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NORTH DELHI MUNICIPAL CORPORATION

INTERNAL AUDIT DEPARTMENT

Mpl. Primary School Bldg.,

Ram Nagar, Arakashan Rd.
Pahar Ganj, N. Delhi-5

No. F.______/IAD/SPZ/2016/______ Dated_____________

Subject: Physical verification & test audit on account of General Branch,

including Licensing Department, S. P. Zone, for the period
13.03.2014 to 10.03.2015.

Please find enclosed herewith the Audit Inspection Report on account of General
Branch, S.P.Zone, for the period 13.03.2014 to 10.03.15. Para-wise replies/comments be
sent to the office of the undersigned within a period of the two weeks of the receipt of this
letter.

Internal Audit Officer

ZAP/S.P.Zone

Asst. Commissioner,
S.P.Zone

Copy to :
1. D.C., S.P.Zone, for kind information pl.
2. D.C.A.(I.A.D.), for kind information pl.
3. Office copy

Internal Audit Officer

ZAP/S.P.Zone

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NORTH DELHI MUNICIPAL CORPORATION
INTERNAL AUDIT DEPARTMENT

Mpl. Primary School Bldg.,

Ram Nagar, Arakashan Rd.
Pahar Ganj, N. Delhi-5

No. F.______/IAD/ZAP/SPZ/2016 Dated_____________

Subject: Physical verification & test audit on account of General Branch, including
Licensing Department, S.P.Zone, for the period 13.03.2014 to 10.03.2015.

INTRODUCTION:

As per approved programme the physical verification and test audit on account of
General Branch including License Department, S.P. Zone, for the period 13.03.2014 to
10.03.15 was conducted by the Zonal Audit Party, S.P. Zone, during the period 10.03.2015
to 20.03.2015. The Audit Party consisting of the following staff working under the control
and supervision of Sh. Sandeep Kumar Internal Audit Officer, S.P. Zone conducted the audit
on the said office.

1 Sh. Pradeep Singh Rawat Accountant

2. Sh. Subhash Mishra Acctt.Asstt.
3. Sh. Satish Chand Sharma UDC

Sh. Pawan Kumar held the post of Asstt.Comm./S.P.Zone at the time of Audit.

AIMS AND OBJECTIVES

The main aim of the General Branch, S. P. Zone is to allot tehbazari sites, PCO Boths,
Hnadicapped tehbazari, Taxi Stand sites, weekly bazaar sites on a prescribed annual
tehbazari fee to the needy and poor people. Apart from this to issue General trade licenses
other than Helath trade license for the shops etc. To conduct the raids in the area to
vacate temporary encroachments on Govt. Land etc.etc.

HOD/H.O.S/D.D.O’s/CASHIERS

The following officials have served as HOD/HOD/DDO/Cashier during the audit.

S. No. HOD Head of Office DDO Cashier

S/Shri S/Shri/Ms. S/Shri/Ms. S/Shri/Ms.
1. Sh. R. S. Meena Sh. Pawan Kumar Sh. Pawan Kumar -----
DC/SPZ AC/SPZ AC/SPZ

Budget Allocation and Expenditure for the year:-

No Budget Register was provided to the audit party.

Budget Year Expenditure up to year ending Excess/Saving

Statutory Audit:-

No audit report of statutory audit was provided to the audit party.

Vacancy Statement:

No Vacancy Statement was provided to the audit party.

S. No. Name of Post No. of Posts Filled Vacant

Sanctioned

Maintenance of Records:-

Since most of the chain of records were either not maintained by the department
concerned or not produced to audit, the maintenance of records by the department
concerned cannot be considered as satisfactory for the period covered by the audit.
Old Audit Report

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There were _260__audit paras outstanding in respect of General Branch, S.P. Zone, out
of which _Nil___para’s has been settled. The remaining _260_paras have been incorporated with
current audit report as part-I (old audit report).

