ACRONYMS AFS Annual Financial Statements IFA Internal Financial Advisors AG (A&E) Karnataka Accountant General (Accounts and Entitlement) IFAC The International Federation of Accountants AG (Audit) Karnataka Accountant General (Audit) IFMIS Integrated Financial Management Information System ALMC Asset Liability Monitoring Cell IGAS Indian Government Accounting Standards AMS Audit Monitoring System IGFRS Indian Government Financial Reporting Standards ATR Action Taken Report IPSAS International Public Sector Accounting Standards BE Budget Estimates KBM Karnataka Budget Manual C&AG Comptroller and Auditor General (India's Supreme Audit Institution) KFC Karnataka Financial Code 1958 CCO Chief Controlling Officer KFRA Karnataka Fiscal Responsibility Act, 2002 CGA Comptroller General of Accounts KII Khajane II CoLB Committee on Local Bodies and Panchayati Raj Institutions KPR Act Karnataka Panchayat Raj Act, 1993 CoPA Committee on Public Accounts KSAD Karnataka State Accounts Department CoPU Committee on Public Undertakings KTC Karnataka Treasury Code 1963 CSS Centrally Sponsored Schemes KTTP Act Karnataka Transparency in Public Procurement Act, 1999 CTD Commercial Taxes Department LOC Letter of Credit DCB Demand Collection Balance MCE Manual of Contingent Expenditure 1958 DDO Drawing and Disbursing Office MIS Management Information Systems DEAS Double entry accrual based accounting system MTFP Medium Term Fiscal Plan DMA Directorate of Municipal Administration NLTA Non-Lending Technical Assistance
DMTFP Departmental Medium Term Fiscal Plan OBB Off Budget Borrowings DoFP Delegation of Financial Powers PAC Public Accounts Committee DOT Directorate of Treasuries PD Account Personal Deposit Account DPAR Department of Personnel & Administrative Reforms PEFA Public Expenditure and Financial Accountability DPE Department of Public Enterprises PFMA Public Financial Management and Accountability DRSC Departmentally Related Standing Committees PMS Project Management Software DSS Directorate of Small Savings PPP Public Private Partnership EIU Economic Intelligence Unit PRI Panchayat Raj Institutions (Rural Local Governments) ERC Expenditure Reforms Commission PSE Public Sector Enterprises FC Central Finance Commission SOE Public Sector Undertakings FD Finance Department of GoK PWD Public Works Department FMRC Fiscal Management Review Committee RBI Reserve Bank of India FRBM Fiscal Responsibility and Budget Management Act, 2003 RDPR Department of Rural Development and Panchayati Raj FRL Fiscal Responsibility Legislation RE Revised Estimates FY Financial Year RTI Act Right to Information Act, 2005 GASAB Government Accounting Standards Advisory Board SE Supplementary Estimates GDP Gross Domestic Product PFMA State Finance Accountability Assessment GFS Government Finance Statistics SFC State Finance Commission GIA Grants in Aid SPV Special Purpose Vehicles GoI Government of India TP Taluk Panchayats (Block level Rural Local Government) GoK Government of Karnataka UC Utilization Certificates GP Gram Panchayats (Village level Rural Local Government) UDD Urban Development Department GSDP Gross State Domestic Product UID Unique Identification HoD Head of Department ULB Urban Local Bodies (Urban Local Governments) HRMS Human Resource Management System VOA Vote on Account IAW Internal Audit Wing WRD Water Resources Department IDF Institutional Development Fund ZP Zilla Panchayats (District level Rural Local Government)
adjustments over Unencashed Cheques clear the backlog of unencashed cheques year, confirmation of non payment from DDO and submit request to AG for alteration memo Reiterate instructions through GO to all Treasuries and DDOs forthwith to follow the procedure prescribed in the KFC Lapsed cheques should be reversed within the same FY. Reduce the periodicity of cancellation of unencashed cheques to 3 months This would require amendment to KFC. Commence monthly reporting of lapsed cheque to AG and finalize accounting treatment of cancelled cheques Develop a process for reporting to the AG for issue of Alteration Memos on a priority basis Institutionalize Internal Audit in GOK Conduct a situational analysis of current internal audit arrangements in GOK departments Study existing organizational structure, skills and capacity of existing staff, and current audit methodologies and procedures and SWOT analysis. Develop risk-based strategy for implementing internal audit function in the State; Carry out categorization of departments and initiate internal audit in high spending departments and implement gradually Suggest institutional model for Internal Audit ; staffing; implementation strategy; audit committees; capacity enhancement; internal audit approach, methodologies and procedures including reporting; Could consider creating a high level Internal Audit Task Force to spearhead the reform Categorize based on budget spent, revenue earned, and the risk perception based on earlier AG audit reports Develop and implement Internal Audit Manual Improve Responsiveness to External Audit Re-iterate the seriousness of with audit paras and prescribe action for continuous failure to take action Issue GOs and organize workshops Clarify and enhance role of the IFA in follow up of audit reports Organise training for follow up and use of Audit Monitoring System Strengthen the institution of Ad Hoc Committees at departmental level Meetings to be convened periodically and minutes of meeting to be posted on the website of the concerned department Constitute a state-level Apex Audit Committee to oversee the status of compliance and working of the Ad Hoc Committees Take measures to ensure expeditious recovery of revenue at least in cases accepted by the Department Mandate data input in the Audit Monitoring System as compulsory and Controller to monitor on a frequent basis Enhance the functionality of the Audit Monitoring System Include aspects such as meeting of ad-hoc committee; classification of audit observations and KSAD reports and integrate with database of KLA. Strengthen Prescribe strict timelines for response to The Handbook should be further strengthened in this area
Implement recommendations of 2004 report . – C&AG Department/ Agency Functioning IAW Adequacy of Audit Staff Compliance with audit reports What the C&AG recommends Commercial Tax Functioning up to 2004/05 but abolished on introduction of VAT and re-established from June 2011. Offices actually covered under internal audit during 2011-12 were 5% and 2012-13 were 7% IAW should be made functional and effective. Action may be taken to strengthen IAW and increase the coverage of audit, fix annual target for coverage of audits and settlement of observations Excise Yes, IAW established. 104 offices out of 311 were planned for audit during 2009/10 and 108 offices were actually audited Working strength of only one Senior Audit Officer and two Assistant Audit Officers During 2005/06 to 2009/10, IAW raised 506 observations involving Rs. 33.79 crore. Only 8% of the total objections cleared during 2005/06 to 2009/10 Take appropriate steps for speedy clearance of outstanding objections, particularly those pending for more than five years Motor Vehicle Yes since 1960; Internal audit was completed for about 94%, 82% and 73% of the offices selected for audit during 2011/12, 2010/11 and respectively 3 posts of First Division Assistants out of sanctioned 8 were vacant Compliance is delayed – settlement rate is under 25% Effective action may be taken by the Department to settle the pending paragraphs Stamps & Registration Fees There is no IAW in the department. GoK is yet to decide on the proposal submitted by the Department in July 2008. Proposal made by C &AG in 2009/10 to expedite the setting up of IAW is pending; recommendation reiterated in 2010/11 to 2012/13. Fisheries Exclusive IAW not Audit team from the Non-establishment of