1

DRAFT INSPECTION REPORT ON THE ACCOUNTS OF THE OFFICE OF THE ZONAL

COMMISSIONER, GHMC, LB NAGAR ZONE FOR THE YEAR 2019-20

Dates of Audit: From 30-7-2019 to 09-08-2019 and

24-9-2019 to 24-09-2019 ( 31 working days)

PART I

INTRODUCTION:
a) Overview of the audit unit:

The Zonal Commissioner, GHMC, LB Nagar consists of 5 Circles. The Zonal

Commissioner is assisted by Assistant Municipal Commissioner, Superintending
Engineer, City Planner, Deputy Director (Parks), Examiner of Account, Financial
Advisor, Sr. Entomologist (UMS), Assistant Director (Veterinary) and Licensing
Officer and other supporting staff in performing various functions of the Zone.

b) i) Incumbent Officers: The following officers held the charge of the Zonal
Commissioner, GHMC, LB Nagar since 2016-17 to date:

Zonal Commissioners
Sl. Name of the Officers / Period of charge
No. Shri From To
1 P.N. Raghu Prasad 17-2-2014 09-6-2017
2 B.V. Gangadhar Reddy 09-6-2017 31-12-2017
3 S. Srinivas Reddy 01-01-2018 21-5-2018 (i/c)
4 S. Srinivas Reddy 22-5-2018 To till date
ii)The following Officials conducted the audit:
S. No. Name of the Officer Designation
1. S. Srinivasa Rao Sr. Audit Officer
2. G. Venkateswara Rao Sr. Audit Officer
3. K. Shekhar Asst. Audit Officer
4. T. Shanker Rao Asst. Audit Officer
5. Mohd Ziauddin Supervisor

c) Scope of Audit

This is the first audit of the Office. During the present audit conducted from 30-7-2019
to 24-9-2019 (31 working days) the accounts/transactions for the period from 2016-17
to July 2019 were generally examined and test check of transactions including nominal
and number audit was conducted. The audit was conducted as part of Compliance audit.
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d) Audit Mandate: The audit has been conducted in accordance with Section 20(1) of
the Comptroller and Auditor General of India (Duties, Powers and Conditions of
Service) Act, 1971 and the applicable Auditing Standards of the CAG of India.
e) Disclaimer: The Report has been prepared on the basis of information furnished/
made available by the Zonal Commissioner, GHMC, LB Nagar Zone. The Office of
the Principal Accountant General (Audit), Telangana, Hyderabad disclaims any
responsibility for any mis-information and / or non-information on the part of the
Zonal Commissioner, GHMC, LB Nagar Zone.
PART-II
PART-II(A) :MAJOR Irregularities: Vide Reprt

PART-II(B):Other Observations: Vide Report

PART-III :
Outstanding Inspection Reports:

NIL

PART-IV

Best practices: NIL

PART-V

Acknowledgement: Audit team acknowledged the co-operation of the Zonal Commissioner

and other officials/staff subject to DNP as pointed out in Para.

Place:Hyderabad Sr. Audit Officer

Date: 24.09.2019 LBAP-XI
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I. NON COLLECTION OF LABOUR CESS FROM BUILDING PERMISSION

APPLICANTS: RS.5.79 CRORE

As per G.O.Ms.No.112, Labour Employment Training & Factories (Lab.II) Department dated 15
December 2009, 1 per cent labour cess is leviable, where the estimated cost of construction exceeds
Rs.10 lakh. The Controlling Departments of the Local Bodies / Authorities which are competent to
approve plans for “Building and Other Construction Work”, viz., (1) Municipal Administration &
Urban Development Department, (in respect of all Urban Local Bodies) (2) Panchayat Raj
Department (All Village Panchayats) etc., where construction activity takes place involving labour
are requested to issue instructions immediately to the Heads of Departments and the Local bodies/
Authorities:
(i) to comply with the statutory provisions under the Building and Other Construction Workers
(Regulation of Employment and Conditions of Service) Act, 1996 (Main Act) and the Telangana
State Rules, 1999 made thereunder; Building and Other Construction Workers’ Welfare Cess Act,
1996 (Cess Act) and Cess Rules, 1998 BY ENSURING THAT 1% Cess on the “Estimated Cost of
Construction” of the building works covered by the definition of “Building and Other Construction
Work” which includes all expenditure incurred by an employer in connection with the Building and
Other Construction works and it excludes the costs of land and any compensation paid or payable to
a worker or his kin under the Workmen’s Compensation Act, 1923 are received by them before they
accord approvals to the plan.
(ii) for the purpose of estimated cost of construction, therein it was advised to follow the
structure value guidelines issued by C&IG(R&S) vide proceedings No.MV/5/12703/2007, dated 30
July 2007 and subsequent amendments thereto.
(iii) to maintain a Register and send Monthly Statement before 10th of the succeeding month to the
Secretary, Telangana State Building & Other Construction Workers Welfare Board,
AnjaiahSamkshemaBhavan, near RTC X Roads, Hyderabad”, to enable him to reconcile the Cess
collection figures with the Bank/Treasury figures.
During the test check of building permission files for the period from June 2015 to July 2019, audit
noticed that in 630 cases labour cess amounting to Rs.5,79,30,911/- was not collected from building
permission applicants as detailed in the annexure. The reason for non collection of labour cesswas
called for.
On being brought to notice, the Zone replied that building permissions were applied online through
DPMS (DEVELOPMENT PERMISSION MANAGEMENT SYSTEM) and permissions were
given to the applicants after collecting the prescribed fees as prompted by the DPMS software.
However, necessary action would be taken to levy labour cess in future under the orders of
Commissioner and Standing Committee and action taken would be intimated to Audit.
 4

