Audit Reports

Jammu and Kashmir State (Upto 30-Oct-2019)

Overview

Report of the Comptroller and Auditor General of India on Compliance Audit for the year ended 31 March 2021

Report No. 3 of the year 2022 (Government of UT of Jammu and Kashmir)

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Overview

This Report contains ten chapters. Chapter I contains a brief profile of the UT Government with the receipt/ expenditure for the year 2020-21, the authority for audit, audit jurisdiction, planning and conduct of audit, response of the Government to various audit products namely Inspection Reports, audit observations/ paragraphs and follow up action on Audit Reports. Chapter II contains observations of the Subject Specific Compliance (SSCA) on processing of refund claims under GST in J&K State Tax Department. Chapter III contains observations of the SSCA on Transitional credits in J&K State Tax Department. Chapter IV contains observations of the SSCA on Human Resources Management in Sher-e-Kashmir University of Science and Technology, Kashmir and Sher-e-Kashmir University of Science and Technology, Jammu. Chapter V contains observations of the SSCA on Swachh Bharat Mission (Urban) in Jammu and Kashmir. Chapter VI contains audit observations relating to Compliance Audit of various UT Government Civil Departments. This chapter comprises seven paragraphs on short levy of tax, probable loss, inadmissible payment, non-recovery of supervision charges and wasteful expenditure. Chapter VII contains a brief profile of investments made in Public Sector Undertakings (PSUs) by Government of Jammu and Kashmir, audit mandate of PSUs and oversight role of the Comptroller and Auditor General of India. Chapter VIII contains observations of the SSCA on Development of Micro/ Mini/ Small Hydroelectric projects in Jammu and Kashmir. Chapter IX contains observations of the SSCA on Management of fixed assets by Jammu and Kashmir Bank Limited. Chapter X contains audit observations relating to Compliance Audit of PSUs of UT Government. This chapter comprises four paragraphs on doubtful recovery, grant of interest free advances and payment of penal interest.

Chapter-I

Overview, Introduction, Profile of the UT Government-Receipts and Expenditure, Authority for audit, Planning and conduct of Audit, Lack of response of Government to Audit, Response of Departments to Draft Audit Paragraphs and Detailed Compliance Audit Paragraphs, Follow-up on Audit Reports - Non-submission of suo moto Action Taken Notes, Action taken on recommendations of the PAC.

Chapter-II

Processing of refund claims under GST, Organisational set up, Audit scope, methodology and sampling, Audit findings - Acknowledgment not issued within time, Refund orders not sanctioned in time, Irregular allowance of refund of inverted duty structure, Irregular grant of provisional refund, Grant of refund despite non-filing of returns, Processing of Refund claims without passing the test of unjust enrichment, Irregular grant of refund on exports without documentary evidence, Creation of Consumer Welfare Fund, Excess refund on higher Input Tax Credit (ICT) shown in refund application as compared to that reflected in GSTR-3B, Irregular grant of refund in ITC mismatch cases, Non-conducting of post audit of refund claims, Refund against wrong ARN, Conclusion, Recommendations.

Chapter-III

Transitional credits, Organisational set up, Transitional credit from VAT to GST, Audit objective, Audit criteria, Audit Sample, Audit findings, Systemic Issue - Verification of transitional credit claims, Mismatch of data, Provisions missing and unclear under J&K GST Rules 2017 and under J&K GST Act 2017, Compliance Issues - Excess credit carried forward, Ineligible/ inadmissible credit taken, Transitional credit claimed without filing legacy returns, Credit not available/ allowed under Legacy regime, Incorrect credit carried forward, Details of credit availed in terms of Section 142(11)(c), Credit availed on time barred documents, Credit availed on time barred documents, Inadmissible/ Unverified Transitional Credit, Non-payment of interest on reversal of transitional credit.

