Strengthening of the RBIA of RD Programmes PRC Meeting 07-06-19

Broad Framework 1. Background 2. Recent Systemic initiatives 3. Quality IA : Way Forward Annual Audit Plan Engagement of Certified IAs Nomination of Trainees Monitoring over quality of Audit : GRIP portal Engagement of SIRDs Follow up Regional Workshops

Year-wise Expenditure (GOI) in Rural Development programmes (Rs Year-wise Expenditure (GOI) in Rural Development programmes (Rs. in crore) 117647.19* 112403.92 105448 95099 77321 67263 58630 50162 *BE for the year 2019-20

Expert Advisory Group (EAG) on IA (March 18) Major Recommendations: IA as a important tool of performance management Strengthening IA ( Risk based IA) as an instrument of management control across RD programmes, up to grass root level. Progression from merely regulatory audit to risk identification and mitigation with sharp focus on objective . Developing Risk Matrix for important RD programmes . Capacity Building Create a pool of 5000 Internal Auditors . Contd…..

Contd…. The effectiveness of IA: Prerequisites 1 Contd….. The effectiveness of IA: Prerequisites 1. the quality of the internal audit; 2. the competencies of the internal audit team; 3. the independence of internal audit; 4. support from the management .  

Risk Matrix & Training Material Risk matrix of MGNREGA, PMAY-G, SBM developed by o/o CCA NIRD&PR and Institute of Internal Auditors engaged to prepare course material for 3 weeks’ certificate course Risk matrix to be reviewed every year

Certified auditors : 3 week certificate course started on Risk Based Internal Audit for RD programmes. Inaugurated by Secretary (RD) on 1st August, 2018 at NIRD&PR. Four batches consisting of 86 trainees have already been trained and are available to take up assignment. List of certified auditors is available at https://rural.nic.in/finance/office-of-cca/annual- internal-audit.

State-wise Certified Internal Auditors S.No State No of Certified Auditors 1 Andhra Pradesh 3 2 Delhi 41 Gujarat 4 H.P 7 5 Haryana 6 Jharkhand Karnataka 8 M.P 9 Maharashtra 10 Mizoram 11 Punjab 12 Rajasthan 13 Telangana 14 U.P 15 Uttarakhand 16 West Bengal Total 86

Training of Trainers (TOT) at NIRDPR, Hyderabad Target to create a pool or 5000 certified internal auditors. 15 SIRDs, NIFM and INGAF selected to conduct the programme, 15 Trainers from 5 SIRDs trained at NIRD&PR in 1st batch of Training of Trainers (ToT) 2nd batch of ToT will start in June with 30 Master trainers

Training of Trainers 1st Batch of ToT 2nd Batch of ToT State No of Master Trainers Odisha 3 Gujarat Assam 2 Tamil Nadu 5 Telangana Total 15 State No of Master Trainers Odisha 3 Rajasthan 5 M.P 7 Karnataka Jharkhand 2 Uttarakhand U.P Total 32

Quality Assurance Certification process : Rationalization 4 stage evaluation process Basic module evaluation Theoretical test by SIRD/NIRD RD specific module evaluation Field audit evaluation Evaluation of actual audit by Audit team leader Evaluation of presentation made by the trainees Expert panel to evaluate performance before award of certificate. (Admissible honorarium payable to experts.) Post certification review Monitoring over quality of audit. Ranking of the certified IAs on quality of audit done. Annual review and updation of course module through wider consultations

Follow up Audit observations/Paras: Appropriate and timely Responses Risk Analysis: strengthen Internal audit initiative

Details of Year wise Outstanding Paras of M/o Rural Development Schemes from 2013-14 to 2018-19 2014-15 2015-16 2016-17 2017-18 2018-19 1601 89 98 97 126 636 555

Irregular Expenditure found Beyond the permissible limit of admin fund by examination of MIS and balance sheet Name of Scheme Distt./State Amount in lakhs MGNREGA Thiruananthpuram, Kerala State 1516.57 Palakkad, Kerala 189.79 Nalanda (Bihar) 476.86 Janjgir Chhatisgarh 135.58 Nagpur (Maharashtra) 176.38 Azamgarh (UP) 579.58 Ramgarh (Jharkhand) 81.19 Jagatsinghpur (Odisha) 57.96 Vikarabad, Telangana 416.00 PMGSY Pune (Maharashtra) 158.73 Mau (UP) 118.39 Rangareddy (Telengana) 555.74 PMAY-G Aurangabad (Maharashtra) 1474.12 Khorda (Odisha) 166.66 Tiruvallur (TN) 168.59

Diversion of Funds to other schemes/Districts Name of Scheme Distt./State Amount in lakhs MGNREGA Ramgarh/Jharkhand 400.00 PMAY-G Dhankanal (Odisha) 1513.60

Blockage/Unutilized Govt. money at end of the Financial Year Name of Scheme Distt./State Amount in lakhs PMAY-G Aurangabad, Maharashtra 840.05 Dhanknal (Odisha) 238.70 Rangareddy (Telengana) 19079.00 MGNREGA North 24 Pargana (WB) 61.02 Janjgir Chhatisgarh 189.33 Vellore (TN) 115.29 Chikkaballapur (Karnataka) 435.97 PMGSY Nayagarh, (Odisha) 1449.67 Pune (Maharashtra) 2200.44 NSAP Ranchi, Jharkhand 1533.22

Irregularities without the call of tender (Procurement of Material), Excess Expenditure booked over and above sanction amount of Govt. of India Name of Scheme Distt./State Amount in lakhs MGNREGA Sangareddy (Telengana) 956.41 Vikarabad (Telengana) 15410.61 PMGSY Hoshangabad (MP) 1960.46

Others: Non release of state share to Districts, Non adjustment of Advances from Line Departments/Agencies/Officials, Irregular payment of salary to regular staff of State Government which is not permitted under the scheme guideline

Way forward THANK YOU I Annual Audit Plan Careful planning To cover all Distt. within a period of 4 years (80:20) II Capacity building : Nomination To nominate the carefully selected candidates for certificate and ToT course To identify the SIRDs to undertake certificate courses. 4-8 batches may be taken each year for next three years. III Deployment Harness the potential of Certified Internal Auditors and deploy them in Internal audit activities in the States. Monitoring over quality of Audit : GRIP portal Contd…. THANK YOU

IA to be mandated in the RD Schemes Systemic issues Setting up of CIARD IA to be mandated in the RD Schemes IA to be included as a mandatory component in the Annual Action Plan. Synergy : with CSOs, Internal audit and CAG Compendium of IAs GRIP : upgradation, customization and integration Internal Audit Unit of the DoRD is being strengthened Workshops May be planned for ascertaining the updated status of IAs, experience sharing and working out future road map

Thank You