The following are the defects noticed:

1. From which Hoarding amount pending could not be known as the collection made in
lump sum & posted in lump sum in the DCB Registers
2. Applications, Demand Notices, were not produced
3. No action was taken to remove the Advertisement relating to the defaulters.

How the Corporation authorities allow the agencies for hoarding the advertisements
without payment of tax was not answered in audit. Hence action would need to be taken
to collect the balance amount and report the compliance to audit.

Para No.5.07 Code no. 7

APMDP SCHEME CLOSED –SECCURITY DEPOSITS PAID AT THE TIME OF EXECUTION OF

WORKS NOT YET REFUNDED THOUGH WORKS COMPLETED – NEEDS ACTION
Rs.6,50,000/-

Audit noticed that, the following Refundable Security Deposit amount was paid to
the authorities concerned during the course of execution of the Package Works under APMDP
as detailed below.
Vr. No. and
Amount
Date in which Details
in Rs.
paid
23/21.8.2015 Paid to GAIL India Ltd., Rajahmundry towards Security Deposit 200000.00
60/7.1.2016 Towards payment of Refundable Security Deposit for laying of
1000MM MS Pipeline from Aratlakatta to Victoria Water Works through
50000.00
Demand Draft in favour of Asst. Pay and Accounts Officer, Locks and
Projects, Kakinada
64/20.2.2016 Towards Payment of Security Deposit (Refundable) for Replacement of
Existing 900 RCC Pumping Main Cross Samalkot Canal by means of
300000.00
DD in favour of Asst. Pay and Accounts Officer, Locks and Projects,
Dowlaiswaram
20/20.7.2016 Towards payment of Refundable Security Deposit for Laying of 1500
MM Dia Pipeline at ADB Road Atchampeta Junction to Asst. Pay and 100000.00
Accounts officer, Works and Projects, Kakinada
Total 650000.00
 As the said Grant works were completed and final payments were made,
immediate action would need to be taken to get them refunded and report the compliance to
audit.

Para No.5.08 CODE NO. 07

BUILDING FEES COLLECTED THROUGH DPMS– NOT FULLY REMITTED TO MUNICIPAL

CORPORATION FUNDS – NEEDS ACTION Rs.58,04,202/-

DPMS web site showed that Kakinada Municipal Corporation collected an

amount of Rs. 13,70,03,629.95 towards Building Approval under the heads noted against
each during the year 2022-23. Out of which an amount of Rs. 4,83,43,104.00 has to be
credited to the funds of this corporation as detailed below.

Sl. Total Amount Amount to be Credited

Receipt Head
No. Collected in Rs. to this Corporation in Rs.
1 14% Open Space Charges 2,31,16,633.00 2,31,16,633.00
2 33% Penalization charges (Penalty) 4,13,090.00 -
3 Application Fee 40,60,000.00 40,60,000.00
4 Application Fee (Penalty) 3,412.00 3,412.00
5 Application Fees (Challan Penalty) 19,000.00 19,000.00
6 Application User charges 3,37,500.00 3,37,500.00
7 Betterment Charges 11,25,340.00 11,25,340.00
8 Building License Fee 1,07,46,675.00 1,07,46,675.00
9 Building Material Charges 16,70,190.00 16,70,190.00
10 City Level Infrastructure Fee -
11 Compound Wall Charges 11,46,581.00 11,46,581.00
12 Compounding Fee 2,36,71,165.00 0
13 Development Charges (Built Up Area) 76,04,018.26 0
14 Development Charges (Vacant Land) 10,07,020.37 0
15 External Betterment Charges 6,27,300.00 6,27,300.00
16 Green Fee Charges 73,16,085.00 0
17 Impact Fee 67,80,021.32 0
18 Labour Cess Component 1 4,04,15,518.00 0
19 Labour Cess Component 2 7,89,598.00 0
20 Layout conversion charges 2,65,290.00 0
21 Layout Development Charges (On Site 3,53,720.00 0
22 Layout
Area) Paper Publication Charges 25,000.00 0
23 Layout Permit Fee 96,510.00 96,510.00
24 Layout User Charges (DTCP) 10,000.00 0
 25 Paper Publication Charges 200.00 200.00
26 Penalization Charges 26,400.00 26,400.00
27 Postal Charges 1,49,800.00 1,49,800.00
28 Processing Fees 88,430.00 88,430.00
29 Rain Water Harvesting Charges 25,34,365.00 25,34,365.00
30 Septic And Gate Charges 1,37,250.00 1,37,250.00
31 Shelter Fee -
32 Site Approval Fee 12,08,155.00 12,08,155.00
33 Technical Scrutiny Fee 10,000.00 0
34 Tree Guard Charges 7,59,220.00 7,59,220.00
35 Vacant Land Tax 4,90,143.00 4,90,143.00
TOTAL 13,70,03,629.95 4,83,43,104.00

