1 AUDIT OBSERVATIONS on ACCOUNTING AND PROCUREMENT th Review Meeting of State FCs- Udaipur (28-29 October, 2013)

2 Procurement Plan Annual Procurement Plan Prepare the Procurement Plan every year and upload on SSA’s website as envisaged in Para 113 of the Manual. MHRD on requested the State to prepare and upload on the web site the procurement plan for Intimation not received from the following 20 States despite the issue of a reminder on Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, Dadra & Nagar Haveli, Daman & Diu, Delhi, Goa, Haryana, J&K, Jharkhand, Karnataka, Lakshadweep, Manipur, Meghalaya, Nagaland, Odisha, Puducherry, Sikkim, Tamil Nadu & Uttarakhand West Bengal has prepared the plan for SPO only and yet to prepare the district plan. States are requested to prepare the Plan for immediately and upload on their web site.

3 Procurement Plan Common errors noticed: Footnotes of the Performa prescribe various stages of contracts, which are not being followed correctly. While six stages are prescribed for goods, nine stages are prescribed for civil works as indicated below: GoodsCivil Works 1.Preparation of specifications and bids document. 2.Issue of Invitation to bid. 3.Open bids 4.Evaluation 5.Award Contracts 6.Delivery 1.Preparation of specifications and bids document. 2.Issue of Invitation to bid. 3.Open bids 4.Evaluation of bids 5.Award of contracts 6.Construction 25% complete 7.Construction 50% complete 8.Construction 75% complete 9.Construction 100% complete

4 Procurement Plan Common errors noticed: Some States have prepared Procurement Plan partially and not covering the entire outlay approved by the PAB for the State Component and all the Districts. The Procurement Plan needs to be complete in all respects taking into account the outlay approved by the PAB for each activity. Various methods of Procurement prescribed in the Manual to be followed during the year need to be indicated in the plan. Civil Works either through community or through contractors have not been provided in the plan by some States. The complete stages for each contract have not been indicated in the plan by some States.

5 STATUTORY AUDIT REPORT – PROCUREMENT OBSERVATONS 1. Purchases without inviting tenders/quotations StateGist of Observations Arunachal Pradesh(a)NCERT books worth Rs crores were purchased from a firm without inviting tenders. (b)Actual quantity of books received not compared with bill before releasing payment. KeralaTenders not invited for procurement of items ManipurComputers, Laptop, furniture and other materials purchased without obtaining quotations. Uttar PradeshQuotations from registered suppliers not obtained for the purchase of computers at district level. Model a make and comparative statements were not available in districts.

6 STATUTORY AUDIT REPORT – PROCUREMENT OBSERVATONS 2. Procurement procedure not followed StateGist of Observations Tamil NaduProcurement procedure prescribed in the FM&P Manual not followed by majority of VECs / SMCs. Uttar PradeshProcurement procedure not followed in many districts. 3. Limited tender instead of Open Tender StateGist of Observations Arunachal PradeshMaths Kit Rs lakh Books for Reading corner Rs lakh Library Books Rs lakh Printing of CCE Report and Rs lakh CGL Sheets Items under EGS/TLE/TLM is Kurung-Kumey District

7 STATUTORY AUDIT REPORT – PROCUREMENT OBSERVATONS StateGist of Observations Chhattisgarh(a) Printing work was given to M/s. CG Samrada. (b)Most of the districts could not produce the procurement procedures followed 5. Non-production of Procurement documents StateGist of Observations Arunachal PradeshProcurement documents not produced to audit on purchase of Maths Kit, books for reading corner, library books, printing of CCE Report Cards. ChhattisgarhSupporting bills/vouchers on expenditure of Rs lakh not produced to audit. GujaratSupporting vouchers for civil works not produced. 4. Single tender instead of other method

8 STATUTORY AUDIT REPORT – PROCUREMENT OBSERVATONS StateGist of Observations ChhattisgarhDistrict could not State the method of procurement adopted for the items procured. 7. Mis-procurement StateGist of Observations BiharGenerator set 15 KVA for Rs lakh from M/s. Satya Enterprises was declared as mis-procurement by the Auditor. KeralaMaterials pertaining to Standard IX were purchased out of SSA funds. 6. District could not State the method of procurement

9 STATUTORY AUDIT REPORT – PROCUREMENT OBSERVATONS StateGist of Observations GujaratExcess payment made to contractors for civil works. LakshadweepExcess payment of Rs was made to the suppliers for the purchase of computers. 9. Cash payment made to contractors StateGist of Observations GujaratCash payment of Rs lakh was made to contractors for construction of KGBV school building. 8. Excess payment made to contractors

10 STATUTORY AUDIT REPORT – PROCUREMENT OBSERVATONS StateGist of Observations Kerala134 CP chairs of poor quality purchased and replacement not yet received. 10. Sub-Standard Quality

11