II. NON/ SHORT LEVY OF ENVIRONMENT IMPACT FEE: RS.78.20 LAKH

As per G.O.Ms.No.34, Industries and Commence (Mines.I) Department, 17 June 2015, the
Government decided to levy Environmental Impact Fee at Rs.3/- per sft on buildings with an built
up area of more than 10000 sft as an additional charge and responsibility of levy and collection lies
with the authority competent to approve the building plans i.e., the Commissioner, Greater
Hyderabad Municipal Corporation, the HMDA in HMDA area and all Commissioners of Municipal
Corporations and Municipalities, etc., shall collect the above said Environment Impact fee.
During the test check of building permission files for the period from June 2015 to June 2019, audit
noticed in 293 cases as detailed in the annexure that there was non/ short collection of Environment
impact fee amounting to Rs. 78,19,834/-.
On being brought to notice, the Zone replied that the building permissions were applied online
through DPMS (DEVELOPMENT MANAGEMENT SYSTEM) and permissions were given to the
applicants after collecting the prescribed fees as prompted by the DPMS (DEVELOPMENT
MANAGEMENT SYSTEM) software. It was clear that DPMS Software do not ensure the levy and
collection of Environment-Impact-Fee. It was further replied that, necessary action would be taken
to verify and action taken would be intimated to audit.
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III.
 6

IV.
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V. NON FINALISATION OF LRS APPLICATIONS PENDING REVENUE

REALIZATION AND FURNISHING OF LRS DETAILS TO REVENUE WING

i)Non finalization of LRS applications and pending revenue realization:

Government of Telangana issued orders in respect of Telangana Regularization of unapproved and
illegal layout Rules 2015 vide G.O.Ms.No.151, M.A dated 02.11.2015 for regularizing the plots that
had come up in unapproved layouts. It shall be compulsory for all plot owners in unapproved
layouts to file an application in the prescribed format for regularization of the Plot/ Layout before
the competent authority to apply for regularization in respect of plots having registered sale deed
executed on or before 28.10.2015 within 60 days from the date of notification (i.e., 2.11.2015) of
these rules duly enclosing required documents and the scheme was extended up to 31 December
2016 with payment of penalty.
The Competent Authority communicates its approval to the applicants as early as possible but not
beyond 6 months from the last date of receipt of applications fixed. In case of applications which
are found to be not in accordance with these rules, orders shall be issued for rejection of such
applications within six months. Further vide Memo No.632/Plg.II(1)2018, dated 19-6-2018,
extension of time was given up to 31 August 2018 for disposal of pending LRS applications.
In view of the above it was observed that L.B.Nagar Zone had received 37811 applications, out of
which 17021 applications has been approved and 4452 applications were rejected and 10623
applications are in finalisation stage and 5707 applications (15.12%) are yet to be processed as of
July 2019. Further in respect of remaining 8 LRS applications the status was not on record.
However, the scheme had come to aclosure on 30 October 2018, thus non-finalisation of the LRS
applications by the Zone had deprived the benefit of getting expected revenue towards payment of
regularization charges. Further, the revenue realizable particulars are not retrievable as the site has
been blocked by CGG (Centre for Good Governance), Hyderabad.
On being brought to notice, the Zone replied that all necessary action would be taken to finalize the
LRS applications already received, as soon as the Government issues further orders on finalisation
of LRS and action taken would be intimated to audit.

ii) Assessment of VLT on vacant lands disclosed in LRS applications:

As per Section 212 (2) of HMC Act 1955 any vacant land not exceeding three times the plinth area
of the building including its site or a vacant land to the extent of 1000 square metres, whichever is
less shall be deemed to be adjacent premises occupied as an appurtenant to the building, and
assessed to tax in accordance with the provisions of this section and the area, if any in excess of the
said limit shall be deemed to be land occupied by or adjacent and appurtenant to such building and
the tax shall be levied thereon at 0.50 per cent of the estimated capital value of the land.
As per Section 91-A of APM Act, 1955, if at any time, it appears to The Municipal Commissioner
that any person or property has been inadvertently omitted from the assessment records, in relation
to such assessments, he may assess with retrospective effect up to five half years immediately
preceding the current half year. Thus, The Municipal Commissioner is competent to levy property
tax on vacant lands with retrospective effect up to five half years preceding the current half year.
Government of Telangana in G.O Ms.No.151, M.A dated 02.11.2015 had issued orders for
regularizing the plots that had come up in unapproved layouts.
 8

Audit observed that 37811 LRS (Layout Regularization Scheme) applications were received by
L.B.Nagar Zone under the LRS scheme. This indicated the presence of number of vacant lands in
L.B.Nagar Zone.
When action was called for to furnish the LRS data to the concerned Revenue Officer/ Revenue
Wing of the 5 Circles (Kapra, Uppal, Hayathnagar, L.B.Nagar, Saroornagar) under the jurisdiction
of the Zone, so as to enable the Revenue wing to taken steps to identify the vacant lands and
identify its owners for widening the tax VLT(Vacant Land Tax) base for generating revenue under
this account, the Zone replied that all necessary action would be taken to forward the LRS
information to the concerned Circle Revenue officer for levy of VLT (Vacant Land Tax) and the
action taken would be intimated to audit.
Compliance may be intimated to audit.

IV. Trade Licenses – Certain observations

Trade License is a License issued by the Local authority to run the listed business by the trader
within the jurisdiction of the local body (GHMC).The following are the Inspecting and approval
authorities for different categories of trades:

Field Inspection Categorty Approval Authority

Asst. Medical Eating & Medical
Dy. Commissioner
Officer of Health Establishments
Non-Eating & Non- Medical
License Officer Zonal Commissioner
Establishments
Asst. License General Establishments (Petty
Dy. Commissioner
Officer trades.)
Meat, Chicken & Veterinary
Veterinary Officer Chief Veterinary Officer
Trades

The License fee rates were as under:

Sl.No No of Lanes Road Width Rate per Sft Maximun Amount
1 Single Lane 20 Feet Rs. 3/- Rs. 10,000/-
2 Double Lane 30 Feet Rs. 4/- Rs. 50,000/-
3 Multiple Lane >30 Feet Rs. 6/- Rs. 2,00,000/-
Star Hotels,
4 Corporate >30 Feet Rs. 6/- Rs. 2,50,000/-
Hospitals

The trade license applications in respect of Non-eating & Non-medical establishments approved by
the Zonal Commissioner for the period 2016-17 to July 2019 were called for. However, the LO
could produce only application received during the year 2018-19 (125 No.s) and 2019-20 (10
applications). Scrutiny of the applications revealed that

1. In most of the cases, the Lease/Rental Deeds enclosed with the applications did not contain
the details of extent of area and road width. In the absence of those details, the correctness of the
 9

License fee levied and collected could not be verified in Audit. Reasons for processing the
applications without obtaining those details may be stated.

