Annexure ‘X’
1
Key Findings on Procurement Emerging
from IPAI Review Reports
Procurement
• Prescribed level of procurement was not
followed.
• Method of Procurement of goods and
services was not included in the
procurement plan.
• Prescribed method of procurement was not
followed and deviations reported in many
cases. Single tender method was adopted
instead of open tender method.
• Purchase orders were split up to avoid
procurement without tenders/quotations.
2
Contd./• Ignorance or disregard of prescribed procurement
procedures common in purchase of computers
and accessories including software and in
printing of textbooks and workbooks.
• Printing of teacher’s hand book was carried out
without providing technical specification and on
single tender basis.
• Purchasing agencies were engaged without
entering into MOU prescribing terms & conditions
like cost, delivery date, inspection, liability of the
seller during warranty period, liquidated damages
for delay in delivery, rate of commission, payment
terms etc.
3
Contd./• Cost
•
•
of goods purchased through
purchasing agency was in excess of the
market rate.
Many computer systems are lying idle for
want of space or power (including
purchase of defective inverters) or trained
staff
UPS and inverters purchased were found
defective in inspection and the firm has
not replaced the same and liquidated
damages not paid.
4
Contd./• Procured
•
•
•
•
printers
for
schools
without
ascertaining its utility.
Excess purchase of text books, furniture and
cycles.
Computer systems and printers bought out of
SSA funds installed in State Government offices.
Computers bought without inviting open tenders
and from suppliers not under DGS & D rate
contract, selected by Zilla Parishad
Purchase of computer books was made from
Central Consumer Cooperative Store without
negotiating for discount.
5
Contd./• Little control over local purchases made at school
•
•
•
•
•
•
level, including civil work.
Quality of materials not ensured and purchased
substandard materials.
Large sets of Vernacular Encyclopedia (17
volumes in a set) bought with apparently little
relevance to elementary education.
Penal provisions in contracts not enforced.
No penal provisions included in the agreement for
delayed or defective supplies.
Liquidated damages not levied for delayed
supplies.
Non-recovery of sales tax/VAT
6
Contd./• VAT paid besides price when contract price was
•
•
•
•
•
inclusive of VAT.
Procurement documents were not available for
review.
Procured goods in excess of the requirement and
lying in stock.
Engaged NGOs without following the selection
procedure.
Part payment was made for part supply without
provision in the agreement to avoid lapse of
budget provision.
Repeat orders were issued without following the
prescribed procedure.
7
Contd./• Uniform procedure for the purchase of science
•
•
•
•
and mathematics kits was not followed.
Injudicious purchases in the month of March to
avoid lapse of budget provision.
Purchase orders were placed without assessing
the actual requirement and the books are lying in
stock for more than 3 years.
While submission of samples are mandatory
alongwith the bids, contract awarded to firm who
failed to submit samples.
Goods were accepted and payments made
without inspection and certification.
8
Contd./• Financial control was not exercised in
•
•
•
procurement.
Security deposit was not obtained from the
prospective bidders.
Substandard school bags were purchased
and the expenditure was not entered in the
financial records.
Non-availability of procurement documents
9
Cont’d/• Procured
•
•
•
goods in excess of the
requirement and lying in stock
Delay in distribution of text books
Feasibility of printing of text books
through state government press not
ascertained before inviting tenders from
private printers
Delay in construction of civil works
10
Key Findings Emerging
from TSG Review of SSA, Maharashtra
State Project Office
Books of Accounts
• Not maintained the following:
- Journal
- Register for Journal/Magazines/News paper
- Register of grants of advances to mobilizing
agencies/NGOs/Voluntary Agencies
- Register of works
- Fixed Assets Register
• Not carried out annual physical verification of
stock and assets.
11
Cont’d./Cash Book
• Maintained under double entry system
• Not fully complied with the provisions of Para 77
of the Manual on FM&P:
- Each entry not attested by DDO
- Overwriting not attested by DDO
- No entry made on the days of no transaction
- Delay in recording receipt entries
- Interest credited by the bank but not entered in
cash book
• Non-SSA transactions like MDM Kitchen shed,
State incentives are included.
12
Contd./• Cheque Issue Register :
- Some of the entries not attested by the DDO.
• Advance Register:
- Funds released to districts not entered
- Advances of Rs.2.74 crore dating back from
October 2004 outstanding for adjustment.
• Register of Investment:
- Last investment was made on 8-4-2005.
