Office of the District Audit Officer, State Audit, Kakinada. · Asst. Audit Officer, State Audit (T1), Kakinada together with the replies in triplicate duly approved by the Council

Office of the District Audit Officer, State Audit, Kakinada.

The Draft Audit Report on the accounts of Municipal Council, Samalkot for the year

2015-2016 is submitted herewith for kind approval duly enclosing the following documents.

1. Annual Account for the year 2015-2016.

2. Audit Report for the year 2014-2015.

3. Draft Special Letter.

AAO Dist. Audit Officer

WORK DONE STATEMENT

Sl.No.

Name of the Auditor Subjects allotted for Audit Signature

1. B. Rama Krishna, AAO Works Audit, Verification ofAnnual Account and overall

supervision on the work doneby auditors.

2. G. Satyanarayana, S.A. General Contingencies,Advances & Deposits,

Work/pay Bill recoveries & theirpayment, Vr. Adj. Regr, MDR &

Town Planning Receipt3. RVT Kumar, SA. Public Health & Engineering

Contingencies, Provident FundA/c, D & O Trades

4. K. Deepak, SA. All Cash Books/Pass Books,Out Sourcing Salaries alongwith EPF & ESI payments,

Treasury salaries w.r.t. TBR5.6.

Ch. Ramesh, SA &Smt K. Sireesha

Chitta, MR, DD’s & ChequesReceipt Regr., Petty Cash

Book, Library Cess Receipt &Payment & PT/WT/VLT ChallanRegrs, Vr. Tracing in cash book

etc.,

GOVERNMENT OF ANDHRA PRADESHSTATE AUDIT DEPARTMENT

From ToSri L. Peeroji, M.Com., The Commissioner,District Audit Officer, Municipal Council,State Audit, Samalkot.Kakinada.

Lr.S.A.No. 92/ 2016-17/ dt:_12.5.17__________

Sir,

Sub :- Audit – Audit Report on the accounts of Samalkot Municipality for the year 2015-2016 – Issued – Reg.

*** I forward here with the audit report on the accounts of Samalkot Municipality for the

year 2015-2016 in duplicate with reference to Rule 60(d) of Schedule – II to the A.P.

Municipalities Act, 1965 and to request that one copy of the Audit Report may be returned to

Asst. Audit Officer, State Audit (T1), Kakinada together with the replies in triplicate duly

approved by the Council within 3 months from the date of receipt of the Audit Report as

required in G.O.Rt.No.876 M.A., Dept., dt.13.11.1967.

Yours faithfully,Sd /- L.Peeroji

DISTRICT AUDIT OFFICER,STATE AUDIT, KAKINADA.

Encl :- Audit Report in duplicate.Copy to the Accountant General, A.P., Hyderabad.Copy submitted to the Regional Deputy Director of State Audit, Zone-II, Eluru.

GOVERNMENT OF ANDHRA PRADESHSTATE AUDIT DEPARTMENT

From ToSri L. Peeroji, M.Com., Sri K.T. SudhakarDistrict Audit Officer, Commissioner,State Audit, Municipal Council,Kakinada. SAMALKOT

Spl. Lr. S.A.No. 86, dt: 04-07-2017

Sir,

I have the honor to invite your attention to paragraphs

35, 36, 39, 41, 42, 46, 47, 48, 51, 53, 54, 60, 61, 101, 102 (Extracts Enclosed) of audit report

on the accounts of Municipal Council, Samalkot, E.G.Dist, for the year 2015-2016 and to

state that unless the defects pointed out in are recorded and the facts reported to this office

within four months from the date of receipt of this letter. Action will be taken under sub-rule 4

of rule 9 as rules issued in G.O.Ms.No.130 Fin&P (FW-Admn-II) Department dated 8-9-2000

under section 16 by Andhra Pradesh State Audit Act.

Yours faithfully, Sd /- L.Peeroji

District Audit Officer, State Audit, Kakinada.

AUDIT REPORT ON THE ACCOUNTS OF MUNICIPAL COUNCIL, SAMALKOT FOR THEYEAR 2015-2016

Name of the Auditor :- Sri B. Rama Krishna. Asst. Audit Officer

Time taken for audit :- 11.07.2016, 16.7.2016,18.07.2016 to 23.07.2016,

16.01.2017 to 21.01.2017, 23.01.2017 to 25.01.2017,

27.01.2017 to 28.01.2017 &30.01.2017.

The office of the Chairman was held by the following persons during the period under

audit.

Sl. No. Name of the SpecialOfficer/Chairman

Period

1 Smt M. Padmavathi 01.04.2015 to 31.03.2016

The office of the Commissioner was held by the following person during the year

under audit.

Sl. No Name of the Commissioner Period

1 Sri K. T. Sudhakar 01-04-2015 to 31-03-2016

1. GENERAL FINANCIAL REVIEW:

The receipts and payments during the year were shown in the Receipts & Paymentsstatement together with the opening and closing balances. The opening balance in the cashbook was in agreement with the closing balance of the previous year. The consolidatedannual account (MGF + CPF + PEF) was showing the closing balance of Rs.11,92,21,600.68on 31-3-2016. The monthly abstracts and yearly abstract are arrived at and noted in thecash books at the time of audit.

1(a) FINANCIAL POSITION

The resources of ULBs consist of grants and assistance from the Government of India

(GOI) and the State Government under various schemes and own revenue generated

through various tax and non-tax collections. The tax revenue mainly accrued from property

tax. Non-tax revenue comes from water charges, encroachment fees, developmental

charges, building fee, etc. The financial position of the ULB has been analysed with

reference to the figures provided in the budget as follows. Further during the year under

audit, as the subsidiary registers were not produced, the actual receipts in respect of

revenue were taken based on the annual account figures.

Rs.

Sl. No Head of account Budgetestimates

Actual Difference

1 Property tax 2,26,40,662.00 2,22,91,248.00 -3,49,414.002 Vacant land tax 10,00,000.00 2,46,593.00 -7,53,407.003 Entertainment tax 20,00,000.00 0.00 -20,00,000.004 Adv. Tax 2,25,000.00 84,883.00 -1,40,117.005 Water fees 55,00,000.00 58,85,931.00 3,85,931.006 D&O trades licence

fee5,00,000.00 5,89,125.00 89,125.00

7 Surcharge on StampDuty

1,20,00,000.00 88,27,218.00 -31,72,782.00

8 Magisterial Fines 1,00,000.00 0.00 -1,00,000.009 Int. on Arrears of Tax

Revenue85,00,000.00 Details not

available---

10 Sundry Receipts(PTC)

4,00,000.00 1,34,415.00 -2,65,585.00

11 Birth and Deathregister extract fee

1,00,000.00 2,11,350.00 1,11,350.00

12 Road Maint. Grant 1,50,00,000.00 0.00 1,50,00,000.0013 Misc. Receipt (TS) 3,00,000.00 3,85,393.00 85,393.0014 Law Charges 35,000.00 0.00 -35,000.0015 JB Grant 1,85,000.00 1,85,000.00 0.0016 OAP Grant 6,30,00,000.00 6,99,32,729.00 69,32,729.0017 Road Cutting Charges 1,00,000.00 0.00 -1,00,000.0018 Water Harvesting Pits 2,00,000.00 0.00 -2,00,000.0019 NFBS Grant 2,00,000.00 0.00 -2,00,000.0020 School Fees 2,000.00 0.00 2,000.0021 Market Leases 10,76,000.00 10,26,000.00 -50,000.0022 Shop Room Rents 27,50,000.00 34,12,826.00 6,62,826.0023 Kabela Fees 95,000.00 4,050.00 -90,950.0024 Avenues 16,900.00 7,484.00 -9,416.0025 Fishery 7,500.00 0.00 -7,500.0026 PH Misc. Receipt 1,05,000.00 88,180.00 -16,820.0027 Education Tax 25,59,930.00 Details not

available---

28 Tap Estimate Charges 1,00,000.00 17,811.00 -82,189.0029 Tap Security Deposits 1,50,000.00 43,480.00 -1,06,520.0030 Tap Repair Charges 1,00,000.00 7,350.00 -92,650.0031 Tap Donations 0.00 2,26,656.00 2,26,656.0032 Building Licence Fees 4,00,000.00 5,63,446.00 1,63,446.0033 Conversion Fees 2,00,000.00 0.00 -2,00,000.0034 Development Charges 1,50,000.00 2,09,291.00 59,291.0035 Compounding Fees 2,00,000.00 34,864.00 -1,65,136.0036 Building Material

Charges1,50,000.00 1,87,927.00 37,927.00

37 Town Planning Misc.Receipts

1,00,000.00 2.00.000.00 1,00,000.00

38 Enc. Fees 1,30,000.00 1,11,650.00 -,18,350.0039 Lay out Fees 1,00,000.00 46,360.00 -53,640.0040 Water Supply Tanker

Charges0.00 80,488.00 80,488.00

1( b) TAX REVENUE RAISED BY THE MUNICIPAL COUNCIL:-

The tax revenue consists of property tax, water tax and advertisement tax etc. Taxon property is the main source which constituted the bulk of revenue receipts of MunicipalCouncil during the year. An analysis of tax revenue for the current year and the precedingtwo years is given below.

Sl.No.

Nature of Tax

Collection Increase/Decrease

w.r.t.previous

year

2013-14Rs

2014-15Rs

2015-16Rs

1 Property tax1,36,93,407.0

0

1,75,93,233.0

0

2,22,91,248.0

0Increased

2 Advertisement tax 1,48,815.00 2,61,670.00 84,883.00Decrease

d3 Vacant land tax 2,76,197.00 1,78,644.00 2,46,593.00 Increased4 Water Tax 47,24,280.00 51,88,583.00 58,85,931.00 Increased

5 Entertainment tax 0.00 10,65,772.00 0.00Decrease

d

1(c) NON-TAX REVENUE OF THE MUNICIPAL COUNCIL:-

Building rents, leases of markets, slaughter houses, D& O Licence fees etc., form thenon-tax revenue and constituted …… percentage of revenue of the municipal council. Ananalysis of the non-tax revenue under some principal heads for the year and during thepreceding 2 years is given here under.

Sl.No.

Item ofrevenue

Collection Increase/Decreasewith ref. to

previous years2013-14 2014-15 2015-16

1Leases of markets

7,83,870.00 8.25.981.00 10,26,000.00 Increase

2Slaughter house

66,500.00 68,100.00 4,050.00 Decrease

3License fees (D&O)

5,14,301.00 5,56,625.00 5,89,425.00 Increase

4Building license fee

4,00,632.00 6,56,975.00 7,72,737.00 Increase

5Shop Room rents

19,60,330.00 24,96,013.00 34,12,886.00 Increase

6 Others 55,735.00 23,904.00 7,484.00 Decrease

7D & O License

fees5,14,301.00 5,56,625.00 5,89,425.00 Increase

8Encroachment

fee63,450.00 1,38,000.00 1,11,650.00 Decrease

1 (d) REVENUE RECEIPTS AND ITS ANALYSIS:-

The source of revenue receipts during the year was through (1) revenue raised by theMunicipal Council (2) receipts from the state government towards share of entertainment tax,and surcharge on stamp duty etc (3) Grant-in-aid received from the Government. Ananalysis of receipts under the above heads during the year along with corresponding figuresfor the preceding 2 years is given below.

Item of revenueRECEIPTS

2013-14 2014-15 2015-16

1.Revenue raised by Municipal Councila) Tax Revenue 1,41,18,419.00 2,32,22,130.00 2,85,08,655.00b) Non-tax revenue leases, fees and rents etc

38,44,488.00 45,40,219.00 65,13,597.00

Total: 1,79,62,907.00 2,77,62,349.00 3,50,22,252.002. Receipts from Govt.

a) Entertainment tax 0.00 10,65,772.00 0.00b) Surcharge on SD 33,71,316.00 72,16,014.00 88,97,126.00c) 13th Fin. Grant ---- 3,05,60,074.00 ----d) 14th Fin. Grant --- --- 1,39,30,736.00Total 3371316.00 3,88,41,860.00 2,28,27,862.00

1 (e) DETAILS OF THE CLOSING BALANCES AS PER RECEIPTS AND PAYMENTS

STATEMENT IN ANNUAL ACCOUNT AS ON 31-3-2016:

SL.NO DETAILS MGF CPF PEF

TOTAL

1

Cash in

Hand 5,90,426.00 0.00 0.00

5,90,426.00

2

Cash at

Bank 7,54,39,973.57

4,29,02,408.1

1

2,88,793.0

0

11,86,31,174.6

8

3

Cheque in

Hand 0.00 0.00 0.00

0.00

TOTAL 7,60,30,399.57

4,29,02,408.1

1

2,88,793.0

0

11,92,21,600.6

8

DETAILS OF THE CLOSING BALANCES AS PER CASH BOOKS IN ULB AS ON 31-3-2016:

Cash Cheque in

hand

Treasury/Bank

C.B as per the General Fundscash book (001)

3,22,164.00 0.00 4,33,64,954.00

C.B as per the General Fundscash book (002)

2,41,766.000.00

91,26,869.00

C.B as per the 13th Finance cashbook (003)

0.000.00

2,40,75,568.00

Library Cess 13,249.00 0.00 0.00

Development Charges 5,192.00 0.00 7,36,590.00

RWHS 8,055.00 0.00 9,01,999.00

Total 5,90,426.00 0.00 *****

****** Closing balances of other cash books separate Statement enclosed

SEPARTAE STATEMENT ENCLOSED

OB'S, RECEIPT, EXPENDITURE & CB'S OF MGF/CPF/PEF'S OF SAMALKOT MUNICIPALITY FOR THE YEAR 2015-2016

SL.NO. NAME OF THESCHEME BANK A/c No. OB

RECEIPT PAYMENTSCB

INTEREST GRANT/OTHER EXP. BC

CAPITAL PROJECT FUND

1 Slum Dev. AB, PDP 23798 1696.00 68.00 0.00 0.00 0.00 1764.00

2 TPRO Salary AB,SMLKT 73160 76899.50 3112.00 0.00 0.00 68.00 79943.50

3 Parks & Play Grounds AB, PDP 779 3454.00 140.00 0.00 0.00 0.00 3594.00

4 Office Building AB, PDP 22647 90406.00 3661.00 0.00 0.00 0.00 94067.00

5 NFBS AB, PDP 229 6742.00 273.00 0.00 0.00 0.00 7015.00

6 JB & SS SBH,SMLKT 83643 -85000.00 0.00 94790.00 0.00 300.00 9490.00

7 MSB AB,SMLKT 99492 79947.00 3236.00 0.00 0.00 0.00 83183.00

8 USEP AB,SMLKT 16830 709.00 28.00 0.00 0.00 0.00 737.00

9 Census AB,SMLKT 18893 83368.00 5020.00 29450.00 0.00 0.00 117838.00

10 NPG AB, PDP 2777 6462697.00 231324.00 0.00 2024321.00 0.00 4669700.00

11 12th Fin. AB, PDP 760 5238.00 212.00 0.00 0.00 0.00 5450.00

12 ASG BOI, SMLKT 12857 146685.00 5853.00 0.00 13759.00 0.00 138779.00

13 BC Census BOI, SMLKT 5109 18236.00 737.00 0.00 0.00 0.00 18973.00

14 ILCS SBH, SMLKT 3623 6485182.00 263325.00 0.00 0.00 0.00 6748507.00

15 School Facilities SBH, SMLKT 99253 8790.00 356.00 0.00 0.00 0.00 9146.00

16SJSRY (Prog. & Maint.) SBI, SMLKT 21468 10776.00 0.00 0.00 0.00 630.00 10146.00

17 13th Fin. SBI, PDP 203003 29810565.00 0.00 0.00 5734997.00 0.00 24075568.00 Dif. With ERP Rs. 3,04,456/-

18 SPL. NPG SBI, SMLKT 25713 159113.83 6456.00 0.00 0.00 0.00 165569.83

19 MP LADS SBI, SMLKT 72333 120863.47 5935.00 675000.00 51809.00 0.00 749989.47

20 COM. TOILETS SBI, SMLKT 25917 4812.00 195.00 0.00 0.00 0.00 5007.00

21 OAP SBI, SMLKT 26353 17196.00 15013.3764453712

64472826 69.00 13026.37

22 PENSION GRANT SBI, PDP 21571 166712.00 0.00 0.00 0.00 630.00 166082.00

23 PAVALA VADDI SBI, SMLKT 95882 173261.00 7000.00 0.00 0.00 0.00 180261.00

24 CDP SBI, PDP 844812022 3873592.00 0.00 550750.00 1218622.00 0.00 3205720.00

25 SJSRY (CS) SBI, SMLKT 21162 7320.00 0.00 0.00 0.00 630.00 6690.00

26 NFBS (TRY.) SBI, PDP 844812012 0.00 0.00 0.00 0.00 0.00 0.00

27 Election Grant SBH, SMLKT 56164 4623.00 143.00 0.00 0.00 0.00 4766.00 Dif., Rs. 45/- in OB & CB

28 ICE Activities SBH, SMLKT 545614 0.00 0.00 2071826.00 44730.00 452.00 2026644.00 NEW

29 SCAP SBH, SMLKT 267640 0.00 0.00 40500.00 40000.00 250.00 250.00 NEW

CPF TOTAL 47733883.80 552087.37 67916028.00 73601064 3029.00 42597906.17

MUNICIPAL GENERAL FUND

1 001 SBI, PDP 8448120001 51716676.00 0.00 19888255.00 27917813.00 0.00 43687118.00 Dif. With ERP Rs. 1,50,434/- (ST)

2 002 SBI, PDP 8448120002 6927054.00 0.00 31742136 29300555.00 0.00 9368635.00 Dif. With ERP Rs. 7,92,765/- (ST)

3 PF STAFF SBI, SMLKT 160643 3847325.00 160115.00 977504.00 719378.00 0.00 4265566.00

4 TEACHING PF SBI, SMLKT 49444 99733.57 4029.00 0.00 0.00 0.00 103762.57

5 BPS/BRS SBI, SMLKT 21106 858750.00 0.00 0.00 0.00 630.00 858120.00

6 RWHS SBI, SMLKT 470602 595131.00 25723.00 282257.00 0.00 1112.00 901999.00 Dif. Rs. 2085/- (Reconcilation)

7 DEV. CHARGES SBI, SMLKT 467317 511638.00 22015.00 204099.00 0.00 1162.00 736590.00 Dif. Rs. 2085/- (Reconcilation)

8 STAFF RECOVERIES SBI,PDP 84332 -52374.00 0.00 3997561.00 3722030.00 859.00 222298.00 Dif. Rs.5524/- i.e., -227822/-

9 WATER USER CHARGESSBH, SMLKT 47248 472500.00 0.00 0.00 0.00 600.00 471900.00

10 PROPERTY TAX A/cSBH, SMLKT 34241 0.00 1055.00 198992.00 0.00 1055.00 198992.00

11 Lib. CessDUMMY A/c 2202010 28844.00 0.00 0.00 0.00 0.00 28844.00 Dummy A/c created by Accountant

12 Service Tax PayableSBH, SMLKT 6831024 0.00 0.00 927077.00 927077.00 0.00 0.00 NEW

13 EPF Online PaymentSBH, SMLKT 2943427 0.00 1.00 693032.00 693033.00 0.00 0.00 NEW

14 14th Fin. SBI, PDP 8448120004 0.00 0.00 13930736.00 0.00 0.00 13930736.00 NEW

15 BDC ON LINE HDFC,PDP 7151 164120.00 0.00 116500.00 0.00 0.00 280620.00 NEW

MGF TOTAL 65169397.57 212938.00 72958149.00 63279886.00 5418.00 75055180.57

PRIMARY EDUCATION FUND

1 Ele. Edn. Funds SBI, PDP 46986 289423.00 0.00 0.00 0.00 630.00 288793.00 OB Dif. Rs. 630/- Rs. 288793/-

PEF TOTAL 289423.00 0.00 0.00 0.00 630.00 288793.00

2 )COMPLAINCE OF AUDIT OBJECTIONS BY THE COMMISSIONER:-

The No. of objections pending at the beginning of the year, the No. of auditobjections added during the year, the no. of audit objections settled during the year andbalance, left at the close of the year along with the amount involved is given here under.

DetailsNo. of

objectionsAmount

Involved (in Lakhs)1972-73 to 2014-2015 1335 1723.17During the Year 2015-2016 114 114.09Total 1449 1837.26Settled during the year 0 0.00No. of Objections outstanding 1449 1837.26

According to the orders issued in G.O.Ms.No.874 M.A. Dept., dt.13.11.1967, the

audit reports and replies shall be placed before the Mpl. Council, and the replies submitted to

the Govt. through the Director of State Audit with a copy of the resolution approving the

replies for consideration of waiver of the objections. The records of the Mpl. Council do not

reveal the observance of these orders. The progress in the settlement of the audit objections

during the year 2015-2016 was poor. The Commissioner may take much interest in

rectifying the defects and in settling down the objections.

Code No.13) (A) Huge differences in Opening Balances (MGF) – Reasons not explained to

Audit :

On verification of annual account for the year 2015-16 there are hugevariations in different heads while adopting the previous year closing balances and openingbalances for this year. The differences are as follows.

Account Code

AccountHead

2014-15 CB 2015-16 OB Difference Remarks

3101001 RevenueTransfers

42,11,10,465.07

50,42,47,461.57

8,31,36,996.50

Reasons forenhancement not known.

3501002 Contractors 91,472.00 0.00 -91,472.00 Continuedfrom 31.3.14through MJ

3501003 Expenses 18,33,697.00 0.00 -18,33,697.00 Continuedfrom 09-10

=49,000.0010-11 =

12,62,020.0011-12 =

4,62,975.0012-13 =

58,752.0013-14 =

950.00 Total=

18,33,697.00

3501105 GPFPayable

7,39,361.00 0.00 -7,39,361.00 Transferredto 3502001

3502001 GPF 11,77,959.00 19,17,320.00 7,39,361.00 Transferredfrom 3502001

3503001 LibraryCess

Current

-3,48,243.00 0.00 -3,48,243.00 Reasons notknown

4501001 Cash inHand

15,91,558.00 8,67,982.00 -7,23,576.00 Reasons notknown

4501002 Cash inTransit

86,832.00 0.00 -86,832.00 Reasons notknown

4501051 Cheque inHand

3,07,435.00 0.00 -3,07,435.00 Reasons notknown

4502118 LibraryCess

(DummyA/c)


4601002 Conveyance Advance


4601003 ComputerAdvance


4601006 Misc. 7,80,862.00 0.00 -7,80,862.00 Reasons not

Advances known

4601007 PayAdvance


4601009 MarriageAdvance


4602000 EPF Loans 12,02,586.00 0.00 -12,02,586.00 Reasons notknown

4603000 Loans toothers


4604003 Advance toExp.


4608011 OtherCurrentAssets

-10,000.00 0.00 10,000.00 Reasons notknown

3) (b) Huge differences in Opening Balances (CPF) – Reasons not explained toAudit :


AccountCode

AccountHead



7,72,108.94 6,90,89,510.24 -81,63,598.70

Reasons forDECREASEnot known.

3501003 Expenses 12,85,410.00 0.00 -12,85,410.00

Reasons forDECREASEnot known.

4601006 Misc.Advances

-10,000.00 0.00 10,000.00 Reasons notknown

3 C) Huge differences in Opening Balances (PEF) – Reasons not explained toAudit :


AccountCode

AccountHead



5,45,437.00 2,88,793.00 -2,56,644.00 Reasons forDECREASEnot known.

