ii (l~ll ~ ~ Yl~cf>(OI . NATIONAL DISASTER MANAGEMENT AUTHORITY (' ws '1~1(i1q, 'qITTf mc6R Ministry of Home Affairs, Government of India (I ~Ill - '\ "ful 'l g~FA q ft q1,iHI f.li;bclld '111 NATIONAL CYCLONE RISK MITIGATION PROJECT (NCRMP} ITT l~, ~ ~. U.'3lf:g;gf.'qq.f, Q;-1, ijlfj~(vl'I ~. Wing 14, First Floor, NDMA Bhawan, A-1, Safdarjung Enclave, ;i'"{ ~ /New Delhi-110 029 11 : 011-26701744, ~ : 011-26714321 F.No.1-43/2013-PMU (Vol. I) Dated: February 01, 2019 To, Shri Deepak Singh, , __Ill & Senior Disaster Risk Managemant Specialist, ~ The World Bank, 70 Lodi Estate, New Delhi-110 003. Subject Submission of External Audit of the World Bank assisted National Cyclone Risk Mitigation Project (NCRMP) & NCRMP (Additional Financing) for the financial year 2017-18. Sir, I am directed to enclosed herewith copies of External Audit Reports on NCRMP & NCRMP (Additional financing) for the financial year 2017-18 in respect of Odisha State Disaster Management Authority (OSDMA) submitted by their Statutory Auditor, M/s. SRB & Associates, Chartered Accountants, Bhubaneswar for information and further necessary action at your end. Yours faithfully, -lt-s~ ~~- (Ashok Kumar Sarkar) Project Accountant/Admn Officer Encl : As above. Copy for information to 8 The Chief General Manger (F&A), Odisha State Disaster th Management Authority (OSDMA), 9 Floor, Rajiv Bhawan, Unit-5, Bhubaneswar-751 001 th w.r.t his letter No. 470/0SDMA dated 29 January, 2019. -I ~ SRB & Associates Chartered Accountants/ ORISSA STATE DISASTER MANAGEMENT AUTHORITY BHUBANESWAR Statutory Audit Report of NCRMP for the year 2017-18 SRB & ASSOCIATES CHARTERED ACCOUNTANTS 5th Floor. IDCO Tower, Janapath, Dhubaneswar-751 022. ~2541043/2545891 ~:91-674-2546414 0 :srbbbsr@ieqiffma:il.cmn ~ SRB & Associates \' Chartered Accountants" JAJPURROAD 06726-220345 ~ SRB & Associates 5TH FLOOR, IDCO TOWER, JANAPATH BHUBANESWAR - 751 022. ODISHA NEWDELHI 011-51601983 TEL : 0q74 - 2541043, 2545880 KOLKATA 033-30930975 )~~ CHARTERED ACCOUNTANTS FAX: 91- 674 - 2546414 Email:srbbbsr@rediffmail.com SECUNDERABAD - 040-27510739 INDPENDENT AUDITOR'S REPORT To The Chairman Orissa State Disaster Manageinent Authority Report on the Financial Statements We are engaged to audit the accompanying Project Financial Statements of NATIONAL CYCLONE RISK MITIGATION PROJECT implemented through ORISSA STATE DISASTER MANAGEMENT AUTHORITY ("the Society") vide letter No. 4928/0SDMA dated 26.11.2018. Management's Responsibility for the Project Financial Statements Management is responsible for the preparation of the Project Financial Statements that give a true and fair view of the financial position, financial performance of the society in accordance with the Accounting Standard prescribed by Institute of Chartered Accountants of India with due regard to the regulation and standard of audit of the Comptroller and Auditor General of India and will include such tests and controls as the auditor considers necessary under the circumstances and the guide lines contained in the financial management manual for NCRMP issued by World Bank. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material mis- . staternent(s). Our audit includes examining, on test basis, evidence supporting the amounts and disclosures in the Financial Statements. Our audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements / presentations. We believe that our audit provides a reasonable basis for our opinion. However, special attention was paid to the following: • All funds provided by the Government of India with World Bank assistance have been used in accordance with the conditions of the relevant agreement and only for the purposes for which financing was provided. • Counterpart funds have been provided and used in accordance with the relevant financing agreement and uti I ized for the purposes for which they were provided. • All Project Financial Statements are on cash basis. • Proper audit trail providing linkages between the Books of Accounts and reports presented to the World Bank exists. • The Project Accounts have been prepared in accordance with the Accounting Standards and Policies laid down in the Financial Management Manual and give a true and fair view of the financial position of the PIU of NCRMP. {, \' ~J SRB - & Associates CHARTERED ACCOUNTANTS t\udifor's Responsibility Our responsibility is to express a11 opinion on these Project Financial Statements based on our audit. We conducted our audit in accordance with the Standards 011 Auditing issued by the Institute of Chartered Accountants of" India. Those Standards require that we comply with ethical requirements and plan and perform tile .iudil lo obtain reasonable assurance about