16 th JRM FINANCIAL MANAGEMENT Thematic Session 21 st July 2012

Progress of Expenditure Rs. in crore

Distribution of Expenditure – ` in crore Total 37837

Category wise Allocation and Expenditure Rs. in Crore OutlayExpdr.OutlayExpdr.OutlayExpdr.OutlayExpdr.OutlayExpdr. Access & Retention Quality Gender & Equity School Infrastructure Management Total

Improved Trend in Quarterly Expenditure  Improvement in expenditure trend after the introduction of monthly expenditure plan. % Achievement to approved outlay

Analysis of Financial Performance % Achievement (Against Outlay) No. of State More than 80% Less than 80% and more than 60% Less than 60%96369 % Achievement (Against Funds) No. of State More than 80% Less than 80% and more than 60% Less than 60%34021

Allocation of Outlay – ` in crore Total 69959

Targeting Funds for the outlay of Rs Crore in ` in crore

9 Status on State Share  20 States have released excess State share of Rs cr. as on 31 st March State(Rs. in Crore)State(Rs. in Crore) Andaman & Nicobar Islands 4.61Assam59.56 Chandigarh8.13Chhattisgarh36.78 Dadra & Nagar Haveli7.27Daman & Diu3.14 Goa5.54Gujarat Haryana133.72Jammu & Kashmir Jharkhand47.00Karnataka Kerala158.66Lakshadweep3.96 Madhya Pradesh533.34Maharashtra10.30 Manipur3.21Nagaland1.21 Puducherry2.41Rajasthan663.19

10 Status on State Share  Marginal Shortfall in 14 States amounting to Rs Cr. State(Rs. in Crore)State(Rs. in Crore) Andhra Pradesh13.66Arunachal Pradesh48.68 Bihar531.04Delhi8.87 Himachal Pradesh14.84Meghalaya2.11 Mizoram5.10Punjab Sikkim2.58Tamil Nadu5.43 Tripura8.82Uttar Pradesh65.28 Uttarakhand4.31West Bengal16.63  Rs lakh is the shortfall in Orissa.

Staff Position of Finance & Accounts S. No.Name of StateVacancies% of Vacancies SPODPOBlockSPODPOBlock 1Arunachal Pradesh Assam Bihar Chandigarh UT Chhatisgarh D & N Haveli Daman & DIU Delhi Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala

Staff Position of Finance & Accounts S. No.Name of StateVacancies% of Vacancies SPODPOBlockSPODPOBlock 16Lakshadeep Madhya Pradesh Maharashtra Meghalaya Mizoram Orissa Puducherry Punjab Rajasthan Tamil Nadu Tripura Uttar Pradesh Uttarakhand West Bengal Total

Staff Position of Finance & Accounts  Position improved in 17 States of A&N Islands, Andhra Pradesh, Arunachal Pradesh, Daman & Diu, Delhi, Himachal Pradesh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Orissa, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal  Sanctioned Accountants at block level in  45% vacancy position at block level and the States need some more time to position them.  Urged the States to take urgent steps to fill up the existing vacancies.  Progress is being reviewed regularly in the Quarterly Review Meeting of State Finance Controllers.

Capacity Building of Finance & Accounts staff Capacity Building of Finance & Accounts staff  5 days mandatory training for finance and accounts staff.  15 States provided adequate training.  Inadequate training provided by 14 States.  No training was provided in 6 States.

15 Capacity Building of Finance & Accounts staff Initiatives taken at National level.  During review meetings of State Finance Controllers provided capacity building on: -  Moving towards quality in Financial Management with special reference to Annual Grants under SSA.  Preparation of Monthly Monitoring Report.  Maintenance of online software to monitor progress of procurement of contracts of above Rs. 10 lakh per contract.  Preparation of Annual Procurement Plan.  Procurement Procedure.  Accounting of 13 th Finance Commission Award.  Responsive Accounting Procedure.  Settlement of Advances.  Tracking of funds at all levels.  Clearance of pending audit observations.

16 Capacity Building of Finance & Accounts staff  Disseminated findings of the following: -  Recommendations of the 14 th and 15 th JRM.  Post Review of procurement carried out by World Bank Consultants.  Key observations made by Statutory Auditors for and  Key observations made by IPAI for the 3 rd Phase of financial review.  Regional Capacity Building Workshops: -  With a view to develop a cadre of Master Trainers at State and District level, conducted 3 Regional Workshops at Western, Southern and Northern regions.  Four such Workshops are planned in the current year.

