Staff advances of Z7.34 Lakhs has been clubbed under "Others" in head "Other Payments" in Receipt & Payment Account. c) The Management has re-casted previous year figures in the statement of Sources and Application of Fund and Statement of Reconciliation of Claims Page 12 of 21 G.R. Garg & Co. Chartered Accountants and total Application of Funds, thereby, changing the project to date figures. For consolidation purposes the re-casted figures have been incorporated and accordingly, there is variation in previous year figures and Project to date figures vis-A-vis consolidated financials for the year 2014-15. d) Item wise list of fixed assets has been provided along with audited financial statements. The same have been regrouped into various sub heads of fixed assets by us as per our limited technical understanding. 10. Jharkhand a) Advance to FSD-CIT of T3.93 Lakhs is clubbed in head "Release to" under sub head "Loans & Advances" in Receipt and Payment Account. b) Receipts from CIT- Advance recovered from staff of T0.83 Lakhs & Advance Refunded Z0.51 Lakhs and Receipts from BIT of T5.30 Lakhs is clubbed in "Other Receipts" in Receipt and Payment Account. c) Previous year unpaid expenses paid during the year to the tune of Z26.97 lakhs has been added to the eligible expenditure by the Management and Auditor of SPFU, Jharkhand & shown as separate line item in statement. d) Receipt (BIT, Mesra, Sundry Debtors recovered & receipt from R.K.Saha ) of Z 3.16 Lakhs has been merged under head 'Other receipts, if any" under sub head "other receipts". 11. Rajasthan Increase in Other current liability of Z 7.92 Lakhs (Previous Year T (9.54) Lakhs) has been treated as receipt in Statement of Sources and Application of funds. 13. Kerala a) In absence of details of amount of Z 352.65 Lakhs, it is shown as "Loans & Advances" in Application of Funds in Audited Balance Sheet. The same has been shown under "Other Advances" in Schedule of "Loans & Advances" in Balance Sheet during Consolidation. b) Statutory Liabilities of Z0.23 Lakhs are clubbed under "Others" in schedule of "Current Liabilities" in Balance Sheet. c) Financial Assistance from Government of Kerala for Salaries for NGOs & for Self-drawing officers amounting to 713.83 Lakhs and Z34.44 Lakhs respectively have been clubbed in head "Received from" under sub head "Funds for SPFU expenditure received from State Government" in Receipt & Payment Account. d) Financial Assistance from Government of Kerala for Salaries for NGOs & for Page 13 of 21 G.R. Garg & Co. Chartered Accountants Self-drawing officers amounting to Z13.82 Lakhs and Z34.44 Lakhs respectively is reflected in receipt side of Receipt & Payment Account by the management with a corresponding payment in same statement. e) Audited Receipt & Payment Account shows Suspense payment of Z 2.19 Lakhs. This has been clubbed under sub head "Other" under head "Other payments" in Receipt and Payment account. f) Attention is drawn to Para 300) of Notes to Accounts of States in Schedule No.9 of Consolidated Balance Sheet wherein the auditor of SPFU has drawn reference to Suspense account of Z6.43 Lakhs. g) Salary to NGOs & salary to Self drawing officers amounting to Z 13.83 Lakhs and Z 34.43 lakhs respectively (P.Y. Z 9.39 lakhs & Z 31.80 Lakhs) have been shown as expenditure were reflected in Expenditure in Income & Expenditure account and were simultaneously deducted from the expenditure due to receipt of financial assistance from state government, thereby nullifying the effect of expenditure. Accordingly, we have not shown the above expenditure in Income and Expenditure account. h) 'Remittance to college" of Z11.99 Lakhs have been reduced from Excess of Income over Expenditure during consolidation. i) Audited Receipt and Payment Account shows receipt as 'VAT Collected' amounting to Z 3.27 Lakhs and 'Work contract tax collected/Labour Welfare Fund Collected' amounting Z 1.35 Lakhs. These are clubbed under head 'Other Receipts' under sub-head 'Current Liabilities". 14. Uttar Pradesh a) Advances with Project Institutions as at April 1, 2015 and March 31, 2016 amounting to T 2136.24 Lakhs and Z 1665.80 Lakhs respectively have been treated as a component of Opening Balance and Closing Balance of Receipt & Payment Account by the Management and clubbed in Loans and Advances during Consolidation. b) Fixed assets procured for the project have been charged to Income & expenditure Account and appear in the Balance Sheet with the corresponding entry made in Capital Reserve. c) Reversal of Payment due to cancellation of Cheque for T 2.19 Lakhs on the Page 14 of 21 G.R. Garg & Co. Chartered Accountants receipt side of Receipt & Payment account has been clubbed under head 'Other receipt, if any" under sub head "others". d) Bank Interest of T 78.14 Lakhs and Loans & advances (liabilities) of T 6.56 Lakhs have been clubbed under head Current Liabilities under sub head "Others". e) Institute has followed Income approach for treatment of Grants in aid received during the year in preparation of financial statements for the year 2015-16 transitioning from the capital approach adopted in the year 2014-15 resulting in excess of Income over Expenditure by T 1538.51 Lakhs. This change has not been highlighted by management in its Accounting policies/ Notes to accounts. (Refer Note no 21 of States Notes to Accounts) f) Previous year figures do not match with figures which were provided to us during last year for schedules of Balance sheet. Hence the revised figures for 31.03.2015 have been incorporated during this year. g) Payment of Project Monitoring & Evaluation of T 37.10 Lakhs has been included under head "Release to project execution" in Receipts and Payment account. h) As per the Significant Accounting Policies mentioned in the Audited financial Statements, SPFU and Participating Institutions are following Accounting following Cash system of Accounting. However, the Balance Sheet contains figure of Expenses Payable to the tune of T 2.19 Lakhs (Previous Year NIL) under the head Current Liabilities which is against the basic principle of Cash system of Accounting. i) Management has re-casted the Previous Year figures pertaining to financial year 2014-15 in the audited financial statement of the year 2015-16. We have incorporated the re-casted figures. 15. UT-Chandigarh a) UIET, PU has negative closing bank balance of T 11.82 Lakhs in the payment side. b) Amount Recoverable from College of T 356.77 Lakhs has been clubbed under "Advance to Project Institutions" in Schedule -7 "Loans and Advances" of the Consolidated Balance Sheet. Page 15 of 21 G.R. Garg & Co. Chartered Accountants c) Procurement of Equipments/Furniture/Minor Items is reported at T 269.47 Lakhs by the management in Income and Expenditure account whereas the same is stated at Z273.34 Lakhs in Statement of Sources and application of Funds. The difference of Z3.87 Lakhs has been capitalized in the Balance Sheet. d) Cost share by private unaided institution of Z 74.72 Lakhs has been shown as Income in Income & Expenditure account but it is not shown as receipts in Receipt & Payment account. Management Reply: Cost shared by Private Unaided Institution of Z 74.72 Lakhs has been shown as Income in Income & Expenditure account but it is not shown as receipts in Receipt & Payment account by PEC university of Technology, Chandigarh in their individual financial statement instead they carried this amount as liability in Balance sheet. e) Amount received from PEC SSF A/c of Z 200 Lakhs has been merged under 'Other Misc. Payments" in Statement of Sources and Application of Funds. 16. Haryana "Advance Adjustment (Exp of 2013-14)" of T 90.60 Lakhs has been clubbed under the head other expenditure in Income & Expenditure Account. 17. Tripura Fixed Assets acquired during the year amounting to Z 88.59 Lakhs have been charged off to Income & Expenditure Account. However, till Financial Year 2014-15, Fixed Assets procured were capitalized in the Balance Sheet and were not charged off to Income & Expenditure Account. The management has re-casted previous year figures after charging off fixed assets to the Income and Expenditure account. This has resulted in overstatement of expenditure in Income & Expenditure Account by T 299.85 Lakhs and understatement of Fixed Assets and 'Amount Received From' by T 308.25 Lakhs (refer note no . 21 of States in Notes to accounts) 18. Himachal Pradesh Outstanding bills include Loans and advances given by Project Institutions/State Project Facilitation Unit of State of Himachal Pradesh to the tune of Z24.00 Lakhs and have been deducted for Calculation of Total Eligible Expenditure in Statement of Reconciliation of Claims to Total Application of Funds by the Management and Auditor. Page 16 of 21 G.R. Garg & Co. Chartered Accountants 19. Punjab a) The Significant Accounting Policies annexed along with the audited financial statements specifies revenue recognition to be on cash basis and expenditure as per the Financial Management manual of the program. However, there are current liabilities amounting to T 2089.75 Lakhs (P.Y. T2547.12 Lakhs) in the consolidated Balance sheet, the nature of which is not adequately disclosed. b) 'Last year Procurements' of T 109.68 Lakhs has been charged to Expenditure in current year Income & Expenditure account. c) 'Recoverable from College' of T 8.80 Lakhs has been clubbed in the schedule of Loans & advances in the consolidated Balance sheet. d) Statement of Sources and Application of Funds Last Year Procurements of T 120.99 Lakhs, has been merged under head 'Others Misc. Payments'. e) Previous year figures for the year 2014-15 mentioned in audited financial statements of year 2015-16 are different from the audited financial statements of 2014-15. For consolidation purposes, figures stated in Audited financial Statements of 2015-16 pertaining to previous year 2014-15 had been incorporated. To that extent the figures of consolidated financials as at 31s, March, 2015 are different from the previous figures i.e. 31s, March, 2015 highlighted in current year consolidated financials. 21. Chhattisgarh a) Staff advance of Z 3.97 Lakhs has been clubbed under "Other Advance" in head "Other Receipts, if any" in Receipt & Payment Account. b) Staff advances issued of Z3.66 Lakhs and Supplier advance of Z 3.00 Lakhs has been clubbed under "Others" in head "Other Payments" in Receipt & Payment Account. c) Transfer of Funds from SPFU to Participating Institutions of Z1500 Lakhs (Previous Year-Z32 Lakhs) has been shown both as Receipts and as Payments in Receipt & Payment Account. This has resulted in overstatement of Grant Receipts in Receipt & Payment Account in comparison to Utilization Certificate by T1500 Lakhs. Similar treatment has been done in Income & Expenditure Account. Page 17 of 21 G.R. Garg & Co. Chartered Accountants CN 20. Telangana a) Stale Cheque of Z1.62 lakhs is shown under head "Other Payments" under sub head "Other" in Receipt & Payment Account. b) Transfer from COE funds of Z325 Lakhs has been shown both as Receipts and Payments in Receipt & Payment Account This has resulted in overstatement of Receipts and corresponding payments by Z325 Lakhs. c) As per the explanation received from Management and auditor, SPFU and Participating Institutions are following Accounting Policies as mentioned in Financial Management Manual and no separate Schedule/ Annexure stating Accounting Policies or Notes to Accounts was prepared. As per Accounting Policies highlighted in Financial Management Manual all the Participating Institutes, States etc. are supposed to follow Cash system of Accounting. However, the Balance Sheet of State of Telangana contains figure of Expenses Payable to the tune of Z3.86 Lakhs (Previous Year Z21.10 Lakhs) under the head Current Liabilities which is against the basic principle of Cash system of Accounting. 21. Maharashtra a) "Fabrication of New Equipments" amounting to Z 1.19 lakhs has been clubbed in Procurement of Asset in Income & Expenditure Account and Receipt & Payment Account. b) Negative figure of "Loan from Institute" for T 26.26 Lakhs in the receipt side of Receipt & Payment account has been reduced from "Other Receipts". 22. Bihar a) Audited Financial statements were not made available for consolidation purposes for F.Y 2014-15 and previous years. In current year, Bihar has submitted audited financial statements specifying the figures of Previous year. To the extent of incorporation of Financial Statements of the Year 2014-15, the previous year figures & Project to Date figure of the Consolidated Statements do not match with the consolidated figures of 2014-15 given in the last year's consolidated report. b) Since no Schedules to the Balance Sheet were provided to us, the total figure of current assets of T 392.13 Lakhs has been bifurcated into 'Bank Balance' of Z 387.85 (picked from closing balance of Receipt & Payments Account) and the balance amount has been shown under head "Loans & Advances" under sub Page 18 of 21 G.R. Garg & Co. Chartered Accountants head "Others". c) Amount received from Government of Bihar against Fixed Assets of T 50.75 Lakhs has been clubbed under sub head "Other Receipts" in Receipt and Payment Account. d) Amount deposit in State Treasury" amounting to T 185.71 Lakhs has been grouped under 'closing Bank Balance" in Receipt and Payment Account. C. GENERAL 1. Disclosure mentioned in Notes to Accounts and accounting policy from Point no. 1 to 17 of CFI and Point no. 1 to 21 of States are observations on Consolidated Financial Statements. Rest of the Notes is observations/ notes of Individual Management and Auditors. 2. Since no specific heads of income & expenditure were specified in the format provided in Financial Management Manual, the institution have supplied information under the varied heads which have been clubbed together keeping in mind the generally accepted accounting principles. 3. No classification/grouping of "Expenditure by Components" has been specified in Performa of Statement of Source and Application of Funds hence, break up of items under "Expenditure of Component" have been clubbed as shown by the individual Institutes. 4. Some Institutions/States have not prepared the financial statements in the formats as prescribed by the Financial Management Manual, and some Institutions/States have not grouped the items/not provided break-up of the items as per the format prescribed by the Financial Management Manual. In all such cases, figures/items have been regrouped/rearranged keeping in mind the basic accounting principles and interpretation of the format prescribed. Figures/ items which could not be regrouped have been shown under the category of others in the same group or by way of special insertion of a new line item. To this extent, format of consolidated financial statements stands modified from that prescribed in Financial Management Manual. 5. In 11 states and 7 CFI's, the figures stated in Project to Date column of statement 'Sources & Application of Fund and Statement of Reconciliation of Claims to total application of Funds' is different than the Page 19 of 21 G.R. Garg & Co. Chartered Accountants current year's and previous years data and document available with us. In order to maintain the continuity and comparability of figures with the previous year's consolidation reports, we have incorporated the data available with us (Refer Note No. 12 of CFI's and Note No 13 of States). 6. One CF and One State have stated "Bank balance" in schedule to Balance sheet as on March 31, 2016 different than that worked out as closing balance on March 31, 2016 of "Receipt & Payment Account" which has resulted an overstatement of Balance of Bank in schedule to Balance Sheet by T 1751.11 Lakhs (Refer note no. 16 of CFI and Note no. 19 of State for details). 7. One State has stated "Cash balance" in schedule to Balance sheet as on March 31, 2016 different than that worked out as closing balance on March 31, 2016 of "Receipt & Payment Account" which has resulted an overstatement of Balance of Cash in schedule to Balance Sheet by ? 0.69 Lakhs (Refer note no. 20 of State for details). 8. Six States have reported Grant in Receipt & Payment Account different than that stated in Income & expenditure Account which has resulted in overstatement of Grant received in Income and Expenditure Account by Z 2999.40 lakhs (Refer note no.9 of State for details). 9. Five States have reported Grant in Statement of Sources and Application of Funds different than that stated in Income & expenditure Account which has resulted in overstatement of Grant in Income and Expenditure Account with 7 4885.63 lakhs (Refer note no.10 of State for details). 10. Three constituents have stated Opening Balance of Statement of Sources & Application of Funds as on April 1, 2015 different from the Closing Balance of Audited Financial Statements as on March 31, 2015 which has resulted in understatement of opening balance of Sources and Application of Funds withZ 672.43 lakhs (Refer Note No. 14 of State for details). 11. In Fourteen constituents, expenditure reported at point - C of Statement of Reconciliation of Claims to Total Application of Funds is overstated from the expenditure reported at point - D of Statement of Source and Application of Funds by T 824.63 Lakhs (refer Note no. 13 of CR and 15 of States for details). 12. In Seventeen constituents, expenditure reported in Income and Expenditure Account is overstated from the expenditure reported in Statement of Source and Application of Funds by T 71.86 Lakhs (refer Note no. 14 of CFI and 16 of States for details). , Page 20 of 21 G.R. Garg & Co. Chartered Accountants 13. In Twenty Four constituents, States/CFI's have calculated World Bank share at different rates in "Statement of Reconciliation of Claims" than specified in Financial Management Manual (refer Note no. 11 of CFI and Note no. 12 of States for details). However, World Bank's share has been calculated @ 60% of Total eligible expenditure in Consolidated Statement of Reconciliation of claim to Total Application of Funds. 14. Three constituents namely, State of Bihar, NIT, Warangal COE and NIT, Durgapur COE have submitted their audited financial statements of Year 2015-16 whereas no statements were furnished in FY 2014-15. To the extent of incorporation of figures of FY 2014-15, previous year's figures do not tally with audited figures of Consolidated Financial Statements of Year 2014-15. 15. 14 number of CFI's and 9 number of States have stated net figure of 'Sources of Funds' as on 31.03.2015 as opening balance of 'Grant in - aid/ Amount Received from' in the audited financial statement of the year 2015-16. (Refer Note no 15 of CFI's and Note no 18 of States for detail). To the extent of adjustment of amount of 'Excess of Income over Expenditure' against the 'Amount Received from / Grant in -Aid / Capital Fund' the opening figure of 'Excess of Income over expenditure' is under stated and that of 'Amount received from / Grant in -Aid / Capital Fund' is over stated as compared to previous year. For G. R. GARG & COMPANY, Chartered Accountants FRN - 000214N Place: New Delhi CA. URAV GARG Date: January 2,2017 (Partner) M. No. - 097327 Page 21 of 21 TECHNICAL EDUCATION QUALITY IMPROVEMENT PROGRAMME PHASE II CONSOLIDATED REPORT ON ANNUAL STATUTORY AUDIT Expenditure Incurred by Implementing Entities (States/CFIs/NPIU) Audit Report for Financial Year ended on 31.03.2016 (Z in Lakhs) S.No. Name of State/CFIs/NPIU Expenditure Reported in FMR (A) Disallowed (B) Net (C = A-B) A. STATES I ANDHRA PRADESH 1,773.63 28.45 1,745.18 2 BIHAR 1.11 - 1.11 3 GUJARAT 1,627.07 - 1,627.07 4 HARYANA 686.26 - 686.26 5 HIMACHAL PRADESH 19.44 24.00 (4.56) 6 JHARKHAND 334.04 0.14 333.90 7 KARNATAKA 3,602.79 - 3,602.79 8 KERALA 2,911.30 23.11 2,888.19 9 MADHYA PRADESH 788.22 - 788.22 10 MAHARASHTRA 3,747.22 - 3,747.22 11 ODISHA 628.23 - 628.23 12 PUNJAB 210.77 47.06 163.71 13 RAJASTHAN 902.88 1.46 901.42 14 TAMIL NADU 1,351.22 -_______ 1,351.22 15 UT-CHANDIGARH 691.11 155.51 535.60 16 UT-PUDUCHERRY 287.66 - 287.66 17 UTTAR PRADESH 1,540.28 - 1,540.28 18 UTTARAKHAND 548.99 - 548.99 19 NCT Delhi 161.37 12.55 148.82 20 WEST BANGAL 2,033.18 - 2,033.18 21 TRIPURA 170.10 - 170.10 22 TELANGANA 1,792.95 45.23 1,747.72 23 CHHATISGARH 545.41 (0.31) 545.72 B. CENTRALLY FUNDED INSTITUTIONS 1 NIT AGARTALA 140.83 - 140.83 2 NIT PATNA 358.54 - 358.54 3 SLIET SANGRUR 115.91 - 115.91 4 ZAKIR HUSSAIN COLLEGE,ALIGARI 105.37 - 105.37 5 NERIST, ITANAGAR 197.87 - 197.87 6 ASSAM UNIVERSITY,SILCHAR 68.71 - 68.71 7 MNNIT ALLAHABAD 211.65 - 211.65 8 MANIT BHOPAL 306.02 - 306.02 9 NIT CALICUT 385.64 - 385.64 10 ISM DHANBAD 243.08 - 243.08 11 NIT DURGAPUR (including COE) 498.71 34.06 464.65 12 NIT HAMIRPUR 439.90 (1.99) 441.89 13 MNIT JAIPUR 147.24 9.24 138.00 14 NIT JALANDHAR 214.58 - 214.58 15 NIT JAMSHEDPUR 222.49 - 222.49 16 NIT KURUKSHETRA 250.94 - 250.94 17 VNIT NAGPUR 670.54 54.79 615.75 18 NIT ROURKELA 260.80 - 260.80 19 NIT SILCHAR 147.97 - 147.97 20 SVNIT SURAT (Including COE) 278.88 - 278.88 21 NITK SURATHKAL 154.51 - 154.51 22 NIT TIRCHY 147.09 - 147.09 23 NIT WARANGAL (Including COE) 78.59 - 78.59 24 NrITR, Chandigarh 407.21 - 407.21 25 IIIEST SHIBPUR (Including COE) 439.24 - 439.24 26 NIT, Raipur 212.54 - 212.54 C. NPIU 464.92 42.38 422.54 TOTAL 33,525.00 475.68 g 049.32 A C2 rC U0Acc~ Notes:- Consolidation Report for the Project has been prepared on the basis of the above mentioned individual audit 1) reports of each State, audit report for NPIU and audit report of each CFIs. We have, therefore, Consolidated and not Audited the Statements and Accounts of the 26 CFIs and 23 States. Expenditure disallowed, where expresly not stated by respective auditor in their audit report, have been 2) considered as ineligible expenditure inclusive of outstanding bills and expenditure not claimed as higlighted in "Statement of Reconciliation of Claims to Total Application of Funds". 3) There is difference in expenditure reported in FMR as stated in the Audit report and as supplied/certified by the NPIU (refer Annexure I for details). 4) For reporting Expenditure in FMR, we have consolidated Centre of Excellence (COE's) with their respective CFI's. There is difference in expenditure reported by the CFI/States/NPIU in FMR and that reported in the audited 6) Financial Statements. The figures of expenditure reported in FMR and the audited Financial Statements by the respective CFI/States/NPIU along with the difference is attached in Annexure II to this report. 7) Expenditure reported in FMR, mentioned in Columnn - A of above table, has been furnished and certified by the NPIU. As per our Consolidation Report of Even Date For G. R. Garg & Company Chartered Accountants FRN - 000214N Agnihotri Tripti Gurha GAURAV GARG Consultant (Finance) Director (TC), MHRD & CPA(Incharge) ARTNER NPIU NPIU M.No. - 097327 Date: January 2, 2017 Place: New Delhi (Annexure - I) Difference in amount of Expenditure Reported in FMR as supplied by NPIU and as reported in Audit Report (Z in Lakhs) Expenditure Amount of S.No. Name of State/CFs/NPIU Amount of expenditure expenditure in FMR in FMR as supplied by as reported in audit Difference (A-B) NPIU (A) report (B) 1 Andhra pradesh 1773.63 1847.33 -73.70 2 Telengna 1792.95 1805.79 (12.84) 3 Gujarat 1627.07 1626.86 0.21 4 Jharkhand 334.04 334.44 (0.40) 5 Karnataka 3602.79 3601.59 1.20 6 Kerala 2911.30 2924.00 (12.70) 7 Rajasthan 902.88 849.76 53.12 8 Odisha 628.23 624.27 3.96 9 Punjab 210.77 274.22 (63.45) 10 Tripura 170.10 171.47 (1.37) 11 NIT Calicut 385.64 426.11 (40.47) 12 MNIT Jaipur 147.24 155.09 (7.85) 13 NIT Kurukshetra 250.94 205.82 45.12 14 NIT, Raipur 212.54 209.68 2.86 15 NITTR, Chandigarh 407.21 407.78 -0.57 16 NIT, Warangal (inclusive COE) 78.59 78.78 -0.19 17 NIT, Trichy 147.09 145.86 1.23 18 MANIT, Bhopal 306.02 306.04 -0.02 TOTAL 15,889.03 15,994.89 (105.86) As per our Consolidation Report of Even Date For G. R. Garg & Company Chartered Accountants FRN - 0214N . ghotri Tripti Gurha C AUR GARG Consultant (Finance) Director(TC),MHRD & CPA(Incharge) PAR R NPIU NPIU M.No. - 097327 Date: January 2,2017 Place: New Delhi Difference in Expenditure Reported in FMR and Audited Financial Statements (Annexure - II) - - (Zin Lakhs) S.No. Name of State/CFIs/NPIU Expenditure A. STATES FMR (A) Audited Accounts (B) Difference (A-B) 1 ANDHRA PRADESH 1,773.63 1,863.55 (89.92 3 BIHAR 1.11 15.29 (14.18) - 3 GUJARAT 1,627.07 2,476.48 (849.41) 4 HARYANA 686.26 783.84( 5 HIMACHAL PRADESH 19.44 45.65 26.21 6 JHARKHAND 334.04 332.39 1.65 7 KARNATAKA 3,602.79 3,595.58 7.21 8 KERALA 2,911.30 2,939.99 (28.69) 9 MADHYA PRADESH 788.22 785.79 2.43 10 MAHARASHTRA 3,747.22 3,797.03 (49.81) 11 ODISHA 628.23 624.27 3.96 12 PUNJAB 210.77 274.22 (63.45) 13 RAJASTHAN 902.88 862.53 40.35 14 TAMIL NADU 1,351.22 1,364.10 (12.88) 15 UT-CHADIGARH 691.11 707.70 (16.59) 16 UT-PUDUCHERRY 287.66 311.47 (23.81) 17 UTTAR PRADESH 1,540.28 1,538.51 1.77 18 UTTARAKHAND 548.99 564.51 15.52) 19 NCT Delhi 161.37 209.95 (48.58) 20 WEST BENGAL 2,033.18 2,272.15 (238.97) 21 Tripura 170.10 162.84 7.26 22 TELANGANA 1,792.95 1,799.76 (6.81) 23CHHATISGARH 545.41 508.39 37.02 B. CENTRALLY FUNDED INSTITUTIONS 1 NIT AGARTALA 140.83 141.76 (0.93) 2 NIT PATNA 358.54 357.78 0.76 3 SLIET SANGRUR 115.91 115.94 (0.03) 4 ZAKIR HUSSAIN COLLEGE,ALIGARI 105.37 120.66 (15.29) 5 NERIST, ITANAGAR 197.87 197.87 (0.00) 6 ASSAM UNIVERSITY,SILCHAR 68.71 61.96 6.75 7 MNNIT ALLAHABAD 211.65 210.41 124 8 MANIT BHOPAL 306.02 306.04 (0.02) 9 NIT CALICUT 385.64 426.11 (40.47) 10 ISM DHANBAD 243.08 243.07 0.01 11 NIT DURGAPUR (including COE) 498.71 525.83 (27.12) 12 NIT HAMIRPUR 439.90 437.68 222 13 MNIT JAIPUR 147.24 155.11 (7.87) 14 NIT JALANDHAR 214.58 212.64 1.94 15 NIT JAMSHEDPUR 222.49 222.47 0.02 16 NIT KURUKSHETRA 250.94 205.82 45.12 17 VNIT NAGPUR 670.54 623.98 46.56 18 NIT ROURKELA 260.80 431.82 (171.02) 19 NIT SILCHAR 147.97 147.97 20 SVNIT SURAT (Including COE) 278.88 279.23 (0.35) 21 NITK SURATHKAL 154.51 148.24 6.27 22 NIT TIRCHY 147.09 145.86 1.23 23 NIT WARANGAL (Including COE) 78.59 78.78 (0.19) 24 NITTR, Chandigarh 407.21 407.78 (0.57) 25 IIIEST SHIBPUR (Including COE) 439.24 240.48 198.76 26 NIT, Raipur 21254 209.68 2.86 NPIU 464.92 522.35 (57.43) 33,525.00 35,013.30 (1,488.30) Note:- 1. Expenditure as per Audited Accounts reported at column B above is the total expenditure stated by individual CFIs, States and NPIU in Statement of Reconciliation of Total Claims to Application of Funds at point C-Total Expenditure made during the year. As per our Consolidation Report of Even Date For G. R. Garg & Company Chartered Accountants FRN - 0214N/ .S. Agnihotri Tripti Gurha CA URAV GARG Consultant (Finance) Director(TC),MHRD & CPA(Incharge) NPIU NPIU M.No. - 097327 ate: January 2, 2017 lace: New Delhi TECHNICAL EDUCATION QUALITY IMPROVEMENT PROGRAMME PHASE II CONSOLIDATED REPORT ON ANNUAL STATUTORY AUDIT Date of Audit Report Audit Report for Financial Year ended on 31.03.2016 S.No. Name of State/CPIs/NPIU Date of Audit Report A. STATES Original Revised/Supplementary 1 ANDHRA PRADESH November 14,2016 2 GUJARAT September 6, 2016 September 6, 2016 3 HARYANA September 1, 2016 4 HIMACHAL PRADESH June 13, 2016 5 THARKHAND August 20, 2016 6 KARNATAKA August 11, 2016 7 KERALA September 5,2016 8 MADHYA PRADESH September 19, 2016 9 MAHARASHTRA August 28, 2015 10 ODISHA September 19, 2016 11 PU September 23,2016 12 RAJASTHAN December 16, 2016 13 TAMIL NADU November 10, 2016 14 UT-CHANDIGARH October 25, 2016 15 UT-PUDUCHERRY June 9, 2016 16 UTTAR PRADESH October 13, 2016 17 UTTARAKHAND July 30, 2016 July 30,2016 18 WEST BENGAL Auust 9, 2016 19 TRIPURA May 20, 2016 20 JBIHAR July 11, 2016 21 CHATTISGARH November 1, 2016 22 NCT DELHI December 21, 2016 23 TELANGANA October 24, 2016 December 7,2016 B. CENTRALLY FUNDED INSTITUTIONS 1 NIT AGARTALA November 15,2016 2 NIT PATNA July 23, 2016 3 SLIET SANGRUR May 19, 2016 4 ZAKIR HUSSAIN COLLEGE,ALIGARH August 9, 2016 5 NERIST, ITANAGAR May 5,2016 6 ASSAM UNIVERSITY,SILCHAR June 23, 2016 7 MNNIT ALLAHABAD April 26, 2016 8 MANIT BHOPAL June 17,2016 9 NITCALICUT August 5,2016 10 ISM DHANBAD July 14,2016 11 NIT DURGAPUR June 27,2016 12 NIT DURGAPUR COE October 19,2016 13 NIT HAMIRPUR May 24,2016 14 MNIT JAIPUR June 30, 2016 15 NIT JALANDHAR November 11, 2016 16 NIT JAMSHEDPUR May 31, 2016 17 NIT KURUKSHETRA June 13, 2016 18 VNIT NAGPUR May 27,2016 19 NIT ROURKELA November 12, 2016 20 NIT S CHAR June 23, 2016 21 SVNIT SURAT August 17, 2016 22 COE SVNIT SURAT August 17, 2016 23 NITK SURATHKAL May 24,2016 24 NIT TIRCHY July 4, 2016 25 NIT WARANGAL August 22, 2016 26 NIT WARANGAL COE August 22, 2016 27 NITTR, Chandigarh May 28,2016 28 NIT, Raiur June 30, 2016 29 IIIEST Shibpur June 3, 2016 30 IIIEST Shibpur COE June 3, 2016 C. NPIU December 23, 2016 Notes:- Warangal COE Date of Audit Report is not mentioned in Auditor's Report, hence date of issue of Utiliazation Certificate has been assumed to be the date of Audit Report. As per our Consolidation Report of Even Date For G. R. Garg & Company Chartered Accountants FR 14N otri Tripti Gurha CA URAV GARG Or ultant (Finance) Director (TC), MHRD & CPA(Incharge) PA R NPIU NPIU M.No. - 097327 Date: January 2, 2017 Place: New Delhi TECHNICAL EDUCATION QUALITY IMPROVEMENT PROGRAMME [TEO1P I PHASE-I KEY OBSERVATION OF AUDITOR Audit Report for Financial Year ended on 31.03.2016 CENTRALLY FUNDED INSTITUTION 1. NITK, Surathkal * Physical verification of Assets acquired from Programme funds has been carried out by the Institution. Certificate for the same is not received. * Advances given during the year has not been closed within reasonable time in few instances. * Security deposit of Z0.38 Lakhs received during the FY 2013-14 from M/s. Neotal Systems & Services has not been repaid as on 31st March 2016. * Tax Deducted at Source on Interest received from Investment is credited to 26AS of National Institute of Technology Karnataka, Surathkal. * Revised Financial Monitoring Report for the 4h Quarter and for the month of March should be submitted. 