3502008 TDS fromEmployees


4702051 Inter FundTransfer


Code.No 1 4 )DIFFERENCES BETWEEN ULB RECORDS & ANNUAL A/C IN RESPECT OFCLOSING BALANCES – NEEDS RECTIFICATION.

Audit reveals that the following are the differences between the ULB records &Annual A/c in respect of Closing Balances in various accounts. The same shall be rectifiedimmediately.

A. Municipal General Fund

ItemName of the

A/c

Amountshown in

ULB Records

Amountshown in

Annual A/cDif.

1. Cheque in Hand

01 2,58,000.00 0.00 2,58,000.00

3.Treasury/ Bank Balances

001 4,33,64,954.00 4,35,15,388.00 1,50,434.00

002 91,26,869.00 99,19,634.00 7,92,765.00

Dummy A/c 0.00 28,844.00 28,844.00

StaffRecoveries 2,22,298.00 2,27,822.00 5,524.00

The reasons for the above differences between ULB records & Annual A/c in respect oftreasury/bank balances are not explained in Audit by the authorities. But, audit revealsthat the authorities are not reconcile the figures between cashbook & passbook. Thetreasury balance shown in the annual account must be the treasury balance shown incash book. But, the accountants are showing the balance available in treasury passbook as treasury balance in Annual Account. This is irregular. The same shall be

rectified.

B.Capital Project Fund

ItemName of the

A/cAmount shown

in ULBAmount shownin Annual A/c

Dif. With reasons

1. BankBalances

13 th Fin. 2,40,75,568.00 2,43,80,024.00 3,04,456.00

Code No.7 5 ) Service Tax paid by the Municipality from the year 2011-2012 to 2015-2016 on theincome derived from “Renting of Immovable Property” i.e., rents on shoppingcomplexes – Service Tax to be collected from tenants from the year 2011-2012 to 2014-2015 – Needs early action

“Renting of Immovable Property” service is chargeable to Service Tax w.e.f.01.06.2007 as per the provisions of the Fin. Act. 1994.

The Samalkot Municipality has applied for Service Tax Code as per theinstructions from Central Excise, Customs & Service Tax Dept., and obtained the ServiceTax Code to the Municipality as “TEMP B 4552 XS D001” on 21.02.2015.

Further, the Asst. Commr. Of Central Excise, Customs & Service Tax,Kakinada II Divn. has requested the Samalkot Municipal Commissioner to furnish the rentamounts received for the service “Renting of Immovable Property” for the period from01.06.2007 to 31.12.2014.

After receipt of necessary information from the municipal authorities, the Asst.Commr. Of Central Excise, Customs & Service Tax, Kakinada II Divn. has issued a notice tothe Samalkot Municipality to pay the service tax due for the years 2011-12 to 2013-14 videshown below.

Financial Year Rents Collected by the MC Service TaxPayable

(including Edn.Cess & SHE

Cess)

Interest Payableon Service Tax

Due

2011-12 2,33,849.00(after allowingexemption up to threshold limit

of Rs. 10.00 Laksh)

35,077.00 21,859.00

2012-13 13,51,367.00 2,02,705.00 1,03,668.002013-14 12,65,701.00 1,89,855.00 58,281.00

Grand Total 4,27,637.00 1,83,808.00

The Municipal Council has also agreed to pay the above amount of Rs.6,11,445.00 (4,27,637.00 + 1,83,808.00) vide CR No. 92 dt. 30.04.2015. The same was paidto Central Govt., vide this office Vr. No. 88 dt. 08.05.2015.

Later, the Municipal authorities were also paid the Service Tax on “Rentsreceived during the year 2014-2015 through the Vr. No. 250 dt. 08.2015 vide shown below.

Financial Year Rents Collected by the MC Service TaxPayable

(including Edn.Cess & SHE

Interest Payableon Service Tax

Due

Cess)2014-2015 8,49,686.00 1,05,021.00 0.00

Audit reveals that the municipal authorities were not recovered the service taxon rents from the tenants during the above years i.e., from 2011-2012 to 2014-2015. Due toavoiding legal complications the MC has paid the entire amount from his own funds. TheMunicipal Authorities are collecting rents along with service tax From the year 2015-2016.The receipt & payment particulars of Service Tax for the year 2015-2016 are as follows.

Financial Year Service Tax collected by theMC along with Shop Rents

Service Tax Paid(including Edn.

Cess & SHECess)

Vr. No. & Date

2015-2016 2,94,701.00 99,876.00 440/11.15 (4/15 to9/15)

75,203.00 576/02.16 (10/15 to1/16)

35,532.00 629/03.16 (2/2016)79,251.00 /06.16 (3/16)

Grant Total 2,89,862.00

Hence, the municipal authorities are here by instructed to recoup the amountsalready paid to Central Govt. towards Service Tax for the years 2011-12 to 2014-2015 fromthe tenants of shops and made good to municipal funds.

6 )Assessment of Service Charges on Railway Properties in Samalkot town – NeedsSpeed up of Collection process Rs. 15,31,812.00

Hon’ble Supreme Court has delivered a Judgement in Civil Appeal No. 9458, 9457,9464, 9465 all four of the year 2003 and No. 6706 of 2004 on 19.11.2009, in the matter ofpayment of service charges payable by Union of India and its sub-ordinate departments toMunicipal Corporations, in the case filed by Rajkot Municipal Corporation against Union ofIndia and others.

The Operating Part of the Judgement is as follows.

“ The Union of India and its departments will pay services provided by theappellant Municipal Corporations. The Service Charges shall be paid at 75 %,50 % and 33 1/3 % respectively of the property tax levied on private owners,depending upon whether Union of India or its department is utilizing the fullservices or partial services or nil services.“

Necessary instructions were also issued by the State Govt., vide Govt. Memo. No.170/TC.1/2001-1 MA, dt. 11.05.2010 for collection of service charges from Central Govt.Properties. Further, vide Govt. Memo. No. 14245/F2/2013-4 MA dt. 21.08.2013 Govt. statedthat there is no ambiguity on payment of 1/3rd of the demand by the railways even after theSupreme Court Orders. Therefore, there is no reason not to collect the same and the samemay be collected with arrears without prejudice to the claims of the respective parties.

Audit reveals that the Samalkot Municipal authorities are initially assessed theservice charges in respect of Samalkot Railway properties as follows.

Service Charges @ 75 % Service Charges @ 50 % Service Charges @ 33 %No. ofAssets

Amount No. ofAssets

Amount No. ofAssets

Amount

0 0 22 20,714.00 127 87,120.00

Later, the same were revised as follows.

Service Charges @ 75 % Service Charges @ 50 % Service Charges @ 33 %No. ofAssets

Amount No. ofAssets

Amount No. ofAssets

Amount

0 0 22 21,287.00 153 1,06,364.00

The Mpl. Commissioner is also addressed to A.D.E.N., South Central Railwayfor payment of service charges payable by Railway Authorities for a tune of Rs. 1,27,651/-per half year from April, 2010 onwards vide Lr. Roc. No. 571/2013-A2 dt. 09.07.2014. TheAssessment wise details were also sent as enclosures.

The Sr. Divisional Engineer (North), S.C. Railway, Vijayawada replied thatMunicipal Commissioner vide Lr. No. 417//I/2/Vol.Vii/Works dt. 01.08.2014. He has informedthat the process of payment of Service Charges to the Samalkot Municipality will be taken upas soon as the detailed guidelines are received from their Head Quarters office.

Further, the Municipal Commissioner has requested the A.D.E.N., SouthCentral Railway, Samalkot vide his Lr. Roc. No. 571/2013-A2 dt. 20.06.2015 to pay theservice charges immediately for the period from 4/2010. Surprisingly, the Commissioner hasasked the Railway Authorities to pay the service charges Rs. 1,07,834/- i.e., (Rs. 20,714/- +Rs. 87,120/-) instead of Rs. 1,27,651/- i.e., (Rs. 21,287/- + Rs. 1,06,364/-) as mentionedearlier. The same shall be rectified immediately.

Till date, the railway authorities are also not paid the service charges to themunicipality.

Hence, the authorities may address again to railway authorities for payment ofservice charges to municipality duly stating the following demand and made good to Mpl.General Funds.

Rs. 1,27,651/- per half year x 12 No. of Half Years = Rs. 15,31,812.00 (2010-11- to2015-16)

Code.No 97 ) Cash Book & Pass Book reconciliation is done in respect of PD A/cs. 001, 002 &003 – Defects noticed – Needs rectification.

Audit reveals that the cash books maintenance in Samalkot Municipality w.r.t.PD A/cs operated in the Sub-Treasury, Peddapuram it is known that the reconciliationprocess is doing now.

On verification of monthly reconciliations it is noticed the following defects. Thetypes of defects are at a glance as follows.

1.While taking the receipt, the remittances were posted in another a/c of thisMunicipality (or) another Municipality.

2.While booking the expenditure, the expenditure was posted in another a/c of thisMunicipality (or) another Municipality.

3.The other Municipal Receipt/Expenditure was taken in the Samalkot MC.

The details are as follows.

001 AccountDefect Needs Rectification

The Municipal Authorities are here byinstructed to address the treasury

authorities to rectify the defect throughAlteration Memo in Form T.A. IX

1. In the month of 7/2015 a Cheque i.e., No. 5111/28.07.2015 was issued for Rs. 34,019.00 from “002” A/c for payment of work bill recoveries to the concerned heads.

But, the expenditure was booked in the same Municipality in “001” A/c by mistake.

2. In the Month of 8/2015 a Cheque i.e., No. 5123/04.08.2015 was issued for Rs. 2,65,874.00 from “002” A/c for payment of EPF amount.


002 Account

Defect Needs Rectification

1. In the month of 7/2015 a Cheque i.e., No. 5111/28.07.2015 was issued for Rs. 34,019.00 from“002” A/c for payment of work bill recoveries to the

concerned heads.


The Municipal Authorities are here by instructed to address thetreasury authorities to rectify the defect through Alteration Memo in Form T.A. IX

2. In the Month of 8/2015 a Cheque i.e., No. 5123/04.08.2015 was issued for Rs. 2,65,874.00 from “002” A/c for payment of EPF amount.


3. In the month of 8/2015 an amount of Rs.35,902.00 adjusted to “002” A/c on 10.08.2015 videCh. No. 2205. But, the same was not deposited bythis Municipality.

Code. No 98) A Review on Journal Entries passed during the year

Journal Book shall be the book of original entry for recording all transactionsother than those involving cash and/or bank. A non-cash/bank transaction is first recorded inthe Journal Book by dividing into its debit and credit aspects, from which a posting is done inthe relevant ledger account.

A) JE’s not passed for demand fixation of receipt heads i.e., for PT/VLT/Advt.Tax/Water Tax/Markets/Shop Room Leases/Enc. Fees/D&O Licence Fees –Leads decrease in the receivables to the institution

Revenue Income is “Gross” inflow of receivables (which includes recoverablelike taxes, fees, lease amounts etc.,). In accrual basis of accounting, revenue incomes are

reflected in the accounts in the period in which they accrue. Accrual basis of accountingsystem could be followed for most of the income sources.

Pre-requisites for recognition of revenue on accrual basis:

Revenue Income

Is the incomeascertainable?

If the answer is “YES”

If the answer is “NO”

Is the data is accurate?Demand Notices served toall the Assesses?

Accrual Basis of Accounting

Cash Basis of Accounting

During the year the demand entries are not passed in Journal Book for thefollowing heads.

AccountCode

AccountHead

Demand raisedfor the current

year

Remarks

110-01-01 Property Tax 0.00

For these heads the income isascertainable & data is accurateand demand notices served to allassesses. Hence, these incomeheads are recognized on accrualbasis of accounting. Hence, theDemand entries to be passed by

the accountant.

110-01-02Vacant Land Tax

0.00

110-11-11 Advt. Tax 0.00110-02-02 Water Tax 0.00130-10-01 Market Sale 0.00130-10-15 Shop Rents 0.00140-11-01 D & O Trades 0.00

140-11-04Slaughter House License Fee

0.00

140-11-06 Enc. Fee 0.00

Format of Receivables:: OB + Fresh Demand(by JE) – Collection = CB

Audit reveals that due to non-passing of demand entries, the receivables of theSamalkot Municipality are decreased un-necessarily.

The details are as follows:-

Account

Code

AccountHead

Sub-Head

Receivables

OBDemandRaised

CB changeddue to

passing ofwrong JE

43110Receivablesof PT & VLT

Property Tax2,90,76,541.0

00.00

Vacant Land Tax

60,77,314.00 0.00

Total (A)3,51,53,855.0

00.00

43119Receivablesof other Taxes

Advt. Tax 3,51,270.00 0.00

Total (B) 3,51,270.00 0.0043130 Receivables Water Supply 1,86,43,524.0

for Fees & user charges

Receivables 00.00

Others 3,68,736.00 0.00Market Sale 11,01,000.00 0.00D & O Trades 4,69,000.00 0.00Slaughter House LicenseFee

83,000.00 0.00

Enc. Fee 1,76,000.00 0.00Building Permit Fee

4,68,000.00 0.00

Dev. Charges 1,84,000.00 0.00Other TP Receipt

2,36,000.00 0.00

Mutation Fees 98,000.00 0.00

Road cutting &restoration charges

6,63,000.00 0.00

Forms & Pass Books

80,000.00 0.00

Scrap 19,000.00 0.00

Old News Papers

2,000.00 0.00

Total ( C) 2,25,91,260 0.00

43140Receivablesfrom Shop Rents

Shop Rents 43,39,321.00 0.00

Total (D) 43,39,321.00 0.00

Total (A+B+C+D) 6,24,35,706.00

0.00

The authorities are hereby instructed to pass necessary demand entriesimmediately to show the correct amount of receivables of the institution.

B) The procedure in accounts manual for accounting of collections against demandnot followed – Collections made under each head were not posted against demand –But, the receivables reduced un-necessarily through passing JE’s - Resultsdecrease in receivables at the end of year – Needs Rectification.

- The procedure for accounting of collections is described below:

a) Recording of tax collections: Based on summary of daily collectionreceived from the various collecting centers, the accounts departmentshall pass the following entry:

Account Code Account Head Debit Credit

450-10-01/02 Cash/ Bank A/c 0.00

431-80-01Receivable control Accounts -Property Tax etc.,

0.00

b) The summary of daily collection does not provide the details in respect of the yearwise head wise collections made in respect of property and other taxes. Hence, thetotal amount collected should be credited to “Receivables Control Accounts – PropertyTaxes etc.,) A/c. The collection made shall be segregated into year wise, head wisecollection on a monthly basis.

c) Recording of break-up of collections: A summary statement of year wise/head wiseCollection of Property & other taxes shall be prepared and sent to the AccountsDepartment to record the details of collection. Interest on delayed payment may becharged to the taxpayer in accordance with relevant provisions. Interest shall berecognized as income only on collection.

d) To record the break-up of collections into year wise recovery, tax received inadvance and to record the interest income the accounts department shall pass thefollowing entry.

Account Code Account Head Debit Credit

431-80-01Receivable control Accounts -Property Tax etc.,

0.00

431-10-81Receivables of Property Taxes (year…..)

0.00

431-10-82Receivables of Property Taxes (year…..)

0.00

350-41-01Advance Collection of Revenues – Property Tax

0.00

171-80-01 Other Interests – Receivables 0.00140-20-05 Penalties & Fines 0.00

Audit reveals that the above procedure is not followed while accounting thetax/fees/rents etc.,

Instead of following the above procedure, at the end of year the accountanthas passed a journal entry vide JE No. MJ – 6146260/2015-2016 dt, 31.03.2016regarding DCB entry. The reason for passing the JE is also not explained in audit.Without adjusting the real collections under each head they are simply passing theabove JE. The same is hereby described as follows.

DCB as per made in ERP Journal Entries

Account Code

AccountHead

Sub-Head

Receivables

Demand(Arrear)

Reducedthrough

passing JE’s

Balance(Arrear)

43110Receivablesof PT & VLT

Property Tax

2,90,76,541.00 2,02,57,541.0088,19,000.00

Vacant Land Tax

60,77,314.00 27,63,314.00 33,14,000.00

Total (A) 3,51,53,855.00 2,30,20,855.00 1,21,33,000.00

43119Receivablesof other Taxes

Advt. Tax 3,51,270.00 2,30,270.00 1,21,000.00

Total (B) 3,51,270.00 2,30,270.00 1,21,000.0043130 Receivables

for Fees & user

Water Supply Receivables

1,86,43,524.001,22,98,524.00 63,45,000.00

chargesOthers 3,68,736.00 3,68,736.00 0.00Market Sale 11,01,000.00 11,01,000.00 0.00D & O Trades

4,69,000.00 4,69,000.00 0.00

Slaughter House License Fee

83,000.00 83,000.00 0.00

Enc. Fee 1,76,000.00 1,76,000.00 0.00Building Permit Fee

4,68,000.00 4,68,000.00 0.00

Dev. Charges

1,84,000.00 1,84,000.00 0.00

Other TP Receipt

2,36,000.00 2,36,000.00 0.00

Mutation Fees

98,000.00 98,000.00 0.00

Road cutting & restoration charges

6,63,000.00 6,63,000.00

0.00

Forms & Pass Books

80,000.00 80,000.00 0.00

Scrap 19,000.00 19,000.00 0.00

Old News Papers

2,000.00 2,000.00 0.00

Total ( C) 2,25,91,260 1,62,46,260.00 63,45,000.00

43140Receivablesfrom Shop Rents

Shop Rents 43,39,321.00 39,80,321.00 3,59,000.00

Total (D) 43,39,321.00 39,80,321.00 3,59,000.00

Total(A+B+C+D)

6,24,35,706.00 4,34,77,706.00 1,89,58,000.00

DCB As per the demand registers of the ULB

Account Code

Account

HeadSub-Head

Receivables

Demand(Arrear+Curren

t)

Collections(Arrear+Curren

t)

Balance(Arrear+Curren

t)

43110Receivables of PT &

VLT

Property Tax

Demand Regrs.Not written up

by the Mpl.Authorities

2,22,87,955.00 Balance detailsnot available in

MunicipalityVacant Land Tax

2,49,886.00

Total (A)

43119Receivables of other Taxes

Advt. Tax 3,05,997.00 79,181.00 2,26,816.00

Total (B)43130 Receivable

s for Fees & user

Water Supply Receivable

Demand Regrs.Not written up

by the Mpl.

58,85,931.00 Balance detailsnot available in

Municipality

charges s AuthoritiesMarket Sale

10,76,000.00 8,00,000.00 2,76,000.00

D & O Trades

5,25,125.00 5,25,125.00 0.00

Slaughter House License Fee

14,050.00 4,050.00 10,000.00

Enc. Fee 1.19.950.00 1,00,050.00 19.900.00

Total(C)

43140

Receivables from Shop Rents

Shop Rents

45,67,716.00 2946670.00 16,21,046.00

Total (D)

Total(A+B+C+D

)(Due to lake of information regarding the arrear demand of PT,VLT, WT the arrear balances of PT,VLT & WT not included in the above figure.

As seen from the above 2 DCB’s the difference in receivables of the institutionis as follows. The same shall be rectified immediately duly passing the necessary JournalEntries.

Receivables as on 31.03.2016 as per ERP (only Arrears shown) 1,89,58,000.00

Receivables as on 31.03.2016 as per ULB DCB Not finalisedlake of

DemandRegisters.

Difference ---

C) Cash balance adjustment entry passed through JE – Bank balances increased –Circumstances for passing the JE not explained to Audit.

Audit objections were raised regarding the differences between ERP & ULBrecords in respect of Cash in Hand in previous years.

The accountant has passed JE vide JE No. 6142756/2015-2016 dt02.04.2015 for clearing the difference in cash in hand and adjusted the difference amount tothe following accounts.

Sl. No. Details of Account Amount in Rs.

1 SBI, Peddapuram 001 (4502105) 2,43,873.00

2 SBI, Peddapuram 002 (4502106) 5,95,265.00

3 SBI, Library Cess (4502118) (Dummy Account)

28,844.00

Total 8,67,982.00

The basis for transferring the amounts to the above accounts is notexplained in audit. Hence, the authorities hereby instructed to explain the reasons withdetails for transferring the cash in hand amount to the above bank accounts to auditimmediately.

D) The real collections towards different taxes & fees are changed due to additions& deletions made through JE’s – Reasons for passing the JE’s are not explainedto Audit

During the year 2015-2016 the following amounts are received under differentheads towards taxes & fees as per Receipts & Payments statement. But, these amountswere changed due to passing of some JE’s by the Accountant. The reasons for additions &deletions to the concerned heads are not explained in audit.

Account

Code

Account

Head

RealReceipt(R &C)

Additionsvide

JournalEntry

Deletions vide

JournalEntry

FinalAmount

Shown asIncome

JE No. Remarks

1100101

Property Tax

2,22,91,248

0 64,55,955

MJ-6146260/15-16dt.31.03.2016

Reasonsnotknownfordeletion

0 3,293 1,58,32,000

MJ-5997354/15-16dt.31.03.2016

VLTtransferred to VLThead

1100102

VacantLandTax

2,46,593 3,293 0 MJ-6146260/15-16dt.31.03.2016

VLTamountreceivedfrom PThead

1,25,114.00

0 3,75,000 MJ-6146260/15-16dt.31.03.2016

Reasonsnotknownforaddition

1100201

WaterTax

58,85,931 1,44,069 0 60,30,000 MJ-6146260/15-16dt.31.03.2016


1101105

Advt.Tax

39,823 84,43,177 0 84,83,000 MJ-6146260/15-16dt.31.03.2016


130101 Shop 36,42,287 0 6,91,287 29,51,000 MJ- Reasons

5 Rents 6146260/15-16dt.31.03.2016

notknownfordeletion

Hence, the authorities are hereby instructed to explain the reasons to audit foradditions & deletions made to above heads.

E) Advances payable by the employees added /deleted through JE’s – Reasons notexplained to Audit:

During the year 2015-2016 the following amounts are given to loans &advances to the employees under different heads as per Receipts & Payments statement.But, these amounts were changed due to passing of some JE’s by the Accountant. Thereasons for additions & deletions to the concerned heads are not explained in audit.

AccountCode

AccountHead

RealExp.

(R &C)

Additions vide

JournalEntry

LoanRecovery vide

JournalEntry

FinalBalanc

eShownas Due

JE No.Remark

s

4601002(MGF)

Conveyance Adv.

60,000 51,750 1,08,750 3000 MJ-6146177/15-16dt.31.03.2016

Reasonsfor Additionof Rs. 51,750/- not known

4601006(MGF)

Other Adv. 0 3,08,400 0 3,08,400

MJ-6146177/15-16dt.31.03.2016

Reasonsfor Additionof Rs. 3,08,400/- not known

4601007(MGF)

MarriageAdv.

80,000 62,366 42,244 1,00,122

MJ-6146177/15-16dt.31.03.2016

Reasonsfor Additionof Rs. 62,366/- not known

4604003(MGF)

Adv. ForExp.

