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Audit Report 2018-19

 

Audit Summary Report: Arpookara Grama Panchayat (2018–19)

1. Overview & Statutory Context

  • Entity: Arpookara Grama Panchayat, Kottayam District, Kerala.
  • Period Audited: Financial Year 2018–19 (along with monetary transactions checked from 01.04.2018 to 31.10.2019).
  • Issuing Authority: Department of Kerala State Audit (Audit conducted by Deputy Director Sabu C. George and team).
  • Statutory Provisions: Issued under Section 215(4) of the Kerala Panchayat Raj Act (1994), Section 13 of the Kerala Local Fund Audit Act (1994), and Rule 18 of the Kerala Local Fund Audit Rules (1996).
  • Audit Period & Queries: Audited between 07.11.2019 and 19.11.2019. Out of 32 audit inquiry notes issued, 27 replies were received.

2. Key Key Personnel during 2018–19

  • Panchayat President: Shri Mohan C. Chaturathira.
  • Secretary: Shri Manoj Chandran.
  • Assistant Secretary: Smt. Rajasree R..
  • Finance Standing Committee Chairperson: Smt. Elsamma Joseph.

3. Financial Overview & Budgetary Performance

A. Budget Performance

The Panchayat’s budget projections deviated substantially from actual receipts and expenditures, indicating non-compliance with standard Panchayat Raj procedures during budget preparation.

Financial ParameterBudget Projection (₹)Actual (₹)
Opening Balance81,95,338.942,35,58,196.94
Receipts49,79,30,000.007,81,80,836.00
Total50,61,25,338.9410,17,39,032.94
Expenditure42,90,94,000.007,30,20,436.00
Closing Balance7,70,31,338.942,87,18,596.94
  • Key Issues: Non-plan estimates were not properly submitted to the Finance Standing Committee. The accounting software (Saankhya) was not integrated with the budget, hindering proper budgetary control.

B. Project Implementation & Fund Utilization

  • Out of 306 approved projects, only 156 projects were implemented (a poor expenditure rate of 35%).
  • General Sector Development Fund: 80.40% utilized.
  • SCP (Scheduled Caste Plan): 58% utilized.
  • TSP (Tribal Sub-Plan): 70% utilized.
  • Road Maintenance Grant: 43% utilized.
  • Non-Road Maintenance Grant: 41% utilized.
  • Central Performance Grant: 100% utilized.

4. Major Audit Findings & Irregularities

A. Revenue Realization & Taxation Deficiencies

  1. Uncollected Property Tax (Higher Education Institutes): Educational buildings under the Center for Professional and Advanced Studies (e.g., School of Medical Education, Institute of Library & Information Science) were not assessed for property tax since 1993–94/1995–96, causing substantial revenue loss.
  2. Mobile Tower Tax Arrears: Tax arrears totaling ₹3,19,996 across BSNL mobile towers (Wards 9, 13, and 16) were pending from 2013–14 without recovery steps.
  3. Uncollected Rent Arrears: ₹24.06 Lakhs (Balance sheet shows ₹28.06 Lakhs) remained pending in rent arrears due to failure to enter formal contracts or collect security deposits.
  4. Trading & Business Licenses: 961 commercial buildings were recorded in software, but only 305 units applied for/obtained licenses. Local dairy cooperatives operated without required licenses or profession tax payments.
  5. E-Tender Fees: E-Tender fees totaling ₹25,050 credited to the LSGD Executive Engineer's account were not transferred back to the Panchayat's Own Fund.

B. Accounting Discrepancies & Internal Control Deficiencies

  1. Annual Financial Statements: Financial statements did not reflect a true and fair view due to unhandled stale cheques, improper register maintenance (Asset, Advance, Deposit, and Suit registers), and software data mismatch.
  2. Special Purpose Grants Held as Liabilities: Special grants totaling ₹57,63,005 (Anganwadi nutrition, Suchitwa Mission, Joint projects) remained unspent/unreturned as liabilities for 3–5 years.
  3. Unclaimed Fixed Deposits (FDs): 10 expired pledged FDs worth ₹1,98,495 were found lying in the cash chest without being credited back to the Panchayat fund per standard rules.
  4. Land Ownership/Asset Issues: The 23.4 cents of land on which the Panchayat office sits is still registered under a private individual's name (Mathew James Chenkondayil) in revenue records.

C. Expenditure Violations, Procedural Defects & Disallowances

  1. Streetlight Purchase Irregularities (₹4,92,000 held up):
    • 205 LED streetlights (24W) were purchased from Edison Electricals at the highest quoted price (₹2,400/unit) instead of accepting lower tenders offering equal/better warranty terms (causing an excess expenditure of ₹72,160). Entire expenditure disallowed/held up.
  2. Illegal Daily-Wage Appointment:
    • A clerk was appointed on daily wages without required government sanction (exceeding 179 days), violating rules. Salaries paid were noted as the secretary's personal liability.
  3. Floods (2018) Relief Fund Discrepancies (₹7,99,865 held up):
    • Expenditure vouchers for food, cattle feed, vehicles, and drinking water lacked proper sub-vouchers, trip sheets, and Finance Committee approval.
  4. Petty Works & Improper Vouchers:
    • ₹67,250 spent on road repairs/cleaning without proper estimates, technical sanctions, or measurement book entries (held up).
    • ₹3,73,198 in Own Fund expenditure held up due to missing quotations, estimates, and delivery records.
  5. ISO Certification & Office Renovation:
    • ₹39.2 Lakhs spent on office works; electrification and networking cables on the top floor were later dismantled and ruined without proper planning or stock entry.
  6. Ineffective Waste Management & CCTV Projects:
    • CCTV cameras installed at Medical College Bus Stand (₹3.15 Lakhs) had monitor setups 5 km away, making live monitoring impossible. Additional electrification bill of ₹25,332 held up due to missing sub-vouchers.
    • Failure to set up operational MRF/MCF facilities despite Medical College being in the Panchayat area.

5. Audit Recommendations & Conclusion

  • Budgetary Controls: Integrate Saankhya software with budget planning and ensure Standing Committees submit timely budget estimates.
  • Revenue Recovery: Immediately assess and collect pending property taxes from higher educational institutes, mobile towers, commercial traders, and rent defaulting shops.
  • Asset & Land Formalization: Transfer ownership of Panchayat land in official revenue records and update the physical Asset Register.
  • Compliance in Procurement: Strictly follow competitive bidding procedures (tenders/quotations) and obtain technical valuations before making payments.
  • Action on Audit Inquiries: Resolve pending audit queries and remit recovery amounts (e.g., excess laptop payments, festival allowances due to CMDRF, and illegal daily wage expenses) into proper accounts.

  • Audit Report 2018-19