2. NIT, Patna We would like draw your kind attention that we observe delay in adjustment of advances given to professor for incurring programme expenses. We suggest to adjust/recover the amount of advances within reasonable time. 3. NIT, Rourkela a) Efforts are being taken to achieve the expenditure limit. b) T 3.52 Lakhs has been settled / recovered out of Z 4.38 Lakhs. Necessary steps shall be taken for adjustment of the balance of Z0.86 Lakhs. c) Currently there in so difference exist. 4. NIT, Warangal a. An amount of 7 6.02 Lakhs recovered towards EMD/ Bid Security has not been repaid as on 31st March 2016. b. Physical verification of Assets acquired from programme funds has been carried out by the institution but certificate for the same is not received. Page 1 of 105 5. NIT, Hamirpur a. Fixed Asset register not maintained. b. TDS details not provided. c. Physical verification of fixed assets have not been done. 6. ISM, Dhanbad a. Fixed Assets :- fixed assets are stated at cost of acquisition plus other attributable expenses, out of which assets valuing 7 1.63 Lakhs are intangible assets. b. Depreciation :- since no depreciation is supposed to be charged based on 'Financial Management Manual' Section-6, Point no-6.2, Clause no-v on page no-29, Hence depreciation on various fixed assets has not been provided in the books of account. c. Grants:- the grants-in-aid of T 200 Lakhs was received during the year 2015-16 in favour of Indian School of Mines, Dhanbad from MHRD (Vide Letter no. F.No. 16-6/2015-TS. VII dated 31.08.2015} and 7 284.02 Lakhs on account of unspent balance of the previous year and Z 11.32 Lakhs towards interest income on TEQIP-II SB A/c, a sum of 7 243.07 Lakhs only has been utilized by the institution for the purpose for which it was sanctioned. That an unspent balance of Z 252.26 Lakhs remaining unutilized at the end of the year is being carried forward for utilization in next financial year 2016-17. Page 2 of 105 7. Zakir Hussain College of Engineering & Technology, Aligarh a. Finance and Cash / Fund Management Partially Satisfactory Domain Finance and Cash/ Fund Management Observation NO. A.1 Subject Title Advances treated as expenditure and reported in FMR Observation * Article 6.2 (ii) of Financial Management Manual states that "all payments will be charged off to relevant project activity account head at the time of making the payments except advance payment". * For meeting the day-to-day operation, the advance is issued to the Principal, ZHCET. Principal, ZHCET is submitting the bills and supporting documents and settling the advance from time to time. * It is noted that ZHCET is recording such advance as " Expenditure" in monthly "Financial Monitoring Report (FMR)" submitted to NPIU. * In the books of account, there stand advances of INR 2.55 Lakhs as on 31st March 2016. However, some part of such advances is spent by the Principal, ZHCET till 31st March 2016. The details are as follow: Dare Head of Cheque Name Amount unspent Expenditure No (Z) in Lakhs 1 FSD 148662 Advances to principal 2.50 2 I-I-I 149062 Advances to principal 0.05 Total 2.55 * However, the above is shown as advance in project financial statements. Domain Finance and Cash/ Fund Management Observation NO. A.2 Subject Title Preparation of Financial Monitoring Reporting (FMRs) Observation * Financial Monitoring Report (FMR) is derived from the expenditure A.2.1 recorded in the books of account. Hence, the expenditure reported in FMR should match with the expenditure recorded in books of account. * On matching of FMRs with books of account, the following differences are noticed: Sr.No Head of Exp Exp in FMR Exp in Books Difference 1 Procurement and civil 2970872.00 2970872.00 - works 2 Providing teaching and 1815992.00 1845992.00 (30000.00) Research Assistantships to increase enrolment in existing and new PG programmes in Engineering disciplines Page 3 of 105 3 Enhancement of R&D and 941909.00 941909.00 institutional consultancy activities 4 Faculty and Staff 1884687.00 2309702.00 (425015.00) Development (FSD) _ _ 5 Enhanced Interaction 487549.00 471971.00 1 578.00 with Industry i 6 Institutional Management 234280.00 201480.00 32800.00 Capacity Enhancement 7 Academic Support for 1096312.00 766474.00 329838.00 weak students 8 Incremental Operating 2660254.00 2812219.00 (151965.00) Cost Total 12091855.00 12320619.00 (28764.00) * From above, it is concluded that there is excess reporting of expenditure in some activity and there is short reporting of expenditure in some activity. In overall, there is under reporting of expenditure by INR 228764.00 in FMRs submitted to NPIU. However, the project financial statements are matching with books of account Domain Finance and Cash/ Fund Management Observation NO. A.3 Subject Title Loans & Advances Observation * As per audited financial statements, there is "Loans and Advanc s" of INR 156548 in the Balance Sheet as on 31 March 2015. * The concerned persons of ZHCET are not aware about the det of such loans and advances. Such loans and advances are continuing from last year's audited financial statements. Domain Finance and Cash/ Fund Management Observation NO. A.4 Subject Title Bank Balance Observation * As per audited financial statements of financial year 2014-15, there is bank balance of INR 20020952 as on 31st march 2015. * However, as per books of account, there is bank balance of INR 1391182 as on 1 April 2015. * From above, there is difference of INR 629770 in bank balanc between audited financial statements and books of account as on 31st March 2016. 8. NIT, Bhopal Cheque of 70.03 Lakhs issued on 22.05.2015, but not presented till 31.03.2016 has not been trasferred to Stale Cheque Account. P ACCO3 ~Pag 4 of 105 9. NERIST, Itanagar * The physical verification of assets has not been done during the year. * Fixed Assets Register, Stock Register, Advances Register and register of Contracts has to be maintained properly as per Section-6 "Financial Accounting" of Financial Man agement Manual. * There is need to strengthen internal control over books of account. 10. MNNIT, ALLAHABAD a. It was noticed that a sum of T 2.00 Lakhs had been given to the department of Electrical ergineering vide Cheque no- 937212 dated 14th September 2015 for conducting Student's conference on Engineering and System (SCES -2015) from 061 November,2015 to 08th November, 2015. However, no utilization certificate had been received from the department of Electrical Engineering towards utilization of the said amount. b. Further, it was noticed that a sum of T 3.50 Lakhs had been given to the Department of Biotech vide cheque no-461524 dated 27th January, 2016 for organizing international confereice titled "International Conference on Translational Biotechnology - Biosangam 2016"from 04th to 06d, February,2016. However, no utilization certificate had been received from the Department of Biotech towards utilization of the said amount. Similarly, it was noticed that a sum of T 3.50 Lakhs had been given to the Department of Bi tech vide cheque no 461523 dated 27h January,2016 for organizing the second edition of the annual E summit "Renaissance 2016" on Entrepreneurship from 29th to 31st January,2016. In this case also no utilization certificate had been received from the Department of Biotech towards utilization of the said amount. c. The following cheques have been issued during the financial year 2014-15 but have not been presented to the bank till date for payment. Since the said cheques are rendered stale, entry regarding issuance of the said cheques need to reversed: Cheque no Dated Voucher no Expenditure head Amount (in 963883 12.08.2014 147 Institutional reforms 284.00 978940 15.09.2014 209 FSDP 1200.00 963755 08.10.2014 291 R&D 3200.00 963779 28.10.2014 301 IOC 4480.00 d. During the course of our scrutiny of the payment vouchers, It had been observed that an greement towards printing of catalogues was made with M/s. Aman Akah Creations. Though deductable, no Page 5 of 105 tax had been deducted at source under section 194 C of the Income Tax Act, 1961 on pay ents made to M/s. Aman Akash Creations. A summary of the said payments is as under: Si No. Voucher No. Date Amount (Z) 01 36 25.05.2015 68500.00 02 37 25.05.2015 20550.00 03 38 25.05.2015 20550.00 04 39 25.05.2015 20550.00 05 40 25.05.2015 20550.00 06 41 25.05.2015 20550.00 07 42 25.05.2015 20550.00 Total Amount 191800.00 e. During the course of our scrutiny of the registers it was found that Fixed Asset reg ter was maintained in prescribed format but it was not updated. Likewise, some of the ledger accounts were also not updated and at some places were not balanced at respective month ends. f. Finally, it is recommended that: i. While giving payments for various workshops, an estimate of expenditure to be incurred should be obtained and attached with the payment vouchers. Any material variance observed in respect thereto can serve as a meaningful tool for subsequent and evaluation for budgeting expenditure estimates. i. Registers / ledgers should be regularly updated and balanced at month ends. iii. Bank reconciliation statements, if any, should be prepared on a monthly basis. 11. VNIT, Nagpur I. Settlement of Advances II. Physical verification of Fixed Assets 12. MANIT, JAIPUR With reference to your observation related to difference in amount of Procurement of Goods Account Head in Financial Statements Vs. Statement of Sources & Application of Funds, the auditor had clarified as under: a. Amount as per Financial Statement: (i) Amount in procurement of Goods Account as per Income & Expenditure Account NIL (Admin & General Exp. - Schedule 11) Page 6 of 105 (ii) Increase in amount of Equipments Account as compared to Previous Year 126.45 Lakhs (Fixed Assets - III Schedule) (25748499-13102807) Total Amount incurred for procurement of Goods {(i) + (ii)1 126.45 Lakhs b.Amount as per Statement of Sources & Application of Funds: (i) Amount shown in Procurement of Goods (Exp. By Components) 126.45 Lakhs Total Amount incurred for procurement of Goods 126.45 Lakhs Difference, If any (a-b) NL Due to accounting treatment of Fixed Assets, Amount of procurement of Equipments shown in fixed assets accounting head in Financial Statements, But in Application of Funds, the same is shown as Procurement of Goods, looking to available heads in Statement of Sources & Application of Fu ds. 13. NIT, TAMSHEDPUR * TDS was not applicable for the expenditure incurred / made during the financial year as per guidelines under Income Tax Act 1961. * Fixed Asset Register and Advance Register has to be maintained properly as per Section 6 "Financial accounting" of Financial Management Manual. * Web based Procurement Management Support System (PMSS) process as per the procurement arrangement under procurement manual was followed. * Observations reported under Internal Audit should be complied and addressed by SPFU. * There is need to strengthen internal control over books of account. 14. ASSAM UNIVERSITY SLICHER a. Procurement of Assets (Civil work, Equipment, Books, Furniture, Software etc..... During the course of our audit we have noticed that the unit has not incurred expenditure on procurement of fixed assets. The institute is duly recording all the transactions details and properly reporting the investment in Fixed Assets as per the requirements of the project However, we would like to draw attention to the fact that the fixed Assets Register is not yet maintained by the ir stitute. As a result of this, it is difficult to reconcile the actual position of fixed assets. Recommendation:- The Institute should maintain fixed assets register by entering all tlhe-quititative details and location of the fixed assets. A Page 7 of 105 b. LONG PENDING OF ADVANCES The Institute has granted advances to various faculties and other persons in relaton to the projects. During the course of audit, we have noticed many instances where advances were unsettled for a long period of time as a result of this practice, the project is losing bank interest. Recommendation Advances should be recovered within a reasonable period of time. c. RECONCILATION OF BANK ACCOUNTS The Institute is presently not preparing Bank Reconciliation Statement at regular iervals. As is evident from BRS a cheque bearing cheque number 156661 lay state since May 2015 amounting to TO.70 Lakhs/- and no action has been initiated for the reversal of the same Recommendation:- The institute should prepare Bank Reconciliation Statement on Monthly basis so tha any error or irregularities in recording the banking transactions could be rectified timely and any stale cheques could be recovered as well in the books of accounts. 15. NIT KURUKSHETRA The physical verification of assets has not been done during the year. 16. NIT, TRICHY The auditor observations are as follows: S. No. V. No. Date Amount Account Nature of payment Rmarks Head 1. 700 25.06.2015 51600.00 4.3 Faculty & Paid to Coimbatore Tax h not been Staff Psychology deductec at source u/s. Foundation 194C of the Income Tax Development towards course fee Act. . .for Informal Learning Programme. 17. NIT, SILCHAR It was observed from the statement of account that an amount of T 15.11 Lakhs paid is advance for conducting various Workshop/ Seminar etc. In our Opinion extending of advance for conducting such type of activities shall be minimized as far as racticable. Pag 8of 105 18. NIT RAIPUR Some procedural discrepancy has been reported by Internal Auditor. The discrepa cy has not been resolved by NIT till submission of our Audit Reports:- a) Bank charges of ZO.O1Lakhs are not entered in books of account. However written communication regarding waver of said bank charges is already made by NIT. b) Fixed Assets Register of Project Fund is under process in the format prescribed under 63 (vi) of Financial Manual of TEQIP-II. However separate Stock Register is being maintained for procurement of Fixed Assets of the project. 19. NITTR, Chandigarh During the audit we have observed that the institute had not opened separate bank acc unts for the said funds - Corpus Fund, Faculty Development Fund, Equipment Replacement Fund and Maintenance fund which the Institute is required to maintain as per world bank guidelines. However, Institute had made separate ledger accounts in their books for each fund. 20. NIT CALICUT a. No Separate Books of Account for TEQIP-II, NITC (i) Conditions During our audit, it was noted that books of accounts are maintained for NITC, as a whcle and that any separate books of accounts are not maintained for TEQIP-II. (ii)Criteria It is a statutory requirement as well as a good practice to have separate books of accounts for TEQIP II. (iii) Effects The figures in the financial statements of TEQIP-II cannot be easily deduced from th2 books of accounts of NITC. (iv) Recommendations Management should ensure that separate books of accounts along with supporting documents are maintained for TEQIP-II. (v) Management Responses Management concurs with the findings and recommendations. b. Retention of surplus funds in saving account (i) Conditions Pag 9 of 105 The institutes had been holding substantial amounts i.e. above Z 10 Lakhs in low interest bearing Saving Bank account, with an average of Z 3.01 crores during the year 2015-16 as given b low: Month Balance at the end of the Month Amount as per Bank Statement (?in crores) April 4.122 May 3.869 June 3.400 July 2.993 August 2.849 September 2.682 October 3.504 November 2.905 December 2.553 January 2.490 February 2.653 March 2.055 However, TEQIP phase-II had not considered the feasibility of evolving a system of automatic transfer of Funds beyond a Fixed balance, say 0.10 crore from the Saving Bank accou t to Term Deposits. If such surplus funds had been deployed in Term Deposits, it would have been possible to earn more interest. (ii)Criteria It is good practice to transfer Funds in the Saving Bank account, beyond a certain limit, to short term deposits, which is not in practice. (iii) Effects The Institute would have been able to earn more interest from funds thus deployed in such Short Term deposits, If an amount of average T 2.90 crores had been deposited in Short term Deposits at an interest rate of say 7% for 12 months, it would have fetched an amount of 7 5.72 Lakhs as additional amount of interest. Page 10 of 105 (iv) Recommendations TEQIP Phase II may consider the feasibility of evolving a system of automatic transfer of Funds beyond a fixed balance, say 0.10 crore from the Saving bank account to Term Deposits. If such surplus funds are so deployed, it would be possible to earn more interest. (v) Management Responses Management concurs with the findings and recommendations. c. Advances Pending Settlement for a Long Time (i) Condition * An amount of Z 47.85 Lakhs is seen paid to NITC (which is outstanding as on 3 /03/2016 also), which seems to be not pertaining to TEQIP-II. Also an amount of Z 2.00 Lakhs is seen paid to TEQIP I (which is outstanding as on 31.03.2016also), which also seems to be not pertaining to TEQIP II. * Advances disbursed during the year (i) 2012-13 amounting to Z0.51 Lakhs(ii) 2013-14 amounting to 7 1.04 Lakhs(iii) 2014-15 amounting to 70.15 Lakhs and advance amounting T 17.57 Lakhs, disbursed in the year 2015-16, which are pending settlement for more than two weeks, as on 31/03/2016. The details of advances pending settlement for more than two weeks (i.e. (c) (d) (e)& (f)) are as given below:- Date of Person to Whom Amount of Advances Advance Disbursement advances given pending/ made amount not during the year settled 01.04.2012 Madhavan Pillai 3000.00 3000.00 16.08.2012 3531.00 3531.00 16.08.2012 4500.00 4500.00 16.08.2012 4500.00 4500.00 15.12.2012 32000.00 32000.00 19.01.2013 3376.00 3376.00 09.04.2013 Pradeep Kumar 924.00 924.00 25.11.2013 Muhammed Shafi 59972.00 59972.00 13.02.2014 Unnikrishanan 20440.00 20440.00 13.02.2014 Praveen Kumar P 23000.00 23000.00 27.02.2015 M. K. Sekar 15250.00 15250.00 06.05.2015 R. Srinivas 375000.00 358400.00 Page 11 of 105 19.05.2015 Dr. G. Varaprasad 300000.00 243852.00 19.06.2015 Sudheer AP 185000.00 185000.00 13.07.2015 Sarvothama 50000.00 28466.00 29.09.2015 Dr. Abraham T. 12000.00 12000.00 Mathew 30.09.2015 Sarvothama 50000.00 44582.00 09.10.2015 Chitra AV 140000.00 117839.00 03.11.2015 Dr. R. Sridharan 52000.00 44314.00 10.11.2015 Dr. R. Sridharan 84500.00 49299.00 13.11.2015 Jagadeesha 45000.00 45000.00 30.11.2015 Shijo Thomas 10000.00 8917.00 05.12.2015 Bimal P. 25000.00 22683.00 05.12.2015 M.A. Naseer 25000.00 22683.00 10.12.2015 Dr. Subha D.P. 471000.00 202252.00 22.12.2015 Sathyananda Panda 7200.00 7200.00 22.12.2015 Sathyananda Panda 9000.00 9000.00 28.01.2016 Lijiya 100000.00 61850.00 28.01.2016 Kasthurba 34800.00 34800.00 28.01.2016 Madhu Kumar 200000.00 98192.00 12.02.2016 Susy Thomas 12000.00 9756.00 23.02.2016 C. Arun Kumar 24000.00 24000.00 03.03.2016 Dr. Shasikala 47000.00 47000.00 07.03.2016 Sudheer AP 43000.00 43000.00 07.03.2016 Biju T 35000.00 35000.00 Total 2459462.00 1925578.00 It may also be noted that, the rules governing the sanction of advances stipulate that, if an advance is outstanding, another advances cannot be granted to the same official without settling the previous one, which is not seen observes in some of the instances, given above. (ii) Criteria It is a good practice to settle advances for expenses immediately on incurring the expenses, and also to restrict the advances, to minimum required. (iii) Effects Expenses are not truly reflected on a timely manner. Page 12 of 105 ~5ACCQ' (iv) Recommendations Management should ensure that advances are disbursed to the minimum requirement, and are settled on a time bound manner. (v) Management Responses Management concurs with the finding and recommendations. d. Non Deduction of TDS on Annual Maintenance Contracts (i) Conditions Payment for Annual Maintenance Contract for TO.33 Lakhs is done without making I eduction, towards TDS. (ii)Criteria As Per Income Tax Act, Payments subject to TDS provisions are to be made after deductg TDS. (iii) Effects As Per Income Tax Act, Penaland interest provisions are there, for non deduction of TDS, (iv) Recommendation Management should take measures to ensure that TDS is properly deducted on payme t towards AMC. (v) Management Responses Management concurs with the finding and recommendation. 21. IIEST, SHIBPUR a. It was observed that in 2 instances that there is gap of more than 6 months between vo cher date and invoice date. Therefore, it can be concluded that tax was not deducted within due date. Management reply regarding same is that there was unavailability of fund. Date Voucher No. Party Name Invoice Remarks Amou t TDS No. ( k 22.01.16 1385/TEQIP- L. S. Davar 31-07-14 Payment 16370 1637 II/R&D/ETC/TDS &Co pending for more than 1 year 25.02.16 1426/TEQIP- Anjan Sen & 18-09-15 Payment 6500 650 II/R&D/ETC/TDS/ Associates pending for ME more than 7 months Page 13 of 105 22. IIEST, SHIBPUR COE a. It was observed that in 2 instances, professional tax was not deducted regarding Emplo ee Saibal Kumar Mondal. Voucher Voucher Person Head of Purpose Designation Amount Month Date No. Expense of (W) Expense 01.04.15 122/COE Saibal Incremental Salary Sec of COE 14000 April TEQIP- Kumar Operating II/IOC Mondal Cost 01.05.16 127/COE Saibal Incremental Salary Sec of COE 14000 May TEQIP- Kumar Operating II/IOC Mondal Cost STATES. 1. ANDHRA PRADESH Audit Observations: 1. Internal Audit coverage by Internal Auditor SPFU have appointed internal auditor for the financial year 2015-16 to conduct internal audit ol all the 11 participating institutions (including 2 COE) and SPFU, Andhra Pradesh. Internal Auditor have conducted Internal Audit into two phases. In first phase they covered period from 01-04-2015 to 31-12-2015 and in the second phase they covered period from 01-01-2016 and 31-03-2016. 2. Non appointment of Experienced Accounts Personnel for TEQIP 2.1 At Participating Institution Audit noted faculty personnel with engineering qualification are identified as Nodal Officer (Finar ce) who is laying little knowledge of accounting system. This is leading to * Non-adherence to financial discipline. * In few Institutions inadequate supporting documents for expenditure resulting in disal owance of expenditure. * Non Deductions of TDS wherever applicable. * Cash payments more than Z20,000/- 2.2 At SPFU, Andhra Pradesh Audit noted that at present there are no qualified/experienced accounts personnel at State SPFU. D ie to this * Books of accounts as per TEQIP Financial Manual is not maintained properly Page 14 of 105 * There is no monitoring of PI's adherence to expenditure incurred on procurement o other soft components * Consolidation of Financial Statement not prepared on timely basis * Report from PI's on Compliance s with Internal Audit observations & previous year statutory auditors is not called for nor monitored * SPFU should ensure has not ensured that Participating Institutions reduces audit disallowances of previous years from their claim statements (FMR's). * SPFU has not ensured FMR reconciliation with Books of accounts of PI's 3. Difference between FMR and Books of Accounts: Audit noted Participating Institutions has not Shown Expenditure in FMR as per Books of Accounts. This resulted in difference between expenditure as per books of Accounts and FMR. Further, there was misclassification of expenses as reported in FMR and actual as per Books. Such differences & Misclassifications should be avoided. Difference between FMR and Books of Accounts of the following Institutions is given under RECONCILATION AS PER BOOKS OF ACCOUNTS AND FMR FOR THE FY 2015-16 (T in Lakhs) SL NAME OF THE INSTITUTIONS Expenditure as per NO Books FMR Diff A SC 1.1 Participating Institution 1 Aditya Institute of Technology & Management, Tekkali, Srikakulam Dist. 134.01 134.01 - 2 JNTUA college of Engineering, Pulivendula, Kadapa Dist. 244.06 243.69 0.37 3 Madanapalle Institute of Technology & Science, Madanapalle, Chittoor Dist. 74.69 74.15 0.54 4 Sree Vidyanikethan Engineering College, A.Rangampet, Chittoor Dist. 111.38 111.38 - 5 Shri Vishnu Engineering College for Women, Bhimavaram, W.G. Dist 124.65 124.65 - B SC 1.2 Participating Institution 1 A.U. College of Engg., Visakhapatnam 255.79 249.11 6.68 2 Gitam Institute of Technology Visakhapatnam 19.84 19.84 - 3 G.V.P. College of Engineering, Visakhapatnam 114.89 110.43 4.46 4 JNTU College of Engineering, Kakinada 257.70 257.70 - 5 S.V. University College of Engg., Tirupati 211.93 211.93 - 6 V.R. Siddhartha Engg. College, Vijayawada 26.26 26.26 - Page 15 of 105 C COE Institutions 1 A.U College of Engg. Visakhapatnam 86.96 86.15 0.81 2 S.V.University College of engg. Tirupati 122.60 122.60 - D SPFU, Anadhra Pradesh 78.79 75.43 3.36 TOTAL 1,863.55 1,847.33 16.22 4. Statutory Compliances: Institutions has not deducted TDS under Income Tax Act, 1961 on the payment made to consultants, faculty honorarium, Car Hire Charges and Catering Expenses. 5. Supporting Documents/Bills Audit noted few of Institutions have shown expenditure in Books and FMR but for which support ng bills or riginals bills not enclosed to expenditure vouchers. As such audit considered same as ineligib e to claim under TEQIP. 6. Ineligible expenditure Audit noted some of the expenditure incurred by the Participating Institutions not eligible for claim under TEQIP Phase - II due to * Non availability of supporting documents: * Non adherence to prescribed guidelines * Amount not paid. Institutions wise ineligible expenditure is enclosed with as Annexure - 1 to the Management lettei ............. The total ineligible expenditure on account of deviation from TEQIP/Guidelines is Z 26.59 lakhs out of Z1863.55 lakhs expenditure incurred during the financial year 2015-16. (Annexure-1 enclosed tc with this 'tter) The expenditure has to be claim only on payment basis. Few Institutions has claimed expendit re though same are not paid. Unpaid expenditure are not eligible as per TEQIP guidelines. Such expendit re will be eligible as when same are paid. The total ineligible expenditure on account of non-payment (that is expenditure incurred but not paid) is Z 1.66 lakhs. This expenditure is eligible for claim as when same is paid by the respective participating institutions. Further Z1.61 lakhs expenditure incurred was not claimed by the PI's is eligible to claim in FMR (Annexure-2 enclosed to with this letter) In the previous financial year total ineligible expenditure on account of non-payment basis was T 16. 3 lakhs of which Z.8.06 lakhs was paid by the PI's during the current year considered as eligible for clain has been allowed and shown as a separate line as eligible expenditure in Utilization Certifkt e Page 16 of 105 Of the T.26.58 lakhs expenditure disallowed, the major disallowed expenditure pertains to following Institutions: Name of the PI's Amount Reason Sree Vidyanikethan Engineering College, 26,13,625 Head: Academic support for weak stu ents A.Rangampet, Chittoor Dist. Procurement of Services - non co pliance with procurement guidelines on servic as Suggestions 1. Each participating institute should have qualified accounting personnel to look a]ter TEQIP accounting & financial aspects as given in Financial Management Manual. 