Office of the Director General of Audit (Central Expenditure) †¯5MI ȯ, Rf ϯC -110002 Indraprastha Estate, New Delhi - 110002 VUE.T: \T--3/5-95/3Tr.3TR/f.3T{TE.4.2018-19/pg 25.09.2018 -ä-t ii00 WT-< +T 4¶ nli fEt W© dT4ad MI'd tT194 ~Tacd a1flfTrR rrRR Trr 3{UgTr 94rca WfT4eU (NCRMP) 3YTu4ifr åf.4772-31r,5413-3TWT ,VIJ 5693-3rrýr 4 2017-18 -f åienHN T -Tr ZlW 13* ffIaruT - å- -TAr & T , i f~ -9Tif f1rTr i- f 3- --r n-tI 9 t il 31r r fe tur r- i f] - r g f1r ftzý* r Ver4, , elä-r d- -r0 +1A11 3* a fl 4 - Cre, f ur iü Ưèreröi1 31fTf5T rr. a3) 26 eP 1.N 4.4.d3593r.T/ërr3r.R#/081/ 25.09.2018: fkxýTUT -whàl fw lài,(9~-ea «ù- Tr ýTW(ig ýp-ý w eta frrR (NCRMP) 311tr4ir ýT.4772-3HtrŠ12,5413-3rrŠWr ,Vcri 5693-Y r, u TrrzT -e1c eirnT Tcr-T le a-n?k Nft-110003 % 3 4-c- T91 >TIT g ETItrd fäfw -vmd t I -cc2. q 1å 3TÍ19i1Il (7.\TE~9k3) THE DIRECTOR GENERAL OF AUDIT, CENTRAL EXPENDITURE, AGCR BUILDING, IP ESTATE, NEW DELHI- 10002 Inspection Report of World Bank assisted National Cyclone Risk Mitigation Project (NCRMP) IDA Credit No. 4772-IN, 5413-IN and 5693-IN under National Disaster Management Authority, Ministry of Home Affairs for the period 201718. Part I (A) 1. Introduction The audit of National Cyclone Risk Mitigation Project (NCRMP), a project of National Disaster Management Authority, M/o Home Affairs, World Bank assisted IDA Credit No. 4772-IN, 5413-IN and 5693-IN was conducted by an audit party comprising Shri. Nand Kishore, Sr. AO, Sh. Arvind Arora, AAO, Sh. Parveen Singh, Sr. Auditor of this office from 19.08.2018 to 04.09.2018 (07 working days) of the Office of the Director General of Audit, Central Expenditure, New Delhi. Last audit of the Project for the period 2016-17 was conducted from 09.08.2017 to 18.08.2017 (07 working days). 2. General Set-up and Activities NCRMP has been drawn by Government of India with a view to deal with mitigation of effects of cyclone risk in our country with World Bank assistance. The overall objective of the project is to minimize the vulnerability to cyclones and make people and infrastructure disaster resilient in harmony with the conservation of the coastal eco-system in the cyclone hazard prone States and Union Territories of India. The project has identified 13 cyclone prone States/UTs. Andhra Pradesh and Odisha are part of Phase-I of the Project with NDMA being nodal authority. It has four principal components A. Early warning dissemination to coastal communities including community capacity building for operation of Early Warning Dissenunation System (EWDS) B. Cyclone Risk Mitigation Infrastructure C. Technical assistance for cyclone risk mitigation capacity building and knowledge creation D. Project management and implementation support and unallocated contingency @ 10 per cent of total cost. Project and Finance Agreement for Phase-I (IDA credit no.4772-IN) was signed on 14"' January 2011 with an outlay of Rs. 1496.71 crore, The project is proposed as a centrally sponsored scheme with 75% contribution (for Component 13 of the project) by the Central Government, as Grant-in-aid and a matching 25% contribution by the State Governments. Other components will be funded 100% by the Central Government, as Grant-in-aid. Additional financing under NCRMP phase-I (IDA-Credit no.5413-IN) was approved by the Government of India in July 2015 for the states of Andhra Pradesh and Odisha with closure by October 2017. Total outlay under additional financing is Rs.835 crore which includes Rs.645.79 crore credit from the World Bank and 25 per cent contribution from state governments totaling Rs. 189.21 crore under Componenrt- on the same lines as in the NCRMP phase-1. The Ministry vide its order dated 09.05.2017 revised the cost estimates if Centrally Sponsored Scheme of NCRMP Phase -1 for the State of Andhra Pradesh and Odisha for Rs 2541.60 corre (an increase of Rs 209.88) crore over the original cost Estimates with the date of completion as on 31s March 2018 which was later revised as 31 December 2018 (Ministry's letter dated 25.01.2018) without cost escalation. Further, Phase-i of NCRMP (IDA-Credit no 5693-IN) was approved in July 2015 for five years up to March 2020 covering states of Goa, Gujarat, Karnataka, Kerala, Maharashtra