CHAPTER 8
COMPREHENSIVE PERFORMANCE REVIEWS

52.    Speed Post Services

Expenditure on speed post services had been understated substantially, on account of exclusion of manpower cost of personnel deployed from other wings of DoP.

(Paragraph 52.6)

Speed post services short achieved financial targets by 40 per cent.

(Paragraph 52.7)

Percentage of revenue realised to cost of operation declined from 217 in 1996-97 to 141 in 1999-2000.

(Paragraph 52.8)

Test check by Audit revealed that delivery efficiency during the months of April 2000, September 2000 and March 2001 was only 65 per cent, 52 per cent and 52 per cent respectively. The department, however, reported this as 98 per cent, 98 per cent and 95 per cent, respectively, indicating inaccuracy in maintenance of records of delivery.

(Paragraph 52.9.1)

Although there was improvement over the years in the proportion of settlement of complaints during the year, number of complaints from customers increased from 32,802 in 1996-97 to 2,91,005 in 2000-01.

(Paragraph 52.9.3)

Speed post revenue of Rs 338.88 lakh was outstanding against various parties under credit management facility i.e. the ‘Book Now Pay Later’ scheme.

(Paragraph 52.10)

Rebate of Rs 103.85 lakh was granted irregularly to bulk customers.

(Paragraph 52.11.1)

There was loss of revenue of Rs 102.34 lakh due to uncoordinated fixation of tariff for registered articles and speed post articles.

(Paragraph 52.12)

Consequent to national and international courier services increasingly satisfying the need of the business community for transmission of letters and parcels, the department introduced the national and international speed post services from August 1986. The main objective of speed post services is to ensure time bound, assured delivery of inland and international letters, documents, merchandise and parcels. Speed Post Services include State Speed Post, Domestic Speed Post, International Speed Post, Speed Post Money Orders and Speed Post Gift Services.

For administration, expansion and promotion of the existing value added services, such as Speed Post, Business Post, Media Post, Satellite Post, Express Parcel Post and Retail Post, the Department of Posts (DoP) set up in February 1996, Business Development (BD) Directorate as an attached office functioning directly under the Secretary, Department of Posts. The Directorate is headed by Deputy Director General and Chief General Manager in Senior Administrative Grade, assisted by General Manager, Additional General Manager and Manager (BD).

Business Development cells at the Circle offices and at regional offices started functioning with effect from April 1999. At the circle level, the Head of the circle is responsible for the management of value added services, their promotion and marketing including speed post at field and circle level. The Business Development Cell at circle level is headed by Director (BD) and assisted by Assistant Director (STA) and Divisional Accountant (BD).

At the Divisional level the Business Development cell is headed by Senior Superintendent/Superintendent of Post Offices assisted by Senior Post master/ Postmaster and Assistant Superintendent of Post Offices or Manager Speed Post and Marketing Executive.

Speed Post Collection Centres (SPCC) were set up under Managers and Assistant Regional Managers (ASRM) depending on the volume of traffic. The centres were part of the Head Post Offices of the places. The SPCCs were provided with special vans and Mail Motor Services (MMS) vans to carry the articles to the airport etc. Booking, handling and transmission were done in the same manner as for other postal articles, except that special attention was paid to ensure that speed post articles were delivered in time.

The Audit review covering the period 1996-2001 conducted during May to August 2001 in all the postal circles, namely Andhra Pradesh, Bihar, Delhi, Karnataka, Madhya Pradesh, Maharashtra, Gujarat, Himachal Pradesh, Kerala, Orissa, Rajasthan, Tamil Nadu, Uttar Pradesh, Assam and North East involved scrutiny of records of national Speed Post centres in all these circles.

There was wide variation between budget allotment and actual expenditure under speed post services/premium product services as available from three different sources viz. (i) the appropriation accounts, (ii) information provided by Department of Posts (BDD) and (iii) data made available by circles to the branch Audit Offices.

(Rs. in crore)

Huge variation in the figures of budget allotment and actual expenditure made available by DoP, circles and found place in Appropriation Accounts indicates lack of financial control

The wide variation in the figures from different sources indicated that DoP had no effective control on the accounting of expenditure on speed post services and was in the dark about the actual financial results of the operations.

Also, as brought out in para 6 below, the position of budget allotment and actual expenditure during the last five years did not depict the true picture because the expenditure incurred on establishment charges for speed post, relating to supervisory staff/staff working in Business Development Group at circle level, as well as at the Directorate had not been apportioned. The expenditure, therefore, was understated.

Expenditure booked under speed post services is inaccurate as it did not include all expenditure on speed post services

Although speed post services were commenced in August 1986, staff was provided primarily by diversion from other wings of DoP. In May 1990, DoP sanctioned staff but on an adhoc basis; diversion, however, did not stop. No regular staff had been sanctioned so far (September 2001). The staff deployed for speed post services was diverted from postal divisions and RMS divisions; but their pay and allowances continued to be charged to their parent offices. In most of the booking centres, speed post work was being handled in addition to other postal work and expenditure on pay and allowances of the staff doing combined work was not apportioned to speed post work. Audit further noticed that expenditure incurred on pay and allowances of administrative/supervisory staff viz., PMGs, DPs, SSPOs and staff working in BD Group at circle level as well as at the Directorate was not apportioned either. Cost of establishment of Mail Motor Services to the extent used for speed post was also not separately booked under speed post head. Thus, expenditure stated to have been incurred on speed post work was lower than the actual expenditure and did not depict the real picture of the expenditure on speed post services.

In fact, all references to cost in this review are subject to this infirmity.

Most of the circles failed to achieve the targets of revenue realisation during 1996-97 to 2000-01

Business Development Directorate in their business plan for the year 1998-99, set an objective to improve its market share to become the third largest in the courier market by increasing the speed post services to Rs 150 crore. As such revenue target for the year 1998-99 was fixed as Rs 153 crore. It was noticed that during that year only Rs 91.36 crore were realised, registering a short fall of more than 40 per cent. No financial or physical targets were fixed by the Directorate for other years under review.