- Some entries remain incomplete
• Register of remittance made into the bank:
- Delay in issue of DD - Cheque for Rs.10.67 lakh
was issued to Bank of India on 25-9-09 for a
DD in favour of a Consultant and the DD was
issued only on 6- 10-09.
13
Contd./• Postal Account
-
Postal stamps in denominations of Rs.5/- only
maintained
- In case the transactions are not in multiples of
Rs.5/-, proper accounting is not made.
• Bank Reconciliation Statement
- Prepared upto September 2009.
- Stale cheques dating back from 31-5-2007 are
still included.
14
Contd./Internal Audit
• Completed up to 2008-09
• Engaged 23 CA firms on 1-9-09 for 2009-10
• TOR includes audit of VECs receiving more
than Rs.1 lakh per year in a cycle of 3 years
• Reports being pursued with the districts for
taking follow up action
• Objections maintained in the computer and not
in the Audit objection register
• Not submitted to SPD monthly
• Gist of observations submitted to EC
15
Contd./Statutory Audit
• 9 CA firms are engaged for 2008-09
• Continuing since 2006-07 and now completed 3
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•
•
•
•
years
The CA firms are not from C&AG’s empanelled list
TOR do not include audit of VECs receiving more
than Rs. 1 lakh per year in a cycle of 3 years as per
amendment dt 1st May 2007.
In the absence of provisions in the TOR, the auditors
have not undertaken audit of VECs in 2008-09 audit.
This year the last date for submission of audit report
was 15-7-09, but nobody submitted it on due date.
Audit reports of all districts except 2 districts in
Pune region submitted to the lead auditor
16
Contd./Statutory Audit
• The
responsibilities of lead auditor
prescribed in MHRD’s letter dt. 26-4-07 not
included in TOR.
• Objections maintained in the computer and
not in the Audit objection register
• Not submitted to SPD monthly
• Gist of observations submitted to EC
17
Contd./Diversion of funds
• A cheque for an advance of Rs.10 lakh was
issued to Director of Education, Pune for
disbursement of pre-metric scholarhips to
minority students on 24-10-08 and the same
cheque returned and credited on 18-2-09. .
• An advance of Rs.7 lakh was paid to 2
advocates to file the petition in connection
with 11th class admission in the High Court and
the same is still outstanding.
• Rs. 10 lakh and Rs.30 lakh were diverted to
NPEGEL and KGBV accounts respectively on
22-09-09
18
Contd./Mis-appropriation of SSA funds
• Remedial Teaching
- Rs. 34.37 lakh was charged from the cash
book
on
31-3-09
towards
prize
distribution to good schools.
- During 2008-09 no fund was allocated
under remedial teaching.
- In the management cost Rs. 40 lakh was
approved to undertake external evaluation
of remedial teaching and this was used for
prize distribution.
- Even though the DDs were taken on 31-3-09
the same are still lying un-disbursed and
the validity stand expired.
19
Contd./Unspent balances of DPEP funds
• The State has already refunded the entire
unspent balances of DPEP funds as per the
utilization certificate.
• However, it was observed that Rs. 3,38,783/-
and Rs.1,59,680/- under DPEP I and DPEP II
respectively were credited in the SSA cash
book on 24-9-08 on account of interest paid by
SBI, Backbay Reclamation Branch.
• 85% of this interest needs to be refunded to
GOI.
20
Contd./Opening of bank accounts
• The State has opened only one joint signatory savings
bank account for each scheme as under:
SSA
- Bank of India
NPEGEL
- Union Bank of India
KGBV
- AXIS Bank
Release of funds to districts
• Major portion of funds received from GOI and State are
released to districts within15 days
21
Contd./Mode of Transfer of Funds
• By E-transfer from SPO to districts
• By Cheques from districts to blocks
•
(Some districts are using core banking facilities)
By cheques/core banking facilities/e-transfer from
blocks to VECs/Clusters.
Backlog of State share
• The State has a backlog of 124.50 crore as on 30-6-09.
• It was reported by the SIS that Rs.120.15 crore was
•
released by the State on 24-7-09.
However, even after nearly 3 months of issuing the
sanction order, this amount was not credited to SSA
account.
22
Contd./Staff position
Sanctioned
post
Filled
Vacant
11
10
1
DPO
Blocks
132
449
112
306
20
143
Total
592
428
164
Office
SPO
23
Contd./• Training of accounts staff
- Not provided any training during the
current year of 2009-10.
• Annual Report
- Submitted English version of the
Report for 2007-08.
