Audit Reports
Kerala
Report of 2005 - Financial and Performance Audit of Local Self Government Institutions of Government of Kerala
Overview
This Audit Report includes four performance reviews and twelve audit paragraphs in addition to observations on the structure and finances of the Local Self Government Institutions (LSGIs) and the results of supplementary audit under the scheme of Technical Guidance and Supervision. Copies of the draft reviews and paragraphs were forwarded to the Government and the replies wherever received have been duly incorporated in this Report.Government did not 'authorise' an officer to consolidate the annual accounts of all LSGIs for its submission to Government and Legislature.The database on revenue and expenditure of all LSGIs, recommended by the Eleventh Finance Commission has not been developed by Government.
Against budget provision of Rs.5357.16 crore for the State plan outlay for the year 2005-06, actual disbursement was Rs.4017.49 crore of which transfer to LSGIs was only Rs.1008.15 crore (25.09 per cent).Though funds of Rs.217.43 crore were available for implementation of four centrally sponsored schemes out of 17, actual utilisation was only Rs.107.65 crore (49.51 per cent).The Comptroller and Auditor General of India (CAG) provides Technical Guidance and Supervision to Director of Local Fund Audit under section 20 (1) of the CAG's (DPC) Act, 1971. The scheme of TGS comprises audit planning, audit of 10 per cent of institutions and supplementary audit of 10 per cent of institutions audited by DLFA. In 2005-06, supplementary audit of 68 LSGIs was conducted. It revealed improper maintenance of various registers of accounts, lapses in preparation of budgets and Annual Financial Statements.The DLFA in its consolidated report failed to highlight arrears in submission of account by LSGIs. There were deficiencies in the audit process followed by DLFA.
The assets of LSGIs included movable and immovable assets, remunerative and non-remunerative assets historically owned by them and those acquired or created from time to time. Government, in the process of decentralisation,transferred to the LSGIs, assets and liabilities of the institutions such as primary health centres, hospitals and dispensaries, schools and agricultural farms having considerable assets in the form of land, buildings and other movable and immovable properties correlated to the transferred functions.Audit review revealed that the asset management in LSGIs was not satisfactory.Six projects for creating immovable assets were abandoned halfway through and forty five others were incomplete due to poor planning, selection of unsuitable land and failure on the part of LSGIs in monitoring resulting in unfruitful expenditure of Rs.6.51 crore.Purchase of encumbered property by the Grama Panchayat, Kulathupuzha resulted in loss of Rs.15.16 lakh.Two slaughter houses constructed at a cost of Rs.67.90 lakh functioned only for two and three days respectively.Pay wards attached to hospital and rooms in shopping complexes were not let out resulting in loss of revenue of Rs.87.40 lakh.Two hundred and five buildings in 15 LSGIs remained without proper maintenance whereas maintenance grant of Rs.21.07 crore remained unutilised during 2004-05 and 2005-06.Land measuring 9.63 acres owned by four LSGIs was encroached due to nonprotection by boundaries.Thirty eight movable assets acquired at a cost of Rs.14.20 lakh were not utilised.