and West Bengal at an outlay of Rs. 2361.35 crore. World Bank funding amounts to Rs. 1881.20 crore and Rs 480.15 crore would be contributed by the state governments. The sub- component of underground cabling has been included under NCR_MP Phase-II (under component -B) At the highest level there would be a National Steering Committee headed by Secretary, NDMA for overall monitoring of the NCRMP. NDMA will be responsible for the overall management and coordination of the project. The implementation of activities and procurement of goods for specific components will be undertaken through NDMA, NIDM and concerned State Governments. Disbursement by World Bank is made on the basis of quarterly interim unaudited finance reports (IUFR) submitted by PMU after consolidating 1UFR received from States/Institutions. 3. Financial Position: Budget provision and actual expendilure incurred by NCRMP during 2017-18 is as follows: - "1s. in akh) Head Budget Provision Actu Y' 1enditure 2245-NCRMP 63039 3 32 4. Internal Audit The internal audit of the PMU for the year 2015-16 to 2017-18 had not been conducted. PART-11 AUDIT FINDINGS Part-II (A)-Significant Audit s NIL Part-II (B) - Othwr Incidental in s Para 1: Implementation of Post Disaster Need Assessment(PD ) National Institute of Disaster Management (NIDM) made an agreement with M/s. Asian Disaster Preparedness Centre (ADPC), Thailand for Post Disaster Needs Assessment (PDNA) study under NCRMP on 15 January 2014 for 18 months at an outlay of $ 5,05,740 (Rs 3.28 crore). The study involved 12 deliverables. The study was extended up to 30 October 2015 on the ground of 'time taken for doing multiple rounds of review of Technical Steering Committee (TSC), NIDM and then for subsequent incolporation of comments provided, in order to improve the quality of deliverables for meetng the conditions set in contract signed for the study. Further an extension of the project was granted to agency up to 31 December 2016. The study was completed in January 2017 and has since been approved by TSC with the observations that some of the deliverables were be taken up and finaiized by NIDM. In this connection, audit noted the following: 1. Mid-term review of the project by the Steering Committee, NIDM was not conducted. 2. Pilot testing of the PDNA India tools in one of the disaster affected areas was not done. 3. TSC in its meeting held on 27.01.2017 approved the draft Portal with an observation that standard web based capturing and authentication systems along with standard formats; geo referenced photography, videography, video linkages and access to baseline data available from relevant government ministries and agencies before making it public. Nothing on record was found that the Web-portal was not commissioned with above suggestions till date. 4. PDMA tools was circulated to all the state governments ard Central Ministries to seek their comments on the tools developed for its execution in December 2017, 5. No justification for entering into lump sum contracts were found in the record in term of Rule 204 (x) of GFR 2005 and 225(x) of GFR 2017. NIDM received comments through MHA from 3 states and 3 C-ntl Ministries only. Since, a workshop envisaged in the meeting held on 17.10.2017 could not be conducted and hence the PDNA tools could not be rolled out for adoption by all states and UTs. In view of the above expenditure of Rs 3.28 crore incurred by the NCRMP on PDNA study remained unfruitful. Matter was referred to the department vide Half Margin No. 2 dated 30.08.2018. Reply of the department is awaited. Para 2: Delay in implementation of Early Warning Disseminatiui System (EWDS) National Cyclone Risk Mitigation Project (NCRMP) envisaged a component namely "Early Dissemination Warning System" for costal community to help them in reducing vulnerability during cyclone. This project was initially launched in the States of Andhra Pradesh and Odisha and would have helped in tackling the existing gaps in Oirculation /spreading of cyclone warnings to the coastal community. It was environed that installation and operationalisation of Early Waming Communication and Dissemination System (EWDS), would enable NCRMP to