- Hindi version is under print.
24
Contd./Procurement
• A separate procurement cell with 3 staff is
available in SPO.
• Prepared procurement plan for 2009-10 on 20-709 and uploaded in the SSA web site.
• All procurements are covered under the
procurement plan.
• Not prepared the list of major contracts above
Rs.5 lakh
• Shared the procurement audit check list
developed by MHRD with both internal and
statutory auditors.
• The State Govt.ceiling for open tender is above
Rs.50,000/- per contract and without quotation
upto Rs. 1,000/- per purchase.
25
Contd./Procurement
• Items procured centrally.
- Computers and its accessories
- Maths kit, Science Kit and English Kit
under LEP
- Special equipment and aid and
appliances for CWSN
- Self Learning Cards and Teachers
Hand Book
26
Contd./Procurement
• Empanelled list of printers.
- After following the prescribed
procedure
7 printers were
empanelled for 3 years for
undertaking printing work.
- Whenever any printing work is to be
undertaken quotations are taken from
these printers only
- This kind of empanelment is not
permissible for value of contracts
covered under open tender method.
27
Contd./• Printing of self learning cards through
open tender for Class I to IV
- Exceeded financial ceiling prescribed.
- Not provided class-wise & subject-wise
schedule
- Bid documents were not made available
till the previous date for submission of
bids.
- Bids did not open promptly from the
time of its last receipt (Delayed by 2
hrs)
- Bid validity period of 1 year allowed
instead of the normal 90 days
28
Contd./• Procurement of English Language Kit and
Maths Kits through open tender
- Exceeded financial ceiling prescribed.
-
Not provided class-wise schedule
Bids did not open promptly from the time of
its last receipt (Delayed by 3.30 hrs).
Bid validity period of 1 year allowed
instead of the normal 90 days.
Approved outlay exceeded considerably in
both the cases
While placing orders for additional quantity,
variable rates approved was not considered,
resulting in excess payment to suppliers.
29
Contd./• Service Contract for third party evaluation
of civil works
- Expression of Interest and Request for
proposal were called for together in
one advertisement.
- Not followed the procedure of short
listing eligible firms first and issuing
RPF to the short listed firms.
30
Contd./• District Project Office, Thana
• Accounts keeping is satisfactory except
.
the following:
- Not maintained Journal and audit
objection register.
- Not carried out annual physical
verification of stock and assets
- Advance of Rs.7.5 lakh dating back
from 22-3-2005 is outstanding for
adjustment.
- Releases to sub-district level units are
treated as expenditure.
31
Contd./District Project Office, Thana
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•
•
Bank reconciliation upto 30-9-09 but
stale cheques from 21-7-08 are
included.
Procurement mainly under State Rate
contract, limited tender, single tender
and without quotation within the State
ceiling of Rs.1,000/- per purchase.
Received all UCs from sub-district
level units up to 2008-09.
32
Contd./-
District Project Office, Mumbai Subrub
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-
-
Accounts keeping is satisfactory except
the following:
Not maintained Journal, Fixed Asset
Register.
Not carried out annual physical
verification of stock and assets
Advances of Rs.328.83 lakh dating
back from 30-1-06 are outstanding
for adjustment.
Releases to sub-district level units are
treated as expenditure.
33
Contd./District Project Office, Mumbai Subrub
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•
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•
Bank reconciliation upto 30-9-09.
No stale cheques included.
Procurement mainly under State Rate
contract, limited tender, single tender
and without quotation within the State
ceiling of Rs.1,000/- per purchase.
Received all UCs from sub-district level
units up to 2008-09.
34
Block Resource Centre
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•
Contd./-
One Accountant is available.
Cash Book on double entry system
Joint signatory savings bank accounts
with one Bank.
Bank
Reconciliation
Statements
prepared regularly.
Stale cheques are available in large
numbers.
Interest not refunded to DPOs.
35
Block Resource Centre
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•
•
•
•
Contd./-
Not maintained ledger, journal, fixed
asset registers.
Not carried out annual physical
verification of stock and assets.
Release to VECs are treated as
expenditure.
UCs not linked properly.
Procurements are mainly through
quotations.
36
Schools
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Contd./-
VEC Manual is available.
Cash book on single entry basis.
UCs are submitted upto 2008-09.
Interest not transferred to blocks/DPO.
Fixed Asset Register not maintained in
any schools.
Annual physical verification of stock
and assets not carried out.
Procurement mainly on single tender
method.
Display board is not available.
37
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