2. SPFU should place experienced and qualified accounts personnel. Financial Statements from the PIs should be called and should be compared with FMR's. 3. FMR should be prepared as per Books of accounts to avoid differences and misclassific itions. The Participating Institutions should revise FMRs as per audited financial statements. 4. Institute should adhere to applicable statutory regulations to avoid any problems in future 5. For Every TEQIP expenditure necessary supporting should be enclosed to the vouchers. 6. The Participating Institutions should be advised to avoid disallowance of expenditure on a count of * Non availability of supporting documents: * Non adherence to prescribed guidelines * Excess payments * Or violation of any other financial/procedural discipline. SPFU should advise the Participating Institutions to reduce the claim amount towards audit disallowance. 7. Adequate Justification with supporting documents should be enclosed for procurement of software/equipments under direct contract method or on proprietary item basis. INSTITUTION WISE DETAILS OF INELIGIBLE EXPENDITURE Ar aexure - 1 S.N NAME OF THE INSTITUTIONS 2015-16 2014-15 A SC 1.1 Participating Institution 1 Aditya Institute of Technology & Management, Tekkali, -10,940 - Srikakulam Dist. 2 JNTUA college of Engineering, Pulivendula, Kadapa Dist. 26,709 45,190 3 Madanapalle Institute of Technology & Science, Madanapalle, 2,27,353 4,93,520 Chittoor Dist. P 1 f Page 17 of 105 4 Sree Vidyanikethan Engineering College, A.Rangampet, Chittoor 26,30,313 21,18,395 Dist. 5 Shri Vishnu Engineering College for Women, Bhimavaram, W.G. -487,320 91,291 Dist B SC 1.2 Participating Institution 1 A.U. College of Engg., Visakhapatnam 2 Gitam Institute of Technology Visakhapatnam 6,680 - 3 G.V.P. College of Engineering, Visakhapatnam - 8,927 4 JNTU College of Engineering, Kakinada 1,41,998 693,700 5 S.V. University College of Engg., Tirupati 122,848 4,500 6 V.R. Siddhartha Engg. College, Vijayawada 1,100 4,91,000 C SC 1.2.1 COE 1 S.V.University College of engg. Tirupati - 27,729 TOUTAL 26,58,741 39,74,252 OUTSTANDING EXPENSES ELIGIBLE TO CLAIM ON PAYMENT BASIS Annmexure - 2 S.N. Name of the Institutions 2015-16 2)14-15 A SC 1.1 Participating Institution 1 Aditya Institute of Technology & Management, Tekkali, 2,661 - Srikakulam Dist. 2 JNTUA college of Engineering, Pulivendula, Kadapa Dist. 288,640 47,364 3 Madanapalle Institute of Technology & Science, Madanapalle, . Chittoor Dist. 4 Sree Vidyanikethan Engineering College, A.Rangampet, Chittoor Dist. 5 Shri Vishnu Engineering College for Women, Bhimavaram, . W.G. Dist B SC 1.2 Participating Institution 1 A.U. College of Engg., Visakhapatnam 40,126 - 2 G.V.P. College of Engineering, Visakhapatnam 121,904 35,985 3 V.R. Siddhartha Engg. College, Vijayawada 1,108 - 4 V.R. Siddhartha Engg. College, Vijayawada Page 18 of 105 5 S.V. University College of Engg., Tirupati TOTAL 454,439 83,349 Expenditure not Claimed in FMR (as per claim statement) B SC 1.2 Participating Institution 1 A.U. College of Engg., Visakhapatnam - 161,067 TOTAL 161,067 2. BIHAR a. Advance of T 4.28 Lakhs i.e. Z 3.63 Lakhs for annual meet and Z 0.15 Lakhs for industry Academic work and T 0.50 Lakhs in SPFU is still lying unadjusted. Action should be taken for early recovery/adjustment. b. An amount of T 50.75Lakhs was received from GOB which have been compensated agair st fixed Assets. c. There is no investment is form of term deposit. d. Interest earned on saving account has been taken as receipt for utilization in Scheme. e. An amount of T 185.71 Lakhs was deposited in State Treasury by BCE Bhagalpur. 3. THARKHAND I. Comments and Observations, if any, on the accounting records, Systems and controls that were examined during the course of audit: a) Accounting Records i. Manual books of accounts, i.e., Two column cash book (for recording the transactions involving receipts and payments by cash and bank), Ledger, Stock and Fixed asset register, which is almost in the format specified by the TEQIP-IL, is maintained. BIT, Mesra: i. Books of Accounts of TEQIP-II-Main and Centre of Excellence is maintained separately by the BIT. ii. Computerized books of accounts are being maintained. Accounts are being prompfly updated and maintained in tally package. iii. Manual Cash book is also maintaining. iv. Cheque issue register is maintaining v. Fixed Asset register is maintained. Page 19 of 105 CIT, Tatisilway: i. Computerized books of accounts are being maintained. Accounts are being promptly updated and maintained in tally package. ii. Manual Cash book is also maintaining. iii. Cheque issue register is maintaining iv. Fixed asset register is not maintained. b) System and Controls: SPFU Office Internal control system exists and is effective, no such major deficiencies and areas )f weakness are observed, which are reported as under and required to be strengthened. BIT, Mesra Internal control system exists and is effective, no such major deficiencies and areas :f weakness are observed, which are reported as under and required to be strengthened. CIT, Tatisilway System and controls is weak specially in the case of procurements, internal control sy 3tem need to be improvements as lot. Procurement and arrangements of documentation is not proper. Filing system is very weak as the related documents not kept and maintained at one places and scattered at various places. Significant time of our audit has been consumed for gathering the related do uents. II. Specific deficiencies and area of weakness (if any) in systems and control and make reconmendations for their improvement: A. Stock & Fixed Asset Register: * SPFU Office: Nil * BIT, Mesra: Nil * CIT, Tatisilway: Not maintained. B. State of Vouchers: NIL C. Programme Advance lying more than 180 days: I List of advances outstanding for more than 12 Month in CIT: (a) Ajay Pandey : 10,000.00 (b) United Telecom Limited: Z 3,500.00 Page ZO of 105 Ill. Degree of compliance with the financial/internal control procedures as documented in the PIP: Compliance with the financial/internal control procedures as documented in the PIP, exce ts in the cases as reported in Para I and Para II above, is found to be satisfactory. IV. Matters that have come to attention during the audit, which might have a significar t impact on the implementation of the programme: (i) SPFU Office No such matter is observed during the course of audit. (ii) BIT, Mesra : Nil (iii) CIT, Tatisilway i. TDS on payment made towards purchase of software in applicable cases, details of hich is given as under. Reference documents on TDS deducted under section 195 of Income Tax Act, 1961 in the cases of procurement of software's, etc, from the agents, dealer of authorize representatives of non-resident producer as required under the act, not taken in all applicable cases. It is recommended that, NPIU should look into the matter and take necessary action. ii. Irregularities observed in Procurement of softwares, Hardwares, E-Tournals,etc,are given as under: 1. It is observed that procurements have been made as per the requirements and specification of the respective departments: * All the initiation has been made after getting its approval from the Principal/Director o the CIT. * Procurements have been made after its approval of purchases committee. * All the Procurements have been made during the year through the offline system, as pe the directives of NPIU due to non-functioning of PMSS software. However, the institute has to upload ll the documents online through PMSS by the end of July 2016 and all the offline procurements are subject to PMSS uploading and its approval. 2. Purchase of proprietary items, such as software and journals: In the case of purchase of proprietary items, copy of offer letter to proprietor is not *ound in the file, however certificate of proprietor is available. As informed by TEQIP Cell of CIT, in all the cases as per the prevailing practices, initi lly email sent to the proprietors and as per their direction, we had initiated purchases through their chunel partners or franchise. Page 21 of 105 3. Software, Tournals, Library learning resources: Licenses, Passwords, Keys of softwares, etc. installed, is available in soft as well as in hard copy with the respective departments. Physical verification and installation of the given items, whether it is installed on server or stand alone computer or online version should be commented or verified by technical expert 4. In the case of purchase of J-Gate e-journal package subscription for 2016, from the records it is observed that, invitation for quotation, which should be made on CIT letter head, the same is found to be printed on the stationary of the supplier named informatics. As informed by TEQIP-II cell of CIT, we had sent invitation for quotation through em il to informatics (proprietor of J-Gate E-journal) and while making it reply, informatics had reprinted ouj emailed matters on its stationary for the sake of its clarity, etc. 5. Purchase of, All Society Periodicals Package (ASPP) 161 Journals, ASCE E-journals< MCGRAW Hill"s Asscess Engg., etc * Requisition from concerned departments not found. * Invitation for quotation not found. In case of a direct purchase from proprietor, letter o proprietor not found. Letter of proprietor (Le. ASME IEEE INC, ASCE Publications. The Mcgraw hills Companies) to contact, GISTPL as its channel partner/distributor for the said subscription of e-journals/ periodicals. If all formalities are duly complied with in this regard, Proprietor's certificate, i.e. wh ther GISTPL is proprietor's channel partner/ distributor not found. * Quotation of vendor not found & Offer to vendor not found. Since, quotation not found, the terms and conditions of invitation for quotation could not be verified and its approval from Procurement/Tender committee not found. Initials of tender committee not found on the documents (which ray be treated as quotation or bill by CIT), because quotation or Performa invoice or Tax invoice no written on the documents given by GISTPL. Covering letter, envelop, email printout not attached with the GISTPL documents. Details/quantum of Taxes added in bill type document not found. * TIN number and/or Service tax number not found on the documents submitted which is treated as bill/invoice/quotation by CIT. * One quotation received in November and others received in December. The manner cf requisition not seems to be proper. * TDS certificate or reference documents not procured from 1st TDS deducted, i.e. may be GISTPL or not available with GISTPL, as required as per income tax Act, 1961, since the e-journals procu ed in India form the various Non-Residents producers. * If there is other channel partner of the above said items in India4 ith ld be procurec through proper tender process, i b titive bidding process. Page 22 of 105 * As per the documents attached in the file, it seems the most of the paper are missing from the file. For example-Page no.7,40,39,31 and 38 is attached in addition to the bill/quotation type doc uents (page no thereof not given and not signed by member of PC) submitted by GISTPL. It seems th t all the related documents are not properly signed by PC member, numbered and found in haphazard manner. From the above it can be said that proper process of procurement is not followed. * As per bill/quotation type document dated 14/12/2015, the order given on 14/12/2015 ind on the same date the said bill/quotation is issued and based on that procurement is made and also payment thereof was processed on 23.12.2015 and transfer made by bank on 28/12/2015 Acknowledgement dated 28/12/2015 of receipts of payment was given by GISTPL vide made in due course. But the details of procurement of goods not found. Tax invoice not found. Link/pw of e-journals not found. * Initially the Principal has approved for purchase of ? 17.34 Lakhs and as per page no. 7 it is wrongly written as Purchase committee approved procurement of T 17.34 Lakhs but the purchase initiated For Z 19.33 Lakhs by adding purchase of unapproved addition of ?1.99 Lakhs for Springer from GISTFL. Demand and approval for initiation of purchase of springer not found as per the documents available in e file. * Procurement made of Z12.28 Lakhs vide voucher no 114 dated 23.12.2015 amounting o T 12.28 Lakhs including purchase of unapproved item no.5, Springer amounting to T 2.04 Lakhs from GISTPL should be disallowed. * Purchase of J-GATE from IPL amounting to T0.69 Lakhs (including 14% Service tax +0.50 /o Swatch Bharat Cess), TDS has not been deducted and the full payment is made by CIT. As per income tax act, 1961, since TDS on bill not deducted, the payment should be disallowed and it shall be allowed in the year in which it is deducted and paid. Further, quotation of dated 15/12/2015 is given and Performa invoice dated 07.12.2015 is found in the file ,i.e. date if procurement of Performa invoice is earlier to the date of submission of quotati n and Performa invoice is taken prior to evaluation by purchasing committee. * It is recommended that NPIU should look into the matter and if found any discrepancy there in, disallow this procurement. 6. Hardware items purchased vide voucher nos.111, 112&113 of T 0.17 Lakhs, Z 0.72 lakhs and T 1.81 Lakhs respectively for QEEE with ref. to email dated 13.12.2013 from NPIU, has been made without following procurement norms, i.e. purchases without following competitive bidding process. Further one of the vendor SKY Connect supplied goods Value of Z 0.17 Lakhs (incl. vat of T0.01 Lakhs), Cash bill issued not having Tin number. Quotation for the said items not found. No documents letter, documents, quotation & Bill if available any not acknowledged or not initialed by the members of FC. Documents of Sky Connect not numbered and other documents not properly numbered. Hence the entire urchased of hardware items, should be disallowed. Page 23 of 105 7. Procurement of ANTIVIRUS amounting to Z 2.68 Lakhs vide voucher no.110 dated 23.12.2015: * The computer hardware installed in various departments, places by the CIT and not belonging to TEQIP. * The fund allocated for TEQIP under the head procurement to the CIT is only to procure ent of Teaching, Learning & researchable software, e-journals, etc., which promote quality, efficiency and researches of the teachers and students and the fund should not to be utilized for purchase of non REQUIP components. * Hence it is the responsibility of the management of CIT to protect the compute' from viru from their own, fund and ANTIVIRUS must not procured under TEQUIP project from, soft component. Hence, the purchase of ANTIVIRUS amounting to 7 2.68 Lakhs is recommended for disallo ance. Other Irregularities are given as under: * As per bill Service tax @14% +0.50% Swach Bharat cess charged on antivirus bill but T S not deducted from the bill amount. Initials of PC members not found on bills as per income tax act. 1961 and the payment is made in full without deducting TDS on bill amount. initials of PC members not found on bills, quotations from 3 parties and other documents related to procurement of antivirus available in the file. * Tin no. and Service Tax no. of Bidders 1. Trisitra Marketing P LTD:2, Jupiter Software & Systems Pvt Ltd.& 3. Comptek international not found in the quotation evaluated without considering such important items must be available in quotation/ bills. * Authorization Letter issued by producers of antivirus such as Quick heal Tech. (for Jupiter Software & System Pvt Ltd.) CASPERSKY (for Comptek international is found and authorization for Trisita Marketing PLTD from CASPERSKY not found. * Letter issued by CIT to producers of antivirus such as Quick heal Tech.(Jupiter Softwa & Systems Pvt Ltd.) & CASPERSKY (Comptek international) not found. * 3 Competitive Rates of same items should be considered by PC and not 2 rate of CASPERSKY and 1 rate of Quick heal Tech ,i.e, either 3 rates of CASPERSKY or 3 rates of Quick heal Tech should compared and the processor 3 competitive bidding not complying with while procurement of general ite s. The Purchase of Quick heal antivirus made on the basis of single quotation of Quick heal antivirus Item. Hence The Purchase of Quick heal antivirus should also be disallowed on this ground, 8. Purchase of software from Tata Technologies amounting to T 39.72 Lakhs vide voucher no.124 dated 24.12.2015: * As per the terms and conditions vide page c/8 attached, 12.36% service tax charged on procurement and as per the quotation dated as per quotation sales tax and other taxes @ 14.50% shall be charge, as per our observation and page no c/8, here the rate of tax levied @ 14.50% relates to service tax. * TDS on payment of Z.39.72 Lakhs not deducted and payment of full bill amount is paid in the accounts of Tata Technologies. It is the violation of the related provision of Income Tax Act, 1961. Page 24 of 105 Other irregularities are given as under: * TIN no. and Service Tax no. not mentioned on quotation/bill type document. Whether the documents as attached are quotations or performa invoice or Tax Invoice not identifiable as no such identification written on the documents dated 08.12.2015. * Quotation type documents are serially numbered but not initialed by PC members. Servic( tax number, vat number and STAMP of Tata Technologies not found on quotation type docs. * Letter to issue performa/ tax invoice issued to Tata Technologies not found in file and t seems that the payment made on the basis of quotation. * Requisition of items from concerned departments and approval from HOD/principal not ound in the file. Only a requisition issued from TEQUIP cell and its approval from principal is found attach d in the file. * Invitation for quotation not found in the file of Bidders 1. Trisita Marketing P LTD: 2.Ju iter Software & Systems & Systems Pvt Ltd. & 3. Comptek international not found in the quotation submi ted by them and the quotation evalued without considering such important items must be available in quo tions/bills. * Authorization Letter issued by producers of antivirus such as Quick heal Tech. (for Jupiter Software & Syatems Pvt Ltd.)& CASPERSKY (Comptek international) is found and authorization for "risita Marketing Pt Ltd from CASPERSKY not Found. * Letter issued by CIT TO PRODUCERS OF ANTIVIRUS SUCH AS Quick heal Tech. (for J piter Software & Systems Pvt Ltd.) & CASPERSKY (Comptek international) is not found. 9. Purchase of AICTE science Direct engg + comp science 275 Jnls amounting to T5.53 Laths vide voucher no.115 dated 23.12.2015: * The quotation type document as attached in the file evaluated as quotation is seems to be in the same format, same type of font and same quality of printout, as that of TTL has given. * It is recommended that NPIU should look into the matter and take necessary action or c rder for detailed procurement audit to evaluate the procurements. * Tax invoice not found attached in the file. * Tin no./Service tax number not found on quotation. In Quotation service tax amo nt not mention separately. 10. Purchase of software of T 26.82 Lakhs: * Purchas of CITsw4 from JSPPL of Z 3.01 Lakhs service tax is charged but TDS not deducted there from. * COMPTEC international bill of Z.5.50 Lakhs not mentioned service tax/sales tax separatel . If the producer is nonresident TDS deduction reference by 1st party in India also not available. Page 25 of 105 * TETCOS bill of Z 6.25 Lakhs mentioned sales tax separately. If the producer is a non reside t TDS deduction reference by 1st party in India also not available. * Core Tech. (Z 3 Lakhs) the quotation type document as attached in the file evaluated as q iotation is seems to be in the same format, same type of font and same quality of Printout, as that of TTL has given. Quotation given inclusive of all taxes and service tax/ sales tax not mentioned separately. I the producer is non-resident TDS deduction reference by 1st party in India also not available. * Web Tek Labs Pvt Ltd. (Z 3.50 Lakhs), the quotation type document as attached in the file evaluated as quotation is seems to be in the same format, same type of font and same quality of printo t, as that of TTL has given. Quotation given specifying service tax and sales tax separately. TDS not deducted on service part and payment made without taking declaration from transferor. 11. Purchase of stationeries, printing materials in excess of T 0.25 Lakhs without PMS3 process/taking competitive quotations from the parties and other irregularities is given as under. For instances: A. Expenses made vide vch. No. 81 dated 30.09.2015 under the head FSD programme: * Payment made to made to I D Publishing, T 0.26 Lakhs vide cheque no. 351006 against supply of Brochure with envelopes, certificates and Bag. 41 Bags. Purchases @ 400/-each without taling competitive quotations). * Payment to Arya Foods, Z 0.56 Lakhs vide ch. No. 351008 dated 07/10/2015 for supply of food. Competitive quotations not taken /PMSS not followed. TIN no. of Supplier not mentioned on the bill, Bill seems to be prepared by Computer and not found in proper format. * Honorarium paid to Resource Persons in cash amounting to T 0.36 Lakhs it should be paid through account payee cheque. * Participant List not shown to us during the course of audit. * Since, procurement process as per NPIU guideline not followed in the above cases henc the programme expenses, related to procurement amounting to (TO.26+ T0.56) Lakhs should be disallDwed, providing reasonable consideration of Event organized in actual should be made by NPIU, if any. B. Expenses made vide vch. No. NOT given dated 30.04.2016: * Advance given during January 2016 and programme organized during 28-30 january 201 but the expense not booked at the end of the year even most of the bills received. * The payment made to Dara Tent House. Z0.58 Lakhs (Before deducting TDS of Z 1350/- contractor) vide cheque no. 458693 against supply of food, etc. but bill dated 02/02/2016 of DARA tent house not containing TIN number and PAN number and also bill ref. no not mentioned From the bill it seems that, the given bill is not proper. More importantly, PMSS system not followe"nd competitive quotations not taken. Approval of purchase committee not found on the bill. Page 26 of 105 ED?~ pj * Honorarium paid to Resource Persons in cash amounting to 7 0.27 Lakhs it should be paic through account payee cheque. * Purchase of Registration kit amounting to Z 63,559.00 vide supporting no.1 a to d, com rising 35 bags @ 270/- each and 55 bags @ 750/- per bag from Y M Enterprises vide bill no. 79 dated 10 02.2016 total bag purchases amounting to Z 57,778.00 against budget for 80 bags @ 400/- each total budget for bag was T 32,000.00 only. PMSS system not followed and competitive quotations not taken. App val of purchase committee not found on the bill. * Since, procurement process as per NPIU guideline not followed in the above cases hence, the programmed expenses related to procurement amounting to Z 57,778.00 should be disallowed. C. Advances for Effective Teaching-II (FSD) given to T 70,000.00 given at the end of the Fi ancial Year. D. Advances given to coordinator for Next Generation Electronics (FSD) and 7 1,302.00 outstanding as on 31.03.2016. It is recommended that programme expenses must be paid directly from project instead o paid in cash etc through the hand of Coordinator V. Any other matters that the auditors considers pertinent: a. SPFU Office: Operating the Bank Current A/c instead of Operating Bank Saving A/c: Current Account with Swap-in facility has been operated and maintained. Hence, des ite of not maintaining saving bank account, loss on account of Interest earning on deposits with bank has not been incurred and found in order. During the year receipts of Interest from bank is ? 4,71,170.00 b. BIT, Mesra: Operating the Bank Current A/c instead of Operating Bank Saving A/c: * It is observed that current account is operated under the project, which results in loss of earning of the bank interest on the funds available. * The matter has been reported in our earlier report for science F.Y. 2012-13, but no action for conversion of Current Bank to Saving Bank A/c's. * However, the fund over required expenses transferred to Term Deposit and Interest earned thereon is Z 16,88,189.00 during the year. Recommendation: It is recommended that, to protect the intent of the project fund, a saving account should be opened and operated instead of operating Current Account. Alternatively swap in facility may be availed for earning of interest from available fund instead of parking of fund to TDR a/c. c. CIT, Tatisilway: * Since February, 2014 operation under the project has been made under through saving bank account. * During the year 2 00 has been earned as bank interest onSB A/c. Page 27 of 105 * In the event of payment made against purchase of software without deducting TDS or taking declaration from vendors at the time of payment. However, after audit discussion or the audit remarks on the same, back dated declarations from 2 parties, namely, Comptek Intern tional and JSSPL taken and shown to us on 20.07.2016, which are unsigned by the purchase com ittee and seems to be received recently after audit discussions. From the discussion with the account staff it is informed that the declaration received through email from JSSPL (date of email and attachment not sent to us for our verification) & since Comptek is local firm hence its email or postal mail could not be verified. It showing malafide on its booking of the same or NPIU should take necessaiy action in this regard of not booking the expenses incurred in January and most of the bill recei ed before 31.03.2016 thereof and the fund outstanding as advance as on 31.03.2016 and manner of piocurement made under the programme. d. Expense made vide vch.No....... dated ....... Under the head FSD programme: * Payment made to YM Enterprises, Z 28,443.00 vide cash against supply of Bags vide n 80 dated 04/05/2016 comprising 35 bags @ 270/- each and 55 bags @750/- per bags each with:ut taking competitive quotations and not following NPIU procurement guidelines. More interestir gly as per para b above bags purchased vide bill no 80. Which comes immediately succeeding the b11 no 79, it seems that the vendor is not proper or the bills as attached are not proper and creating sus icion and also NPIU procurement guidelines not adhere with. Hence this expenses amounting to Z28,443.00 should be disallowed, providing reasonable consideration of Event organized in actual should be made by NPIU, If any. * Payment Arya Foods, T87,220.00 vide ch. No. 351008 dated 07/10/2015 for suppl of food. Competitive quotations not taken/PMSS not followed. Tin no. of supplier not mentioned on the bill AF/05/16/04 as given. Since NPIU procurement guidelines not adhere with. Hence this expenses amounting to Z 87,220.00 should be disallowed, providing reasonable consideration of Event organized in actual should be made by NPIU, if any. - Honorarium paid to Resource Persons in cash amounting to Z30,000.00 it should be pa d through account payee cheque. - Participant list not shown to us during the course of audit. - Since, procurement process as per NPIU guideline not followed in the above cases hence, the programme expenses related to procurement amounting to Z26,302.00+ T56,441.00 should be disallowed, providing reasonable consideration of Event organized in actual should be made by. iii. Advance Management: 1. It is observed that, in most of cases for incurring programme, entire budgeted programme e penditure given as advance to coordinator and the expenses lastly paid in cash to the parties, vend', etc. from coordinator and guidance on payments made through account"payee heque is violated md it also Page 28 of 105 showing weaker programme management system. The expenses should be paid directly to the parties and not via media to programme coordinator. It is also observed that some of the huge programme advance given and instances of advances outstanding for refund or adjustment thereof such as: a. Advances for IIS-2016 (III) with Mr. Ranjan kumar amounting to ?2,07,180.00. given during January and not adjusted till the end of the Financial Year. b. Advances for MDSPA-(FSD) given to Mr. Sumanta Bhattacharya amounting to T55,000.00 iven at the end of the Financial Year. practice of CIT and management of CIT is trying to its best to prove the right the wrong process and procedure in purchase of software, etc. and made payment thereof and instead of taking corrective measures, submitting such back dated documents procured after audit discussion, Therefore, it is recommended that NPIU and SPFU should take necessary steps so that such malafide practices should be avoided in future by the institutes. VI. Certify whether Physical Verification of Fixed Assets was carried out by the institution: a. SPFU Office and CIT, Tatisilway: No such fixed asset is purchased till the date under the project. Hence, physical verification of Fixed Assets is not applicable. b. BIT, Mesra: Physical verification of fixed assets as well as stock items has been made by the organization on periodical basis. c. CIT, Tatisilwav* Computer, etc, hardware's purchased during the year but no such records of Physical ve ification of fixed assets procured under the project has been observed. VII. Suggestion/Recommendation on above observation: a. SPFU Office: NIl b. BIT, Mesra: NIL c. CIT, Tatisliway - It is recommended that, NPIU should order for detailed procurement audit of all the purchases made by the CIT under the project including the procurement made during the current financial year along with the physical verification of softwares, hardware and take the necessary actions accordingly. - Expenditure for procurement made towards organizations of programme, seminars, workshops, such as food, stationary, bags etc, should be made as per the guideline of NPIU. - Transfer of Z 80,600 each in 4 funds amounting to Z 3,22,400.00 on 25.02.2016 as repor ed in BRS wrongly transferred from TEQUIP fund and now returned as on 02.06.2016 and now rectified. Page 29 of 105 ,-~ ~X However bank interest earned on this fund during the period 25.02.2016 to 02.06.2016 should also be transferred to the TEQUIP fund. 4. State of Haryana There was a difference between FMR and Books of Accounts. Details are given below:- S.No. Name of Institute Expenditure as per Books Expenditure as per FMR Difference 1. Faculty of Science, KUK T11170816.00 Z 11161075.00 Z 9741.00 Total Z 9741.00 5. PUNJAB State Project Facilitation Unit (SPFU), Punjab & its institutions We have visited the SPFU office & its projected institutions and conducted the statutory a dit for the financial year 2015-16. Our Major Observations are as follows:- A. CHANDIGARH ENGINEERING COLLEGE,LANDRAN 1. Voucher no 14 dated 04.01.2016, booked under 'Institutional reforms Z 1.15 Lakhs for tl e National Board of Accreditation, No TDS deducted from the amount. Hence disallowed. 