disseminate to the villages directly, by strengthening emergency operation centers at state., distinct and subordinate level. The component also envisaged providing satellite phones to key officials for fool proof EWDS. A provision was made to start new radio based wireless communication technology in one block in each state. It would help in carrying out emergency mobilization of people and maintenance and regular use of equipments by officials and village representatives. It would also help communities in disaster preparedness by preparation of disaster management plans by arranging mock drills etc. The Financial and Project Agreements relating to NCRMP were signed between Department of Economic Affairs, World Bank and the State governments of Andhra Pradesh and Odisha on 14.01.2011. This constituted Phase I of the project comprising of four principal components to be implemented over a period of five years up to 31.1.2015 at a cost of Rs 1496.71 crore which were later revised to 1985.68 crore with completion dated of 31.12.2018. An amount of Rs 72.75 crore was originally earnarked for EWDS component and later revised to 132.00 crore. NCRMP engaged M/s Telecorrmunications Consultants India Ltd. (TCIL) in January 2014 for suggesting technology for developing EWDS for a period of 24 months at a cost of Rs 2.52 crore. M/s TCIL were engaged after lapse of three years of the World Bank contract which resulted in delay of the project. Further, as per the terms of the contract with TCIL, supply and installation of the equipment and services should have been completed by the end of 20th month from the date of contract. Audit noted that the EWDS work was awarded to M/s L&T in Odisha and Andhra Pradesh on July 2016 and October 2016 respectively after more than 30 months of the signing of contract. The delay in awarding works resulted in addendum to the contract suppressing an important clause of Third Party Acceptance Testing (TPQA) para 6.4 of the contract wherein M/s TCIL was awarded the contract of testing and TPQA of equipment and services of EWDS in the states of Andhra Pradesh and Odisha with additional cost amounting to Rs 26.55 lakh without following the tendering process as envisaged in rule 161 of GFR 2017. Moreover, as per the validity clause of Addendum, the contract with M/s TCIL would keep getting extended in a manner so long M/s L&T keeps getting extension for implementation of EWDS for either Govt. of Andhra Pradesh or Odisha till the date of completion of Phase I or till the completion of EWDS related activities, whichever is earlier. In addition the works related to Radio Module of the Alter Sirens and Location Based Alter System (LBAS) were still pending in Odisha and the following works were still pending in Andhra Pradesh even though the State Project Implementation Unit (SPILU) had given 5 extensions to L&T for completion of the project. Details are given in the table below: Status- Andhra Pradesh EWDS No - Total Comp eted Balance 1 30 Mtrs Tower Foundation 118 104 14 --- --- --seece-- 104iie 14 2 Towers erected 118 86 32 3 Diesel Engines Installed 86 84 02 4 Solar Panel Installation 153 84 18 ass Messaging, Alert Sirens M/s L&T has issued Purchase order but procurement is - i yet to be com leted It is evident that due to lackadaisical approach of NCRMP resulted into delay of three years in award of contract to the M/s TCIL after the project agreement with the World Bank, and award of contract to L&T ltd. with a lapse of 30 to 34 months resalted in delay in overall execution/implementation of the project and given the status of pendency of works as mentioned above. Further delay in completion of EWDS (Phase I) and escalation of cost, within the revised deadline cannot be ruled out in audit. Matter was referred to the department vide Half Margin No. 5 dated 04.09.2018, reply of the department is awaited. 