Certificate of the Comptroller and Auditor General of India
                               on Finance Accounts

         This compilation containing the Finance Accounts of the Government of Bihar for the
year ending 31 March 2018 presents the financial position along with accounts of the receipts and
disbursements of the Government for the year. These accounts are presented in two volumes.
Volume I contains the consolidated position of the state of finances and Volume II depicts the
accounts in detail. The Appropriation Accounts of the Government for the year for Grants and
Charged Appropriations are presented in a separate compilation.

         The Finance Accounts have been prepared under my supervision in accordance with the
requirements of the Comptroller and Auditor General's (Duties, Powers and Conditions of
Service) Act, 1971 and have been compiled from the vouchers, challans and initial and subsidiary
accounts rendered by the treasuries, offices and departments responsible for the keeping of such
accounts functioning under the control of the Government of Bihar and the statements received
from the Reserve Bank of India. Statements 8, 9, 10,15 (Annexure-I), 17(b), 17(c), 19 and 20 and
Appendices III, IV, IX, XI and XII in this compilation have been prepared directly from the
information received from the Government of Bihar/Corporations/Companies/Societies who are
responsible to ensure the correctness of such information.

          The treasuries, offices and/or departments functioning under the control of the
Government of Bihar are primarily responsible for preparation and correctness of the initial and
subsidiary accounts as well as ensuring the regularity of transactions in accordance with the
applicable laws, standards, rules and regulations relating to such accounts and transactions. I am
responsible for preparation and submission of Annual Accounts to the State Legislature. My
responsibility for the preparation of Accounts is discharged through the office of the Accountant
General (A&E). The audit of these Accounts is independently conducted through the office of the
Principal Accountant General (Audit) in accordance with the requirements of Article 149 and 151
of the Constitution of India and the Comptroller and Auditor General's (Duties, Powers and
Conditions of Service) Act, 1971, for expressing an opinion on these Accounts based on the
results of such audit. These offices are independent organisations with distinct cadres, separate
reporting lines and management structure.

          The audit was conducted in accordance with the Auditing Standards generally accepted
in India. These Standards require that we plan and perform the audit to obtain reasonable
assurance that the accounts are free from material misstatement. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements.




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          On the basis of the information and explanations that my officers required and have
obtained, and according to the best of my information as a result of test audit of the accounts and
on consideration of explanations given, I certify that, to the best of my knowledge and belief, the
Finance Accounts read with the explanatory ‘Notes to Accounts’ give a true and fair view of the
financial position and the receipts and disbursements of the Government of Bihar for the year
2017-18.

         Points of interest arising from study of these accounts as well as test audit conducted
during the year or earlier years are contained in my Financial Compliance and Performance Audit
Reports on the Government of Bihar being presented separately for the year ended 31 March
2018.

Emphasis of Matter

         I want to draw attention to the following significant issues/concerns which are important
from the point of view of accuracy, transparency and completeness of these accounts and
maintaining legislative financial control over public finances:

   1. Under different Major Heads, departments of the State Government had drawn ` 2,906.91
      crore from Government accounts against 1,540 Abstract Contingent (AC) bills during the
      financial year 2017-18 but did not submit 1,508 Detailed Contingent (DC) bills of
      ` 2,903.61 crore before the close of the financial year. Therefore, there is no assurance
      that the amount of ` 2,903.61 crore has actually been incurred during the financial year for
      the purpose for which it was sanctioned/authorised by the legislature. This is a possible
      overstatement of expenditure in the year 2017-18.
      In addition to this, 13,706 AC bills amounting to ` 3,259.07 crore drawn up to 2016-17
      were also outstanding as on 31 March 2018. Thus, a total of 15,214 AC bills amounting to
      ` 6,162.68 crore were outstanding as on 31 March 2018. Advances drawn and not
      accounted for increased the possibility of wastage/misappropriation/malfeasance etc.
   2. During the year 2017-18, 316 Utilisation Certificates amounting to ` 14,680.40 crore,
      which had become due, were not submitted by the bodies and authorities of the State
      against the grants-in-aid provided by 35 departments. Therefore, there is no assurance that
      the amount of ` 14,680.40 crore has actually been incurred during the financial year for
      the purpose for which it was sanctioned/authorised by the legislature.
      In addition to this, 2,139 UCs amounting to ` 21,913.10 crore due for submission up to
      2016-17 were also outstanding as on 31 March 2018. Thus, a total of 2,455 UCs
      amounting to ` 36,593.50 crore were due for submission as of 31 March 2018. High
      pendency of UCs is fraught with risk of misappropriation of fund and fraud.
   3. Revenue and Land Reforms Department of the Government deposited ` 65.11 crore of
      scheme funds under Personal Deposit Account, (Major Head 2029) for the periods ranging
      from 2013-14 to 2017-18, to avoid lapse of grant during financial years, in violations of
      the principles of budgetary and financial control. Non transferring the unspent balance,
      lying in PD Accounts, to Consolidated Fund of State entails the risk of misuse of public
      funds, fraud and misappropriation.
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   4. Total contribution towards New Pension Scheme was ` 3,891.21 crore for the period
      2005-06 to 2017-18 against which an amount of ` 3,762.93 crore was transferred to the
      designated authority (NSDL) leaving a balance of ` 128.28 crore to be transferred to
      NSDL for further investment as per the provisions of the scheme. Thus, the current
      liability stands deferred to future years. Further, the State Government has created interest
      liability on the amount not transferred to NSDL, has incorrectly used the funds that
      belongs to its employees, leading to possible uncertainty in the rate of return to the
      employees/avoidable financial liability to the Government, and thus failure of the scheme
      itself.
   5. Government provided budgetary support (equity, loans, grants and subsidies) and accepted
      liability (guarantee) of ` 26,640.53 crore in 27 Public Sector Undertakings during the
      period for which their accounts were in arrear as on 31 March 2018. These PSUs have not
      finalised their accounts for the last one to 41 years in violation of provisions of the
      Companies Act/Acts of the respective statutory corporations. I am, therefore, unable to
      discharge my responsibilities with regard to the certification of accounts of these PSUs as
      required under the CAG’s DPC Act, 1971, the Companies Act and Acts of respective
      statutory corporations.

       The audit observations on above issues have been detailed in the State Finances Audit
Report for the year ended 31 March 2018.




Date :                                             (RAJIV MEHRISHI)
Place : New Delhi                          Comptroller and Auditor General of India




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