Annexure- CAG Category 2.

REPLIES ON THE INSPECTION REPORT ON THE ACCOUNTS OF THE DIRECTOR VISVESVARAYA INDUSTRIAL AND
TECHNOLOGICAL MUSEUM (VITM), BENGALURU FOR THE YEAR 2016-17 UNDER SECTION 20(1) OF COMPTROLLER
AND AUDITOR GENERAL’S (DUTIES, POWERS AND CODNITIONS OF SERVICE) ACT, 1971

MATERIAL FOR SEPARATE AUDIT REPORT DIRECTOR’S REPLIES DIRECTOR GENERAL’S

REPLIES
PART - I
A. Introduction

The accounts of the Director, Visvesvaraya Industrial and No Comments No comments.

Technological Museum, Bangalore were last audited
during October 2016 for the period 2015-16.

During the current audit on 16 August 2017, Director,

Visvesvaraya Industrial & Technological Museum was
requested to furnish replies and latest development of the
outstanding objections along with relevant records .

Action taken on the outstanding paragraphs of the previous

Inspection Report were verified and the paragraphs was
treated as finally settled. There is no outstanding paras.

PART - II

Current Audit

During current audit, the accounts of the Visvesvaraya No Comments No comments.

Industrial and Technological Museum (National Council
of Science Museums), Bengaluru for the year 2016-17
were test checked besides conducting a general review of
all the records and registers produced to audit. Important
points noticed are brought forward in this part of the
report.
 SECTION –A
Nil
SECTION -- B
I Para I/IIB/2016-17- Mandatory Publication of
Tender Enquiries on the Central Public Procurement
Portal-reg.
As per the OM No. 10/1/2011-PPC, dated 30th
November 2011, it is mandatory for all the autonomous
bodies to publish their tender enquiries, corrigenda thereon
and details of bid awards on the CPP Portal using 3-
publishing module.e.f.1st April 2012.
On a check of files relating to Work contract, Electrical
Contract and Purchase files, it is seen that VITM has
executed the following works during the year 2016-17.
Sl. No. Particulars No. of works
1. Civil Works 27
2. Electrical Works 05
However, it is observed that the VITM has not
published their tender enquiries for awarding the contracts
in respect of civil works, electrical works and purchase of
inventories in the CPP portal which is against the
provisions of the OM dated 30.11.2011 issued by Ministry
of Finance, Department of Expenditure, Public
Procurement Cell, New Delhi.
In reply the VITM stated that effectively the e-
procurement system came into place in VITM and its
satellite units in October 2016 and thereafter e-tendering
was strictly adhered to for procurement/award of
Civil/Electrical contracts in VITM and its units.
The reply is not tenable barring one or two works;
.
Although e-procurement system was introduced in No further comments.
NCSM in January 2016, it took some time for
obtaining digitization of signature and dongle
switches for the members of tender committee of
VITM and its satellite units which were actually
received in July 2016. The documents pertaining to
introduction of e-procurement system and receipt,
dongle switches etc., were shown to the audit.
Since the officials of VITM were quite new to the e-
procurement system, it became necessary to impart
training to them with the help of NIC in Sep 2016.
Finally when the e-tender system was started, it was
noticed that most of the contractors especially
Civil/Electrical Contractors were not having
necessary registration with NIC for accessing the e-
tender published by VITM. Since the financial year
was coming to an end, it became necessary for VITM
to ensure speedy process of tendering to ensure
completion of the work before the end of the
financial year. This is the reason why in a few of the
cases, e-procurement system could not be followed
with necessary approval from the competent
authority.
Hence, this audit para may kindly be dropped.
majority of the civil and electrical works and supply orders
costing above Rs.2.00 lakh awarded after October 2016
have been tendered either through paper advertisement or
calling for quotations from short listed contractors. Hence,
the above procedure of tendering the contract through CPP
may be followed mandatorily henceforth.
II. Para II/IIB/2016-17- Excess payments made to
contractor
The work relating to providing granite stone slab
flooring and wall cladding Phase-II at VITM, Bangalore
was estimated to cost Rs. 18,32,475/-. After e-tendering
this work was entrusted to M/s Sri. Chaitanya
Constructions on 07.02.2017 at Rs. 15,50,449/- which was
below 15.39% the estimate cost. The work was completed
on 24/03/2017 and first and final RA bill for Rs.
16,78,826/- was settled and approved for payment on
31/03/2017.
In this regard, it is observed that even though as per the
contract agreement and Letter of Indent, the value of work
was entrusted to the above contractor at Rs. 15,50,449/-
the total gross value of the work was paid at Rs.
16,78,826/-. Hence, this has resulted in excess payment to
the contractor by Rs. 1,28,337/- and ultimately resulted in
undue benefit to the contractor.
In reply, the VITM stated during the progress of work
and as per the site condition, some additional quantity of
work worth Rs. 1,28,387/- had to be executed. As such no
extra payment was made to the contractor and the total
expenditure is sanctioned by the competent authority.
The reply is not tenable since the estimates have not been
properly drawn up. If the estimate was drawn up as per site
conditions more competitive bids would have participated
thereby avoiding excess payment to the said contractor.
It is stated that no excess payment, whatsoever, was No comments.
made to the Contractor. The point in question, as
raised by the audit, is that when the work was
awarded for Rs.15,50,449/-, the final bill was settled
for Rs.16,78,826/- thereby incurring an additional
expenditure of Rs.1,28,337/-. It was brought to the
notice of the audit that when Civil/Electrical work is
undertaken, certain changes may occur due to site
conditions. There is an express provision in the
contract to take care of such variation in the
quantities. A deviation statement prepared by the
Civil Engineering Section of VITM was attached to
the bill, which was also inspected by the audit.
It is further stated that the increase is less than 10%
of the work, which is well within the norms.
Necessary approval and sanction were obtained from
the Competent Authority with full justification for
settlement of final bill of the contractor as per the
terms and conditions of the contract.
It is reiterated that no excess payment was made to
the contractor as observed by the audit.
In view of the above, this audit para may kindly be
dropped.