Arpookara
Grama Panchayat

Arpookara Grama Panchayat

Audit Report Analysis (2017–18)

English Report

1. Executive Summary

This report presents an analysis of the Audit Report of Arpookara Grama Panchayat for the financial year 2017–18, prepared by the Kerala State Audit Department. The audit assessed the Panchayat's financial management, budget implementation, development projects, revenue collection, internal control systems, and compliance with statutory provisions.

The audit identified several administrative and financial deficiencies, particularly in project implementation, budget planning, revenue management, accounting practices, and internal controls.

2. Financial Overview

The financial position of the Panchayat during 2017–18 is summarized below:

Although the Panchayat maintained a healthy closing balance, the audit identified several accounting deficiencies requiring corrective action.

3. Budget Analysis

The revised budget projected:

• Expected Revenue: ₹51.55 Crore
• Expected Expenditure: ₹51.09 Crore

However, the actual receipts and expenditure were only around ₹6 Crore, indicating a significant gap between budget estimates and actual financial performance.

The audit concluded that the budget was unrealistic and recommended preparing future budgets based on actual financial trends and reliable projections.

4. Development Plan Performance

The Panchayat approved:

• 247 Development Projects
• 116 Projects Implemented
• Total Project Outlay: ₹28.33 Crore
• Actual Expenditure: ₹3.39 Crore
• Overall Plan Expenditure: 11.95%

This represents a very low level of implementation.

The Assistant Engineer was responsible for 169 projects, but only 70 projects were executed, indicating serious delays in development activities.

5. Loss of Government Grants

Due to delays in project execution and inadequate planning, the Panchayat failed to utilize ₹1.16 Crore of Government grants.

The unutilized grants included:

• Development Fund
• Maintenance Grant
• Finance Commission Grant

The audit emphasized that timely implementation of projects is essential to avoid such financial losses.

6. Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)

The performance of the employment guarantee programme was satisfactory.

Achievements include:

• 277 projects planned.
• 86 projects implemented.
• 42,307 person-days of employment generated.
• 762 families benefited.

However, discrepancies were noticed between the MGNREGS Cash Book and the Annual Financial Statements.

7. Social Welfare Schemes

The Panchayat successfully implemented various welfare programmes, including:

• Old Age Pension
• Widow Pension
• Agricultural Labour Pension
• Disability Pension
• Unemployment Allowance

A total of ₹3.97 Crore was disbursed through B-Fund welfare schemes.

8. Major Revenue Audit Observations

The audit identified several deficiencies in revenue administration:

• Irregularities in the use of manual receipt books.
• Property tax was not fully assessed and collected.
• Mobile communication towers were not properly assessed for property tax.
• Community halls attached to religious institutions were not taxed according to applicable rules.
• Large arrears of shopping complex rent remained uncollected.
• Professional tax arrears were not effectively recovered.
• Several commercial establishments were functioning without valid licences.

9. Major Expenditure Audit Observations

The audit reported several irregularities in expenditure management:

• Daily wage appointments were not made according to prescribed procedures.
• Electricity arrears of a drinking water project were paid without proper authorization.
• CCTV installation was carried out without executing a formal agreement.
• Pre-monsoon programme expenditure lacked supporting records.
• Supporting documents for certain expenditures were unavailable.
• Construction work was undertaken on land not owned by the Panchayat.
• Grants received for waste management remained unutilized and were consequently lost.

10. Accounting and Financial Reporting Issues

The audit observed significant accounting deficiencies, including:

• Asset Register not updated.
• Value of Panchayat-owned land not recorded.
• Stale cheques not properly accounted for.
• Deposit Register incomplete.
• KSEB deposits not accurately reflected.
• Rent Demand-Collection-Balance (DCB) Register not maintained.
• Professional Tax DCB figures did not match the financial statements.
• Several fund balances lacked proper supporting records.

11. Internal Control System

The audit found weaknesses in internal governance:

• Stock registers were incomplete.
• Effective action was not taken to recover arrears.
• Procurement Committee approval was not obtained for all purchases.
• Asset management system was inadequate.
• Accounting entries in Sankhya Software were not properly maintained.
• Monitoring and supervisory mechanisms were weak.

12. Audit Recommendations

The Audit Department recommended that the Panchayat should:

• Prepare realistic annual budgets based on previous financial performance.
• Improve planning and timely execution of development projects.
• Ensure full utilization of Government grants.
• Strengthen revenue collection, particularly property tax, rent, and professional tax.
• Maintain updated Asset Registers, Deposit Registers, and DCB Registers.
• Correct accounting irregularities and improve financial reporting.
• Strengthen Working Groups and Standing Committees for effective project monitoring.
• Improve procurement practices and internal financial controls.
• Ensure complete documentation for all expenditures.
• Enhance transparency and accountability in financial administration.