Office of the Director General of Audit (Central Expenditure) qu e 9t f, vt- I10 002 Indraprastha Estate, New Delhi - 110 002 TtC-W: 7T.*.-I/IR/2-33/NRLPI2015-16/ / 6o f4TW : 08.12.2015 Assistant Director (RL) 08 DEC 2015 National Mission Management Unit Ministry of Rural Development 6 th Floor, Hotel Samrat New Delhi-1 10021 q 2013-14 M 2014-15 zth fi National Rural Livelihood Project, IDA Credit 4978 - IN t* TAl'f fMta qi Af wT t 3g f4 T t f Tqt ard 1 ZRml TR ftrq-- ft rdt _3 puT T9TT afra qat t &R w Tiler L irt r WPmfI --ff r< ar ZsrfR ctf 7I) titrF 7r~ ('.R. I Ph. :91-11-23454100 A.G.C.R. Building, I.P. Estate, New Delhi-110002 Fax : 91-11-23702271 e-mail : dgacr@cag.gov.in 183 多て Office of the Director General of Audit Central Expenditure I.P. Estate New Delhi-110002 Inspection Report on the accounts of World Bank Assisted Project on National Rural Livelihood Project (NRLP), IDA Credit 4978-IN for the period 2013-15. Part-I-(A) (1) Introductory The audit on the account of World Bank Assisted Project on National Rural Livelihood Ministry of Rural Project (NRLP), IDA Credit 4978-IN, National Mission Management Unit, of the Director Development for the period 2013-15 was conducted by an audit party of office Subroto Basu, Sr. General of Audit (Central Expenditure), New Delhi- 110002 comprising Shri Audit Officer, Shri Dhiraj Kuma r Tiwari, Assistant Audit Officer, Shri Narendra Kumar Yadav, (15 working days). Auditor and Shri Praveen Mishra, Auditor w.e.f. 20.10.2015 to 10. 11.2015 14.08.2013 (12 working The last audit for the period 2012-13 was conducted from 29.07.2013 to days). Set up and activities - (11) International Ministry of Rural Development entered into financial agreement with The Association Development Association (IDA) vide Credit Number 4978-IN on 18.07.2011. forth or referred to in this aarees to extend to the recipient, on the terms and conditions set five million eight hundred agreement, a credit in an amount equivalent to Six hundred thirty "Credit and Financing") to thousand Special Drawing Rights (SDR 635,800,000) (variously, agreement ("Project"). National assist in financing the project described in schedule I to the of Rural Development at the Rural Livelihood Project (NRLP) will be implemented by Ministry level which participate in the National Level and State Rural Development Departments in states World Bank. project. NRLP will be funded by the Government of India and the mode, both to provide direct The NRLP has been designed for implementation in a mission poors in the country as well as to support to 12 high poverty States accounting 85% of the whole country. Further, the number provide the architecture for managing the NRLM across the 2013. The implementation period of of NRLP States have increased to 15 as on 3l't March Project is 5 years and it covers intensive livelihood investment in 100 Districts and 400 Blocks, covering target approximately 24 million rural poor (about 4.8 million households). The main objective and component of the project are to establish efficient and effective institutional platforms of the rural poors to enable them to increase household income through sustainable livelihood enhancements and improved access to financial and selected public services. The project description/components are as under:- 1. Institutional and Human Capacity Development: The objective of this component is to transform the role of Ministry of Rural Development (M/o RD) into a provider of high quality technical assistance in the field of rural livelihood promotion. 2. State Livelihood Support: The objective of this component is to support State Governments in establishment of the necessary institutional architecture for the implementation of the National Rural Livelihood Mission (NRLM) activities from the State to the block level, including support to the formation of institutions of the rural poor. 3. Innovation and Partnership Support: The objective of this component is to create an institutional mechanism to identify, nurture and support innovative ideas from across the country to address the livelihood needs of the rural poor. 4. Project Implementation Support: The objective of this component is to establish an effective project management unit at the National Level that develops key systems and processes for coordination and management of the proposed project and the NRLM. The activities to be supported under the proposed National Rural Livelihood Project intend to achieve the following key outcomes: (i) Enhance effectiveness of public expenditure on National Rural Livelihood Project Leverage resources for the rural poors. (ii) Increase access to other Government programmes across the whole country. 2 (III) Incumbency The following officers held the charges of respective posts indicated below during the period 2013-15. SI. No. Post Name of the Officer Designation Period 1. Head of the Sh. T.Vijay Kumar Joint 01.04.2013 to Office Secretary 31.03.2015 2 Head of Mrs. Nita Kejriwal Direcor 01.04.2013 to Administration 31.03.2015 3. Officer in Sh. G.P.Gupta CCA (M/o 01.04.2013 to charge of RD) 31.03.2015 accounts (d) Financial Position (Rs. in lakh) Year Budget Actual expenditure Plan Non-Plan Plan Non-Plan 2012-13 33000.00 - 32999.85 - 2013-14 31800.00 - 31448.34 - 2014-15 45000.00 - 44928.00 - (e) Internal Audit The internal audit on the accounts of World Bank Assisted National Rural Livelihood Project, Ministry of Rural Development, New Delhi for the financial year 2013-14 and 2014-15 has not been conducted till date. 3 Part-I-(B) Result of Review of old outstanding objections At the commencement of audit, 1 Inspection Report with 6 paras were outstanding. During settled and current audit, 3 paras were settled and 3 paras remained outstanding. List of paras outstanding is given below:- List of paras outstanding S Year Para Brief of para Remarks No No. 1. 