An analysis of achievement with reference to targets fixed at circle level revealed that most of the circles failed to achieve the targets as indicated below:

(Rs in crore)

Decline in percentage of revenue to cost of operation

After introducing speed post services in 1986 for seven metro cities, DoP expanded the speed post network every year by adding new speed post centres. As on date, it has a national network, linking 594 major cities and towns in India. In the International network, 97 countries are linked. There are about 2000 collection centres, from where speed post articles can be booked. Although there was rapid expansion in speed post network, actual cost of operation of speed post services was neither available with the Business Development Directorate, nor with the circles. With effect from 1 April 1999, the detailed head of account for speed post services under Major Head 3201 was substituted by a detailed head for ‘Premium Product Services’.

Moreover cost of operation of circles was not correct, as it did not include manpower cost on control and supervision, transportation cost of speed post articles by air/surface, conveyance of speed post articles through Mail Motor Services (MMS), pay and allowances of MMS drivers, expenditure on computerisation, modernisation and mechanisation of speed post booking centres and offices.

The position of expansion of network, formation of national and regional collection centres and related traffic and revenue realised during the period of five years is given below:

(Rs in lakh)

Percentage of revenue realised to cost of operation declined from 118 per cent to 41 per cent between 1996-97 and 1999-2000 as well as cost of operation increased from Rs 3210 lakh in 1996-97 to Rs 8929 lakh in 1999-2000

Despite sizeable expansion of speed post network, percentage of revenue realised to cost of operation steadily declined from 217 per cent in 1996-97 to 141 per cent in 1999-2000. The department stated that the postal strike of December 2000 was one of the reasons among others, which adversely affected speed post business, and many prestigious corporate parties/banks switched over to private couriers after the strike. It did not offer any reasons for the decline in profitability for the period up to 1999-2000.

Business development group is a strategic business unit of the DoP. It functions on business considerations. The department defined speed post as a commercial service. In order to operate speed post commercially, the Postal Services Board decided in October 1998 that the premium product should not get merged in the overall umbrella and a new costing structure should be evolved according to standard practices. This, however, has not been done so far (September 2001). Although Business Development Directorate professed to work on commercial and corporate principles and claimed that speed post service was managed with a commercial approach in its operation and management, the actual cost of operation of speed post was not known to them. In the absence of separate accounts, the department has taken into account the entire postal expenditure including routine postal services for arriving at the cost. Since expenditure on speed post is much higher as compared to postal services due to factors like computerisation, mechanisation, modernisation, track and trace system, advertisement sale, publicity, training seminars, incentive to booking and delivery staff, commission to collection agents etc, entire expenditure on postal services cannot be clubbed to arrive at the cost by dividing the total traffic. Thus in the absence of actual cost of operation, it was not verifiable whether speed post tariffs fixed by the department were commensurate with the cost of operation, and whether profitability shown by the department was real and correct.

52.9    Quality of Services

Quality of service, specially delivery of speed post consignments and customer care are the focus areas in speed post. Speed post has guaranteed time bound and assured delivery of all inland and international speed post articles. As per delivery norms fixed by the department, delivery of speed post consignments should take place on the next working day in major cities linked by flight, while in other stations, Speed Post Article (SPA) should be delivered on the third or fourth day depending upon the availability of flights. If a speed post article was not delivered even after two attempts, the same would be kept in deposit for a period of six days and thereafter it would be returned to the sender with appropriate remarks indicating reasons for non-delivery.

The delivery efficiency ranged between 51.51 per cent to 64.76 per cent as against 95 per cent to 97.97 per cent as intimated by department

Test check by Audit of the consolidated delivery lists for the months of April 2000, September 2000 and March 2001 in Delhi circle revealed that the extent of timely delivery of SPA was only 64.76 per cent in April 2000, 51.51 per cent in September 2000 and 52.45 per cent in March 2001, which were far below the percentage of delivery efficiency of 97.97 per cent (April 2000), 97.57 per cent (September 2000) and 95 per cent (March 2001) as calculated by the department.

Audit findings in the Delhi circle were corroborated by an earlier survey on delivery efficiency of SPA conducted by M/s A.F. Ferguson, a firm of consultants. A test mail for the sample month of February 1999 was conducted by the firm, which revealed that out of 20 test mails, only 62 per cent were delivered in time, 26 per cent were delivered late and 12 per cent were not delivered. “Speed Post Quality of Service Test” was also conducted by Business Development Directorate in December 1999, in eight metro cities viz Delhi, Mumbai, Kolkata, Bangalore, Chennai, Hyderabad, Pune and Ahmedabad. This revealed that delay in delivery of speed post articles ranged between 50 to 70 per cent during the course of test mail.

Quality Test of Speed Post Service was again conducted by M/s Ferguson in eight metro cities from 19 September to 21 September 2000. 917 letters were tested during that period of test check which revealed that out of 917 letters only 662 letters were delivered in time, 171 letters were delayed in transit {Mumbai (166) and Delhi (5)} due to failure in connecting the transit bags to onward flights. 15 letters were delayed due to wrong despatch from Ahmedabad SPC and 69 letters were delivered late in local delivery.

Reasons for delay in delivery were attributed by the department to the Speed post man returning the undelivered articles on some or other pretext, mis-sent mail, late arrival of speed post bags in the post offices and non closing of direct speed post bags for metro cities.

Cases of delay occurred in delivery of articles sent through speed post and compensation paid for such delay are shown below.

From the above it was evident that there was steady increase in the number of cases of delay, which were entitled for refund. In the absence of reliable records relating to delayed delivery as brought out in para 52.9.2, audit could test check only those instances of delay where refund was paid to customers. Although the percentage of such number of SPA delayed to the total SPA traffic was not significant, the number of cases of delay involving refund increased from 1363 in 1996-97 to 4940 in 2000-01.

It was also noticed in Delhi circle that delivery nodal offices had shown more SPA delivered than actually received during April 2000 and September 2000 as per details given in table 52.9.2:

Test check revealed that records of receipt of speed post articles and their delivery was not maintained properly

In view of the inaccuracy in the records, the data showing total number of SPAs received and delivered in time/late were not reliable. Also, no prescribed mechanism was followed to identify between failed attempts and an absence of attempt to deliver.

In order to watch and monitor the complaints for delay in delivery of speed post articles, the department introduced a business performance report at circle level in July 1999. Number of complaints received and disposed of during the years 1996-97 to 2000-01 are given below in Table-52.9.3.

Complaints in respect of speed post articles increased from 32,802 in 1996-97 to 2,91,005 in 2000-01

From the above it was evident that during the year 1996-97, out of 32,802 complaints received, only 20,318 were cleared. Moreover, although there was improvement over the years in the proportion of complaints settled during the year, the number of complaints increased from 32,802 in 1996-97 to 2,91,005 in 2000-01.

