Pcx t"c.P4PIA JiA-1TAC(YA\1-A The Director (Finance), National Ganga River Basin Project, Rear Wing, MDSS, 9-CGO Complex, Lodhi Road, New Delhi-110003 U W W6t M-F WI TLI41I "National Ganga River Basin Project, 1i ftq;4 NGRBP", IDA Credit No. 4955-IN and IBRD Loan No. 8065-IN (Central Portion) for the year 2012-13 A-imtT VPT q1 I \10)YEm ftTf tcT ?IT -C 3T1 T TIlfuI "National Ganga River Basin Project, NGRBP" , IDA Credit No. 4955-IN and IBRD Loan No. 8065-IN (Central Portion) for the year 2012-13 1TTf ;M TE4ql RT q:q 3Certificate N t tI Central Portion tT7 t I Consolidated Certificate 7c t urlt T ffl T I CFINANUIAL M.1NAGEMENT 14 FEB 2014 P4EWVrOLHI Audit Report of the Comptroller and Auditor General of India in respect of World Bank Assisted project "National Ganga River Basin Project, (NMCG), MoEF for the year 2012-13. To, The Director (Finance) National Mission for Clean Ganga Rear Wing, MDSS, 9- CGO Complex, Lodhi Road, New Delhi-1 10003 Report on the Project Financial Statements: We have audited the accompanying financial statements of "National Ganga River Basin Project, (NMCG)", IDA Credit No. 4955-IN and IBRD Loan No. 8065-IN, financed under World Bank which comprise the Statement of Sources and Application of funds and the Reconciliation of Claims to Total Applications of Funds for the year ended 3 1 st March 2013. These statements are the responsibility of the Project's 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 of the project "National Ganga River Basin Project, (NMCG)", for the year ended 3 1st March 2013 in accordance with Government of India accounting standards. In addition, in our opinion (a) with respect to the Statement of Expenditure, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursement of expenditure incurred during 2012-13 (total amount received by NMCG Rs.713.52 lakh against which an expenditure of Rs.672.93 lakh was incurred under the project) and (b) except for ineligible expenditure of Rs. 40.59 lakh as detailed in audit observations appended to this report, expenditure of Rs.598.91 lakh are eligible for financing under the Loan/Credit Agreement.(after application of disbursement percentage i.e. 89%) During the course of audit, Statement of Expenditure/ Financial statement amounting to Rs.672.93 lakh and the connected documents were examined which can be relied upon to support reimbursement of Rs. 598.91 lakh under the Loan/Credit Agreement, as per the 'Annexure 1': 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. Pr. Directo f uit f(SD) Place: New Delhi GURVEEN SIDHU Date: Principal Director of Audit Scientific Deptt. A.G.C.R. Building, 1.P.Estate New Delhi-110002 'Annexure 1' (Rs. In Lakh) S. Name of the SOE Actual Expenditure Expenditure Percentage Amount No agency Figure expenditure disallowed in admitted in admissible Reimbursable as verified in audit audit as per Audit agreement 1. National 713.52 672.93 40.59 672.93 89% 598.91 Ganga River Basin Authority, New Delhi Total 713.52 672.93 40.59 672.93 89% 598.91 L-re.Cr (E-A) EFi SINGH DIH&RAM (ertilieation Audit of World Bank - Aided Projeet National Mission for Clean Ganga (NNIC) lor the period 2012-13 INTRODUCTION The project has been initinted with National Ganga River Basin Authority (NGRBA), ,National Ri\er Conservation Directorate (NRCD) under Ilie Ministry of Environment and Forest (MoL) of Government of India (Gol. The entire World Bank and other Externally Aided Porjects (A P) and Non-lxternally Aided Projects (Non-KAP) ha\e been transferred to National Mlission tor Clean (janga (NMUG). a society registered under Societies Registration Act 1860 vide Registration Nuinber - S/56/Dist. Soutli:201 Il dated 12"' August. 2011. Ihe Societ\, NMCG, is a separate legal entity. registered under The Societies Registralion Act, 1860. having a Governing Bod (GB) and a Governing Council (GC) presided h cxccutic councii of' NMCG vested with the overall management of the society, as described in the Menoranduni of Association (MGA > ind should meet at least once in four months to discuss Ihe traiisaction,, of the SocietN. I'G has been registered under section 12A of the Incoie 'ax Act 1961. lie tendin mistrument is a Specific Investinent loan (SIl, blending U1$$180 nillion of International Developient Association (hl),\)-4955-1N and J$$820 million of International Bank fOr Reconstruction and Developnient (1 I3RD)-8065-IN resources, with total World