2. The site inspection report of the Licensing Officer was also not available in any of the
applications processed for issue of TIN (Tax Payer Identification Number).
3. There are cases of incorrect levy and collection of License fee as indicated below:

S. Name of the Trade/Opera Plinth Road Trad Licen Diff Reamark

N Business tion area of width e se fee eren s
o. Owner the Licen to be ce
establish se fee Colle
T ment collec cted
he ted
re
ar
e
ca
se
s
of
sh
or
t
le
vy
an
d
co
lle
cti
on
of
Li
ce
ns
e
fe
e
as
in
di
ca
te
 10

d
be
lo
w:

S.
N
o.
1. K. Saidulu Sri 1700 30ft 5100 6800 1700 Road
Raghavendra with 30ft.
Auto Hence
Agencies rate is
(Two Wheeler Rs.4/sft
spare parts,
wholesale)
2. Kaushlya Ben Sun Heart 7200 Multipl 4320 6480 2160 Total
Patel Tiles Depo e roads 0 0 0 1200
sqyds
(1200X9
=10800).
But only
7200 sft
was taken
into
account.
3. Harish Munat ShreeParamP 4000 Multipl 2400 9400 3240 There
ujya Granites e roads 0 sft 0 were two
(5400 Rental
+400 agreemen
0) X ts
6 conclude
=56,4 d with
00 two
parties
side by
side, one
for 600
sq.yds
and
another
for 444
sqyds.
But
License
fee
collected
for 444
sqyds
only.
 11

4. A Dodla Diary 1000 Multipl 6000 Extent of

Madhusudhan Limited e roads portion
a Reddy taken on
lease is
not
clearly
mentione
d in the
Lease
deeds.
5. Sai Nikhil Sai Resins 1800 Multipl 1080 2160 1080 License
Kaleru and Paints e roads 0 0 0 fee
Industry collected
for 1800
sft
instead of
3600 sft
as per
agreemen
t.
6. K. Saraswathi 682 Multipl 2728 4092 1364 For
Raghavendra Enterprises e roads multiple
Rao roads the
7. KompalliUpe Sri Uma Saree 100 Multipl 400 600 200 rate is
nder Centre e roads Rs.6/sft.
8 AchantaKesha Ayurvedic All 140 Multipl 560 840 280 For
va Sai Kumar Products e roads multiple
roads the
rate is
Rs.6/sft.
Extent of
portion
let out is
not
clearly
mentione
d in the
agreemen
t
9. Sanju Devi Anusha 1700 150 ft 6000 1020 4200 Extent of
Enterprises 0 portion
was taken
as 1000
sft
instead of
1700 as
per
agreemen
t
10 N. Poornacha Pooja Saanvi 4374.3 100 ft 1345 2624 1278 Extent of
 12

. nder Fashions 8 6 8 portion

was taken
as 2243
sft
instead of
4374.3 sft
as per
agreemen
t
11 Robin Joyalukkas 6206 Multipl 3480 3723 2436 Extent of
. Thampy India Private e roads 0 6 portion
Limited was taken
as 5800
sft
instead of
6206 sft
as per
agreemen
t

4. Reasons for non-furnishing of applications for the years 2016-17 and 2017-18 may be
stated.

On this being pointed out, it was replied that the Licensing Officer sought time for furnishing
information.
Compliance may be furnished to Audit.

X. IMPLEMENTATION OF SWACHH BHARAT IN LB NAGAR ZONE - CERTAIN

OBSERVATIONS
It is observed from the Cashbook and Bank Statement (A/c No.624326243) that the Zonal
AE.No.41 Office received the following amounts during the year 2017 from GHMC Head Office towards
implementation of Swachh Hyderabad in the Zone.
Page No.
Date of transfer from HO GF Amount transferred
S. Srinivasa Rao, 11-01-2017 1986000
SAO 05-05-2017 2544000
19-09-2017 2500000
Total 7030000
The following observations were made:
1. No funds were received towards swachhHyderabad under SBM from GHMC Head Office
during the year 2018. .
2.Out of the total amount of Rs.70.30 lakh received by the Zonal Office, an amount of Rs.774,224
was sent back to HO GF on 12-5-2017. 3.Out of the remaining amount, the zonal office could spent
only Rs.60.78 lakh leaving a balance of Rs.1.78 lakh remaining unspent as of July 2019. ,
 13

4.No vouchers were made available to audit for verification despite several requests. In the absence
of vouchers, the authenticity of the payments made could not be verified in audit.
5whether any guidelines were issued by the GHMC Head Office/Government for utilisation of
funds under Swachh Hyderabad. If so, the same may be furnished to audit.
6.It was observed from the Cashbook that payment were made towards construction of Individual
Household Toilets, Community toilets etc. In this connection, the following informationwas called
for:-

Name of No. Of Conversion of No. Of Community No. of Public

the Circle IHHT Insanitary toilets toilets constructed toilets
toilets constructed
constructed Septic Undergr No. Of No. Of
(new) Tank/Twi ound community toilet
n Leach drainage toilets seats
pit connecti
on
1 2 3 4 5 6 7

On this being pointed out, in respect of Points (1) to (5), it was replied that the Commissioner was
the competent authority for allocation of funds to any particular scheme as per requirement and
availability of funds. With regard to Point No.6, it was replied that the information was being
obtained from the concerned Executive Engineers.
The reply is not tenable since the reply is silent about non-utilisation of funds/return of funds to HO
and any guidelines issued for implementation of the scheme. The information sought vide Point
No.6 may be obtained and furnished to Audit along with vouchers and specific reasons for Points 2
to 5.

Compliance may be furnished to Audit.

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IX. NON-UTILISATION OF FUNDS RECEIVED UNDER NUHM/NULM

As seen from the Cashbooks, two separate bank accounts were opened in SBI, P&T colony
for the schemes NUHM(National Urban Health Mission) and NULM(National Urban Livelihoods
Mission) on 9-8-2017 and the following funds were transferred from GHMC Head Office to Zonal
Office during the year 2017-18 towards implementation of the schemes.