Chapter-IV

Human Resources Management in Sher-e-Kashmir Universities of Agricultural Sciences and Technology, Introduction, Sanctioned strength and Persons in Position, Establishment expenses, Deficient Manpower Planning, Audit findings - Deficient Manpower Planning, Vacant posts, Unauthorised conversion/ re-designation and diversion of posts, Re-designation of non-teaching posts, Up-gradation of post of Comptroller, Re-designation/ renaming of statutory positions without necessary approvals, Appointments in excess of sanctioned strength/ advertised posts, Appointment of Officers of the University, Appointment of teaching/ scientific staff, Non-adoption of Academic Performance Indicators for appointment of teachers, Appointments without mandatory NET qualification, Appointments without requisite teaching experience, Appointments to teaching posts through lateral entry, Career Advancement Scheme (CAS) of teaching staff, Irregular promotions due to dilution of prescribed criteria, Inadmissible promotions due to extension of benefit of retrospective CAS, Inadmissible promotions due to non-completion of minimum residency period, Inadmissible promotions due to non-completion of required trainings, Counting of period spent on unauthorised leave without pay, Non deferment of promotions during absence while on study leave, Inadmissible promotions due to counting of period spent on acquiring PhD towards teaching experience, Inadmissible promotions due to inadequate research papers and PhD not in relevant subjects, Appointments of non-teaching staff, Regularisation as mode of recruitment, Appointments in violation of procedure of direct recruitment, Appointments in violation of statutes, Appointments without qualifying mandatory tests, Regularisation of ineligible daily rated workers, Career progressions of non-teaching staff, Inadmissible benefit of two tier Career Advancement Scheme, Premature placements without completion of required service in previous  grades, Irregular up-gradation without required quorum of selection committee, Up-gradations without qualifying examinations, Flawed recruitment rules, Appointments by granting unreasonable and irrational age relaxation, Discretionary provisions in Recruitment Rules, Inconsistent provisions in Recruitment Rules, Inconsistent amendments, Appointment to ex-cadre positions, Appointment of Subject Matter Specialists, Appointment of Programme Assistants, Transfers and deployment, Absence of a transfer policy, Violation of transfer policy of ICAR, Pay and entitlements, Irregular adoption of higher pay scales, Undue extension of revised pay scales, Payment of House Rent Allowance at higher rates, Irregular Payment of Leave encashment, Payment as arrears in respect of old claims, Inadmissible pay protection granted to teaching staff, Irregular Grant of Non Practising Allowance (NPA) and Additional incentive of 2½ days’ salary, Wrong pay fixation, Inadmissible Grant of study leave, Conversion of non-pensionable service into pensionable service, Wrong authorisation of family pension, Conclusion, Recommendations.

Chapter-V

Swachh Bharat Mission (Urban), Housing and Urban Development Department, open defecation, Urban Local Bodies, Position of release of funds and expenditure incurred, Identification of beneficiaries, Targets vis-à-vis achievements, Construction of IHHLs by beneficiaries themselves, Wasteful expenditure, Excess/ double payment, Construction of IHHLs by NGOs, Lump sum payment to NGOs, Doubtful payment, Unproductive expenditure, single chamber pit, two chamber pit, Missing files and non-production of files, Depiction of wrong achievement of targets, Public Toilets, Allotment of works without valid agreements, delay in completion of works, Non-imposition/ less imposition of penalty, construction of Public toilets, non-selection of encumbrance free sites, Abandonment of works, Non-functional/ non-operational PTs, Physical Verification of Public Toilets.

Chapter-VI

Compliance Audit Paragraphs of Civil Departments, State Taxes Department, Short levy of tax due to suppression of turnover, Jammu & Kashmir General Sales Tax (GST) Act, 1962, Jammu & Kashmir Goods and Services Tax Act, 2017, Banquet Hall services, Catering services, Assessing Authority, Banquet food sale, Banquet Hall services, Short levy of tax due to concealment of purchases, State Taxes Circles, concealment of Interstate Purchases, Probable loss due to delay in auction of space and consequent non-realisation of rent, Housing and Urban Development Department, fixation of minimum reserve rent, Inadmissible payment on account of one month additional salary to police personnel, Irregular action of Home Department, Non-recovery of supervision charges, Public Works Department, non-deduction of supervision charges, Avoidable wasteful expenditure on rent, maintenance and upkeep of  hostel buildings hired for Other Backward Classes students, Social Welfare Department, Wasteful expenditure on construction of Other Backward Class (OBC) Boys’ hostel.