2,08,000

1,03,000 1,85,000 1,26,000

MJ-6146177/15-16dt.31.03.2016

Reasonsfor Additionof Rs. 1,03,000/- not known

46011000 (CPF)

Loans toOthers

14,543 0.00 14543.00

0.00 CJ-6146178/15-16dt.31.03.2016

Reasonsfor Deletionof Rs. 14,543/- not known

F) Adjustment of Work Bill Recoveries through JE’s – Reasons not explained toAudit:

During the year 2015-2016 the following amounts are Work Bill Recoveries & theirpayments under different heads as per Receipts & Payments statement. But, these amountswere changed due to passing of some JE’s by the Accountant. The reasons for additions &deletions to the concerned heads are not explained in audit.

Account

Code

AccountHead

RealReceipt(R &C)& OB

Additions vide

JournalEntry

Exp. videJournalEntry/Real Exp.

FinalBalanc

eShownas Due

JE No. &Date

Remarks

3502003

(MGF)

GIS 8,61,48750,967

11,713 09,24,167

0.00 MJ-6146189/15-16dt.31.03.2016

Reasons forAdditionof Rs.11,713/-notknown

3502008

(MGF)

TDS fromemployees

03,55,619

0 3,55,6190

0.00 MJ-6146189/15-16dt.31.03.2016

Reasons forDeletionof Rs.3,55,619/- notknown

3502015

(MGF)

LabourCess

0.00 12,66012,660

1,7865,1012,707

15,726 MJ-6146189/15-16dt.31.03.2016

Reasons forDeletionof Rs.5,101/-notknown

3502025

(MGF)

TDS fromContractor

s

4,65,4692,68,312

5,582 2,70,7294,20,798

47,836 MJ-6146189/15-16dt.31.03.2016


3502052

(MGF)

VAT 8,99,6761,93,893

0 1,78,0708,34,363

81,136 MJ-6146189/15-16dt.31.03.2016


3502053

(MGF)

CST/GST 06,211

0 6,2110

0.00 MJ-6146189/15-16dt.31.03.2016


3502054

(MGF)

ServiceTax

026,008

9,01,069 09,27,077

0.00 MJ-6146189/15-16dt.31.03.2016

Reasons forAdditionof Rs.9,01,069/- notknown

3502056

(MGF)

Seignorage

2,01,2266,549

3,064 3,7961,80,651

26,392 MJ-6146189/15-16dt.31.03.2016


3503001

(MGF)

Lib. CessCurrent

5,54,74612,660

0

0 12,66012,660

58976,798

4,64,699

0.00 MJ-6146189/15-16dt.31.03.2016

Reasons forDeletionof Rs.589/- notknown

3117006

(CPF)

OAP 69932729 11660

15,531 069946894

13,026 CJ-6146203/15-16dt.31.03.2016


3502008

(CPF)

TDS fromemployees

073,525

0 73,5250

0.00 CJ-6146203/15-16dt.31.03.2016


3502015

(CPF)

LabourCess

57,3190

2,862 43,70050

16,431

0.00 CJ-6146203/15-16dt.31.03.2016


3502024

(CPF)

OtherEmp.

Deductions

01,100

0 1,100 0.00 CJ-6146203/15-16dt.31.03.2016


3502025

(CPF)

TDS fromContractor

s

74,8683,01,086

0 1,2732,97,163

77,518

0.00 CJ-6146203/15-16

Reasons forDeletion

dt.31.03.2016

of Rs.2,97,163/- notknown

3502052 (CPF)

VAT 2,65,10216,636

0 2,3241,06,578

0.00 CJ-6146203/15-16dt.31.03.2016


3502056

(CPF)

Seignorage

1,00,7798,860

0 3,0611,06,578

0.00 CJ-6146203/15-16dt.31.03.2016


3502058 (CPF)

Otherrecoveries

fromcontractor

s

56,0461,64,065

42,283 042,283

1,64,065

--- ---

3503001

(CPF)

Lib. CessCurrent

010,681

1,41750

10,6811,467

0.00 CJ-6146203/15-16dt.31.03.2016


Code.No 1 9 ) Huge differences between the figures in ULB Records & Annual A/c in respect ofrecoveries payable – Needs Rectification.

Audit reveals that the authorities are promptly remitting all the recoveries everymonth to the concerned heads & departments. By mistake some of the deductions are notremitted. They are petty & shown below. But, as seen from the annual account under thehead of “350-20” i.e., Recoveries Payable showed huge balances pending remittance. Thisis not correct. The same shall be rectified duly re-examining the receipt & payments undereach head. The differences are as follows.

Sl. Account Code Head of Recoveries Payable as Difference

No Accountper

ULBRecords

Annual A/c

1350-20-01

(CPF)GPF --- 1800.00 1800.00

2350-20-02

(CPF)GPF-employees

on deputation---

5400.00 5400.00

3350-20-03

(CPF)GiS

---180.00 180.00

4350-20-05

(CPF)APGLI

---390.00 390.00

5350-20-54

(CPF)Service Tax

---1,37,748.00

1,37,748.00

6350-20-58

(CPF)

OtherRecoveries from

Contractors

Notavailable

1,64,065.00 ---

7 350-20-14 Labour Cess 19,943.00 15,726.00 3,617.00

8350-20-24

(MGF)Other employee

deductionsNot

available2,95,531.00 ---

9350-20-25

(MGF)TDS from

Contractors31,608.00 47,836.00 16,228.00

10350-20-52

(MGF)VAT 53,584.00 81,136.00 27,552.00

11350-20-55

(MGF)NAC 673.00 3,548.00 2,835.00

12350-20-56

(MGF)Seigenorage 19,755.00 26,392.00 6,637.00

13350-20-58

(MGF)

OtherRecoveries from

Contractors

Notavailable

3,91,009.00 ----

10. Advances Pending Adjustment & Advances Pending Realisation Code No. 8

The advances account consists of personal advance like Festival Advance, Education

Advance, Motor Cycle Advance, and House building advance. The total amount of advances

paid, advances recovered and the balance left etc., are as fallows. The balance of advances

have to be recovered according to time schedule prescribed by the Govt. The same may be

recovered at an early date and credits pointed out to audit.

Sl.No

Nature ofAdvance

DEMAND COLLECTION BALANCE

Arrear Current Total Arrear Current Total Arrear Current Total

1Festival Adv

4000 0 4000 0 0 0 4000 0 4000

2 MCA 291213 60000 351213 50600 0 50600 240613 60000 300613

3Marriage Adv

96916 80000 176916 27266 12128 39394 69650 67872 137522

4Sivarathri work Adv

100000 100000 200000 100000 0 100000 0 100000 100000

5All Advances

114100 108000 222100 100000 105000 205000 14100 3000 17100

Total 606229 348000 954229 277866 117128 394994 328363 230872 559235

Code No.9

11 ) MGF Receipt - Tender Deposits, EMD’s, Shop Deposits etc., were shown under

the head of other income i.e., Lapsed Deposits 180-11-02 – Irregular – Needs

Rectification.

As per Para No. 5.74 of AP Municipal Accounts Manual, Deposits not claimed

within 3 years from the date it is due for payment, shall be considered as lapsed and shall

not be repaid to the party. At the end of each accounting year, the respective sections shall

prepare a list of such lapsed deposits. To recognize the income, on obtaining the approval of

the authorities, the accounts section shall pass the necessary journal entries. But, this

process was not done in the year 2015-2016.

However, during the year the Other Income i.e., Lapsed Deposits under the

head “180-11-02” is shown in the Receipt & Payments as Rs. 21,83,592.00.

Audit reveals that the amount shown under the head of “180-11-02” during the

year is the receipt towards Tender Deposits, EMD’s & Shop Deposits amount etc., The

Shop Deposits, EMD.s & Tender Deposits are Capital Receipt. But, they are shown as

Revenue Receipt. This is irregular. The same shall be transferred to the heads noted against

each. The details are as follows.

Sl. No. Details Amount Head to be transferred1 Shop Deposits 17,48,217.00 340-20-012 EMD’s & Tender

Deposits4,35,075.00

340-10-01

Grand Total 21,83,592.00

Hence, the authorities are here by instructed to transfer the entire amount to

concerned heads immediately.

Code No.9

12 ) MGF Receipt – Rental Deposits under the head of 340-20-01 shown less than the

actual receipt – Irregular – Needs Rectification.

On verification of the subsidiary registers like Deposit Register it is noticed that an amount of Rs. 20,77,678.00 is received during the year 2015-16 towards Shop Deposits.

But, as seen from the annual account for the year 2015-16 the receipt towards Rental Deposits under the head of 340-20-01 is shown as Rs. 1,00,000.00. This is irregular.

While entering the receipt figures in ERP the same were entered in different headsas Revenue Receipt erroneously. The same shall be transferred to the head 340-20-01 immediately.

Name of the Receipt Transfer from Transfer to AmountOpening Balance 50,500.00

Rental Deposits

Receipt under the head 1,00,000.00130-10-15 340-20-01 2,29,461.00

180-11-02 340-20-01 17,48,217.00Grand Total 21,28,422.00

Code No.9

13) MGF Receipt – Earnest Money Deposits under the head of 340-10-01 shown less

than the actual receipt – Irregular – Needs Rectification.

On verification of the subsidiary registers like Deposit Register it is noticed that an amount of Rs. 7,73,918.00 is received during the year 2015-16 towards EMD’s.

But, as seen from the annual account for the year 2015-16 the receipt towards EMD’s under the head of 340-10-01 is shown as Rs. 3,36,168.00. This is irregular.

While entering the receipt figures in ERP the same were entered in different headsas Revenue Receipt erroneously. The same shall be transferred to the head 340-20-01 immediately.

Name of the Receipt Transfer from Transfer to AmountOpening Balance 3,02,884.00

EMD’s

Receipt under the head 3,36,168.00340-20-02 340-10-01 2,675.00

180-11-02 340-10-01 4,35,075.00Grand Total 10,76,802.00

Code – 9

14) MGF Receipt – Receipt towards Shop Deposits are posted under the head “130-10-

15” i.e., Rents from Shopping Complexes – Irregular - Needs rectification.

Audit reveals that the receipt towards Rents on shopping complexes during the year isRs. 34,12,826.00.

But, as seen from the Receipt & Payment statement, the receipt towards Rents onshopping complexes showed under the head of “130-10-15” is Rs. 36,42,287.00

Hence, the following amounts i.e., Shop Deposits etc. are shown under this head bymistake, the same shall be transferred to concerned head immediately duly passing theJournal entries.

Name of the Receipt Transfer from Transfer to AmountRents from Shopping

ComplexesReceipt under the head 36,42,287.00

130-10-15 340-20-01 (-) 2,29,461.00Grand Total 34,12,826.00

Code.No.9 15 )MGF Receipt - Recovery & Payment of Labor Cess is shown under the head ofOther recoveries from Contractor (350-20-58) – Irregular – Needs rectification.

As seen from the Receipt & Payments statement, the receipt & expenditureunder the head of “350-20-58” i.e., other recoveries from contractors is shown as Rs.1,66,035.00 & Rs. 1,64,572.00.

But, Audit noted that the LC recovery made from the contractors and paymenttowards “Labour Cess” during the year was entered in this head as “Other recoveries fromcontractors” by mistake.

Hence, the same shall be transferred to concerned head shown below dulypassing the Journal entries.

Name of the Receipt &Payment

Transfer from Transfer to Amount

Other recoveries from contractors

350-20-58 350-20-15

1,66,035.00(credit)

1,64,572.00(Debit)

Code.No.9 16 )MGF Payments – Payment towards Commissioner’s vehicle Hire Charges –Shown in the head of A/c of 230-40-02 instead of 220-40-02 – Irregular – Needsrectification

As seen from the Receipt & Payments statement, the expenditure taken under thehead of “230-40-02” i.e., Hire Charges to Vehicles is shown as Rs. 3,98,724.00

But, Audit noted that the payments made towards Commissioner’s vehicle hirecharges were entered in this head as “Hire Charges to Vehicles” by mistake.

Audit also reveals that the Commissioner’s vehicle hire charges to be enteredin the head of A/c of “220-40-02”


Name of the Payment Transfer from Transfer to Amount

Hire Charges to Vehicles 230-40-02 220-40-02 3,98,724.00


Code.No.9 17 )MGF Exp. – Amount is shown under the head of Prior period item “OtherExpenses” (280-80-00) – Irregular – Needs rectification

As seen from the Receipt & Payments statement, the expenditure taken under thehead of “280-80-00” i.e., Prior period item “Other Expenses” is shown as Rs. 3,87,196.00

As per para No. 6.89 & 6.90 of AP Municipal Accounts Manual, Prior period items aregenerally infrequent in nature and can be distinguished from changes in accountingestimates. Accounting estimates by their nature are approximations that may needs revisionas additional information becomes known.

The nature and amount of prior period items should be separately disclosed in thestatement of Profit & Loss in a manner that their impact on the current profit or loss can beperceived.

But, Audit noted that School Sweeper salaries, School Rents, Park WatchmanSalaries, TPBO & AE salaries, Election Deposit Refunds & Penalties to Income Tax Dept.,are entered in this head as Prior period item “Other Expenses” by mistake.

Hence, the same shall be transferred to concerned heads shown below duly passing

the Journal entries.

Name of the Receipt Transfer from Transfer to Amount RemarksPrior period item

“Other Expenses”280-80-00 210-10 1,37,852.00 Stipend to AE

210-10 86,513.00Stipend to

TPBO

210-10 3,960.00Park Watcher

Salary210-10 82,773.00 School

Sweeper

Wages

350-20-25 71,078.00Default

payment to ITDept.,

340-20 2,500.00Refund of Ele.

Deposits

220-10 1,600.00School

Building Rent--- 900.00 Misc.


18) Demand Registers for Property Tax, Vacant Land Tax & Water Tax not written up and produced to Audit- Irregular.

Audit reveals that the demand registers of Property Tax, VLT & Water Tax arenot written up and produced to audit for the year 2015-16. The authorities stated thateverything is available in online. Hence, they are not preparing the demand registersmanually. But, the CDMA, AP has issued instructions for continuation of maintenance ofmanual records even though the demand, collections are made available on online. Theauthorities are not adhered the instructions of the CDMA.

E.Suvidha is closed during the year 2015-2016 and ERP module is now runningfor collection of taxes. But, the data available in E.Suvidha are not transferred to ERPmodule. The authorities are also not taken the data from E.Suvidha before closing themodule. Now, the authorities are not certifying the exact demand of Property Tax, VLT,Water Tax. Simply, they are stated that data is not available in ERP.

The Bills issue register is also not maintained. Hence, it is not possible to verifythe exact demand in respect of Property tax, VLT & Water Tax.

The Audit is now confines only to the collection of taxes. The data for demand inrespect of PT, VLT & Water Tad etc., are not available in office for verification.

Further, the collections towards PT, VLT & Water Tax are not split up to arrear &current. Up to the previous year the authorities are noted the arrear collection figures in aregister. During the year the same system is dis-continued. They have stated that the wardwise collection particulars for the year 2015-2016 on available in on line.

The present position of the revenue sections is that they are collecting the taxeswithout knowing the manual demand for both current & arrear. They are totally depending onon line. This is irregular. Hence, the authorities are hereby suggested and maintain themanual registers also even the transactions are made in on line.

Code.No 11

19 ) ARREAR COLLECTIONS DURING THE YEAR IN RESPECT OF TAXES/FEES &RENTS – ADR’S NOT PREPARED – COLLECTIONS NOT POSTED – BALANCES NOT

ARRIVED - AUDIT NOT DONE IN RESPECT OF ARREAR DEMAND, COLLECTION &BALANCES

During the year the following arrear collections in respect of the followingtaxes/fees & rents. Sl.No

Account Code

Head of AccountArrear Collections

REMARKS

1 110-01-01 Property TaxData not

available inthe

Municipality

For these heads ADR’s not prepared. Due to this reason the Arrear Demand, Collection & Balances are not verified & certified in audit.

2 110-01-02 Vacant Land Tax3 110-02-02 Direct Water Tax5 140-11-01 D &O Trades6 140-11-06 Encroachment Fee7 130-10-01 Market 0.00 For these heads ADR prepared.

Due to this reason the Arrear Demand, Collection & Balances are verified & certified in audit.

8 110-11-50 Advt. Tax 48,611.009 130-10-07 Shop Rents 7,30,233.00


It is the fundamental responsibility of the section head to verify the collections shown in the annual account i.e. Receipts & Charges are tallied with figures shown in subsidiary registers.

If the figures were not tallied with the Receipts & Charges the subordinates shouldbe asked to get the figures tallied with other. But, this was not done. This clearly shows thatthe section heads are not paying required attention on exhibiting true and fair accounts.Necessary steps may take to follow these instructions as per AP Municipal Accounts Manualby all the section heads.

a)Recording of tax collections: Based on summary of daily collection received fromthe various collecting centres, the Revenue Officer shall prepare Form GEN-12 andsent to the accounts department for passing necessary entries:

b)The summary of daily collection i.e., Form Gen-12 does not provide the details inrespect of the year wise head wise collections made in respect of property and othertaxes. Hence, the total amount collected should be segregated into year wise, headwise collection on a monthly basis and prepare the Form P & OT - 3.

c)Recording of break-up of collections: After preparation of summary statement ofyear wise/head wise Collection of Property & other taxes i.e., Form P & OT – 3, thesame shall be sent to the Accounts Department to record the details of collection.Interest on delayed payment may be charged to the taxpayer in accordance withrelevant provisions. Interest shall be recognized as income only on collection.

d)To record the break-up of collections into year wise recovery, tax received inadvance and to record the interest income the accounts department shall pass thefollowing entry.

Code.No 9 20 ) Huge Arrears of Taxes/Fees/Rents etc,., pending receipt as per annual account -Provisions for doubtful recoveries not made as per AP Municipal Accounts Manualnorms – All the balances are shown as receivables - Irregular. As per para No. 5.27 of AP Municipal Accounts Manual every municipality makenecessary provisions in annual account in respect of property tax demand outstandingbeyond 2 years on the following norms:

i) Outstanding for more than 2 years, but not exceeding 3 years : 25%ii) Outstanding for more than 3 years, but not exceeding 4 years : 50%iii) Outstanding for more than 4 years, but, not exceeding 5 years: 75%iv) Outstanding for more than 5 years : 100%

As per para No. 5.34 & 5.81 of AP Municipal Accounts Manual every

municipality make necessary provisions in annual account in respect of Water tax & RentalIncome demand outstanding beyond 2 years on the following norms:

i) Outstanding for more than 2 years, but not exceeding 3 years : 50%ii) Outstanding for more than 3 years : 100%

The arrears pending collection on 31.03.2016 are as follows.

Sl.No

AccountCode

Head of Account Arrears DUE REMARKS

1 431-10-01Property Tax Receivables

88,19,000.00Year wise split up not available in MC. ADR’s not prepared & available in Revenue section.

2 431-10-02Vacant Land Tax Receivables

33,14,000.00

Year wise split up not available in MC. Only arrear collections were entered in a register for knowing the collection of arrears. Arrear Demand details are also not available.

3 431-19-03Other Taxes Receivables

1,21,000.00Year wise split up not available in MC. Arrear Demand details are also not available.

5 431-30-01Water Supply Receivables

63,45,000.00Year wise split up not available in MC. Arrear Demand details are also not available.

6 431-40-01 Rent Receivables 3,59,000.00

The amount relates to 7 years i.e.,from 2007-2008 to 2013-14. But, provisions not provided in annual account as per the accounts manual.

But, as seen from the Balance Sheet & Income & Expenditure Statement there is noprovisions are made against the doubt full recoveries under head of “270” in respect of Taxes& Leases. Hence, the authorities are hereby instructed to made necessary provisionsagainst doubt full recoveries.

The provision made in the form of debit at the end of the year only for accountingpurpose and it should neither be considered as reduction in demand not be treated as writtenoff.

Code.No 4

21 ) ILCS Grant received – Kept in Banks – Non-utilization of the Grant – Irregular.

Audit revels that the Samalkot Municipality had received the grant towards ILCS in the

year 2010-2011 for helping the public for constructing the toilets. The same was deposited in

SBI, Samalkot in A/c. No. 10938524662. The particulars are as follows.

Details Rs. Rs.

Grant received on 22.04.2010 20,00,000.00Grant received on 25.05.2010 34,00,000.00

Total 54,00,000.00Interest received

2010-2011 1,37,550.002011-2012 2,19,461.002012-2013 2,33,121.002013-2014 2,42,001.002014-2015 2,53,049.002015-2016 2,63,325.00

Total 13,48,507.00Balance available on 31.03.2016 67,48,507.00

As seen from the above it is known that during the 4 years a single rupee is notexpensed by the Municipality towards construction of toilets. Interest accumulated for Rs.13,48,507.00 till date.

The authorities are here by instructed to utilize the grant received towards ILCSwithout lapse the same to the GOVT. in future.

Code No.4

22 ) AMOUNTS KEPT IDLE - UNSPENT BALANCES NOT REMITTED:

The CDMA Hyderabad vide circular No Roc No PD A/c /CDMA/2012 Dt:13.10.12

issued instructions to all the Municipal Commissioners in the state to close all the non-

operative accounts and FDRs which were opened without any orders of the higher

authorities and transfer the available balances to the PD A/c No “001”and after transferring

those amounts separate cash book and other necessary record shall be maintained for

reconciliation and issue of UCs. The ULBs shall maintain a Master Cash Book for the Head

wise and scheme wise transactions etc., and before the transfer and closing of accounts, it

shall be informed to the Municipal Council for recording in the Minutes.

During the course of audit, it was observed that this Municpality has opened following

saving bank accounts without any permission from the competent authority for depositing of

funds received for implementation of the schemes sanctioned by the GOI and GOAP. The

said scheme funds were kept idle with banks. No transactions were done during the year

under audit. The Executive Authority would need to take immediate action to remit the

unspent balance amounts which were kept idle with the banks, to the heads concerned and

the result may be intimated to audit.

Sl.No

Name of the Scheme Name of theBank

A/c.No.

Amount in Rskept idle.

1Slum Devlopment

AB,Peddapuram

23798 1,764.00

2Parks & Paly Grounds

AB,Peddapuram

779 3,594.00

3BRS A/c

AB,Peddapuram

22647 94,067.00

4NFBS

AB,Peddapuram

229 7,015.00

5 Cyclone Grant AB, Samalkot 16830 737.006 CENSUS AB, Samalkot 18893 1,17,838.007 Maint. Of internal roads BOI, Samalkot 5109 18,973.008 School Fecilities SBI, Samalkot 99253 9,146.009 SJSRY SBI, Samalkot 21468 10,146.0010 Community Toilets SBI, Samalkot 25917 5,007.0011 Pension Grant SBI, Samalkot 31571 1,66,082.0012

12th FinanceAB,

Peddapuram760 5,450.00

13 SJSRY (CS) SBI, Samalkot 21162 6,690.0014 Pavala Vaddi SBI, Samalkot 95882 1,80,261.94

Code.No 1

23 ) VARIATION IN COLLECTION FIGURES OF PROPERTY TAX – NEEDS RECTIFICATION.

A Comparison of the collection figures of Property Tax for this year from thestatements generated by ERP Module and DCB related records of the ULB revealedsubstantial variances as follows.

PROPERTY TAX COLLECTIONS

I As per ULB records Amount(Rs.)