2012- 1 Non-utilization of entire grant-in-aid - Rs. In view of reply the 13 1202.53 lakh para may be treated as settled 2. -do- 2 Slow progress of the National Rural Similar irregularity still Livelihood Project persists. Para stands. 3. -do- 3 Unnecessary release of grant-in-aid amounting to Rs. 399.00 lakh to Andhra -do- Pradesh State 4. -do- 5 Irregular release of 2nd installment of grant- fixedsettled -do- Non-maintenance of consolidated 5. assets register-do- Similar na tre of 6. -do - 7 Non-achievement of target observation still persists. Para stands. Part-I-C Persistent Irregularities -Nil- 4 Current Audit Part-II-A -Nil- Part-II-B Para 1. Slow pace of utilization of grant in the Project The objective of the National Rural Livelihood Project is to establish efficient and effective institutional platforms for the rural poor to enable them to increase household incomes through sustainable livelihood enhancement and improved access to financial and selected public services. The Project consists of the following components:- (i) Institutional and Human Capacity Development (ii) State Livelihood Support (iii)Innovation and Partnership Support (iv)Project Implementation Support Scrutiny of records relating to Project revealed that an amount of Rs.436.68 crore was made available under this Project but only Rs.138.38 crore was utilized during the year 2013-14 and 2014-15. Details of state wise availability of the funds and its utilization were as under:- (Rs. in lakh S.No. State G-i-a released Total funds Total Percentage by the Ministry available utilization of of utilization during 2013-14 with the grant during of grant State. the year For the year 2013-14 / 767.21 1736.21 191.84 11.05 1. . Andhra Pradesh / 3445.01 8022.70 1888.73 23.54 2. Assam Karnataka '1167.94 1635.52 568.55 34.76 3. Kerala 0.00 250.30 45.24 18.07 4. 5 3998.30 8762.87 3396.53 38.76 5. Maharashtra 1250.00 4021.21 1123.82 27.95 6. Orissa 0.00 1954.27 331.72 16.97 7. Rajasthan 1414.50 5369.58 2455.44 45.73 8. Tamil Nadu Uttar Pradesh 2618.43 3757.91 312.25 8.31 9. 4172.64 5770.53 2852.55 49.43 10. West Bengal For the year 20 14-15 0.00 1704.72 650.77 38.17 1. Rajasthan Telangana Oflo 682.28 20.97 3.07 2. 18834.03 43668.10 13838.41 31.70 Total It is evident from the table above that utilization of fund available during 2013-14 ranged Maharashtra, between 3 per cent to 49 per cent. It was also seen that Andhra Pradesh, Assam, even could not utilize the Odisha and Tamil Nadu received funds during 2013-14 but these states entire released 2013-14 available balance at the beginning of the year 2013-14. This led to only 4 per cent of the fund unutilized at the end of the year. Further, Karnatka could spend. released during 2013-14. vide H M Memo Confirmation of facts and figures and their comments were called for No.1 dated 7.10.2015 In its reply department stated that, slow progress of the project was a matter of grave capacity of states, concern to the World Bank, MORD and MoF. Keeping in view the absorption allocation of IDA credit from the NRLP has been restructured with a reduction in the total US $1.0 billion to US $ 500.00 million. the reasons/constraints for slow Project authority and MoRD is requested to examine along with the steps taken to improve the progress of work and furnish the same to the audit same. 6 Para 2. Non-achievement of target Scrutiny of Interim Unaudited Financial Report (IUFR N-3) for the month of March 2014 and March 2015 relating to Expenditure against Annual Agreed Work Plans revealed that Approved Annual Work Plan allocated against different components were not fully achieved. Approved Annual Work Plan for 2013-14 and 2014-15 and expenditure in different components are as under:- (Rs. In Lakh) S.No. Name of Component Approved Actual Shortfall in Annual Work Expenditure percentage Plan For the year 2013-14 1. Al-Technical Assistance 136 115.36 15.18 2. A2-Human Resource 30 25.28 15.73 Development 3. D2-Electronic National Rural 260 Nil 100.00 Livelihood System(e-NRLM) 4. D3-Monitoring and evaluation 100 78 22 5. D4-Govemance and 5 0 100 accountability framework 6. D5-Knowledge Management 115 20.43 82.23 and Communication For the year 2014-15 1. A-Institutional and Human 250 219.24 12.30 Capacity Building 2. D1.1- Staff at NMMU(includes 750 722.42 3.67 20% additional HR costs and travel and related costs of 30% of staff costs) 7 3. D1.3- Office 30 27.11 9.63 Equipment(Desktop, Computers, Tablets, CUG, Mobiles) 4. D1.4-Other operating costs 950 901.70 5.08 5. D1.5- Project Implementation 70 63.12 9.83 Support and Supervision From the above, it is evident that during 2013-14, under the components Al, A2, D2, D3 and D5 shortfall in achievement of targets ranged from 15.18% to 82.23% and in the component D4, no expenditure was incurred during the year which resulted in the shortfall of 100%. Further, during 2014-15, under the components A, D-1.1, D-1.3, D-1.4 and D-1.5 shortfall in achievement of target ranged from 3.67% to 12.30%. 