ielig \TCTRM ;ýsNý)XT ]TE 361, 3TUIT ¯ , - - 600 018. OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL (G & SSA) Tamil Nadu & Puducherry "LEKHA PARIKSHA BHAVAN' 361, Anna Salai, Teynampet, Chennai - 600 018. É/ No. No.PAG (G&SSA) GS I, I 12-03 2018-19 CDRRP AC 2017-18/ 3 Dt.08 .05.2019 To The Coimissioner, Disa ster Management. Tanil Nadu State Disaster Managemnent Agency Chepauk, Chenna i - 600005. Sir, Sub:- World Bank assisted Coastal Disaster Risk Redluction Project (C)RRP) - Repori of he Comptroller a td Auditor General of India for 2017-18. Ref :- Your otice letter No. TAU.2_ 4244 2016 datedO3.12.2ulS. I am to forward herewith ihe Report of the Comptroller and Audi:or Generai et India on the financial statements for tie year 2017- in respe of subjht projet along with necesary encloes ures. Receipt of the letter along with cnclosures may be acknowledged. Yousfifl. Deputy A \ccountant Generail GS) EncL:- 1. Audit Report (two pages) 2. Appendix (two pages) 3. Fi na ncial Sta tenent i attached to Audit Report -1TN / Phone : 044 - 2431 6400 trum / Fax : 044 - 2433 0012 ¯IT / E-mail : agautamilnadu1@cag.gov.in 361, ~3TrTT 1å, å-11 , 1- - 600 018. OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL (G & SSA) Tamil Nadu & Puducherry 'LEKHA PARIKSHA BHAVAN" 361, Anna Salai, Teynampet, Chennai - 600 018. ~1/ No. PAG (G&SSA), GS III 1 12-03 2018-19 'CDRRP AC 2017-18/3 D.08 .05.2019 Repori of the Comptroller and Auditor General öf Indi: To The Commissioner, Disaster Manaccnient & Project Director, CI)RRP. Tamil Nadu, Chepauk, Cheninai 600 00-5. Report on tie Prolect Financial Statements 1. We have audited the accompanving financial stateients of the Coastal Disaster Risk Reduction Projeci (CDRRP), Tamil Nadu component, financed under World Bank Credit No.5279-IN) comprising Statcement of Expenditure (SO), Statement of Sources & Application of Funds and the Reconciliation of Clainis to Tat, Application of Funds for the year ended 31 March 2018. These statements are the responsibility of Projeccti. manacmenit. Our responsibility- is to express an opinion on the accompaying financial stateiens based on our audit. 2. We conducted our audit in accordancc \ith the Auditing Standards promulgated by the Comptroller and Auditor General of India. Those standards require thai we plan and perform the audit to obtain reasonable assurance about wheheilie be fi ianci:l statemeints are free of material mis-statemenis. Our audit examines, on test basis, evidence supporting the amounits and disclosures in the financial statemenits. It also iincludes assedsing the accountng principles used and significant estimates made by the management, as well as evaluating lie overall statement presemation. We believe that our audit provides a reasonable basis for our opinion. 3. In our opinion, Ilie financial statements present fatriv, in all mateiial respects, the sources ani application of funds of CI)RRP, Tamil Nadu component, for the year endel 31 March 2018 (01 April 2017 to 31 Mkrch 2018) in accoridance w;t Gvernmet: at india A\ccounting( Standards. RIT / Phone : 044 - 2431 6400 4F4;ZT / Fax : 044 - 2433 0012 m / E-mail: agautamilnadul@cag.gov.in PAG (G&SSA)! GS II I I 12-03 2018-19 CDRRP AC 2017-18/5 DIt.05 01.2019 4. In addition, in our opinion. (a) with respect to SOF. adequate supporting documentation has been maintained to support claims to the World Bank fOr reimbursements of expenditure incurred, and (b) except for ineligible expendiure. as detailed in the Audit observations appended to this audit report, expenditure is cligible for financing under the Loan ' Credit Agreement. During the course of audit. the Statemnt of Expenditure for Z 97.33 crore and the connected documents were examined and these can be relied upon to support reimbursement under the Loan Credit Agreement. 5. This report is issued without prejudice to Comptroller and Auditor General's right to incorporate the audit observations in the Report of Comptroller and Auditor General of India for being laid before Parliament, State Union Territory Legislature. 