2. Voucher no. 3 dated 01.05.2015 booked under Interaction with industry Z 5.30 Lakhs Pay nent made to Medhaavi Centre for Automotive Research. The following are our observations on the agreement between the institute and party:- I. Agreement dated 23.12.2013 was given. However it does not specifies the total I ayment or mode of such payment to be made. Hence it consider as null & void II The validity of agreement is not also mentioned, Agreement starting or ending date:s not there in the agreement. III The agreement is silent about service tax which has been paid Z 0.80 Lakhs. (Z 6.50 Lakh @ 12.36%) IV TDS is deducted @2% Z 0.13 Lakhs, Since service tax has been charged the TDS should have been 10% i.e. Z 0.63 Lakhs. Hence Z 6.80 Lakhs (Z5.30+Z0.80) Lakhs booked under Interaction with industry is disallowed. 3. Voucher no .1 dated 01.05.2015 booked under 'Interaction with industry' 0.75 Lakhs payme t made to Web Tek Labs Pvt. Ltd The agreement between the institute and party stating the following facts:- .I. Address of Chandigarh Engineering College and its constitution has been wrongly mentioned in the contract. II As per agreement each student would pay the fees to Web Tek directly as per clause no.2 on page 3 of the agreement. Page 30 of 105 However bank interest earned on this fund during the period 25.02.2016 to 02.06.2016 shou d also be transferred to the TEQUIP fund. 4. State of Haryana There was a difference between FMR and Books of Accounts. Details are given below:- S.No. Name of Institute Expenditure as per Books Expenditure as per FMR Difference 1. Faculty of Science, KUK T11170816.00 Z 11161075.00 0 9741.00 Total Z 9741.00 5. PUNTAB State Project Facilitation Unit (SPFU), Punjab & its institutions We have visited the SPFU office & its projected institutions and conducted the statutory audit for the financial year 2015-16. Our Major Observations are as follows:- A. CHANDIGARH ENGINEERING COLLEGE,LANDRAN 1. Voucher no 14 dated 04.01.2016, booked under 'Institutional reforms T 1.15 Lakhs for the National Board of Accreditation, No TDS deducted from the amount Hence disallowed. 2. Voucher no. 3 dated 01.05.2015 booked under Interaction with industry Z 5.30 Lakhs Pay ent made to Medhaavi Centre for Automotive Research. The following are our observations on the agreement between the institute and party:- I. Agreement dated 23.12.2013 was given. However it does not specifies the total payment or mode of such payment to be made. Hence it consider as null & void II The validity of agreement is not also mentioned, Agreement starting or ending date is not there in the agreement. III The agreement is silent about service tax which has been paid T 0.80 Lakhs. (T 6.50 Lakh @ 12.36%) IV TDS is deducted @2% Z 0.13 Lakhs, Since service tax has been charged the TDS sh)uld have been 10% i.e. ? 0.63 Lakhs. Hence Z 6.80 Lakhs (Z5.30+T0.80) Lakhs booked under Interaction with industry is disallowed. 3. Voucher no .1 dated 01.05.2015 booked under 'Interaction with industry' 0.75 Lakhs payme t made to Web Tek Labs Pvt. Ltd The agreement between the institute and party stating the following Iacts:- .I. Address of Chandigarh Engineering College and its constitution has been wrongly mentioned in the contract. II As per agreement each student would pay the fees to Web Tek directly as per clau e no.2 on page 3 of the agreement. Page 30 of 105 "'j III TDS deducted @ 2% of Z 0.75 Lakhs instead of 10% 7 0.75Lakhs. Hence Z 0.75 Lakhs booked under interaction with industry is disallowed. 4. As per internal audit report, TDS was not deposited into bank within prescribed time period. Date of Date of deposit Amount of Observation deduction TDS 20.02.2016 30.03.2016 9000 Payment of Z 0.90 Lakhs nade for processing fees of Ac reditation programme. B GURU NANAK DEV ENGINEERING COLLEGE, LUDHIANA 1. A sum of ? 5000/- is outstanding with the dispatcher as impressed no entry of expe diture or adjustment is made since last 2 years. 2. Voucher no. 29 dated 17.09.2015 for Z0.18 Lakhs. Registration fee receipt not available in case of expenditure of 'Capacity Enhancement. 3. Voucher No. 7 dated 01.05.2015 for ? 0.43 Lakhs was reimbursed as thesis expenses in 'Facu ty & staff development' no TDS was deducted. 4. Voucher no.6 dated 20.04.2015 for T 0.49 Lakhs was reimbursed as thesis expenses in 'Fa ity & staff development' no TDS was deducted. 5. The Institute has paid a sum of ? 4.06 Lakhs as extra reimbursed to exciting employ s out of 'Incremental Operating Cost. 6. College received grant of ? 165.00 Lakhs vide voucher no.3 dated 09.04.2015. This grant is fully utilized to repay the loan to the college. 7. ? 54.84 Lakhs was current assets on 31.03.2016 it contains surplus/deficit of previous years 8. Voucher no.55 ? 0.48 Lakhs paid to party booked under FSD No TDS Deducted hence disal owed. 9. Many cheques were paid in bearer mode to staff as per bank statement- Sr.No. Date Amount Head 1 07.04.2015 7121/- IOC 2 13.04.2015 5000/- IOC 3 21.05.2015 38886/- IOC 4 28.05.2015 1686/- IOC 5 28.05.2015 1260/- IOC 6 05.06.2015 9935/- IOC 7 14.07.2015 6349/- IOC 8 22.07.2015 3000/- IOC Page 31 of 105 9 22.07.2015 5236/- IOC 10 29.07.2015 3630/- IOC 11 24.08.2015 468/ IOC 12 02.09.2015 2360/- IOC 13 15.09.2015 12380/- IOC 14 29.09.2015 21361/- IOC 15 09.11.2015 4332/- IOC 16 10.11.2015 15960/- IOC 17 30.11.2015 17500/- IOC 18 04.12.2015 2880/- IOC 19 18.12.2015 32770/- IOC 20 18.02.2016 7300/- IOC 21 19.02.2016 17000/- IOC 22 16.03.2016 30585/- IOC 23 29.03.2016 23291/- IOC 24 30.03.2016 38424/- IOC Hence Z 3.09 Lakhs booked under IOC payments made through bearer cheques are disallowed. C SHAHEED BHAGAT SINGH COLLEGE OF ENGINEERING & TECHNOLOGY, FEROZ7PUR 1. Voucher no.9 dated 10.04.2015 of T 3.91 Lakhs. Honorarium paid to existing staff pertains to 2014-15 is not allowed under 'Incremental opera don cost as follows:- S.No. Date Amount (Z) 1 12.05.2015 83,862/- 2 05.06.2015 82,000/- 3 06.07.2015 82,000/- 4 06.08.2015 82,000/ 5 03.09.2015 82,000/ 2. Voucher No. 12 dated 16.04.2015 of T 0.99 Lakhs. International conference attended by Mr. Amit Arora, 'Faculty & Staff development' expend ture T 0.99 Lakhs only It was found from records that the faculty was on study leave at the time of attending the conference at China. The ticket was also booked from Rorkee. 3. 'Voucher no 17 dated 21.04.2015 of Z 0.32 Lakhs was spent on gift of mementos of Golden temple to NAAC members under 'Operation and Maintenance' Page 32 of 105 4. Voucher no.19 dated 30.04.2015 sum of Z 0.61 Lakhs paid to Sarabjit Bus Service under I no TDS deducted. 5. Voucher no 18 dated 21.04.2015 Z 0.85 Lakhs booked under IOC expenditure was incurre from the college A/c in March, 2015. However later it was transferred to TEQIP A/c. Hence disallowec. 6. Voucher no 84 dated 26.08.2015 booked under Research & Development' Printing of proceedings of conference NCCCS 2015 Z 0.60 Lakhs all quotation were posted from Delhi on the same date with same serial no. of speed post at the same Post office. 7. Voucher no 88 dated 03.09.2015 booked under 'Research & Development' 100 school bags were purchases for Z 0.56 Lakhs no stock record found. 8. Voucher no 66 dated 25.06.2015 T 1.19 Lakhs booked under Faculty & Staff development' i. BOG approval only for Z 1.00 Lakhs. ii. Z 1.50 Lakhs advance was taken from college against approval of T 1.00 Lakhs/- Out o this ZO.31 Lakhs was refunded to college but later he expenditure of Z 0.88 Lakhs was booked in EQIP A/c iii. Cancellation penalty of ticket of Z 0.03 Lakhs is not allowed. 9. Voucher no 54 dated 30.05.2015 of Z 0.26 Lakhs booked under Incremental Operating Cost' p id to UCG in cash for reimbursement of tickets not allowed. 10. Voucher no 70 dated 10.07.2015 Expenditure of Z.2.04 Lakhs incurred for UCG hospitality not allowed in Incremental Operating Cost' specifically. 11.Voucher no 73 dated 16.07.2015 Z 0.19 Lakhs expenditure on Hospitality of NAAC team booked under Incremental Operating Cost' not allowed as per rules. 12.As per Internal Audit Report, in some cases payments were made in cash which are disallowed. The details are as follows:- Date V. no Amount Observation 09.02.2016 153 15129 Cash paid to M/s Bhagwan genral store for conference kit 30.05.2015 54 25645 Amount paid to P.H.sawant for honorarium & TA in cash not allowed. 09.02.2016 153 11900 Cash paid to Kumar Vaishno dhaba 21.03.2016 165 9900 Cash paid to saral stationers. D. GAINI ZAIL SINGH PTU CAMPUS BATHINDA 1. As per Internal audit report, voucher no. 32 dated 22.06.2015 Z 0.50 Lakhs paid to Bansi Lal c re taker of guest house for the refreshment/Lunch/dinner etc. TDS not deducted. Hence disallowed. 2. During the course of audit we observed that the following advances are pending till 31.03.2015 Page 33 of 105 Sr.No. Name Date Amount Balance 1 Balwinder singh 11.05.2015 20000 20( 00 2 Karanveer singh 29.05.2015 60000 60(00 3 Gursharan singh 10.04.2015 125000 75(49 3. Voucher no 47 dated 17.06.2015 Z 0.32 Lakhs booked under IOC purchased of instruments for Punjab university, Chandigarh Z 0.22 Lakhs and T 0.10 Lakhs were charged as service tax @ 14% Was it a service or equipment. No service tax number is available on invoice. 4. Similarly voucher no. 31 dated 11.06.2016 Z 0.10 Lakhs booked under IOC service tax charged and no service tax no. available on invoice. 5. Voucher no 6 dated 08.04.2015 Z 1.63 Lakhs booked under IOC remuneration to campus dire tor for last 4 years not allowed. 6. Voucher no. 5 dated 08.04.2015 Z 1.63 Lakhs booked under IOC remuneration to J.S.Hund 1, campus director for previous years not allowed. 7. Voucher no 10 dated 27.04.2015 booked under IOC Z 0.06 Lakhs remuneration paid for pr ious year not allowed. 8. Voucher no 29 dated 10.06.2015 Z 0.60 Lakhs paid to NBA workshop charged to FSD no TDS deducted. 9. Voucher no 94 dated 02.02.2016 Z 0.43 Lakhs remuneration booked under IOC for previous ear as not allowed. E. BEANT COLLEGE OF ENGINEERING & TECHNOLOGY 1. Payment of Z0.72 Lakhs booked under Procurement was made for installation of CCTV cam ra in girls hostel. Any expenditure in girls hostel is not allowed as per SOE. 2. Disallowed expenditure of last year Entry in books of account not passed till date. F. THAPAR UNIVRSITY, PATIALA 1. Voucher no 35 dated 31.03.2016 Z 1.73 Lakhs booked under Procurement payment to wood t c India for aluminum portion work in Antena testing lab in girls hostel for modernization of lab is not all owed. 2. Voucher no 26 Z 0.22 Lakhs booked under FSD dated 30.01.2016 includes a sum of Z 0.05 Lalds for ticket cancellation charges not allowed. 3. Voucher no. 16 dated 30.09.2015 Z 0.16 Lakhs booked under FSD expenses on workshop on embedded systems includes Z 0.05 Lakhs expenses to Hotel grant Park. As per the communication with hotel there were no rooms available on such date. Hence Z 0.05 Lakhs is disallowed. 4. Voucher no 9 dated 03.09.2015 Z 0.14 Lakhs booked under FSD conference to Chennai no bills attached hence disallowed. Page 34 of 105 5. Assistantship paid through voucher no 37 and 42 dated 31.03.2016 7 0.18 Lakhs & ? 8.94 Lak s credited to Thapar University. Hence Z 9.13 Lakhs is disallowed. 6. ?0.03 Lakhs booked under Procurement via voucher no 39 dated 31.03.2016 credited to Thapar University. 7. As per internal audit report, list of disallowed expenses of 2014-15 which are not resol ed by the management- i. Voucher no 20 dated 31.05.2014 booked under capacity enhancement Z 0.33 Lakhs expenses for misc. expenses by faculty during leadership training at Haridwar not allowed is purpose of purchasing product and reason for donation not specified. ii. Voucher no 15 dated 31.05.2014 T 4.40 Lakhs booked under R&D salary p id to Dr. S.P.Nigam and Dr. V.P. Nigam as visiting faculty from feb to may reason for not deducting TDS and approval of BOG that the salary is to be reimbursed to university through TEQIP not taken. iii. voucher no 10 dated 31.05.2014 Z 0.08 Lakhs expenses for dissertation work by viv k Sharma, purchases above Z 0.05 Lakhs but no quotation is obtained. iv. Voucher no 13 dated 31.05.2014 Z 2.44 Lakhs as salary paid to Hanish Mittal, Gu eet kaur, satbir singh from February to May such salary is paid by Thapar University and zeimbursed through TEQIP funds. Approval of BOG for the same is not obtained. v. Voucher no 9 dated 15.05.2014 Z 2.67 Lakhs under Capacity Enhancement barding & lodging expenses for FSD during 2nd leadership programme at haridwar, approval for the same is not found. G GURU NANAK DEV UNIVERSITY, AMRITSAR No records provided by the institute for statutory audit of 2015-16. 6. GUJARAT I. Emphasis of Matters * Point 21 of notes to accounts describes change in accounting policy in Line with the Financial management Manual of the TEQIP-II: * Point No. 1 of General Observations below describes the uncertainty relating to out me that project Institute has GEC Bhavnagar, has not maintained separate dead stock register TEQIP p: oject and in case of project institute GEC Gandhi nagar has not maintained separate fixed asset register, * Point No. 2 of General Observations below states weakness in internal control at proj ct institute LEC Morbi due to dual authority to account officer under TEQIP-II. Page 35 of 105 * Utilization of the Funds by IT Gandhinagar, IPR Gandhinagar and KCG Gandh agar has been accounted by the 7 Project Institutions on the basis of self-certified Utilization Certifica e issued by such above respective entities. II. Other Matters * Auditor has also drawn attention to Significant Accounting Policy and Notes to account to the Financial Statement. These financial statement being special purpose financial statements have Ieen prepared on cash basis. * The project is about to end in October 2016. However there is uncertainty regarding substantial funds being Lying unspent with the Project Institutes & SPFU and the funds lying unspent with the IIT- Gandhinagar, IPR- Gandhinagar and KCG Gandhinagar as on the date of signing balance sheet Also there is uncertainty on the extension of the extension of the deadline of the project d the status of unspent funds lying with the project institute IIT-Gandhinagar, IPR-Gandhinagar and KCG Gandhinagar given by the project institutes and at the end of the project. III. General Observation fRemarks by Auditors; 1. Project Institute GEC Bhavnagar has not maintained separate dead stock register for the TEQIP Project as required as per FM Manual. 2. During the audit, we found that officer in charge of accounts of TEQIP is handling dual charge of both TEQIP Coordinator and Finance Coordinator. 3. Education Dept., Govt. of Gujarat Vide resolution No. TEQ-102010-2090(3)-S dated 28.09.2011 has given direction to frame for funds namely, Corpus Fund, Staff Development Fund, maintenance fund and Depreciation Funds. As per the Resolution, the said funds are required to be contributed by the project institution from the specified sources subject to at least 0.5% of annuai recurring expenditure in each fund. However, the project institution has not made compliance to the said resolution in cases of project institution -GEC Patan, BVM VVNagar. 4. Staffing Policy needs to be improved in case of State Project Facilitation Unit, Gujarat,k 7 Project Institutions as maintenance of accounting work of Program is not done by the pE rsonnel as specified in the Finance Management Manual. 5. During the year, Project Institution GEC Gandhinagar has not complied with the Provisions of Tax Deducted at Source (TDS) under Income- Tax Act, 1961. Details are as under: S. No. Particulars Amount (Z) 1 Advertisement Expenses 66,995 2 Catering Service (Work Contract) 1,9c,803 Total 2,66,798 Page 36 of 105 6. Project Institution BVM have not complied Provision of Income Tax Act 1961 reg rding tax deducted at Source under section 194C for Z 2.82 Lakhs (em foods -Works Contract) 7. State Project Facilitation Unit has not yet complied with the Provisions of Tax Deducted at Source (TDS) under Income-Tax, 1961 relating to FY 2014-15 Details are as under; Sr.No. Remarks Date Payment Amo nt 1 TDS not deducted on payment to Sun Caterers 17/06/2014 1,22,8 3 2 TDS not deducted on payment Ganesh Canteen 16/08/2014 2,54,8)0 7. TRIPURA 1. Large number of cheques pending more than 3 Months which, were not presented and reverse entry was also not passed till 31.03.2016 S.No Cheque No. Date Amount 1 209842 25.07.2014 700.00 2 209838 25.07.2014 3000.00 3 213401 20.02.2015 300.00 4 213460 04.03.2015 1500.00 5 213465 04.03.2015 3000.00 6 213500 16.03.2015 700.00 7 895838 12.06.2015 979.00 8 895962 15.10.2015 365.00 9 492879 07.12.2015 6000.00 10 492880 07.12.2015 1785.00 2. Security deposit of ? 0.06 Lakhs which of earlier year not shown as opening balance in MIS. 8. KARNATAKA During the course of audit, FMR for the period ending 31St March, 2016 for expenses amouning to ? 3,601.59 Lakhs and the connected documents were examined and these can be relied upon to suppoit reimbursement under Loan/Credit Agreement. We observe that there is a difference of T 6.01 Lalhs between the expenditure stated in FMR's and the books of accounts maintained. (As per books of acco nts/Income and Expenditure account the total expenditure amounts to Z 3,595.58 Lakhs). The difference is r ainly on account Page 37 of 105 of inclusion of certain expenditures of previous years, in the current year FMR's which wE re omitted to be included in the earlier year FMR's 9. ODISHA 1. Bank reconciliation should be done on monthly basis. 2. Party wise advance register is not maintained and same should be maintained. 3. Journal register should be maintained to record any purchases on credit. 4. Periodic physical verification of assets should be done by the management. 10. TAMIL NADU a. Financial Accounting: As per the Financial Accounting Manual the books of accounts of institution for TEQIf accounts are to be maintained in Double Entry system of Accounting on cash basis. However thE following institutions are still following the single entry method of accounting. (i) Govt. College of Technology- COE- AER, Coimbatore. (ii) Govt college of Engineering Salem Recommendations: It is suggested that above mentioned institutions to purchase a suitable accountin software and maintain the books in the double entry method of accounting in future. b. Expenses & Accounting of Expenses: i. It was found that the following institution have made the all-expense payments without maintaining & recording in payment vouchers. * Govt. College of Technology- Including COE -AER Coimbatore * Department of Computer Science & Engineering M.S.University, Tirunelveli * Alagappa Chettiar College of Engineering & Technology- Karaikudi Recommendations: It is suggested to have preprinted payment vouchers or vouchers from accoun software for every transaction in accounting software for future reference and better underst nding. I. The following institution paid advance to various departments for various prograrr me during the period 01.04.2015 to 31.03.2016. Some programmes were completed during the audit and same is not settled with TEQIP, as a result of which, amount is shown under advances at the end of the year. Recommendations: At the end of the year, effort has to be made to collect the bills for expenses made till the end of year and me has to be accounted under respective project activities. As a resu t of which Page 38 of 105 actual expenses under project activity and actual advance at the end of year can be determined. II. IV It was observed during the audit FPD expenses have been incurred without proval of SPFU but ratified by core committee (DCSE-MS university). It is not advisable to incur the expense which is specifically not approved by Head of the SPFU even though approved by core committee. Expenses incurred were Z 0.47 Lakhs towards Registration Fee fcr program on "Productivity and Competitiveness: Concepts and Measurements, by National Productivity Council at Port Blair. III. An amount of T 0.01 Lakhs has been paid to Mrs Poorna pusphakala, Typist-Alagap pa College of Engineering & Technology Karaikudi, as monthly honorarium from month of 0 t 2015 but there is no BOG approval for the same. c. Statutory Payments - Tax Deducted at Source: TDS related payments are verified and our observations are as follows: I. Following Institutions have made the payment to various other Institutions and Consultants for FDP, Training Programme and Conducting of Workshop but TDS not deducted in some cases. It is recommended to deduct TDS at prescribed rate, wherever applicable under sec ion 194J of Income Tax Act, 1961. II. Honorarium paid to Regular Staffs (Principal and Coordinator) and outside persons for conducting seminars special classes & Training Programme but TDS not deducted i all cases. It is recommended to deduct TDS at prescribed rate, wherever applicable under section 194J of Income Tax Act, 1961. > Coimbatore Institute of Technology- Coimbatore > Govt. College of Technology - Coimbatore including COE- AER, COE-ES > P.S.G College of Technology- Coimbatore > University College of Engineering - Trichy > Alagapa Chettiar College of Engineering and Technology - Karaikudi > Thiagarajar College of Engineering - Madurai > Department of Computer Science & Engineering M.S University- Tirunelvali > Government College of Engineering - Salem > State Project Facilitation Unit. Chennai III. It was found that TDS remittances are made transaction wise, as and when transaction takes place. Page 39 of 105 It is suggested that TDS Payable amount for all the transactions for a mon h shall be clubbed up and remitted in one instance on or before due date. IV. It was observed that following Institutions have remitted the TDS amount after the due date of payment in some months: > Govt. College of Technology - Bargur > University College of Engineering - Trichy Details are as follows: Institution Month of Recovery Amount Due Date Paid Date Bargur April 2015 4,000 07th May 2015 05th June 2(15 Bargur June 11,932 07th May 2015 10th July 20 5 Bargur Aug 2015 9,932 07th Sep 2015 08th Sep 2015 Bargur Aug 2015 39,140 07th Sep 2015 08th Sep 201 5 Bargur Aug 2015 4,353 07th Sep 2015 09th Sep 2015 UCE, Trichy Feb 2016 4,000 07th March 2016 08th March 016 Following is the chart of TDS Remittance, which will be useful: Month Due date of Remittance April to February 7h of the succeeding month March 30th April V. Following Institutions have been deducted TDS amount and remitted in bank but not filed the E- TDS quarterly return for the period of 01.04.2015 to 31.03.2016:- * University College of Engineering, BIT Campus- Trichy * Department of Computer Science & Engineering, M.S University- Tirunelveli * Govt College of Engieneering- Salem VI. Following Institution have not been filed the E- TDS quarterly return on time as prescribed under the Income Tax Act, 1961. Quarter Due date of Actual date of Delay ii days Submission Submission Alagappa Chettiar College of Engineering & technology - Karaikudi Q 1 15th July 28th July, 2015 13 Q 2 15th October 30th Oct, 2015 15 Following is the Chart of E-TDS return, which will be wefftE- Page 40 of 105 QUARTER DATE OF FILING 1st Quarter (Apr - Jun) 151 July of succeeding quarter 2nd Quarter (Jul - Sep) 15hOct of succeeding quarter 3rd Quarter (Oct - Dec) 15thJan of succeeding quarter 4th Quarter (Jan - Mar) 15tMay of succeeding quarter VII. Consequences on Late filing of E-TDS return and TDS amount remitted after due date under Income Tax Act, 1961: / Fee for late filing U/S 234 E: Deductor will be liable to pay by way of fee of T 200/- per day till the failure to file TDS statement continue, however the total fee cannot xceed the amount of TDS deductible for which statement was required to be filed. Hence on the above case, late filing fees to be paid subject to TDS. V Interest on late remittance of TDS: The income tax department may raise the d mand for short deduction U/S 201(1) along with interest @ 1.5 % per months or part thereof u/s 201(1A) and penalty U/S 271 C of Income Tax Act, 1961. / Under Section 271 H of Income Tax Act, 1961: Penalty for failure to furnish stitement, a person shall be liable to pay penalty, if, he fails to deliver or cause to be delivered a statement within the time, the penalty referred shall be a sum which shall not be less than Z 10,000/- but which may extend to Z 1,00,000/- V Interest on TDS deducted but not paid: Interest shall be levied at 1.5% for eve month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax was actually remitted to the credit of the Governmc nt. It was observed that following Institutions have deducted the TDS amount but have not paid the amount to the government account till date. * Government College of Engineering Salem * Department of Computer Science & Engineering M.S. University-Tirunelveli Details are as follows: Institution Name Date of Recovery TDS amount Party Name GCE Salem 28.07.2015 28,954 Trident Techlabs vt Ltd. GCE Salem 05.10.2015 Trident Techlabs 't Ltd. DCSE,MS University 03.11.2014 58 - DCSE,MS University 10.11.2014 66 Page 41 of 105 d. Advance & Advance Register: As per Financial Manual, all Institutions shall maintain manual advance register, which s all contain the following entries: * Date of advance paid. * Amount of advance. * Adjustment made Amount / Bill No/Voucher No. * Amount Paid. * Amount received. i. Some of the institutions have not maintained advance register in proper format as prescribed. ii. The TEQIP officers shall take necessary steps to adjust the advance pending a*ter getting utilization certificates, bills & other related documents and the unutilized advan es shall be recovered from the concerned party. iii. We observed huge delays in the settlement of advance paid for various FDP Programmes and other Schemes. Details are as follows: DATE OF ADVANCE PARTICULARS AMOUNT (T) DATF OF SETTELI MENT GCE - SALEM 04.02.2015 R & D 21,68,000 Not Se fed Recommendations: The Institutions should frame an advance payment policy, which should be take in place immediately. As Decided in policy, after the due date for settlement; 2 separate notices (with one week interval) for settling advances should be served on concern staff. Even, after that still advances are not settled, immediately steps should be taken by appropriate authority to ecover the amount from concern staff, from the dues if any payable by the institutions to concern st ff. f) Petty Cash Book: As per the Financial Accounting Manual, manual petty cash book should be maintained; containing the following details: (a) Receipt (Date/Amount) (b) Payment (Date/ Voucher No./ Amount) (c) Balance (d) Particulars of Expenditure (e) Signature Page 42 of 105 A reasonable amount of cash will be fixed as Imprest to meet routine office ex enses and it will be in the custody of the cashier. 