SARVA SHIKSHA ABHIYAN Uttar Pradesh INTERNAL AUDIT

INTERNAL AUDIT The term Audit has been derived from the Greek word Audire that means to hear. Representatives of the kings used to hear about the expenditure of the royal money. Audit Started for the first time in Egypt. Kautilya has also written that the king should appoint some loyal, shrewd and experienced people to monitor the expenditure of the State.

Types of Audit Statutory Audit Internal Audit Performance Audit Technical Audit

Principles behind Internal Audit in Government Sector Strengthening of financial system Mid term appraisal of schemes Imparting information about the latest GOs to the concerned offices. Suggestions to improve and update the records prior to Statutory Audit so that there are less objections in the report of Statutory Audit. Internal Auditor should work as friend philosopher and guide.

Internal Audit in Uttar Pradesh In 1960 in some of the departments Internal Audit wings were established. FCs of the departments were directed to send quarterly reports regarding the financial discipline. In 2000 a post of State Internal Auditor was created in the finance department. It was made mandatory for every department to have a unit of Internal Auditors. In the beginning of every financial year a schedule of Audit Calendar is to be sent to Director, Internal Audit as well as to Finance Department.

The government has also constituted committees at different level. At directorate level a sub committee has been constituted under the chairmanship of Director which has following members: Finance Controller Member Additional Project Director Member Senior Accounts Officer (Audit) Member Secretary Apart from it an Internal Audit Committee formed at Govt. level under Chairmanship of Principal Secretary/Secretary. This committee has full powers to settle the Audit paras/ observations made during the internal audit.

Financial Activities and their monitoring under SSA is being done efficiently and according to the manual on Financial management & Procurement. To ensure proper maintenance of financial records, Internal Audit Programme is being implemented. Main points covered under Internal Audit of SSA are as follows:- Ensuring that the funds remitted from SPO to DPO are being remitted/ transferred to lower level like BRC, CRC and VEC etc. within due time

Ensuring that the expenditure incurred by the DPO for different activities are within the provision of the particular head and according to the norms of manual on financial management & Procurement ( FM&P) . Ensuring that the purchase procedure laid down in the manual is being followed by BRC, CRC, VECs etc. for each and every type of procurement. Ensuring that the payment for salaries are being done according to rules / procedures Where there are cases of irregular payment under salaries, the excess payment has been recovered from the person concerned and credited the same in SSA account.

Ensuring that proper books of accounts as required under FM & P manual are being maintained at BRC, CRC, VECs etc. In those cases where it is not being maintained properly, efforts are being made to ensure that all these books of accounts are maintained. Procedural mistakes which have come into the light during Internal Audit are informed to the concerned so that they can be rectified and not repeated again in future.

Following documents are provided to the Internal Audit team. Cash book ( SSA, NPEGEL & KGBV). Ledger ( SSA, NPEGEL & KGBV). Cheque issue register . Bank reconciliation statement. Pass book / Bank statement. Utilization Certificate. Physical verification report.. Dead stock register. Stationary / Consumable register. Salary register

Payment Voucher. T.A. Bill/Medical reimbursement register. Service book/Personal file of Re-deployed Employee. Logbook of Vehicle/ Generator. Grant register. Electricity/Telephone register. Tender /Quotation file. Fund Transfer File. Proceedings of purchase committee. Advance register. Audit objection register. Asset register

Audit reports are presented in the following format: PART-1(A) In this part following informations are provided; Name of DDO, Designation & Period of work and his tenure. Period for which Internal Audit has been conducted Name & Designation of the members of Internal Audit team. Period of internal audit.

PART-2(A) In this part cases of serious/important matters related to irregularities, objections, misuse of Govt. money, excess payment etc. which normally have to be included in yearly Audit Report are shown. PART-2(B) In this part General financial irregularities found during internal audit are included.

PART-3 In this part other objections in short are mentioned and the documents which have not been produced during the course of internal audit have been mentioned mandatorily. After the completion of internal audit the audit report is sent to the concerned districts for compliance. After the compliance is received the report is put up before the sub committee. Paras unsettled up to sub committee level are then referred to the committee at Government level.

No of units Covered in internal Audit Status of coverage of internal audit work during the year 2009-10 S.No Total No of Units No of units Covered in internal Audit Period Cover Units not Covered 1. State Project Office- 1 - 2009-10 01 2. District Project Offices- 71 37 34 3. BRCs- 880 217 663 4. URCs- 09 09 NIL 5. NPRC/CRCs- 8249 97 8152 6. VECs- 92311 3092 2009.10 89219 7. DIETs- 71 38 33 8. KGBV- 454 120 334 Total 102046 3610 98436

Remarks- Recovery action to be taken on the reports of internal audits covered during 2009-10 as per following - S.No Particulars No of Paras Amount to be recovered 1. Excess payment 109 3812907 2. Excess payment against allotment 04 7893 3. Losses due to Mathematical error 256820 4. Misappropriation 03 149583 5. Cases of process violation 421 72589025 6. others 62 1577468 Total 603 78393696

Recoveries and penalties imposed on the basis of internal audit are more than those by the statutory audit.

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