DETAILS OF OLD AUDIT REPORT:

(A)
S. No. Year Total Paras Para Settled Para no. of Outstanding para’s
Settled Para’s with Para No.
1. 1969-73 06 --- --- 06
2. 1969-75 14 --- --- 14
3. 1975-79 08 --- --- 08
4. 1975-80 05 --- --- 05
5. 1980-81 04 --- --- 04
6. 1984-88 06 --- --- 06
7. 1985-88 08 --- --- 08
8. 1988-89 07 --- --- 07
9. 1989-90 08 --- --- 08
10. 1989-91 05 --- --- 05
11. 1990-92 13 --- --- 13
12. 1991-92 12 --- --- 12
13. 1992-93 12 --- --- 12
14. 1993-94 07 --- --- 07
15. 1994-95 08 --- --- 08
16. 1995-96 05 --- --- 05
17. 1996-99 03 --- --- 03
18. 1998-00 05 --- --- 05
19. 2000-02 04 --- --- 04
20. 2002-03 11 --- --- 11
21. 2003-04 10 --- --- 10
22. 2004-05 08 --- --- 08
23. 2005-06 06 --- --- 06
24. 2006-07 13 --- --- 13
25. 2007-08 15 --- --- 15
26. 2008-09 13 --- --- 13
27. 2009-11 15 --- --- 15
28. 2011-12 15 --- --- 15
29. 2012-14 14 14
30. Total 260 --- --- 260

(B) Details of Old Recovery

S. No. Year Total old Amount Recovered Balance

Recovery Recovery
In Rs. against Paras
(Amount in Rs.
Para wise)
1. 1969-73 74.02 -------- 74.02
2. 1969-75 ------ --------
3. 1975-79 ------ --------
4. 1975-80 148.85 -------- 148.85
5. 1980-81 09.60 -------- 09.60
6. 1984-88 10.00 -------- 10.00
7. 1985-88 186.00 -------- 186.00
8. 1988-89 1760.00 -------- 1760.00
9. 1989-90 143.00 -------- 143.00
10. 1989-91 240.00 -------- 240.00
11. 1990-92 202.00 -------- 202.00
12. 1991-92 16697.00 -------- 16697.00
13. 1992-93 93538.50 -------- 93538.50
14. 1993-94 2196.80 -------- 2196.80
15. 1994-95 94384.05 -------- 94384.05
16. 1995-96 50.00 -------- 50.00
17. 1996-99 74.00 -------- 74.00
18. 1998-00 340.00 -------- 340.00
19. 2000-02 ------ --------
20. 2002-03 160.00 -------- 160.00
21. 2003-04 3350.00 -------- 3350.00
22. 2004-05 ------ --------

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23. 2005-06 -------- --------
24. 2006-07 -------- --------
25. 2007-08 1660.00 -------- 1660.00
26. 2008-09 871.00 -------- 871.00
27. 2009-11 187878.00 -------- 187878.00
28. 2011-12 5100.00 -------- 5100.00
29. 2012-14 600.00 --------- 600.00
30. Total 409672.82 -------- 409672.82

Current Audit Report

Details of Current Recovery (Audit Period 13.03.14 to 10.03.15.):-

Para No.’s Total Recoveries (in Rs.) Amount Recoveries Balance (in Rs.)
6 Rs. 6386715/- Nil Rs. 6386715/-
Total Rs. 6386715/-

The Internal Audit Report has been prepared on the basis of information furnished
and records produced by the department concerned.

This party disclaims any responsibility for any misinformation and/of non-information
on the part of audittee.

Internal Audit Officer

ZAP/SPZ

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PART –II: CURRENT AUDIT

The following records were requisitioned for audit/scrutiny on test check basis vide
this office memo no. IAD/ZAP/SPZ/01, dated 10.03.2015.

1. Cash Book
2. Imprest Register
3. Temporary Advance Register
4. ECR/Personal File/Service Book
5. Telephone Bill Register
6. Electric Bill Register
7. Purchase file of furniture/Allied article
8. Property register
9. O.T.A. Register
10. Log Book of vehicle
11. G-8 Books/Challans
12. Medical Reimbursement Record
13. T.A./D.A. Record
14. Uniform Register
15. Check Register
16. Income Register
17. Stationary Stock Book
18. G-8 issue register
19. List of Unauthorized Takhats & Chabutaras
20. L-I & L-II Register
21. Raid Register
22. Auction File
23. Schedule of Rates
24. Disposal of unclaimed articles
25. Records pertaining to the parking sites i/r of fine/charges etc.
26. Attendance register with biometric sheets
27. Any other auditable record related to audit.