1 Collection of Property Tax as per Chitta (PT + LC) 92,18,998.002 Collection of Property Tax through Cheques (PT + LC) 63,91,240.003 Collection of Property Tax through E-Seva 28,14,143.004 35% share of PT from APIIC 48,68,159.00

Grand Total 2,32,92,540.00II As per E-Suvidha Records

1

Collection of Property Tax As per E-Suvidha (Including the penalty amount of Rs. -––––––––––––)both in I & II HYS)

EMASSclosed datanot saved.Details notavailable

III As per DCB furnished by the Municipal authorities 0.00IV As per the R & C in Double Entry Account 2,22,87,955.00

Hence the authorities are here by instructed to update the Property Tax collections inthe Online system in order to avoid variation in collection figures of Property Tax from theStatements generated ERP data base and DCB register of the ULB’s.

To reconcile both the systems of data i.e. manual system/ on line system ERP and take necessary steps and ensure that only single system of maintenance is primarily relied upon with other system only used to fulfil the bare and essential requirements.

Code.No 9

24) PROPERTY TAX – JOURNAL ENTRIES NOT PASSED BY THE ACCOUNTSSECTION FOR CURRENT YEAR DEMAND – NEEDS ACTION.

It is normal practice for the ULB to include the arrears of the tax dues whileissuing the fresh demand. Entries in respect of the arrears would have already beenrecorded in the earlier years. So, income should be recognized only in respect of thecurrent year property tax demand.

As per manual records of the Samalkot Municipality the demand in respect ofProperty Tax for the year 2015-16 is as follows.

Sl.No

Details AmountRs.

1 1st + 2nd Half Year Demand Not Available

As per Para No. 5.17 of AP Municipal Accounts Manual the account section maypass the journal entries for property tax receivables after receipt of the demand particularsfrom the revenue section before accounting for the collection.

But, journal entries are not passed by the account section for current year demand.

Hence, action may be taken to pass the journal entry as per Para No. 5.17 of APMunicipal Accounts Manual for raising the current demand of Property Tax.

Code.No 9 25 ) Collection of Property Tax through E-Seva Kendras – Remittance of PropertyTax to the Municipality through the AD, E-Seva, Kakinada after deducting the LibraryCess/Transaction Charges/Service Tax there on – Net amount was taken as receiptunder the head of Property Tax by the Municipal Authorities – Irregular.

Audit reveals that the collection of property tax by E-Seva Kendras in the Municipalarea is returned back to the Municipality from the AD, E-Seva, Kakinada byFortnightly/Monthly through DD’s.

While sending the Property Tax collections the AD, E-Seva, Kakinada have made thefollowing deductions.

1.LIBRARY CESS: Directly sent the same to the ZGS, Kakinada.2. Transaction Charges: Rs. 5/- per transaction at their end.3.Service Tax on Transaction Charges: Rs. 12.36% /14% / 14.5 % to Govt.,

After deducting the above amounts, the AD, E-Seva, Kakinada has sent the DD for“Net Amount” to the concerned municipality. The same was also adjusted to treasury passbook in “002” A/c towards property tax collection made by E-Seva’s on behalf of MC. TheMunicipal authorities while entering the same in their cash book the “Net Amount” sent by theAD, E-Seva, is taken. This is not correct.

For example, the total property tax collected by the E-Seva on behlalf of MC Samalkotis Rs. 23,25,393.00 and the property tax received by the Municipality after deductions duringthe year is Rs. 21,74,774.00 shown below for ready reference.

Sl. Period PT Deductions Total Net amount

No

collectedby E-Seva

deductions

received byMC

LC

TransactionCharges @Rs5/-

ST @12.36%,14%,14.5 %

11/3/15 to 31/03/15

4,22,959 21410 1995 247 23652 3.99.307.00

21/4/15 to 30/04/15

1,32,978 6245 995 123 7363 1,25,615.00

31/5/15 to 31/05/15

29,116 1461 300 37 1798 27,318.00

41/6/15 to 30/06/15

2,74,284 16560 2425 340 19325 2,54,959.00

5 1/7/15 to 31/7/15 2,81,731 15923 3915 548 20386 2,61,345.00

6 1/8/15 to 31/8/15 1,55,555 8325 1755 246 10326 1,45,229.00

71/9/15 to 30/09/15

1,37,205 6220 935 131 7286 1,29,919.00

81/10/15 to31/10/15

56,604 2858 590 83 3531 53,073.00

91/11/15 to 15/11/15

35,070 1874 320 45 2239 32,831.00

1015/11/15 to 30/11/15

96,058 5608 1370 199 7177 88,881.00

111/12/15 to 31/12/15

7,03,833 40374 6255 907 47536 6,56,297.00

TOTAL 23,25,393 15061921,74,774.0

0

The following DD is adjusted during the year 2016-2017.

11/1/16 to 31/01/16

2,34,350 0 2425 352 2777 2,31,573.00

21/2/16 to 29/02/16

2,69,595 0 1680 244 1924 2,67,671.00

31/3/16 to 31/03/16

4,07,764 0 2260 328 2588 4,05,176.00

9,11,709.00

7289 9,04,420.00

Hence, it is suggested that while making the entry towards collection of PT from E-

Seva in cash books, the entire collection made by the E-Seva shall be shown as total receipt

towards PT and the deductions done by the AD, Eseva may be shown as expenditure i.e.,

remittance of LC & Collection charges etc., through BOOK ADJUSTMENT.

Unless the following this procedure the total amount collected towards property tax by

E-Seva and how much amount remitted by the E-Seva authorities towards Library Cess and

how much amount deducted by the E-Seva authorities towards collection charges & Service

Tax there on are not reflected in the Municipal Account.

Code.No. 9

26 ) 35 % share in Property Tax received by the MC, Samalkot from APIIC authoritiesin the year 2015-2016 – Collection shown towards Property Tax in the Mpl. Account –Journal entry not passed for generating the demand against collection – NeedsAction.

Audit reveals that during the year Samalkot Municipality has received an amount ofRs. 48,68,159.00 towards the 35% share in Property Tax from APIIC, as the APIICauthorities are collected the Property Tax on the buildings industrial area in the SamalkotTown.

The details are shown below.

From Whom Amount (Rs.)PT share from APIIC, Kakinada 33,16,147.00PT share from APIIC, Kakinada 67,950.00PT share from APIIC, Kakinada 59,549.00PT share from APIIC, Kakinada 7,26,633.00PT share from APIIC, Kakinada 7,257.00PT share from APIIC, Kakinada 5,56,883.00PT share from APIIC, Kakinada 62,518.00PT share from APIIC, Kakinada 71,222.00TOTAL 48,68,159.00

The receipt of 35% share of Property Tax from the APIIC may be shown asdistinct item in annual account until the passing the demand entry in Journal Book. If thesame posted against the head of Property Tax, it decreases the existing property taxdemand to that effect.

Hence, the authorities here by instructed to add the industrial area property tax(35% share) to the existing demand of Property Tax and shown the above receipt againstthat demand. Compliance report may be sent in this regard to audit for verification.

Further, in the previous year an amount of Rs. 25,84,946.00 was received from theAPIIC towards 35% share in Property Tax but, this year the same was increased to Rs.48,68,159.00. The reasons for this increase may also be obtained from the APIIC authoritiesand produced to audit for verification.

Code.No 9 27 ) MGF Receipt - Library Cess collected on behalf of State Govt. together withProperty Tax is reckoned as Income and shown under the head of Library Cesscollection & administrative charges “140-70-02” in annual account – Irregular – LCCollection & Remittance to be shown under the head of “350-30-01” i.e., Govt. duespayable – Needs rectification

Audit reveals that the Library Cess Collections made by the Municipality during theyear are shown in the annual account under the receipt head of “140-70-02” i.e., LibraryCess collection & administrative charges. This is irregular.

Library Cess is not a receipt or income to the institution. The Local Body iscollected the LC on behalf of State Govt. On collection of LC, the liability to State Govt.arises to the local body. The Local Body shall free from the liability as and when the samewas paid to ZGS.

As per the instructions of the AP Municipal Accounts Manual under the head of TaxRevenue i.e., in respect of Property Tax at Para 5.14 it was stated that the collections to bemade on behalf of State Govt., i.e., Library Cess and included in the property tax demandshall be reckoned together with Property tax demand and credited to Control Account called“State Govt. Levies in Taxes – Control A/c under the head of “431-91-00”.

The liability on behalf of the State Govt. shall be recognized on collection based onthe receipt of summary statement of the year under Property Tax. After recognition theliability for recording the same, the Accounts Department shall transfer the amount from thehead of A/c “431-91-00” to “350-30-01” through the Journal entries.

On receipt of the payment order the remittance on behalf of the State Govt. should berecorded duly debiting the head of “350-30-01”. But, the procedure is not done by theAccountant.

As per the ULB records the details of collection of LC & remittance of LC during theyear in the MC are as follows.

Details Amount in Rs.Cash on hand at the beginning of the year for payment of LC 28,844.00Collection of LC during the year by the Municipality (E-Seva Collection not included)

5,54,746.00

Liability on behalf of State Govt. for payment of LC 5,83,590.00Remittance of LC by the Samalkot MC during the year 5,70,341.00Cash on hand at the ending of the year for payment of LC 13,249.00

But, the above details are not available in annual account due to non-passing theabove entries as per the instructions of AP Municipal Accounts Manual and entering theentire collection towards LC in the income head i.e., “140-70-02” and remittance particularsto “350-30-01”.

Code.No 9 28 ) Library Cess remittances to ZGS, Kakinada by Samalkot Municipality during theyear 2015-16 – 15% Collection Charges not deducted by the Municipality -Loss –Needsadjustments in future remittancesRs.85,551.00

Audit reveals that an amount of Rs. 5,70,341.00 was paid by the Municipality during

the year towards payment of LC to ZGS, Kakinada.

As per instructions of the G.O. Ms. No. 37 M.A. dt.25.01.2000 15% collection charges

should be deducted on Library Cess before remitting to ZGS by the municipalities. But, no

amount was deducted towards service charges while paying the LC to ZGS. This is irregular.

Due to this in action of the municipality the institution has sustained loss in a tune of

Rs. 85,551.00 i.e.15% on Rs. 5,70,341.00.

Hence the authorities here by instructed to adjust to the service charges of Rs.85,551.00 in future remittance of Library Cess and made good to municipal general funds.

Code.No. 9

29 ) LIBRARY CESS REMITTANCES TO ZGS KAKINADA BY THE AD E-SEVAKAKINADA ON BEHALF OF SAMALKOT MUNICIPALITY DURING THE YEAR 2015-16 –15% COLLECTION CHARGES TO BE ADJUSTED TO MC from FUTURE REMITTANCESBY THE MUNICIPALITY. ………………………………………Rs.19,029.00

During course the audit it was observed that the following amounts were directlysent by the AD, E-Seva Kakinada towards the remittances of Library Cess on behalf ofSamalkot Municipality.

Sl.No

PeriodLC remitted by AD,E-Seva,Kakinada

1 1/3/15 to 31/03/15 21410

2 1/4/15 to 30/04/15 6245

3 1/5/15 to 31/05/15 14614 1/6/15 to 30/06/15 165605 1/7/15 to 31/7/15 159236 1/8/15 to 31/8/15 83257 1/9/15 to 30/09/15 62208 1/10/15 to31/10/15 28589 1/11/15 to 15/11/15 187410 15/11/15 to 30/11/15 560811 1/12/15 to 31/12/15 40374

TOTAL 1,26,858.00

As per the instructions of the G.O. Ms. No. 37 M.A. dt.25.01.2000, 15%collection charges should be deducted on library cess before remitting to ZGS by themunicipalities. But, no amount was deducted towards service charges while paying the LC toZGS. This is irregular.

Due to this in action of the municipality the institution has sustained loss in atune of Rs.19,029.00 i.e.15% on Rs.1,26,858.00.

Hence the authorities here by instructed to adjust to the service charges ofRs.19,029.00 in future remittance of Library Cess and made good to municipal generalfunds.

Code.No. 1

30 ) COLLECTION FIGURES OF DIFFERENT RECEIPT HEADS SHOWN IN RECEIPT &CHARGES NOT TALLIED WITH THE FIGURES SHOWN IN SUBSIDARYREGISTERS/DCB OF REVENUE & PUBLIC HEALTH SECTION – VARIATION INFIGURES – NEEDS RECONCILATION.

While comparing the subsidiary registers maintained in Revenue & Public Healthsections and DCB for the year 2015-16 w.r.t. Annual Account i.e. receipts & charges the

collection figures of the following heads of account were not tallied and resulting in variationin account figures as detailed below.

Sl.No

Account Code Head of AccountCollection as

per R & C

Collection asper Subsidiary

Reg.1 110-01-01 Property Tax 2,22,87,955.00 Subsidiary

Regrs. Notmaintained this

year

2 110-01-02 Vacant Land Tax 2,49,886.003 110-02-01 PT - Water Tax 58,85,931.004 110-02-02 Direct Water Tax 0.005 140-11-01 D &O Trades 5,89,425.00 5,59,075.006 140-11-04 Slaughter House Rent 4,050.00 4,050.007 130-10-01 Market 10,26,000.00 8,00,000.00

8 130-10-15Rent from Office Buildings&

Shopping Complex36,42,287.00 29,46,670.00

It is the fundamental responsibility of the section head to verify the collectionsshown in the annual account i.e. Receipts & Charges are tallied with figures shown insubsidiary registers. If the figures were not tallied with the Receipts & Charges thesubordinates should be asked to get the figures tallied with other. But, this was not done.This clearly shows that the section head is not paying required attention on exhibiting trueand fair accounts.

It is opined that while entering the data in Double Entry account most of the incomehas been taken as misc. income i.e. others (or) Un-classified items etc. The same shall betransferred to concerned heads for tallying the above discrepancies.

The following amounts are shown in annual account as Other Income/ Fees & Un-Classified Items.

Sl.No.

Head of Account

Name of the Account Head

Amount

1 140-40-11 Other Fees 11,530.002 180-60-06 Others 38,102.002 180-80-06 Other Income 2,77,220.00

Code – 1

31 ) VARIATION IN COLLECTION FIGURES OF WATER TAX – NEEDS RECTIFICATION.

A Comparison of the collection figures of Water Tax for this year from thestatements generated by ERP Module and DCB related records of the ULB revealedsubstantial variances as follows.

WATER TAX COLLECTIONS

I As per ULB records Amount

1 Collection of Water Tax as per Chitta 44,47,025.002 Collection of Water Tax through Cheques 1,350.003 Collection of Water Tax through E-Seva 17,63,900.00

Grand Total 62,12,275.00II As per E-Suvidha Records

Collection of Water Tax As per E-Suvidha Data not

(excluding the old chitta amount of Rs. -----------------)

available

III As per DCB furnished by the Municipal authorities -NIL-IV As per the R & C in Double Entry Account 58,85,931.00

Hence the authorities are here by instructed to update the Water Tax collections inthe Online system in order to avoid variation in collection figures of Water Tax from theStatements generated in ERP data base and DCB register of the ULB’s.

To reconcile both the systems of data i.e. manual system/ on line system ERP and take necessary steps and ensure that only single system of maintenance is primarily relied upon with other system only used to fulfil the bare and essential requirements.

Code – 9

32 ) WATER TAX – JOURNAL ENTRIES NOT PASSED BY THE ACCOUNTS SECTIONFOR CURRENT YEAR DEMAND – NEEDS ACTION.

It is normal practice for the ULB to include the arrears of the tax dues while issuing thefresh demand. Entries in respect of the arrears would have already been recorded in theearlier years. So, income should be recognized only in respect of the current yearWater tax demand.

As per manual records of the Samalkot Municipality the demand in respect of WaterTax for the year 2015-16 is as follows.

Sl.No

DetailsAmount

Rs.1 Year Demand Not available

As per Para No. 5.17 of AP Municipal Accounts Manual the account section may passthe journal entries for Water tax receivables after receipt of the demand particulars from therevenue section before accounting for the collection.

But, the journal entry for the current year demand is not passed by the accountsection.

Hence, action may be taken to pass necessary demand journal entry as per Para No.5.17 of AP Municipal Accounts Manual for raising the current demand of Water Tax.

Code – 9 33 ) Collection of Water Tax through E-Seva Kendras – Remittance of Water Tax tothe Municipality through the AD, E-Seva, Kakinada after deducting the TransactionCharges/Service Tax there on – Net amount was taken as receipt under the head ofWater Tax by the Municipal Authorities – Irregular.

Audit reveals that the collection of Water tax by E-Seva Kendras in the Municipal areais returned back to the Municipality from the AD, E-Seva, Kakinada by half yearly throughDD’s.While sending the Water Tax collections the AD, E-Seva, Kakinada have made thefollowing deductions.

1. Transaction Charges: Rs. 5/- per transaction at their end.2. Service Tax on Transaction Charges: 12.36% /14 % / 14.5 % to Govt.,

After deducting the above amounts, the AD, E-Seva, Kakinada has sent the DD for“Net Amount” to the concerned municipality. The same was also adjusted to treasury passbook in “002” A/c towards Water tax collection made by E-Seva’s on behalf of MC. TheMunicipal authorities while entering the same in their cash book the “Net Amount” sent by theAD, E-Seva, is taken. This is not correct.

For example, the total Water tax collected by the E-Seva on behalf of MC Samalkot isRs. 14,23,650.00 and the Water tax received by the Municipality after deductions during theyear is Rs. 14,12346.00 shown below for ready reference.

Sl.No

Period

WTcollected

by E-Seva

DeductionsTotal

deductions

Net amountreceived by

MC

Transaction Charges

ST @ 14.5 %

1 1/3/15 to 31/03/15 2,86,800 1680 208 1888 284912.002 1/4/15 to 30/04/15 1,39,650 700 87 787 1,38,863.003 1/5/15 to 31/05/15 22,950 150 19 169 22.781.004 1/6/15 to 30/06/15 30,150 220 31 251 29,899.005 1/7/15 to 31/7/15 1,87,275 1580 221 1801 1,85,474.006 1/8/15 to 31/8/15 1,21,500 980 137 1117 1,20,383.007 1/9/15 to 30/09/15 49,950 465 65 530 49,420.008 1/10/15 to31/10/15 40,050 285 40 325 39,725.00

91/11/15 to 15/11/15

25,800 105 15 120 25,680.00

1015/11/15 to 30/11/15

83,325 615 89 704 82,621.00

111/12/15 to 31/12/15

4,36,200 3155 457 3612 4,32,588.00

TOTAL 14,23,650 11,30414,12,346.0

0

The following DD’s is adjusted during the year 2016-2017.1 1/1/16 to 31/01/16 1,86,075 1225 178 1403 1,84,672.002 1/2/16 to 29/02/16 1,82,425 900 131 1031 1,81,394.003 1/3/16 to 31/03/16 2,58,550 1240 180 1420 2,57,130.00

TOTAL 6,27,050 3854 6,23,196.00

Hence, it is suggested that while making the entry towards collection of Water Taxfrom E-Seva in cash books, the entire collection made by the E-Seva shall be shown as totalreceipt towards WT and the deductions done by the AD, E-seva may be shown asexpenditure i.e., Collection charges etc., through BOOK ADJUSTMENT.

Unless the following this procedure the total amount collected towards Water taxby E-Seva and how much amount deducted by the E-Seva authorities towards collectioncharges & Service Tax there on are not reflected in the Municipal Account.

Code – 9

34 ) ASSIGNED REVENUES – ENTERTAINMENT TAX NOT ADJUSTED DURING THEYEAR for the years 2013-14 TO 2015-2016 – ADDRESS THE COMMERCIAL TAXAUTHORITIES FOR DETAILS OF further ADJUSTMENTS

The Proceeds of the Entertainment Tax collected in respect of Entertainments heldwithin the limits of any local authority are to be apportioned as follows.

3% to be credited to the State Government. 7% to be expended for the purpose of promoting Cinematographic Film and

Arts 90% to be paid to the local authority.

It was however observed from the records of the ULB that the following amountswere adjusted towards ET collected by the Commercial Tax department to the ULB inthe previous year i.e., 2014-2015. The details are as follows.Sl. No. Details of Adj. of Entertainment Tax Amount adjusted

1 2011-2012 4th Quarter 2,35,978.002 2012-2013 2nd Quarter 2,56,564.003 2012-2013 3rd Quarter 2,23,236.004 2012-2013 4th Quarter 3,49,994.00

GRAND TOTAL 10,65,772.00

During the year even single rupee amount is not adjusted to Mpl. Funds towardsEntertainment Tax. The instalments due for the years 2013-14, 2014-2015 & 2015-16 arenot yet adjusted to Municipal Funds.

Scrutiny of records revealed that the ULB had never made any effort to collect thedetails of monthly collections database of Theatres/ Cable operators in the ULB jurisdictioni.e., DCB statements etc. from the CTO’s concerned.

Further, although the rules stipulated that every proprietor of Cinema Theatremanager (or) Person-in-charge of any entertainment is required to submit the periodicalreturns to the Municipal Commissioner. The ULB had not obtained the relevant informationfrom them to keep a watch on the revenue receipts.

In the light of no. of revenues accrued, the management of revenue by the authoritiesof ULB assumes significance. The adequacy of internal controls insures transparency incollection of revenues and their accountal.

The authorities are here by instructed to pursue the matter with the Commercial TaxOfficers and take necessary further action for adjustment of ET for the years 2013-14,2014-2015 & 2015-16.

Code – 7 35 ) CELL TOWERS INSTALLATION FEES & RENEWAL FEES PENDINGCOLLECTION – NEEDES RECOVERY Rs. 5,00,000.00

As per the instructions of the G.O. Ms. No. 183 MA dated 27.02.2008, the SamalkotMunicipality has resolved vide CR. No. 1158 dt. 03.12.2012 that the cell tower companiesshould pay the installation fee @ Rs. 25,000/- per each cell tower existing in the area ofSamalkot Municipality and also pay renewal fee @ Rs. 5,000/- per year regularly.

Audit reveals that at the time of passing the CR by the Municipality there are 12cell towers existing in Samalkot Municipal Area. The necessary notices were also issued tothe cell tower companies. But, the collections are very poor in this regard. Necessary stepsto recover the balances immediately from the companies and made good to Mpl. Funds.

Sl.No.

YearNo. ofCell

Towers

InstallationFee @ Rs.

25,000/- each

Renewal Fee@ Rs. 5000/-

per year

Receipt tillthe date

BalanceDue

12012-

1312 3,00,000.00 60,000.00 40,000.00

3,20,000.00

22013-

1412 0.00 60,000.00 0.00 60,000.00

32014-

1512 0.00 60,000.00 0.00 60,000.00

42015-

1612+1 50,000.00 60,000.00 50,000.00 60,000.00

Total 3,50,000.00 2,40,000.00 90,000.005,00,000.0

0

Code.No.11

36) CPF Payments – Refund of EMD’s & FSD’s from ULB –Original Credit particulars& previous deposit registers not produced to audit – Irregular.Rs. 67,703.00.

As per Para No. 5.74 of AP Municipal Accounts Manual, Deposits not claimedwithin 3 years from the date it is due for payment, shall be considered as lapsed and shallnot be repaid to the party. At the end of each accounting year, the respective sections shallprepare a list of such lapsed deposits. To recognize the income, on obtaining the approval ofthe authorities, the accounts section shall pass the necessary journal entries. But, thisprocess was not done in the year 2015-2016. Audit reveals that the payment towardsrefunds of EMD’s FSD’s during the year are as follows.Sl.No.

DetailsVr. No. &

DateDetails Rs.