1. None of the institutions maintain petty cash voucher for petty expenses. Expect one nentioned below: I SPFU Chennai II University college of Engineering, Trichy However only SPFU Chennai maintains separate petty cash register III It is suggested to maintain petty cash register at University College of Engineerit g, Trichy. g) Fixed Deposits It was observed during the audit the institution (Alagappa Chettiar College of Eng neering & Technology) have parked their funds in Co-operative banks to the tune of T 300 Lakhs bu as per the instructions of SPFU the bank accounts are to be opened in nationalized bank. We have already done it. h) It is observed in certain circumstances date re-validation of cheques is done in practice, which is not healthy practice. Proper letter of confirmation has to be obtained from the parties befo e issue of new cheques. i) As per the TEQIP manual BOG Meeting has to be conducted at least once in a quarter. But as per details provided to audit the last BOG (Core committee) meeting held on 30.12.2013 anc. thereafter the next meeting was held only on 06.11.2015. There is long gap between these two core committee meetings. It is suggested to conduct the core committee meeting once in a quarter to review the progress of the TEQIP Activity - Department of C & SE,M.S University. j) Procurement of Machines: A machinery - (Advance Drive systems & high precisio has been purchased by University College of engineering from M/S Rockwell automation Chennii Ltd thru competitive bidding for which the vendor has raised a service bill of T 1.12 Lakhs (nvoice no RAIPL/MD/dated 26.03.2015 for which payment has been made based upon performa nvoice not on original invoice but institution is yet to provide produce original invoice till date of ou audit. 11. State of Chhattisgarh i. TDS not made as per guidelines under Income Tax Act, 1961. ii. Fixed Assets Register, Stock Register, Advances Register and Register of Contracts has o be maintained properly as per Section -6 "Financial Accounting" of Financial Management Manual. iii. Web based Procurement Management Support System (PMSS) process as per the Procure ent Arrangement under Procurement Manual was not followed. Pagc 43 of 105 el4 . . . . . iv. Observations reported under Internal Audit Should be complied and addressed by SPFU. v. There is need to strengthen internal control over books of account. vi. We have not received confirmation from Government Engineering College, Jagdalpur anc Bilaspur bank's that the FDR standing as on the year ended 31st March, 2016 is free from any charge. 12. UTTAR PRADESH:- 1) Comments and observation, if * It was observed that the books of accour ts were any, on the accounting maintained by the institutes, however in casE of IET, records, system and controls Lucknow MMMUT, Gorakpur KNIT Sultanpur records that examined during the were maintained in manual form. course of review. * The system of payment of advances in soma of the institutes lack internal control with respect to adjustment thereof. It was observed that new advances were not settled and the settlement of advances, have not been done on timely basis. * During the course of audit, we have obse ed that project institutions are accepting TA Bills from some Experts/Members without adequate supporting like bills in relation to the travel made 2) Specific deficiencies and area * It was observed that the internal control at few of weakness in system and institutions like, IET, Lucknow, MMMUT, Go rakhpur controls. KNIT, Sultanpur were weak as they follow manual system of accounting * The advance register in few institutes were also not correctly made and in some institutes were not updated. Further it was also observed that in IMMUT, Gorakhpur the advances were given even When old advances were not settled. As per PIP guidelines, all project institutions have to 3) Compliance with covenants maintain a separate bank account with a Schedled for in the financing agreement TEQUIP II. and comments, if any, on internal & external matter effecting such compliance. Difference in FMR and ledgers have been repo ted and 4) Any other matters that the there were few cases where timely submission of FMR to auditor consider pertinent. SPFU was not being done by the Institutions. Page 44 of 105 13. WEST BENGAL i. Deficiencies and areas of weaknesses in the system & control and recommendatior, for their improvement: i) Bank Reconciliation statement: On verification of Bank Reconciliation Statement as on 31.03.2016, following cheques have been issued but not debited by bank for a Period more than 3 months: SI Name of Date Cheque No Amount (r) Paid to/ For No. Implementing Agency 1 West Bengal University 04/08/2015 926782 6,000 Not Available 2 of Technology, Saltlake, 07/09/2015 926814 6,15,600 Not Available 3 Kolkata 07/09/2015 926815 6,15,600 Not Available ii) Advances: I While checking Advance register, it was observed that certain Advances were not adj asted over a period of 30.days. SI Name of Name of Date of Advance Purpose of Date of No institution Person taking advance Amount Expenditure Adjustment Advance taken () 1 University Sripati 13/06/2014 76,000 Management 27/05/2016 Institute of Mukhopadhya Development Technology Programme 2 Burdwan Shibkali Gupta 12/07/2013 16,000 Faculty & Staff 05/02/2016 Development 3 Rimi Paul 12/11/2013 30,000 Faculty & Staff 08112/2015 Development 4 RCC Institute of Jhuma Roy 15-07-15 13,000 Attending Nagpur 3011.2015 Technology for paper Kolkata presentation on 4 & 5 sept 15 5 Tathagata Deb 17-07-15 8,000 For attending 3112.2015 seminar at IIT Rorkee from 21 to 25 july,15 Page 45 of 105 6 Arpan Deyasi 17-07-15 12,000 For attending 31.12.2015 seminar at IIT Kanpur from 26 to 30 Oct,15 7 Arijit Ghosh 17-07-15 17,900 For attending 30.10.2015 seminar at CMR campus from 24 to 26 July,15 II While checking Advance register, it was observed that certain Advances are not adjusted till year end (31st March 2016) Unadjusted Amount S.L. Name of Name of the Person Advance Amount of Pur >ose of No Institution Advance taken taken on advance 7 Expenditure 1 University 21.06.2013 4,400 F.S.X Institute of Souvik Bhattacharyya 24.01.2013 35,000 F.S. 2 Technology, Sauvik Roy Chowdhery 07.11.2014 4,500 R & D Burdwan 21.06.2013 4,400 F.S. 13.06.2014 76,000 N.X.P 3 Quazi Md. Alfred 06.03.2013 33,000 R&D 11.06.2013 10,000 R&D 26.09.2013 13,000 F.S.1 4 Faruk Bin Poen 11.01.2013 27,000 F.S.: 5 Shiladitya 23.07.2013 17,000 F.S.: 6 Parthasarathi 08.02.2013 24,000 F.S.1 Chakraborty 18.03.2016 40,000 F.S.: 7 B.K.Pramanik 18.10.2012 20,000 1.0. 8 Suvajit Chakraborty 17.01.2013 24,000 F.S.: 9 Dipankar Dutta 29.08.2013 20,000 ND' 10 Jayshree Mukhargee 21.06.2013 4,400 F.S.3 11 Krishendu Parsad 11.12.2013 14,000 LO. Banerjee 22.01.2014 8,000 LO. 12 Sumit Gupta 06.03.2014 10,000 F.S. D 13 University College Sanjit Setua 23.11 .2013 23,000 N.A. Page 46 of 105 of Technology Calcutta University 14 Sanjit Setua 13.01.2014 80,000 15 Saurabh Das 10.03.2014 40,000 16 80,000 17 Rajib Chakraborty 21.01.2014 80,000 18 Sudhindu Bikash 29.04.2014 80,000 Mandal 19 University College Amlan Chakrabroti 10.06.2015 30,750 N.A. of Technology Calcutta University COE Nerula Institute of Technology * There is an unadjusted amount of T 17.62 Lakhs as advance at the end of 31st ma ch 2016, in which advance of T 16.00 Lakhs is carried forward from 2014-2015, which is not adjusted till 31st march 2016: Birbhum Institute of Engineering & Technology * An old advance of T 0.03 Lakhs is still lying unadjusted. The advance was taken by Janarul Shaikh on 01.11.2013. UCT-CU(COE) 1 Advance given to Dr. Amlan Chakraborti of Z 0.31 Lakhs given on 10-06-2015 is still not adjusted. iii) Lack of Proper Supporting Birbhum Institute of Engineering & Technology 1 Traveling expenses for participation by faculty in seminar, voucher no-13 A. Train fare from B.I.E.T, SURI to I.I.E.S.T., Shibpur of Z 0.01 Lakhs & retun by Z 0.01 Lakhs. No self-declaration for total taxi fare of Z 0.01 Lakhs. B. A reimbursement of Z 0.02 Lakhs made on 23.06.2015 for boarding, lodging & hospitality for faculty training programme related to "qualification up gradation' at I.I.T Iharagpur, Voucher No-74. iv) Procurement Narula institute of Technology 1 Procurement of test book, e-journal, Software done from john Wiley & son vide bank payment vouchero NK/P/201506-12 (Amounting-to _ 15.89 Lakhs, v de bill no Page 47 of 105 A2629976 Dated 18/7/14. Purchase order date.26/6/14). There was no penalty clause attached to it. v) Other Issues: Murshidabad College of Engineering & Technology: 1 Under WB VAT Act, 2003, the institute is required to recover STDS (sales tax d ducted at source) and TCS (collection of tax at source) from the bills at the time of makini payment to any dealer (contractor or supplier) at specified rates and deposit the same t the State Government. However this has not been complied with during the year 2015-16 2 Suspense Account has a credit Opening and Closing Balance of T0.01 Lakhs. However the source of such receipts could not be ascertained. 3 Loan from Staff account has an Opening Credit Balance of T 30. No transaction has taken place in this account and the source of such liability could not be ascertained. vi) TAX DEDUCTED AT SOURCE 1 We observed that in following under mentioned cases income tax deduction were not made. Sr. No. Name of the Name of the Amount Section PAN TDS PIA Payee paid (Z) Y/N S hould have been deducted 1 Murshidabad S.S.Enterprises 13,52,567 194C 1,35,257 2 College of Technology 8,96,148 194J 15,300 Engineering Development and Centre YES 3 Technology Avior 1,48,850 194J 13,000 Technologies Pvt. Ltd 4 Narula L.N.CAR 59,940 194C 1,199 Institute of SERVICE Technology TOTAL 24,57,505 1,64,756 Page 48 of 105 2 We observed that in the following cases there was delay in payment of income ta: List of TDS Delay Payment S. No Name of Name of Account Date of Amount TDS Rate Interest Da e of Challan Implementin Deductee Head Payment paid Deducted of % Deposit Sr. No g Agency Tax 1 College of Sarswati 194J 03.06.2015 60,500 6,050 10 17.02015 4 Engineering & Tour & Management Travels 2 Bijender 194J 27.02.2016 1,20,000 12,000 10 30 12..2016 2531 Singh 3 Murshidabad Rizing 194J 07.02.2016 6,60,000 66,000 10 Not 150 College of dep sited Engineering till and 31.0.2016 Technology 3 Matter that have come to attention during the audit that might have a significant impact on the implementation of the project: NIL 4 Any other matter that the auditor consider pertinent to report in relation to the financial management of the project: NIL 14.UT-CHANDIGARH (A) CENTRE OF EXCELLENCE, PEC UNIVERSITY OF TECHNOLOGY, CHANDIGARl Financial Management Report: During the checking of Final Accounts of SPFU, it has revealed that grant of Z 433.33 Lakhs (Rupees Four Crore Thirty Three Lacs Thirty Three Thousand Only) released by the SPFU, Chandigarh to Centre of Excellence (PEC University of Technology). On checking of Financial Monitoring Report (FMR) of CoE as on 31.03.2016, it has been noticed that total expenditure of Z337.13 Lals (Rupees Three Crore Thirty Seven Lacs Thirteen Thousand Only) made by the COE till the reporting month i.e. March 2016. 1. Manpower obtained on contract from SPIC is not covered under Contractual employees as provided under Table-19 under Key Activity-9. It is observed that only salary paid to contract employees is allowed and contract payment is not allowed. Hence, Z 7.41 Lakhs for anpower bill against SPIC is n allowed. Page 49 of 105 2. It has been seen that Scholarships are being provided under Key Activity-2. As per I able-19(b) scholarship is not covered as eligible expenditure. Hence total amount of scholarship laid under Key Activity-2 Z 15.45 Lakhs is not allowed. 3. Voucher No.134 dated 31.03.2016 Z 5.00 Lakhs Humanizing work advance booked uAder R&D not allowed. (B) Dr. SSB UNIVERSITY INSTITUTE OF CHEMICAL ENGINEERING & TECHNOLOGY, CHANDIGARH Financial Management Report: During the checking of Final Accounts of SPFU , it has revealed that grant of Z92 .00 Lakhs (Rupees Nine Crore Twenty Five Lacs Only) released by the SPFU, Chandigarh to Dr. SSB University Institute of Chemical Engg. & Technology, Panjab University, Chandigarh. On checking of Financial Monitoring Report (FMR) of UICET as on 31.03.2016, it has be*n noticed that total expenditure of Z 577.87 Lakhs (Rupees Five Crore Seventy Seven Lacs Eighty Seven Thousand Only) made by the UICET till the reporting month i.e. March, 2016. 1. Voucher No. 2 dated 15.04.2015 Z 0.10 Lakhs Diesel expenses to Chairperson eenakshi Goyal booked under Consumables not allowed as departmental Genset not covered in TEQIP. 2. The hospitality, tent and other expenses related to degree ceremony function booKed under EIWI not allowed as per SOE. Details are as follows:- Sr. No. Voucher No. Date Am:unt (Il Z) 1. 39 24.04.2015 3,000.00 2. 87 21.05.2015 15,400.00 3. 88 21.02.2015 11,876.00 4. 89 21.05.2015 5,060.00 5. 90 21.05.2015 3,808.00 6. 91 21.05.2015 18,112.00 7. 97 27.05.2015 1,328.00 Total . 58,584.00 Page 50 of 105 3. Voucher No.123 & 124 dated 09.06.2015 for Z0.42 Lakhs and Z 861.00 respectivE ly paid to Sanjay printers for printing of technical magazine. Whether the magazines were made available free of cost or paid. 4. Voucher No.25 dated 13.04.2015 T0.14 Lakhs payment to Johar stationary undei the head FSD not allowed. Outsider faculty programme not covered under FSD. 5. Voucher No.9 dated 06.04.2015 T 1.56 Lakhs (Z 0.26 Lakhs pm for 6 months) to Institute of public auditors of India consultancy expenses booked under salaries head not allo ed under TEQIP. 6. Extra amount of salaries are being given to existing staff not covered as per SOE. Details are as follows:- Sr. Name Voucher Date Amount No. No. 1. Lajwanti 26 17.04.2015 18,000.00 2. Naresh Kumar 27 17.04.2015 18,000.00 3. Amarjeet Sehgal 28 17.04.2015 18,000.00 4. Krishan Sethi 29 17.04.2015 18,000.00 5. Raj Mal Rahi 30 17.04.2015 18,000.00 6. Dinesh Kumar Maurya 31 17.04.2015 18,000.00 7. Vinay Kaushal 32 17.04.2015 18,000.00 8. Manu Ram 33 17.04.2015 18,000.00 9. Tripta Devi 34 17.04.2015 4,500.00 10. Tulsi Ram 40 17.04.2015 18,000.00 Total ,66,500.00 (C) PEC UNIVERSITY OF TECHNOLOGY, CHANDIGARH Financial Management Report: During the checking of Final Accounts of SPFU , it has revealed that grant of Z 1250.00 Lakhs (Rupees Twelve Crore Fifty Lacs Only) released by the SPFU, Chandigarh to PEC University of Technology, Sector-12, Chandigarh. On checking of Financial Monitoring Reporl (FMR) of PEC University of echnology as on 31.03.2016, it has been noticed that total expenditure of Page 51 of 105 Z1088.62 Lakhs (Rupees Ten Crore Eighty Eight Lacs Sixty Two Thousand Only) made by the PEC University of Technology till the reporting month i.e. March, 2016. 1. It has been observed that Scholarships are being provided under Key Activity-2. As pe Table-19 scholarship is not covered as eligible expenditure. Hence total amount of scholarship paid under Key Activity-2 Z 79.40 Lakhs is not allowed. 2. Manpower obtained on contract from SPIC is not covered under Contractual em loyees as provided under Table-19 under Key Activity-9. It is observed that only salary paid to contract employees is allowed and contract payment is not allowed. Hence, Z 21.73 Lakhs for nanpower bill against SPIC is not allowed. 3. Voucher No. 38 dated 18.05.2015 Z 1.15 Lakhs for attending national ConfE rence on advancement & futuristic trends in aerospace engineering not covered under Key Acti ity-4(a). 4. Voucher No. 315 dated 16.03.2016 Z 3.59 Lakhs provided to Dr. Umesh Sharma to :onduct a workshop on finishing school on Soft Skills Development is not covered under Key Activity- 8(B). Umesh Sharma is our own faculty. Hence disallowed. Procurement A. Voucher No. 316(a) dated 15.03.2016 payment of Z 0.70 Lakhs made to M/s ch ssic book centre for purchase of print books for Central Library of institute. (i) Invoice is in the name of senior librarian. (ii) Classic Book Shop is not a sale distributor. (iii) Quotations have been called only from M/s classic book Centre as a ailable in records. B. Voucher No. 316(b) dated 15.03.2016 payment of Z 0.50 Lakhs made to M/s ci ssic book centre for purchase of print books for Central Library of institute. (i) Invoice is in the name of senior librarian. (ii) Quotations have been called only from M/s classic book Centre as a ailable in records. C. Voucher no. 316(c) dated 15.03.2016 payment of Z 0.68 Lakhs made to M/s Cl ssic Book Centre for purchase of print books for Central Library of institute. (i) InvoiA- is in the name of senior librarian. Page 52of 105 (ii) Quotations have been called only from M/s classic book Centre as a ailable in records. 5. During the course of audit we have observed that the following advances have been o tstanding. The details of these advances are as under:- Sr. Name Amount (In Z) Date of Advance No. 1. Arun Kumar 92,300.00 06.04.2015 1,60,000.00 01.06.2015 2 Ankit Yadav 10,000.00 25.01.2016 3. Ajay Mittal 9,600.00 17.06.2015 4. Harjinder Kumar 36,000.00 02.09.2015 5. Jagdish kumar 50,000.00 09.09.2015 6. Kulwant Singh 22,500.00 03.06.2015 7. Mahesh Kalia 55,000.00 02.09.2015 15,500.00 13.10.2015 8. Maya Ram 47,600.00 01.04.2015 52,000.00 02.09.2015 48,000.00 10.12.2015 9. P.S.Satsangi 1,04,000.00 09.02.2016 10. Harminder Kaur 17,000.00 02.09.2015 11. Joginder Singh 14,720.00 04.03.2016 12. Dheeraj bharat 25,000.00 09.09.2015 13. Parveen kalra 2,00,000.00 18.05.2015 14 Rakesh Kumar 80,000.00 10.12.2015 Dang 15. Rintu Khanna 41,500.00 06.04.2015 33,000.00 02.09.2015 16. R.K. Mahajan 1,22,000.00 06.04.2015 2,17,000.00 02.09.2015 80,000.00 08.12.2015 D jj 3,r ' Page 53 of 105 (I) In few cases above it has been observed that there is late adjustment of advance. (II) In some cases, the returned amount of advance by staff is more than 75% of the advance provided. (III) It has been observed that in most of the cases above the advances given in excess of the estimated expenditure. (IV) It has been observed that advances have continuously been kept by staff members for Icng period without any valid reason and average balance goes upto Z1.00 Lakhs per month alsD. Due to which institute is suffered a loss of interest. For Example: Advance given to Mr. Maya Ram opening balance amounted to Z 0.27 Lakhs on 01.04.20 5 further advance amounted to T 0.48 Lakhs was given to him on 06.04.2015 without booking any expenditure and out of which he returned back T 0.40 Lakhs to College on 19.05.215 and spent T0.12 Lakh; under III till date. Similarly, Z 0.52 Lakhs was provided to him on 02.09.2015 and out of which he returned back T 0.29 Lakhs on 14.11.2015 and spent Z 0.23 Lakhs under III and further Z 0.48 Lakhs given to him as advance on 10.12.2015 out of which he spent Z 0.26 Lakhs under FSD and he deposited back Z 0.22 Lakhs on 15.01.2016. Hence it is observed that advance is being provided in excess of the estimated expenditure anL also kept with the party for unreasonable period with no valid reasons. 6. Advance amounted to Z 0.10 Lakhs provided to Mr. Ankit Yadav on 25.01.2016. It has not bee: adjusted till 31.03.2016. 7. In case of Mr. Dheeraj Bharat advance of Z 0.25 Lakhs was paid to him on 09.09.2015 the exp nditure is booked under Enhancement of R&D activities via. Voucher No.292 dated 31.03.2016 but no p roper bills are available. 8. In the case of Mr. Jagdish Kumar advance amounted to T 0.50 Lakhs given to him on 09.09.2015 and the expenditure booked by him under the head Enhancement of R&D via. voucher No.265 dated 09.02.2016. It has been observed that proper bills are not available. 9. Advance T 2.00 Lakhs provided to Mr. Parveen kalra on 18.05.2015 and no adjustment is made till 31.03.2016.Hence It has been observed that the amount is kept with the party for unreasonable period of time without any valid reason so interest @18% for 10 months T0.30 Lakhs to be recovered from him. Page 54 of 105 10.Advance Z 0.80 Lakhs given to Mr. Rakesh Kumar Dang on 10.12.2015. It has not been adjusted till 31.03.2016. Interest @18% for 3 months i.e Z 3,600.00 to be recovered. 11.7 5.16 Lakhs advance given to Mr. R.K. Mahajan on 18.08.2015 (opening balance Z 0.97 La hs) out of which he spent ! 2.78 Lakhs under III till 25.02.2016 and Z 1.58 Lakhs deposited back and remaining balance ! 0.80 Lakhs still outstanding with him till 31.03.2016. Hence it has been observed that extra amount of advance he returned after using it for 3-4 months. Reply by Institute As on date all these advances stand adjusted. This office has taken serious view of pendency o advances and the practice of allowing advance without proper justification/valid reasons has been disco araged. In future, it will be ensured that advances are granted in case of urgency with proper justificatior and their adjustment is done within stipulated time. The reply of the institute is found satisfactory. Hence the above observations from 5 to 11 witt reference to advances now dropped. (D) UNIVERSITY INSTITUTE OF ENGINEERING & TECHNOLOGY, CHANDIGAR H Financial Management Report: During the checking of Final Accounts of SPFU , it has revealed that grant of T125).00 Lakhs (Rupees Twelve Crore Fifty Lacs Only) released by the SPFU, Chandigarh to University Institute of Engineering and Technology, Chandigarh. On checking of Financial Monitoring Report (FMR) of University Institute of Engineering and Technology as on 31.03.2016, it has been noticed that total expenditure of ! 1024.38 Lakhs (Rupees Ten Crore Twenty Four Lacs Thirty Eight Thousand Only) made by the University Institute of Engineering and Technology till the reporting month i.e. March, 2016. 1. Voucher No. 267 dated 31.03.2016 T 2.93 Lakhs booked under Teaching an research assistantship paid to 14 PhD students. No classes taken by them, only their attenda ce in PhD classes is available. No further proof of research conducted by them was provided. 8-10 hrs of teaching & research required. 2. Voucher No.30 dated 07.05.2015 Z 0.07 Lakhs booked under IOC as Annual maintenance charges of 11 aqua guard machines in campus is not allowed. Page 55 of 105 3. As per stock register one Split AC was installed at Director's room out of TEQIP funds. The value of AC is calculated at Z 0.37 Lakhs (9,36,452/25). 4. The expenditure submitted by the institute shows that the bank balance is (-)1181818/-. It was observed that large number of cheques were issued on year ending dates, whereas the actual clearance of cheques took place in April, 2016. 5. The following payments are made otherwise then by a crossed cheques i.e. by bearer cheques, hence disallowed Sr. Name Date Amount Head No. (In Z.) 1. Hardeep Singh 27.01.2016 3,000.00 F&D (E 2. Surinder Singh 09.03.2016 280.00 JOC 3. Harish Kumar 16.02.2016 2,390.00 Ca pacity enha cement S T 4. Sarvjit Singh 25.02.2016 1,366.00 JOC A 5. Surinder Singh 09.03.2016 280.00 IOC T 6. Surinder Singh 04.12.2015 832.00 1OC E 7. Renu Vig 31.03.2016 1,010.00 Ca acity enha icement p 8. Sukhwinder Singh 31.03.2016 1,032.00 Ca pacity R enha acement o 9. Dinesh Kumar 24.06.2015 3,000.00 SD J 10. YP Verma 04.07.2015 1,030.00 OC E 11. Vibhakar Mansotra 13.07.2015 3,000.00 I&D T 12. Sukhwinder Singh 31.08.2015 497.00 OC 13. Rakesh Tuli 21.10.2015 1,610.00 1&D Total 19,327.00 A CILITATION UNIT (SPFU), Sector-12 CHANDIGARH Financial Management Report: During the checking of Final Accounts of SPFU, it has revealed that grant of T 175.00 Lakhs (Rupees One Crore sventy Five Lacs Only) received by the State Project Facilitation Unit (SPFU), Pag 56 of 105 Chandigarh from Centre and State Govt. On checking of Financial Monitoring Report (FMR) of State Project Facilitation Unit (SPFU) , Chandigarh as on 31.03.2016, it has been noticec that total expenditure of Z.1,04,18,997.00 (Rupees One Crore Four Lacs Eighteen Thousand Nine Hundred and Ninety Seven Only) made by the State Project Facilitation Unit (SPFU), Chandig rh till the reporting month i.e. March, 2016. 15.TELANGANA 1. Internal Audit coverage by Internal Auditor. SPFU have appointed internal auditor for the financial year 2015-16 to conduct internal audit of all the 14 participating institutions and SPFU, Telengana. Internal Auditor have conducted Internal Audil into two phases. In first phase they covered period from 01-04-2015 to 31-12-2015 and in the second phase they covered period from 01-01-2016 and 31-03-2016. 2. Non appointment of Experienced Accounts Personnel for TEQIP i. At Participating Institution Audit noted faculty personnel with engineering qualification are identified as Nodal Officer (Finan:e) who is having little knowledge of accounting system. This is leading to * Non-adherence to financial discipline. * In few Institutions inadequate supporting documents for expenditure resulting in disallowance of expenditure. * Non Deductions of TDS wherever applicable and TDS deducted but not paid. * Cash payments more than Z 0.20 Lakhs. ii. At SPFU, Telengana Audit noted that at present there are no qualified/experienced accounts personnel at State SPFU. D e to this * There is no monitoring of PI's adherence to expenditure incurred on procurement on other soft components * Consolidation of Financial Statement not prepared on timely basis * Report from PI's on Compliances with Internal Audit observations & previous years statutoi y auditors is not called for nor monitored * SPFU should ensure has not ensured that Participating Institutions reduces audit disallc wances of previous years from their claim statements (FMR's). * SPFU has not ensured FMR reconciliation with Books of accounts of PI's P o Page 57 of 105 3. Difference between FMR and Books of Accounts: Audit noted Participating Institutions has not Shown Expenditure in FMR as pei Books of Accounts. This resulted in difference between expenditure as per books of Accounts and FMR. Further, there was misclassification of expenses as reported in FMR and actual as per Ilooks. Such differences & Misclassifications should be avoided. Difference between FMR and Books of Accounts of the following Institutions is given under:- SL NO NAME OF THE INSTITUTIONS Expenditure as per Books FMR Diff A SC 1.1 Participating Institution 1 Anurag Engineering College 89.79 89.79 - 2 Aurora's Scientific Technological & Research 12.09 12.39 0.30 Academy 3 Chaitanya Bharathi Institute of Technology 77.74 77.74 - 4 Gokaraju Rangaraju Inst of Engg & Tech 109.24 108.64 -0.60 5 Malla Reddy Engg College 118.65 118.65 - 6 Nizam Institute of Engg & Tech 27.30 30.54 3.24 7 Vasavi College of Engineering 111.85 111.85 -0.00 8 VNR Vignana Jyothi Institute of Engg & Tech 66.14 66.14 - 9 University College of Eng, Kakatiya University 81.65 81.65 - B SC 1.2 Participating Institution 1 JNTUH College of Engineering, Kukatpally, 181.07 181.07 - 2 JNTU Institute of Science & Technology 479.15 489.65 10.51 3 University College of Engg., Osmania University 148.84 156.72 7.88 4 University College of Technology, Osmania 88.37 88.82 0.45 University 5 Sreenidhi Inst of Science & Tech., 39.10 39.02 -0.08 C SC 1.2.1 Participating Institution 1 JNTUH College of Engineering, Kukatpally, 58.16 58.16 - 2 University College of Technology, Osmania 64.01 65.89 1.88 University D SPFU- Telangana 46.63 29.08 -17.55 T TAL 1,799.7( 1,805.79 6.03 Page 58 of 105 4. Statutory Compliances: Institutions have not deducted TDS under Income Tax Act, 1961 on the payment made to cc nsultants, faculty honorarium, Car Hire Charges and Catering Expenses. TDS amount not remitted to Govt. within due date as per guidelines. 5. Supporting Documents/Bills Audit noted few of Institutions have shown expenditure in Books and FMR but for which s apporting bills or originals bills not enclosed to expenditure vouchers. As such audit considerec same as ineligible to claim under TEQIP. 