It was noticed in Delhi circle that department did not maintain any record of complaints of ‘International In’ prior to February 2001

52.10    Heavy outstanding under Credit Management Scheme

In order to increase the market share for speed post by motivating bulk customers, department introduced in November 1990, the ‘Book Now Pay Later’ (BNPL) scheme. A speed post customer belonging to corporate/Government sector who provides an average monthly business of Rs. 5000 or more can be provided with BNPL facility against a deposit, equivalent to the value of two months’ transactions of all premium services, in a post office SB Account pledged to the Post Master. Under this scheme, customers need not make payment at the time of booking; instead they could make payment at the time of presentation of bill which is to be issued by 10th of the following month. Speed Post revenue outstanding under credit management facility as on 31 March 2001 was to the extent of Rs 338.88 lakh. Out of this Rs 279.18 lakh, Rs.31.74 lakh and Rs 27.96 lakh were outstanding against Govt, semi-Govt. and private parties respectively. Year wise break up is given in table 52.10.

Outstanding revenue under BNPL scheme increased from Rs 0.32 lakh in 1996-97 to Rs 338.88 lakh at the end of March 2001

(Rs in lakh)

This indicated that the department failed to pursue the matter adequately, which resulted in the accumulation of arrears for five years.

52.11    Grant of incentive

Irregular rebate was granted to bulk customers to the extent of Rs 103.85 lakh between 1996-01

Under the scheme of volume discount facility, bulk customers are entitled to rebate at the rate of 5 per cent of monthly business of Rs 10,000 and above and up to Rs 49,999 and at the rate of 10 per cent of monthly business of Rs 50,000 or more. As per terms and conditions of the agreement, customers shall be served with monthly bills before 10th of the following month and they shall be entitled to rebate at the above rates subject to the condition that they made payment by the end of billing month, failing which they would not be entitled to any rebate. It was noticed by Audit that a number of customers did not make payment of bills by the due date but even then they were granted rebate and thus, rebate of Rs 102.42 lakh was irregularly granted to customers enjoying credit facility. This irregularly granted rebate was also not adjusted in the subsequent bills issued to these customers and remained outstanding as per details shown below:

(Rs in lakh)

In addition to the above, it was also noticed in Maharashtra circle that a bulk mail customer authorised for using franking machine was also granted rebate under this scheme, without valid permission to avail of the facility, as required under the instructions of Directorate. Thus, payment of rebate of Rs 1.43 lakh to the bulk mail customer was irregular.

Under BNPL scheme Corporate customers were supplied with journals of Speed Post Booking lists which were handed over to the officials deployed to pick up the articles at the door step of the customers. Entries in the booking list were checked with reference to the SPAs received. One copy duly signed was given to the customers. Articles thus picked up were then deposited at the BNPL Channel alongwith two other copies for further processing. No more booking of such articles was required at the speed post booking centres. During test check by Audit of incentive paid records of New- Delhi Head Post Office it was observed that incentive of Rs 1.87 lakh was paid to the staff working on BNPL channel during the period September 1999 to January 2001. As no further booking of articles received at the BNPL channel was needed, payment of incentive to the staff was irregular.

Incentive of Rs 5.11 lakh was granted to the staff irregularly

According to the departmental provisions, no outsider can be engaged for delivery of speed post articles. It was noticed in Madhya Pradesh circle that outsiders were engaged for delivery of SPAs and incentive of Rs 3.24 lakh at the rate of Rs 1.50 per SPA was paid for delivery of 2,16,299 SPAs, which was irregular. Thus payment of incentive of Rs.5.11 lakh in the two circles was irregular.

52.12    Loss of revenue of Rs 102.34 lakh

Registered letters traffic diverted towards speed post articles due to un-coordinated tariff fixation of registered letters articles and local speed post articles resulting in loss of revenue of Rs 102.34 lakh

Scrutiny of records of Gujarat Postal circle by Audit in May 2001 revealed that local speed post traffic in three regions was 1.25 lakh, 8.80 lakh and 9.45 lakh during the years 1998-99, 1999-2000 and 2000-01 respectively. Further, growth in registered letters traffic during these years was negative. The percentage reduction of traffic ranged from 9.08 to 68.96 per cent. The charges for local speed post articles was fixed at Rs 15.00 upto 200 grams weight, whereas the charges for registered letter was Rs 17.00 upto 20 grams. The decline in traffic of registered letters could be attributed to diversion of the same towards speed post which was due to uncoordinated tariff fixation for registered and local speed post articles. This resulted in loss of revenue of Rs 102.34 lakh to the department during the years 1998-99 to 2000-01. The loss also included discount/commission given to customers and staff members for operations of speed post services.

Speed post services failed to achieve the basic objective of assured and time bound delivery. Customer care was one of its focus areas but it failed to satisfy the customers and a number of corporate customers switched over to private couriers. The position of actual expenditure did not depict the true picture, as the expenditure on establishment charges for speed post was understated. The department had neither maintained an account of their actual expenditure on speed post services nor compared the same with revenue generated by the speed post services, thus failing to adhere to the basic cannon of being a commercial service. Percentage of revenue growth declined considerably during the last five years.

The matter was referred to the Ministry in October 2001; their reply was awaited as of December 2001.

53.    Working of Postal Accounts offices

An amount of Rs 1045 crore drawn from bank remained unlinked in the bank schedules at the end of March 2001 in nine Postal Accounts offices test checked. The pairing in Madhya Pradesh Postal Accounts office was very unsatisfactory as only 10 per cent of the unlinked drawings during 1996-2001 was paired. Similarly, Rs 797 crore drawn from bank remained unlinked in the Post office schedules.

(Paragraph 53.8)

An amount of Rs 30.82 crore drawn from treasury remained unlinked in the post office schedules in five Postal Accounts offices test checked. In Orissa Postal circle although an amount of Rs 10.51 crore was drawn from treasury by post offices during 1996-2001, no pairing work was done with the treasury schedule by Orissa Postal Accounts office.

(Paragraph 53.9)

Test check conducted in 10 Postal Accounts offices disclosed that a sum of Rs 2934.34 crore remitted to bank remained unlinked in the bank schedules. Similarly, a sum of Rs 1778.04 crore remained unlinked in the post office schedules at the end of March 2001. As a result any fraud, wrong debiting or crediting of money in Government accounts would remain undetected.