1EMD’S

REFUND26/1.2.16

Pavani EngineeringCompany

2,000.00

27/1.2.16Pavani Engineering

Company2,754.00

2FSD’s

REFUND25/1.2.16

Pavani EngineeringCompany

4,205.00

31/10.11.15 T. Venkata Chalam 9,855.00

32/10.11.15 T. Venkata Chalam 11,296.00

43/21.01.16 Veera Venkata Ramu 7,566.00




GRAND TOTAL 67,703.00

As seen from the Receipt & Expenditure statement, the refund of EMD’s &FSD’s under the head of “340-10-01” “340-10-02” respectively in CPF are Rs. 4,754.00 &62,949.00.

The Original credit particulars of the EMD’s & FSD’s are not shown to Audit.The previous demand registers are also not produced to audit. Hence, the correctness of thepayment is not certified in audit.

Hence, the authorities are hereby suggested to follow the instructions at paraNo. 5.74 of AP Municipal Accounts Manual to lapse the deposits from time to time tomunicipal funds.

Code.No.9 37 )CPF Receipt - Recovery & Payment of Labor Cess is shown under the head ofOther recoveries from Contractor (350-20-58) – Irregular – Needs rectification

As seen from the Receipt & Payments statement, the receipt & expenditure under thehead of “350-20-58” i.e., other recoveries from contractors is shown as Rs. 56,046.00 &Rs. 42,283.00.

But, Audit noted that the LC recovery made from the contractors and payment towards“Labor Cess” during the year was entered in this head as “Other recoveries fromcontractors” by mistake.


Name of the Receipt & Payment

Transfer from Transfer to Amount

Other recoveries from contractors

350-20-58 350-20-15

56,046.00(credit)

42,283.00(Debit)

Code.No 9

38 ) Library Cess not separated from Property Tax – Entire amount adjusted toMunicipal Funds towards Property Tax –Library Cess not remitted to ZGS, EG Dist.,Kakinada -

Audit reveals that the municipal authorities are remitted library cess every day from

the collections of property tax. But, it is found that during the following days the library cess

is not separated from property tax entire amount is remitted to Mpl. Funds. Library cess is

not arrived on the following days also not remitted to ZGS, EG Dist., Kakinada.

Sl. No. Details Amount

collected

towards PT

LC to be

Remitted to

ZGS, KKD1 Cheque received from TTD Kalyana

Mandapam

5,343.00 427.00

2 Chitta Collection on 27-10-2015 3,198.00 256.003 Chitta Collection on 12-11-2015 20,835.00 1,667.004 Chitta Collection on 30-12-2015 1,92,022.00 15,362.005 Chitta Collection on 18-01-2016 7,633.00 611.006 Chitta Collection on 19-01-2016 24,045.00 1,924.007 Chitta Collection on 20-01-2016 16,166.00 1,293.008 Chitta Collection on 11-02-2016 26,637.00 2,131.009 Chitta Collection on 17-02-2016 1,62,598.00 13,008.00

10 Chitta Collection on 29-02-2016 1,82,791.00 14,623.00Total 6,41,268.00 51,301.00

Hence, the authorities are hereby instructed to remit the same to ZGS, EG Dist., Kakinada duly deducting the 15 % collection charges and challan may also be produced to audit for verification.

Code.No 9

39) Hiring of vehicles- - Not effected deduction of Income Tax as required from billclaimed by suppliers. Rs. 3,360.00

State Govt. imposed (Jan, 1994) ban on purchase of vehicles by Govt.Departments and Govt. affiliated organization and allowed hiring of vehicles in cases ofextreme necessity subject to certain conditions.

The CDMA, AP, Hyderabad has accorded permission to the SamalkotMunicipality for hiring of one four wheeler vehicle for the official usage of Commissioner,Samalkot vide Prog. Roc. No. 7201/2011-OP2 dt. 18.05.2011.

After receipt of the above orders the Samalkot Municipality has engaged onefour wheeler vehicle every year duly calling quotations from the local travels.

During the year 2015-2016 the council has accorded permission vide CR No.60 dt. 30.09.2014 for engaging the vehicle @ Rs. 24000/- pm w.e.f. 10.07.2014 to31.03.2015. The Supplier is Sri S. Siva owner of Vamsi Travels, Samalkot. The travels hasalso supplied the vehicle to the MC and received the payment of Rs. 24000/- PM w.e.f.10.07.2014 to 31.03.2015 during the year 2015-16.

Audit scrutinized the vouchers relating to payment of monthly hire charges forvehicle. Audit was carried out with the objective of checking compliance with G.O.’s andprovisions of IT Act in connection with deduction of IT at source.

As per section 194C of IT Act, the DDO were required to deduct income tax atsource at two percent of the payments (as per section 206AA 20 percent in case PANnumber was not mentioned in the bill) made to credited to the account of the owners of thevehicles.

But, as seen from vouchers the Drawing Officer had not effected any deductionof IT as required.

Sl.No

Date ofPayment

Details PaymentIT @ 2 %

to bededucted

Deducted Short

1 28/04-15

Car Hire Charges for the period from 1.3.15 to 31.3.15

24,000 480

0

480

2 89/05-15

Car Hire Charges for the period from 1.4.15 to 30.4.15

24,000 480

0

480

3 156/06-15

Car Hire Charges for the month of5/15

23760.00 480

240 240

4 202/8-15


23760.00 480

240 240

5 296/9-15

Car Hire Charges for the months of 7/15 &8/15

47520.00 960

480 480

6 337/10-15


23760.00 480

240 240

7390/11-15


23760.00 480

240 240

8 518/12-15


23760.00 480

240 240

9 533/1-16


23760.00 480

240 240

10571/2-16


23760.00 480

240 240

11 619/3-16


23760.00 480

240 240

Grand Total 48000.00 5760.00 2400 3360

Hence, it is instructed to recover the amount of Rs. 3,712.00 from the vehicle suppliertowards IT and remit the same to the IT Department duly intimating the same to audit forinformation.

Code.No 9

40 ) Hiring of vehicle for the official usage of Commissioner – Sanction fromFinance Dept., necessary.

State Govt. imposed (Jan, 1994) ban on purchase of vehicles by Govt.

Departments and Govt. affiliated organization and allowed hiring of vehicles in cases of

extreme necessity subject to certain conditions. Specific sanction of Finance (DCM-II)

Department has to be obtained through the concerned administrative departments of

Secretariat with proper justification for permitting the hiring of vehicle.

As seen from the Municipal records, the Samalkot Municipality has engaged a

taxi for the official usage of Commissioner in terms of the orders of the CDMA, AP,

Hyderabad. The CDMA, AP, Hyderabad has accorded permission to the Samalkot

Municipality for hiring of one four wheeler vehicle for the official usage of Commissioner,

Samalkot vide Prog. Roc. No. 7201/2011-OP2 dt. 18.05.2011.

The CDMA, AP, Hyderabad is also not obtained any prior concurrence from

Fin. Dept., for issuing the above Memo. Hence, it is hereby suggested to obtain the Finance

Dept., permission specifically for the usage of hiring vehicle.

41)PH SECTION- VEHICLE OIL CHARGES – CONNECTED LOG BOOKS NOT PRODUCED – NEEDS EARLY ACTION FOR PRODUCTION OF LOG BOOKS. Rs.109626.00

Audit reveals that the following payments were made towards vehicle Oil Bills. But,following Oil utilization details not recorded in the concerned Log Books. But reasons for not-recording of details in log books were not explained in audit.

Hence, the correctness of payment could not be verified in audit. The Executive

authority may take steps to enter the details in concerned log books and produce for

verification in audit. The loss if any sustained in this regard would need to be worked out and

recovered from the person or persons responsible and made good to municipal funds.

Sl.

No

Vr No & date

Particulars

Date

Vehivle No &

Type AUTO

Quantity of Diesel

(in Ltrs)

Amount

1 74/04-15 Amount paid toRenuka Enterprises, PDP

5.4.15 AP05 TA7858AP05 TA7859

18

18

2028.00

12.04.15

AP05 TA7858AP05 TA7859

18

18

2028.00

2 75/04-15 -Do – 16.03.15

AP05 TA7858AP05 TA7859

18

18

2093.00

-Do – 23.03.15

AP05 TA7858AP05 TA7859

18

18

2093.00

-Do – 23.03.15

AP05 TA7858AP05 TA7859

18

18

2093.00

-Do – 28.03.15

AP05 TA7858 Engine Oil1 Lt

260.00

3 76/04-15 -Do – 01.03.15

AP05 TA7856 18 1047.00

-Do – 05.03. AP05 TA7859 18 1047.00

15

-Do – 09.03.15

AP05 TA7858AP05 TA7859

18

18

2093.00

4 77/04-15 -Do – 22.02.15

AP05 TA7858AP05 TA7859

18

18

1948.00

-Do – 07.02.15

AP05 TA7858AP05 TA7859

18

18

1948.00

-Do – 24.02.15

AP05 TA7858AP05 TA7859

18

18

1972.00

22.02.15

FoggingMachine

14 813.00

07.02.15

FoggingMachine

18 2041.00

24.02.15

No Details 50 2705.00


750.00

5 78/04-15 -Do – 04.15 AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

3140.00

6 94/05-15 -Do – 19.04.15

AP05 TA7858AP05 TA7859

18

18

1977.00

7 147/06-15

-Do – 15.05.15

AP05 TA7858AP05 TA7859

18

18

2069.00

-Do – 14.05.15


460.00

8 157/06-05

-Do – 24.05.15

AP05 TA7858AP05 TA7859

18

18

2175.00

9 158/06-05

-Do – 01.06.15

AP05 TA7858AP05 TA7859

18

18

2175.00

-Do – 07.06.15

AP05 TA7858AP05 TA7859

18

18

2175.00

-Do – 15.06. AP05 TA7858 18 2175.00

15 AP05 TA7859 18

10 230/08-15

-Do – 06.07.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

3141.00

11 231/08-15

-Do – 22.06.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

3183.00

12 231/08-15

-Do – 30.06.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

3184.00

13 251/08-15

-Do – 29.07.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

3009.00

14 252/08-15

-Do – 04.08.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2803.00

15 305/09-15

-Do – 10.08.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2803.00

-Do – 16.08.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2737.00

16 346/10-15

-Do – 22.09.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2709.00

-Do – 28.09.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2709.00

-Do – 22.09.15

JCB 100 5017.00

17 347/10-15

-Do – 07.09.15

AP05 TA7857AP05 TA7858

18 2709.00

AP05 TA7859 18

18

-Do – 14.09.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2709.00

-Do – 13.09.15

JCB 60 3010.00

18 348/10-15

-Do – 21.08.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2737.00

-Do – 31.08.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2737.00

394/11-15

05.10.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2737.00

06.10.15

AP05 TA7857 15 760.00

19 395/11-15

21.10.15

Vehicle No. not mentioned

15 775.00

20 396/11-15

12.10.15

AP05 TA7857AP05 TA7858AP05 TA7859

18

18

18

2737.00

14.10.15

AP05BJ 5696 50 2534.00

21 471/11-15

02.11.15

AP05 BL6794 Engine Oil3 Lt

750.00

22 472/11-15

09.11.15

JCB HSD 80 4145.00

23 511/12-15

20.11.15

JCB HSD 20 1055.00

24 512/12-15

16.11.15

JCB HSD 20 2636.00

25 513/12- 30.11. Water tanker HSD 30 1582.00

15 15

26 527/01-16

08.12.15

CAR (Meetingat Vijayawada)

HSD 30 1575.00

27 551/01-16

21.12.15

CAR (Meetingat Vijayawada)

HSD 30 1560.00

29 594/02-16

05.02.16

For SWMWORK SHOP

25 1249.00

30 634/03-16

05.03.16

Water tanker 20 1035.00

08.03.16

Water tankerfor MahaShivaratri

30 1553.00

TOTAL 109626.00

42) ENGG. SECTION- GENERATOR OIL CHARGES – CONNECTED LOG BOOKS NOT PRODUCED – NEEDS EARLY ACTION FOR PRODUCTION OF LOG BOOKS. Rs.105120.00

Audit reveals that the following payments were made towards Generator Oil Bills.

But, following Oil utilizations are not noted in Log Books and not produced to audit for

verification.

Hence, the correctness of payment and utilization could not be verified in audit. The

Executive authority take steps to maintain necessary log books for oil utilization and the

same shall produce for verification in audit. The loss if any sustained in this regard would

need to be worked out and recovered from the person or persons responsible and made

good to municipal funds

Sl.

No

Vr No & date

Particulars

Date

Type of Utilisation

Quantity of Oil (in Ltrs)

Amount

231/08-15 Amount paid to Renuka Enterprises, PDP

23.06.15

160KVA Generator

300 Lts HSD

22485.00

1 232/08-15 Amount paid to Renuka Enterprises, PDP

23.06.15

160KVA Generator

300 Lts HSD

17685.00

Engine Oil 20Lt

4800.00

-Do – 09.07.15

-Do – 200 Lts HSD

11634.00

-Do – 20.07.15

-Do – 200 Lts HSD

11144.00

-Do – 20.07.15

-Do – Engine Oil 40Lt

2229.00

349/10-15 -Do – 01.09.15

-Do – 200 Lts HSD

10034.00

-Do – 01.10.15

-Do – 200 Lts HSD

10034.00

628/03-16 -Do – 20.02.16

-Do – 200 Lts HSD

10050.00

-Do – 24.02.16

-Do – 100 Lts HSD

5025.00

Total 105120.00

43) PH SECTION – PURCHASE OF NEW SPARES TO VEHICLES – OLD SPARES NOT AUCTIONED- NEEDS EARLY ACTION FOR AUCTION.

Audit reveals that the PH Section spends on vehicles spares vide the following

vouchers and replace the Spares to the Vehicles mentioned below. But, the old spares and

scrap was not auctioned. It causes leakage of revenue to the municipal council. Action

would need to be taken to auction the old Batteries and Scrap etc., The loss if any sustained

in this regard would need to be worked out and recovered from the person or persons

responsible and made good to municipal funds.

S.No. Vr. No./ dt

Details New Spares Installed

1 140/06-15

Naveen Kumar Engineering Works, Samalkot

Battery, Truck Doors & Others

2 375/10-15

Paid to AP Agro’s Development Corporation, Kakinada

5no’s of Tractor &Auto tyres

3 56/04-15 M/s Koduri Piaggio Showroom, Kkd

Old spares

44) PH SECTION – PURCHSE OF CONSERVANCY ARTICLES – TENDERS NOT CALLED FOR AND OTHER DEFECTS

Audit reveals that the PH Section of Samalkot Municipality procured the

conservancy articles from the Visakhapatnam Co-Op Society, VSP during the Financial year

2015-2016. The following defects noticed in audit.

1. No tenders and quotations are called for. 2. Name of the company and grade not mentioned in the bill for Bleaching and Phenoil.3. Sizes and Quality not mentioned in the bill for Drains and Roads cleaning materials.4. Rates not compared with the local traders5. The nearest suppliers ignored. Hence the leakage of revenue in the shape of transport

and other charges arises.

Hence, the authorities here by suggested obtaining local rates and comparing the

same with the rates of Visakhapatnam Co-op Society, VSP and take necessary steps to

utilize the municipal funds in a better way.

45) PH SECTION – AMOUNT PAID TOWARDS REPAIRING OF TRACTOR – CONNECTED FILE NOT PRODUCED. RS. 87,700.00

Audit reveals that an amount of Rs. 87,700.00 was paid M/s Naveen Kumar

Automobiles, Samalkot towards repairing of tractor No.AP 05 BL 6976 vide CR

No.87/30.09.14. But, the connected file not produced to audit for verification. Action would

need to be taken to produce the connected file. The loss if any sustained in this regard would


good to municipal funds.

46) PUBLIC HEALTH – REPAIRS TO COMMUNITY TOILETS – CONNECTED FILE NOT PRODUCED. Rs, 61695.00

Audit reveals that an amount of Rs. 61,695.00 was paid towards Community Toilets

cleaning charges in the following vouchers. But, the connected file regarding the tenders &

agreements etc., not produced to audit for verification. Action would need to be producing the

connected records to audit for verification. The loss if any sustained in this regard would


good to municipal funds.

Vr.No. & Dt.

Details Amount

370/10-15 Amount paid to Lakshmi Ganapathi Septic cleaners,Samalkot towards cleaning charges of 13community toilets

16000.00

504/12-15 Amount paid to Devi Septic cleaners,Samalkot towards cleaning charges of 4th ward community toilets

1800.00


1800.00


1800.00


1800.00

592/02-16 Amount paid to Sri Bonasu Narayana Murty, Samalkot towards cleaning charges of 3th ward community toilets

18963.00

593/02-16 Amount paid to Sri Bonasu Narayana Murty, Samalkot towards cleaning charges of 3th ward community toilets

19532.00

TOTAL 61695.00

47) PUBLIC HEALTH – TENDER FILES AND STOCK REGISTER OF CONSERVANCYARTICLES NOT PRODUCED – NEEDS EARLY ACTION FOR PRODUCTION OFCONNECTED RECORDS Rs.4,83,205.00

Audit reveals that the Samalkot Municipality was incurred an amount of

Rs.4,83,205.00 towards purchase of the conservancy articles to PH Section in the following

vouchers. But, the tender Files and Stock Register for the year 2015-2016 are not produced

to audit for verification. In absence of the same, the correctness of the Stock receipts, issues

and balances at the end of the year and misuses if any could not be verified in audit. The

loss if any sustained in this regard would need to be recovered from the person or persons

responsible and made good to municipal funds.

Vr.No. & Dt. Details of the trader Details of items Amount

52/04-15 Amount paid to Sri Veera Venkata Durga Welding works, Samalkot

Conservancy articles 5130.00

350/10-15 Amount paid to the VisakhapatnamDist Co-Op Marketing Society, VSP



60 no.s of dust bins 57600.00

476/12-15 Amount paid to Sri M. Ramachandra Rao, Contractor, Rjy

Stone Lime 19.99 tons 49975.00

477/12-15 Amount paid to Sri M. Ramachandra Rao, Contractor, Rjy

Bleaching Powder 60

bags

37500.00




Supply of Coconut Oil 34500.00


Supply of Coconut Oil and Bar Soaps

51500.00


Supply of Coconut Oil and Bar Soaps

51500.00




Stone Lime 20.00 tons Bleaching Powder 25 bags

68750.00

Total 4,83,205.00

48) D & O TRADES – PREVIOUS YEAR DEMAND NOT TAKEN INTO CURRENT YEAR DEMAND – IRREGULAR. Rs. 11,600.00

Audit reveals that the D& O Trades Demand Register of the Samalkot Municipality

for the year 2015-2016 it was noticed that the following D& O Trades demand amounting of

Rs.11,600.00 are not brought forwarded to the current year. No reasons were recorded in

the Demand Register for not taking them in the present demand and also additions and

deletions list was not produced to the audit for verification

Hence, the authorities hereby instructed to inform the reasons for omitting them

from demand.

In this connection the loss if any found in this regard would need to be recovered from

person & persons responsible and made good to municipal funds. The list is as follows.

S.

NoName of the Trader/Shop Type of Trade

Area of the Shop

Amountof Tax

1 SunShine Offset Printing Printing press Vigneswara Theater Road

450.00

2. Elisatty Jagadeeswara Rao Tea Stall Station Center 300.00

3 Asa Jyothi Sweet Stall Tea Stall Station Center 1550.00

4 Gowri Shankar Hot Chips Hot Chips Mehar Complex 750.00

5 Shirdi Sai Sundar Milk Depo Milk Matham Center 450.00

6 Kondapilli Konda Raju Bajji &Mixture Sales No.1 Market 150.00

7 Siva Krishna Kirana Kirana Devi Chowk 750.00

8 G M Super Bazar Kirana Kothuru 750.00

9 Bheemeswara Cooldrinks Cooldrinks Kothuru 450.00

10 Sri Varalakshmi Kangan Hall

Fancy Mehar Complex 450.00

11 Sivasai Pan Shop Pan Shop Matham Center 300.00

12 D. Veera Bhadrarao Sangeetarao Peta

450.00

13 Maha Lakshmi Cut pieces Cloth Shop Golivari Street 750.00

14 Saibaba Enterprises Electrical & Furniture

Mehar Complex 750.00

15 Venkateswara Iron Shop Iron Storewell shop Golivari Street 750.00

16 Naveen Kumar Engineering works

Welding works Station Center 450.00

17 Sri Ramakrishna Electricals Electricals Radham Center 750.00

18 Sri Chintala Prasad Cheppals Matham Center 450.00

19 Revati Shoemart Shoemart Mehar Complex 450.00

20 Rajendra Chiken Center Chiken Center No.1 Market 450.00

Total 11600.000

49) PROVIDENT FUND – DEFECTS IN MAINTENANCE OF PROVIDENT FUND ACCOUNTS

Audit focused on the maintenance of Provident Fund Accounts of Staff and

PH workers of the Samalkot Municipality for the year 2015-2016 and noted the following

defects.

1. In the abstract register each employee wise and month wise totaling and balances not

promptly arrived. The Monthly receipt & expenditure figures in the cash book are not tailed

with the figures in the abstract register.

2. Further, while sanctioning of advances from PF the applicants are not followed the PF

Rules.

i) Manual Application only submitted by the Individual.

ii) Prescribed Proforma of application not submitted.

iii) Education purpose: School certificate of the children not enclosed

iv) Marriage purpose: connected Wedding card not enclosed

v) House purpose: Copy of Approved Plan and House documents not enclosed.

vi) Medical purpose: Medical Certificate issued by the Competent Authority not

enclosed.

Action would need to follow the rules for sanctioning the advances from PF

balances. In this connection the loss if any sustained would need to be recovered from the

person or persons and remitted to the municipal funds.

50) PROVIDENT FUND – ADVANCES RECOVERABLE REGISTER NOT MAINTINEDAND PRODUCED

Audit reveals that the Advances Recoverable Register of Provident Fund Accounts

of Staff and PH workers of the Samalkot Municipality for the year 2015-2016 were not

produced to audit for verification. Hence the details of Opening balances, newly sanctioned

advances and its receipts in the financial year and details of balances and no. of installments

pending could not be verified. Action would need to be taken to produce the above register

to audit for verification of the correctness. In this connection the loss if any sustained would

need to be recovered from the person or persons and remitted to the municipal funds.

51) ADVERTISEMENT TAX – PREVIOUS YEAR DEMAND NOT TAKEN INTO CURRENT YEAR DEMAND – IRREGULAR Rs. 101750.00

Audit reveals that the following advertisement tax demand i.e., amounting toRs.101750.00 is not brought forwarded to the current year. No reasons were recorded in theDemand Register for not taking them in the present demand.

Hence, the authorities hereby instructed to inform the reasons for omittingthem from demand. In this connection the loss if any found in this regard would need to berecovered from person & persons responsible and made good to municipal funds. The list isas follows.

S.No.