PARA NO.-1 NON PRODUCTION OF RECORDS

Out of the above requisitioned records, the record at Sl. No.4 (p), 17, 20, 21 and D
& C register of ward no 76 only were produced for audit scrutiny. The Audit Party issued
Memo’s bearing Nos. 02/IAD/ZAP/SPZ/2015, 03 and 04 on dated 11.3.2015, 12.3.2015 and
17.3.2015 respectively to produce the complete record as mentioned in the requisition letter
but department failed to produce the complete record. If any irregularities/ discrepancies
etc found in the record which were not produced the department will be responsible itself.
It is presumed that the officials did not keep these records or the production of the same
has been avoided, the reason whatsoever may be best known to the department, be
explained to audit.

PARA NO.-2 NO PHYSICAL VERIFICATION OF STORE OF RAID ITEMS

During the last audit, the physical verification of the store of raided items could not
be done because the items lying in the store was in hotchpotch manner and clubbed with
the items of raid pertaining to the Health Department, as reported by the in-charge, of the
Stores. Further marking of each lot was also not shown in the store. In the present
circumstances, it was very difficult, for Audit to get physical verification of the store.

This year also there was no change in the store and still the raided items of Health
Deptt. as well as General Branch were kept in a clubbed manner and hence physical
verification could not be done. It seems that authority competent had taken no care of the
report and did not bother to maintain the store in a separate place so that audit could be
done in a proper way of both the departments.

The audit party recorded some of the items from the raid register prepared by the
department which were seized and kept in the store as per raid register but it was not
possible to check these listed items with the items kept in the store due to non viability of
detail of the items mentioned in the register and non marking of the serial no. and date
mentioned in the raid register by yellow paint on the seized items. It was surprised how the
store keeper return back these items to its owner after receiving store charges/penalty etc
without having detail of item and mark with the yellow paint, needs clarification.

Hence, the authority competent is once again requested to pass necessary

instructions for necessary changes and improvements with segregation of items of Health
Deptt. or the Store of Health Deptt. be shifted to somewhere else for proper storage of
raided items of both the departments, to maintain the store in a proper manner, so that
verification of the same can be done by the Audit as well as any authority of the zone. It

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is also requested that in the present scenario the physical verification of the store may be
carried out by the authority competent of General Branch and submit a certificate in this
regard to Audit and one copy be also placed in the auction file.

It is pertinent to mention here that audit has been drawn the attention of authorities
time to time and again to this issue (as in the reports for the last repeated years) but till
date no fruitful action has been taken resulting loss to MCD.

PARA NO.3: AUDIT OBSERVATIONS WITH REGARD TO L-I REGISTER:

L-I register produced by the department for the period 13.9.2012 Sr. No. 3619 to
14.01.2015 Sr. No. 4055 only. During the scrutiny of this register it has been noticed that
as per policy the decision to be taken in two month whether license is to be granted or case
to be rejected but M/S Jaipur Murti Kendra 8591, Qutub Road, Ram Nagar Delhi-55 applied
for license of Marble Statue business on dated 12.02.2013 but Licence was sanctioned on
26.08.2014 i.e. after 18 months. In a similar case M/S Shiv Shakti Agency, GF 3 Thapar
chowk applied the license on dated 04.09.2013 but the license was sanctioned on
09.05.2014 i.e. after 9 months. These are the examples only and other cases of similar
nature cannot be denied. L-II register has been shown without action and were left blank.
Due to above irregularities MCD may occur the monetary loss and not taken timely action
on the part of department to materialize the same is not known.

Reason for above said irregularities in L-I register and reason for left blank the L-II
register be clarified to audit.

PARA NO.-4: IMPROPER MAINTENANCE OF RAID ARTICLE REGISTER

During the course of test audit of the Raid Article Register (produced w.e.f.10.9.2012
to 27.9.2013 and 04.10.2013 to till date), the following irregularities were noticed:

1. Many cutting and overwriting were noticed in raid register without attestation from
Competent authority.
2. Sr. No. was repeated twice while entering the article in Register.
3. In many places total number of items mentioned wrong some examples are tabulated
below:-

S. No. date Should be Wrongly entered as

1. 03.06.2014 7/64 7/68
2. 03.06.2014 33/95 33/96
3. 24.06.2014 26/254 26/255
4. 31.07.2014 26/471 26/472

In view of the above, it is advised that a thorough check of the register to be made by
supervisory officer and necessary rectification to be made under intimation to audit.

