Strengthening Internal Audit and Revamping of the Accounts Training Schools of the Government of Madhya Pradesh Objectives of Proposed Activity: The objective of proposed project is to complete studies on internal audit functions and working of the accounts training institutes to impart training to persons at the cutting edge of the system. It also envisages suggesting the approach to carry out the improvements in these areas. The Government of Madhya Pradesh has already embarked on streamlining financial procedures and rules and implementing electronic treasury procedures, the proposed study will extend and deepen the process already initiated by Government.       10. Description of activity:                                                          Under the control of The Finance Department, the Directorate of Treasuries and Accounts is entrusted with the responsibilities of administration of Treasuries, Cadre management, Internal Audit of Departments (other than local bodies and corporations), Financial Management, Training and Generation of MIS to support Financial Planning. All this is performed with the help of field level offices including 53 Treasuries, 160 Sub-Treasuries, 07 divisional offices and 07 Account Training Schools(ATS).               The responsibility of audit of Urban Local Bodies (ULB's), Panchayati Raj Institutions (PRI's), Universities and various corporations/boards lies with the Directorate of Insurance and Local Fund. There are 07 divisional offices under this Directorate; the directorate is located at Gwalior. Besides keeping records of various Insurance schemes launched by the State Government for benefits of employees, this Directorate also conducts Resident audit and post audit of the above-mentioned offices,               The Project activities will be divided into the following work streams: - (A)   Study the scope of enhancing quality of audit and Capacity building of the auditors to improve performance, adaptation of IA standards, and policies, including audit of Urban Local Bodies (ULB's) and  Panchayati Raj Institutes (PRI's) with especial emphasis on IT audit. (B) Analyze the training needs of Accounts Training Schools and suggest the approach to develop them as training and research centers of excellence and carry out the improvements possible within project period. (A)  The current function of internal audit is often not effective enough to cater to the needs of the fast changing scenario of liberalization in every field. Therefore, the GoMP needs to improve its current internal audit functions as well as the audit procedures of ULB's and PRI's. Evaluating the existing internal audit procedures/ manual and developing general audit procedure manual for Government departments/ public sector undertakings/ corporations and bodies is the need of the hour. Moreover there is a strong need of capacity building of the auditors in the State by means of participation in various workshops and training in best International and National institutes. (B) Across departments personnel at the grassroots level responsible for the maintenance of accounts are essentially clerks who are often not exposed to any meaningful accounts training. The only institutions to impart accounts training to these personnel are Accounts Training. Schools (currently 7 in numbers). There is a need to impart advanced specialized training, for technical and non-technical personnel. To ensure consistent optimum performance of the system, the current syllabus of accounts training needs revamping. Modules on Budget, Store Management, Cash & Account, Audit & Inspection, Office Procedures and Basic Computer Applications may be introduced in the curriculum of ATS. There is a need to develop customized training modules for Panchayati Raj Institutions, Urban Local Bodies, Civil Society Organizations and NGOs. Under the proposed project all these needs can be studied and methodology for improvements may be suggested. Accordingly necessary curriculum will be developed and  Hardware/Software will be procured and Accounts Training Schools will be developed as model schools. Almost all the Public Financial Management & Accountability  (PFMA) System assessments undertaken by the Bank at the sub-national level in India have consistenly observed the lack of an efficient internal audit system. The current function of internal audit entrusted with the Directorate of Treasuries and Accounts in the Government of Madhya Pradesh (GoMP) is no exception to the situation prevalent elsewhere in India at the sub-national level. The Internal audit function in GoMP is  limited to auditing individual transactions as opposed to periodic evaluation of the adequacy of the internal control systems and   governance processes. Thus there is a strong need for strengthening the internal audit function in the State.  With recent modernization in the State treasury systems and steady transition towards better standards in financial management in the State, there is also an acute need for revamping the Accounts Training Schools of the Government  The objective of this Grant is to assist the Government of Madhya Pradesh  (1) in  strengthening  internal audit through institutional restructuring, adoption of internal audit standards and implementation guidelines and exposure of the government internal auditors to best practices through classroom and on-the-job training and (2) Revampingthe training facilities available in the State for imparting training in Finance functions.