Name of the Agency/

Item of the Add

Area of theAdvt

Amount ofTax

1 Brandoo Adds Kakinada road 640.00

2 Brandoo Adds --do-- 640.00




6 Sama Public School --do-- 2360.00

7 Chandana Brothers ADB Road 2360.00

8 Water Servicing Station --do-- 370.00

9 Prakash arts --do-- 910.00

10 Chinna Ads Railway StationCenter

2360.00

11 Chinna Ads Railway StationCenter

2360.00

12 Twiltist Beauty Clinic --do-- 640.00

13 Datta Sai Pan’s --do-- 1180.00

14 Medical Labs Golivari Street 1180.00

15 Santhi Jewellers Golivari Street 640.00

16 VKM Info Tech Matham Center 640.00

17 Malli Adds PDP Road 910.00

18 Pratibha Vidya Niketan Matham Center 1180.00

19 Twiltist Beauty Clinic PDP Road 640.00

20 Prakash Arts --do-- 640.00

21 Malli Adds NookalammaTemple Road

940.00

22 Madhu Adds --do-- 2350.00

23 Friendly Online services Mehar Complex 640.00

24 Friendly Online services Mehar Complex 1180.00

25 Chandana Brothers PDP Road 4050.00

26 Prakash Arts --do-- 9720.00

27 Sri Digitals 21480.00

TOTAL 101750.00

Code.No.9

52) ADVERTISEMENT TAX – CERTAIN TYPES OF ADVERTISEMENTS NOT BOOKED

BY THE TOWN PLANNING SECTION – IRREGULAR

In due course of audit it was observed that certain types of advertisements were

not booked by the Town Planning Section. As per Andhra Pradesh Municipal Manual the

Tax was not collected on the following Advertisements

1. Illuminated Advertisements (with lights)

2. Wall Paintings on walls

3. Advertisements on Private vehicles

4. Paper / Polytheine Posters

Code 9

53) ENCROACHMENT FEE - PREVIOUS YEAR DEMAND NOT TAKEN INTO CURRENT YEAR DEMAND – Irregular Rs.53,250.00

Audit reveals that the following Encroachments were not brought forwarded tothe current year. No reasons were recorded in the Demand Register regarding for not takingthem into demand.

Hence, the authorities are hereby instructed to write necessary reasons foromitting them from demand in demand register immediately.

In this connection the loss if any found in this regard would need to berecovered from the person or persons responsible and made good to municipal funds.

S.

No.Name of the Agency

Area of theEncroachment

Type of theEncroachment

Amountof Fee

1 G.Verraju Brownpeta Center Baddi 900.00

2 A. Ratnam -- do -- Baddi 600.00

3 S. Venkateswara Rao -- do -- Baddi 600.00

4 G. Prakasa Rao -- do -- Baddi 600.00

5 M. Maruti -- do -- Baddi 600.00

6 P.Raghava Rao -- do -- Baddi 600.00

7 G. Jagadeesh -- do -- Baddi 600.00

8 K.Mani Kumar -- do -- Baddi 750.00

9 S. Appa Rao -- do -- Baddi 600.00

10 Deepak Kumar MRO Office Center Baddi 600.00

11 KV Bhadra rao -- do -- -- do -- 600.00

12 K. Nagesh -- do -- -- do -- 600.00

13 V.Rangachari -- do -- -- do -- 600.00

14 R.Siva Babu Balla Market center -- do -- 750.00

15 P.S. Prakasa Rao -- do -- -- do -- 750.00

16 N. Rambabu -- do -- -- do -- 750.00

17 K. Govindu -- do -- -- do -- 750.00

18 M Annapurneswari -- do -- Shed 750.00

19 P. Vara Lakshmi Rajiv Gruha Kalpa area Shop 750.00

20 N. Dhana Lakshmi -- do -- Baddi 750.00

21 N.Suribabu Gollagudem Road -- do -- 750.00

22 V.Ch.Venkata Rao -- do -- -- do -- 750.00

23 G.Raju -- do -- -- do -- 750.00

24 P.Naga RajuNookalamma Temple area

-- do --750.00

25 P.Veera Babu -- do -- -- do -- 750.00

26 Rama Krishna -- do -- -- do -- 750.00

27 G. Challa Rao -- do -- -- do -- 750.00

28 K. Varahalu -- do -- -- do -- 750.00

29 M.Sattibabu -- do -- -- do -- 750.00

30 M. Apparao -- do -- -- do -- 750.00

31 B. Satyanarayana -- do -- -- do -- 750.00

32 B. Srinu -- do -- -- do -- 750.00

33 MohanaKumari Travels -- do -- -- do -- 750.00

34 S. Durga -- do -- -- do -- 750.00

35 K.P. Durga Rao -- do -- -- do -- 750.00

36 Y. Gandhi -- do -- -- do -- 750.00

37 B. Someswarao -- do -- -- do -- 750.00

38 P. T. Kristopher ADB Road -- do -- 750.00

39 P. Prudhvi Raju -- do -- -- do -- 750.00

40 M. Veerraju -- do -- -- do -- 750.00

41 P.Ramu -- do -- -- do -- 750.00

42 K. Govind -- do -- -- do -- 750.00

43 P. Lakshmi Water Tank road -- do -- 750.00

44 K. Satyavathi -- do -- -- do -- 750.00

45 V. Sarveswara Rao -- do -- -- do -- 750.00

46 R. Appa Rao Matham Center -- do -- 750.00

47 K. Seshagiri Rao -- do -- -- do -- 750.00

48 K.Apparao -- do -- -- do -- 750.00

49 P. Polarao -- do -- -- do -- 750.00

50 K. Rama Krishna -- do -- -- do -- 750.00

51 K.Srinivas -- do -- -- do -- 750.00

52 A.Surya Kumari -- do -- -- do -- 750.00

53 M.M. Reddy Mehar Complex Area Baddi 750.00

54 N. Ramana -- do -- -- do -- 750.00

55 P.K. Chowhan -- do -- -- do -- 750.00

56 A.Naga Ratnam -- do -- -- do -- 750.00

57 B.V. Rao Sri SatyaKrishna Baddi 750.00

Theater Area

58 N. Rambabu -- do -- -- do -- 750.00

59 M. Narayana -- do -- -- do -- 750.00

60 P. SrinuSeetamma Cheruvu

Gattu Baddi 750.00

61 K. Venkata rao -- do -- Baddi 750.00

62 A. Satti Raju No.1 Market Center -- do -- 750.00

63 V. Satyanarayana --do-- -- do -- 750.00

64 P. Verraju --do-- -- do -- 750.00

65 D. Eswara Rao --do-- -- do -- 750.00

66 D. Hareswara Rao --do-- -- do -- 750.00

67 M.Babji Pension Line -- do -- 750.00

68 P.Satyanarayana -- do -- -- do -- 750.00

69 D. Ravi Kumar -- do -- -- do -- 750.00

70 K. Murali Krishna -- do -- -- do -- 750.00

71 K. Murali Krishna -- do -- -- do -- 750.00

72 T. Krishna Rao -- do -- -- do -- 750.00

73 B.Satti babuChadra Sekhar Temple

area-- do --

750.00

Total 53250.00

Code.No.11 54 )Works – M. Books, Estimates & connected files not produced – Irregular Rs. 72,49,240

During the year the Municipality has taken up several development works i.e.,construction of Roads, Drains & Culverts. & erecting new pipe lines for water supply underdifferent schemes.

But, the following vouchers are submitted to audit with the M. Books, Estimates &connected files. The audit is not certified the correctness of the payment made towards thefollowing works due to non-production of important records. The details are as follows.

Vr. No. & Date Details of Works Amount paidSCSP FUNDS489/12.2015 Constrn. Of 230 mm CCTD Drain at 11th ward 1,71,000.00

13th Fin. Funds1 /04.2015 Constrn. Of CC Drain at Jaggammagari peta 2,47,000.002 / 04.2015 Constrn. Of CC Drain at Veerraghavapuram 4,20,000.008/ 08.2015 Constrn. Of CC Drain at Veerraghavapuram 3,82,000.0013/ 08.2015 Constrn. Of CC Drain at Jaggammagari peta 3,42,000.00

14/ 11.2015 Constrn. Of CC Drain at Jaggammagari peta 1,31,000.0033/ 08.2015 Constrn. Of CC Drain at Jaggammagari peta 3,43,000.00001 Funds72/04.2015 Supply & Delivery of STL Material 87,775.00153/06.2015 Drilling of deep borewell at Kothamma Chervu 7,45,000.00192/07.2015 Supply, Delivery, Transportation, Errection &

Train Run of 160 KV Diesel Generator at Headwater works

10,44,953.00

302/09.2015 Costrn. Of RCC Slab Culvert under SFC 14-15 89,283.00306/09.2015 Drilling of deep borewell at Kothamma Chervu 82,463.00469/11.2015 Supply & Delivery of Furniture & other Maint.

Works to SMLKT MC68,758.00

491/12.2015 Constrn. Of RCC Slab Culvert under SFC - 2014 38,500.00492/12.2015 Constrn. Of RCC Slab Culvert under SFC - 2014 42,000.00

493/12.2015 Constrn. Of RCC Slab Culvert under SFC - 2014 25,000.00

483/12.2015 Supply & Delivery of Material to Deep PowerBore Well

82,044.00

515/12.2015 Providing CC Road at Nimma Thota Park LayOut in 25th Ward

66,000.00

540/01.2016 Engaging JCB on hourly basis 30,995.00543/01.2016 Supply, Delivery, Transportation, Errection &

Train Run of 30 KV Diesel Generator atMunicipal Office

3,51,000.00

614/3.2016 Providing CC Road in 22nd Ward 2,53,000.00SFC – 13-1465/04.2015 Providing 110 mm Dia PVC Distribution Pipe

Line in 28th Ward43,000.00

68/04.2015 Providing 110 mm Dia PVC Distribution PipeLine in 25th Ward

39,000.000


72,000.00


41,000.00

284/08.2015 Constrn. Of CC Drain in 25th Ward 1,07,730.00298/09.2015 Constrn. Of RCC Slab Culvert at 7th Ward 48,000.00300/09.2015 Constrn. Of RCC Slab Culvert at 16th Ward 40,000.00352/10.2015 Constrn. Of 300 mm CCTD Drain at New

Harijana Peta at 4th ward68,000.00

384/10.2015 Providing Oil Engines for removing stagnatedrain water

53,800.00

475/11.2015 Constrn. Of 230 mm CCTD Drain at Bulusupetaslum at 4th ward

78,000.00

554/11.2015 Constrn. Of CC Drain at Narayyapeta Culvert in24th Ward

90,500.00

608/03.2016 Constrn. Of RCC Slab Culvert opposite BTRoad

44,000.00

613/03.2016 Constrn. Of 300 mm CCTD Drain at at 16th ward 1,27,000.00632/03.2016 Constrn. Of 300 mm CCTD Drain at at 16th ward 31,000.00

Maint. Of Roads& Drains (08-09)

5/07.2015 Constrn. Of 300 mm CCTD Drain in Gandhi 7,565.00

Nagar in 30th Ward06/07.2015 Constrn. Of 300 mm CCTD Drain in Gandhi

Nagar in 30th Ward10,248.00

07/.07.2015 Constrn. Of 300 mm CCTD Drain in GandhiNagar in 30th Ward

10,542.00

10/8.2015 Providing CC Road in 5th Ward 43,000.0016/09.2015 Providing CC Road in 28th Ward 3,02,000.0017/09.2015 Providing CC Road in 28th Ward 3,02,000.0018/09.2015 Providing CC Road in 28th Ward 1,50,484.0028/11.2015 Restoration work to existing distribution pipe line 2,20,000.0029/11.2015 Construction of RCC Slab Culvert at 10th Ward 33,000.0033/12.2015 Construction of retaining wall at 5th ward 2,45,000.00

Code.No.4

55 )NON-UTILISATION OF THE AMOUNT COLLECTED TOWARDS RAIN WATERHARVESTING PITS (RWHP

Rain Water Harvesting was made mandatory from June 2000 for all building with plotsize if 300 Sq. Mts. The area limit of 300 Sq. Mts. was revised and downward to 200 Sq. Mt.from Feb 2005.

In Order to ensure that the construction of RWHP’s takes place, the ULBs hadadopted the practice of collecting amount up from the applicants. These amounts were to beutilized for constructions of RWHPs by the ULBs in case the applicants failed to dischargethis obligation, but would be returned to the applicants on satisfactory completion of theRWHP obligation.

Now, Rs.15/- per Square Meter is collected from the applicants as per theDistrict Gazette No. 37/2013 dt. 03.04.2013 in Samalkot Municipality w.e.f. 01.04.2013.

Audit revealed that the ULB was not ensuring the strict implementation of the rules. Asevident from the scrutiny of records, the amount collected during the period covered underaudit for RWHPs i.e. Rs.2,82,357.00 was lying in the accounts of ULB without being put touse. By March, 2016 an amount of Rs. 9,01,999.00 is available in SBI, Samalkot A/c.No. 470602.

Hence the authorities are here by instructed to adhere the instructions of the Govt.vide GO.MS No.422 MA dt.31.07.1998, GO.MS No.423 MA dt.31.07.1998, GO.MS No.611MA dt. 09.06.2000, GO.MS No.62 MA dt.15.02.2005 and detailed instructions issued byCDMA vide Cir. Roc. No.11437/ 2011/ K1 dt.24.04.2012 on implementation of Rain WaterHarvesting and obtain permission for utilization of the amount collected for this purpose.

Code.No.9

56 )NON-UTILIZAION OF PUBLICATION & POSTAGE CHARGES

As per the District Gazette No. 37/2013 the Publication & Postage charges arecollected @ Rs.200/-, Rs.1000/- & Rs. 2,500.00 from the individuals (Res. & Non-Res.)and builders of apartments respectively from the individuals who seek permission forconstructions of buildings.

The Fee was intended for meeting the expenditure towards publication in thenewspapers of information regarding the building permissions being accorded from time totime. This would enable the public to make complaints, if any, to the Municipal authorities onun-authorized / illegal constructions so that follow up action could be intended by themunicipal authorities.

Audit revealed that the publication charges collected from the applicants during theyear are Rs.28,600. But, the authorities had failed to publish the particulars of buildingpermissions being accorded in the newspapers. The same was shown as Misc. Receipt.

Hence, the authorities are here by instructed to utilize the publication chargescollected from the building applications for publication of building permissions in news papersof official web site of the ULB.

Code.No.9

57.ESTABLISHMENT – PUBLIC HEALTH WORKERS – ABSENT FROM DUTY – ABSENTNOT REGULARISED – IRREGULAR.

The Public Health worker work in the municipality have been treated as Class-IVEmployees with effect from 1-4-77 and they were made eligible for time scale of pay, lowpension & other benefits on par with other last grade employees. The public health workersas the Municipality are frequently absenting from duty, for which they are being markedabsent even for one day the pay and allowance for the days of absence without regulatingthe period of absence is highly irregular. No action is also being taken to regularize the un-authorized absence which constitutes break in service. The sanction of periodical incrementalso without regularizing the un-authorized absence of workers concerned in also irregular.Action may be taken to regularize the services of the individuals during the break periodeither by the leaves or by the extra ordinary leave and the Annual Increment or such personsshould be sanctioned only after regularization of the break period, sanction of periodicalincrement without regularizing the break period is highly irregular. The break periods wouldneed to be regulated as an early date.

Code No.11

58.PURCHASE OF UNIFORM TO PUBLIC HEALTH STAFF UNIFORM STOCK REGISTERNOT PRODUCED Rs.170121.00

An aggregate amount of Rs. 170121.00was drawn and spent towards purchase of

Uniform to Public Health Staff as detailed below. But the connected Stock registers were

not made available for verification in audit. In the absence of the same it could not

verified in audit whether the stock received in good condition and utilized properly. On

account of the above omissions the correctness of the payments made towards purchase

of Uniform to Public Health Staff could not be checked in audit. Hence the expenditure

could not be admitted and is held under objection.

Vr.No./Dt. Details Amount

565/1-16 Amount paid to Apco – fabric showroom , VSPtowards supply of uniform of PH workers.

170121.00

Total 170121.00

Code.No.11

59.LEGAL CHARGES –LEGAL CHARGES PAID TO MUNICIPAL STANDING COUNCIL CONNECTED FILES AND KATHA EXTRACTS NOT PRODUCED NEEDA ACTION

Rs.174073.00

Audit reveals that the following amounts were paid to Municipal Standing Council for various OA’s. But the connected files katha extracts are not produced to for verification.

Due to this reason the correctness of payments could not be verified in audit Executive Authority has to take initiative steps for production of these records to audit.

Sl.No Date Particulars Amount(Rs.)

1 169/6-15Amount paid to Sri T.Sudheer,

advocate9073

2 204/8-15Amount paid to Sri T.Sudheer,advocate towards rly. Station

shops 15000

3 224/8-15

Amount paid to Sri N.Venkateswarulu, advocate

MSC, Hyd. Towards COP No.40132/2014

5500

4 368/10-15Amount paid to Smt. N.Santhi

advocate towards W.P.No.21553/2

3000


advocate7500

6 375/1-15Amount paid to Sri N.

Venkateswarulu, advocateMSC, Hyd.

5500

7 575/2-16

Amount paid to SriY.Ravindrababu , advocateMSC, Hyd. Vide Roc.No.

125/2010/C1

84000

8 577/2-16Amount paid to Sri M.MohanaReddy advocate Ex-MSC, Hyd.towards W.P.No. 8162/2011

17500


advocate towards W.P.No.12216/2015

10500

10 579/2-16Amount paid to Sri N.

Venkateswarulu, advocateMSC, Hyd.

16500

TOTAL 174073.00

60. SANCTION OF VARIOUS ADVANCES TO THE STAFF – CONNECTED FILES NOT PRODUCED – IRREGULAR. RS. 2,63,000.00 Code.No.9

Audit reveals that the following payments made towards advances to staff for various purposes as detailed below. But the connected files and registers not produced to audit for verification. Due to this reason the correctness of payments could not be verified in audit. Executive Authority has to take initiative steps for production of these records to audit. The loss if any sustained in this regard would need to be recovered from the person or persons responsible and made good to municipal funds.

Sl.No CR/Roc.No.&Dt. Vr .No & Dt.

Name & Designation of the employee

Purpose of advance

Amount sanctioned.

1 31/28.2.2015 84/5-15 Y.Simhachalam, SM

Marriage advance

30,000

2 56/2010/B1 96/5-15 B.Apparao, BC Marriage advance

50,000

159/6-15 Ch. Venkateswararao, SI

Work advance 20,000

591/2-16 M.Rajasekhar, AE MCA 60,000

601/3-16 K.Rajasekhar, SI Sivaratri work adv.

1,00,000

544/1-16 P.V.Nookaraju, SA TA Advance 3,000

Total 2,63,000.00

Code.No.8

61.Non-Recovery of Election Advance of Rs. 2,00,000.00

As per article 84 of AP Financial Code Vol.1 office advances paid to employeesfor any purpose shall be adjusted within 3 months. But, it is observed that the employeeslisted below are taken the advances for election purpose not submitted the adjustment bills intime even after a period of one year. This is serious irregularity and was in contravention ofthe provision as per Article 227 of AP Financial Code.

Vr. No. & Date

Details of Expenditure Amount

Remarks

448/03.2014

Advance to KW Jayakar, SA to meet urgent Election Exp.

200000 Advance still pending Adj.

GRAND TOTAL 200000

The connected note file is not produced to audit for verification to know for whichpurpose the advance had been sanctioned. The incumbent is also not submitted adjustmentbills till date.

Hence, the authorities hereby instructed to take necessary steps to recover the samefrom the individual immediately besides disciplinary action.

Code.No.11

62. PROPERTY TAX – REGISTER OF BILLS ISSUED NOT MAINTAINED.

In spite of the defect having been pointed out in the previous audit reports. No actionhas been taken to produce the register of bills issued.

The register of bills issued has not been made available for verification during audit.

As per rules in force that all bill books, entrusted to Bill Collectors for collection a re entered

in the register duly noting the date of issue and taking the initial of bill collector concerned.

Whether the bill books are returned to the office of the date of their returns is noted with the

number of bills pending collections and at the same time and fresh books are issued only

after books previously issued have been returned. The Register of bills issued noting down

the above particulars was not made available for verification in audit. In the absence of the

same the correctness of the collections made by the bill collectors could not be verified in

audit.

Early action would need to be taken to produce said register for verification in audit.

Code.No.11

63.PROPERTY TAX NOT LEVIED ON LANDS NOT USED EXCLUSIVELY FORAGRICULTURE PURPOSE

On a cross check of the register of building applications with the Vacant Land Taxdemand registers it is noticed that in respect of the several cases, Property Tax was notlevied U/s 65(3) of A.P. Municipalities Act 1965 for the previous years for which permissionwere granted for the construction of buildings on the Vacant Lands during the year underreport. The loss due to non-levy of Property Tax on those lands may be worked out andrecovered from the person or persons responsible.

Code:1164. PROPERTY TAX – GOVERNMENT OFFICES LOCATED IN PRIVATE BUILDINGSAND PAYING RENT TO OWNERS – REGISTERS NOT MAINTAINED AND PRODUCEDTO AUDIT.

Information relating to Govt. Offices located in private buildings was not available toverify whether property Tax was levied as per the rents paid by Government offices to thebuilding owners. A register containing Government offices located in private buildings shouldbe maintained so as to verify whether Property Tax was being levied as per the rent paid bythe Government Offices or not and in order to prevent leakage of revenue to the Corporation

similarly a register containing Central and State Government Offices located in their ownbuildings also needs to be maintained so as to verify the correctness of levy of Property Taxas per rules relating to levy and collection of the P.T on Government buildings.

Code No.11

65.PROPERTY TAX APPEALS – RECORDS NOT PRODUCED :

The appeals and connected files relating to property tax, in respect of all wardsincluding appeals pending in courts were not produced to audit. In the absence of the same,the correctness of the assessments of the tax due to appeals could not be verified in audit.Due to non production of records in this regard, it could not be verified whether thecorporation was collecting the admitted assessed amount of tax or not. Hence, early actionwould need to be taken to produce the property tax appeals to audit for verification.

Code No.11

66) TAXES – OUTSTANDING BILLS NOT VERIFIED DUE TO NON PRODUCTION OFPROVISIONAL ARREAR DEMAND REGISTER.

According to the instructions issued in Lr.No.5481/88, dt.18-2-1988 of theDirector of Mpl. Administration and Lr.Roc.No.3123/A2/88, dt.27-5-1988 of the Director ofState Audit, A.P., Hyderabad, the Commissioner should prepare provisional arrear demandregister at the end of each year for un collected bills and produce the same to audit forverification of outstanding bills.

But, the Arrear Demand Register for the year 2012-13 was not written up. Theprovisional arrear demand register for the subsequent years duly posting the collectionsmade during the subsequent years up to date were not written up and produced.

In the absence of provisional Arrear Demand Register and collection registerfor the preceding years, it is not possible to verify the outstanding bills. Action would need tobe taken to get the provisional arrear demand register written up and produced to audit alongwith collection register for verification of outstanding bills to prevent the possible defalcationand in tax collections.

Code No.11

67.TIME BARRED TAXES AND FEES:

The arrears of taxes and fees relating to the year 2015-2016 which were allowed to betime barred by limitation of time prescribed under section 365(1) of the A.P. MunicipalitiesAct, 1965 during the current financial year. According to section 365 (2) of the A.P.Municipal Act 1965 it is the duty of the Commissioner to place before the council a list ofarrears due to the Municipal Council which are likely to become time barred, at least oneyear before the limitation stating the reasons for the non-collection of such taxes and seekinstructions of the council in regard to recovery of such taxes. According to section 365(3), if

the Commissioner fails to submit such list or omits or show in such list any arrears due tofailure on the part of bill collector to any other employee as the case may be, is deemed tobe negligent and action under the section 374(1) of the Act for the recovery of all suchrecoveries should be taken against him. Record showing the placement of the matter beforethe council in respect of the taxes and fees which are allowed to become time barred was notpointed out. Under section 374(1) the loss caused to the Municipality due to the abovedefect has to be assessed and made good from the persons responsible. Further it wasnoticed in audit that though elaborate procedure was prescribed in rules to take action on thetaxes likely to become barred by time in practice the Arrear demand registers were not beingmaintained to quantify the taxes that are likely to be barred by time. This deficiency of notmaintaining the ADRs relating various taxes and non taxes is resulting in the inability of theMC even to quantify the loss on account of barring by limitation of time.