2. As per Programme Implementation Plan and information provided by the Ministry, following revised targets were to be achieved:- S.No. Particulars Revised Targets Achievement as Shortfall(In for 5 years on 31.03.2015 percentage) 1. Blocks to be covered 444 380 14.41 2. No. of poor households 4.8 3.7 23 mobilized(in millions) 3. Number of poor covered in 4.8 @ 1 poor per 3.7 23 million) house From the above table it could be seen that there was a shortfall in achievement of above mentioned targets ranging from 14.41% to 23%. Confirmation of facts and figures and their comments were called for vide H.M.Memo No.3 dated 28.10.2015. In its reply the Department stated that during 2013-14 targets could not be completed accordingly, however, the financial targets have been compensated by component D. 1. For the year 2014-15, it was stated that shortfall is due to reduction of the staff strength in 8 NMMU/NRMC pool, also, the shortfall in physical target will be met during the financial year 2015-16. The reply of the department is not acceptable as component wise targets could not be achieved. Steps may be taken to achieve the physical target under intimation to audit. General The general condition on the account of World Bank Assisted Project on National Rural Livelihood Project (NRLP), IDA Credit 4978-IN, National Mission Management Unit, Ministry of Rural Development, Samrat Hotel, New Delhi for the period 2013-15 was found to be satisfactory subject to observation made in the Inspection Report. The Inspection Report has been prepared on the basis of information furnished and made available by NMMU, Ministry of Rural Development, Samrat Hotel, New Delhi. The O/o Director General of Audit, Central Expenditure, New Delhi disclaims any responsibilities for any mis-information and/or on the part of the auditee. Sr. Audit Officer (AMG-I/Hqr) 9 b i Office of the Director General of Audit Central Expenditure New Delhi-110002 Audit Certificate The expenditure statements relating to the World Bank Assisted Project on National Rural Livelihood Project (NRLP), IDA Credit 4978-IN, National Mission Management Unit, Ministry of Rural Development, Samrat Hotel, New Delhi forthe year 2013-14 attached hereto have been audited in accordance with the regulations and standards of audit of the Comptroller and Auditor General of India and accordingly included such tests of accounting records, internal checks and controls and other accounting procedures necessary to confirm (a) that resources were used for the purpose of the project and (b) that the expenditure statements are correct. During the course of audit referred to above, statements of actual expenditure amounting to Rs. 3,14,47,92,000/- ( Rs. Three hundred fourteen crore forty seven lakh ninety two thousand) for the year 2013-14 and the connected documents were examined and these can be relied upon to support the reimbursement claim of Rs.4, 17, 44, 32,037 (Rs. Four hundred seventeen crore forty four lakh thirty two thousand thirty seven) under the aforesaid credit agreement. On the basis of information and explanations that have been obtained as required and according to the best of our information as a result of test audit, it is certified that the Expenditure Statements read with the observations enclosed represent a true and fair view of the implementation and operation of the project for the year 2013-14. This certificate is issued without prejudice to CAG's right to incorporate any audit observations, if and when, made in the report of the CAG of India for being laid before Parliament/legislature. Sr. Audit Officer (AMG-I/Hqr) 10 % 1 Office of the Director General of Audit Central Expenditure New Delhi-110002 Audit Certificate The expenditure statements relating to the World Bank Assisted Project on National Rural Livelihood Project (NRLP), IDA Credit 4978-IN, National Mission Management Unit, Ministry of Rural Development, Samrat Hotel, New Delhi for the year 2014-15 attached hereto have been audited in accordance with the regulations and standards of audit of the Comptroller and Auditor General of India and accordingly included such tests of accounting records, internal checks and controls and other accounting procedures necessary to confirm (a) that resources were used for the purpose of the project and (b) that the expenditure statements are correct. During the course of audit referred to above, statements of actual expenditure amounting to Rs. 4,49,27,52,043/-( Rs. Four hundred forty nine crore twenty seven lakh fifty two thousand and forty three) for the year 2014-15 and the connected documents were examined and these can be relied upon to support the reimbursement claim of Rs.8,14,27,28,632/- (Rs. Eight hundred fourteen crore twenty seven lakh twenty eight thousand six hundred and thirty two) under the aforesaid credit agreement. On the basis of information and explanations that have been obtained as required and according to the best of our information as a result of test audit, it is certified that the Expenditure Statements read with the observations enclosed represent a true and fair view of the implementation and operation of the project for the year 2014-15. This certificate is issued without prejudice to CAG's right to incorporate any audit observations, if and when, made in the report of the CAG of India for being laid before Parliament/legislature. Sr. Audit Officer (AMG-I/Hqr) 11 ts 1 - s s. s s s