6. Ineligible expenditure Audit noted some of the expenditure incurred by the Participating Institutions not eligibh for claim under TEQIP Phase - II due to * Non availability of supporting documents: * Non adherence to prescribed guidelines * Amount not paid. Institutions wise ineligible expenditure is enclosed with as Annexure - 1 to Audit Report dated ............. The total ineligible expenditure on account of deviation from TEQIP/Guidelines is T44.98 lakhs out of Z1799.76 lakhs expenditure incurred during the financial year 2015-16. The expenditure has to be claim only on payment basis. Few Institutions has claimed e:penditure though same are not paid. Unpaid expenditure are not eligible as per TEQIP guidelines. Such expenditure will be eligible as when same are paid. The total ineligible expenditure on account of non-payment (that is expenditure incurred but not paid) is TO.26 lakhs. This expenditure is aligible for claim as when same is paid by the respective participating institutions. In the Previous financial year total ineligible expenditure on account of non-payment basis ias T21.10 lakhs of which Z17.51 lakhs paid by the PI's during the current year considered as eligible for claim has been allowed and shown as a separate line as eligible expenditure in Utilization Certifica te. Of the Z44.98 expenditure disallowed, the major disallowed expenditure pertains to following Institutions: Page 59 of 105 Name of the PI's Amount Reason Aurora's Scientific 677600 Payment made to various companies toward Technological & Research service utilization of software/project Training Academy, Bandlaguda, program. Hyderabad This being a in nature of service contract, th , institutions should have been followe selected resource person as per procureme manual. Osmania University 565442 Replacement of Old drainage system (Existin College of Engineering, Gents Toilet systems converted in to Ladie Hyd toilet systems at Ground Floor Main Building of UCE, OU) Such Expenditure is not eligible for claim under TEQIP. 72000 Purchase of Tally ERP 9 Multiuser softwari and annual maintenance charges . Thi; expenditure related to Institute. Vasavi College of 15,27,505 Amount paid to consultants, Equate India, Engineering towards pedagogy training for qualit r improvement in teaching & Learning process of outcome based SARS of NBA was held on 15th to 18.08.14. This service order has not been processed through PMS software, hence expenditure incurred on that training is not allowable as per TEQIP norms 66825 Salary arrears paid to TEQIP staff. But BOG approval not obtained. CBIT Salaries of ' 9.00 Lakhs for 9 months (01.06.1 to 31.03.15) has been paid to K.Subba Rao, ECE- Dept & K.Ganesh Babu, Civil Dept for Newly started P G.Programmes which is no t allowable under TEQIP since it is a regular 9,00,000 salary persons in CBIT. However approved in BOG Minutes dated. 18.04.15. Its noted that "It should be noted that the above payments do not increase the present salaries of the above professors'. 51,000 Semi nor for Role of Engineers in the Page 60 of 105 development of New State Telangana. which is not allowable under Teqip project. JNTU-IST 220100 Procurement of equipments are not updated in PMSS Suggestions 1) Each participating institute should have qualified accounting personnel to look after TEQIP acc >unting & financial aspects as given in Financial Management Manual. 2) SPFU should place experienced and qualified accounts personnel. Financial Statements fro the PIs should be called and should be compared with FMR's. 3) FMR should be prepared as per Books of accounts to avoid differences and misclassifica ions. The Participating Institutions should revise FMRs as per audited financial statements. 4) Institute should adhere to applicable statutory regulations to avoid any problems in future. ?) For Every TEQIP expenditure necessary supporting should be enclosed to the vouchers. o) The Participating Institutions should be advised to avoid disallowance of expenditure on accoun of o Non availability of supporting documents: 0 Non adherence to prescribed guidelines o Excess payments o Or violation of any other financial/procedural discipline. SPFU should advise the Participating Institutions to reduce the claim amount towards audit disa lowance. 7) Adequate Justification with supporting documents should be enclosed for procur ment of software/equipments under direct contract method or on proprietary item basis. 16. MADHYA PRADESH i. There is need to improve internal control regarding the cash management system. Cash has been withdrawn regularly during the year for incurring expenses by institutes. To the extent it is possible; it should be incurred through account payee cheques only. Further cash should be withdrawn in the name of any official. ii. Observation reported under Internal Audit should be complied and addressed. iii. There is need to ster ngthen internal control over books of accounts of Institutes. Page 61 of 105 17.MAHARASHTRA 1. The SPFU and Project Institutions have maintained books of account on cash basis as prE scribed by NPIU. 2. The bank balance in the books of SPFU and project Institutions and with the banks is reconciled by preparing Bank Reconciliation Statement. Though the volume of transaction is very less, t will be a prudent practice to reconcile account every month. 3. Payment of expenditures under the project should be made through banking channeh only. No expenditure should be incurred in cash. 4. All expenses vouchers should be duly approve and signed by the authorized signa ories. The accounting thereof shall be done on routine basis in the accounting package to ensure maximum control. 5. As far as possible the SPFU and project Institutions have followed the procedures prescribed in PIP. 6. SPFU has recognized the object TEQUIP-II and has diligently implemented and monitored i: across the State. 7. Physical verification of Assets and Books acquired under TEQUIP-Il Grants: * We have found that SPFU has maintained Fixed Asset Register (FAR) for equipment acquired under TEQUIP-II Grants. Looking at the materiality in our opinion it is prudent to verify the fixed assets physically once in every year. 18.DELHI 1. As per guidelines of Financial Management Manual, Register of Contracts needs to be ma ntained by Implementing Institutes. However, DTU has not maintained any such Register. 2. As per the petty cash book, Cash balance as on 31.03.2016 was Z 822. However, the management has shown the entire cash withdrawn from bank as Incremental operating cost. This has resulted in overstatement of expenses by Z822 and understatement of cash in hand by the same amount. The amount being immaterial is not subject to Qualifications issued. 3. Separate Fixed Asset register for assets acquired out of TEQIP Funds has not been maintain d. 4. Physical Verification of Fixed assets has not been carried out at year end by Delhi Te:hnological University. 5. Provisions of Employees State Insurance Act, 1948 and Provident Fund Act, 1925 have not been followed by DTU (TEQIP-II) in case of 7 employees engaged in the project whose ttal annual emoluments were T 6.08 Lakhs. Pag( 62 of 105 6. No quotations called for following works contracts awarded:- Date Name of Vendor/ Service Voucher details Amount Description of works/ provider services 20.08.15 Jerald D'almedia Catering August/186/2015 105150 Food & Beverages and Contractor related services 16.12.15 Sunil Yadav Canteen December/159/2015 68790 Food & Beverages and Contractor related services 18.12.15 Jerald D'almedia Catering December/192/2015 95350 Food & Beverages and Contractor related services 18.12.15 Rudhra Events December/192/ 2015 95350 Printing Work 14.01.16 Jerald D'almedia Catering January /173/2016 53700 Food & Beverages and Contractor other related services 7. During the year TEQIP-II has not complied with the provision of Tax Deducted at Source (T DS) under income Tax Act, 1961 on payment made for catering expenses. Details are as under: S.No. Name of Contractors Amount (T) TDS Deductible 1 Sunil Yadav Canteen Contractor 126375 1264 2 Jerald D'almedia Catering Contractor 289845 2898 8. In Following cases management paid more than the budgetary provisions decided for vario s programs:- Date Particular Voucher Head Amount Remarks No. () 20.05.2015 Tanmay MAY/190/2 IOC OPR & 2,000.00 Permissible amount in case of Bishnoy 015 MAINT 9(C) honorarium is Z 1,500 per lecture (one hour), tax Z 3,000 per day per expert but professor paid 500 nore than the limit allotted 20.05.2015 Sishir MAY/190/2 IOC OPR & 2,000.00 Permissible amount in case of 015 MAINT 9(C) honorarium is Z 1,500 per lecture (one hour), rax T 3,000 per day per e pert but Page 63 of 105 professor paid Z 50) more than the limit allott d 16.12.2015 Guest December/1 FSD- 1,600.00 In this case We-are aying to House 59/2015 National guest house which s situated (TEQIP-II) in the same university (4a) campus 14.01.2016 Guest January/173 FSD- 200.00 In this We are paying to guest House /2016 National house which is situited in the (TEQIP-II) same university carpus (4a) 05.02.2016 RAJESH February/10 R&D- 5,816.00 Bills are available o T 4,316 KUMAR 5/2016 National only SINGH (TEQIP-II) (3a) 9. As per the expenditure in various heads approved by BOM & Vice Chancellor for expenses of Z 600 Lakhs, the management has exceeded the expenditure in following head:- Head Alloc Total Curren Total Reply of the Management ated budgeted t exp. cumulative %age expenditu %age exp. till re March'16 Providing Teaching & 20% Z 600 32.31% Z193.88 The approved al ocation of Research Assistantship for Lakhs Lakhs budget in the Head- significantly increasing Providing Tea hing & enrolment in existing and research Assist nship (2) new Master and Doctoral has been T 2 50 Lakhs programs in Engineering against total allocation of & Applied Sciences the project T 1 50 Lakhs. disciplines The research assistantship/sc olarship are given to research scholar on monthly basis and therefore, cannot be put in tight compartments. Page 64 of 105 DTU has spen - 193.88 Lakhs which is less than the overall allocated budget. However, under this head allocation of budget has been increased by the 19th eeting of BoM dated 07.0 5.2016 to T 343.75 Lakhs so as to enable awardm research scholar/fellowship to University Ph.D scholar. Therefore, the e penditure is well within the limit prescribed in the total of the Project an its life. Hope the j stification meets the requ rement of the audito and expenditure nay be allowed please. 19.KERALA 1. STATE PROTECT FACILITATION UNIT 1. During the course of audit it was observed that the FMR submitted by the institution for the year ended March 2016 doesn't tallied with the actual expenditure incurred till the end of March 2016. The details of which are as follows: Total Expense as per FMR : 158.33 Lakhs Total Expense As Per Books : 158.36 Lakhs Difference : .03 Lakhs (Excluding am rsed to institutions) i Page 65 of 105 2. During the year the institution reimbursed Z 15,245/- relating to TEQIP III Pre-Appraisal mE eting held at Bangalore. In relation to which Z 4,274/- was incurred by Dr. V Gopakumar as expendi ure for air travel from Trivandrum to Bangalore. Since Boarding pass is not available for our verificati n Z 4,274/- is disallowed. 3. It is observed that Statutory Liability amounting to Z 5,800/- is not paid till 31.03.2016. The liability is existing from F.Y 2013-14. 2. COLLEGE OF ENGINEERING TRIKARIPUR 1. During the course of audit it was observed that the FMR submitted by the institution fo the year ended March 2016 doesn't tallied with the actual expenditure incurred till the end of March 2016. The details of which are as follows: Total expense as per FMR : T 92.68 Lakhs Total expense as per Books : Z 93.02 Lakhs Difference : Z 0.34 Lakhs 2. During the previous financial year (FY 2014-2015) an amount of Z 63,192/- was disallowed and shown as ineligible amount in the audit report of that year. Out of the above mentioned amount of disallowance, an amount of Z 26,295/- was due to non submission of original invoices/ Su Pportings. During the current financial year (FY 2015-16) the institution submitted the original invoices/Supportings relating to the above amounts (ie, Z 26,295/-) for our verification. Hence the above amount becomes eligible and the final disallowance for the Financial Year 2014-2015 comes to Z 36,897/-. 3. It was observed that the system of internal control relating to advances for expenses need ubstantial improvement. The institution should exercise adequate internal control mechanisms for the settlement of advance. Huge amount of advance were given by the institution for more than 3 months. If the institution doesn't employ proper control mechanisms then the person taking the advance may obtain undue advantages from the amount taken. 4. Other Observations are furnished in Annexure I. ANNEXURE-I * FACULTY AND STAFF DEVELOPMENT FOR IMPROVED COMPETENCE BASED ON TRAINING NEEDS ANALYSIS I Boarding Pass is not annexed for flight travel to Boarding pass is compulsory for attend a wokshop on "Quality Initiatives in claiming Air Travel expense. So T: Technical & Higher Educational Institutions" at 27,479/- is to be disallowed. Hyderabad amounting to T 18,633/- by Asst Prof Arun P.L and T 81846/- by Asst Prof Ratheesh T. Page 66 of 105 II It is observed that the faculty Mr. Ratheesh T Faculties can claim only tuitin fees. claimed a sum of Z: 3,950/- (as DDF Contribution Any payments made to facultis other 1,200 & Sponsorship Fee 2,750) for the M.tech than tuition fee is disa lowed. Course Therefore, : 3,950/- is disallowed. III Workshop on the topic "Outcome based The Expense in connection wi NBA Education and for NBA Accreditation" Accreditation programme 7: 9,019/- accounted under the head "Faculty and Staff can be accounted under Development for Improved Competence based Implementation of Insttional on Training needs Analysis". academic reforms. IV Asst. Prof Sudheesh N claimed a taxi chargeof Expenses cannot be claimed ith the T:800/- for the travel from Yeswathpur railway photocopy bill. So the amount: 800/- station to Banglore Airport after attending a is disallowed. Training Programme on "Operation, Maintenance and Performance Monitoring of Centrifugal Pumps and Compressors" by _Aceittosubmitting a Photocopy bill *INCREMENTAL OPERATING COST I An employability assessment test to students The institute should procure the was conducted under Incremental Operating "employability assessment" est to Cost at an amount of!Z: 1,73,000/-. students through consultancy ;ervices The same should have been treated under as per the guidelines provided in the procurement of consultancy services, procurement manual. The mnount must have been passed through the PMSS software since it was a n iture of procurement. So the amount :- S1,73,000/- is fully disallowed. *OTHER ITEMS I During the course of audit it is observed that Advance taken to be settled ithin 3 there is a delay in the settlement of advance months of time, otherwise intrest to ten bystaffs. be charged at the rate of 1% per annum. II It is observed that the institution is not All the institutions are requ red to maintaining the bank accounts (Corpus Fund, maintain the bank accounts stecified Equity Replacement Fund, Faculty in the Teqip guidelines. Das perthe books of accounts. prvd-i h must hv bo the PMS sotwae snc itagneoflO prourmet. o heameun 1 3. GOVERNMENT ENGINEERING COLLEGE, KANNUR 1. During the course of audit it was observed that the FMR submitted by the institution f>r the year ended March 2016 doesn't tallied with the actual expenditure incurred till the end of Marc - 2016. The details of which are as follows: Total expense as per FMR : T 114.37 Lakhs Total expense as per Books : Z 109.90 Lakhs Difference : T 4.47 Lakhs 2. During the Previous year 2014-15 a sum of T: 2,00,000/- received from the project insti tion was accounted under Earnest Money Deposit instead of accounting as Contribution from Project Institutions. During the current year, the said contribution is correctly recorded in Balance s heet. 3. During the course of audit it was noticed that the institution has made withdrawals from the Bank Account "Corpus Fund" on 12.08.2015 T: 2,65,956/- 4. During the course of audit it is observed that there is a delay in the settlement of advande taken by staffs. 5. It was observed that the system of internal control relating to advances for expenses need ubstantial improvement. The institution should exercise adequate internal control mechanisms for the settlement of advance. Huge amount of advance were given by the institution for more than 3 months. If the institution doesn't employ proper control mechanisms then the person taking the advance may obtain undue advantages from the amount taken. 6. Other Observations are furnished in Annexure I. ANNEXURE-I * FACULTY AND STAFF DEVELOPMENT FOR IMPROVED COMPETENCE BASED ON TRAINING NEEDS ANALYSIS I During the course of audit it was observed As per G.O. (Rt) No:1993/2013/ H.Edn that the college purchased 150 jute bags Dated 08.10.2013, maximum T:150 per costing Y: 385/bag for a National Conference. faculty/staff per programme is only permitted for purchasing consumables/ training materials. Here an excess amount 7: 35,250/- ((385-150)*. 50) is incurred for the purchase of the b ig. Page 68 of 105 II During the course of audit it was observed Timely settlement/ claimn of that the faculties make a delay in settlement/ expenditure to be ensured. elayed claiming the expenditure which are eligible settlements should not be enterta ed. under Teqip. * OTHER ITEMS I The advance given to Baburaj T: 9,575/- is Advance taken to be settled w thin 3 outstanding for more than 10 months. months of time, otherwise intere t to be charged at the rate of 18% per um. II It is observed that the institutions conducted The institute should procure e "life life skill program/ Placement training skill program/ Placement aining program to students. The same should have program" to students ough been treated under procurement of consultancy services as pe the consultancy services. guidelines provided in the procu ement manual. The amount must hav been passed through the PMSS s ftware since it was a nature of procu ement item. 4. COLLEGE OF ENGINEERING THALASSERRY 1. During the course of audit it was observed that the FMR submitted by the institution for the year ended March 2016 doesn't tallied with the actual expenditure incurred till the end of Marc 2016. The details of which are as follows: Total expense as per FMR : Z 225.37 Lakhs Total expense as per Books : Z 223.47 Lakhs Difference : 1.90 Lakhs 2. During the Previous financial year the following amount was disallowed at the time of our udit: i I 1 Incremental Operating Cost T: 14 500.00 2014-15 2 FS T: 140 780.00 2014-15 Page 69 of 105 During the current financial year (FY 2015-16) the same amount was re-contributed by the institution. Since the above amount was shown as an expenditure in the "Receipts and Payment account" of earlier year, the re-contribution of the same was accounted as other income in "Receipts and Payment account" of current year. 3. It was observed that the system of internal control relating to advances for expenses need ubstantial improvement. The institution should exercise adequate internal control mechanisms for the settlement of advance. Huge amount of advance were given by the institution for more than 3 months. If the institution doesn't employ proper control mechanisms then the person taking the advance may obtain undue advantages from the amount taken. 4. During the previous financial year (FY 2014-2015) an amount of Z: 8,44,731/- was disallDwed and shown as ineligible amount in the audit report of that year. Out of the above mentioned mount of disallowance, an amount of Z: 64,800/- was due to non submission of original invoices/ Su pportings. During the current financial year (FY 2015-16) the institution submitted the original invoices/Supportings relating to the above amounts (ie, Z: 64,800/-) for our verification. Hence the above amount becomes eligible and the final disallowance for the Financial Year 2014-2015 comes to Z: 7,79,931/-. 5. Other Observations are furnished in Annexure I. ANNEXURE-I * IMPROVEMENTS IN TEACHING TRAINING AND LEARNING FACILITIES I Package No: It is found that majority of civi works TEQIP-II/KI/KL1G13/170 under Teqip are done by N.K.C During the course of audit we have found that the Ummer. Adequate liq idated Institute has awarded a minor civil work of flooring for damages to be recovered f om Li Labs in CSE/IT block and Administrative block vendor. contract to L2 vendor(N K C Ummer) for Z: 11,15,900/- (including all taxes) disregarding Li vendor Manjush Kumar who have agreed to execute contract for Z: 10,23,000/- (including all taxes). II While conducting the physical verification it is Assets should be tagged for proper observed that the assets procured under Teqip are not identification so as to ensure hat the properly tagged or maintained. assets are procured under Teqip. Page 70 of 105 * FACULTY AND STAFF DEVELOPMENT FOR IMPROVED COMPETENCE BASED ON TRAINING NEEDS ANALYSIS I It is observed that following faculties claimed M.Tech As per TEQIP rules maximum tution fee above the permissible limit of T: 45,000/-. amount of fees permissible to be S.No Name Of the Faculty Tuition fee claimed by a faculty as M.Tecli tution 1. Ms. Arathi M. Nair 1,00,000/- 2nd & fee for a semester is T 45,000/- So the 3rd semester excess amount of T: 30,C 0/- is 2. Ms. Priya V V 65,000/- disallowed. 2nd semester II An expense of !: 34,832/-(18,021+16,811) in connection The expense in connection with NBA with a 3 day workshop on "Outcome Based Education Accreditation to be accounted under and NBA Accreditation (OBENA)" from 10t to 12th the head "Implementation of December 2015 at COE Kidangoor, claimed by Ms. Institutional academic reforms'. Shyamna Sadanandan was accounted under the head Faculty and Staff Development. * ACADEMIC SUPPORT FOR WEAK STUDENTS I The institution conducted "Personality Development" A quality based classes to be workshop to 3rd semester Mechanical Engineering provided to the students by q alified Department and Civil Engineering Department faculties. Forging data regardng any amounting to Z: 95,030/ {49,291(Ms.Rinitha) & 45,739 expense is unethical. The institute (Mr. Rajeev P)). During the course of audit it was should follow the Teqip gu delines observed that the details provided for the verification and maintain a good qualit** while of the above is forged and the committees held on 16th conducting programmes. The expense November 2015 made a very negative remark Z: 95,030/- incurred in connectin with regarding the quality and qualification of the faculties the forged programmes is disa lowed. and the classes taken. * ENHANCEMENT OF RESEARCH & DEVELOPMENT AND INSTITUTIONAL CONSU LTANCY ACTIVITIES. I It was observed that the BOG disallowed an expenseThexnsdialwdbfi B=r amounting to T: 31,575/- in connection with publishingofGvrrs(O)fthiniuin the paper titled "Design and fabrication of super cannot be treated as eligible charging an Engine using vehicle suspension" in the expenditure. So the amount 1,575/- applied Mechanical and Aerospace Engineering held at is disallowed. Rome, Italy from 16th to 17th July 2015 by Mr. Shijin Maniyath in t meeting held on 26th March 2016. Page 71 of 105 5. COLLEGE OF ENGINEERING VADAKARA 1. During the course of audit it was observed that the FMR submitted by the institution fcr the year ended March 2016 doesn't tallied with the actual expenditure incurred till the end of March 2016. The details of which are as follows: Total expense as per FMR : T 63.41 Lakhs Total expense as per Books : 7 63.53 Lakhs Difference : Z 0.12 Lakhs 2. It was observed that the following faculties not settled the amount of advance as on 31.03.2016 even after two years of taking the advance: 1. Rohikaa Micky 1,00,000/- 2. Roshith 1,00,000/- 3. During the course of our audit it was observed that the institution maintaining an addi ional bank account (Security Deposit Account - SBT 67313191470) other than the four band accounts permitted by the Teqip guidelines. 4. It was observed that the system of internal control relating to advances for expE nses need substantial improvement. The institution should exercise adequate internal control iechanisms for the settlement of advance. Huge amount of advance were given by the institution for more than 3 months. If the institution doesn't employ proper control mechanisms then he person taking the advance may obtain undue advantages from the amount taken. 5. During the FY 2014-15 the following amount was disallowed due to non submission of original invoices: 1 Mr. Jithendra K B 3660.00 Photo Copy of Invoice 2 Nithya A K 22215.00 Photo Copy of Invoice 3 Anupama K 22215.00 Photo Copy of Invoice 4 Akhila M 17230.00 Photo Copy of Invoice TOTAL 65 320.00 During the time of Current year audit the institution have submitted the original invoices for the same. Hence Z 65,320/- can be considered as eligible amount relating to the FY 2014-15. 6. Other Observations are furnished in Annexure I. Page 72 of 105 ANNEXURE - I * FACULTY AND STAFF DEVELOPMENT SLS As per Teqip Norms the institutio can During the FY 2015-16 the institution reimburse the fee incurred by the facu ty for incurred an expense of T 70,000/- as qualification upgradation relating t the 1 reimbursement of M.tech fee of Aruna A courses registered after signing the M U. In S. This includes the fees relating to earlier the given case the faculty joined PG years. course before signing the MOU. Hen e the amount of T 70,000/- is disallowed. * INCREMENTAL OPERATING COST During the year the institution purchased It is in the nature of Procurement and the Network Switches at a cost of 7 47,440/- same has been procured through IMSS. and accounted under the head Hence it should have been accounted mder "Incremental Operating Cost". the head " Procurement " instead of "Incremental Operating Cost" * OTHERS During the course of audit it was observed that the following advances Advance should be settled pro ' prly. 1were outstanding for more than 1year: Otherwise interest to be charged fromk the 1. Advance to Shejina.V - T 75,000/- defaulting persons. 2. Advance to Anish A. AZIZ - T 60,000/- 6. GOVERNMENT ENGINEERING COLLEGE,WAYANAD 1. During the course of audit it was observed that the FMR submitted by the institution fcr the year ended March 2016 doesn't tallied with the actual expenditure incurred till the end of Marcb 2016. The details of which are as follows: Page 73 of 105 Total expense as per FMR : Z 178.48 Lakhs Total expense as per Books : 178.68 Lakhs Difference : Z 0.20 Lakhs 2. During the course of audit it is observed that there is a delay in the settlement of advance taken by staffs. 3. Following faculties didn't settle the advance taken by them for various programmes even af :er 1 year: 1. Anilkumar C.D 6=,000 (14-05-2013) 2. Job Chunkath 30,000 (15-02-2014) 3. Jyothi T 40,000 (15-02-2014) The advance taken to be settled within reasonable time after conducting the programmes for which the advance taken. Prof. Anil Kumar has taken the advance of Z: 5,24,000 on June 2013 and settled the advance taken after Two and a Half year. Delay in settling the advance taken is a violation of TEQIP norms. 4. During the P.Y 2014-15 the performance Security received was accounted under Earnest Money Deposit (EMD) and the same is rectified during current year. 5. The Other Income amounting to Z: 20,500/- shown in the Receipt & Payment and Icome & Expenditure account relates to a) refund of Z: 10,000/- unutilized seed money which is shown as expenditure in the F Y 2013-14 under the head research & Development and b) refund of disallowance of the F.Y 2013-14 amounting to Z: 10,500/-. 6. It was observed that the system of internal control relating to advances for expenses need E ubstantial improvement. The institution should exercise adequate internal control mechanisms for the iettlement of advance. Huge amount of advance were given by the institution for more than 3 mor ths. If the institution doesn't employ proper control mechanisms then the person taking the advance may obtain undue advantages from the amount taken. 7. During the previous financial year (FY 2014-2015) an amount of T: 3,44,259/- was disallowed and shown as ineligible amount in the audit report of that year. Out of the above mentioned mount of disallowance, an amount of Z: 13,363/- was due to non submission of original invoices/ Supportings. During the current financial year (FY 2015-16) the institution submitted the original invoices/Supportings relating to the above amounts (ie, T: 13,363/-) for our verification. Hence the above amount becomes eligible and the final disallowance for the Financial Year 2014-2015 c mes to Z: 3,30,896/-. 