But the amount received to the PD Account from the DPMS during the year 2022-23 was as
follows.

Month Amount Rs.

Apr-22 28,42,374.00
May-22 42,19,977.00
Jun-22 17,06,642.00
Jul-22 26,49,875.00
Aug-22 30,04,450.00
Sep-22 35,69,315.00
Oct-22 22,73,926.00
Nov-22 20,91,455.00
Dec-22 55,81,389.00
Jan-23 16,78,644.00
Feb-23 21,22,922.00
Mar-23 1,07,97,933.00
4,25,38,902.00

Hence it was evident that an amount of Rs. 58,04,202.00 was short remitted. Action would
need to be taken to obtain the same and report the compliance to audit. Further the classified
Receipts for the lump sum amount posted were not being made available to audit to verify
whether the amounts collected Head of Accounts wise in fact received by the KMC or not.
PARA NO. 5.09 CODE NO. 7

MDR - ARREARS PENDING IN ACCORDANCE WITH PREVIOUS YEAR AUDIT REPORT NOT
CARRIED FORWARD IN MDR:

In spite of the defect having been pointed out in the previous year audit report, the following
amounts which were shown as pending collection up to the end of the year 2017-18 were not
carried forward in the MDR. Due to this year wise details of the amount pending realization
was not known to audit. Hence the said amount which was pending at the end of the year
2017-18 was still pending at the end of the year 2022-23. Therefore immediate action would
need to be taken to enter the same in the MDR along with year wise classification and collect
the arrear amount along with interest and report the compliance to audit.

Sl.No Non-Tax Head Arrear pending as Collected during the Balance pending as
on 1.4.2018 Rs. years 2018-19 to on 31.3.2023 Rs.
2022-23 Rs.
1 Markets 8682793.00 0.00 8682793.00
2 Advertisement Tax 6600255.00 0.00 6600255.00
3 Avenues 514913.00 0.00 514913.00
4 Encroachments 106000.00 0.00 106000.00
5 Slaughter house 138551.00 0.00 138551.00
6 Fishing rent 23000.00 0.00 23000.00
7 Ferry rent 32500.00 0.00 32500.00
8 A&V Tax 2000.00 0.00 2000.00
Total 20056604.00 0.00 20056604.00
Para No. 6.01 Code No. 8

ADVANCE SANCTIONED IN 2019-20 PENDING ADJUSTMENT AS ON 31.3.2023-

NEEDS ACTION
In accordance with the provisions contained in Article 226 & 227 AP Financial
Code Vol.1, advance provided to the officials for executing works etc., need to be got
adjusted or recovered within one month from the date of drawl or at least by the end
of that financial year. In spite of the defect having been pointed out in the previous
year audit report at Para No.6.02, the following advances which were sanctioned in
the year 2019-20 were still pending adjustment at the end of the year 2022-23
Hence action would need to be taken to recover the outstanding advances from the
concerned under intimation to audit immediately.

