Page 120 - HUDCO BEST PRACTICE AWARDS

Urban Design anD regional Planning, inner city revitalization anD conservation

Year 2018-19

pre-audit/internal audit in 168 ulBs of chhattisgarh by State

urban development agency, chhattisgarh

The role of ULBs regarding financial management became important due to inability of ULBs to develop infrastructure on account of lack of funds and with the launch of various governmental
schemes which needs to be implemented at ULB level. In this context, aimed towards self-sustainability by optimum end use of grants of ULBs, deduction and rectification of irregularities in
revenue process compliance, systemized control on payment process and ensure transparency in urban governance led to the launch of Pre-Audit /Internal Audit in all 168 ULBs in the state
of Chhattisgarh. After developing a model for pre-audit and internal audit, the audit team was authorized to be an integral part of ULBs and the process has been executed by dividing whole
state into 5 clusters. As a result of this initiative, FDR along with the balance was identified and credited back. Areas for self-sustainability have been evolved by the ULBs through increasing
revenue sources with audit initiatives and advice, reduction in unnecessary expenses.
Introduction Key dates

stablishing internal control is a continuous exercise, meant to reduce/eliminate/detect Dates Significance/Achievement
E every possibility of revenue leakage, misappropriation, underutilization of assets, fix
2015-16 to 2017-2018 Huge saving of revenue during the compliance process of internal
responsibility and promote accountability in staff and ultimately optimum utilization audit objectives, approximately Rs. 95 crore.
of enterprise resources, available opportunity. Absence of these always affects the 2015-16 to 2017-2018 Due to timely statutory compliances, ULBs have experienced saving
department adversely in one or another way. Chhattisgarh State Urban Administration of fines.
and Development Department through its Nodal Agency State Urban Development Agency 2015-16 to 2017-2018 Introduction & implementation of ranking mechanism for assessing
(SUDA) had taken an initiative and implemented the Practice of Pre-Audit/Internal Audit in the work of ULBs through successful compliance of internal
audit leading towards competitive environment to achieve self-
168 ULBs of the state which includes 13 Municipal Corporations, 44 Nagar Palika Parishads, sustainability.
111 Nagar Panchayats, having a total population of approximately 65 lakh. The project 2015-16 to 2017-2018 Database creation with the help of audit for information related to
has been implemented by dividing the State into 5 divisions namely Raipur, Bilaspur, Central & State Government reforms.
Ambikapur, Bastar and Durg. 2015-16 to 2017-2018 Overcomes irregularities in compliance to revenue process in ULBs.
Background Main focus
i. Leading towards the self-sustainability by sustainable and optimum end use of
n a department, a process runs by procedures and system as defined by the department.
IFurther, it is also necessary to evaluate periodically whether the control procedures are grants of ULBs, budgetary control on the expenditures, control on diversion of fund in
urban local bodies and check & control mechanism for evaluation of expenses and
properly working, and are being followed by the concerned persons. Violation of procedures due reversal of expenditures.
may be done intentionally or by instance, which in shorter period may not cause any revenue ii. Detection and rectification of irregularities in revenue process compliance in ULBs for
loss, but continuous violation may cause serious implication in revenue generation. Thus, ensuring regular file processing according to CAG compliance, statutory compliance,
a requirement was felt by the ULBs to take special attention on these issues. The national i.e., TDS, PF, CT on timely basis, proper store accounting and physical verification
reforms agenda for urban sector includes reforms in municipal accounting practices and of materials and reporting non-compliance to higher authorities in order to mitigate
strengthening of financial discipline. Even after the 74th amendment to the Constitution such error in future.
of India, the ULBs of Chhattisgarh were not able to develop infrastructure on account of iii. Systemized control on payment process in Urban Local Bodies through cross
lack of funds. With the launch of schemes like Jawaharlal Nehru National Urban Renewal checking of proper documentation in each payment file of ULBs, with all requisite
Mission (JnNURM), Urban Infrastructure Development Scheme for Small and Medium compliances, review of the running bills of all construction activities as per tender
Towns (UIDSSMT), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), process and sanctioned amounts.
Pradhan Mantri Awas Yojana-Housing for All (PMAY-HFA), Swachh Bharat Mission (SBM), it iv. Appropriate implementation of Municipal Corporation Act 1956, Municipality Act
1961, Procurement rules, capacity building of ULBs for compliance of pre-defined
has become necessary that the ULBs had at their disposal the financial resources to be able rules and regulations and ensure transparency in urban governance, and introduction
to effectively discharge their duties. Thus, the role of ULBs regarding financial management and implementation of ranking mechanism for assessing the work of ULBs.
became important and with this, the need for better financial practices emerged. Mobilization of resources
Hence, Pre-Audit and Internal Audit procedures were launched in ULBs to make effective Total budget for the project was Rs. 13.95 crore, which was spent in three financial years.
check on financial monitoring, which was untouched till that time. Also, as per the Allocation for each financial year was Rs 4.5, 4.5 and 4.95 crores for the FY 2015-16, 2016-
recommendations of the 13th Finance Commission, without Accrual Based Double Entry 17 and 2017-18 respectively. Entire fund had been sanctioned by State Urban Development
Accounting System & Audit process, the ULBs would not have been eligible for Performance Agency, Chhattisgarh. Regarding technical manpower, five CA firms were selected to
Based Grants & Reform amount. mobilize the audit team and execute the services.

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