Name of the A/c. No. Amount Date of transfer

Scheme transferred
NUHM 37076521730 200,000 29-8-2017
210000 08-9-2017
NULM 37076520019
840000 27-3-2018

It was, however, observed, no funds were spent under NUHM till date. Under NULM,
though Rs.10.50 lakh was received during 2017-18, only an amount of Rs.2.80 was spent in the
month of June 2019 under the component SUH (Shelter for Urban Homeless) towards making
payment of Honorarium for care takers of BharathiMahilaSangam maintained by Mrs. Sajida
Begum for the months of April 2018 to March 2019. The balance of Rs.7.70 lakh was lying
unutilised in the Bank account as of July 2017.
When the reasons for non-utilisation of funds under NUHM/NULM despite lapse of two years
called for, it was replied that Commissioner, GHMC was the only authority to allocate funds either
in NUHM/NULM and also utilisation of the funds allocated in the respective i.e. NUHM/NULM
and in respect of un-utilisedfunds of Rs.7.70 lakh as per the instructions of the higher authorities
and based on the instructions issued in this regard the funds would be utilised.
1) Implementing units should open bank accounts for the funds received and operated under joint signature
with both the signatories

2) All the units need to report their performance periodically on various financial parameters to their
supervisory units.

3) Regress monitory system should be introduced at all levels to avoid accumulation of un adjusted advances
post completion of activities.

4) Online reporting format should be followed.

5) The statutory and concurrent audits should cover the above mission.

As per the above guidelines a detailed reply may be furnished to audit.

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XVII. NON/ SHORT RECOVERY OF GPF SUBSCRIPTION

As per GPF rules 6% of Basic pay should be deducted towards GPF subscription from all
AE.No.27
employees except in respect of Class –IV employees which is to be recovered at 4%.
Page No. As per pay bills for the month of May 2019 GPF subscription was as detailed below:
GPF to be
Name of the Official Basic GPF Short
Mohd. Ziauddin, deducted
Sl.No. Designation pay Deducted recovery
Supervisor @ 6% on
S/Smt. Rs. Rs. Rs.
basic pay
78910/
01. P.Vanisri, DEE - 4735 4735
-
36070/
02. K.Anand Kumar, Supdt 2000 2164 164
-

On this being pointed out, it was replied that difference amount would be deducted from the month
of August 2019. However, the deductions particulars were not produced to Audit. The same may
be produced to Audit.
 16

XVII. SHORT/ NON- SUBSCRIPTION OF TGLIS.

Governments of Telangana vide G.O.Ms no. 49, dated. 27.04.2015 (Fin-Admn.I) Dept. based on the
AE.No.26 proposal of the Director of Insurance, Telangana State ordered for revising the pay slabs and
monthly premium with reference to the revised pay scales, 2015 towards Telangana Government
Page No. life Insurance scheme with effect from 01.06.2015.

Mohd. Ziauddin,
Scrutiny of pay bills of JUNE 2019 revealed that TGLIS premium was short / Non-recovered as
Supervisor
detailed vide Annexure -1.
Action needs to be taken to subscribe the actual TGLIS subscription from future pay bills.
On this being pointed out, it was replied that short fall amounts would be recovered from
August 2019. However, the recovery details were not produced to Audit. The same may be
recovered and audit intimated.
 17

ANNEXURE-I
LIST OF EMPLOYEES OF OFFICE OF THE ZONAL COMMISSIONER OFFICE, LB
NAGAR ZONE, HYDERABAD

SHORT/NON RECOVERYOF TGLIS

Name of the TGLIS

SL.N TGLIS to be Short Deduction
employee Basic pay RS. Deducted
O Deducted Rs. Rs.
and designation Rs.
1 M.Shailaja, ACP 48,600/- --- 1400/- 1400/-
Dr.P.Ramakrishna
2 67,990/- --- 2000/- 2000/-
Rao, V.O.
KonkayalaRajani,
3 39160/- 1150/- 1400/- 250/-
S.E.
4 P.Nooka Raju, DIS 49,870/- 1150/- 2000/- 850/-
K.Anand Kumar,
5 36,070/- --- 1400/- 1400/-
Supdt
A. Surya Kiran
6 28,940/- --- 850/- 850/-
Reddy, S.A.
M.Vijaya Lakshmi,
7 31460/- --- 1150/- 1150/-
S.A
8 M.RajaShekar, J.A 22460/- --- 850/- 850/-

9 T.N.Venkatesh, J.A 25840/- --- 850/- 850/-

B.Satyanarayana,
10 13,390/- --- 500/- 500/-
O.S
11 M.Mahender, O.S 18,400/- --- 650/- 650/-

12 J.Srilatha, PHW 18,400/- --- 650/- 650/-

13 K.Mallesh, PHW 23,740/- --- 850/- 850/-

N.Venkatesh,
14 43,680/- 1150/- 1400/- 250/-
Dy.E.E.
TOTAL 12,500/-
 18

XIX. OBSERVATIONS ON SERVICE REGISTERS

The following observations are noticed during the scrutiny of Service Registers detailed in the
statement (enclosed)
AE.No.34 1. Non – recording list of family members in the Service Register
According to Rule 16(b) of Annexure –VII (Rule No 92) of APTC Rules issued in GOMS
Page No. No.266 Finance and Planning (FW –TA) department dt. 21.09.1996 every employee should
furnish a list of family members who are dependent on him and the same has to record in the
Mohd. Ziauddin, Service Register of the employee. Whenever there is a change in the family members either
Supervisor due to addition /deletion a revised list has to be furnished to the office. It was seen that the
details of family members are not available in the Service Register.
2. Non–furnishing of Nominations relating to GPF,DCRG and APGLC employees
working in the office
According to the general conditions of service under FR -10 and subsidiary rules the
nominations of General Provident fund, DCRG and APGLI etc., are required to be furnished
by the individual employee and the same has to be noted in the Service Register.
However, the entries relating nominations for General Provident fund, DCRG &APGLI
were not noted. Also the prescribed forms were not affixed in the Service Register.
3. Non-declaring the Home Town by the staff_It was also noticed that entries relating to the
declaration of Home town were not recorded in the Service Register.
4. Non-Attestation of the staff in the Service Register - As per GOMs No. 152 Finance
Department dt. 20.05.1969, it shall be the duty of Head of the Office to obtain the signatures
of the employees every year in their Service Registers in token of entries recorded thereon.
However, the signatures of the employee were either not obtained in the Service Register.
5. Non fixing of photo of the employee in the 1 st page of Service book: It was observed that
Photo of the individual employee was not fixed in some of the service books. The
Photograph of the employee should be attested by the Head of the Office with date.
6. In some cases date of birth of the employee was not written in words.
7. TGLIS / GPF Account Numbers were not recorded in the service books.
8. Earned Leave and Half pay leave account were not maintained properly.