1. Property Tax

2. Vacant land tax

3. Excess water charges.

Code No.9

68.INFORMATION NOT FURNISHED REGARDING PROPERTY TAX- NEEDS MAINTAINED.

The Revenue Officer/Revenue Inspectors and the Bill Collectors shall in theircapacities undertake field visits within their jurisdiction for detection of any un-authorizedconstructions and other properties which were yet to be identified and brought under theProperty Tax net. The property tax shall be levied for every half year and it is the duty of theassesses to pay it within 30 days after the commencement of each half year i.e. 30thApril/31st of October. In this regard the records of such visits or any details of propertiesidentified were not maintained in this municipality. Loss, if any sustained by the institutiondue to non-collection of tax within time specified as per Municipal Act, the ExecutiveAuthority will have to be held responsible.

Code No.11

69.REGISTER OF REVISION PETITIONS AND APPEALS ALONG WITH FILES NOTFURNISHED.

The records relating to the revision petitions received and allowed were not producedto audit. Hence it could not be verified in audit whether RPs were allowed or not if allowedwhether the same was done as per rules and eligibility or not could not be verified. Further itwas noticed that the window for modification was being allowed in the month of April by thee-Suvidha for a predetermined period and there was no assurance in audit that in the saidperiod only RPs allowed by the Commissioner were modified as the system allowsmodification of any of the assessments there was scope for misuse of the facility more sowhen the DEO was operating all the three logins of the DEO, RO/RI and the Commissioner.The Executive Authority would need to produce the same to audit for verification.

Code No.1170.REGISTER OF REMISSIONS AND WRITE OFFS NOT PRODUCED.

The records relating to the remissions and write offs allowed were not produced toaudit. It was not made known as to how much was allowed as remissions and write offs inthe financial year 2012-13. In the absence of the same the quantum of remission and writeoff and whether the same was allowed as per the provisions of the Act or not could not beverified in audit. The same would need to be produced immediately.

Code No.1171.MUTATION REGISTER NOT PRODUCED.

During the course of audit the register containing all the permanent changes madeeither by the Commissioner or by the Appellant Authority in the assessment of house andland taxes after the demand registers for the tax concerned was written up for the year wasnot maintained and produced, in the absence of the same whether the procedure prescribedin arriving at the changes in the assessments were made and recorded properly or not couldnot be checked in audit. This important register may be maintained and produced to audit.

Code No.1172.REGISTER OF BUILDINGS EXEMPTED FROM THE PAYMENT OF PROPERTY TAX -NOT MAINTAINED AND PRODUCED TO AUDIT.

The register of buildings exempted from payment of property tax during the year 2015-2016 was not maintained and produced to audit for verification. In the absence of the same,it could not be ensured in audit whether such buildings were assessed to other taxes/chargessuch as water tax, drainage tax and primary service charges etc.

Early action would, therefore, need to be taken to get the register written up andmaintained up to date.

Code No.9

73.OBSERVATIONS ON VACANT LAND TAX :

A) Non identification of vacant plots for levy:

Section 85(3) of the Municipalities Act, 1965 read with instructions issued by Govt ofAP provides for levy of a tax on vacant lands in Municipal limits@ 0.20% per annum of thecapital value of the site/land. The levy of VLT has been long neglected by the Municipalities

even though this is a potential source of income. But the collection of Tax is indeed difficultin view of the difficulty in finding the actual owners of the site. This information canpossibily be obtained from the Registration Department:

(A) Audit Observed that:

The Municipality had not made any effort for identification and collection of Vacant Land Tax. In view of the fact that the Municipality has been receiving requestsfor approval for construction of buildings this information can be utilized for collectionof Vacant Land Tax.

Even though the VLT was being collected by the Town Planning Wing at thetime of giving approvals for Building constructions for the previous 3 years, the feethus collected was not being accounted for under the VLT.

The Municipality needs to urgently identify all the vacant sitesWithin Municipal limits.

B) Improper maintenance of VLT records:

During the review of VLT records, it was seen that as per DCB register of VLT,there were …… assessments as on date and an amount of Rs…………. need to be collected(including arrears and current balances). However, the date reflected in the DCB registerwas not correct as.

(i)Even though the land owners applied for building permissions and constructed thehouses in the vacant lands, the same were not updated in the VLT demand register from……..(year) onwards.

(ii)At the time of granting permission for building construction, the municipality hadbeen charging the VL Tax (by town planning section) at the rate of ….times to the normaldemand. However, the same was not updated in VLT demand register. Hence the demandshown in the DCB register does not reflect the actual position.

As such the municipality need to review all the outstanding VLT cases along withtown planning records and the actual position ascertained. A fresh DCB for VLT may beprepared and furnished to audit.

Code.No.11

74.WATER SUPPLY – TAP CONNECTION APPLICATIONS NOT PRODUCED .

On verification of the demand register of Excess Water Charges the followingtap connections executed and tax levied and collected for the year 2014-2015. But, theconnected Tap applications were not produced to audit for verification

In these connections, Tap contributions, Estimate Charges of the aboveconnections are collected (or) not be verified in audit.

Hence the loss if any sustained in this regard would need to be recovered fromthe person or persons responsible.

CODE NO.7

75.HUGE ARREARS IN PENDENCY OF WATER TAX - NEEDS COLLECTED

As per section 133 to 145 of A.P.M.A,1965 the municipality has to maintain water courses/works, supplyand collect water charges for the supplyof water through pipes.There were huge arrears in collection of thecharges for water supply. The accumulated dues in this regard causes huge drain on the resources in themunicipality towards making arrangements towards providing regular water supply to the town and also makealternate supplies. However, it was observed that from the AP online computer generated statements that thearrears on account of dues from the households were to the tune of Rs 3614550.00 (current only) as of31.3.2015 as detailed below.

Demand Collection Balance

Arrears Current Total Arrears Current Total Arrears

Current Total

Due to non maintenance of demand register ADRs details not available.

Though arrears in collection of water charges exist up to date i.e period of audit, thedemand, collection and balance statement was not yet finalized by the municipality. In theabsence of above the exact amount of arrears in collection of water tax could not beassessed in audit and there was no assurance in audit that the computer generated demandwas correct.

As per the section mentioned above, the commissioner is to take stringent action forrecovery of water charges/arrears which includes disconnection of water supply and levyingpenalty. It was amply evident from the water charges collected, that the municipality was nottaking deterrent action against the defaulters.

Code No.1876.DEMAND REGISTER – WATER TARRIF FOR HOUSE HOLD WATER SUPPLYSERVICE CONNECTIONS (HSCs) - NOT MAINTAINED.

As per G.O.ms.No.303 Municipal Administration & Urban Development (A2)Department, dated 3-8-2004 the Government have decided to formulate a new strategy forthe urban poor i.e. Below Poverty Line households, for provision of house serviceconnections. Accordingly the following orders are issued.

1. Any Below Poverty Line house holders, possessing a White Ration Card and nothaving access to house service connection, shall be granted one HSC on payment ofRs.1200/- per connection including the cost of pipes and road cutting charges. Thecost of tap, however shall be borne by the individual.

2. The beneficiary shall be given the option of paying the amount in 12 equal monthlyinstallments without interest. The house service connection shall be given afterpayment 1st installment and the rest shall be recovered along with the monthly/bimonthly billing for water consumed.The proof of receiving the installments and the schedule of the giving connections was

not produced to audit. But the Demand register of water tariff was not maintained andproduced to audit. In the absence of the same, it could not be verified whether theinstallments were being collected regularly or not. Loss, if any, caused in this regardwould need to be recovered from the person or persons responsible. The above saidregister would need to be prepared and produced to audit early.

Code No.1177.REGISTER OF REVENUE YEILDING PROPERTIES NOT MAINTAINED AND PRODUCED.

In order to guard any item of Municipal revenue being left out in M.D.R., a register of Revenue yielding properties and other Miscellaneous sources of revenue of the Municipality will have to be maintained. It has to be ensured that all the items shown in this register with the exception of those that are managed departmentally are entered in the M.D.R for watching the realisation of the revenue due.The register also helps in watching the rise or fallof revenue over several years and also to make investigations, if necessary.

However,this important register was not maintained .As a result it could not be fully ascertained in audit,whether revenue from all sources was being recorded or there were any leakages .It could not be verified in audit,whether all the sources of revenue were include in the M.D.R. due to non-maintenance of the above register.Immediate action may be taken to maintain the register and produce the same to audit.

Code No.1178.ADVANCE COLLECTION OF D&O TRADE FEES INCLUDED IN THE I&E STATEMENT

The convention in the ULBs with regard to the collections of D & O trade fees was to collect the same in advance for the subsequent year i.e., before February of an year. The collections made after February are to be made along with collection of belated fees. The advance collection made shall be kept under deposit for that year and adjusted to General funds in the subsequent year. But during the course of verification of account it was noticed

that the said distinction was not observed and the collections made were not classified basedon the year to which they pertain. As a result of which the entire amount collected was reflected as income in the Income and Expenditure statement for the year 2015-2016 thoughthe income actually pertains to the subsequent year 2015-2016. The correctness of the Income and Expenditure statement to that extent suffered due to the above defect pointed out.

CODE NO.7

79.NON COLLECTION OF ADVERTISEMENT TAX ON CABLE TVs.

Vide G.O. Ms No.266, M.A. Dt.05.05.2000 clause 7B of Advertisement Tax rules wasincorporated and as per G.O. Ms.No.487, M.A. Dt.20.04.2000 read with District GazetteNotification No.24/2013 dt:28.02.2013 and Council Resolution No…1187,Dt.22.01.2013 ofSamalkot Municipality, Advertisement Tax on Cable T.V. Advertisements @ 10% of the Costof the Advertisement has to be collected by the Municipality

During the scrutiny of Town Planning Section records of the Municipality it was noticedthat advertisement tax was not being collected form the cable T.V. operators.

Action may be taken to obtain the monthly statements of advertisements and the taxcollected accordingly.

When non collection of advertisement tax was brought to notice it was replied thatnecessary arrangements would be made to obtain the particulars of Cable TVAdvertisements from the Cable operators and tax would be collected.

Code.No.7

80.NON-COLLECTION OF GARBAGE CHARGES – NEEDS COLLECTED.

The Municipal bodies as per the guidelines of “total sanitation programme” arerequired to collect garbage charges from the eating establishments, hospitals, diagnosticcentres, clinics, theatres, function halls, lodges, shopping complexes etc., since theseestablishments generate garbage in bulk. The bulk garbage charges are to be collected asper the bed strength in respect of the hospitals and nursing homes and at flat rate asassessed by the Municipal body in respect of cinema halls and other places of entertainment.

However it was noticed that no bulk garbage charges were collected by themunicipality during the year of audit and no reasons were forthcoming in audit for noncollection of the same.

Code No. 9

81.D & O TRADERS – LICENSE FEE COLLECTED LICENSES NOT ISSUED TOTRADERS – IRREGULAR: The counter foils of the licenses issued to the traders i.e. form No. 8 for the year 2012-13 were not made available for verification in audit. The license fees collected throughchallans were not produced to audit for verification. It was irregular to allow the traders toconduct the business without issue of license even though they had paid the fees.

Therefore action would need to be taken to issue the licenses to the traders and counter foils produced to verification.

Code No.9

82.ADVERTISEMENTS – EXHIBITED WITHOUT WRITTEN PERMISSION OF THECOMMISSIONER - FINE NOT IMPOSED – LOSS TO THE CORPORATION-LOSS TO THEMUNICIPALITY- NEEDS ACTION.

No person shall without the written permission of the Commissioner, erect, exhibit, fillor retain any advertisement whether now existing or not upon any land, building , wall,hoarding or structure’. The word ‘structure’ in this section shall include, a tram car, omni busand any other vehicle and any movable board used primarily as an advertisement or anadvertising medium.

Further, according to Municipal Act, for exhibiting an advertisement withoutpermission, a fine up to Rs.1,000 can be imposed and in no case, it shall be not less thanRs.500.

On verification of the records relating to tax on advertisement, it was noticed thatapplications received and permissions issued to erect, exhibit, fix or retain theadvertisements for which tax was levied during the year 2015-2016 were not furnished toaudit. Therefore, it was construed that, those advertisements were noticed during theinspections of the town planning personnel. As the advertisements were exhibited withoutthe written permission of the Commissioner, fine has to be imposed from Rs.500 to 1,000 onthe owners of those advertisements. But, the same was not imposed and the Municipal bodysuffered loss of revenue to that extent. Therefore, action would need to be taken to imposefine and report compliance to audit.

Code No.983) TOWN PLANNING: ENCROACHMENT – REGISTERS OF ENCROACHMENT NOTMAINTAINED PROPERLY:

As per annual account an amount of Rs.99,450.00 was adjusted to municipal fundstowards encroachment fee. Further as verified from the register of encroachmentsmaintained for the year 2014-2015 the following defects were noticed. The demand,collection and balance was not noted in the register at the end of the financial year.

1. A list of encroachments were not prepared by the town planning officers or buildinginspectors and not certified by the Commissioner and produced for audit.

2. The encroachments were not got classified as objectionable or non- objectionable.3. The notification for the levy of fees on non objectionable encroachments was not

made available for verification in audit.4. The action taken for the removal objectionable encroachments was not stated in

audit.5. The sanction of higher authorities was not obtained in respect of encroachments

allowed for more than one year.6. The monthly lists of addition and omission were not at all obtained, from the out door

staff and produced for audit.If any loss caused due to the above lapse it would need to be made good by thepersons responsible.

Code-9

84.ENCROACHMENTS NEW ENCROACHMENTS NOT BOOKED BY THE TOWN PLANING SECTION LOSS

The town planning section of municipality has not taken up and efforts to raise the

demand under encroachments during the year 2015-16. Such encroachments during the

year were not taken for 2015-16 even a nil report for the year has not been obtained from the

town surveyor. This is highly irregular. According to the instructions, the town surveyor has to

book the fresh cases under encroachments which have to be classified by the commissioner

as obtainable or not and necessary fees has to be levied on objectionable encroachment.

Early action would need to taken to book the cases left over during the year. The loss if any

sustained due to the above omissions would need to be worked out and made good to the

municipal funds.

Code No-11

85.ENCROACHMENT – ENCROACHMENTS BOOKED BY TOWN SURVEYOR – LISTS

NOT PRODUCED.

The lists of encroachments booked by the town surveyor during 2015-16 were not

made available for audit for verification. It was stated during audit that no such lists were

given by the town surveyor and that the encroachment were booked by the municipal town

planning staff themselves offer local verification. The reasons as to why the same were not

obtained from the town surveyor were not explained during audit. In the absence of the

information about the encroachment booked by the town planning staff for the year 2014-15,

the loss if any sustained to municipal funds would need to be recovered from the person or

persons responsible.

Code No-11

86.Register of Lay - Outs not produced.

During the course of audit on the accounts of Samalkot ULB for the year 2015-2016

as verified from the Register of Lay-Outs not produced to audit for verification. In the

absence of the same how many layouts were approved and all fees remitted to municipal

funds & all conditions of the Town & Country Planning are satisfied or not could not be

verified in audit. In this connection the loss if any caused in this regard would need to be

recovered from the person or person responsible and credited to Municipal funds.

Code No.9

87.ENCROACHMENT – CLASSIFICATION NOT DONE:-

The list of encroachments in the Municipal area was not got prepared by the Municipal

surveyor / Building inspector and verified by the Commissioner. The encroachments were

not got classified as objectionable and non-objectionable by the Municipal Commissioner and

got approved by the Municipal council and the District Collector. All the objectionable

encroachments have to be licensed under section 193 of the Act duly collecting the requisite

fee. An amount of encroachment fee Rs.138000.00 collected was treated as demand under

this item as no separate demand was fixed which was not correct. In the absence of proper

demand having been fixed with reference to the encroachment list, the correctness of the

collections made and balance left could not be ascertained in audit. Immediate action may

be taken to rectify the defect.

CODE NO.9

88. REGISTER OF BUILDING APPLICATIONS – MAINTENANCE DEFECTS.

As seen from the register of building applications maintained for the year 2013-14 thefollowing defects were noticed in audit.

1. In column No.15 the dates of completion of building were not noted duly obtaining thecompletion reports.

2. All the columns in the register were not filled in with appropriate

information or particulars.

3. Challan No & date in respect of building fees paid in respect of each case were notnoted.

4. Compounding fees levied and collected were not noted.

5. Further action taken for the renewal of license fee the building not completed withinone year from the date of granting the same was not noted.

6. Renewal of license of any granted and fee collected was not noted.

7. Objectionable constructions were not taken to unauthorized construction register andfurther action not watched through it.

8. Monthly reports from building inspectors were not obtained and produced for audit.

9. Register of unauthorized constructions was not produced for audit.

10. As seen from the building applications the challans where from the fees paid were notenclosed.

In the absence of the above details whether the building newly constructed wereproperty assessed to property any in time or not could not be verified in audit.

89) NON ISSUANCE OF OCCUPANCY CERTIFICATE AND CONSEQUENT LOSS.

Occupancy Certificate shall be mandatory for all buildings and unless such certificate

has been granted by the sanctioning authority no person shall occupy or allow any other

person to occupy any building or part of the building. The Property owners consequent upon

completion of the construction have to intimate the Municipality of the same in the prescribed

proforma to facilitate the ULB to issue occupancy certificate and levy of PT. It was observed

that there was no such arrangement indicating failure of the Municipality in enforcing the

provisions laid down. Government have issued G.O.Ms.No.168 MA&UD(M) Department

Dated 07.04.2012 and as per Rule 26(d) the rate of compounding fee shall be equivalent to

100% of the value of the land as fixed by the Registration Department at the time of

compounding for the violated portion. As the files concerned were not produced to audit the

observance of the rules issued in the said G.O by the ULB could not be checked in audit.

Further clause ‘g’ under Rule 26 of GO.Ms.No.168 MA & UD (M) Dept. dated 07-04-

2012 the functional/line agencies shall not give regular connections of power, water,

sewerage etc., unless such occupancy certificate is produced or alternatively may charge

three times the tariff till such time occupancy certificate is produced. It was noticed in audit

that in most of the cases the said connections were given even without issuing the

occupancy certificate and normal tariffs are charged.

Thus non production of building application files to audit would give scope for non detection of such irregularities which cause huge loss to the income of the ULBs.

CODE NO 990) NON-REMITTANCE OF EDUCATION CESS BY MUNICIPALITY – NEEDS ACTION.

As per section 37 (1) of the Andhra Pradesh Education Act, 1982 any MunicipalCouncil may, with the previous sanction of the Government, and shall if so directed by them,levy within its jurisdiction, taxes for the purposes of this Act, at such rates as may beconsidered necessary, as an addition to the taxation levied in the Municipality under the A.P.Municipalities Act, 1965 under the head of property tax or profession tax or under both theseheads. Govt. of A.P. GAD (V&E) dept., vide alert note no.38, dated 14.3.05, directed theULBs to remit the Education cess arrears to the Officers concerned. It was observed that no amount was remitted to Education cess to the competentauthority so far. Reasons if any were not explained to audit as to why the Education cesswas not remitted to so far. Immediately the executive authority would need to take goodsteps to remit education cess at an early time.

CODE NO 991.WATER CESS NOT PAID TO AP POLLUTION CONTROL BOARD – NEEDS PAID.

As per Section 3 of Water (Prevention and Control of Pollution) Cess Act-1977, watercess is to be paid on the quantity of Water supplied for domestic purpose. Further as per theprovisions contained in the said Act all the ULB’s have to file the water cess returns dutymentioning the water supplied by ULB’s for domestic purpose.

The AP Pollution Control Board (APPCB) has to issue Amendments orders based on thewater supply figures to be furnished by ULB’s as required under Sub-Section (i) of section 5of the Act and the Sub-rule(i) of Rule 4 of the water (P&C of Pollution) Cess Rules 1978.

As per Section 12 of the said Act any amount due under this Act including any interest orpenalty payable u/s 10 or 11 as the case may be from any local authority may be recoveredby the Assisting Authority (APPCB) in the same manner as if it were an arrear of landrevenue.

The CDMA of Hyderabad under Lr.RC.No.2189/2009/E1, dt.09.03.2005 andLr.Rc.No.962-1/2010/H, dt.29.03.2010 requested all the Regional Directors – cum AppellateCommissioners of Municipal Administration and all Municipal Commissioners to pay watercess to APPCB as per the provisions of Act.

During the course of audit it was observed that no amount was paid to the AP PollutionControl Board towards water cess so far. As verified from the file no correspondence was

made with the Irrigation Department for furnishing information. In this regard if any penalty isimposed by APPCB, the said penalty will have to be recovered from the person or personresponsible.

Code No. 992) DEPOSITS – PENDING FROM YEARS TOGETHER SHOULD BE LAPSED - NEEDSACTION:

Deposits remaining unclaimed for three completed years after their refunds fall due andsurplus proceeds of distrait property not claimed within six months from the date of saleshould be lapsed and credited to the revenue Head of account. The deposits thus lapsedshall be entered in a register called “Register of Lapsed Deposits” which should bemaintained in the form set out in Annexure VII to the rules relating to Deposits issued inG.O.Ms No. 519 MA dated 04-07-1970 as amended in G.O.Ms No. 385 M.A. Dt. 12-07-1974. For the claims subsequently made and admitted, the amounts concerned may berefunded from the general balance of the Municipal Corporation with the sanction of theCorporation. Therefore action would need to be taken accordingly under a report to audit.

CODE NO.1193.PROVIDENT FUND ACCOUNT NOT MAINTAINED PROPERLY – NEEDSRECTIFICATION.

Though subscribing to the provident fund is optional in Municipal Councils, theprovident fund account with the existing balances of the employees, had to be maintainedproperly, as it was governed by the provident fund rules. The following importantregisters/Forms have to be maintained in connection with provident fund.

1. Forms of nomination.2. Statement of annual account.3. Notice to the nominee.4. P.F. ledger of subscriber.5. Abstract register.6. P.F. cash book.7. Voucher for payment of P.F.8. Register of subscriber.9. Register of Temporary withdrawals and their recoveries.But none of the above registers were maintained in Municipal Council,Samalakot .As

a result the correctness of the transactions carried out, under P.F. during the year could notbe verified in audit. Loss if any sustained by the Municipal Council as a result of non-maintenance of the above registers, would need to be made good from the person orpersons responsible. Immediate action may be taken to maintain the above registers andproduce the same to audit.

Code No.1194.D & O TRADES- MONTHLY LISTS – NOT PRODUCED IRREGULAR.

During the course of audit for the year 2015-2016 under D&O trades the monthlylists in inspect of all Divisions were not produced for verification in audit. Loss if any,sustained due to non production of the monthly lists would need to be made good to theMunicipal funds

Code No.11 95.PUBLIC HEALTH – D&O TRADES – DELETIONS LIST NOT PRODUCED TO AUDIT –NEEDS ACTION.