whether the financial statements are free from material 111isst,11 cmcn t. audit involves performing procedures to obtain audit evidence about the amounts and discourses in the An Project linancial Statements. The procedures selected depend on the Auditor's judgment including the assessment of' the risks of' material misstatement of the Project Financial Statements, whether due to fraud or error. I 11 111ak i ng I hose risk assessments, the aud itor considers I nterna I Control relevant to the Soc iety' s preparation antl fair preseurntion of the Project linanc ia l Statements in order to design audit procedures that are r1pprnpri:11c in the circumstances. An audit also includes evaluating the appropriateness of policies used and the IL',1:-.l111,ilile11css of the ,1cun111ti11g esrirnatcs mndc by management, as well as evaluating the overall presentation of' Ilic l)r,1jcct l-"i1rn11cinl St;1tcmc111::;. We believe that the audi: evidence we have obtained is sufficient and appropriate to provide <1 basis for our qualified audi: opinion Basis !'or C)unlified Opi11io11 Physica] verification or fixed assets has notbeen done on regular basis. ' 1:ixl·d IJcposit: lntcrest 011 Fixed Deposit has not been recorded in the books of account; rather it has been 1rc111sk1Tcd Io OSDMA account. The amount could not be ascertained. I .a ho u r Welfare Cess: !-\s per p;iu1 7(a) of the resolution passed by the labour and employment department of' govcnuucnt of Odish», :ill govl. dept. PSlJs and other Govt Departmental agencies/bodies carrying out any buildings or nl her construct inn works wh ich are covered under section 2( I)( cl) of the bu i Id i ng and other construction workers act, 1996 shall pay I% of' the amount of the cost approved as per the tender notification. This amount will he deducted from the bill at the time of making payment to the contractors and such amount sli;1II he remit red by way of account payee cheque in favour of the Odisha Building & Other Construction Workers Welfare 1:k)nrd within JO days of 111;-iking payment along with n forwarding letter to the Secretary C11111 CEO, Ilic Odisha 13uildi11g & other Construction Workers Welfare Board, Office of the Labour Cn111111issio11er, Odisha. Hhubancswar. It has been observed that this labour cess is not being deposited by the i'IU ol'NC!Uv!P 011 time. 4. The u n-rcconc i led and un-adj usred figures reflected 111 B<111k Reconci I iation Statement of A llahnbad Bank Ale No.SO 118507823 needs to be reconciled and adjusted . . f, I, 5. As per Receipt and Payment Account Rs.3,28,0Q,000 has been received from NDMA towards Grant-In-Aid for preparation of DPR for NCRMP. Since the amount does not relate to Project Fund, the same has not been taken into account at the time of submission of Utilization Certificate as well as Audited Financial Statement. 6. No fund has been received from World Bank during the FY 17-18.Durirrg the year a sum of Rs 2.40 crorc and Rs.27.04 crore has been received from NOMA for Component A,C,D and Component B respectively. 7. There was a difference of Rs.8000 in opening balance of Government of India (GO[) Fund which has been adjusted during the year. Opinion I. We have obtained all the information and explanations which to the best of my knowledge and be! ie f were necessary for the purpose of our examination. 2. 111 our opinion, proper books of account have been kept by the Project Implementation Unit, so far as it appears from our examination of the books. 3. The Statement of Accounts dealt with in this report are in agreement with the Books of Accounts. 4. In our opinion and to the best of our information and according to the explanations given to us, the accounts of Project Implementation Unit ofNCRMP give the information in the manner so required and give true and fair view, subject to the qualifications and observations given in the Management Letter in as much that: ::i) ln the case of Project Financial Statements of the state of affairs of the Project Implementation Unit as on 31" March 2018 b) Interest earned on the amount of Grant-In-Aid deposited in the Bank is being credited to the Project Implementation Unit's account. For SRB & Associates Chartered Accountants F. R.No:310009£ Partner M.No:056264 Place: Bhubaneswar Datc:07.01.2019 I. \' . i \ •• --- -- -- Audited P(oli:,t Financial St2temtnt For The Period Ended 31-03-2018 PIU of National Cyclone Risk MlligatlQQ Proj~!,t IO!,lisha} [Rupees In Crore) -- -- --- ---- Cumulative For the year PAlnlCULARS Total (Till Date) upto ended -------· --·- 31/03/2017 31/03/2018 --- ---------· SOURCES State Government Funds 173.8586 9.0130 182.8716 Government of India Funds 449.0060 29.4408 478.4468 !