On this being pointed out, it was replied that circular instructions would be issued in the matter
calling for the particulars and necessary entries would be made in the Service Registers of
individuals.

Compliance may be reported to Audit.

 19

XV. OBSERVATION ON SANCTIONED STRENGTH OF THE OFFICE OF THE

AE.No.36
ZONAL COMMISSIONER, LB NAGAR ZONE, GHMC, HYDERABAD
Page No.
The following was the sanctioned strength of the office of the Zonal Commissioner, LB
Mohd. Ziauddin,Nagar Zone, GHMC, Hyderabad.
SupervisorSl. Sanctioned Posts G.O. No. Existing No. of Posts Vacancy
Name of the post
No. Perm. Temp and Date Perm. Temp.
Zonal
1 1 - - 1 - 0
Commissioner

2 Joint Commissioner 1 - - 1 - 0

3 Financial Advisor 1 - - 1 - 0

Examiner of
4 1 - - 1 - 0
Accounts
Asst. Examiner of
5 1 - - 1 - 1
Account
6 Dy. City Planner 1 - - 1 - 0

7 Asst. City Planner 2 - - 2 - 0

Dy. Executive
8 2 - - 2 - 0
Engineer

9 Asst. Director Vet 1 - - 1 - 0

10 Veterinary Officer 1 - - 1 - 0

Senior
11 1 - - 1 - 0
Entomologist
Asst. Municipal
12 1 - - 1 - 0
Commissioner

13 License Officer 1 - - 1 - 0

Dy. Executive
14 1 - - 1 - 0
Engineer (DCTO)
15 Assistant Engineer 5 - - 5 - 0
16 Superintendent 3 - - 3 - 0

17 Senior Assistant 2 - - 2 - 0

18 Junior Assistant 3 - - 3 - 0

19 Office Sub- 3 - - 2 - 1
 20

Ordinate

20 P.H. Worker 2 - - 2 - 0

In this connection authority under which the sanctioned strength of the office wasbeing maintained,
and whether the approval of the Government was obtained,was called for. The Department replied
that the Commissioner, GHMC sanctions the staff for the offices under the GHMC as per the word
load. Government approval were taken by the Commissioner, if any additional posts are required in
addition to the existing staff caterory wise After formation of the GHMC a Committee was
constituted and based on the Committee recommendation a government order G,O.MS.NO.156,
dated 9-4-2013 was issued.
On verification of the said G.O. Audit observed that following posts in excess of sanctioned
strength in the said G.O.
Name of the Post Sanctioned Posts In Position Difference
Joint Nil 1 1
Commissioner
Dy. Executive 1 2 1
Engineers
Asst. Director 0 1 1
Veterinary
Dy. Executive 0 1 1
Engineer (DCTO)
Asst. Engineers 2 5 3
Office 0 3 3
Subordinates
PH Worker 0 2 2

Reasons for operating the additional posts in excess of sanctioned strength may be stated.
Compliance may be reported to Audit.
 21

DISCREPANCY IN MONTHLY EXPENDITURE DETAILS FURNISHED BY THE ERP

CELL
Consolidated Cashbooks were being maintained in respect of the Zonal Office and Circles
AE.No.38 (Centralised Banking System) at GHMC Head Office by Blooms Solutions in Oracle e-business
centre software. As such the audit was not in a position to segregate the transactions relating to
Page No. Zonal Office for verification. The ERP cell of the GHMC segregated the transactions and provided
S. Srinivasa Rao,the monthly expenditure details and extract of transactions relating to Zonal Office for the years
SAO 2014-15 to 2018-19. On verification of the information provided by the ERP cell, the following
observations are made:
1. The details of month-wise expenditure show the following variations with consolidated cash
books.

Month As per As per the ERP Difference

Consolidated information for all
General Fund the Circles Rs.
Account including Zonal
Office
Rs.
Rs.
June 2016 411039627 37494908 373544719
April 2017 696367349 41178853 655188496
It is clear from the above that there is huge difference between the expenditure figures furnished by
the ERP Cell and General Fund Cash book.
2. Further, the details furnished by the ERP cell do not reflect the transactions relating to the
following items/wings:
a) Payment made for procurement of Larvicides/Anticides by Entomology wing
b) Refund of fee to applicants in case of rejection of LRS applications.
c) Payments made towards purchase of items relating to Veterinary wing.
d) Any other miscellaneous expenditure incurred.
In the absence of above details and relevant vouchers, the audit could not verify the
correctness of the expenditure incurred by the Zonal Office during the period covered by audit.
On this being pointed out, it was replied, that in respect of month-wise expenditure and
consolidated cash book figures variation information had been called for from Bloom Solutions and
as soon as receipt of the same it would be forwarded.
Compliance may be furnished to Audit.
 22

III. AVOIDABLE EXPENDITURE RS. 49.73 LAKH CONSTRUCTION OF RCC BOX

DRAIN FROM JANAPRIYA COLONY TO THAPOVAN COLONY EXISTING CURVERT
(ON KARMANGHAT-SAROOR NAGAR ROAD) (REACH I & II)

AE.No.39 To overcome the problem of rain/flood water inundating the colonies situated in the
catchment area of Saroor Nagar Lake, it was proposed to widen the existing nala to 1.80X1.80 and
Page No. to exrtend the drain in open land with a section of 2.60X1.80 mtrs RCC Box type drain from
Janapriya Colony to Thapovan Colony Culvert (Reach I & II).
S. Srinivasa Rao,
SAO Accordingly, estimates were prepared for Rs.181.00 lakh (as per SSR 2015-16) for four
works and administrative sanction was accorded by Commissioner, GHMC in June 2016. Tenders
were called for through e-procurement and the works were awarded to different contractors. Out of
the four works, the following two works were awarded to the contractors with a stipulation to
complete the work within 4 months as detailed below:

S.No. Name of the Estimated ECV Name of Quoted Percentag Date of

work cost put to L1 the price e Agreement
tender contractor
1. Construction of 49.00 45.31 A. 33.98 25.00% 15-04-2017
RCC Box Drain Kranthi less
from Janapriya Kumar
Colony to
Thapovan
Colony existing
culvert (on
Karmanghat –
Saroor Nagar
Road) (Reach-I)
in Ward No.18,
Lingojiguda of
LB Nagar Circle
3B, GHMC
2. Construction of 50.00 46.70 GorigeMa 35.01 25.03% 21-10-2016
RCC Box Drain nikPrabhu less
from Janapriya
Colony to
Thapovan
Colony existing
culvert (on
Karmanghat –
Saroor Nagar
Road) (Reach-II)
in Ward No.18,
Lingojiguda of
LB Nagar Circle
3B, GHMC
0 0 0
 23

The works were executed and the following payments were made to the Contractor till date.

Contractor Bill No. & Date Amount Remarks

A. Kranthi Kumar 1st& Part/13-12- 1572930 2nd& final bill for
2017 Rs.1997371.35 is
submitted. It is yet
to be passed for
payment.
GorigeManikPrab 2nd & Final/17-8- 19,34,116
hu 2019

In this connection, the following observations were made:

1. There was delay in handing over of site to the Contractor in respect of work at Sl.No.2. The
site was handed over in January 2017 and hence granted extension of time upto 31-5-2017. Audit
observed that no site investigation was done by the department while preparing the estimates. As
such, after completion of work upto side walls (60% of work valuing Rs.39.31 lakh), it was found
that the construction was made in a Private land and as the land owner objected for construction at
his land, the work was stopped by the contractors. The works could not be executed for more than a
year due to site dispute. Although the dispute with the Private land owner was settled and he agreed
for construction of box drain passing through his land, the contractors did not come forward to take
up the balance work as the rates were increased. Despite issuing two notices, they expressed their
inability to execute the work at that site and requested for release of FSD etc.
2. Accordingly, the two contracts were proposed for closure on 15-4-2019 and sought
administrative sanction for Rs.96 lakh for completion of balance work (Valuing Rs.29.68 lakh). The
balance work was awarded to the firm M/s. BVR Projects at 5.04% less than the ECV of Rs.83.62
lakh i.e., for Rs.79.41 lakh with a stipulation to complete the work within 4 months. The
Department replied that 70% of the work was completed and bill payment was yet to be made.
Had the site investigation been done before preparation of estimates and award of work to
contractors the additional burden of 49.73 lakh (as per latest agreement) due to cost overrun could
have been avoided besides achieving the objective of overcoming the problem of flood/rain water
inundating the colonies.
Compliance may be furnished to Audit.
 24

XVI. OBSERVATION ON CONSUMPTION OF DIESEL BY GHMC VEHICLES FOR

AE.No.60
LIFTING OF GARBAGE IN THE OFFICE OF THE DEPUTY CHIEF TRANSPORT
OFFICER, LB NAGAR ZONE, GHMC
Page No.
The following was the information of Diesel Consumption for different types of Vehicles
Mohd. Ziauddin,used for lifting of Garbage in difference Circles i.e., Kapra, Uppal, Hayathnagar, L.B Nagar
Supervisor &Saroornagar and furnished by the office:
Diesel Appr
Consumpti Approx. km
Avg
on kms covered cover
Mileage
Circle Type of Vehicle Vehicle No. per month per mo
per litre
Jun- Apr- during duri
()
16 17 June'2016 April'
7
Dumper Placer AP11X6672 3kmpl 1560 1200 4680 360
Tipper AP11X6960 4kmpl 840 828 3360 331
Kapra Enforcement AP11X7855 5kmpl 189 168 945 840
Sky Lift Ladder AP29V1617 5kmpl 150 195 750 975
Veterinary AP11U0186 4.5kmpl 360 600 1620 270
Dumper Placer AP11X6605 3kmpl 720 610 2160 183
Tipper AP11X6935 4kmpl 365 390 1460 156
Uppal Enforcement AP11X7848 5kmpl 203 189 1015 945
Sky Lift Ladder AP29U9638 5kmpl 170 270 850 135
Veterinary AP11X7870 4.5kmpl 435 450 1958 202
Dumper Placer AP11X6998 3kmpl 609 1450 1827 435
Hayathnagar
Tipper AP11W3691 4kmpl 840 735 3360 294
L.B.NagarSar
oornagar Sky Lift Ladder AP29S6083 5kmpl 172 255 860 127
Veterinary AP11X7866 4.5kmpl 357 510 1607 229

The Audit observation were as follows:.

1. The vehicles were more than 10 years old and none of the vehicle was fitted with
Odometers. The details of fitness certificate, insurance etc. were also not made available to
Audit. In the absence of Odometers the details of kilometres run by each vehicles were not
maintained in the log books. In the absence of Log Books; the Audit could not verify the
correctness of Consumption of the Diesel by these Vehicles.
2. The Pin-point programme made available to Audit also did not contain the average distance
coverage by each vehicle per day.
3. Information regarding norms fixed for issue of diesel to these Vehicles. In the absence of
odometers, the consumption of diesel could not be monitored by GHMC. Reasons for not
fitting the vehicles with odometers and not recording the mileage details
On this being pointed out, it was replied that
(1) vehicle were used for lifting of garbage and due to severe conditions and wear and tear,
odometers were getting damaged frequently,readings were not accurate and the cost of odometers
exceeds likely saving in diesel.
(2) Routes were almost fixed and diesel issued was based on the total kms covered by the pin point
programme.
 25

(3) Insurance and fitness file was under circulation and once obtained would be intimated to Audit.
The contention of the department that the cost of odometers may exceeds the likely savings ondiesel
was not acceptable since without odometers monitoring the actual mileage of the vehicles and
consumption of diesel not possible. The pin point programme also did not mention the average
distance covered by each vehicle. In the absence of that, the proper monitoring mechanism could
not be ensured. Action may be may be taken to fix the odometers and audit intimated.
 26