Name and Designation of the Amount

Vr. No. and
Employee Purpose for which Advance was Pending
Sl.No. Date of
Sanctioned Adjustment in
Sri/ Smt Sanction
Rs.
1 P. Ravi Varma, Sanitary Inspector Special Sanitation 123/6.19 96600
2 G.S.Naidu, Sanitary Inspector 4 Gauge Machines 584/22.7.19 24000
3 Dr. P.Prasanth, Mun. Health Officer Travelling and Other Expenses 444/7.9.19 50000
Supply of Snacks to 10th Class
4 N.Nooka Raju, AFC School 558/6.1.2020 33600
Students
Providing Internet in the Ward
5 Ch.Ravi Shankar, Co-ordinator 796/1.2020 10000
Secretaries Training
V.Rajendra Prasad, Sanitary
6 Spl. Sanitation 1349/2.2020 96600
Inspector
Total 310800
Para No. 6.02 Code No. 8

NON RECOVERY/NON-ADJUSTMENT OF ADVANCES FOR YEARS TOGETHER

NEEDS ACTION: Rs. 1,26,33,214/-

In accordance with the provisions contained in Article 226 & 227 of AP Financial
Code Vol.1, advance given to the officials for executing works etc., need to be got
adjusted or recovered within one month from the date of drawl or at least by the end
of that financial year. But on verification of General Fund Advances Recoverable
Register it was observed that an amount of Rs. 1,26,33,214/- remained
unadjusted/un-recovered for the year ending with 31.3.2023

Opening Balance ₹ 1,20,46,796.00

Advances Given ₹ 38,45,240.00
Total ₹ 1,58,92,036.00
Advances Adjusted ₹ 32,58,422.00
Closing Balance ₹ 1,26,33,614.00

However, scrutiny of advance registers revealed that,

1. Amounts advanced to different officials/ agencies/bodies were not adjusted
right from the year 2000-01 to 2021-22. The unadjusted advance amounts
were neither recovered from the officials nor obtained detailed bills for
settlement of pending advances.

2. Huge Arrears were pending from years together In accordance with Subsidiary
Registers as detailed below. Though the same was pointed out in the previous
year audit reports action taken to recover the same may be furnished to audit.

PENDING AS ON ADJUSTED DURING THE PENDING AS ON

1.4.2022 YEAR 2022-23 31.3.2023
YEAR
AMOUNT AMOUNT AMOUNT
NO. NO. NO.
(in Rs.) (in Rs.) (in Rs.)
2000-01 1 29,675 0 - 1 29,675
2001-02 12 7,10,320 0 - 12 7,10,320
2002-03 26 13,26,021 0 - 26 13,26,021
2003-04 1 20,000 0 - 1 20,000
2004-05 2 60,000 0 - 2 60,000
2005-06 1 60,000 0 - 1 60,000
2007-08 1 25,000 0 - 1 25,000
 2008-09 3 2,48,085 0 - 3 2,48,085
2009-10 1 22,034 0 - 1 22,034
2010-11 3 71,708 0 - 3 71,708
2011-12 1 4,86,866 1 4,86,866 0 -
2012-13 4 1,82,086 4 1,82,086 0 -
2014-15 1 43,750 0 - 1 43,750
2015-16 1 3,445 0 - 1 3,445
2016-17 3 48,02,450 0 - 3 48,02,450
2017-18 2 5,38,250 0 - 2 5,38,250
2018-19 1 80,000 0 - 1 80,000
2019-20 6 3,10,800 0 - 6 3,10,800
2020-21 6 6,93,676 1 5,000 5 6,88,676
2021-22 26 23,32,630 21 15,83,630 5 7,49,000
Arrear Total 102 1,20,46,796 27 22,57,582 75 97,89,214

In accordance with the provisions contained in Article 226 & 227 AP Financial
Code Vol.1, advance provided to the officials for executing works etc., need to be
got adjusted or recovered within one month from the date of drawl or at least by
the end of that financial year. But on verification of General Funds Advances
Recoverable Register for the current year 2022-23, it was observed that an
amount of Rs.28,44,400/- remained unadjusted/un-recovered as detailed below.