6. Other comments on the weakness in the procedures. systems and controls and discrepancies noticed during the course of audit are communicated in a Management Letter which is being issued separately to the Project Director. CDRRP. Tamil Nadu. (J. ter Antony Rai) Deputy Accountant General (GS) 2yb Encl.: 1. Appendix as per Paragraph 4 of the Report 2. Financial Statements referred to in Paragraph 1: i) Statement of Expenditure ii) Statement of Sources and Application of Funds (Revised) iii) Reconciliation of Claims to Total Application of Funds (Revised) - all received from Project Director, CDRRP vide letter No. TAU.2 4244 '2016 dated 09 April 2019 No. PAG (G&SSA) GS Ill, I; 12-03 2018-19 CDRRP AC 201i7-lb /3 DI.09105.2019 Appendix to Audit Report (Ref: Paragraph 4) A. Details of ineligible expenditure SI. Department Amount Reason "or ineligibilitM No.! Office '- I PMU. 54.500) Non-adjustment of advances drawn in seven cases for car service Chennai charges. tour DA. refreshment charges etc 48,404 In three cases, against advances of Rs.S4MOO drawn (Aug 2017). Rs. 48.404 was not utilized remited back (\'g Oc 2017) 3 6,18,979 Purchase of motor car (17.05.2017), despite WB specifically discouraging it. 4 3,821 Three cheques have become time barred as on 31.03.2018. 5 50.570 Payment of late fee for delayed payment of Rs.25.28 lakh as spectrum charges to GOI 6 Kanchipuram 68,000 Expenditure related to 2016-17, but was included in SOE of 2017-18. Unit 7 State 1.07,099 Double accounting of pavrnci i.e. cheques for Rs. 1,07.099 issued to Institute of IT Dept in June 2017 were cancelled and fresh cheques were issued in Rural Dec 2017 Jan 2018. D Development 19,315 Receipt of Rs.19,315 as interest was incorrectly included as expenditure. 9 SCERT 31,000 PMU included an expenditure of Rs.6.42 lakh against SCERT's actual expenditure figure of Rs.6. 11 lakh. 101 FIMSUL 3,95,276 Unspent amount lying with PWD out of funds civen for construction of Fisheries Library 11 Fisheries 2,52.210 Visa charges and cancellation charges in respect )f visit of Fisheries Minister and officials to Australia 12 Fisheries 1.60,320 Excess payment of advance by Executive Engineer, Fisheries Harbour Division, Tuticorin 13 IFMSUL 3,41,625 Procurement of 25 vehicle trackino devices and subscription charges (not approved by WB) 14 FIMSUL 10,32,000 Expenditure figure restricted to the figure of FlMSUL office Rs. lakh SOE of Item of expenditure PM FIMSLu-ll Difference o1fice Improved cipacity and 331.33 329.56 1.77 i knowledge niagntlemnent Fisheries livelihood 249.30 i _475.5 fsupport Total 31,83,119 Appendix continlued ...2 Appendix continued - Pa"e 2 B. Other significant observations (a) Non-production of documents in support of closing balance of funds The Statement of Sources & Application of Funds (Revised) showed a closing balance (CB) of Rs. 11.061.02 lakh as on 31.03.2018 in various Departments Offices. On Audit s request (5 April 2019) for bank statements and bank reconciliation statements (BRS) to verify correctness of the CB figure, the Project Director, CDRRP (PD) replied (11 April 2019) that reconciliation was under process and the details would be furnished to next audi*. Bank statement and BRS for two components obtained by Audit directly from Director of Fisheries revealed that the PD included different figures in the Statement of Sources and Application of Funds as follows: Rs. lakh Component CB stated by PD CB as per cash book of the Difference office concerned Fisheries Dept 6,368.95 3.686.60 2.682. 2 FIMSUL 943.65 1,595.51 651.86 Due to non-production of bank statements and BRS by the Project Director. CDRRP and the non-reconciliation, Audit could not verify correctness of CB figure of Rs. 11,061.02 lakh. (b) Diversion of funds An amount of Rs. 81,00.000 was transferred from the funds of Project Implementation Unit of CDRRP to Natural Calamities Account of the Government of Tamil Nadu during April 2017 to February 2018. Diversion of funds to a purpose not related to CDRRP was not in order. The P) replied that the Government sanctioned (June 2018) Rs. 2.15 crore to Natural Calamities Account and after approval of the Commissioner (Disaster Management), the funds would be transferred back to CDRRP account. (c) Incorrect indication of year In the Statement of Sources and Application of Funds (component-wise) and Reconciliation of Claims to Total Application of Funds. -current year and 'nreviou\ car' have been indicated without mentioning the relevant financial -car viz 20!7-18 and 2016-17 respectively. Senior Audit Officer GSi1