(Paragraph 53.10)

Ministry of Finance issued instructions for levy of interest from Public Sector banks on all delayed remittances, excess/double reimbursement etc. It was observed that interest amounting to Rs 4.59 crore was not recovered from the concerned banks for such delayed remittances and excess/double reimbursement during 1996-2001.

(Paragraph 53.12)

Whenever any voucher is not received or the expenditure can not be classified to the correct of head of account, such expenditure is classified as Unclassified suspense. A credit suspense of Rs 366.79 crore and debit suspense of Rs 587.86 crore were outstanding at the end of March 2001 in ten Postal Accounts offices under review.

(Paragraph 53.14)

Test check conducted in nine Postal Accounts offices revealed that an amount of Rs 95.86 crore was outstanding at the end of March 2001 under “Departmental Advances - Other Advances” which is a temporary head of account for booking the expenditure for want of details etc.

(Paragraph 53.15)

General Provident Fund accounts should not contain negative balances. The GPF accounts maintained by eight Postal Accounts offices, however, contained minus balances totalling Rs 0.32 crore from 1996 onwards.

(Paragraph 53.16)

Cash certificate work like posting of cash certificate issues and discharges and other accounting work was in arrears ranging from three to five years in seven Postal Accounts offices; as a result, any fraud that may have taken place would remain undetected. The department needs to take urgent steps for early clearance of arrears.

(Paragraph 53.19)

Foreign Money orders originating from other countries and paid in India should be recovered from the foreign Governments. A sum of Rs 26.44 crore on account of foreign money orders paid in India was to be recovered from the foreign Governments as of July 2001.

(Paragraph 53.21)

Department of Posts undertakes agency work by making pension payment through post offices on behalf of other Ministries/ departments. Audit scrutiny disclosed that a sum of Rs 30.26 crore was to be realised on account of such pension payments made by Post offices at the end of March 2001.

(Paragraph 53.22 and 53.23)

British Postal orders paid in India should be reimbursed by the Government of United Kingdom on sending the paid vouchers through the Postal Accounts office nominated for this purpose. Due to non-receipt of paid vouchers from Post offices, an amount of Rs 94.83 lakh could not be realised in eight Postal Accounts offices test checked at the end of March 2001.

(Paragraph 53.24)

Department of Posts did not realise Rs 28.49 crore from Department of Telecommunications from 1993-94 onwards being the commission for transmitting telegraph messages through combined Post Offices.

(Paragraph 53.26)

Department of Posts (DoP) discharges functions like sale of postal stationery, and issue of money orders and also performs agency functions such as Savings Bank, Cash certificates, Postal Life Insurance, Public Provident Fund scheme, disbursement of pension to Military, Railways, Coal mine pensioners etc., at the level of Head Post offices (HPO)/sub offices (SO) and extra departmental branch offices. In order to check and compile postal accounts of the HPOs, Railway Mail Service (RMS), Mail Motor Service (MMS), Postal Stock Depots (PSD), Postal Stamp Depots etc falling under their jurisdiction, Postal Accounts offices have been set up at the circle level. These offices are also responsible for conducting Internal check inspection of the postal units to ensure their efficient working and to bring any serious irregularities such as loss, misappropriation, defalcation etc., to the notice of the Postal Services Board.

The HPO is the primary accounting unit in the DoP as it provides cash for the requirements of other units such as Railway Mail Service, Mail Motor Service, Post Master General’s office and Director General’s office. The HPO maintains the initial accounts and renders the cash account along with supporting vouchers, schedules and bills to the Postal Accounts office.

The Postal Accounts section in the Postal Accounts office is responsible for checking and classifying the expenditure detailed head wise, compiling and preparing the classified abstract for each HPO. Immediately after completion of the compilation, the Post office schedules relating to General Provident Fund, Pension, drawings from bank/treasury etc., are sent to the concerned wings for further action.

The review was conducted during June-July 2001 on the working of Postal Accounts offices covering the period 1996-97 to 2000-01 in 12 out of 14 Postal Accounts offices viz. Andhra Pradesh, Bihar, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal. The objectives of the review were to examine the efficiency of operations of both technical and non-technical areas of working of Postal Accounts offices, study the effectiveness of Internal check and comment on the inadequacies.

The Secretary, Department of Posts (DoP) is the Chief Accounting Authority who is also the ex-officio Chairman of the Postal Services Board. The Member (Finance) advises and assists the Chief Accounting Authority in all accounts and financial matters. There are 22 Postal circles each headed by a Chief Post Master General. For one or more Postal circles, there is a Postal Accounts office which is headed by an officer of the rank of Director/Dy. Director of Accounts who is under the administrative control of Chief Post Master General (CPMG) and the functional control of the Dy. Director General (Postal Accounts and Finance).

• The Head Post Office (HPO) is the primary accounting unit. Each HPO renders accounts along with vouchers to the Postal Accounts office.
• Postal Accounts offices classify the expenditure detailed head wise, compile the accounts and prepare the classified abstract for each Head Post office. All the classified abstracts for all the Head Post offices in a Postal circle are compiled and a Circle abstract is prepared which is sent to the Postal Directorate for preparing the General Abstract.
• After completion of the compilation of the accounts, various schedules/ vouchers such as drawal from/remittance to bank/treasury, GPF, Pension etc are sent to the respective sections for further accounting.

Variation ranged between 30 and 32 per cent between budgeted and actual expenditure noticed in Bihar circle

While the variation between the budgeted and actual expenditure during the period under review was within a limit of 10 per cent in respect of seven out of 11 Postal Accounts offices viz., Andhra Pradesh, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh and West Bengal Postal Accounts offices, the variation in respect of Bihar circle Postal Accounts office ranged between 30 and 32 per cent during 1996-99 as given in Appendix XXXIV.

Unnecessary allotment of supplementary grant

Scrutiny by Audit disclosed that although there were savings with reference to original grants in Bihar, Gujarat, Karnataka, Madhya Pradesh and Uttar Pradesh Postal Accounts offices during 1996-2001, funds under supplementary grants were allotted resulting in more savings as indicated below:

(Rs in lakh)

The Ministry stated in December 2001 that since the heads of circles were the chief budgetary authority in respect of their circles, the expenditure/receipt of offices/units including Postal Accounts offices formed part of the circle budgets and the reasons for any variations were explained in the circle appropriation accounts.