4. After entering the seized items the Register was not properly closed and vacant portion
left blank, it needs clarification.
5. On scrutiny of this register it was found that after seizing the items from site, it is
entered in the raid register but has not been handed over to the Chowkidar of store and
store incharge as there is no signature of LI/RC concerned for handing over the seized
articles to store Chowkidar. It means none is the custodian of the seized articles. In the
case of any theft or fire, which will be responsible, needs clarification.
6. At most of the entries, at the time of releasing the items, no address of squatting site is
mentioned;
7. No copy of any G-8 receipt is attached with releasing order form so that actual amount
recovered may be ascertained;
8. The Raid Register has not been prepared in column-wise. No record is being kept of the
total amount collected-date-wise/raid wise from the release of impounded items/goods,
for the ready reference of the collections in the M.C.D. treasury.
9. No signatures of dealing assistant and competent authority done in the register.
10. No details of items i.e. weight, length, size etc.etc. are mentioned in the raid register
due to which it is very difficult to calculate the correct amount of charges of the raided
articles. It may be intentional. Loss of revenue cannot be denied due to non-mention of
actual weight, size of the article.
11. As per circular no 1450/CL&EC/99 dated 16.02.1999 the rates of composition fee,
removal and storage charges have been approved by the Commissioner and CLO. As
per this circular the seized items should be released by the department after charging
the rates as approved but on going through the raid register the items were released

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without charging the appropriate rates w.r.t. composition fee, removal charges, etc.
More over it was not mentioned in the register that the items seized are from the
hawker or shopkeeper or Transport Company or timber merchant etc as well as actual
weight of the seized item. The department may explain that in the absence of above
said information in the register how they are calculating the correct releasing charges of
the seized items.

The amount charged have not been bifurcated in the register as to how the said charges
have been charged by the Store Keeper.

PARA NO.-5: LOSS TO MCD WHICH IS BEYOND CALCULATION DUE TO NON

RECOVERY ON RENEWAL OF LICENSES AND NON-UPDATION OF L-II REGISTERS:

On test check basis, audit has observed that L-II Register, so produced and prepared
was found blank which inter-alia reflects that the entries of renewal of licenses are not being
made in the L-II Registers

Besides above, the said records are not being updated on the ground that G-8
receipts/licenses are being issued/renewed by CSB Centers w.e.f. 2002-2003 onwards
hence no L-2 Registers are being updated. Audit is in the view that the counterfoil/copies in
yellow color are being issued by the CSB Centers and sent to the respective departments for
posting in the respective ledger/registers. The reasons for none updating of L-II registers
explained by the department to audit was not clear and satisfactory. What actions are being
taken by the Enforcement Staff on the trades which are not getting their licenses renewed
from time to time due to which MCD is suffering revenue loss of particularly when MCD is
facing acute shortage of funds. Also the working of Enforcement Staff in the field does not
seem to be justified, which needs further clarification. In absence of L-II register the
information regarding total numbers of different types of trades, annual income of MCD by
renewing the license, arrears yet to be received from the defaulters etc could not possible to
ascertain.

PARA NO.6: NON RECOVERY OF TEHBAZARI FEE FROM SQUATTERS (Loss of

Rs.63,86,715/-).

During the course of audit, the department has produced only one D&C Register for
audit scrutiny, i.e. D & C Register for ward number 76 Deputy Ganj, S P Zone. It is revealed
that concerned authority has not worked out on recovery of Tehbazari Fee from authorized
squatters, taxi stands, PCO booths etc. Following arrears from Tehbazari Markets in Ward
no. 76 are lying pending and yet to recover.

