OFFICE OF THE ACCOUNTANT GENERAL (ECONOMIC AND REVENUE SECTOR AUDIT), TAMILNADU AG (E&RSA)/WMC/CDN IV/2017-18/ i 99 Dated 03/01/2019 To Chepauk O The Project Director, TN- IAM Project, 3 037 JAo 2019 MDPU, DPaU, Chennal-5 CheCp a uk, Chennai 600 005 Sub: Issue of Audit Certificate for the year 2017-18 - Reg Ref: Your DO letter No. MDPU /E1/479/2018 Dated 20/09/2018 addressed to Sr.DAG/ES-1 With reference to your letter cited, I wish to state that the Audit Certificate in respect of Tamil Nadu Irrigated Agriculture Modernisation for the years 2016-17 and-2017-18 is enclosed herewith. Kindly acknowledge the receipt of the Audit Certificate. Yours faithfully, Senior Audit Officer/WM C "AMOU T4;" 361, 31Ti u, 'q - 600 018, "Lekha Pariksha Bhavan", 361, Anna Salai, Chennai - 600 018. ./Phone: 044 - 24316660 to 6666; /Fax: 044 - 2431 1659 UF/Telegram: "AUDITTWO" Chennai t-A/E-mail: agautamilnadu2@cag.gov.in Report of the Comptroller and Auditor General of India To The Project Director, TNIAM (IAMWARAM-I) Project, MDPU, Chepauk, Chennai 600 005 Report on the Project Financial Statements We have audited the accompanying financial statements of the Tamil Nadu Irrigated Agriculture Modernisation (TN- IAM) Project financed under World Bank Loan No. IBRD 8797 INR, which comprises the Statement of Sources and Applications of Funds for the years ended 31.3.2017 and 31.03.2018. Preparation of these statements is the responsibility of the Project's management. Our responsibility is to express an opinion on the accompanying financial statements based on our audit. We conducted audit in accordance with the Auditing Standards promulgated by the Comptroller and Auditor General of India. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement. We examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements. We also assessed the accounting principles used and significant estimates made by management, and evaluated overall presentation of the statements. In our opinion, the financial statements enclosed present fairly, in all material respects, the sources and applications of funds of TN- IAM Project for the years ended 31.3.2017 and 31.03.2018 in accordance with Government of India accounting standards. In addition to our opinion, (a) with respect to Statement of Expenditures, (SOE enclosed) adequate supporting documents are maintained to support claims to the World Bank for reimbursements of expenditure incurred, and (b) except for ineligible expenditures as detailed in the audit observation (Annexure A) appended to this audit report, expenditures are eligible for financing under the Loan/Credit Agreement. During the course of the audit, Statement of Expenditure (aggregating to Rs.65,64,41,766 (SOE enclosed) and the connected documents were examined and these can be relied upon to support reimbursement under the Loan/Credit Agreement. This report is issued without prejudice to CAG's right to incorporate the audit observations in the Report of CAG of India for being laid before Parliament/State Legislature. Sr. Deputy Accountant General /ES-1 Annexure -A 1. Inadmissible Expenditure In respect of Cauvery Basin Sub-division, Thanjavur expenditure amounting to Rs.3,06,612/- pertaining to Packages -10 & 8 was found in-admissible due to payment made in excess of the quantity measured in respect of "Providing and placing plain cement concrete MI 5 grade" in the work "Rehabilitation and Modernisation of head sluices and bed dam of Manniyar River". 2. Internal audit not conducted The Project Appraisal Document of the World Bank stipulates that the project will have an internal audit to review the internal control procedures and procurement procedures to be adhered to at the project level. It was noticed that the internal audit was not conducted. 3. Discrepancy in expenditure booked by O/o AG (A&E) & Department records During 2016-17 and 2017-18, the amount incurred and claimed by the department varies from the amount booked by O/o AG (A&E).The discrepancy needs rectification. A comparison of expenditure incurred by the department and the expenditure booked by AG (A&E) is as follows. Years Departments Expenditure Expenditure Discrepancy incurred booked Rs. By department Rs. By O/o AG(A&E) Rs. 2017-18 WRD 57,62,78,474 57,50,42,712 (-)12,35,762 .-do- Agriculture 15,21,417 15,21,417 Nil -do Agriculture Engg 88,49,521 88.49,521 Nil -do- Agriculture Marketing 20.35.775 20.35.775 Nil And Agri. business -do- Animal Husbandry 4,08,44,400 4,08,44,400 Nil 2016-17 TN-IAM - Multi 73,41.066 1,53,89,610 80,48,544 Disciplinary Project Unit (MDPU) _ 2017-18 -do- 1,95,71,113 1,92.93,748 (-) 2,77,365 Total 65,64,41,766 66,29,77,183 65,35,417 Sr. Deputy Accountant General /ES-1 Annexure I I A1,til NAi)U IRRIGATED AGRICULTURE MODERNISATION PROJECT ANNUAL FINANCIAL STATEMENTS TO 2017-18 m o o ,~ ,i-d Applications of Funds Report for the year ended 31.03.2018 Rs.000 Current Previous Cummul Year Year ative Particulars 1 2 3 Opening Balance, (If cash balance are controlled by the entity) (A) 0 0 t0umd re eived from Government through Budget (These will include external o,istan c roceived by Government for the Project) 656441 - 656441 Funds received directly by Project Implementing Authority through external assistance 13ckneficiary Contribution (if any) Total Receipts (B) Total Sources (C=A+B) Expenditures by Component Sources of Funds GOTN World Bank Total Sources 656441 656441 Uses of Funds A Irrigation and Water Management I Institutional strengthening and capacity building for water management 5957 5957 2 Irrigation systems modernization 570321 570321 3 Participatory Irrigation Management 4 Convergence for improved service delivery B Agriculture Productivity Enhancement, Diversification, Improving Livelihoods, Marketing and Value Addition 1 Agriculture intensification and diversification 1. Agriculture 1521 1521 2. Horticulture 3. AED 8850 8850 2 Improving alternative livelihood sources through livestock and inland fisheries 1. Animal Husbandry 40844 40844 2. Fisheris 3 Agriculture marketin& value addition and post-harvest management 1. Agri Marketing 2036 2036 C Project Management Support 1 MDPU 1. Salaries, Including salariesof Regular Government Staff posted in MDPU. 11766 11766 2. Other Operating Costs 15146 15146 3 Monitoring and Evaluation and Internal Audit Consultancies D Contingeng Eergenc Response Total Uses 6564411 656441 Financial Management Specialist Date: Notes to Account & Accounting Policies 1 The expenditure figures reported are reconcilied/ with the AG (A&E)- please list departments which are reconciled Funds drawn against Advance bills, if any, and recorded as expenditure which are not settled amount of Rs.428. 05 lacs; previous quarter Ps.NIL 2 (please provide department wise summary) 3 Security deposit/with-held deposit from contractors aggregate to Rs. NIL Previous quarter Rs. NIL (as per schedule 1) 4 Grant to FF Otounting to ls. 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