7Para 3: Delay in implementation of project ' National Cyclone Risk Mitigation Project (NCRMP) had been drawn up with a view to address the cyclone risk in the country, with the World Bank assistance to reduce the cyclone risk and its vulnerability in the coastal districts. Phase-I of the project was to be implemented over a period of five years w.e.f January 2011 to October 2015, wiich was extended up to March 2018 and further to December 2018. First phase was to be implemented in two states of Andhra Pradesh and Odisha. The status of physical progress as on 3 1 July 2018 is as under: Si No Item State Planned Completed Under Execution 1 MPCS (Nos) Andhra Pradesh 219 218 __ 01 Odisha 316 306 10 2 Road (RCS) Andhra Pradesh 318.10 316.50 1.60 (Km) - -- Odisha 388.50 388.50 3 Road (RCH) Andhra Pradesh 379.92 379.92 - (Km) Odisha Nil - 4 Bridge Andhra Pradesh 35 30 05 Odisha Nil -_- 5 Saline Embankment Andhra Pradesh 29.90 29.90 (Kmn) Odisha 58.22 58-22 It was noticed during audit that as on 31 July 2018 under Phase-1, in Odisha, out of 316 multipurpose cyclone shelters (MPCS), 306 have been completed and 10 are still under execution. Similarly in Andhra Pradesh, out of 35 Bridges under Phase-1, 30 have been completed as on 31 July 2018 and 05 are still under execution. Efforts may be made by the management to complete the works under execution within the revised deadline of December 2018 to avoid any further cost escalation. Phase-II, approved in July 2015 for five years up to March 2010 with an outlay of Rs, 2361.5 crore in the states of Goa, Gujarat, Karnataka, Kerail Maharashtr and West Bengal. The status of physical progress as on 31 July 2018 is as under; SI. Component Gujarat Karnataka Ge0 no no a West Bengal To be Comple To be Complet To be Comple To be Cople constr ted constr ed constru ted construe ted/ ucted ucted cLed ted Under executi 1 Cycone 12 C 1----__--_-on Cycone 112 Complet 11 Under 14 Under Co et shelter ed-22 execution executio 150 ed- Under -07 1n-10 (4 sites Under exenutio dropped execido n-46 due to n Non availabili ty of - _____ land) 2 Roads 156.7 90 km 48 (03 45 30 Nil 4 km Under Kns Dropped executio droppe keeping n-67 d) in view sufficien cy of existing network The details of fund released and expenditure in the states under Phase-A as on 3 March 2018 is as uinder: State Release Unspent u Percetae% Goa 35.72 1.73 3399 9 Guarat 176.69 119.715698 Karnataka 49.81 12.64 327 K e r a l a 8.53 1 _ _ _ _ 2 Maharashtra 43.01 5.25 7 73 West Bengal 391.17 318.83 2:34_ From the above it is evident that unspent amount ranging from 18 to 95 per cent is lying with the states. The reasons attributed for the delay was that reraininy states of Kerala and Maharashtra are in the process of finalization of sites, designs, DPR, tendering process, etc. It is also suggested that the cost of works deleted/dropped may be reduced accordingly. Matter was referred to the department vide Half Margin No. 3 dated 31.08.2018, reply of the department is awaited. Para 4: Disallowance of expenditure due to non availability of payment Vouchers National Cyclone Risk Mitigation Project (NCRMP) submitted statement of expenditure (SOE) amounting to Rs 3.32 crore which includes 223 paid vouchers under differert heads of accounts. Out of the 223 paid vouchers NCRMP failed to provide 57 payment vouchers amounting to Rs 1.57 crore. Thus audit could verify SOEs amounting to 1s 1.75 crore only, which resulted into disallowance of expenditure amounting to Rs 1.57 crore. Matter was referred to the department vide Half Margin No, 4 dated 31.08.2018, reply of the department is awaited. Para 5: Blockade of funds amounting to Rs 64.83 lakh As per rule 238(i) of GFR 2017 the Utilization certificate (UC) should be submitted within twelve months of the closure of the financial year by the institution or organization concerned. Scrutiny of Grant-in -aid register for DPR and preliminary activity of NCRMP revealed that Utilization Certificates amounting to Rs 64.83 lakh released during 2005-06 to 2010-11 were not received till date. Details of the same are given as under: (Rs in Lakhis SI Name of Sanction Order No. and date Amount Amount Amount No State/Org Released Utilized Outstanding I West Bengal 1/MIT/NCRMP/2007/PMU(16) 98.00 49.39 48.61 dated 19.03.2009 2 CRRI 1/MIT/NCRMP/2007/PMU(09) 2.97 225 0.72 dated 21.04.2009 3 Kerala 1/MIT/NCRMP/Kerala/12006 25.83 15.33 10.50 dated 20.10.2010 4 Puducherry Sanction dated 23.03.2006 _____5.00 0.00 5.00 Total 13.80 66.97 64.83 It is further noticed that