C1042 014 to 3 32I STATE HEALTH & FAMILY WELFARE SOCIETY - TB (NRHM/RNTCP) OF KERALA ASA & ASSOCIATES Chartered Accountants, G 35 I Cross Road Panampilly Naaar, Kochi - 682 036 Kerala Tel: +91 48 4232 1015 207 - 208, 2nd Floor A&AssociatesPioneer Tower Marine Drive chartered accountants (A member firm of NIS Global) Kochi 682 031 INDIA AUDIT REPORT Tel +91 484 410 9999 www.asa.in Fax +91 484 410 9990 To, The State Mission Director State Health & Family Welfare Society, Kerala Kerala State Introduction We have audited the accompanying expenditure statements/consolidated financial statements of the Revised TB Control Project implemented through the State Health & Family Welfare Society-TB (NHM) (Under the Revised TB Control Project RNTCP II) financed under World Bank Credit/Loan No. 2936-IN as of March 31, 2015. Our responsibility is to express an opinion on these financial statements based on our audit. Scope We conducted out audit in accordance with the Request for Proposal (RFP) and Terms of Reference (TOR) agreed upon with the Kerala State Health and Family Welfare Society (National Health Mission), Thiruvanathapuram vide agreement dated 07'1 July, 2015 and in accordance with Standards on Auditing issued by Institute of Chartered Accountants of India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, the consolidated financial statements give a true and fair view of the Sources and Application of Funds and the financial position of Revised TB Control Project for the period ended March 31, 2015, in accordance with Standards on Auditing issued by Institute of Chartered Accountants of India. In addition, (a) with respect to SOEs, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditures incurred; and (b) wh'ch expenditures are eligible for financing under the Loan/Credit Agreement (c) procurement of goods and services has been carried out as per the procurement manual by the Central TB Division, Government of India. r ASA & ASSOCIAT tuL >hr(te ccountants Place: Trivandrum Date : 09/11/2015 Dat: 0/11201 ({. Ramachandra Kamath Partner Mem. No. 26308 RN, No. 009571N1/N500006 Head Office: KS House 118 Shahpur Jat New Delhi 110 049 INDIA Tel +91 11 4100 9999 Fax +91 11 4100 9990 Ahmedabad * Bengaluru . Chennai e Gurgaon * Hyderabad * Kochi 9 Mumbai * New Delhi ASA & Associates (a partnership firm) converted into ASA & Associates LIP (a Limited Liability partnership with 11tP Identification No AAB-7688) with effect from September 16, 2013 化 2 f /.; &\ ＇。馴戶 f「－ !j! !!- 戶－ 7 奉 3 に 今 ，〞 勵、 、龜 ，權 夢唱 ·。禹 才，為 御 \ ＇才一亂 斗 g C> CD cý cý Ln CD c=) 1=ý CD 00 00 C) Ln Lrý <= p cn C) C) CD cý C) CD c, c) c=ý C) CD C> 00 00 "-4 Ln C) OC) ocý <=ý cý Ln 00 Ln 1.4 cn CD <= Ln 4- Ln OC) (-1 ý:D -4 CD 00 en :j -izý o ci <:D C) 00 UD <= Ln c,] 4w ~～熾〝、 &If胎 一梯〝卜× 么 f 一，·、 州 》k 文搬訕 斗 7 ド ヌ 作 9 馨 鰍＿__!____＿、＿＿一！ 口且蟈必 &. 少 볘，[ 7 Z 9 R 9 R 9 R äý ix tw stall 42 31 誹 j斗 S.NO. 8 ACCOUNTING POLICIES (TO BE APPENDED TO THE ANNUAL ACCOUNTS) BASIS OF ACCOUNTING 1. The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting policies under the double entry system of accounting ii. Unless otherwise stated here under, the Financial Accounts arc drawn up on cash basis. TREATMENT OF GRANT IN AID FROM CENTRE/ STATE Grant-in-Aid has been taken into account on actual receipt from CTD /STCS /Others. However, the Grant sanctioned/ funds transferred by Government of India / State Society during the year (usually fag end of the year) but actually received by the Society after the close of the year has been credited to Grant-in-aid by debit to the head "Funds inTransit A/c". TREATMENT OF ADVANCES General Advances are charged off to the relevant account head on receipt of adjustment bill/ utilization certificate / actual receipt of goods or services. Grant-in-Aid to NGO(s) Funds released to the NGO(s) are treated as advance and booked as expenditure only on receipt of the utilization certificate from the NGO. For Civil Works Funds deposited with Public Works Department/ contractor