S.No. Name of Market Total dues upto Current year 2014-15

31.03.2014 dues
1. Purana Kapra Market 6x4 Rs. 5,36,158/- Rs. 5,14,098/-
tehbazari
2. Mata Shera Wali Market 7x5 Rs. 18,36,060/- Rs. 8,38,200/-
tehbazari
3. Azad Market 7x5 tehbazari Rs. 8,58,054/- Rs. 1,91,400/-
4. Chowk Kishan Ganj 6x4 Rs. 5,58,824/- Rs. 65,910/-
tehbazari
5. Raghubira Market 7x5 Rs. 7,25,721/- Rs. 2,62,290/-
tehbazari
Total Rs. 45,14,817/- Rs. 18,71,898/-

In view of the above, table it is clear that North DMC are in huge need of funds and
concerned authorities on whose shoulder are responsibity to recover the Municipal dues are
not working properly to recover the dues in time. No supervisory authority has checked the
D & C Register. As it is noticed in one D&C Register there could be huge such
amount in other D&C Register which is lying unrecovered. The authority concerned
may direct the concerned staff to look into the matter and take appropriate action
to recover Municipal dues on urgent basis under intimation to audit. Reason for
delay in realizing the Municipal dues from Tehbazari sites be clarified/justified to audit.

PARA NO.7: IMPROPER MAINTENANCE OF DEMAND & COLLECTION REGISTER:

Chapter III of the Municipal Account Code I provides that a Demand & Collection
Register shall be maintained in form 2. At the beginning of the each year a fresh D&C
Register shall be opened in which shall first be entered the name of all leases against whom
the arrears are shown as due on a/c of previous years with the amount of such arrears after
which the entries relating to the demand of the current financial year shall be posted and
the word “arrears” being written in red ink in the column “Remarks” columns against the

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name of any person in the list of current year. The department had produced only one D&C
register for the ward 76 pertaining to NDMC for scrutiny. A review of the D&C registers
maintained in the General Branch Department disclosed that the registers were not being
maintained properly. The detail with regard to office order number and date vide which
tehbazari fee received deposited, total dues etc has not been mentioned in the columns
provided for the purpose and in most of the cases and also the amount of arrears as dues
on a/c of previous year has not been mentioned in red ink in the column “remarks” by the
department. In most of the cases the dues Tehbazari Fee were pending. Reason for not
recovering of pending Tehbazari fee or the present position of the case/site was not
mentioned in the register. As per list of positions of the sites in all manner as mentioned in
the Register it has been noticed that in number of sites from which the tehbazari fee were
not received by the department and still pending.

In the absence of mandatory entries in the D&C register,( such as closing of old
sites which are not running and opening of the new sites which were not allotted yet, non
mentioning of No dues pending certificate etc,) the amount on a/c of recovery of Tehbazari
fee and outstanding dues cannot be ensured. It is a serious lapse on the part of the
department. The reason for the non maintenance of D&C register properly may be clarified
to audit and submit the statement of outstanding dues.

In view of the above the authority competent is requested to take action in this
regard at the earliest possible under intimation to audit.

PARA NO.8: IRREGULARITIES NOTICED IN STATIONARY REGISTER:

During the course of audit Stationary Register so produced to audit was w. e. f.

30.09.2014 onwards. Following irregularities were noticed:-

1. The register was page numbered but no paging certificate was available in this register.
2. Indent on which stationary items received from HQ not produced to audit so exact
received quantity could not be verified.
3. In most of places the quantity issued, balance after and date of issue not mentioned.
4. In some places signature of recipient not taken.
5. No supervisory check of register was found.
6. Date of receipt of items from HQ was not mentioned in the register.

Reason for above irregularities be explained to audit.

PARA NO.9: OBSERVATIONS REGARDING PERSONAL FILE AND SERVICE BOOKS:

(A) PF and SB of Sh. Dharambir s/o Sh. Ballu Ram Peon:

a) No photograph changed after 10 years of service. in the service book of the incumbent;
b) Column no. 08 of the SB was not filled up to date.
c) Annual increment entries were not made since July 2009 to till date.
d) Signature of the DDO/AAO in the entries of arrears such as bonus, DA etc, was not
found available in the file.
e) PF found not paged numbered.
f) Cutting/ overwriting were not attested by the competent authority.
g) E/L account was not completed w.e.f. 31.12.2013 to till date.

PARA NO. 10:-GENERAL OBSERVATIONS.

1. Most of the records have not been paged numbered, even paging certificate not given in
the beginning of each record.
2. Most of the cuttings and alterations have not being got attested by the authority
competent.
3. In some cases it seems that during the releasing of the items, the G-8 no. and amount
so recovered was not entered in the register.
4. The check from the supervisory staff was not done in most of the records so maintained,
which should be must.

INTERNAL AUDIT OFFICER

ZAP/S.P.ZONE