1. INTERNAL AUDIT Mechanism in SSA-MADHYA PRADESH

2. Staff sanctioned for Financial Management S.No.Name of Post Post sanctioned Post FilledPost Vacant State Level Staff 1Additional Director & Manager Finance 11 Deputy Manager (F)11 Assistant Manager (F)1 1 Accountant33 L.D.C.11 District & Block Level Staff 2Assistant Project Coordinator (Finance) 48426 Accountant48408 Accountant at Block31723978

3. State Audit Cell A state level internal audit cell has been formed consisting of three officers posted from Treasuries & Accounts Department The cell monitors the on going audit program by the various C.A. firms in the state. The cell apart from overseeing the audit objections also guides the Districts in sorting out the objections raised by various audit authorities like Statutory, internal, IPAI, AG, C&AG

4. Status of Internal Audit As per GOI instructions the states have to conduct internal audit in a minimum of 1/3 rd of total number of Districts in a year. The State of M.P. had selected six firms as per the selection procedure laid down in the FMP Manual for the year 2003-04 The Chartered Accountants were engaged to conduct internal audit of District offices up to the year 2005-06

5. Year wise position of Internal Audit YearNo. of Districts & Blocks covered Expenditure on Internal Audit (rupees in lakhs) CA Firms involved 2003-0415 (102 Blocks)2.9966 2004-0516 (117 Blocks)3.1926 2005-0617(95 Blocks)3.0206 Total48(314 Blocks)9.208

6. Status of Internal Audit The Chartered Accountants have covered all the 48 Districts of M.P. by the year 2005-06 Hence, For the Year 2006-07 the internal audit was conducted by the State audit cell in some of the District Offices

7. Status of Audit for the year 2007-08 & 2008-09 The selection procedure for conduct of internal, concurrent, Statutory audit for the years 2007-08 & 2008-09 was completed 29 firms have been entrusted with the task of concurrent audit for the year 2008-09 in all the 48 Districts The Concurrent Audit will be conducted up to PTA & GP level during this year 8 firms have been assigned with the work of internal audit for the year 2007-08 and they have started the process of audit and it is nearing completion 6 firms have been appointed as Statutory auditors for the year 2007-08 and they also started the work of audit and will be completing by November-2008

8. TOR for Conducting Audit in SSA As per the GOI guide lines the state has made a detailed TOR for auditors for the Year 2007-08 & 2008-09 Some of the excerpts of the TOR are The concurrent auditor CA is required to visit the Dist Office twice in a month and the block office once in a month. The Firm should submit monthly periodical report in the prescribed format to the District office and the quarterly report to the State Head Office. The report ending with the last quarter of the financial year should also include the final accounts for the year 2008-09 The firm should submit the certified MER of the District every month –The following are the expected date of receipt of quarterly reports by the concurrent Auditors to the Rajya Shiksha Kendra For 1st & 2nd Quatrers(April-08 to Sep-08) - 15th Nov-2008 For 3rd Quarter( October-08 to December-08) - 15th Jan-2009 For 4th Quarter ( January-09 to March-09) - 30th April-2009

9. TOR for Conducting Audit in SSA Specific Scope of Internal Audit Carry forward of Opening Balance on 1st April of each year correctly. Checking of Cash / Bank Book Totals including carried forwards. Vouching of receipts and payment with supporting documents Whether sanctioned amount of all vouchers are tallying with Cash / Bank –Book? Checking of Cash-Bank Contra entries. Verify all vouchers entered in the Cash / Bank Book duly sanctioned/ attested by Officer in charge? Physical Cash Verification –Random. Preparation of Bank Reconciliation Statements. Checking Monthly expenditures incurred & submitted by the CRC with supporting documents. Check whether the Demand Draft issued has been cleared within reasonable time limit i.e 15 days from the date of issue, Report on the delay in clearance of the Demand Draft.

10. TOR for Conducting Audit in SSA General Ledger scrutiny, accounting transactions are correctly accounted for in the respective Account Heads. Check calculation of salary payments and entry for the salary payments. Check that payment to government, other departments and to HO towards EPF, IT, HBA deduction and P.T etc are made timely. Verification of different deductions against the staff advances. Physical Verification of any Investment / Deposit and check its timely renewal / realization the maturity along with Interest. TDS has been deducted as per the provisions of the IT Act and deposition in made within prescribed time period. To check credits for interest on bank deposits and saving account with bank statements/bank reconciliation statement.

11. TOR for Conducting Audit in SSA Check irregularities in payments on the following counts –Splitting of Bills. –Purchase expenses without following procurement norms. –Overwriting on bills. –Inadequate/improper supporting/authorization for payments. –Inadequate delays in payments. –Purchase made directly for which rate contract is available.

12. TOR for Conducting Audit in SSA Guidelines for verification of Procurement Procedure –The proposal of purchase has been approved by the competent authority or purchase committee –Indent for purchase should give details of the quantity required, last purchase rate, lead time and the name / address of the consignee, etc. –Approval of mode of procurement –Tender documents. –Contract award and its execution. –The internal audit should check that the stores/goods received are properly recorded in the stock registers –The quality of the Goods / stores purchased are certified by the competent person and are as per the purchase order in terms of quality, quantity specification and price and store register number is recorded on the bill / invoice.

13. TOR for Conducting Audit in SSA Guidelines for verification of Payment procedure for the Procurements made –Original bill duly signed by the supplier is submitted. –Supplier has put his initials in all cuttings/ corrections in the bill. –All supporting documents are attached with the bills. –Job completion certificate should be processed by the dealing assistant of SSA. –Bills are passed for payment as per the norms of mission. –Before passing the bills it is to be checked that all the terms and conditions have been complied with. –Every final bill is checked in details with the measurement books if required.

14. TOR for Conducting Audit in SSA Checking those legal recourses that have been taken in due course against defaulting contractors or suppliers Physical Verification of Fixed Assets with the Fixed Assets Register.

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