The audit point, however, is focussed on the budgetary control in respect of Postal Accounts office per se and not that of the circle/department as a whole. Allotment of supplementary grants when there were savings in the original grant indicated inadequate budgetary control in the Postal Accounts offices.

Results of review of the working of Postal Accounts offices with regard to their critical functions viz., pairing of drawings from/remittances into bank/treasury, suspense items, GPF, British Postal Orders, money orders, and agency functions such as cash certificates, savings bank and pension payments to other department are given in succeeding paragraphs.

Prior to 1993, the daily scrolls were prepared by banks in triplicate sending one copy to HPO, one copy to PAO along with cheques and one copy to Reserve Bank of India (RBI) for adjustment in Government balances. In the Postal Accounts offices the drawings from/remittances into bank shown in the bank scrolls were paired with the amounts shown in the post office schedule. Any item remaining unlinked was being taken up with the concerned post office/bank for reconciliation of the discrepancy.

Revised procedure for reporting and accounting of transactions of DoP

A revised procedure for reporting and accounting of transactions of DoP was introduced from October 1993. The salient features of this scheme were that the daily scrolls of drawings from/remittances into bank were prepared by the dealing bank separately in quadruplicate and one copy sent to the PO and another one retained as office copy. Two copies would be sent to the ‘Focal Point Bank’ with challan/cheques. The ‘Focal Point Bank’ would consolidate the scrolls received from various branches and prepare a main scroll and send it to the Postal Accounts office. The ‘Focal Point Bank’ would then prepare a daily memo and send it to its link cell at Nagpur (GAD Branch in the case of State Bank of India) for effecting the requisite change in the balance of Government. The Postal Accounts offices would verify the duplicate copy of the main scroll and point out mistakes on a daily basis.

Test check conducted in nine Postal Accounts offices disclosed that a sum of Rs 1045.23 crore remained unlinked in the bank schedules in the books of Postal Accounts offices at the end of March 2001 as given below:

(Rs in crore)

Only 71 per cent of unlinked amount raised in respect of drawings from bank was linked with the bank schedules

The table 53.8(i) indicated that out of unlinked amount of Rs 1563 crore raised during 1996-2001 in respect of drawings from bank, only an amount of Rs 1105 crore (71 per cent) was adjusted, leaving only 29 per cent unlinked, adding further to the accumulations. The percentage of pairing work done to that raised in Postal Accounts offices in Gujarat (18), Karnataka (32), Madhya Pradesh (11), Uttar Pradesh (44) was low. The reason attributed was that the Focal Point Bank gave only a lump sum figure for the amount drawn from/ paid into banks daily, instead of giving figures item-wise, as required, causing difficulties in pairing the amounts shown in the Post Office schedules. This could lead to any fraud/wrong debiting or crediting of the money in the Government accounts not being detected, defeating the very purpose of linking the amount shown in the bank schedules with post office schedules.

Rs 796.62 crore drawn from bank remained unlinked in PO schedules

Similarly, a sum of Rs 796.62 crore relating to drawings from the bank remained unlinked in the Post office schedules in eight Postal Accounts offices test checked as given below:

(Rs. in crore)

To an audit enquiry, the Postal Accounts offices replied that efforts were being made to clear the unlinked items early.

Rs 30.82 crore drawn from treasury remained unlinked in the PO schedules at the end of March 2001

Post offices draw cash from treasury, wherever bank facility is not available. The amount drawn from treasury by Post Offices is to be settled by the Accountant Generals of the State through settlement account. At the end of March 2001 Rs 30.82 crore remained unlinked in the post office schedules in five Postal Accounts offices test checked viz., Gujarat, Karnataka, Maharashtra, Orissa and Uttar Pradesh circles, as indicated in Appendix XXXV.

In Orissa Postal Accounts office, the opening balance as on 1 April 1996 showed a minus balance of Rs 4.01 crore which was yet to be rectified (July 2001). Although Rs 10.51 crore was drawn from the treasury during 1996-2001, no pairing work was done with treasury schedules. Maintenance of accounting records with minus balances defeated the very purpose of accounting and checking. More over, any fraud or wrong booking of the transactions would remain undetected.

The Ministry stated that minus balances in Orissa circle might be due to erroneous accounting adjustments and PAO concerned had been asked to reconcile the same immediately.

Rs 2934.34 crore remitted to bank remained unlinked in the bank scrolls

Scrutiny of records of ten Postal Accounts offices disclosed that Rs 2934.34 crore remitted to the bank remained unlinked in the Bank scrolls at the end of March 2001 as given below:

(Rs in crore)

Only 40 per cent of unlinked amount raised in respect of remittance to the bank during 1996-2001 was paired with bank scrolls

It was observed that out of an amount of Rs 4870.83 crore unlinked in respect of remittances to bank during 1996-2001 including balance at the beginning of April 1996, only an amount of Rs 1936.49 crore (40 per cent) was paired/adjusted. The pairing work in all Postal Accounts offices except Andhra Pradesh, Kerala, Tamil Nadu and West Bengal was slow, ranging between 10 and 39 per cent. Some of the outstanding items were more than 20 years old. The Postal Accounts office AP circle stated in June 2001 that due to non-observance of RBI’s guidelines by the dealing branches of SBI and SBH Hyderabad in respect of clearing the transactions, heavy amounts remained unlinked both in Post Office schedules as well as in bank scrolls. It added that the dealing branches were clearing debit and credit items on net basis instead of doing it separately for receipts and payments, in violation of guidelines issued by Reserve Bank of India (RBI).

Rs 1778.04 crore remitted to banks remained unlinked in eight Postal Accounts offices

Scrutiny of records in eight Postal Accounts offices disclosed that a sum of Rs 1778.04 crore remained unlinked in the Post Office schedules as detailed below:

Table 53.11 Remittances remaining unlinked in the Post Office schedules during 1996-2001

(Rs in crore)

The amounts remaining unlinked were as old as from 1964 onwards. The possibility of clearing such old unlinked items at this distant period was remote. The reason for unlinked items was due to non-receipt of Post office schedules properly.

The Ministry explained that consequent on introduction of focal point bank system from October 1993, the improvement expected could not be made fully as the reporting system of the banks, particularly for clearing house transactions, was on lump sum basis instead of cheque wise as required by the PAOs for prompt reconciliation/pairing.