is treated as advance at the time of release. On receipt of certificate of stage of completion, it booked as expense to the extent it is certified by PWD/ to the extent due to the contractor based on the stage of completion the terms of agreement. Cont.. 2 .2 -2- ACCOUNTING POLICIES (TO BE APPENDED TO THE ANNUAL ACCOUNTS) TREATMENT OF PURCHASE OF MATERIAL (E.G. IEC material, stationery, medicines, lab consumables etc.) The materials purchased are treated as expenditure in full in the year of purchase and the purchase transaction is complete only with the receipt of material and making of the payment. Material supplied by CTD or other donor agencies free-of-cost are not taken into account in the financial books of accounts, and only recorded in the relevant stock registers. TREATMENT OF FIXED ASSETS AND DEPRECIATION Assets acquired under the project are valued at historical cost including all direct costs (i.e. purchase price, transportation expenses, installation charges and other expenses incurred for bringing the fixed asset in working condition), incurred prior to its first use. In consonance of financial guidelines, no depreciation is charged on fixed assets. TREATMENT OF INTEREST EARNED IN THE BANK ACCOUNT No funds are kept in the Fixed Deposit. Interest earned on the funds kept in the Saving Bank Account maintained by the Society is accounted as Receipt and treated like Grant-in-aid, to be utilized for the same purposes for which the grant was received and subject to the same norms/guidelines. TRANSFER OF FUNDS TO DISTRICT SOCIETIES /INTER- DISTRICT TRANSFER OF FUNDS WITHIN THE STATE The receiving Society credits the amount under the head 'Intra-State Transfer (Receipts) and the remitting Society Debits the same under the head Intra-State transfer (Payments) and in consolidated accounts these are set off against each other like contra entries. *Tr-vfdu n S.No.9 ANNEX-XXII MANAGEMENT LETTER As per Terms of Reference for the audit of Consolidated Financial Statements of the RNTCP implemented through the State Health and Family Welfare Society-TB, Kerala 1. Proper Books of accounts for RNTCP Programme at Trivandrum District TB Centre was not maintained and transaction were verified based on the bank statement and expenditure vouchers. The point has been reported to the management even in the previous year. 2. Sundry Creditors lying outstanding is Rs. 1,28,600/- payable to V.M. Industries towards furniture purchased on 17.09.1999 in Palakkad. The point has been reported to the management even in the previous year. 3. At some district cheques issued but not presented for payment and pending for more than six months has not been reversed. The point has been reported to the management even in the previous year. 4. Since the programme receives funds from other institution, the balance of other funds has been segregated from the total and for which a separate Receipt & Payment, Income & Expenditure & Balance sheet has been prepared. The fund so received is not covered in our scope of audit. 5. The society is maintaining same bank account for handling the RNTCP & Other funds received by the society. Hence it is recommended to open a separate bank account for handling the funds other than that of for RNTCP activities. This matter has already been reported to the management in the previous year. 6. It is found that there is no concurrent audit system for the Disease Control Programme. orASA & ASSOCIATES LuP Chrtr ccountants Place: Ernakulam "N4 Ramachandrn Kamath Date : 09/11/2015 P . rem No 260 Fr I No 009571N/N500006 S.No. 18 Name of the Society: State Health & Family Welfare Society-TB-(NRHM), Kerala. Management Reply to the Audit Observations raised vide Audit report for the period from 01.04.14 to 31.03.15 SI.No. Audit Observation Management Reply - 1. The records are maintained in the prescribed format. Factual Statement. 2. The records are signed by authenticated officer. Factual Statement. 