CAG Report 2016-17 placed in Assembly Only Rs 7.20 crof total expenditure of Rs 220.15 cr spent on p

Gangtok, 16 Jul [PIB]:

The Report of the Comptroller and Auditor General of India (Social, Economic, Revenue and General Sectors) for the year ended 31 March 2017 on Government of Sikkim was laid before the State Legislature on 12 July 2018.

A synopsis of the important findings contained in the Report is presented below:

1. Performance Audit (PA) on National Rural Drinking Water Programme (Rural Management and Development Department)

National Rural Drinking Water Programme in Sikkim was riddled with deficiencies in planning, programme execution and monitoring. As of March 2017, the Department was able to cover only 737 habitations out of 2,084 habitations, as Fully Covered while the remaining 1,347 habitations (65 per cent) had not been covered even after the implementation of revised scheme from 2009. Out of 462 projects, 105 projects had not been completed recording delay between three and four years. Highlights of findings were as follows:

· Only Rs 9.12 crore out of the total required State share of Rs 13.95 crore was released by the State Government. There was also delay in release of funds by State to State Water and Sanitation Mission.

· Eighty four electro-chlorinators worth Rs 1.18 crore procured during 2012-13 for immediate restoration and repair of damaged drinking water supply works were not put to use and were lying idle in dilapidated condition.

· There were cases of tapping of water from non-perennial sources, non-commencement of work involving Rs 53.63 lakh and abandonment of six projects despite incurring an expenditure of Rs 19.43 lakh owing to land dispute, absence of source and contractor’s negligence.

· All the three mega projects involving Rs 40.77 crore were behind schedule by more than two and a half years due to non-receipt of forest clearance, non-availability of pipes/fittings and contractor’s negligence, etc.

· The District Laboratories conducted only 5,820 tests during 2012-17 out of required 1,83,990 bacteriological and chemical tests.

2. PA on Sikkim Nationalised Transport Division including implementation of the Integrated Depot Management System {Transport Department (Sikkim Nationalised Transport Division)

The Sikkim Nationalised Transport (SNT) was unable to meet the huge demand of public transport in the State despite its virtual monopoly on public bus transport within the State. The weigh bridges installed at the check-posts at substantial cost were mostly non-functional. Supervision charges were also not being collected from private trucks within the State carrying sand, stone, stone aggregates, etc., leading to loss of revenue.

The Integrated Depot Management System (IDMS) had not delivered the desired result of improving operational efficiency of the SNT. There was no scope in the IDMS to capture many vital data. There were instances of incorrect data feed due to absence of standardised mode of data entry and data authentication. Main highlights of the PA were as follows:

· Capital expenditure of Rs 7.20 crore constituting barely three per cent of the total expenditure of Rs 220.15 crore during 2012-17 indicated low priority accorded to public transport.

· The SNT had a yearly revenue gap of the order of Rs 1.58 crore to Rs 18.75 crore during the period 2012-17.

· The SNT was unable to provide connectivity equitably to all areas of the State. There was no connectivity of West district with the capital town (Gangtok). Further, far flung areas in the North and West districts like Lachung, Lachen and Yuksom were not connected by bus to the respective district headquarters.

3. PA on functioning of State Bank of Sikkim

In the absence of a clear lending policy and detailed credit appraisal mechanism, the sanction of credit facilities was not based on objective criteria. SBS did not have any comprehensive procedure for post sanction/disbursement monitoring and follow-up of loan assets leading to Gross Non-Performing Assets of 45.75 per cent of total loan assets as on 31 March 2017.

There were only eight ATMs of SBS in the State which were lying defunct. There was no system for preparing Bank Reconciliation Statements (BRS) for inter branch/inter-bank transactions. SBS neither had a system of internal audit nor was there any formal arrangement for regulating the activities of SBS through oversight functions or through administrative supervision by GoS. Instances of non-compliance with the provisions of the State Bank of Sikkim Proclamation, 1968 and Reserve Bank of India (RBI) guidelines, 1949 were also noticed.

4. Compliance audit on National Social Assistance Programme (Social Justice, Empowerment and Welfare Department): The number of beneficiaries of National Social Assistance Programme (NSAP) rose from 19,517 to 23,565 during 2012-17. However, implementation of NSAP was riddled with inadequacies as the Department did not follow the prescribed procedures enshrined in the programme guidelines regarding awareness generation, selection of beneficiaries and verification of eligibility of beneficiaries.

The Department had not taken up any initiative to reach out to all eligible people and for assessing of total number of potential beneficiaries. The Department neither carried out any verification of the eligibility of beneficiaries while accepting the list of beneficiaries nor annual verification of the beneficiaries as required under the guidelines. Payment to ineligible beneficiaries was noticed.

Scrutiny of records of 3,621 NSAP beneficiaries revealed that 697 beneficiaries were ineligible under Indira Gandhi National Old Age Pension Scheme (IGNOAPS) and survey of 342 beneficiaries across all NSAP schemes revealed that 267 beneficiaries were ineligible for assistance. Further, 84 beneficiaries were receiving less assistance while 216 beneficiaries were receiving excess assistance under IGNOAPS.

5. Compliance audit on Border Area Development Programme (Development Planning, Economic Reforms and North Eastern Council Affairs Department): Border Area Development Programme (BADP) contributed towards creation of a number of durable assets in the border villages for the benefits of people in border villages. Data of the Baseline survey conducted in 2010 was not updated during 2012-17.

There were cases of non-provisioning of funds for maintenance of assets, non-adherence to sector-wise minimum allocation, non-release of State share, execution of impermissible schemes, delay in completion of works and idling of assets.

