( , q)l~flil~ li6IPt~lTCf) cl6lIQfim (~ ~ "flcn Ii";;ililil ~) Office of the Director General of Audit (Economic & Service Ministries) ~~S4~ ~c. ~ ~l"t'ft-110 002 Indraprastha Estate, New Delhl-110 002 No. AMG-IIIIDC(MSME)/2(U)/TCSP-2014-15/World Bankl2015-1612:=J.S Dated '- \ 0 ~OCT 201 t ;] Report of the Comptroller and Auditor General of India in respect of World Bank assisted "Technology Centre Systems Programme (TCSP)" - IBRD Loan No. 8330-IN - Ministry of Micro, Small & Medium Enterprises, for the year 2014-15 To The Secretary to the Government of India Ministry of Micro, Small & Medium Enterprises Udyog Bhawan, New Delhi Sir, We have audited the accompanymg Financial Statements of the World Bank assisted "Technology Centre Systems Programme (TeSp)" - IBRD Loan No. 8330-IN, Ministry of Micro, Small and Medium Enterprises which comprises the Statement of Sources and Application of Funds and the Reconciliation of claims to total Applications of Funds for the year ended March 2015. These statements are the responsibility of the Project Management. Our responsibility is to express an opinion on the accompanying Financial Statements based on our audit. We conducted our audit in accordance with the Auditing Standards promulgated by the Comptroller and Auditor General of India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material mis-statement. Our audit examines, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. It also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Financial Statements present fairly, in all material respects, the sources and applications of funds for the World Bank assisted "Technology Centre Systems Programme (TCSP)" - IBRD Loan No. 8330-IN, for the year ended March 2015 in accordance with Government of India accounting standards. Telephone: +91-11-23702357, Fax : +91-11-23702359, E-mail : pdaesm@cag.gov.in In addition, in our opinion, with respect to Interim Financial Reports (IFRs), adequate supporting documentation has been maintained to support claims to the World Bank for reimbursement of expenditure incurred; except for audit observations mentioned in the Management Letter appended to this Audit Report, expenditure are eligible for financing under the Loan Agreement. During the course of audit, IFRs amounting to Rs. 538.82 lakh for the year 2014-15 and connected documents were examined which can be relied upon to support reimbursement under the Loan Agreement. This report is issued without prejudice to CAG's right to incorporate the audit observations in the Report of CAG of India for being laid before Parliament. ~~ (MALA SINHA) Director General of Audit CfHllflilll'161Pi ~ ~Iif) Jt -~. • 4. Non formation of the PAC As per the Project Appraisal Document, a Programme Advisory Committee (PAC) was to be set up comprising of thought leaders from academia and industry associations to provide strategic inputs on strengthening the Indian MSME ecosystem through this programme. The committee was to work closely with National Programme Director, Chairman and Implementation Committee through the design and execution phases of the project i.e. Technology Centre Systems Programme to ensure continuity. It was observed that the PAC had still not been constituted by DC(MSME). Thus, the design phase and execution phase of the project is being executed without strategic inputs on strengthening the Indian MSME ecosystem. Encl: As above Yours faithfully, ~~ (MALA SINHA) --- Director General of Audit {~'\ \. -) Technology Center System Program Loan No. 8330 - IN "',_..., Reconciliation of Claims to Total Applications of Funds Report for the year ended 31st March 2015 Bank Funds claimed d - IFRperiod ending io" November 2014 989.60 - IFRperiod ending zs" February 2015 1, .80 1,42,51,088.80 - IFRperiod ending 31st March 2015 1,43,15,243.20 Bank Funds claimed (A) 4,31,05,321.60 iTotal Expenditure made during the year (B) 5,02,82,892.00 35,9 760.00 5,38,81,652.00 enditures not claimed ('E 5,02,82,892.00 760.00 5,38,81,652.00 28,79,008.00 05,321.60 Notes: 1. Total expenditure made during the year (B above) must be the same as the Total Expenditures shown on the Statement of Sources and Applications of Funds (D on the Statement of Sources and Applications of funds) 2. Amounts A and G above must reconcile. If they indicate any excess/shortage, it needs to ~I~ned. and adjusted in future IFRs. ~1\< Technology Center System Program loan No. 8330 -IN Component Wise Claim Statement Report for the year ended 31" March 2015 • Actual Claims made during the year includes claim amounting to Rs. 28,79,008/- i.e. 80% of 35,98,760/- for the period covering retroactive financing i.e. for the period ending 31st March 2014 # Variation is due to the reason as the claim relating to expenditure incurred during 2013-14 as per above note (period under retroactive financing) has been claimed during current year i.e. FY2014-15 Technology Center System Program Loan No. 8330 - IN Statement of Sources and Applications of Funds Report for the year ended 31st March 2015 1,00,56,578.40 7,19,752.00 1,07,76,330.40 652.00 -Component -I TechnicalAssistance to TCs -Component - II Investments to upgrade exist; !g/develop new TCs -Component - III TechnicalAssistancefor Program Implementation & Monitoring & Evaluation 4,26,37 834.25 35 760.00 4,62,36,594.25 4,26,37,834.25 760.00 4,62,36,594.25 Advar c~sGiven (IC) Total: pplications (D=8+C) 760.00 * As tile TCSPprogram is on re-imbursement method the sources of funds have been taken on the basis of actual expenditure incuned ! and bifurcated as per Gal and World Bank share I Note This financial statements is based on cash basisof aCCOl nting Technology Center System Program Loan No. 8330 - IN Component-wise Expenditure Statement Report for the year ended 31st March 2015 Renovation of existing TC Procurement of Plant & Machinery Operating Cost of New TCs Consulting Services -Implementation Partner Total- Component III Notes: The expenditure as mentioned above should match with the expenditure reported in Statement of Sources & Application of Funds. i