XII. DRAWAL OF FAMILY PLANNING INCREMENTS

The sanction of the Family planning increments and all advances increments were
withdrawn by Government with effect from 01-07-1998. Further it was clarified in Government
Memo No.1943/32/A1/PC.1/2006, Fin.(PC.I) Department, dated 03-03-2006 that all the employees
whoever were sanctioned Family planning increment after 01-07-1998 should be discontinued and
amounts drawn should be recovered from the official from the date of drawal after 01-07-1998.
AE.No.35
Sri. N,S,K, RAMESH GOUD, Junior Assistant, of the Office of the Commissioner, L.B.
Page No. NAGAR MINICIPALITY, RANGA REDDY DISTRICT was sanctioned Family Planning
Increment of Rs.120/- per month with effect from 26-01-2001 vide Proc.No.C1/929/200102 dated
Mohd Ziauddin,17-5-2001 and was being drawn and paid upto 31-10-2011 as per LAST PAY CERTIFICATE
Supervisor (Lr.No.C1/Estt/179/GHMC/2011-12 dated 08-11-2011) of L.B. NAGAR MUNICIPALITY,
RANGAREDDY DISTRICT and the copies enclosed for reference.
During the scrutiny of Service Book of Sri. N,S,K, RAMESH GOUD, Junior Assistant of
the office of the Commissioner, L.B. NAGAR, MUNICIPALITY, RANGA DISTRICT it was
noticed that the following official is drawn Family Planning Increment as detailed below.
Name of the
Family planning Month from which
Sl.No official,Designation Basic pay Rs.
increment drawing
and I.D.No
SRI J.S.K.
RAMESH GOUD, Rs. 120/- 26-01-2001 to
1. 4070/-
JUNIOR Per month 31-10-2011
ASSISTANT

The official has drawn Family Planning increment of Rs 120/- per month from 26-01-2001 to 31-
10-2011 (Rs 120 x 129 months) i.eRs 15,480/-.
Hence recovery of Rs 15,480/- may be recovered from the above employee on monthly
basis from October, 2019 onwards.
On this being pointed out, the Department accepted to recover the amount in 4 instalments from
October 2019 onwards.
Compliance may be reported to Audit.
 27

XX. NO-COLLECTION OF SECURITY DEPOSIT

As per Article 276 of APTC, Volume – I, Security Deposit has to be collected from
the persons entrusted with handling of Government cash / Stores. The names and
AE.No 10
designation of the Officials dealing with the Government cash / stores along with the
Page No. relevant records, registers showing the details of Security collected was called for:
It was replied that the information was not available in Zonal Office, LB Nagar Zone,
T.Sankar Rao,
GHMC.
AAO
Compliance may be reported to Audit.
 28

XXI. NON-MAINTENANCE OF STOCK AND STORES REGISTERS

According to Article 143 of APFC Volume – I, the stores and stock, furniture, equipment, tools and
plant and other dead stock of the office has to be got physically verified by a responsible
AE.No.12 subordinate officer every year and the results of verification got recorded in the stock registers duly
indicating whether found serviceable or unserviceable, found surplus or short etc. The Head of the
Page No.
Office has to be record the action taken on the results of physical verification. When the
information on the Annual Physical Verification was called for, it was replied that the Stock and
T.Sankar Rao,
Stores register were not maintained in the Zonal Office, LB Nagar Zone.
AAO
Stores & stock registers may be maintained and audit intimated.
 29

XXIII. NON-DISPOSAL OF CONDEMNED VEHICLES

When the list of unserviceable articles and the particulars of plant and machinery kept idle
AE.No.13 were called for, the Department furnished the details of eight condemned vehicles purchased
during 1989 to 1996. However, no action was taken by the Department for disposal of the
Page No. same.

Mohd Ziauddin, Action may be taken to dispose of the same and Audit intimated.
Supervisor
 30

XXII. DEPARTMENTAL INSPECTION AND INTERNAL AUDIT OF THE OFFICE

I. Departmental Inspection: According to GO.Ms.No.247 of GAD dated 8-2-1962 and instructions
issued from time to time, District Offices and their sub-ordinate offices are required to be inspected
by the Heads of the Departments periodically and furnish Inspection Reports in the form of
questionnaire prescribed therein. The need for inspection of Govt. Offices, periodically, was
AE.No14
emphasized in GO.(Cir).No.42050 / Ar – III / 97-7 of GAD dated 26-7-1997.
Page No.
II. Internal AUDIT: As per the GO.Ms.No.34 of Finance Deptt., dated 12-1-1989 and
G.O.Rt.No.1416, Finance and Planning Department, dated 1-7-1997, it is the responsibility of the
T.Sankar Rao, AAO
Accounts Branch of the Head of the Department to conduct Internal Audit of the Regional Offices,
District Offices, Unit Offices etc., periodically at least once in a year and furnish report.
When the period up to which the Departmental Inspection and Internal Audit of the Office was last
held and the relevant reports were called for, it was replied that it was not applicable to GHMC.
Compliance may be reported to Audit.
 31