Bank Group financing of 1 $$ 1000 million. This constitutes 64% of the total project cost of U 5$ L556 million, w'ith counterpart funding including U$$ 437 million from the state governnent and US$ Il19 million fron Ilie central government. Tlie duration of the projeet is cight years. The project has developed and will support Ilie institutional core of the NGRBA Program will follow a single coisistent N iRBA Prograni Framework designed as part oif project preparation. Project Objectives. The objectives are to support the National Ganga River Basin Authority (NGRBA) in: (a) Buiiding capacity of its nascent operational-level institutions, so that they can manage Ilie long-term Ganga eleani-up and conser ation progranm: and (b) Iimplementinp a diverse set of demonstrative in estiienits for reducing point-source polltition load in a slustainable manner, at priority locations on Ilie Ganga. ProPjec components Two colml)(nelts: 'The project vill have two components relating to institutional developnent anid prioriti infrastructure investnient. The lirst coiponent seeks to build the institutional capacits to efl'cti\ely implenient the overall NGRt3A Progran, including infrastructure in estneni funded bY the second coniponenit. Corponent (>ne: Institutional I)cvelopmientl (U$$ 200 million) Objective: Ilie objectives o1' this component are to: (i) build funetional capacity of Ilie NGRBA's operational institutions at both Ilie central and state levels; and (ii) provide support to associated institutions for imupleienting the NGRBA Program, including infrastructure investmenis turided b Ilie secoid coiponent: (a) NGRI3A Operationali/ation and Program Management (b) Technical Assistance for irban L.ocal Bodv (VIM-) Service Providers. (e) Technical Assistance for E.nvironmental Regulators. Component Two: Priority Infrastructure Investments (US$ 1.356 million) Objective: The objective of this component is to finance demonstrative infrastructure investments in key sectors to reduce pollution loads in priority locations on the river. The investments are intended to exemplify, anong other attributes. the high standards of technical preparation and implementation. sustainabilility of operations, and public participation envisaged in the NGRI3A framwc\\ork. This component will also support innovative pilots, Ir new and transformative technologies or irmplenentation arrangernents. The project started on June 14, 2011 and its elosing date is December 3 1, 2019. Audit Comments: NMCG received Rs. 53.62 erore as grants during 2012-13. and out of it Rs. 5.04 crore had becen released to 1ive states of which Rs. 1.40 crore had been spent by these states. An arnount of Rs. 7.14 crore was the expenditurc of MNCG during 2012-13. Scrutinv of the records further revealed as under: 1. Ilead-wise details of funds received/authorized from MoEF and head-w ise demands/disbursernent of funds to the five states alongwith the head-wise position of expenditure incurred were not available with NMCG in absence of which head wise position of excess! ineligible expenditure incurred if any. could not be ascertained in audit. 2. The releases of funds amounting to Rs. 1.10 crore (Rs. 0.60 crore to Bihar on 03.05.12 and Rs. 0.50 erore to Jharkhand on 03.05.12)xwere made to the statés of Bihar and Jharkhand without showing the I lead-wise budget details. The expenditure in Bihar was - Nil1- and in Jharkhand it was nominal i.e. meager expenditure of Rs. 6.03 lakh. There was unwarranted parking of funds n ith these states. 3. The Pav,ment vouchers and sanctions for the payments made under NMCG through NRC) amounting to Rs. 40.59 lakh was not available in the records in absence of which the whole of the expenditure of Rs. 40.59 lakh was inadimissible/ineligible. 4. NMICG generated lxed assets \orth Rs. 68.51 lakh during 2012-13 fr wllichi depreciation to the tuine of Rs. 6.38 lakh as not charged. wNhich an 5. NMICG recei\ cd funds to the tune of Rs. 53.62 erore during 2012-13 out of expenditure of Rs. 8.54 crore only (Rs. 7.14 crore by NMCG and Rs. 1.40 crore by states) was incurred leaving a huge balance of Rs. 45.)8 erore. This depicted the unrealistic budgeting both by NMCG and Moll. eligible to be Thus. an amount of Rs. 36.13 lakli (89 per cent of Rs. 40.59 lakli) was not of improper and inefficient reimbursed from World Bank Funds and there were instances budgeting. Audit Officer (EA) 2