the department was not aware about the purpose of funds released. Copies of Sanction orders and UCs received were also not available with the department. Moreover, no efforts were made by NCRMP to recover/adjust the amount. Thus due to deficient financial control in the NCRMP resulted into blockade of funds amounting to Rs 64.83 lakh since 2006 onwards Matter was referred to the department vide Half Margin No. I dated 30.08.2018. Reply of the department is awaited. Para 6: Unrealistic Budgeting Circulars issued by the Ministry of Finance every year stipulate that due note should be taken of past performance, while framing the budget estimates, and at the stage of formulation/implementation of the various schemes, the institutional capacity of the implementing agencies to implement the scheme, the constraints on spending by the spending agencies etc. Head-wise budget and expenditure figures for 2017-18 showed that PMU made excess provisions under the following sub-heads, which had ultimately resulted in large savings at the end of the year. Details are given in the table below: - Rs. in thousands Heads Revised Expenditur Savings Savings (% Estimates 2245-- Medical treatment 200 25 175 8.50 Foreign Travel Ex enses 100 0 100 100 Other Admn.epenses 200 79 121 60.50 Revised estimates were not prepared prudently, which attributed te savings ranging 60.5 to 100 per cent savings in above mentioned heads. The large savings ia the aforesaid heads are indicative of over-estimation of the requirement of funds, poor contract management and lack of an internal control system. Similar type of observations was also pointed out by audit but the department had not taken any corrective measures in this regard. Matter was referred to the department vide Half Margin No. 6 daed :1 09.2018. Reply of the department is awaited. Part III At the commencement of audit three Inspection reports containing 08 paras were outstanding. During the current audit one Inspection Report and 05 paras were settled/taken afresh and 03 paras remained outstanding. The position of paras settled and outstanding is given below: Annex-I List of paras settled/taken afresh SI. Year of Para Brief Remarks No. IR No.R a 1 2014-15 1 Delay in implementation of Early Warni Taken afresh Dissemination System (EWDS) 2 2015-16 5 Outstandi --UC -Taken afresh- 3 2016-17 1 Delay in finalization of PDNA Taken afresh 4 2016-17 2 Unrealistic budgeting Taken afresh SI. Year of Para Brief Remarks No. IR No. 5 2016-17 3 Delay in implementation of project Taken afresh Annex-II List of paras outstanding SI. Year of Para Brief Remarks No. IR No. 1. 2015-16 6 Reimbursement of expLnditure from Reply not furnished, hence world bank para is outstanding 2. 2016-17 5 Non-conduct of internal audit Reply not furnished, hence :paa iS outstanding 3 2016-17 4 Theft of toners Copy of letter of MHA dated 27.7.18 as mentioned in reply may be provided. PART IV BEST PRACTICES Nil PART V ACKNOWLEDGEMENT The following officers have held the charge of the respective posts during the period of audit: Designation Period S..T Head of De artment (Membr 1.042017 to 3NDM3.2A18 Ms. Ama ali Dikshit Assistant Advisor i 2017 to 31.03.2018 Sh. A. Sachidanand DDO -Head of Account) - 1.04.2017tofl03 2018 Sh. Sushil Kum ar Tikadhar Cashier -------- - 8 -- ----- 04.2017 to 31 03 2018 Office of the Director General of Audit, Central Expenditure, ew Delhi acknowledges the cooperation extended to audit by the officers/officials of National Cyclone Risk Mitigation Project (NCRMP), New Delhi. General The general condition of the accounts of the National Cyclone Risk Mitigation Project (NCRMP), M/o Homne Affairs, financed under World Bank IDA Credit No. 4772-IN, 5413- IN and 5693-IN for the period 2017-18 was found to be satisfactory subject to the observations made in the inspection report. The inspection report has been prepared on the basis of information furnished and made available by the National Cyclone Risk Mitigation Project, New Delhi. Office of the Director General of Audit, Central Expenditure, New Delhi disclins any responsibility for any misinformation and/or non-information on the part of the audited unit. Sr. Audit Officer (AMG-III)