GOVERNMENT OF ANDHRA PRADESH GROUND WATER AND WATER AUDIT DEPARTMENT From, To, Sri M. John Satya Raju, M.Tech., The Senior Joint Commissioner Director, Unit Head-Ill, Ground Water and Water Audit Department, NPMU-National Hydrology Project, Vysya Bhavan, Namboorivari Veedhi, GOl, MOJS, DOWR, Hanumanpet, Near Railway Station, NEW DELHI. VIJAYAWADA-520 003. Email:andhragw(a,gmail.com Lr. No. 2400/NHP/AUDIT/2024 Dated:21-03-2025. Sir, Sub: Andhra Pradesh Ground Water and Water Audit Department - National Hydrology Pro1ject - Submission of Audit Certificate by Implementing Agencies (lAs) for Financial Year 2023-24 under NHP from CAG -Regarding. Ref: 1) This office Lr.No. 2400/NHP/AUDIT/2024, Date:24-07-2024 to PAG (Audit), Andhra Pradesh. 2)File No. X-91014/1/2016-NHP/3509-3513, GOI, Mo)S, DoWR, RD&GR, NHP, New Delhi Dated:04.03.2025. 3)Lr.No.PAG(Au)/AP/AMG-II/NHP-GW/83-2024/580,Dt:1 3.03.2025 Accountant General/AMG-1l, O/o Principal Account General (AUDIT), Andhra Pradesh. Kind attention is invited to the subject and references cited. The department has received the Audit certificate for the year 2023-24 in respect of National Hydrology Project financed under World Bank (Loan No.8725- IN) vide reference 3rd cited as below and herewith attached for your information and further action. a) Statement showing expenditure incurred, verified, ineligible and reimbursable (Annexure-A) b) Statement showing ineligible expenditure/disallowance as per audit (Annexure-B) c) Statement showing ineligible/disallowance expenditure in previous year now allowed (Annexure-C) The total expenditure verified as per audit is Rs.11,87,92,598-00 and informed that Eligible expenditure as per audit Rs.10,71,95,440-00 and Rs.1,15,97,158-00 as Ineligible Expenditure/ Disallowance (which is the GST amount) as per audit. Yours faithfully, Encl: As above DIRECTOR. ~I~1hT~ ~i~~) (FF[ICE OTIIV PINCIPAL "45 ACCOUNTANT GENERAL (AUDIT) ANDiRA PRADESH, VIiAYAWADA-520 002. PI, fiM i - 520 002. * ft-r[T/ DATIV PAC(Au)/AP/AMG-1 I/NI IP-GW/83-2024/5O To The Director/Nodal Oflicer (NI IP-APGW) Ground Water and Water Audit Department. Vvsva Bhavan. Namboori Vari Veedi, Hanumanpet. Vijayawada - 520 003, AP. Sub: Audit Certificate in respect of National Hydrology Project (NHP), Ground Water and Water Audit Department financed under World Bank/ International Bank for Reconstruction and Development (Loan No. 8725-IN) for the year 2023-24-reg. Sir, I am to forw\ard Audit Certificate for the year 2023-24 and Audit Report ofComptrollcr and Auditor General of India along with following Anexures in respect of the Externally Aided Project-National Hydrology Project (NHP), Ground Water and Water Audit Department. GoNemment of Andhra Pradesh, financed under World Bank (Loan No.-8725-IN): a) Statement showing expenditure incurred, verified, ineligible and reimbursable (Annexure-A) b) Statement showing ineligible expenditure / disallowance as per audit (Annexure-B) c) Statement showing ineligible /disallowance expenditure in previous years allowed during 2023-24 (Annexure-C) 2. There is no Management Letter prepared on the Project Financial Statements for the year. 3. Receipt of the above-mentioned documents may please be acknowledged. Encl: As above. Yours faithfullN, Deputy Accountant General PAG(Au)/AP/AMG-JI/NIIP-GW/83-2024/ Date: March 2025 Copy to; (without annexures) 1) The Secretary, Government of India, Ministry of Finance, Department of Economic Affairs, Room No 39-B, North Block, New Delhi- 110001 for information 2) The Principal Secretary to the Government of AP, Finance (PM/lU) Department, AP Secretariat, Velagapudi - 522503, Guntur District, Andhra Pradesh. Address: 8th Floor, Stalin Central Mall, M.G. Road, Governorpet, Vijayawada - 520 002. Website: www.cag.gov.in/ag/andhra-pradesh/en e-mail : agauandhrapradesh(cag.govain MI" R ~OFFICE OF THE PRINCIPAL * 1 ACCOUNTANT GENERAL (AUDIT) ANDIIRA PRADESH, VI.IAYAWADA-520 002. 