The Ministry added that some guidelines were issued by Reserve Bank of India to the bank authorities; their implementation was under review.

Ministry of Finance issued instructions for levy of interest on all delayed remittances

Ministry of Finance issued instructions in August 1991 for levy of interest from Public Sector Banks on all delayed remittances, if the period of delay exceeded 30 days, in respect of double/excess reimbursement starting from the 8 day of obtaining the excess/double reimbursement i.e. the date of put-through.

Interest amounting to Rs 4.59 crore not recovered from the banks for delayed remittances

Test check of records of eight Postal Accounts offices in Andhra Pradesh, Gujarat, Karnataka, Kerala, Madhya Pradesh, Orissa, Jammu and Kashmir and Uttar Pradesh circles revealed that interest amounting to Rs. 4.59 crore was not recovered from the concerned banks for delayed remittances of receipt and excess/double reimbursement.

The Ministry stated that recovery of penal interest for delayed remittance from the concerned Focal Point branch was subject to the acceptance of the same by that branch and its final settlement was a time consuming process. The Ministry added that in some cases, whenever the circle Postal Accounts offices referred the cases to the Postal Directorate, the matter was also taken up at the level of Controller General of Accounts for their settlement.

In Government accounting, classifying the expenditure incurred to the correct head of account is of prime importance. If the expenditure is not classified to the correct head of account it would not reflect a true and fair view. Any expenditure classified wrongly to another head of account and detected subsequently, is brought to the correct head of account by means of a transfer entry.

Accounting corrections were made in 20 heads of accounts in March 2001

Test check of records of seven Postal Accounts offices viz., Andhra Pradesh, Bihar, Karnataka, Madhya Pradesh, Maharashtra, Tamil Nadu and Uttar Pradesh disclosed that during March 2001 alone in 20 heads the credit balance was corrected by a sum of Rs. 208.19 crore and debit balance by Rs 170.95 crore.

The Ministry stated that apart from correcting the classification wrongly made in the accounts, Postal Accounts offices were also to effect transfer entries for clearing the amounts placed under ‘Suspense, DAOA etc’.

The fact, however, remained that the accounting corrections were made in 18 more heads of accounts.

Accounting procedure prescribe that if any transaction could not be classified to the correct head of account for want of details such as payment date, name of the official to whom it was paid, want of sanction, head of account etc., such expenditure was temporarily classified to suspense head and taken to objection book. On receipt of the details from the concerned Postmasters, the same was classified to the correct head and taken to final head of account.

Debit suspense of Rs 20.55 crore was outstanding for want of details etc.

Test check of the records of five Postal Accounts offices viz., Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh and Tamil Nadu disclosed that debit suspense of Rs.20.55 crore at the end of March 2001 was outstanding for want of details as given in Appendix XXXVI. To an audit query the units replied that position was reviewed after the close of the Broad Sheet every year. Audit, however, noticed that the balance in Debit Suspense as on 31 March 1997 was Rs 2.70 crore which rose to Rs 20.55 crore as on 31 March 2001 i.e. nearly by eight times during these four years.

Huge amount of Rs 366.79 crore under credit suspense and Rs 587.86 crore under debit suspense remained unsettled at the end of March 2001

Departmental rules prescribe that when the vouchers of the items kept in objection books of the Account Current sections for inter-Government and inter-departmental transactions were subsequently received from the Accounts offices concerned, they should be sent to the Accounts and other sections concerned for classification. The Account and other sections should make suitable adjustment relieving the head ‘unclassified suspense’. No items should be left unadjusted in the inward adjustment register after the monthly closing. Test check of records of 10 Postal Accounts offices in June 2001 revealed that credit suspense of Rs 366.79 crore and debit suspense of Rs 587.86 crore were outstanding at the end of March 2001 as detailed in the table 53.14(b). To an audit query the Postal Accounts offices stated that the position would be reviewed and suitable action taken to liquidate the outstanding debit/credit suspense.

(Rs in crore)

Accepting the facts the Ministry stated that all efforts were being made to monitor this work from Headquarters level and suitable instructions were issued to all Postal Accounts offices from time to time to keep the suspense balance at the minimum level.

Rs 95.86 crore was outstanding under DAOA for want of details to classify to the correct head of account

Departmental rules prescribe that if details were wanting for advances paid to officials of the department which could not be classified to the correct head of account, then such amounts were initially classified as “Departmental Advances-Other Advances” (DAOA). Subsequently after obtaining the details from the concerned Post Offices, the amounts were taken to the correct head of account. Test check conducted in nine Postal Accounts offices disclosed that an amount of Rs 95.86 crore was outstanding at the end of March 2001 as given in table 53.15.

(Rs in crore)

The Ministry stated that clearance of amounts placed under DAOA was a continuous process. The heads of Postal Accounts offices were monitoring the clearance of the amount placed under DAOA through objection books maintained for this purpose; the Postal Directorate was also monitoring the same.

Minus balances amounting to Rs 1.20 crore in broadsheet of GPF accounts in six PAOs

Test check of broadsheet of GPF other than Group D in six Postal Accounts offices viz., Andhra Pradesh, Bihar, Karnataka, Maharashtra, Orissa and Uttar Pradesh disclosed that an amount of Rs. 92.37 lakh was shown as a minus figure. To an audit query it was replied that broad sheets were being closed regularly and the outstanding amount was being attended to. It was noticed that there were no unposted items either on the credit or debit side of the GPF accounts. The reasons for minus balance in the broad sheet could not be explained. Similarly, a minus balance of Rs. 28.25 lakh was noticed in the GPF Group D accounts.

The Ministry stated that the differences between detailed book figures and ledger figures might also be due to mistakes in schedule total, misclassification between Group D and other than Group D recoveries, credit given in unclassified receipt for which schedule not received etc.

Fact remains, however, that the differences were required to be reconciled by the Postal Accounts offices.

Departmental rules prescribe that any over or short payment of subscription to the fund in any month should be adjusted in the subsequent month wherever possible. Test check of records in eight Postal Accounts offices viz., Andhra Pradesh, Bihar, Gujarat, Kerala, Madhya Pradesh, Maharashtra, Orissa and Uttar Pradesh disclosed that a sum of Rs 0.32 crore was shown as minus balances in the accounts from 1996 onwards. The reasons for minus balance in the accounts were attributed to wrong posting of withdrawals, non-posting of deposits or excess payments etc. But the same remained unadjusted (June 2001). Concerned Postal Accounts offices stated that necessary correspondence would be made with the units concerned and action would be taken for rectification/adjustment of minus balances.