As verified from the D&O Trade license fees register, division wise during the year2015-2016 many new licenses were sanctioned. But the details as to of how may licenseswere renewed and how may licenses were cancelled, were not produced to audit forverification. The deletions list duly enclosing the stoppage letters from the traders along withcouncil resolution were not produced for verification. It would need to be produced early. Inthe absence of the deleted list, loss if any caused in this regard would need to be made goodfrom the person or persons responsible.96) MAINTENANCE OF VEHICLES - RELEVANT REGISTERS NOT MAINTAINED ANDPRODUCED.

The following were the important registers to be checked in audit of bills relatingto maintenance of Vehicles in Public Health Section.

1. Log book

2. Register showing the repairs ,replacements etc.,

3. Register showing the cost of Petrol, Oil etc.,

4. Register of Inventory of equipment

5. Hire charges payment Registers.

6. Registers of old parts collected after replacement

7. Register of Accidents

1. LogBook: During the course of audit due to non production of these books it could not be verified in audit whether the following procedure was followed.

1. That all the entries in the relevant columns in the log books were made

2. That the entries in log book were noted by the Officer who used the vehicle in his own hand, writing the mileage at the start and at the completion of their trips after verifying kilometers.

3. That Sufficient particulars were recorded regarding movements and purpose to indicate that the journeys were on Official business.

4. That the log book in respect of each Vehicle was closed at the end of the month and a summary prepared in the logbook showing details of duty and non duty journeys performed during the month in the prescribed proforma.

5. That the quantity of petrol, diesel oil purchased has been entered in the log book of the respective vehicle.

6. That the hire charges collected as per hire charges payment register have been entered in the concerned log book.

7. That the log book was scrutinized personally by the authority concerned, once ina month and his signature appended there in.

8. That the log books were written in the prescribed proforma with full details.

2. Register showing the repairs, replacements, spare parts etc.,

Due to non production of these registers it could not be verified in audit whetherthe following prescribed procedure was followed.

1. That the voucher No. and date and nature of repairs etc., together with amountwere noted in the appropriate columns of the register.

2. That in the case of replacements etc., the old parts were disposed off in PublicAuction noted and the sale proceeds credited to Municipal funds.

3. That in case of purchase of spare parts, the rules relating to the invitations anddisposal of tenders have been observed.

3. Register showing the cost of petrol, Oil etc.,

Due to non production of this register, it could not verified in audit whether thefollowing prescribed procedure was followed or not.

1. That the details of expenditure incurred towards cost of Petrol, Oil etc.,have been entered with reference to the voucher No. and date and the amountcovered for the same.

2. That the consumption of the petrol, oil etc., date wise, has been entered there in.

3. That in respect of the contingent bills for the supply of petrol, diesel oil, thefollowing certificates have been recorded by the authority concerned on the bills.Certified that quantities purchased have been entered in the log books of therespective vehicles. Certified that necessary recoveries under rules have beenmade from the parties concerned to the institution.

4. That the mileage run by the vehicle at particular period as per log book was inaccordance with the issues of petrol and oil shown in this register.

5. That the propulsion charges or cost of fuel etc., received if any from the personwho used the vehicle on non duty have been issued to the parties.

6. That the register was periodically checked by the concerned authority

and a certificate to that effect has been recovered

4. Register of inventory of equipment.

Due to non production of this register, it could not verified in audit whether thefollowing prescribed procedure was followed or not.

1.That the nature of equipment purchased has been entered in this registertogether with the date of purchase and price etc., as per voucher.

2. That the inventory of equipment has been checked by the concerned authorityevery month and a certificate to that effect has been recorded there in.

3. That the Loss if any arising out of negligence or fault of any person has beenrecovered and credited to the funds.

Code No.1197) ESTABLISHMENT AUDIT REGISTER NOT PRODUCED:

As per the procedure, all recurring charges have been entered in theestablishment audit register and order’s sanctioning each post have been quoted in support.The order should be verified in every case in which the charges have been newly sanctionedor there has been change in them since last audit. Due to Non- production of this register the following observations could not be madein audit.

1. That any excess over the sanctioned scale appeared in any month or of the whole period under audit and all excesses over the sanctioned monthly scale have been satisfactorily explained.

2. That the orders sanctioning the establishment have been noted in all cases andthe amount entered to the sanctioned scale columns authenticated by the initials of themanager or executive authority

3. That all the alterations in the scale column have also been initialed by themanager or the executive authority and the dates from which they taken effect have beeninvariably noted .

4. That pensionery contribution if any, as well as house rents and fixed contingenciesdrawn along with pay have been properly posted in the audit register.

5. That refunds by short drawals, fines and amounts withheld for further paymentshave been correctly noted.

6. That the fly leaves have been correctly noted.

1. That the temporary establishments have been entered separately after the permanent establishments in the audit register the period for which sanction holds good has been noted and lines have been drawn across the pages or months previous and subsequent to such period and.2. That the register has been maintained correctly and on the lines indicated inchapter V and posted monthly when pay bills are passed for payment.

Code-18

98.PROVIDENT FUND – ABSTRACT REGISTER AND TEMPORARY ADVANCEREGISTER NOT MAINTAINED

The provident fund abstract register was not maintained properly. MaNy of theemployees were retired from service and there is no opening and closing balances in theirPF accounts. The above names and PF amounts were continued every year in AbstractRegister. If there is balance in their PF accounts that names were not necessary to continuein Abstract Register. The Abstract Register was not prepared and certifying by the Executiveauthority.

The register of Temporary Advances and with drawls was not maintained properly.The loans received and the balances pending recovery at the end of the year 2015-2016 wasnot shown in the register. The voucher number in which the temporary advance sanctionedwas also not shown in the register.

Effective steps would need to be the defects of the abstract register and temporaryadvance register.

Code No.1899.REGISTER FOR PAYMENT OF LIBRARY CESS NOT MAINTAINED.

(A) As per GO.Ms No 68 dt.12.9.2009, under Section 85(2) of the AP,Municipality Act read with Section 20 of Andhra Pradesh Libraries Act 1960, the MunicipalCouncil is required to levy and collect the amount of Library Cess @ 8 paisa for every rupeeon the property Tax collected and transfer the same to Zilla Grandhalaya Samstha (ZGS)concerned to provide library service to public. The register of library Cess was notmaintained in this municipality. As such it could not be known how much the amount waspending to remit to ZGS towards library cess in audit. The executive authority would need towork out and arrive at the remitted Library Cess which was pending prior to 26-10-2009 andsame would need to be remitted to ZGS early. (B) Government issued orders vide GO. No 122 Education (PE Prog.I)Department Dt:26.10.2009 para 5 of (II) directing of Library Cess @ 8 percent on propertytax collected, at e-seva center level and remit the same to City/Zilla Grandhalaya Samstha(ZGS) concerned through e-seva. However it was observed from the copies of statementsfurnished by Administrative Officer, e-seva ,Samalkota, that library cess was not collected atthe rate prescribed by Government i.e @ 8 percent. The executive authorities would need totake good steps to collect library cess as per Government norms.

Code No.18100.NON MAINTENANCE OF REGISTERS PRESCRIBED IN THE MANUAL.

The APMAM prescribed maintenance of certain registers and forms. The formats ofthe books, registers and forms referred to in Table 4.1 of Chapter 4 of APMAM need to bemaintained. But it was observed that all the registers and forms were not maintained duringthe year 2015-16 contrary to the instructions contained in the manual. The details werementioned in Annexure-II. The registers and forms would need to be maintained andproduced to audit for verification of annual account along with the registers.

101) SUPPLY OF PRINTING OF BOOKS & FORMS, STATIONARY, ETC., - FILE, STOCK REGISTER NOT PRODUCED. Rs.2,11,801.00

An aggregate amount of Rs.2,11,801.00 was drawn and spent towards supply of

Printing, Stationary & etc, as detailed below. But the connected Files & Stock registers were

not made available for verification in audit.

In the absence of the same it could not verified in audit whether the reasonable

rates were paid, stock received in good condition and utilized properly.

On account of the above omissions the correctness of the payments made towards

the above items could not be checked in audit. Hence the expenditure could not be

admitted and is held under objection.

Vr.No./Dt. Details Amount53/04-15 Amount paid to Prabhat Press, Guntur towards supply

of Property Tax & Water Tax Demand Notices 30577.00

198/08-15 Amount paid to Prabhat Press, Guntur towards supplyof M.Books, Log Books and Deposit Registers

31157.00

254/08-15 Amount paid to Prabhat Press Guntur towards supply of Sationary

30381.00

379/11-15 Amount paid to Prabhat Press Guntur towards supply of Sationary, Books& Forms

21531.00

380/11-15 Amount paid to Prabhat Press, Guntur towards supplyof Property Tax & Water Tax Demand Notices

35570.00

428/11-15 Amount paid Deccan Law House, Vijayawada towards supply of Municipal Manual

4500.00


16444.00


41641.00

Total 211801.0

0

Code No – 14

1 0 2) PUBLICATIONS – ADVERTISEMENTS NOT ROUTED THROUGH DPRO – IRREGULAR. Rs.1,82,869.00

As per the Government orders issued vide G.O. Ms.No.572 TGA (CPR) Dept. dt.10-

08-1999 ,G.O. Ms.No.679 PR & RD dt.10-02-1999 and G.O. Ms.No.37 I & PR Dept. dt.28-1-

1994, all the advertisements by the departments should be made through the District Public

Relation Officers and the bills shall be released only on certification by them.

But during the course of audit it was observed that the said instructions were not

followed by the Executive Authorities and incurred an amount of Rs.8000.00 to

advertisements for publication of the developmental activities of the Municipal Council paid

the advertisement charges which was irregular.

Therefore the expenditure incurred by the Municipal Council on advertisements in the

following vouchers as detailed below could not be admitted in audit and held under objection.

S.

NoName of the Paper Vr.No / Date

Amountspent Rs

1Paid to Vijayabhanu Publications Pvt.Ltd towards celebrations

265/08-15 15000.00

2Paid to Deccan Chronical Holdings Pvt.Ltd, Rajahmundrytowards celebrations

264/08-15 24000.00

3Paid to Andhra Prabha Publications Pvt.Ltd, Hyd towardscelebrations

295/09-15 25000.00

4Paid to AP Working Journalists Fedaration, Kakinada towards Advertising Charges

263/08-15 30000.00

5Paid to AGA Publications Pvt.Ltd, Rajahmundry towards Annevarsary celebrations

266/08-15 30744.00

6Paid to Jagati Publications Pvt.Ltd towards SWAGATA SUBHAKANKSHALU

541/01-16 58125.00

TOTAL: 182869.00

Code No.18103.VERIFIED FOBS NOT FURNISHED

The OBs of the respective G.L. accounts were drawn from the OBs provided in the FOBS furnished to audit. The said FOBS was verified and certain material deviations from the instructions envisaged in the APMAM, and instances of under/over stating of value of assets and non-identification of assets etc., were pointed out and communicated to the Executive Authority for rectification. But the said FOBS was not returned duly rectifying the defects pointed out or existed in the FOBS. The annual accounts for the years 2009-10 to 2015-16 furnished were prepared with the OBs as arrived at in the FOBs. Thus adopting of incorrect OBs rendered the annual account for the year 2009-10 to 2015-2016 not reliable and could not be held to reflect the true and fair view of the transactions of the accounting period. In view of the non rectification/ remedying the defects pointed out in FOBS issued to the Municipal Council vide letter SA No. dated: ………. persisted in the final accounts of this year ………. also and as such the defects already pointed out in the verified FOBS may be read as part and parcel of this audit report.

Code No.18104.NON EXCHANGE OF INFORMATION BETWEEN TOWN PLANNING AND REVENUESECTION :

The Revenue Wing of the Municipality did not have access to the Building Approvalsplans form the town Planning wing as there was no system to furnish copies of approvalsby the Town planning Wing to the Revenue Wing for monitoring of the buildings and assesit under PT in accordance with the details therein. The Revenue wing similarly did notfollow the procedure to bring to the notice of the Town Planning Wing in respect of buildingsthat have been constructed unauthorized for taking further necessary action. Details of visitsmade by the Building inspectors for verification of the status of the buildings for whichpermissions were given were not forthcoming in audit. The U.C. Registers maintainedshowing the details of the notices given for the deviations noticed and the unauthorisedconstructions against which action was taken were not produced to assess the work of thetown planning wing of the ULB.

CODE NO 9

105.NON PREPARATION OF ACTION PLAN/DEVELOPMENT PLAN BY THE MUNICIPALITY RECENTLY.

The Urban Local Body should prepare Annual Action Plan/Development Plan/Budgetat the beginning of the Financial Year to achieve the Targets/bench marks prescribed and toreview the shortfalls for the service sectors like water supply, sewerage and sanitation, solidwaste management and storm water drainage, etc.

Similarly plan is required for increasing the revenue by introducing GIS system formapping of the property which will reduce the Tax evasion, funds received through othersources like ET, VLT, PT, Surcharge on Registration, Rental Income, income of lease holdproperty, Grants (plan and non plan) and repayments of loan amounts, payment of powercharges methods to be adopted to increase of the taxes.

The executive authority would need to be take steps to prepare annual actionplan/Development Plan for taking up developmental activities in municipality.

CODE NO 9106. NON PAYMENT OF ROYALTY CHARGES.

As per G.O.Ms.No.1276 Revenue (M) Dept, dated 30-11-76 every municipality isliable to pay the royalty charges to the government, for the water used by it. Accordingly theengineering authorities of irrigation department were raising demands for the same againstthe Municipality. However, the Municipality had not allocated any budget for the payment ofroyalty charges. The demands raised by the engineering authorities were not consolidatedand the actual demand, payment and outstanding amounts were not made available in audit.

CODE NO 9107.ADMINISTRATIVE REPORTS OF THE MUNICIPALITY NOT PREPARED – NEEDSACTION.

Under the provision of Section 34 of A.P.Municipalities Act,1965, Council should submitas soon as may be after the first day of April in every year and not later than such date asmay be fixed by the Govt. through the District Collector, a report on the administration of theMunicipality during the preceding year in such form and with such details as the Govt., maydirect, if the Collector makes any remarks on the report such remarks shall be forwarded tothe council, and council shall be entitled within such time as the Govt., may fix, to offer ormake such explanations or observations as the council thinks fit.

The Commissioner shall prepare the report and submit to the council. The Council shallconsider the report and forward it to Govt. with its resolution, if any.

The report and resolution, if any shall be published in the manner as the council maydirect, subject to approval of the Government.

Action would need to be taken to prepare administrative reports here after and produceto audit.

Code No.18108.DEPARTMENTAL INSPECTION AND INTERNAL AUDIT OF THE OFFICE NOT DONE .

Departmental Inspection:- According to the Government orders inG.O.Ms.No.247,GAD,dated 8.2.1962 and instructions issued from time to time. DistrictOfficers and their subordinate officers are required to be inspected by the Heads ofDepartments periodically and furnish Inspection Reports in the form of Questionnaireprescribed therein. The need for inspection of Government offices periodically was alsoemphasized in Government Memo.

Internal Audit:- As per the orders in G.O. Ms.No.34, F & P Department dated 1-7-1997, it was the responsibility of the Accounts Branch of the Head of the Department toconduct Internal Audit of the Regional offices, District offices, unit offices etc., periodically atleast once in a year and furnish report.

The copies of the Departmental Inspection notes and Internal Audit notes were notproduced to audit. In the absence of the said copies it could not be known whether theinspection either departmental or internal was conducted in time or not. The same may befurnished to audit.

Code.No.18

109.RECEIVABLES AND PAYABLES NOT ASCERTAINED PROPERLY

APMAM mandates that the receivables in case of tax income shall be ascertained forthe last five years and incase of non tax income for the last three years. But the same wasnot adopted either in the FOBS or in the account rendered now to audit. If the receivables

and payables were not assessed properly now there was every chance that of the institutionsuffers at a later date. However the basis for the amounts arrived at as receivables andpayables was also not made known to audit.

Code.No.18

110.RECEIVABLES NOT RECONCILED

The Accounts Section and the Tax Section shall reconcile the balance at thebeginning of the accounting year in respect of the year wise property and other taxreceivables as appearing in the balance sheet of the previous year with the year wise total ofthe arrears recorded in the demand register as per the provisions contained in APMAM. Butduring the verification of the annual accounts it was noticed that the arrear demand registerswere not maintained by the ULB and as such the amount shown in the balance sheet couldnot be held to be correct and the basis on which the figures had been finalized was also notmade known to audit.

Code.No.18

111.FIXED ASSETS REGISTER NOT MAINTAINED

The A.P. Municipal Asset Valuation Methodology Manual provides for maintenance ofFixed Assets Register for 11 categories of assets and formats were prescribed in Annexure-6and as per instructions the register has to be maintained updating the details ofacquisition/construction/improvement of assets for each particular year. But it was noticedduring audit that no such registers have been maintained under certification by thecompetent authority for the years 2012-13 to 2015-2016 duly incorporating the assetsidentified in FOBS/rectified FOBS.

No effort has been made either to maintain Fixed Asset Register as part ofpreparation of annual account in the year 2012-13 and no updation was recorded bycapturing the additions/deletions during the year 2015-2016 in the annual accounts for theyear 2015-2016.

Non maintenance of the important Asset register by the ULBS having significant and valuable assets, impairs the asset management system and proper watch on the cost of the assets/improvement to assets would not be possible.

Code.No.18

112.NOTES TO ACCOUNTS NOT ENCLOSED TO FINANCIAL STATEMENTS.

The Notes to accounts comprising of the statement of significant accounting principles followed by the ULB in respect of accounting for its transactions and its preparationand presentation of the financial statements, statement of contingent liabilities representing obligations relating to past transactions and claims against the ULBs which were contingent on the happening of future uncertain events, subsidy report in accordance with the provisions of the Act and rules governing the ULBs and instructions of the Government in respect of certain services along with many other disclosures like details of honorarium paid to mayor/chair person, amount of refunds, remissions and writes of etc., were not enclosed with the financial statements and in the absence of the same the annual account prepared could not be analysed fully during the course of audit.

Code No.16

113.NON-SUBMISSION OF UTILISATION CERTIFCATES:

According to Article 211 (A) of the Andhra Pradesh, Financial Code Vol-I it is theresponsibility of the grant receiving authority to furnish U.C. to the grant releasing authority.The Utilization certificates would need to be furnished to the District Audit Officer, StateAudit, in the proforma Prescribed for counter signature. But the utilization certificates for noaccounts were furnished to audit for verification.

Code.No.18

114.RECONCILIATION PROCEDURES NOT OBSERVED:

A.P.M.A.M., prescribed reconciliation procedures with an objective to ensure that theaccounting information is recorded at more than one place, there are no discrepanciesbetween the different sets of records. The procedures include the following.

a) Bank reconciliation: aiming at reconciliation of bank, treasury balances with cash bookbalances.

b) Inter Unit reconciliation: intending to identify the disputed/un accepted inter unittransactions and to take appropriate action for rectification which is necessary in the processof consolidation of ULB at the head office level as the balances of inter unit account balancesshall be nullified.

c) Reconciliation of Deposits: Aiming at reconciliation the balance of EMD/SD etc., andany other deposits received by the ULB. The reasons for differences shall be identify andrectification entries passed whenever required by the section concerned.

d) Reconciliation of receivables and collections : The receivables and collections shall bereconciled on a quarterly basis or such other shorter time intervals, however the procedurefor reconciling outstanding balances of receivables and collections of all kinds of receivablesnamely viz., property tax receivables, Water tax receivables etc., is the same.

e) Reconciliation of Advances given: Advances given shall also be reconciled on aquarterly basis including advances given to employees of ULB, sections of the ULB andcontractors and suppliers.

Further A.P.M.A.M. envisaged reconciliation of loans taken, reconciliation of payables,reconciliation of ledger balances etc., also.

But during the scrutiny in audit it was observed that these procedures prescribed werenot followed and no reconciliation statements were enclosed to the final accounts, in theabsence of reconciliation of receivables and collections the balances shown as eitherreceivable or collected could not be held to be correct. Urgent steps would need to be takenby the Executive Authority to cause preparation of the reconciliation statements as per theinstructions of the A.P.M.A.M.,

Code No.11115.MONEY VALUE FORMS – STOCK REGISTER NOT PRODUCED :

The money value forms stock register for the year 2015-16 was not produced. In theabsence of the same, the opening balance of the money value forms received, utilizedbalance as on 31-03-2013 and as on the date of audit could not be verified in audit. In the absence of the same it could not be verified in audit as to who was thecustodian of the money value forms and the procedure adopted in issuing the M.V. formsand the watch kept over the return of the bill book.

Further the amount collected, credited to municipal funds by using the money valueforms could not be certified in audit.

Losses if any noticed later, the same would need to be made good from theperson(s) responsible and remitted to municipal funds under intimation to audit.

Code:11116.IMMOVABLE PROPERTY – CONSOLIDATED REGISTER OF PROPERTIES NOTMAINTAINED AND STATUS OF THE PROPERTIES NOT FURNISHED:

Consolidated register showing the properties owned by the Municipal Corporation wasnot maintained. Several immovable property registers were produced to audit. The reasonsfor maintaining so many registers were not furnished. The details of properties acquiredwere simply noted in the registers. But, the present status of the properties was not noted.In the absence of the same, the details of the buildings, lands, shops, vacant sites etc.,owned by the corporation and the properties utilizing by the corporation, properties leasedout, properties encroached etc., could not be verified in audit. Action may be taken for thepreparation of consolidated register of properties owned by the corporation duly recordingthe present status, certified and produced to audit for verification.

The details of assets available in the official web site of the Guntur MunicipalCorporation are enclosed to the audit report.

Loss, if any, caused due to not safe guarding/non-leasing of assets may be workedout and made good from the person or persons responsible.

117 )RECEIPTS AND CHARGES.

The gross receipts and Charges of the Municipal Council, Samalkot for the year 2015-2016 are as furnished below.

Name of the Fund Receipts ExpenditureMGF 7.78.47.519.00 6,87,56,780.00CPF 7,46,18,026.37 7,97,52,069.00PEF 0.00 0.00

TOTAL 15,24,65,545.37 14,85,08,849.00

118)Pending Objections:1449 of objections involving an amount Rs. 1837.26 lakhs are pending settlement up

to the year 2015-16 as detailed below. Early action would need to be taken to settle theobjections.

Sl. No. Year No. of Paras Amount1 1973-74 to 82-83 36 6.20

2 1983-84 8 0.923 1985-86 12 1.604 1986-87 12 1.815 1988-89 35 9.616 1989-90 26 3.617 1990-91 22 16.938 1991-92 28 6.619 1992-93 12 4.6210 1993-94 33 33.5411 1994-95 18 14.3912 1995-96 24 49.8113 1996-97 11 11.0914 1997-98 39 23.2915 1998-99 24 76.3916 1999-2000 13 14.4317 2000-2001 20 35.9918 2001-2002 33 127.7319 2002-2003 43 73.6820 2003-2004 39 156.5321 2004-2005 28 35.9022 2005-2006 43 99.4323 2006-2007 30 100.9624 2007-2008 55 323.3625 2008-2009 65 183.1026 2009-2010 113 14.5527 2010-2011 99 79.3528 2011-2012 103 97.9529 2012-2013 149 46.7530 2013-2014 17 36.0031 2014-15 137 33.15

1335 1723.1732 2015-2016 114 114.09

Total 1449 1837.26 District Audit Officer, State Audit, Kakinada.

Documents

Office of the District Audit Officer, State Audit, Kakinada. · Asst. Audit Officer, State Audit (T1), Kakinada together with the replies in triplicate duly approved by the Council