31* , ftilo - 520 002. PI-fiT / DA`FE PAG(Aui)/AP'/AMG-llI/Nili'-GV/83-2024/ AUD)IT CERTI FICATE The Expenditure Statement/ Project Financial Statements relating to the Project "National Hydrology Project (NIP)-Anidltrn Pradesh Ground Water and Water Audit Department" financed under International Bank for Reconstruction and Development / World Bank (Loan No. 8725-IN) for the year 2023-24 attached hereto have been audited in accordance with the regulations and standards of audit of the Comptroller and Auditor General of India (CAG) and accordingly included such tests of accounting records, internal checks and controls and other auditing procedures necessary to confirm a) that the resources were used for the purpose of the Project; and b) that the expenditure statements/financial statements are correct During the course of the audit referred to above, the revised Statement of Expenditure (SOE) for an amount of Z11,87,92,598/- and the connected documents were examined, and these can be relied upon to support reimbursement under the aforesaid loan agreement. On the basis of the information and explanations that have been obtained as required and according to the best of our information as a result of the test audit it is certified that the Expenditure Statements/Financial Statements read with the observations set out below represent a true and fair view of the implementation (and operations) of the project for the year 2023-24. This certificate is issued without prejudice to CAG's right to incorporate any further/detailed audit observations if and when made in thte Report of CAG of India tor being laid before the Parliament /the State Legislature. (Narendra V Nikhila) Deputy Accountant General/ AMG-1l Address : 8th Floor, Stalin Central Mail, M.G. Road, Governorpet, Vijayawada - 520 002. Website: wwwcag.gov.in/ag/andhra-pradesh/en e-mail: agauandhrapradesh@cag.gov.in ~I~(M ell) .OFFICE OF TilE PRINCIPAL ACCOUNTANT GENERAL (AUDIT) 311TI W , - 520 002. ANDIlRA PRADESH, VIJAYAWADA-520 002. Report of the Comptroller and Auditor General of India The Director/Nodal Officer (NHP-APGW), Ground Water and Water Audit Department 14-7-29, Vasya Bhavan Namboorivari Veedhi, Hanumanpet, Near Railway Station, Vijayawada - 520 003, AP. Report on the Project Financial Statements We have audited the accompanying Project Financial Statements of National Hydrology Project (NHP)-Andhra Pradesh Ground Water and Water Audit Department financed under International Bank for Reconstruction and Development / World Bank Loan No. 8725-IN which comprises the Statement of Expenditure (SOE) and Statement of Sources and Applications of Funds for the year 2023-24. Preparation of these statements is the responsibility of the Project's Management. Our responsibility is to express an opinion on the accompanying fimancial statements based on our audit. We have conducted our audit in accordance with the Auditing Standards promulgated by the Comptroller and Auditor General 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. Our audit examined on a test basis, evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Revised Project Financial Statements (06.01.2025) present fairly, in all material respects, the sources and applications of funds of National Hydrology Project. Andhra Pradesh Ground Water and Water Audit Department for the year 2023-24 in accordance with Government of India accounting standards. In addition, in our opinion, (a) with respect to SOE, adequate supporting documentation has been maintained to support claims to the World Bank/IBRD for reimbursements of expenditure of 11,87,92,598/- incurred; and (h) except for ineligible Cxpen[diatLre of tI,15,97,158/- as detailed in audit observations appended (Appendiv) to this Audit Report for the year 2023-24, the expenditures are eligible for financing under the Loan Agreement. During the course of the audit, SOE and the connected documents were examined, and these can be relied upon to support reimbursement under the Loan Agreement as per Annexure A, B & C. This Report is issued without prejudice to Comptroller and Auditor General of India's right to incorporate the audit observations in the Report of Comptroller and Auditor General of India being laid before the Parliament / the State Legislature. Deputy Accountant General/AMG-ll Address : 8th Floor, Stalin Central Mall, M.G. Road, Governorpet, Vijayawada - 520 002. Website . www.cag.gov.in/ag/andhra-pradesh/en e-mail : agauandhrapradesh@cag.gov.in Appendix to Audit Report Audit observations in respect of IIBRD/World