NMCG/2017-18/

Dear

I have audited the annual accounts of National Mission for Clean Ganga (NMCG),

New Delhi for the year 2016-17 and have issued the Audit Report thereon vide letter dated

/..l2 During the course of audit, some deficiencies were noticed (as per Annexure A)

which are of a relatively minor nature and were, therefore not included in the Audit Report.

These are being brought to your notice for remedial and corrective action.

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Separate Audit Report of Comptroller and Auditor General of India on the Accounts of the

National Mission for Clean Ganga (NMCG) New Delhi for the year ended 31 March, 2017.

1. We have audited the attached Balance Sheet of the NMCG as at 31 March 2017, the

Income & Expenditure Account and the Receipts & Payments Account for the year ended

31.03.2017 under Section 20(1) of the Comptroller & Auditor General's (Duties, Powers &Conditions of Service) Act, 1971. The audit has been entrusted for the period upto 2016-17.These financial statements are the responsibility of the NMCG's management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

2. This Separate Audit Report contains the comments of the Comptroller and AuditorGeneral of India (CAG) on the accounting treatment only with regard to classification,conformity with the best accounting practices, accounting standards and disclosure norms,etc. Audit observations on financial transactions with regard to compliance with the Law,Rules & Regulations (Propriety and Regularity) and efficiency-cum-performance aspects,etc., if any, are reported through Inspection Reports/CAG's Audit Reports separately.

3. We have conducted our audit in accordance with auditing standards generallyaccepted in India. These standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from material mis-statements. An audit includes examining, on a test basis, evidences supporting the amountsand disclosure in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating theoverall presentation of financial statements. We believe that our audit provides areasonable basis for our opinion.

4. Based on our audit, we report that:

(i) We have obtained all the information and explanations, except records relating tofixed Assets, which to the best of our knowledge and belief were necessary for thepurpose of our audit.

(ii) The Balance Sheet, Income & Expenditure Account and Receipt & Payment Account

dealt with by this report have not been drawn up in the format approved by theMinistry of Finance.

(iii) In our opinion, proper books of accounts and other relevant records have beenmaintained by the NMCG, so far as it appears from our examination of such books.

(iv) We further report that:

A) Balance Sheet

(i) Balance Sheet of NMCG as at 31st March 2017 shows that against the value of fixed

assets of 60.76 lakh procured during 2016-17, NMCG created Fixed Assets Reserves for an

amount of Z61.21 lakh ( 372.03 lakh - Z310.82). Thus, liabilities side of Balance Sheet was

overstated by 0.4 lakh ( 61.211akh - 60.76 lakh).

(ii) There was a static balance of 4.0 lakh for last 4 years in Schedule-4-Current Assets and

Loans & Advances of Balance Sheet of NMCG. But the amount was not an advance but was

final payment of fees made to the Third Party Inspection (TPI) agency, Environmental

Engineering Cell, Department of Engineering, Bengal on 26.07.2013 against submission of

bill after completion of assigned work. Thus, current asset of NMCG was overstated to the

extent of Z4.00 lakh.

B) Income & Expenditure Account

(i) NMCG earned bank interest of (101.35 crore. However, in Schedule-5-Income of Income

& Expenditure Account for the year ended 31.03.2017, interest earned in respect of EAP,

Non-EAP and NGP. In Schedule-1 -Unutilised Grants interest earned from bank accounts of

'Beautification of Ghat Works' was added with the grants received during the year under

'Beautification of Ghat Works'. The interest earned on grant should be added to respective

grant accounts. The NMCG should disclose the accounting treatment of interest earned on

the grant in its accounting policy.

(ii) NMCG had 10 Flexi Deposits worth i 2090.14 crore in its 4 savings bank account as on

31.03.2017, not shown in the Schedule-5-Income of Income & Expenditure Account. On

which the accrued interest was Z16.09 crore as on 31.03.2017. Thus, income was

understated to the extent of 16.09 crore.

C) Grants-in-aid

NMCG had an opening balance of unutilized grants of K1937.51 crore as on 1st April 2016.

During the year F.Y. 2016-17, NMCG received grants-in-aid of :1681.19 crore. During the FY

2016-17 NMCG had utilized -416.02 crore and balan' ,e remained unutilized

as on 31 March 2017.

D) General

(i) NMCG did not prepare its Annual Accounts for the year 2016-17 as per Common Format

of Accounts prescribed by CGA, despite the issue raised in previous report.

E) Management letter

Deficiencies which have not been included in the Audit Report have been brought to the

notice of the Director General, National Mission for Clean Ganga (NMCG) through a

management letter issued separately for remedial/corrective action.

(vi) Subject to our observations in the preceding paragraphs, we report that the Balance

Sheet, Income & Expenditure Account and Receipt & Payment Account dealt with by this

report are in agreement with the books of accounts.

(vii) In our opinion and to the best of our information and according to the explanations

given to us, the said financial statements read together with the Accounting Policies and

Notes on Account, and subject to the significant matters stated above and other matters

mentioned in Annexure to this report give a true and fair view in conformity with accounting

principles generally accepted in India.

a. In so far as it relates to the Balance Sheet, of the state of affairs of the National Mission

for Clean Ganga, New Delhi as at 31 March 2016 and

b. In so far as it relates to Income & Expenditure Account of the Surplus for the year ended

on that date.

For and on behalf of the C&AG of India

Principal Director of Audit (SD)

Place: New Delhi

Date:

Draft Annexure-1

1. Adequacy of Internal Audit System:

i) There is no internal audit wing in National Mission for Clean Ganga.

ii) Internal audit of the National Mission for Clean Ganga by the Ministry has not been

conducted in 2016-17.

2 Adequacy of the Internal Control System: There is scope of improvement in the

Internal Control System of National Mission for Clean Ganga as the following

deficiencies were noticed:

i) Valuable Register was not maintained.

ii) Fixed Deposit Register and Register for Flexi Deposits were not maintained.

iii) Fixed Assets Register was not maintained in GFR-40. Though NMCG stated in

September 2017 that it maintained Fixed Asset Register in GFR-40, it could not be

verified due to non-submission of the same to Audit.

iv) Stock Register for stationery/consumable stores was not maintained in GFR 41.

Though NMCG stated in September 2017 that it maintained Stock Register for

stationery/consumable stores in GFR-41, it could not be verified due to non-

submission of the same to Audit.

v) As required under Rule 13(iii) of Receipts and Payments Rules, 1983, totalling of cash

book of NMCG was not verified and initialled as correct by the Head of the Office or by

some responsible subordinate officer other than the writer of the cash book.

vi) NMCG releases grants to various SPMGs under EAP and Non-EAP. It was observed

that Utilization Certificates for 344.57 crore were still awaited as on 31.3.2017.

vii) The value of fixed assets of 2.02 crore as shown in Schedule-3-Fixed Assets of the

Balance Sheet of NMCG as at 31.03.2017 could not be verified in the absence of Fixed

Assets Register.

viii) NMCG could not furnish copy of ledger maintained for procurement of stationery/

consumable stores items during 2016-17. Though NMCG stated in September 2017

that it maintained the ledger but the same could not be verified due to non-

submission to Audit, though asked for.

3. System of Physical Verification of Inventory

The physical verification was carried out in January 2017, the same could not be

verified due to non-submission of records/files to Audit.

4. System of Physical Verification of Assets.

The physical verification was carried out in December 2016, the same could not be

verified due to non- submission of records/files to Audit.

5. Regularity in payment of statutory dues:

The NMCG had a liability of TDS payable for !46.75 lakh and E.P.F payable for Z1.06

lakh which could not be paid during 2016-17.

Director (EA)