Chapter-VII

Functioning of Public Sector Undertakings, Definition of Government Company, Mandate of Audit, PSUs in Jammu & Kashmir, Investment in PSUs and Budgetary support, Equity holding and Loans given, Subsidy and Grant to PSUs, Oversight Role of CAG, Audit of Public Sector Undertakings (PSUs), Timeliness in preparation of accounts by Government Companies, Timeliness in preparation of accounts by Statutory Corporations, CAG’s oversight - Audit of accounts and supplementary audit, Financial reporting framework, Audit of accounts of Government Companies by Statutory Auditors, Supplementary Audit of accounts of Government Companies, Result of CAG’s oversight role.

Chapter-VIII

Development of Micro/ Mini/ Small Hydroelectric Projects in Jammu and Kashmir, Power Development Department, Power Development Corporation Limited, Policy for development of hydropower projects by JKPDC, Policy for development of hydropower projects by Jammu and Kashmir Energy Development Agency (JAKEDA), Mechanism for implementation of Hydro Power Policies, development of Small Hydroelectric Projects (SHPs), Identification of sites and development of SHPs and MHPs, Implementation of Small hydro power projects by JKPDC, Dismal performance in development of SHPs, Preparation of deficient DPRs, State Hydroelectric Projects Development Policy-2011, Power from completed projects not evacuated, Electrification Corporation and financial assistance, Penalty on defaulting IPPs not imposed, Incentives for IPPs not availed from GoI, Central Financial Assistance (CFA), Non-recovery of open access charges, Implementation of micro/ mini hydro power projects (MHPs) by JAKEDA, Dismal performance in development of MHPs, Preparation of deficient DPRs, Incentives for IPPs not availed from GoI, Benefits of power generated in remote areas not availed, Non-execution of projects under EPC mode.

Chapter-IX

Management of Fixed Assets by Jammu & Kashmir Bank Limited, Finance Department, policy for acquisition of premises on lease/ rental/ outright purchase basis, acquisition of land, construction/ up-gradation/ modification related to civil/ interior works, furniture, electrical works and hiring of the premises, Purchase of land, blocking up of funds, Irregular payment for purchase of land, Wasteful expenditure in hiring and development of premises, Undue favour to the Lessors leading to extra expenditure towards lease rent, Delay in commencement of operations at hired premises, Award and execution of works, Non recovery of penalty on account of delay in execution of works, Abandonment of works, Award of work on single tender basis.

Chapter-X

Compliance Audit Paragraphs of Public Sector Undertakings, Doubtful recovery on account of Non-exercising of due diligence at the time of sanctioning/ enhancing bill discounting facility, Jammu and Kashmir Bank Limited, Finance Department, Doubtful recovery on account of sanction of credit facility without obtaining adequate security cover, Grant of interest free advances to Small Scale Industrial Units, Jammu and Kashmir Small Scale, Payment of penal interest on account of delay in deposit of GST, Industries Development Corporation Limited, Industries and Commerce Department.

Functioning of State Public Sector Undertakings – Introduction, Accountability Framework, Statutory Audit, Role of Government and Legislature, Impact of contribution of Public Sector Undertakings, Disinvestment, restructuring and privatisation of PSUs, Investment in Public Sector Undertakings, Budgetary support to Public Sector Undertakings, Submission of accounts by Public Sector Undertakings , Performance of Public Sector Undertakings, Key Parameters, Rate of Real Return (RORR) on Government Investment, Comparison of investment as per historical cost and as per present value of such investment, Erosion of Net worth of PSUs, Dividend Payout, Analysis of long term loans of the Companies, Interest Coverage Ratio, Debt-Turnover Ratio of PSUs, Inactive State PSUs, Comments on Annual Accounts of Public Sector Undertakings, Non Compliance with provisions of Accounting Standards/ IND AS, Corporate Governance, Follow-up action on Audit Reports, Compliance to Reports of COPU.

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• Report No. 3 of the year 2022 - Compliance Audit for the year ended 31 March 2021, Government of Union Territory of Jammu and Kashmir.
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