ADVANCE
ADVANCE
MONTH ADJUSTED BALANCE Rs.
SANCTIONED Rs.
Rs.

Apr-22 15,000 15,000 -

May-22 7,50,840 5,50,840 2,00,000
Jun-22 - - -
Jul-22 19,15,000 4,35,000 14,80,000
Aug-22 7,50,000 - 7,50,000
Sep-22 94,400 - 94,400
Oct-22 - - -
Nov-22 - - -
Dec-22 1,00,000 - 1,00,000
Jan-23 80,000 - 80,000
Feb-23 1,40,000 - 1,40,000
Mar-23 - - -
TOTAL 38,45,240 10,00,840 28,44,400
 In accordance with Para 4.23 and 4.24 of Andhra Pradesh Municipal Accounts
Manual, advance register is to be maintained in GEN.16 form and employees of the
ULBs to whom advances are provided for incurring expenditure on behalf of ULB
shall prepare a payment order for the expenditure incurred as soon as the purpose
for which advance provided was accomplished. If detailed bills in support of the
adjustment of advances were not submitted within prescribed time, the total advance
has to be recovered at once. Further, penalty for late submission of detailed bills
were also to be imposed on the officials concerned. Adjustment of advances was to
be watched by noting the details of adjustment against the advances made. The
advance register should be closed showing advances pending adjustment.

But it was noticed that the advances sanctioned in 2022-23 were not fully
entered in the Register of Advances maintained for the current year i.e., 2022-23. In
that register all the advances sanctioned were not entered and only advances
sanctioned for employees were entered.

On detailed verification of the same it was noticed that, the advance

sanctioned to the following individuals was still pending adjustment/ recovery till the
end of the year 2022-23

Vr. No./ Date Name of the Employee Purpose Amount Rs.

& Designation
526/26.5.2022 Sri T. Prasad, S.I. Arrangement of Snacks for Council 200000.00
Meeting on 26.5.2022
676/7.2022 Sri Ch.V.V.Ramana, To speed up the process of houses to 980000.00
TPRO I/C weaker sections under the programme
“Pedala andariki Illu”
737/29.7.2022 Sri G.Sivarama Krisha, For preparation of Ward wise voter list 500000.00
T.P.S.
739/8.2022 Sri M.Rambabu, S.S. For Shifting of Stray Animals 500000.00
850/8.2022 Sri G. Dharmaji, S.I. For arrangements of Tea, Snacks, Meals 250000.00
& water Bottles for the council meeting
on 29.8.2022
960/26.9.2022 Sri G.Dharmaji, S.I. For refreshments at YSR Cheyutha 94400.00
Programme
1321/20.12.2022 Sri K.Rajesh Reddy, J.A. For conducting Mass Compaction 100000.00
programme at Panduru lay out
1386/15.1.2023 Ms. B. Lijji, J.A. For YSR Pension Kanuka 80000.00
1651/2.2023 Sri T.Prasad, S.I. For servicing the Fogging Machine 140000.00
Total 28,44,400.00
The matter was already brought to the notice of the Commissioner and Accountant
through Audit Observation Lr. SA.No. 25 /Audit-2022-23/ Dt.25.9.2023 with a request
to take necessary action for rectification of the above defects, update the Registers/
Annual Accounts and produce the same to audit. Action would need to be taken to
recover the outstanding advances from the concerned under intimation to audit
immediately.
Para No. 7.01 Code No.9

HUGE AMOUNT KEPT UNDER THE HEAD 1808006 OTHER INCOME UN-CLASSIFIED –
IRREGULAR

It was noticed in audit that amount credited to the Municipal Funds through CFMS/ RTGS etc.,
for different purposes has to be posted to the heads concerned in ERP by the Accounts
Section by obtaining the details from the concerned Treasury/ Bank authorities. But the same
was not done and huge amount of Rs. 72,88,699.04 as detailed below was shown under the
Head 1808006 “ other income un-classified which was irregular”. Immediate action would
need to be taken to post the said amount to the respective heads and report compliance to
audit.