Evaluation study was not carried out during 2012-17. No action was initiated to address the lacunae pointed out in the Evaluation study of NITI AAYOG during 2015. Critical infrastructure such as Junior High Schools and Senior Secondary Schools, water supply schemes and Public Health Sub Centres/Public Health Centres were not sanctioned during 2012-17. Projects were not completed within the stipulated time frame. Main highlights of the findings were as follows:

· Implementation of programme was restricted to the villages located within 0-10 km of international border for the last 19 years without declaring any village saturated thereby depriving the benefits to villages located beyond 10 km.

· There was a total of Rs 22.95 crore of unspent balance indicating lack of preparedness of line departments to absorb allocated funds and State Government also failed to release its proportionate share of Rs 3 crore in 2016-17.

· BADP schemes were executed in eight non border villages. Nine of the works executed were not permissible under programme guidelines.

· Out of 23 completed works of Rs 21.79 crore, five works (Rs 6.07 crore) were completed with delay of four to 24 months and eight works (Rs 10.89) were under progress beyond schedule by 7 to 24 months.

· Car park and Cafeteria at Selempu, Adventure tourism in and around Kupup, Road from Sopakha village to Chewabhanjyang via Jorebotey, etc. were lying idle.

6. IT audit on Sikkim Integrated Financial Management System (SIFMS): The Finance, Revenue and Expenditure Department initiated SIFMS in 2008-09 with the objective to provide real-time data and to make the accounting system of the Government more transparent and accurate. The objective of SIFMS had not been achieved as of November 2017. The System had weak control mechanisms and third party test of the system was not conducted. Main highlights of the findings were as follows:

· There was no Information System Security Policy and Password Policy. The SIFMS did not have the provision to restrict the number of invalid login attempts and “Session time out” in order to safeguard against any unauthorised access which exposed the system to the risk of unauthorised use.

· Fire extinguishers, air conditioned machines, etc. were not available in the IT Cell and PAO offices except in PAO (HQ). Physical access to the site and individual personal computers was not regulated.

· While the database and the application had been hosted at the State Data Centre, Gangtok, the disaster recovery site of State Data Centre was created at the National Data Centre, New Delhi. However, they were not tested in disaster simulation exercises. IT personnel were also not trained to respond effectively in emergency situations.

· The IT cell, handling the data of the entire State was being manned by temporary programmers, hence, was fraught with the risk of interfering in the security and integrity of the data.

· There were inconsistencies in data due to absence of data validation system before input.

· Non-mapping of applicable rules into the system had resulted in short realisation of Government revenue. Further, cases of excess expenditure over budget provision were also noticed.

Other important observations:

7. The Sikkim Building and Other Construction Workers’ Welfare Board incurred irregular expenditure of Rs 3.03 crore out of total expenditure of Rs 11.21 crore from the cess fund exclusively meant for the benefit of labours and their families/dependents for whom the cess was actually collected.

8. Diversion by Social Justice, Empowerment and Welfare Department of Rs 0.83 crore out of Rs 1 crore earmarked for construction of Ashram School defeated the objective of creating a permanent structure for the school.

9. Delay in installation of power supply by Animal Husbandry, Livestock, Fisheries and Veterinary Services Department resulted in idling of Fish Feed Mills worth Rs 1.16 crore for more than three years and missed production of fish feed worth Rs 12.00 crore.

10. Setting up of a new bio-fertiliser production unit by Food Security and Agriculture Development Department at a cost of Rs 1.29 crore at the same site of an existing unit was unwarranted as the Department was not able to utilise the product of existing unit. This was also irregular as the approval from the national mission for sustainable agriculture was for state of art bio-pesticide unit and not for bio-fertiliser unit.

11. Delay in execution/completion of work by Roads and Bridges Department due to prolonged tendering process and belated action for obtaining statutory clearances for encumbrance free land and shifting of power and electrical utilities led to avoidable payment of cost escalation of Rs 1.40 crore.

12. Failure to exercise due diligence by the Roads and Bridges Department in executing the deposit work led to abandonment of project by user agency and consequent unwarranted burden of Rs 24.58 crore on the State exchequer.

13. There was excess payment by Rural Management and Development Department of (i) Rs 0.60 crore to the contractor on haulage charge of non-stock materials and (ii) Rs 0.64 crore towards labour on resizing and carriage of stones beyond requirement despite availability of stone at the work site.

14. Lack of proper planning by Urban development and Housing Department to provide encumbrance free site prior to issue of work order resulted in delay in commencement of the work leading to cost escalation of Rs 1.22 crore on account of increase in material and labour cost.

15. Failure to award the declaration under Section 11 of the Land Acquisition Act 1894 due to absence of budgetary provision with Urban Development and Housing Department for land acquisition and subsequent revision of compensation resulted in avoidable committed liability of Rs 23.73 crore.

16. Incorrect billing of 33 out of 167 Bulk Supply consumers by Energy and Power Department for the periods when their electric meters remained defective resulted in short collection of revenue of Rs 4.11 crore.

17. Short levy of demand charges contrary to the tariff provisions by Energy and Power Department resulted in extension of undue benefit to two HT consumers with corresponding loss of revenue of Rs 2.54 crore.

18. Failure in collection of water tax by Water Resources and River Development Department resulted in loss of revenue of rupees one crore.

In accordance with the provisions contained in Article 151 of the Constitution, the Comptroller and Auditor General of India is required to submit his Reports on Accounts as well as major findings on audit of transactions to the Governor, who causes them to be laid on the table of the State Legislature. Once laid on the table, the Reports stand referred to the Public Accounts Committee/Committee on Public Undertakings for discussion and suitable recommendations.