The Ministry stated that a major part of the minus balances had already been settled viz., PAO Lucknow settled 319 items totalling of Rs 11.67 lakh out of Rs 13.45 lakh and in Orissa circle of the pending amount of Rs 35 lakh, Rs 20 lakh had already been recovered.

Cash Certificate section in each Postal Accounts office maintains stock and issue register for each Head Post office wherein all the certificates issued and discharged are noted. Figures appearing in the monthly schedules received from the Post offices are reconciled with the detailed book figures. Any excess/shortfall between these two sets of figures is required to be brought to the notice of the concerned Post Offices by means of objection memos and the same is noted in the objection book maintained for this purpose. The objection is settled on receipt of reply from Post offices.

Rs 17.78 crore held under objection during 1996-2001 remained unsettled

Test check in four Postal Accounts offices in Andhra Pradesh, Gujarat, Maharashtra and Uttar Pradesh circles disclosed that Rs 17.78 crore remained unsettled in the objection books held for various reasons such as not indicating the principal and interest separately, inter changing the figures between the other series, excess/short payment of interest etc., for the period 1996-2001.

In Andhra Pradesh Postal Accounts office alone, excess payment of cash certificates of Rs 6.43 lakh held under objection was yet to be recovered. Due to lack of effective pursuance by the Postal Accounts wing, the objections remained unsettled.

The Ministry stated that this was mainly an accounting reconciliation and not related to recovery of interest from the individuals or ex-holders of cash certificates; clearances/settlement of such differences was a continuous process. They added that such type of omissions could not be completely ruled out.

The fact remained that with the passage of time the chances of settlement/ recovery would diminish further.

Cash certificates issued Rs 732.04 crore and discharged Rs 10.44 crore not posted in the registers

The Postal Accounts office maintains for each Head Post Office a stock register for noting cash certificates issued and discharged. Test check of records of cash certificates section in four Postal Accounts offices i.e. Andhra Pradesh, Karnataka, Orissa and Uttar Pradesh revealed that cash certificates issued valuing Rs 732.04 crore and discharged cash certificates valuing Rs 10.44 crore were not posted in the registers as on March 2001. This defeated the very purpose of maintaining such stock registers by Postal Accounts office.

The Ministry stated that clearance of these unposted items was being monitored by the Postal accounts offices and finally settled by obtaining the necessary particulars from the field units/CSDs etc. Quarterly progress for this item of work was reviewed in the Postal Directorate also. The fact, however, is that large amounts remained unposted indicated lack of effective pursuance by the concerned Postal Accounts offices. With the passage of time, getting information from field units/CSDs would become increasingly difficult.

Cash certificate work was in arrears from three to five years

Comment was made in Paragraph No 55.8 of the Report of the Comptroller and Auditor General of India for the year ended 31 March 1998 (No 6 of 1999) regarding arrears in cash certificate work in various Postal Accounts offices. Scrutiny of records of seven Postal Accounts offices disclosed that cash certificate work was in arrears ranging from three to five years as given below:

Cash certificates worth Rs 14.52 lakh fraudulently encashed

Test check of records of Phulbani Head Post Office in Orissa circle disclosed that cash certificates valuing Rs 14.52 lakh were fraudulently encashed. The NSCs were issued in fictitious names and the same was not included in the issue journal. Later the same was encashed in different post offices, other than the office of issue. As the issue work in Postal Accounts offices was in arrears, the discharge of certificates could not be posted in time and the fraud could not be detected. The department needs to ensure that such an important item of work does not fall in arrears further and steps are taken to clear all the arrears in a time bound programme.

The Ministry stated that during the last one decade, despite tremendous increase in workload, additional staff required could not be provided in PAOs due to ban on creation of posts. However, all efforts were being made to clear the arrears of work by redeploying the staff from other sections and also deploying the staff on honorarium basis. Accepting the fraud which occurred in Phulbani Head Post office, the Ministry stated that it was a failure on the part of the concerned post office.

The annual interest passed by the Savings Bank Control Organisation (SBCO) in respect of various accounts is required to be adjusted in the Postal Accounts office and booked under the relevant head of account.

Interest of Rs 52.69 crore on SB etc., short passed was not adjusted

Test check of records of five Postal Accounts offices in Karnataka, Kerala, Orissa, Uttar Pradesh and West Bengal during 1996-2001 revealed that an amount of Rs 52.69 crore passed towards annual interest of Savings Bank, National Savings Scheme, Public Provident Fund etc., was not adjusted.

The Ministry stated that some of the PAOs have already adjusted the amount on receipt of Grand Summary from the SBCOs subsequently in the current financial year.

Foreign money orders (FMOs) are those money orders, which originate in or are ultimately paid by the Postal administration of another country. Foreign money orders consist of inward and outward money orders. Inward FMOs are those money orders which are received from foreign senders and payments are made in India. Outward FMOs are those money orders which originate in India and are sent to different countries.

Inward foreign money orders are received in the exchange office at Mumbai and converted into Indian money orders and sent to different post offices for payment. The paid money orders are sent to Nagpur Postal Accounts office for consolidation and reimbursement from the concerned countries.

Foreign money orders of Rs 26.44 crore was not realised from foreign Governments

Test check of three Postal Accounts offices disclosed that a sum of Rs 26.44 crore was yet to be recovered from foreign governments as of July 2001 (Rs 1.07 crore from 1996-97 onwards).

The Ministry stated that realisation of the amount relating to Foreign money orders was controlled, watched and settled by DAA section of the Postal Directorate. Necessary action was being taken by that section in this regard.

Department of Posts undertakes agency work by making pension payment through post offices on behalf of other Ministries/offices on commission basis and subsequently gets reimbursement from the concerned Ministry/offices.

Pension amount of Rs 19.37 crore paid on behalf of other departments not realised

Test check of records of ten Postal Accounts offices viz., Andhra Pradesh, Bihar, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Jammu and Kashmir and West Bengal revealed that the post offices had not received reimbursement of pension payment of Rs 19.37 crore on behalf of other departments, from 1996-97 onwards. Although these Postal Accounts offices raised the debit, they failed to pursue the same to get the amount realised.

