'j t< W iP i'v: N4II ' 0 ' VI i NMNEt'4n <41 '4< 1MA rHiNlI" WV 1i speed Post No. A-14011/1/2019-WQMI e P4/1/2019 The Director txpenditure & Audit) The Compt, liir & Auditor General of India Pockt-9 con Dayal Upädhyaya Marg, New[) hi-110124. Sub: Audit Certificate for the FY 2017-18 of the World Bank Aided National Lydrology Project (NHP)-reg. Sir, With reference to the letter no MoWR,RD&GR/Nll/CPICB/2018-19/1132 dated 9/10/2018, this is to inform you that audit of CPCBi accouir:t for sponsored projects from outside hodies inchuding National Hydirology Project for the Financial Year 2017-18 has been conducted and its report is enclosed as Annexure-l. Yours faithifully, (A. Sudhatkar) DH, WQM-l Encl: As above Copy to: 1 Sh Ashish Kunar for miformation and record please Director (NHP) Rear Wing, 2d Floor, MDSS Building CGO Complex, Lodhii road New Delhi . N.K. Manglik :i orformation and record pLease Director, National i lydiology Project Ministry ofWater Resources, RD&GR Rear Wing, 2"' Floor, MDSS Building (MTNL) Opposite to Gate No 13 of JLN Stadium CGO Complex, Lodhi Road, New Delhli-110003 3 l/c F&A, CICP> 1or iif'orimiatio ilease 4 PS to MS, CPCI: lor ini umation ti 'MS' please (A. Sudhakar) ......... (~~ ~ ~ 1 00Lu~ 4~11 i i' i 414 . vk1 1f,44 < K ? l 4 I AMG & ASSOCIATES aC4/19, Safdarjung Development Area & ASOCITESNew IDelhi: 110016 Car. red Accountants E-mail: ca@kamg.in iNDEPENDENr AUDITORS REPORT TO THE MEMBERS OF CENTRAL POLLUTION CONTROL BOARD-DELHI We have audited the accompanying Financial Statements of CENTRAL POLLUTION CONTROL BOARD, (Ministry of Environment Forests & Climate Change, Govt. of India), (the Board) which conprise of the Balance Sheet as at 31st March 2018, the Income & Expenditure Account and the Statement of Receipts & Payments of the Board for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements 2. Managenentof the Board is responsible for the preparation of these Financial Statements in accordance with the accounting principles accepted in India and in accordance with 'Form of Financial Statement for the Central Autonomous Bodies' as per the directions of Ministry of Environment and Forest, Govt. of India vide their fetter no. - G25O12/l/2010CPW, dated 10.02.10.as circulated by Controller General of Accounts, Ministry of Finance. 3, This responsibility also includes maintenance of adequate accounting records in accordance 4n>% with the provisions of the Act for safeguarding the as2ets of the Company and for preventing and detcting frauds and other irregularities; selection and application of appropriate accountinig policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view of the financial position, financial performance and Receipts & Payments and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility 4. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. &Ass>"- G'ASASSOCIATES ered Accountants 5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internail control relevant to the Board's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 6. Basis for Qualified Opinion Attention is drawn to following: i) Note No. 3A of Schedule 25 as regards Grants for capital assets received as grant in aid has been taken in income & Expenditure account which is not in accordance with the generally accepted accounting principles. Fixed assets purchased out of grants received for that purpose has been recognized at cost and depreciation is provided on that. This is not in line with the directive of the Ministry which requires such assets to be recognized at nominal value. ii) Note No. 5 in Schedule 25 as regards Depreciation is charged on Assets on straight line method as per rates prescribed by Income Tax Act 1961. Depreciation has been charged on full year basis irrespective of date of purchase/sale of Assets. Further depreciation has been calculated on gross asset instead of individual assets. This has resulted in depreciation being overcharged the effect of which is not ascertainable at this stage. This is not in accordance with Accounting Standard 10 (AS-10). This was also mentioned in the report for earlier year. iii) Note 4 of Schedule 26 as regards advances/ recoverable aggregating to Rs. 937,708,408 and poyables/liabilities aggregating to Rs. 13,501,737 (including balances related to sponsored/ earmarked project) are subject to reconciliation / confirmation. Many of these balances are very old and may have material impact on the Balance Sheet, Statement of income and Expenditure and Receipt and Payment Account on adjustment. This was also mentioned in the report for earlier year. iv) Note 5 (d) of Schedule 26 as regards liability on account of Leave Travel Concession has neither been ascertained nor provided for. This was also mentioned I the report fo 6iAs0 yeUrf. C 1G & ASSOCIATES erx J Accountants V) Note 6 in Schedule 26 as regards capitol work in progress include Rs. 2,010,655 being advance given to suppliers (Head Office) since long and have not been adjusted/transferred to fixed asset Account. In absence of details, we are unable to comment on adjustability/ realisabily of the same. This was also mentioned in the report for earlier year V.) Note 8.3 in Schedule 26 as regards Rs. 10,091,327 has not been accounted for reason stated therein regarding the project "National Water Quality Monitoring Network". This is not in line with the accounting policy of the Board which follows accrual method of accounting , Had this been accounted for, the expenditure for the year, the fund balance and the current liabilities would have been higher to that extent. vii) Note 10 in Schedule 26 as regards credits aggregating to Rs. 2,275,834 appearing in the bank account of Head office at New Delhi have not been accounted for and are appreaing in the bank reconciliation statement as direct credit by bank. Pending reconciliation the effect cannot be ascertained. viii) The consequential impact of the matter specified above on the financial statement could not be ascertained at this stage. 