8. Other Observatio are furnished in Annexure I. Page 74 of 105 ANNEXURE-I * FACULTY AND STAFF DEVELOPMENT FOR IMPROVED COMPETENCE BASED ON TRAINING NEEDS ANALYSIS I The college conducted a Six day Programme on The maximum honorarium pay able per "Six Sigma Quality in Engineering Technology person per day is limited to T.3000/- as per Education" from 15th to 20f June 2015. T: 30,000/- the Government Order. is paid as honorarium for six faculties. As per So T.12,000/- paid in excess by the G.O.(Rt).No.1355/08/H.Edn. Maximum Institution in connection w th the permissible Honorarium is T 3,000/- per day. Here programme is disallowed. the college paid excess honorarium of T 12,000/-. II A programme "Stress &Time Management" was The aforesaid programme cainot be attended by the faculties of the institution. Amount considered as a subject oriented of Z. 65,926/- incurred for the programme is programme. It's a management capacity debited under the head FSD. development programme, and the amount should have been debited under he head Institutional management capacity development. III The college conducted a Two day Workshop on The maximum honorarium payable per "QUALNET" from 08t to 09t December 2015. T: person per day is limited to T.3000 - as per 12,000/- is paid as honorarium to faculty Mr. the Government Order. Suresh A. As per G.O.(Rt).No.1355/08/H.Edn. So Z.6,000/- paid in excess by the Maximum permissible Honorarium is T 3,000/- per Institution in connection w th the day. Here the college paid excess honorarium of T workshop is disallowed. 6,000/-. * INCREMENTAL OPERATING COST I The institute has renewed Microsoft software and The aforesaid transaction is a case of Kasperky during the year. The amount of ?: procurement of goods, which s ould be 5,41,875/-(3,46,875+1,95,000) was incurred for the made through PMSS software. Since the same and it is debited under the head Incremental same is not done, the amour t of Y: Operating Cost. 5,41,875/- is disallowed. Page 75 of 105 * ENHANCED INTERACTION WITH INDUSTRY II Expenditure incurred for the renewal of Expenditure for the renewal of membership membership of ICT Academy accounted of ICT Academy may be booked under under the head Enhanced interaction with Incremental Operating Cost (IOC). So the Industry Expense in connection with renewal of membership of ICT Academy T: 68,4C0/- can be accounted under Incremental o erating Cost (IOC). * ACADEMIC SUPPORT FOR WEAK STUDENTS I Soft skill development programme and The institute should procure the "I fe skill Employability Enhancement training program/ Placement training program" to programme to students was conducted students through consultancy service; as per under Academic support for weak students. the guidelines provided in the proc rement The same should have been treated under manual. The total amount T: 6,76,685/ - must procurement of consultancy services. have been passed through the PMSS software since it was a nat re of procurement of consultancy service. * PROVIDING ASSISTANTSHIPS FOR INCREASED ENROLMENT IN EXISTING AND NEW PG PROGRAMMES IN ENGINEERING DISCIPLINES. As per PIP (circular no. TEQIP/PTRA/2012/900) So the excess stipend paid students Z: non-gate scholarship should not exceed the limit 7,05,806/- is disallowed. of k.6,000/- per month and the scholarship amount is enhanced from 6,000/- to 8,000/- from December 2015 onwards. But the institute pays a stipend of T.9300/- per month for 24 students. 7. GOVERNMENT ENGINEERING COLLEGE, KOZHIKODE 1. During the course of audit it was observed that the FMR submitted by the institution f r the year ended March 2016 doesn't tallied with the actual expenditure incurred till the end of March 2016. The details of which are as follows: Total expense as per FMR : T 106.62 Lakhs Total expense as per books : T 106.47 Lakhs Difference : Z 0.15 Lakhs Page 76 of 105 2. During the Previous financial year the following amount was disallowed at the time of our audit: RZGC Meeting was conducted under R&D, and the college incurred room Rent for the resource person amountingto Z. 5,700/-. Which also includes room service bill of T 2,652/- . The same amount of T 2,652/- was Z 2 652.00 2013-014 also claimed as food and refreshment expense (using the above mentioned room service bill). Amount excess claimed by bill duplication amounting to T.2,652/- is disallowed. During the current financial year (FY 2015-16) the same amount was re-contribu:ed by the institution. Since the above amount was shown as an expenditure in the "Receipts and Payment account" of earlier year, the re-contribution of the same was accounted as other income in "Receipts and Payment account" of current year. 3. During the Financial year 2014-15 the institution paid an amount of Z 24,000/- as assistantship to a student who got financial assistance from other means. Hence during the current financ al year the institution re-collect the amount of Z 24,000/- from him. Since the above amount was s own as an expenditure in the "Receipts and Payment account" of earlier year, the re-contribution pense may be disallowed if TDS is not deducted and other penal consequences may follow. b. Expenses of Complementary gifts to participants during Short Term Training Program were included in Incremental Operating Cost (Code no-1.2.9). Acknowledgement from Participants should be collected & kept on record. c. TDS Late Payment charges were paid during FY 2015-16 due to late deposit of TDS to the credit of the Government. Details of the same are as under:- Sr. Name of Section Due date Actual date Delay in Amount of No. expenditure on under of TDS of TDS number of Late which TDS is which Deposit deposition days Payments deducted TDS Interest deducted Charges (W) 1 Operation & 194 C N.A. due 18.12.2015 N.A. due to T 93 Maintenance to non non charges- food generation generation bill Geetha of challan ofchallan Caterers 2 Operation & 194C 07.03.2016 16.03.2016 10 days T. 168 Maintenance charges- food bill Geetha Caterers 3 Maintenance 194C 30.04.2016 30.06.2016 60 days T 234 charges -I R Technologies Maintenance Fees d. Patent Registration expenses also include food & travelling expenditure. e. Tax Deduction at Source has been made on interest income received from Fixed De osits with Canara Bank during FY 2015-16. The same has been netted off from Interest Income in the Income & Expenditure account. 25. SVNIT, Surat COE a) Tax Deduction at Source has been made on Interest Income received from Fixed Deposits with Canara Bank during FY 2015-16. The same has been netted off from Inter est Income in the Income & Expenditure Account. b) FD of Z 100.00 Lakhs was matured in January, 2016. Maturity amount was kep in Saving Bank Account till date of audit report. 26. VNIT, Nagpur a) Expenditure pertaining to earlier year has been debited to Reserve Fund. b) All grants received over the years are accumulated under Capital Account and ar a stated at Gross figures. 27. IIIEST, SHIBPUR The Grant received by the project and Expenditure incurred are as follows: Sr. Particulars Current year Previous Year No. (31.03.2016) (31.03.2)15) (Amount in T) (Amount inT) A Opening Balance as on 1st April 19067682.00 14578463.00 B Government's Grant Received 25000000.00 40000000.00 C Interest Income 605300.00 41973.00 D Other Income 507600.00 56400.00 E Total 45180582.00 55 76836.00 F Expenditure incurred in the project 18446331.50 36 09154.00 G Closing Balance a on 31st March 26734250.50 19067682.00 28. IIIEST, SHIBPUR COE The Grant received by the project and Expenditure incurred are as follows: Sr. Particulars Current Year Previous Year No. (31.03.2016) (31.03.2T15) (Amount in Z) (Amount in T) A Opening Balance as on 1st April 10817355.00 32704712.00 B Government's Grant Received 6667000.00 10(00000.00 C Interest Income 458918.00 958414.00 D Other Income 29446.37 NIL E Total 17972719.37 4 663126.00 F Expenditure incurred in the project 5601529.00 32845771.00 G Closing Balance a on 31st March 12371190.37 1817355.00 29. NIT, TALANDHAR a. The total grant received is recorded on Cash basis of Accounting and no grant received during financial year 2015-16. The amount of Grant sanctioned for the project TEQIP-II is Z 12.50 Crores. b. Depreciation has not been provided for in the books of accounts as per point 6.2 of 5chedule 6 of Financial Management Manual issued by Government of India. c. Loans and advances given to staff/ faculty is adjusted after actual expenditure is made by the respective person. d. The Bank Balance of the saving account has been reconciled with the books of accDunts. The cheques which are issued for more than three months and are not cleared as on 31.03.2016 are transferred to Time Barred Cheque account. e. The information provided by the management has been incorporated in the balmce sheet wherever necessary. f. Sundry creditors shown in the Balance Sheet amounting to T 4.53 Lakhs represent 0% of the total amount payable in respect of equipments purchased. g. In the Financial Year 2015-16 grant is not received therefore the expenditure exceeds income by Z 97.92 Lakhs. h. The physical verification of FDR's is not done nor has the certificate of FDR Balances been provided to us. i. We suggest that in respect of FDR's quotations should be invited from different banks so that maximum Rate of interest can be availed by the institute. Also we suggest that i separate Investment committee should be formed which should include one outside professional person to decide how and where the funds of the institute should be deposited. j. We suggested that the Institute should not keep large balances in the Saving Accounts of Banks and the balance in excess of Minimum balance required to be kept should be transferred to either sweep account or FDR account. k. We suggest that the date on which FDR is formed should be mentioned in the FDR register maintained by e management. 1. The Internal audit report has not been provided to us as required as per Point 9.5 of schedule 9 of Financial Management Manual issued by Government of India. II. NATIONAL PROJECT IMPLEMENTATION UNIT (NPIU) 1. Out of the total fund of Z 997.50 Lakhs received from Ministry of Human Resources T epartment (MHRD) for faculty Development Program in FY 2012-13, a sum of T 868.63 Lakh- has been advanced for the programs to various selected institutes (T 153.09 Lakhs advanced in FY 2012-13 & T 715.54 Lakhs in FY 2013-14) and deposited service tax to the tune of Z 109.73 Lakhs on advance received in FY 2012-13. Advances given of Z 868.63 Lakhs has been adjusted by the Ed CIL in the FY 2015-16 on the bases of Utilisation Certificate received from Institutes and service tax of T 109.73 lakhs has also been adjusted and balance outstanding as on 31st, March, 2016 is T 19.13 Lakhs. 2. These statements are prepared on the basis of extracts from the audited financial statements submitted by EdCIL(India)Limited to Ministry of Human Resource Development, Govt. of India, on mercantile system of accounting. Now these financial statements have been redrafted in accordance with the Performa prescribed by the World Bank in Financial Manageme t Manual dated November, 2014. 3. Fixed Assets acquired prior to Financial Year 2011-12 have been capitalised and those acquired from April 1, 2011 have been transferred to Income & Expenditure Account as prescribed in Financial Management Manual. 4. On Similar grounds stated above in Point 3, grant received during the financial year )ther than amount received by EdCIL (India) Ltd. on account of Faculty Development Program, have been transferred to Income & Expenditure Account. 5. Previous figures have been regrouped / rearranged wherever necessary. III. STATES 1. As the CFI /SPFU and State Program Institution are Non- Profit making Autonomous for academic purposes hence, no provision for taxation has been made in the accounts. 2. Only the eligible expenditure incurred on the project activities is claimed. Expenditure not in accordance with the project agreements not to be claimed. 3. Advance to Faculty/staff have been treated as expenditure by CFI's only upon subnission of expenditure information. 4. Interest income on FDR is accounted for an accrual basis and accrued interest is shown as current assets of the project 5. Revenue from the grants & Bank interest are recognized on receipt basis, / '4c 6. Material purchased for the project activities have been charged off to the relev t project expenditure at the time of purchase. 7. Five states have treated grant as capital in nature and taken it directly to Capital Grant/Capital Reserve in Balance Sheet:- Sr. Name of State Grant from Institute Total No. Government Share (Zin Lakhs) (Zin Lakhs) (Zin Lakhs) a. Maharashtra 5838.00 36.00 5874.00 b. Uttarakhand 721.22 0.00 721.22 c. Telangana 1088.00 196.56 1284.56 d. Andhra Pradesh 904.12 28.30 932.42 e. Jharkhand 854.90 20.00 874.90 Total 9406.24 280.86 9687.10 8. Three States has adopted "Income Approach" for accounting of government grant and have transferred the amount of grant to Income & Expenditure Account corresponding with the amount of expenses incurred by the respective institutes during the year. The details are as follows:- Sr. Name of States Amount of Grant transfer to Inome & No. Grant Received Expenditure Acc unt (Zin Lakhs) (Zin Lakhs) a. Tripura 340.00 162.84 b. Uttar Pradesh 978.50 1538.50 c. Delhi NIL 209.95 Total 1318.50 1911.29 9. Six States have reported Grant in Receipt & Payment Account different than that stated in Income & Expenditure Account. The details are as under: Sr. Name of the State Grant as per Receipt Grant as per Income & Difference No & Payment Account* Expenditure Account** (Z In Lakhs) (Zin Lakhs) (Zin Lakhs) a. Kerala 3375.32 3150.00 225.32 b. UT-Puducherry @ 450.00 225.00 225.00 D A7 c. UT-Chandigarh 1426.75 1501.47 (74.72) d. Gujarat # 2649.99 5814.99 (3165.00) e. Chhatisgarh 3040.00 3000.00 40.00 f. Rajasthan 1250.00 1500.00 250.00) Total 12192.06 15191.46 ('.999.40) * Grant as per Receipt & Payment Account: includes grant received from Government, Private Institutions, SPFU, Grant received from State Government on behalf of P rticipating Institutions, Funds for SPFU expenditure received from State and Institute's own Contribution. ** Grant as per Income & Expenditure Account includes Grant received, Contrib tion from Participating Institutions and Institution's Own Contribution. @ Refer Annexure-B of our Consolidation Report for details # Difference is due to change in accounting policy by the management. Cumulati e amount charged in Income & Expenditure Account. Reply of Auditors for difference in Grant:- UT-Chandigarh: Cost shared by Private Unaided Institution of Z 74.72 Lakh has been shown as Income in Income & Expenditure account but it is not shown as receipts in Receipt & Payment account by PEC university of Technology, Chandigarh in their individual financial statement instead they carried this amount as liability in Balance sheet. (But in previous year it was shown in both Income & Expenditure Account and Receipt & Payment Account instead of taken it to balance sheet as liability). 10. Five States have reported Grant in Statement of Sources and Application of Funds differen than that stated in Income & expenditure Account. The details are as under: S.No Name of the Grant as per Statement of Grant as per Income Difference State Source and Application & Expenditure (Z In akhs) of Funds* Account** (Zin Lakhs) (Zin Lakhs) a. Kerala 3327.06 3150.00 177.06 b. Madhya Pradesh 629.27 1190.26 (560.99) c. Chhattisgarh 1540.00 3000.00 (1160.00) d. Gujarat # 3023.29 5814.99 (2791.70) e. Rajasthan 1250.00 1500.00 ( 50.00) Total 9769.62 14655.25 (4 85.63) * Grant as per Sources & Application of Funds includes Funds from Government; Fund received directly by project Implementing Authority through External Assistance. ** Grant as per Income & Expenditure Account includes Grant received, Contribu ion from Participating I ons and Institution's Own Contribution. # Difference is due to change in accounting policy by the management. Cumulati e amount charged in Income & Expenditure Account. 11. Seven States have capitalized Fixed Assets purchased in Balance Sheet and not charged to Income & Expenditure Account as prescribed in Financial Management Manual:- Sr. Name of State Amount of Fixed Asset as No. on 31.03.2016 (Z in Lakhs) a. Madhya Pradesh 1243.64 b. Maharashtra 8125.22 c. Odisha 900.99 d. Uttar Pradesh 16.21 e. Uttarakhand 849.14 f. UT- Puducherry 551.01 g. UT-Chandigarh 6.89 Total 11693.11 12. Following States have calculated World Bank share at different rates in "Statement of Reconciliation of Claims" than specified in Financial Management Manual: Sr. Name of State Rates Shown No a. Himachal Pradesh 90% b. Odisha Not Calculated c. Uttarakhand 90% d. Tripura 47.89% e. UT- Punducherry 75% f. West Bengal 73.19% g. Andhra Pradesh 70.25% h. Haryana 75% i. Telangana 69.72% j. Bihar 100% However, in consolidated statement World Bank's share has been worked out @ 60% of To:al Eligible Funds. 13. Eleven States have stated figures in Project to Date column of statement 'Sources & Application of Fund and Statement of Reconciliation of Claims to total application of Funds' that are different than the current year's and previous years data and document available with us. List is as under:- Sr. No. Name of State Name of Statement -1 1. Punjab Sources & Application of Funds, Reconciliation f claims to total application of funds 2. Madhya Pradesh Sources & Application of Funds, Reconciliation f claims to total application of funds 3 Chhatisgarh Sources & Application of Funds 4 Karnataka Reconciliation of claims to total application of funds 5 Odisha Reconciliation of claims to total application of funds 6 Ut-Chandigarh Reconciliation of claims to total application of funds, Statement of Sources and Application of Funds 7 Uttrakhand Sources & Application of Funds, Reconciliation of claims to total application of funds 8 Tripura Reconciliation of claims to total application of funds 9 Himachal Pradesh Reconciliation of claims to total application of fun s 10 Uttar Pradesh Statement of Sources and Application of F ds and Reconciliation of claims to total application of fun ss 11 Kerala Statement of Sources and Application of Funds 14. Three States have stated Opening Balance of Statement of Sources & Application of Funds ofccount as on April 1, 2015 different from that worked out as closing Balance on March 31. 2015. The details are as under:- Sr. Name of State Balances as per Opening Balance Diff erence No Audited statement of of 2015-16 of of funds 2014-15 of Sources Source and and Applications Application (tin Lakhs) (in Lakhs) a. Gujarat 1986.10 1978.21 7.88 b. Uttar Pradesh 2468.43 2140.29 328.14 C. Punjab 1039.91 703.51 336.0 Total 5494.44 4822.01 672.43 a. ujaat 98610 97821 .8 15. Six States have reported expenditure at point - C of Statement of Reconciliation of Claims to Total Application of Funds different than that reported at point - D of Statement of Source and Application of Funds:- Sr. Name of State Expenditure as Expenditure as per Diference No. per Statement of Statement of (?in Lakhs) Reconciliation of Source and Claims to Total Application of Application of Funds Funds (Zin Lakhs) (Zin Lakhs) a. Gujarat 2476.47 1777.47 699.00 b. Punjab 274.22 227.16 47.06 c. Uttarakhand** 564.51 613.99 (49.48) d. Madhya Pradesh 785.79 796.26 (10.47) e. Tripura 162.84 171.47 (8.63) f. UT-Chandigarh 707.69 552.19 155.50 TOTAL 4971.52 4138.54 832.98 * Difference is due to Advances of T 48.44 Lakhs and Security Refund of Z 1.05 Lakhs ad ded to the expenditure in Statement of Sources and Application of Funds. 16. Nine States have reported expenditure in Income & Expenditure Account different than that reported at point-D of Statement of Source and Application of Funds (excluding differences on account of addition in Fixed Assets). The Details are as under: Sr. Name of the State Expenditure as per Expenditure as per Difference No. Income & Statement of (Z In Lakhs) Expenditure Source and Account Application of (Zin Lakhs) Funds (Zin Lakhs) a. Gujarat ** 2607.43 1777.47 829.96 b. Madhya Pradesh 912.57 796.26 116.31 c. UT- Chandigarh 548.33 552.19 (3.86) d. Uttarakhand @ 314.47 --63.96 (49.49) e. Chhatisgarh *** 149.57 (358.82) f. Himachal pradesh 21.66 45.65 (23.99) g. Odisha 174.85 16724 7.61 h. Punjab # 348.22 227.16 121.06 i. Rajasthan 861.08 862.48 (1.40) Total 5938.18 5300.80 637.38 ** Gujarat :- Reply from Auditor Due to change in Accounting Policy, Procurement of Fixed Assets upto 31st March 2015 has been transferred to expenditure in Income & Expendit re account while the expenditure in Statement of Sources & Application of Funds pertains to IY 2015-16. Hence, due to change in accounting policy there is difference in both the amounts. @ Difference in Uttarakhand is due to Advances and Security refund amounting to T48.43 Lakhs and T 1.05 Lakhs respectively, treated as Expenditure in Sources and Application of Funds. * T 149.57 Lakhs is net of Total expenditure of Z 1649.57 Lakhs and Fund disbursed to various Institutions of Z 1500 Lakhs (Even there is no procurement of assets). # Difference in Ut-Chandigarh is due to difference in amount of procurements of equipment/furniture/Minor Items. 17. State of Bihar had not furnished any financial statements till the financial year 2014-15 but during this year, Bihar has submitted the audited financial statements for the year 2015-16 containing previous year figures pertaining to 2014-15. Consequently, figures of Audited Financial Stateme t for the concerned year and previous year have been punched in for the consolidation. To that exten, previous year figures do not match with the figures provided in previous year consolidated financials 18. 9 States have incorporated net balancing figure of 'Sources of funds' of the previous year balance sheet as at 31.03.2015 (after deducting / addition of balance of 'Excess of Income over Expenditure') as the opening balance of 'Amount received from/ Grant in - aid' in the financial statements of the FY 2015- 16. The details are as under:- Sr. Name of State Closing Closing balance Net figure of Opening No. balance of of 'Excess of Closing bidance of 'Sources of Income over balance as on 'S urces of Fund' as on Expenditure' as 31.03.2015 Fund' as on 31.03.2015 on 31.03.2015 0 .04.2015 1. Jharkhand 42566360.13 (29550270.80) 13016089.33 13016089.33 2 Karnataka 262948945 (128052624) 134896321 134896321 3 Kerala 131873724.47 259257674.38 391131398.85 391131398.85 N) 4 Himachal Pradesh 16288000 1 1828 18285000 5 Maharashtra 917316709 (210550877) 706765833 706765833 6 Punjab (94123090.68) (88510587.80) (18263367850) (1R2633678.50) 7 UT-Chandigarh 146840994.50 (35091156) 111749838.50 11749838.50 8 Uttar Pradesh 293595007.02 (79566273) 214028734.02 J 14028734.02 9 West Bengal 182235329 100795346 283030675 283030675 19. State of Uttar Pradesh has stated "Bank balance" in schedule to Balance sheet as on March 31, 2016 at ? 1752.60 Lakhs whereas closing balance of bank as per Receipt & Payment Account is T 39.66 Lakhs, difference being Z 1712.94 Lakhs. 20. State of Uttar Pradesh have stated "Cash balance" in schedule to Balance sheet as on March 31, 2016 at Z 0.70 Lakhs whereas closing balance of cash as per Receipt & Payment Account is T (.01 Lakhs, difference being Z 0.69 Lakhs. 21. Changing in Accounting Policies a) STATE OF GUJRAT Project institutes have changed the accounting policies from the accounting policies consistently followed to comply with the Financial Management Manual of the TEQIP-II in following Cases: 1. Grants Received by MHRD & Government by State Project Financial Unit is now treated as Income of the project institute by transferring the Grants to Income & Expenditure Account at the end of Financial Year Instead of TEQIP Grant Fund and was accordingly reflected :n Balance sheet. Moreover the opening balance of the TEQIP Grant fund as on 01/04/2015 is also transferred to Income & Expenditure account. Due to change in said accounting policy, there is material impact on the Income of the Project Institute which is mentioned in Point 7 below. 2. Funds released to Project Institution by State Project Financial Unit is now treated as Advance to Projected Institute instead of setting off against "Amount received from Government & MHRD from Capital Funds". 3. Grants received by Project Institution from SPFU during the year are now treated as Income of the Project Institution by transferring the Grants to Income & Expenditure account at the end of Financial Year instead of TEQIP Grant Fund and was accordingly reflected in Balance Sheet. Moreover the opening balance of the TEQIP Grant fund as on 01/04/2015 is also transferred to Income & Expenditure account. Due to of the change in said accounting policies, there is material impact on the i come of Project Institute which is mentioned in Point 7 below. 4. Procurements of the Assets by the State Project Financial Unit and Project Institutions are now considered as Revenue Expenditure by debiting total value of procurements to Income & Expenditure account at the end of the financial year instead of reflecting it as "Fixed Assets in the Balance Sheet". The opening balance of the Fixed assets as on 01/04/2015 transferred to Income & Expenditure account is mentioned in Point 7 below. 5. The Balance of Income & Expenditure Account is transferred to General Fund at the end of the financial year. 6. Interest Income is now booked Net of Tax deducted at Source. 7. The net financial impact on account of change in Accounting Policies in the Consolidated State Project Financial Unit Gujarat Accounts can be calculate as under: Particulars Amount (Z) Grants received by Project Institutions in FY 2015-16 26,49,99,000 Add Grants received by Project Institutions during 1/4/2012 to 31/03/2015 31,65,00,000 Add Grants received by SPFU 1,15,00,000 Total 58,14,99,000 Less Procurement (Fixed Assets)as on 01-04-15 (8,34,47,596) Less Procurement (Fixed Assets) Purchased during FY 15-16 (14,15,36,050) Less TDS Receivable for the previous year -GEC-Gandhinagar (1,28,496) Less TDS deduction from Interest Income -GEC Morbi (3,70,844) Net Increase in Income over Expenditure due to change in accounting policy 35,60,16,014 b) STATE OF UTTAR PRADESH Grant received from project authority under the project during the year has been transferred to Income and expenditure account to the tune of T 1538.51 Lakhs corresponding with the expenditure incurred, thus adopting Income Approach for treatment of Grants. Till the year 2014- 15, SPFU and States were following capital approach for treatment of Grants, thereby r flecting it in Grants/Funds Account in the Balance Sheet. However, the Management has not re-casted previous year figures in accordance with the change in accounting policy. This cl ange has resulted in increase in excess of Income over Expenditure by Z 1538.51 Lakhs. c) STATE OF TRIPURA Fixed Assets acquired during the year amounting to Z 88.59 Lakhs have been charged off to Income & Expenditure Account. However, till Financial Year 2014-15, Fixed Assets procured were capitalized in the Balance Sheet and were not charged off to Income & Expenditure Account. The management has re-casted previous year figures after charging off fixed assets to the In:ome and Expenditure account. This has resulted in Increase of expenditure in Income & E penditure Account by T 299.85 Lakhs and reduction in Fixed Assets and 'Amount Received From' Iy T 308.25 Lakhs. 