_ot;,_I_ Sources ( I) 622.8646 38.4538 661.3184 EXPENDITURE BY COMPONENT Con_11~one11t-/\ -- ---- -- Last Mile Co,wctivity {Al _ 23.2800 23.2800 -- Co_':'.'P~:"ent-ll --- - -- Phy-.11 .. 11 lnlra\truclurc _____ --·· ~0.:1.:st,~ti:,n/R~~-''Lion ol r mbarkments Construction of Multi Purpo!,l! Cyclone Shelters and Access Roads 168,3695 9.6723 178.0418 -----· Con,.trut1io11/L_':,'.P.O~ll·C 0.0730 0.0010 0.0740 ---·---·- Risk Assessment -------- ·- --- _somponent-0 30.7238 2.5237 33.2475 _Advances to Suppliers/Others ( E) Advances for Civil Works Advances for Eq<1ipnw11ts Ollwr Advances .. ---- . Total of Cornponent-E -·- ---- - - - Total (A+B+C+O+[) ___ ·- 546,7326 44.0752 590,8078 In terms of our report of even date SRB & Associates i, Chartered Accountants I RNoJJO:~~~ ~~,1) 1 1 ;111111:1 ''""""~t\ OSOM~ \, ~ I N,dl:ifi2r.•I Executive Director (F&A) OSOMA l' l ;ig11ilica11t Accounting policies And Notes to Accounts Accounting Policies (A) General The Accounts are prepared on Cash basis. (B) Accounting treatmentof grants (a) State Government and World Bank (i) Government of Orissa and World Bank grants for construction and creation of Cyclone Shelter, Access Road and Repair & Upgradation of Saline Embankments facilities are credited in concerned grant funds. Utilization from these funds for construction of cyclone shelter, Access Road and Repair & Upgradation of Saline Embankments facilities are .I directly reflected as a reduction from such grant funds and the balance is I shown under concerned grant fund liability. l A II revenue expenditure incurred for direct/indirect administrative I (ii) expenses for which no specific grant is receivable are appropriated from j i I the Govt. of Orissa reconstruction fund and recognized as the revenue r grant. (iii) Interest earned Interest earned on deposits relating to the various funds has not been recognized as income and neither recorded in the books of account, rather they are transferred directly to OSDMA funds. (iv) fixed Assets I ! ! Depreciation on fixed assets purchased by NCRlYlP has not been provided. l Notes on Accounts ;11 I I (a) Funds received from Govt. of India & Govt. of Odisha and utilization for the same has ! been exhibited in Audited Financial Statement. (b) Previous year figures have been regrouped / rearranged and or recasted wherever i considered necessary. . ,. l' • Backg.-ound The Government of India & has initiated National Cyclone Risk Mitigation Project('NCRM P'), herein after referred to as the 'Project' or 'NCRM P', with a view to address cyclone risks in the country. National Disaster Management Authority ('NOMA') under the aegis of Ministry of fY ' Home Affairs (MHA) shall implement the Project in coordination with participating States/UTs, The key objectives of the NCRMP are as follows: Reduction in vulnerability of coastal States, through creation of appropriate infrastructure ' :l • ,- which can help mitigate the adverse impacts of cyclones, while preserving the ecological balance of coastal regions. • Strengthening of cyclone warning systems enabling quick dissemination of warnings and advisories from source/district/sub-district level to the community for their timely reception and adequate response. To begin with, NCRMP is proposed to be implemented in the States of Andhra Pradesh and Orissa. Other coastal stateswould be considered in further phases of the Project. Components Based on the above objectives, the Project has been divided into four components, namely: Component A: Last Mile Connectivity for the dissemination of cyclone warming and advisories from district/sub-district level to communities. This activity will be implemented by NOMA in consultation with participating States/ UTs. Component B: Construction / Repair of Physical Infrastructure for cyclone risk mitigation. This component will be implemented by the States I UTs. Component C: Technical assistance for capacity building on hazard risk management. NOMA and NIDM are the implementing agencies for this Component. Component D: Project Management and Monitoring applicable to all implementing agencies. .., ,. I' :' .- ~ SR B & Associates Chartered Accountants/ ORISSA STATE DISASTER MANAGEMENT AUTHORITY . BHUBANESWAR l Statutory Audit Report of NCRMP-AF for the year 2017-18 ' SRB & ASSOCIATES CHARTERED ACCOUNTANTS 5th Floor, IDCO Tower, Janapath, •'l\rnbaneswar-751 022. ~2541043/2545891 l.J:91-674-2546414 ~ :srbbbsr@rediffmail.com V SRB & Associates (, '' Chartered Accountants'x, 5TH FLOOR, IOCO TOWER, JANAPATH. JAJPURROAD 06726-220345 BHUBANESWAR - 751 022. OOISHA NEWDELHI 011-51601983 TEL: 0q74 - 2541043, 2545880 FAX: 91- 674 - 2546414 KOLKATf.. 