XI. NON REMITTANCE OF ESI (Employees State Insurance) and EPF(Employees

Provident Fund) CONTRIBUTIONS BY M/S. VSPN & CO, HYDERABAD - 16.32 LAKH
As per Circulars issued from time to time by the Municipal Administration Department of
A.P. Hyderabad vide Roc.No.1994/2007-D1, dated 1.2.07, 1994/2007-M1 dated 22.2.08,
1994/2007-M1 dated 6.10.08 all the Commissioners of ULBs and Regional Director-
cum-“Appellate Commissioner of Municipal Administrations in their capacity as Principal
AE.No. Employer in the state are instructed to develop/establish a mechanism to ensure that the bid amount
accepted takes care of the minimum wages fixed by the Commissioner of the Labour as well as
Page No. contribution towards EPF(Employees Provident Fund) @ 13.15% of pay to the labour and also
the Minimum Wages Act to the workers engaged on contract basis and recovery should be made @
Mohd Ziauddin,12% from the remuneration paid to outsourcing staff.
supervisor The Greater Hyderabad Municipal Corporation, Tank bund, Hyderabad, Agreement with Sri
M. Prabhaker Reddy, S/o. M. Chandra Reddy (Contractor) for providing 179 Number of Drivers
&Labours.
As per Special Terms & Conditions Number 2 it was written that the Daily attendance
should be consolidated by the firm and monthly bill for wages, EPF(Employees Provident Fund)
and ESI(Employees State Insurance) Challans and ECR (Electronic Challan cum-Return) should
be submitted to the Drawing Officer invariably by 25th of every month.
As per Special Terms & Conditions Number 3 it was written that the Monthly attendance
sheet should contain details of the drivers and labours along with bank account number ESI
registration number and EPF registration number. It is the responsibility of the firm to register with
ESI and EPF authorities of the new entrants, every month. No bill will be admitted without ESI,
EPF registration numbers and Bank account number i.e., paid challans and ECR.
As per Special Terms & Conditions Number 23 the Agreement it was written that ESI and
EPF etc., of the Drivers and Labours engaged by the agency/contractor as per the provision of the
relevant Act’s registration of new workers, remittance of monthly contribution, and arrangement of
EPF & ESI benefits to the workers are carried out and paid through consultant agency M/s. VSPN
& CO appointed by GHMC. On verification of Challans generated by the agency, the
following observations were made:
 32

A. Non remittance of EPF contributions to PF Office

As per section 17 and Para 38 of Employees’ Provident Fund and Miscellaneous Provision
Act, 1952 the recoveries effected by the Municipality from the wage bills of contract labour on
account of PF have to be remitted to the Provident Fund Commissioner within 15 days after the end
of the month. Failure to remit such recoveries within the prescribed time attracts damage charges
ranging from 5 per cent per annum (for delays less than 2 months) to 37 per cent per annum (for six
months and above). In the municipality the remunerations to the workers is being paid to the out-
sourcing employees’ supplying groups, duly deducting the EPF amounts by the Municipality.
Scrutiny of Challans revealed that Challans for Rs.12.92 lakh were not made available to Audit
for scrutiny. In the absence of which, the correctness of the remittance made could not be verified
in Audit.
(B) NON-REMITTANCE OF ESI
The Employees’ State Insurance Act, 1948 is a social security legislation that provides for
medical care and cash benefit in contingencies of sickness, maternity, disablement and death due to
employment injury to workers.
In accordance with the provisions contained in the ESI Act 1948 (Amendment 1989) it is
obligatory on the part of the employer to calculate and remit ESI contribution comprising of
employer’s share of 4.75% plus employee’s share of 1.75% upto June-2019 and July-2019 onwards
employer’s share of 3.25% plus employee’s share of 0.75% which is payable on or before 21 st of
the following month to the ESI Corporation. The contribution to the ESI is to enable the workers
engaged on contract basis to obtain benefits towards obtaining compensation due to hospitalization
and also towards their treatment at these hospitals. On verification, it was found that Challans for
Rs.3.31 lakh were not made available to Audit in support of remittances made. It was further
observed that
1. In Kapra Circle-1, for the month October 2018 the amount as per the Pay bill was Rs.37810.
Whereas the amount paid as per Challan dated 20-11-2018 was Rs.32929, thus there was short
remittance of Rs.4881.
2. In Kapra Circle-1, for the month November 2018 the amount as per the Pay bill was Rs.38336.
Whereas the amount paid as per Challan dated 15-12-2018 was Rs.33453, thus there was short
remittance of Rs.4883.
Action may be taken to either to produce the Challans or to remit the amounts if not remitted earlier
under intimation to Audit.
(C) The following sections of office of the Zonal Commissioner, LB Nagar Zone, GHMC,
Hyderabad did not produce the monthly bills of EPF and ESI contribution of outsourcing staff from
01.04.2016 to 31.08.2019 as detailed below:
1. Health & Sanitation
2. Entomology (Malaria)
3. Veterinary
4. Horticulture
5. Engineering
6. Electrical (EPF - contribution verified, ESI – contribution could not be verified due to non-
availability of password of the agency)
7. Administration (EPF - contribution verified, ESI – contribution could not be verified due to non
availability of password of the agency).

On this being pointed out, the department replied that VSPN sought 15 days time for production of
the same.
 33

Compliance may be furnished to Audit.

 34

ANNEXURE-I
STATEMENT SHOWING THE PARTICULARS OF EPF AND ESI CONTRIBUTION IN
THE OFFICE OF THE ZONAL COMMISSIONER, LB NAGAR ZONE, GHMC,
HYDERABAD BY M/S. VSPN & CO. TO THE CONCERNED ACCOUNT
(TRANSPORT WING)
Sl. Total
Name of the Circle Period EPF ESI
No. Amount
1 Kapra Circle-1 July-2016 121848 31231 153079
2 Uppal Circle-2 July-2016 83795 21485 105280
3 Circle-3,4&5 July-2016 366729 93120 459849
4 Kapra Circle-1 August-2016 122750 31462 154212
5 Uppal Circle-2-Drivers August-2016 36586 9382 45968
6 Uppal Circle-2-Labours August-2016 44394 11382 55776
7 Circle-3,4&5 August-2016 361445 92675 454120
8 Kapra Circle-1(Arrears) 21-05-17 to 31-08-17 31943 8254 40197
9 Uppal Circle-2(Arrears) 21-05-17 to 31-08-17 18303 4729 23032
Hayathnagar Circle-
10 21-05-17 to 31-08-17 28056 7261 35317
3(Arrears)
L.B. Nagar Circle-
11 21-05-17 to 31-08-17 26217 6782 32999
4(Arrears)
Saroornagar Circle-
12 21-05-17 to 31-08-17 31117 8054 39171
5(Arrears)
Kapra Circle-1 (5 Non-
13 September-2018 18755 4880 23635
Sanitation Drivers)
0 0 0
 35

XXIV. DOCUMENTS NOT PRODUCED

The following information/documents though called for were not produced to Audit for the period
2016-17 to July 2019.The same may be produce to next local audit.
1. Information on Rain Water Harvesting Pits
2. Information on encroachment of JillelagudaChandanaCheruvu
3. Log books of Zonal Office Government Vehicles
4. Stock Registers of Furniture, Fixture and Computers5. Veterinary records