22. TRIPURA The Financial Manual as available in the website for TEQIP-II Project is being followed by TIT Narsingarh for the under-mentioned activities/decisions relating to accounts and finance. a) Allocation of fund to different expenditure heads is being maintained. b) Permissible and Non-permissible expenditure for different expenditure heads is also maintained (in case of any deviation, approval from NPIU & BOG is obtained prior to implementation). c) Expenditure head appropriation and head finalization in the sanction memo. d) All types of financial reporting (both off-line and online) to SPFU/NPIU as per direction. e) Maintenance of Cash book, Mapping of Expenditure/BRS, Standard books of accounts, Stock Register, Fixed Assets Register, Advance Register, Register of Contracts are being done as per the format. f) Different types of Standard expenditure/adjustment entries are being made in the a counting software. g) Internal Audit and Statutory Audit are carried out as per the provision laid in the ma ual. h) Delegation of financial powers is mentioned below as per the minutes of 2nd BOG. Principal For single purchase order -Z 20 lakhs Limit for consumables - T 01 lakhs Limit for non-consumables -Z 20 lakhs Limit for hiring services - Z10 lakhs Head of the Department or equivalent For single purchase order - Z0.501akhs Limit for consumables -T 0.10lakhs Limit for non-consumables -T0.50 lakhs All expenditure above Z 20 lakhs would have to be approved by the Board of Governors. Similarly all expenditure above T 0.50 lakhs by the Head of Department shall be approved by the P incipal. k, A i) The composition of Financial Management Sub-Committee (FMS) TEQIP-II Unit is mentioned below: Sr. Name Designation Will serve as No 1 Sri, Ashis Debbarma Assistant Professor Nodal officer 2 Sri, Bidyut Bhattacharjee Assistant Professor Member 3 Sri, Dhirendra Chandra Sarkar Account officer Member 4 Sri. Swadesh Ranjan Acharjee U.D. Clerk Member 5 Sri. Param Lal Harijan Cashier Member j) The operational principle for accounts relating to works is mentioned below: " All documents are submitted to the Principal and Project Head. / The authority forwards the documents to the coordinator of the project and the coordinator forwards the matter to the Nodal officer, Financial Management Sub- committee. / The Nodal officer forwards the matter to the Accountant TEQIP-II / The Accountant prepares the document as per the standard accounting norms related to project and the work is verified by the Project Head on recommendatic n of the coordinator. / All third party bills relating to procurement are verified by another member of account section before verification done by the Nodal Officer, FMS. / TDS are deducted as per the prevailing rates and guidelines of the respective departments and duly deposited as per norms. / For TA & DA the govt. notification approved by Chairman BOG is followed / All payments are done through cheques/RTGS as per the prevailing govt. norms. / Approval from competent authority is obtained prior to processing and payments of the vouchers. V All vouchers along with sanction memos are preserved as per govt. norms. / All advances and adjustments are processed as per the prevailing govt. norms. / For timely adjustment of advances demand notices are also issued as per govt. norms. / All cheques are issued jointly by Cashier and DDO of the Institute / The authority for deduction and deposition of TDS is made through DDO of the Institute who is also a member of the FMS. / The fixed Assets Register is maintained by the Central Store in- Ch J7 I / All the Tour Diaries related to Faculty and Staff Development are verified by the Nodal Officer, Faculty and Staff Development (FSD) and is approved by Project Head. / All communications relating to accounts and finance are initiated by account mt and is placed in succession to the Nodal Officer, FMS and the Coordinator TEQIF-II and is finally signed by the Project Head. 23. GUTARAT 1) Cash Balance is not verified by Auditors. The same is as certified by the Management. 2) Auditors have not physically verified Assets created out of funds utilized. 3) Project Institutions have been consistently providing Utilization of Funds in the Books of Accounts on the basis of self-certified Utilization Certificates received from IIT Gandhinagar, IPR Gandhinagar and KCG Gandhinagar. 4) As per the Guidelines of the Finance Management Manual of the TEQIP-Il project grants received by state Project Financial Unit and Project Institutions have to be transferred Income & Expenditure Account at the year end. However the Project Institute has not foll>wed the guidelines in the previous financial year. Hence during the current financial year, retrospective effect has been given by transferring cumulative balance of grant received from SPFU as on 01-04- 2015 T 3165.00 Lakhs to Income & expenditure Account. Moreover the grants of ? 2699.9) Lakhs is also transferred to Income & expenditure account on 31/03/2016. 5) As per the Guidelines of Finance Management Manual of TEQIP-II project, Procurement of Goods for Improvement in teaching, training and learning facilities namely Equipments, Furn ture, and books, LR's and software & Minor Items have been transferred to Income & Expenditure Account at the year end. However the projects Institute have not followed the said guidei es in the previous financial year. Hence during the current financial year retrospective effect has ben given by transferring ? 834.48 Lakhs to Income & expenditure Account as along with current year procurements of T 1415.36 Lakhs. Sr. Particulars Balance as on 01/04/2015 From 01/04/2015 to No 31/03/2016 1 Equipments 6,76,52,934 12,71,34,659 2 Furniture 84,81,713 34,85,132 3 Books & LRS & Software 72,93,104 1,09,16,249 4 Minor Items 19,845 til Total 8,34,47,596 14,15,36,050 6) As per the Guidelines of the Finance Management Manual of the TEQIP-II project Grants received from the Government and MHRD by state Project Financial Unit has to be transferred to Income & Expenditure Account at the year end. However the SPFU has not followed the guidelines in the previous financial year. Hence during the current Financial year, retrospective effect has been given by transferring Grants received by State Project Financial Unit till 31/03/2015 7 115.00 Lakhs to Income & Expenditure on 01/04/2015. 7) Project Institution GEC Gandhinagar have adjusted TDS receivable balance on Interest ncome of the earlier financials year Z 1.28 Lakhs against the current financial year as the said 'lDS is not recoverable due to non-availability of Permanent Account number with the Project Instit te. 8) In case of Project Institution Morbi, Tax deducted at source for the years Z 2.63 Lakhs and for the current year of Z 1.08 Lakhs has been settled against the Interest Income during the FY 15-16 as the said TDS is not recoverable due to non availability of Permanent Account number with the Project Institute. 9) As per the Guidelines of the Finance Management Manual of the TEQIP-II project Funds released by State Project Facilitation Unit to Project Institution shall be debited to the respective Project Institution account i.e to be treated as "Advance to the Project Institutions " However, State Project Financial Unit was setting off the amount from the capital Fund. Hence during the current Financial year, total funds released by State Project Financial Unit to Project Institutions is treated as Advance to Project Institutions on retrospective basis. 10) In case of GEC Rajkot, Interest earned on the bank balance of the four funds namely Corpus Funds, Depreciation Fund, staff development fund and Maintenance Fund which was credited to the bank interest income in FY 2014-15 is now transferred to the respective funds accounts. 24. KARNATAKA Cumulative Expenditure of Nineteen Educational Institutions and the Karnataka SPF , TEQIP Phase II, since inception amount to Z 13,424.22 lakhs. However the corresponding aggregate expenditure reported in the FMR Statements filed with NPIU amounts to T 13,457.88 Inkhs. The difference of T 33.66 lakhs will be rectified in the FMR's by the Management of the Institutions and SPFU, Karnataka in the following year. 25. UT-CHANDIGARH The grant received for the financial year 2015-16 from MHRD is Z 1016.75 Lakhs end from Chandigarh Admin. is Z 4,10.00 Lakhs. Interest received is Z 75.80 Lakhs and other receipts is Z 7.14 Lakhs and unspent bank balance of Z 2088.09 Lakhs. Total fixed assets are, 6.89 Laths. Total expenditure for th financial year is Z 552.19 Lakhs. 26. TAMILNADU The payments made for various expenses are charged to respective project activit es except advance payment for expenses. Expense/Programme Advances are accounted under appropriate project activities head, when expense bills are submitted. 27. MAHARASHTRA 1. In the case of following institutions, the programme has taken funds from the institutei as loans. The same has been showed under the head current liabilities and the closing balances of the loans as on March 31,2016 are as follows: S.NO. NAME OF INSTITUTION AMOUNT 1 G.H. Raisoni College of Engineering, Nagpur 1,63 26,414/- 2 Department of Technology, Shivaji University, Kolhapur 4,93,350/- 3. Centre of Excellence, Veermata Jijabai Technology Institutes , 83 00,000/- Mumbai TOTAL 2,51,19,764/- 2. In case of college of Engineering, Pune following observation has been noted: The grant pertaining to Centre of Excellence (COE) of T 100.00 Lakhs was directly transfer red in the bank account of CSIP, Pune instead of CSRES, Pune bank account. However, the same a ount has been transferred to CSRES, Pune bank account in the current year. 3. In case of Institute of Chemical Technology, Mumbai following observations have been noted: The project institute has opened its bank account as a current bank account instead of say ngs bank account, because of the same there is no interest loss to the programme on the excess funds lying in the bank account. 4. It has been noticed in the case of following Institutions that the following amounts are still outstanding and to be paid in subsequent year, since the programme is following cash basis of accounting therefore the same has not been taken in to the books of accounts as sundry creditors: Sr. Name of Institution Amount No. (in T) 1. Department of Chemical Technology, North Maharashtra University, 1,940/- Jalgaon 2. Bharti Vidyapeeth College of Engineering, Pune 97,500/- 3. Government College of Engineering, Jalgaon 64,116/- Total 1 63,556/- 5. It has been observed in case of following institutions that the institute has made expenditire during the year where the grants received from the SPFU were Z. Nil; Sr. Name of Institution Anount No. (nZ) 1. Centre of Excellence, Shri Guru Govind Singh Institute,Nanded 1,78,99,211/- 2. Centre of Excellence,Veermala Jijabai Technological Institute ,Mumbai 2,03,41,498/- 3. Innovation, Institute of Chemical Technology, Mumbai 46,53,465/- Total 4,28,94,174/- 6. It has been observed in case of following institutions that the banks has deducted TDS on interest income on FDRs due to which and amount of T 1.24 Lakhs has been deducted as TDS anc the same is shown under current assets: Sr. No. Name if Institutions Amount in T 1 Centre of Excellence for SRES, College of Engineering, Pune 35,348/- 2 Government College of Engineering, Aurangabad 88,660/- Total 1,24,008/- 7. Statutory Non-compliances: a) Dr.Babasaheb Ambedkar Technological University ,Lonere TDS on payment amounting to Z 2.84 Lakhs paid to Vertiois Training and Consultancy Pvt Ltd on 13th January 2016 has been deducted u/s 194C @ 2% instead of u/s 194J @ 10% (Voucher no 220). b) Government College of Engineering, Talgaon 1. TDS Challans were filed after due dates. 2. TDS u/s 194J @ 10% has not been deducted on Z 0.45 Lakhs being Honorarium paid to Sudhasheel Ghos on 2nd December 2015. 8. Fixed Assets: Physical Verification: Shivaji Unversity, Kolhapur 1. During Physical Verification, it was observed that Unique Identification Number (UIN) was not allocated on the assets. 2. Ductility testing machine (Fixed Asset) purchases on 9-6-2015 (Voucher No. 29) from Kulkarni & co. was not available in the department during physical verificati n. 9. Indirect Expenses: I. Incremental Operating Cost (IOC) Government College of Engineering T-algaon Two mobile phones were purchased amounting to T 0.10 Lakhs and Z 0.11 Lakhs The same has been debited under IOC. The same should be recovered during current year as per the instructions given 10. Inditect Incomes: Shivaji University, Kolhapur: a) Penalty Income of Z 1.80 Lakhs charged to supplier for delivering assets after due date, were transferred to Shivaji University instead of treating it as Indirect Income under TEQUIP-II. The details of delay charges are as under: Delay charges paid to University Date Cheques No Amount 27/May/15 311549 14438 27/May/15 311551 12792 27/May/15 311555 46725 28/May/15 311557 39119 6/Jun/15 311567 1502 8/Jun/15 311570 5225 9/Jun/15 311574 4014 16/Jul/15 311591 30815 30/Sep/15 13182 12939 30/Sep/15 13186 8702 12/Oct/15 13190 3860 Total 180131 b) The Miscellaneous Receipt of ! 1.25 Lakhs which was appearing under Current Liabilities is treated as Miscellaneous Income in current financial year. The account entry passed in the previous was not correct, therefore adjusted in current year. Government College of Engineering Amravati: It has been observed that institute had a balance of ! 263.29 Lakhs in its bank account but the same has not been invested as Fixed Deposit resulting into interest loss to the Program. 11. Adjustments/Rectifications: Department of Chemical Technology, North Maharashtra University, Talgaon During the year 2013-14 an amount of Z 88 Lakhs was recorded as expenditure under the head "Research & Development" (Seed Money Project.) A refund of T 19.00 Lakhs was received by the institute in previous year i.e. 2014-15 and wrongly accounted as "Loans & Liabilities" instead of crediting back to the respective head. Adjustment entry crediting to the expenditure head "Research & Development "has be n passed during the current year. 12. Loss of Funds to Program: Government college of Engineering,Chandrapur a) The Institute had booked payments of mobile bills amounting to Z 0.16 Lakhs during the year. However this is against TEQUIP-II Guidelines .Please refer details of the pa Vments as given below: Date Voucher No. Amount 29/4/2015 28 1100 29/4/2015 29 3705 8/7/2015 70 2508 16/9/2015 121 1210 16/9/2015 122 1150 7/11/2015 157 1100 10/11/2015 167 1220 30/12/2015 219 1200 15/1/2016 250 1243 29/03/2016 309 1100 30/03/2016 318 249 15785 b) Principal's office glass work expense of Z 0.05 Lakhs was charged along with TEQIP-II expenses. (Amount paid to M/s K. M. Kanchwala, invoice no. 2473 dated 03/08/2015 the same should be transferred back to TEQIP-II account. c) It has been observed that the banks had deducted TDS on interest income on FDRs in 2013- 14 of Z 1.09 Lakhs. The same is recoverable from the bank, institute is-nt tak ng active initiatives to re over the same. r\ 13.Others: A) Bharati Vidyapeeth College of Engineering According to TEQIP-II Guidelines, transactions entered into the cash book should be printed and authenticated by the Finance Head on monthly basis. This practice has not been followed by the institute. B) G.H.Raisono College of Engineering, Nagpur It has been observed that generally the payments have been made from GHRCE's bank account opened for TEQIP should be used for making any payments or receiving any funds. In case there is no balance in TEQIP bank account, Institute can transfer amounts to TEQIP-Il bank account first then the transactions must be made from TEQIP account. C) Walchand College of Engineering, Sangli During the audit, it is observed that the institution is doing various transactions in cash f Dr making payments. The Institute shall do as much as possible transactions through account payee cheques only. 28. PUNJAB The grant received for financial year 2015-16 from MHRD is Z 376.50 Lakhs. Interest received is T 14.82 Lakhs and other receipts is Z 2.38 Lakhs and unspent bank balance of Z 655.21 Lakhs. Total expenditure for the financial year is Z 227.16 Lakhs. 29. RAJASTHAN Notes on Accounts - 1. During the financial Year Z 12.50 Crore has been received in Personal Deposit Acco nt which has been allocated in the ration of 75:25 as amount received from MHRD & S ate Govt. respectively. 2. Personal deposit Account having balance available as on 31.03.2016 Z 1.40 Crore however out of the Same Z 0.40 Crore pertains to SPFU. 3. Expenditure incurred by the following project institutions Under the project I ave been disallowed to the following extent as they have not incurred in accordance with the prescribed norms Sr. No Institutions Amount () 1. Government Engineering College, Jhalawar 123190/- 2. Institute of Engineering & Technology, Alwar 2629/- Total 1 15,819/- 4. In case of Institute of Engineering and Technology, Alwar following observations has been noted: * The Project institute has received TEQIP-II fund in its own (college) bank account in place of designated bank account opened as per TEQIP guidelines. Funds are transferred to the designated account as and when required for incurring the expenditure. * Salary Payment of Z 11.95 Lakh has been made through college Accounts. 5. In case of Government Engineering College, Bikaner following observations has been noted: * The Institute has not transferred contribution ( at the rate of 0.50% of annual recurring expenditure to each fund ) for the financial year 2014-15 & 2015-16 * There is a Difference of Z 15,776/- between the closing balance of FFD account as on 31.03.2016 as per bank and As per Books of Accounts which need to be reconciled. The Same has been shown under suspense account under bank reconciliation Statement as on 31.03.2016. * All Loans & Advances are Subject to confirmation /reconciliation. * Advances are pending for adjustment as on 31.03.2016 are as under Particulars Opening Balance Debit Credit Closing balance as on 01.04.2015 as on 31.03.2016 AICTC-2016 100000.00 100000.00 Dr (ADVANCE) Dharmendra 15500.00 6920.00 8 80.00 Dr Singh Advance A/c JAYANT 20000.00 20000.00 Dr ACHARYA (ADVANCE) JITENDRA 5000.00 2181.00 2 19.00 Dr KUMAR JAIN (ADVANCE) Maninder Singh 22000.00 Dr 560.00 214 40.00 Dr Nehra Advance A/c Manish Tater 17000.00 Dr 17(00.00 Dr Advance A/c MANOJ KURI 70000.00 7029.00 65971.00 Dr (ADVANCE) Mohd. Yunus 25567.00 Dr 2 567.00 Dr Sheikh SANJEEV lAIN 50000.00 10392.00 39608.00 Dr (ADVANCE) S.K. BISHNOI 20000.00 1595.00 18405.00 Dr Surya Prakash 43511.00 Dr 43511.00 Dr Takhar Advance A/c TARUN - 20000.00 20D00.00 Dr CHOPRA (ADVANCE) 6. In case of Government Engineering College, Jhalawar following observations has been noted: The Institute has transferred T 4,54,137/- only as institute contribution to each fund (Corpus Fund, Faculty Development Fund, Equipment Replacement Fund and Maintenance Fund) against Z 6,26,797/- calculated at the rate of 0.50% of annual recurring expenditure of college for the FY 2014-15. 7. In case of College of Technology and Engineering, Udaipur following observations has been noted: The Institute has transferred Z 85,000/- as its contribution to each fund i.e Corpus Fund, Faculty Development Fund, Equipment Replacement Fund and Maintenance Fund during the financial Year on Lump Sump Basis however the same should be transferred @0.5% af Annual recurring expenditure incurred by the college during the year. 8. In case of University College of Engineering, Kota following observations has be n noted: Z 53,439/- Shown under Bank reconciliation Under "Suspense Account". Management not able to Locate the difference and hereby the bank reconciliation Statement has been reconciled by showing Z 53,439/- Under Suspense Account. / Accounting entries of vouchers, Books of Accounts, Bank reconciliations Statement, ecording of receipts etc not done in Proper Manner. / College not matched the actual receipts in main Bank account with the books of Accounts. / College not recorded the interest credited by Bank amounting to Z 10,75,492/- in cash book Maintained manually however the same has been Accounted for in the financial Statements. CARGN~ / College not accounted for TDS refund credited by bank Amounting to T 35,964/- luring the financial year 2014-15 in the cash book Maintained manually however the sam has been accounted for in the current year financial Statements. / Certain amount has been credited by the bank in the Previous as well as current fin mcial year however the same has not been accounted for in the cash book as well as financial 5tatements due to not availability of detailed information about the same. / Expenditure incurred and shown in the FMRs have been regrouped 1whenever necessary to align with the guidelines of World Bank. / Loans & Advances are Subject to confirmation /reconciliation as on 31.03.2016. Deiails of the same are as under Particulars Opening Balance Debit Credit Closing balance as on 01.04.2015 as on 31.03.2016 A.K. SHARMA 100000.00 Dr 100)00.00 Dr Dr. D.K Palwalia 100000.00 Dr 100)00.00 Dr Dr.Praveen Kumar 90000.00 Dr 90)00.00 Dr Dr. R.S.MEENA 40000.00 40)00.00 Dr Dr. Sanjay Kumar Tak 1500.00 Cr 1500.00 Cr Mr.Girish Parmar 137000.00 Dr 137)00.00 Dr Mr. Om Shankar Prajapati 112000.00 Dr 112)00.00 Dr Mr. S.C. Jain 200000.00 Dr 200 00.00 Dr Mr. S.D. PUROHIT 9500.00 9 00.00 Dr R.K. Bayal 169815.00 Dr 169 15.00 Dr Suspense Advances 24685.00 Dr 24685.00 Dr Amount receivable from 205000 Dr 205000 Dr RTU TDS Receivable 381 30. KERALA a. We are of the opinion that the internal control with regards to the utilization of fund needs substantial improvement. The internal audit should ensure that the amount spend ty various institutions are strictly in accordance with the procedures and the norms specified in the "Project Implementation Plan". The Internal audit report shall contain variation of tilization of funds from project implementation plan and the ineligible expenditure if any, should be highlighted. b. The documentation in respect of transactions effected at the Project Institutions and PFU need to be improved. c. During the Financial year 2014-15 an amount of Z 48.89 lakhs was disallowed at the time of statutory audit of that financial year. Subsequently the institution submitted original invoices/Supporting relating to the disallowance amounting to Z 6.50 lakhs. Hence the above amount becomes eligible and the final disallowance for the Financial Year 2014-2015 comes to T 42.39 lakhs. d. No Annual Contribution to 'Four Funds' (Bank accounts) in case of certain institutions. e. During the course of audit it was observed that the institution "Government E gineering College Bartonhill" accounted advance to staff and its settlement not Financial Management Manual. Since the advances are not properly accounted properly in books of accounts maintained in tally as prescribed in "in books, the figures shown in books of accounts may materially misstated. The financial statements prepared on the basis of the books of accounts maintained by the institution. The effects of the same on the financial statements are neither ascertainable nor quantifiable. f. It was observed that the system of internal control relating to advances for expenses need substantial improvement. The institution should exercise adequate internal control mechanisms for the settlement of advance. Huge amount of advance were given by istitution for more than 3 months. If the institution doesn't employ proper control mechanisms then the person taking the advance may obtain undue advantages from the amount taken. Further it is observed that there are long pending unsettled advances as on 31/03/20 6. g. It was observed that in some cases the institutions were not following the practice of attaching the original transportation allowance bills. Instead they are claiming the TA as per Kerala State Rules. h. The Documentation should be in a correct format as per the government rules. In nost cases the files are attached in separate files. i. The tally vouchers numbers are not in order with the payment vouchers in physical fc rm. j. During the preceding years, the institution "LBS Institute of Technology for Womens Poojapura, Trivandrum" hasn't accounted the advances paid to staff and other transactions in the books of accounts properly. Subsequently the institution rectified few of the above mentioned transactions after the audit of the relevant previous years. Hence a mismatch was reported in the amounts as per books of accounts and audited financial statements which in turn resulted in a suspense amounting to T 6.43 lakhs in the financial statement. k. In some instances Revenue stamps are missing in case of payments exceeding Z 5000/ 1. None mentioning of head of expense in the proceeding under which the expense ave been incurred. m. The impacts of these observations on financial statements are unascertai iable and unquantifiable. 31. UTTAR PRADESH a. Fixed assets comprising of equipment and furniture purchased during the year are shown as Project Expenditure under the Income & expenditure account as per the guidelines gven under Financial Manual of TEQIP-II as against the earlier practice of capitalizing the same in the balance sheet. b. The unutilization amounts by the funded institutions are shown as 'Advance with hstitutions' in the Balance Sheet as against the earlier practice of consolidation of head wise asset/ liabilities of the concerned institution with the SPFU. 32. WEST BENGAL 1. The consolidated account consists of accounts of state Project Facilitation Units (SPI U) and 16 Project Institutions. 2. During the year 2015-16 a sum of T 3734.00 Lakhs (Rupees Thirty Seven Crore Thirty Four Lakhs only) was received by SPFU from State Government vide following Order Nos S.No. Particulars Am unt (Z) 1 Vide letter No 164 EH/P/SPFU/WB/2013/08dt.25/08/2015 ? 8,56,00,000.00 2 Vide letter No 144 /EH/P/SPFU/WB/2013/08 - Part - Adt - 8,48,00,000,.00 23/7/2015, 206/EH/SPFU?WB?2013/08-PART-B dt 2-11-15, 25(SANC)/EH/P/SPFU/WB/2013/08 dt 5-5-15, 289-Edn (T)/EH/P/SPFU/WB/2013/08 dt 25-6-15 3 Vide letter No 08-/EH /P/SPFU/WB/2013/08 dt 27-01-2016 T 7,50,00,000.00 4 Vide letter No 53/EH/P/SPFU/WB/2013/08/-Part c dtd T 12,8(,00,000.00 28.03.2016 3. During the financial year following institutions have refunded the amount to TE QIP Fund which were earlier allowed as inadmissible. Name of Institution Relating to year Aount () Murshidabad College of Engineering & Technology 2013-14 2,68,645 Birbhum Institute of Engineering & Technology 2012-13 2,20,811 33. NCT-DELHI 1. NCT- Delhi consists of two units for TEQIP-II Project namely, State Project Facilitation Unit, Delhi (SPFU) and Delhi Technological University (DTU). 2. The State Project facilitation Unit has neither received any Fund for the project nor in urred any expenditure till the end of financial year. 3. Advances issued to faculty for the various faculty and staff development programs have been treated as expenditure on the date of the issue of the advance and not on adjustment The details of advances issued pending adjustment in Financial Year 2015-16 are as under:- S. No. Particulars Amount 1. Advances released in F.Y.2015-16 which pertain to Programs to be 6,47,390 conducted in FY 2016-17 2. Advances issued to Dr. Ranganath M. Singari during the year but 3,80,000 not adjusted till March 31, 2016 but shown as expenditure 3. Advances issued in F Y 2015-16 but adjustment done in FY 2016-17 2,27,256 Total 12,54,646 4. Prior-period expenses During the year DTU (TEQIP II) has booked expenses of Z 2.80 Lakhs which are related to Financial Year 2014-15. Details are as under: S. No. Nature of Expenses Anount (Z in Lakhs) 1. INSTITUTIONAL MANAGEMENT CAPACITY ENHANCEMENT 0.32 2. IOC OPR & MAINT 9 (C) 2.06 3. FSD NATIONAL (TEQIP-II) (4A) 0.01 4. IMPLEMENTATION OF INSTITUTIONAL ACADEMIC 0.41 REFORMS(TEQIP-II) (7) Total 2.80 5. In the year 2014-15, T 0.95 Lakhs was treated as Ineligible Expenditure due to non- payment/encashment of cheque beyond a period of six month. However, the management has reversed the cheque entry in Enhancement of R&D and Industrial Consultancy account n current year, thereby resulting in double effect of disallowance of expenditure. To neutralise the same, a separate line item has been inserted in Statement of Reconciliation of claims to total Application of Funds and total expenditure for the year 2015-16 increased by Z 0.95 Lakhs, so that total expenditure incurred in the project and balance unspent fund are in agreement with each other. 6. Previous year's figures have been regrouped and rearranged wherever necessary. For G. R. GARG & COMPANY, Chartered Accounants FRN - 000214N N.S. Agnihotri Tripti Gurha Consultant (Finance) Director (TC), MHRD & CPA (Incharge) NPIU NPIU CA. URAV G RG (Partner) M. No. - 097327 Place: New Delhi Date: January 2, 2017 CONSOLIDATED EXPENDITURE STATEMENT OF IIT's & IIM's IN RELATION TO TEQIP-II , ( In Lakhs) S.No. PARTICURALARS F.Y. 2014-15 F.Y. 2015-16 Total Iumulative Proj ct to Date Opening Balance 1172.59 1,498.18 Releases of IITs and IIMs Grant Receipt of IITs 746.10 395.02 2,391.12 Grant Receipt of IIMs 430.26 501.06 1,156.23 TOTAL releases for IITs and IIMs 1,176.36 896.08 3,547.35 Total 2,348.95 2,394.26 3,547.35 Expenditure for IITs and IIMs A. Sub- Component 1.3 Faculty Development for Effective Teaching- Pedagogical Training (IITs) 501.88 706.62 1,246.46 B. Sub- Component 2.1 Building Capacity to Strengthen 348.89 71.16 684.41 Management of Technical Education (IIMs) Total Expenditure 850.77 777.78 1,930.87 CLOSING BALANCE 1,498.18 1,616.48 1 1IT, Bombay 1 IIM, Indore 2 IT, Guwahati 2 IIM, Lucknow 3 IIT, Delhi 3 JIM, Raipur 4 IIT, Kharagpur 4 IIM, Kozhikode 5 IIT, Gandhi Nagar 5 IIM, Udaipur 6 UT Roorkee 6 IM, Trichy 7 lIT Kanpur 7 IIM, Bangalore 8 IIT Hyderabad 9 IIT Madras N.S. Agnihotri Tripti Gurha Consultant (Finance) Director (TC), MHRD & CPA (Incharge) NPIU NPIU Place: New Delhi Date: January 2, 2017