Rs 10.89 crore of pension payment made on behalf of other departments not realised due to non-submission of vouchers

Test check conducted in four Postal Accounts offices disclosed that though they raised debit against the department on behalf of which pension payments were made, the concerned departments rejected the claims on account of non submission of paid vouchers and other disputes. The Postal Accounts offices failed to submit paid vouchers and resolve the disputes. This resulted in non-recovery of Rs 10.89 crore from the concerned departments.

The Ministry stated that there would be some gap in getting the reimbursement after the claim was preferred as these departments give reimbursement after due scrutiny of the claims with reference to the records maintained by them. The department had also introduced a new scheme of EPF payment under the nomenclature of EPF 95 from July 2001; the issue of merger of the existing EPF 71 scheme with EPF 95 was under consideration. Once it was merged then there would not be any difficulty as the amount to be reimbursed would be received in advance from the EPF authorities. As regards Railway Pension, since the amount was adjusted through RBI, the delay might be due to non-receipt of clearance memo from RBI. The Ministry also stated that apart from regular pursuation with the concerned departments, circle PAOs have also initiated special drive for collection of old vouchers from the defaulting Post offices.

Value of British Postal Orders (BPOs) paid in India at Post office counters is required to be reimbursed by the Government of United Kingdom (UK) along with commission for payment. Accordingly, the circle Postal Accounts office was required to send a monthly statement of BPOs paid in the Postal circle together with supporting vouchers to PAO Calcutta to enable that office to effect recovery through the PAO nominated for this purpose. Cases of non-receipt of paid vouchers of BPOs were also required to be watched by the concerned circle PAO through objection book.

Cases of non-receipt of paid vouchers of BPOs from the post offices and non-recovery of the amount from the Government of UK was commented in the Report of the Comptroller and Auditor General of India for the years 1983-84 (para 45), 1991-92 (para 3.3) and 1999-2000 (para 49). In response, the Ministry issued instructions in February 1985/May 1987 emphasizing speedy realisation of the value of BPOs.

BPOs worth Rs 94.83 lakh paid in India was not realised from UK Government

Despite issue of instructions, the position of recovery of dues from the Government of UK continued to be slow. Test check conducted in eight Postal Accounts offices disclosed that a sum of Rs 94.83 lakh was due to be recovered from the Government of UK on account of BPOs paid in India due to non-receipt of paid vouchers from the post offices at the end of March 2001. The oldest period of wanting paid vouchers of BPOs was 1987-88 in Orissa circle. Circle wise position is given below:

(Rs. in lakh)

The Ministry replied that recoveries of dues in respect of BPOs was a continuous process and suitable instructions were issued from time to time to keep this item of work up to date in all PAOs. They added that the progress was also being monitored by PA wing of the Postal Directorate on a monthly basis.

Test check of records of 8 Postal Accounts offices revealed that a sum of Rs 147.55 crore was shown as minus balances in Savings bank/CTD/FD as given in Appendix XXXVII. The reasons attributed for minus balances were deposits not taken into account, interest adjusted without credit balance, misclassification etc. Concerned Postal Accounts offices replied that the post offices would be addressed and minus balances would be rectified. In Kerala and Tamil Nadu circles, every year from 1996-97 there has been sizeable incidence of minus balance. In Karnataka and Bihar circles, minus balances of 1996-97 and 1997-98 still remained as of 2000-01.

The Ministry contended that the problem was one of reconciliation and not of minus balances; also that it was the duty of the SBCOs to reconcile cash book figures with the list of transaction on daily basis. The Ministry added, however, that suitable instructions would be issued to all the PAOs for taking up the matter of un-reconciled balances with the concerned units.

The contention of the Ministry that the problem was not one of minus balances is not acceptable, because the concerned PAOs were exhibiting the minus balances in their own record and had attributed reasons for their existence.

Commission of Rs 28.49 crore for transmission of telegraph messages by combined offices not realised from DoT

DoP transmits telegraph messages through combined post offices for which a commission at Rs 6.95 per message is being reimbursed by the Department of Telecommunications (DoT). Test check conducted in seven Postal Accounts offices disclosed that they failed to recover commission amounting to Rs 28.49 crore from DoT from 1993-94 onwards.

The Ministry stated that the reasons for delay in getting the reimbursement from DoT was due to dispute about the rate of commission levied/claimed for transaction of telegraph messages through combined Post Offices. The issue was being sorted out and the matter was being actively pursued with the DoT; the outstanding amount would be realised shortly.

53.27    One of the functions of the Postal Accounts office is to conduct internal inspection of various Post Offices, Mail Motor Services, Railway Mail Service offices etc to ensure their efficient working and bring to notice any serious irregularities such as loss, misappropriation, overpayment etc.

Test check of the records of Internal Check Organisation (ICO) conducted in nine Postal Accounts offices disclosed that 10,559 objections with a monetary value of Rs 3.93 crore raised by the ICO were outstanding at the end of March 2001. The position of outstanding paras in Postal Accounts offices test checked is given in Appendix XXXVIII. It was observed in audit that in eight offices other than Uttar Pradesh, the total amount of Rs 2.88 crore outstanding was on account of over payments pointed out by ICO, which were yet to be recovered from the officials concerned (July 2001). Details relating to the Postal Accounts office of Uttar Pradesh circle were not available.

The Ministry stated that PAOs were regularly pursuing with various units/offices within circles for early settlement of pending items/paras and recovery of amounts due. PA wing of Postal Directorate also periodically reviewed the clearance of old items/paras and amounts due, and fixed targets for expediting early clearance of old paras and recovery of amounts outstanding.

The work in Postal Accounts offices was heavily in arrears. Huge amounts drawn from/remitted to bank/treasury remained unlinked; as a result any fraud or wrong debiting or crediting of Government money remained undetected. Crores of rupees remained unadjusted under unclassified suspense and Departmental Advances - Other Advances. Minus balances were noticed in the General Provident Fund accounts and concerted action was required to be taken for rectification/adjustment of these minus balances. The work in cash certificate sections was in arrears ranging from three to five years. Excess payment of money orders remained unrecovered from 1996 onwards. Crores of rupees paid towards pension through Post Offices on behalf of other Ministries/departments and towards value of British Postal Orders paid in India remained to be recovered. Excess payments pointed out by Internal Check organisation were not recovered.