3. We have obtained all the figures for the finalization and consolidation of Factual Statement. accounts. 4. Bank Reconciliation statement is prepared on a regularly basis. Factual Statement. 5. SOE's were submitted as per the guidelines of the Central TB Factual Statement. Division, New Delhi. 6. It is noted that the entire expenditure as per SOE is incurred for the purpose of functioning of the society Factual Statement. and are as per the guidelines by the Central TB Division. 7. Fixed Asset Register is maintained properly in consonance with the Factual Statement. financial accounts. 8. The entire expenses are covered by proper vouchers and authentication. 0'P o%xm Manager State Mion Director 0 Aditional Director - TB NRHM Addl. Director of Health Services-TB/ GOKUL GAR I;, P State TB Officer, State TB Cell, State Mission Drrctor ( "I) Directorate of Health Seri Directorate of Health Servics Thiruvananthf Thiruvananthapuram-35 We agree with th mernReplies S.Nol9 S.No19 Name of the Society: State Health & Family Welfare Society-TB- (NRHM), Kerala. Miaaement Reply to the Audit Observations/ Suggestions raised1 vide Management Letter for the period 01.04.14 to 31.03.15 S Audit Observation Management Reply No. Proper Books of accounts for The District TB Officer, 'rivandrim District RNTCP Programme at Trivandrum TB Centre will be advised to do the needful and )istrict 1B Cell was not maintained take action to maintain and rewrite thc books and transaction were vcrified based of accounts correctly and neatlY pcrtaining to on thc baank statenient and the financial ycar 2>014-15 and to be reported. expenditure vouchers Sundry Creditors lying outstanding As reported in the previous years, the said is Rs. 1,28,600/- pavable to V.M. amount of Rs. 1,28,600/- sundry creditors lying Industries towards furniture outstanding in Palakkad District TB C0ntrol purclased on 17.09.1999 in Society, the same has not been settled because 2. Palakkad. of the penlding eiqruiry in 1)rocuremet and lthe creditors has send court notice for claimii the amount. Tihe amount will be settled or \written off subject to the completion of enquiry Or op on court decision. At some of the district cheques Instruction will be given to all DistTl3t l issued but not presented for Centers to do the needful to get the outstanding 3. payment and pending for more pending dishonored cheques either to be than six months has not been revalidated or to get reversed and settled at the reversed. carliest. Since the programme receives As advised & instructed by the CentrIal TB funds from other institution, the Division, Gol, New Delhi to turnish the final balance of other funds has been accounts exclusive of other graitts and segre,gated from the total and for expenditure thereof for onward subimission of 4 whicl a separate Receipt &k the saine to the funding aguncieis/\Wrld bank Pavment, Income & Eixpenditure & Balatnce sheet has been prepared. The fund so received is not covered in our scope of audit. The society is maintaining sane Since the reccipt of fund from other sources 1s bank account for handling the not a frequent routine activitv. Thle RNTCP & Other funds received by recommendation of the auditors to open a the society. Hence it is separate bank account for handling the other recommended to open a separate fund apart from RNTCP) fund, the discussion bank account for handling the Vith the higher official in the above \atter \i11 funds other than that of for be considered to decide on the 2 silnatory RNTCP ) actvities. This matter has authoried person in the chequie. The societv is already ben reported to the been permitted to Cpen oly one bank accont mina gement in the previous y-ear. It is found that there is no Pertaining to RNTCP D1isease C ol concurrent audit system for the Programme, the auditors appointed bv \ H \1 Disease Control Programme. are also carrIMg out the concurrent audit of RNTCIP where ever concmrrent auditors have been appointed by the NRI \. S rai n e \ on Director dd 0 e-t t ffTCC-TB b