Bank assisted Project- National Illydrology Project (Loan No.8725-IN) Ground Water, Water Resources Department, Government of Andhra Pradesh for the year 2023-24 Introduction The Water Resources Department, Government of India, introduced National I lydrology Project under International Bank for Reconstruction and Development / World Bank Loan No. 8725-fN to improve the extent. and water resources information and expand Hydrology Data and Information Systems, strengthen water resources operation and planning systems and enhance institutional capacity for water resources management in India. Accordingly, the Ministry of Water Resources. River Development & Ganga Rejuvenation has signed Memorandum of Agreement with Andhra Pradesh Ground Water Department which is the implementing agency in Andhra Pradesh. Funds flow from the Centre in the form of the Grants-in-Aid. National Hydrology Project (NHP) is having a duration of eight years and the department has prepared Project implementation plan (PIP) with a budget of Rs. 69.84 crore for Andhra Pradesh. Total eligible expenditure claimed by the Project up to 31 March 2023-24 was Rs. 55.47 crore (cumulative). NHP is a Central Sector Scheme, where 50% of the Central Government's assistance would be financed under the IBRD/World Bank loan repaid by Central Government and the remaining 50% would be Central Assistance from the budgetary support. The closing date of the Project under loan agreement is March 31, 2025. The project has four components: (A) Water Resources Monitoring Systems; (B) Water Resources Information Systems; (C) Water Resources Operations and Planning Systems; and (D) Institutional Capacity Enhancement. Component A: Water Resources Monitoring Systems: A.t: Hydromet Observation Networks A.2: Supervisory Control and Data Acquisition (SCADA) Systems for Water Infrastructure A.3: Establishment of Hydro-informatics Centers Component B: Water Resources Information Systems (WRIS) BA 1National WRIS B.2: Regional/Sub National WRIS Component C: Water Resources Operations and Planning Systems C. t: Development of Analytical Tools and Decision-support Platform C.2: Purpose-driven Support C.3: Piloting Innovative Knowledge Product Component D: Institutional Capacity Enhancement D. 1: Water Resources Knowledge Centers D.2: Professional Development D.3: Project Management D.4: Operational Support Page l of 2 At the State Level, the Project headed by a Director / Nodal Oflicer Under Ground Waler and Water Audit Department of Government of Andhra Pradesh, is 'Project Management Unit' (PMU), who is assisted by Joint Director (JD) and Deputy Director (DD), Assistant Director (AD) and other Technical Officers/ ministerial staff. Audit Observation The details of ineligible expenditure relating to the Financial year 2023-24 are given below: Goods and Service Tax (GST) imposed by borrowing country 1. Audit of Externally Assisted Project (EAPs), namely, National Hydrology Project (Ground Water) assisted by World Bank is conducted by Comptroller and Auditor General of India (C&AG) in accordance with Terms ofReference (TOR) read with Loan Agreements, and related documents. As per TOR issued (March 2009) by the Union Ministry of Finance for Audit of World Bank/IBRD assisted Projects by the C&AG, audit is carried out in accordance with the Auditing Standards, regulations and guidelines promulgated by the C&AG and will include such tests and controls as considered necessary under the circumstances. As per extant provisions of Audit Manual of Standing Instructions (MSO) of C&AG to the extent applicable to audit of EAP financed by World Bank/IBRD, the Bank does not finance custom duties and other taxes imposed by borrowing Country. Thus, the amount of GST (Goods and Service Tax) imposed by the borrowing country, i.e. Central and State Governments, is considered ineligible expenditure for the sake of disbursement under the loan agreement. In this context, GST paid by the Project to the contractors amounting to Rs 1,15,97,158/- during the year in respect ofthe bills made available to audit is considered as ineligible expenditure for the purpose of reimbursement tinder the Project. Details are included in Annexure-B. Deputy Accountant Cencral/AMG-l Page 2 of 2