7. Qualified Opinion In our opinion and to the best of our information and according the explanations given to us except for the effect of the matter described in basis of qualified opinion paragraph, the Balance sheet, Income & Expenditure Account and Statement offReceipts & Payments read together with the Accounting policies and notes to Accounts thereon, give the information so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. In the cose of Balance Sheet of the state of Affairs of the Board as at 31" March 2018. ii. In the case of Income & Expenditure Account of the excess of Income over Expenditure for the year ended on that date, iii. In the case of Statement of Receipts & Payments of the Receipts & Payments for the year ended on that dote. Page | 3 & ASSOCIATES ed Accountants 8, Emphasis of matters We draw ationtion to the following matters: i) Note 5 (a) in Schedule 26 as regards Central Pollution Control Board has created Contributory Provident Fund (CPCB) under guidelines called The Central Board for the Prevention & Control of Water Pollution Employee's contributory Provident Fund since 1977-78 and the employee contribution is deducted from the salary of the employee and transferred to CPF Fund. The accounts of CPF Fund are audited up to 31" March, 2007 only. The shortfall in PF liability to be borne by Board, if any, has not been ascertained. This was also mentioned in the report for earlier year, ii) Note 6 in Schedule 26 as regards the fixed asset register has not been properly maintained at Head office and its Regional Directorate, with respect to depreciation charged, location and identification number. Further Fixed Asset register has not been reconciled with financial records. Physical verification of fixed assets conducted, has not been reconciled with fixed assets register/ financial records. This was also mentioned in the report for earlier year. iii) There is no internal audit system in the Board. The internal control system need to be significantly strengthened to make it commensurate with the size and nature of activities of the Board, particularly with respect to monitoring / adjustment of advances given for various expenses including advances for earmarked/ sponsored projects and obtaining utilization certificate etc., the payables/ refundable ah4d bank reconciliation. This was also mentioned in the report for earlier year. Our opinion is not qualified in respect of the above matter. For KAMG & Associates Chartered Accountants Firm Registration no. 311027E &Ass0 q Anjan ircar Partner Membership no. 050052 Place: New Delhi Date: Page | 4 ..�_-. � -._�._ --__ ..._..__ ___��_..__._...._._..______...__i. .^- � i г I ! .. ._; -_ .. . ; 5сиеди!е�'С'; GEN7RAL Р{?C6UTi0N COiU7Fë0L BOA1tp : DELH1 • 1Е(l032 �_- .. _ _ _. . � __--Г4 _ Т ._ _ __. � --- _ ___{__..____� .._._..в� _--i---- - � , --- _ _ ___ i �____ _ . . _ _ -_._...__.. .. , ! , , � ��� � � - - --' ' � DEPCD51T5 RECf1VEp EOR WORKS F0.0M ОUТSФЕ @OD1E5 �OTHER 5P4N50RED PR(71ECTi 2817•18 _ ..__.... . -_.__._ .._...,....__.,."_ . _ - _... _-. .... _._ . . . .,_. ._.,..____ ... . . .. ..-_.._-..... .._... .__. .___ ...___ �__..,._ .._... __... _...__ �.�_.._ 1 ,.._.._....._ .°...._.__. _ ... �_.. . . � . . - _ . � � • ! _ , ; Amount 1п дs.; � � RE{Е!цЕ0 pl1К1NG ТНЕ ЧЕАR ` � �� . � �� �� � PAYMENT �URiNG ТНЕ У€АА п� - 5i N ryAM€ OF ТНЕ рКО1Е(Т OPENING @AUINCE � � � CLO$1NG @AIANtE О. 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' A4 - rk ri P1'0f71-CSS F:JLf-jL-- Rs. 2,010,655 be ng advance given to suppliers (Delhi Zo in earlier years which is being, carr ed forward, NE C.eSSM-y entries v,,ill be passed once the supporting details including cletiik of installation (-LC, are approved at the appropr ate level. 7. Certain advances have been given to the state pollution control boards for implementing various projects/ activities. These expenditures are recognised once the utilisation certificate is subm tted and aprroved. Utilisation certificate is pending from certain state pollution boards for which necessary follow Lip 1- being made. 8. Earmarked Funds- Sponsored Projects 8.1 During the year 40 Nos. of projects were carried Out by Central Pollution Control Board as per details given in schedule 'C' (attached), 8.2 During the year, out of the total expenditure of Rs. 455,096,806 incurred in sponsored project, Rs. 48,37,617 has been incurred on procurement of fixed assets. 8.3 Under project National Water Quality Monitoring Netork, a sum of Rs. 20,247,142 has been approved but due to insufficiency of funds in that project, only Rs 10,155,815 has been paid and accounted for, Balance of 10,091,327 has been paid susequently and accounted for in the year of payment. This has resulted in the expenditure for the year and current liabilities being under stated and the fund balance being overstated to that extent. 8.4 There are unspent balances in some Sponsored/ Earmarked Projects, These will be adjusted according to the instructions from Sponsors/ Donors once the same are received. In view of no taxable income under the Income tax Act, 1961, no provision for income tax is considered necessary. 10. Credits aggregating to Rs. 2,275,834 apearing in the bank account of Head office at New Delhi have not been accounted for and are appreaing in the bank reconciliation statement as direct credit by bank. These are in the process being reconciled and necessary adjustment entry will be passed once the reconciliation is complete. 11. The figures in the Balance Sheet and Income and Expenditure Account have been disclosed in rupees. Corresponding figures for the previous year Ass have been regrouped/rearranged wherever neccessary, A 11 9 1