033-30930975 Email:srbbbsr@rediffmail.com SECUNDERABAD - 040-27510739 · INDPENDENT AUDITOR'S REPORT To The Chairman Orissa State Disaster Management Authority Report on the Financial Statements We are engaged to audit the accompanying Project Financial Statements of NATIONAL CYCLONE RISK MITIGATION PROJECT (Additional Fund) implemented through OR!SSA STATE DISASTER M1\Ni\Gl'-:MENT AUTHORITY( "the Society") vide letter No 4928/OSDMA dated 26.11.2018. Management's Responsibility for the Project Financial Statements Management is responsible for the preparation of the Project Financial Statements that give a true and fair view of the financial position, financial performance of the society in accordance with the Accounting Standard prescribed by Institute of Chartered Accountants of India with due regard to the regulation and standard of audit of the Comptroller and Auditor General of India and will in.elude such tests and controls as the auditor considers necessary under the circumstances and the guide lines contained in the financial management manual for NCRMP issued by World Bank. Those standards require that we plan and perform the audit 10 obtain reasonable assurance as to whether the financial statements are free of material mis- statement(s). Our audit includes examining, on test basis, evidence supporting the amounts and disclosures -in the Financial Statements. Our audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements/ presentations. We believe that our audit provides a reasonable basis for our opinion. However, special attention was paid to the following: • All funds provided by the Government of India with World Bank assistance have been used in accordance with the conditions of the relevant agreement and only for the purposes for which ti nancing was provided. • Counterpart funds have been provided and used in accordance with the relevant financing agreement and utilized for the purposes for which they were provided. • All Project Financial Statements are on cash basis. • Proper audit trail providing linkages between the Books of Accounts and reports presented to the World Bank exists. • The Project Accounts have been prepared in accordance with the Accounting Standards and Policies laid down in the Financial Management Manual and give a true and fair view of the financial position ofthe P[U ofNCRMP - AF. /. l' · l¼J SRB & Associates • :........ CHARTERED ACCOUNTANTS Auditor's Responsibility Our responsibility is to express an opinion on these Project Financial Statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material m isstatement. /\11 audit involves performing procedures to obtain audit evidence about the amounts and discourses in the Project Financial Statements. The procedures selected depend on the Auditor's judgment including the assessment of the risks of material misstatement of the Project Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers Internal Control relevant to the Society's preparation and fair presentation of the Project financial Statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the Project Financial Statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Opinion I. We have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of our examination except as explained in "Limitation of Audit''. 2. In our opinion, proper books of account have been kept by the Project Implementation Unit, so far as it appears from our examination of the books. J. The Statement of Accounts dealt with in this report are in agreement with the Books of Accounts. 4. In our opinion and to the best of our information and according to the explanations given to us, the accounts of Project Implementation Unit of NCRMP (AF) give the information in the manner so required and give true and fair view i) In the case of Project 'Financial Statements of the state of affairs of the Project Implementation Unit as on JI" March 2018. ii) Interest earned 011 the amount of Grant-In-Aid deposited in the Bank is being credited to the Project Implementation Unit's account. \' / ~ .rAJ ~!..~;R,~~~:~I~eived from Wodd Bank during the FY 17-18. During the year a sum of Rs 2.40 crore and Rs.22.63 crore has been received from NDMA for Component D and Component B respectively. 6. Bank Charges amounting to Rs. 680 is required to be accounted for. For SRB & Associates Chartered Accountants if}on:o~:l CA~n:Vo Partner M.No:056264 Place: Bhubaneswar Date: 07.01.2019 l' \\. • J - ---------- -------------------------------~ Audited l'rojc1:l Financial Sfalcmcnt For The Period ~ndcd 31-03-2018 t'I LI or Na1io11nl Cyclone Risk Mitigation Project (0dishn) Additio-u-n.l fund (Hur1c.es· 111 Crores) C11111111:ltil'l' For the year Tol~I Up!u F.,idrpli,·rs/Otli,·r,_1_ : )-----------+------~-----!------< 1·~ 1\