17 Capacity Building of Finance & Accounts staff  Preparation of Annual Training Plan: -  To provide intensive capacity building at all levels, States have been requested to prepare an annual training plan.  22 States prepared annual training plan for  13 States of Andhra Pradesh, Chhattisgarh, Dadar & Nagar Haveli, Daman & Diu, Goa, Himachal Pradesh, Jammu & Kashmir, Lakshadweep, Manipur, Nagaland, Tamil Nadu, Uttar Pradesh and West Bengal are yet to prepare the plan.  Urged the States to provide adequate training at all levels and implement measures to assess its effectiveness and relevance.  Progress is being reviewed regularly in the Quarterly Review Meeting of State Finance Controllers.

Accounting Bank Reconciliation Statement  Prepared monthly up to district level in all States except some districts of Manipur and Meghalaya.  Introduced at BRC level in most of the States, except Arunachal Pradesh, Bihar, Delhi, Kerala, Manipur, Meghalaya, Rajasthan, Sikkim and Uttar Pradesh.  Monitored regularly in the Quarterly Review Meetings of State Finance Controllers. Fund Flow  Release of GOI funds to all States by e-transfer/RTGS  Except Sikkim, all States releases funds by e-transfer/RTGS/Bank transfers from States to districts and districts to sub-district level units based on facilities available.

Accounting Software  Installed in 30 States upto District level except in Madhya Pradesh (2 districts only covered)  BRC level covered in 6 States of Gujarat, Jharkhand, Maharashtra, Punjab, Tamil Nadu and West Bengal  Not installed in 5 States.  Parallel system of accounting is continuing in all States and the Manual cash book, is the basis of audit.

20 Statutory Audit Report Audit Reports of all the 35 States/UTs for the year are on the SSA website. Comparative Statement of the receipt of Audit Report:- Period By November8 States11 States Delay of 1 month7 States10 States Delay of 2 months9 States6 States Delay of 3 months2 States6 States Delay of 4 months2 States0 Delay of 5 months4 States1 State Delay of 6 months2 States1 State Delay of 7 months1 State0

Statutory Audit (cont’d.) Audit Report of is due on 1 st November Alert Memo for timely submission issued to all States on 11 th June Held a video conference on 10 th July 2012 to take stock of the position.  Accounts for closed by all States.  Auditors appointed by all States except Goa, Gujarat and Uttarakhand (will be appointed shortly)  Audit is in process.  All States have committed to submit the report by due date. Progress is being monitored in the Quarterly Review Meeting of State Finance Controllers. 21

Statutory Audit (cont’d.) Compliance of Audit Report: Awaited from the following States: Vigorously pursuing with the States (8 States) Arunachal Pradesh, Andhra Pradesh, Bihar, Haryana, Chhattisgarh, Mizoram, Manipur & Nagaland (16 States) Arunachal Pradesh, Andhra Pradesh, Bihar, Chhattisgarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Manipur, Mizoram, Meghalaya, Nagaland, Puducherry, Sikkim, Tamil Nadu & Tripura (16 States) Arunachal Pradesh, Bihar, Chhattisgarh, Haryana, Himachal Pradesh, Karnataka, Kerala, Meghalaya, Maharashtra, Punjab, Nagaland, Rajasthan, Tamil Nadu, Tripura, Uttar Pradesh & Madhya Pradesh

Statutory Audit (cont’d.) Compliance of Audit Report: (22 States) Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Chandigarh, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Tripura, Tamil Nadu & Uttar Pradesh (28 States) Assam, Andhra Pradesh, Arunachal Pradesh, Bihar, Chandigarh, Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Jammu & Kashmir, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttar Pradesh & West Bengal

Status of Internal Audit  10 States on concurrent basis  15 States in progress  10 States not carried out

Internal Audit In view of the significant increase in the quantum of outlays, the States have been requested to strengthen the internal audit system as under:  Prepare an Annual Internal Audit Plan to focus on:  review of priority operations, internal controls and risk management in the high expenditure and priority areas like teacher’s salary, civil works, procurement, unadjusted advances, BRC/CRC expenditure etc.  Conduct the internal audit on concurrent basis.  Revise the staffing level as necessary to meet these objectives. The progress is being monitored in the Quarterly Review Meeting of State Finance Controllers. 25

Concurrent Financial Reviews & Procurement Plan  IPAI has completed 1 st, 2 nd and 3 rd phase of concurrent financial review in all States; reports shared with all States for follow up action:  Settlement of review Reports:  1 st phase : completed for 16 States; in progress for 19 States.  2 nd phase: completed for 1 State; in progress for 34 States.  3 rd phase: In progress for all States.  The IPAI’s contract for the 4 th Phase of review has now been extended for

Concurrent Financial Reviews & Procurement Plan  State Procurement Plan :  Requested the States to upload on States’ web-sites.  Intimation received from 5 States of Andhra Pradesh, Madhya Pradesh, Maharashtra, Tripura and Rajasthan.  On line software to monitor progress of procurement;  Software hoisted in a dedicated website called  Login id and password shared with States and Districts.  Operational Manual developed and disseminated.

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