Ledger Date Amount in Details

Rs.
13-May-22 1,67,842.00 Credited towards Property tax compensation amount from APIIC, Kakinada
for the period from 1.10.2021 to 31.12.2022
24-Jun-22 38,850.00 Remitted towards Excess wages paid for security services to MYB Securities
29-Jun-22 5,000.00 Credited towards Film shooting in Gandhinagar Park
21-Jul-22 1,260.00 Remitted by P.Buchibabu, HM towards unspent amount of Snacks to 10th
Class Students for the year 2021-22
30-Jul-22 79,346.00 Credited towards Property tax compensation amount from APIIC, Kakinada
for the period from 1.1.2022 to 31.3.2022
18-Aug-22 6,500.00 Credited towards refund of Excess Salary of late G.Ramudu, PH Night
Sanitation worker (File Roc No.3952/2019/F4)
03-Sep-22 100.00 Amount credited by Bank in NGD Account (Head: 4502016)

13-Sep-22 250.00 Amount credited towards LAD Scheme (LPNo.9/73)

29-Sep-22 5,000.00 Credited towards Janmabhoomi Park Lease (Roc No. 191/2022 /E4) by E.G.
Roller Skating Association
06-Oct-22 5,000.00 Credited towards Janmabhoomi Park Lease (Roc No. 191/2022 /E4) by E.G.
Roller Skating Association
13-Oct-22 266.00 Credited by Kather Mohiddeen, Chennai through EMO (M.O.
No.105379627-031158063 Dt.9.9.2022)

13-Oct-22 51,000.00 Credited towards VLT Asst. No.1060114134,4135(Roc No.5914 /22 /A2
Dt.6.10.2022)
10-Nov-22 50.00 Balance of Advance for Mpl. Election staff Honorarium (3,9,16, 30 wards)
Roc No.4393/2021/C5
10-Nov-22 11,000.00 Balance of Advance for Mpl. Election staff Honorarium (3,9,16, 30 wards)
Roc No.4393/2021/C5
07-Dec-22 3,32,881.00 Credited towards Property tax compensation amount from APIIC, Kakinada
for the period from 1.4.2022 to 30.9.2022
05-Jan-23 42,000.00 Fine amount regarding stray cattle
 07-Jan-23 64,74,831.00 Aratlakatta Land Acquisition amount returned by RDO

25-Jan-23 400.00 Unspent Advance amount Refunded by S.Sambasiva Rao, A.E.( Street
Lighting)
07-Feb-23 2,950.00 Lease amount Rs.2500/-+450/-GST remitted by Pattana Padmasaali
Samkshema Samgham, Kakinada

10-Feb-23 177.00 Cheque Bounce Charges paid by Sri PVVBRS Trinadh

16-Feb-23 177.00 Cheque Bounce Charges paid by VV Kumari(698463/29.12.22)

18-Mar-23 20,000.00 Tender Deposit amount paid by MJR Sales & Service for Stationary
25-Mar-23 100.00 Site Rent for 2022-23 paid by Sri Ramakrishna Seva Samithi
27-Mar-23 43,596.00 Amount paid by Smt Y. Parameswari towards Asst. No.1060046062 as
cheque No.02435/9.3.2023 bounced
31-Mar-23 123.04 HPCL LPG Subsidy amount
Total 72,88,699.04
Para No. 7.02 Code No.9

REMITTANCES MADE WERE POSTED UNDER THE HEAD COLLECTIONS INTEAD OF RESPECTIVE
HEADS NEEDS ACTION

During the year under audit, it was noticed that the following amount remitted to the General Funds
through Collection Center at Municipal Corporation Office, were posted under the head collections
instead of the respective head noted against each. Action would need to be taken to pass necessary
journal entries and report the compliance to audit.

To Be Posted
Challan No. Date Purpose Paid By Amount Rs. Under The
Account Head
Sri Ramakrishna Seva
04/2022-23/2587 07-04-2022 Rent From Open Space 100.00 1301004
Samithi
N.Kyrishna Dipak
04/2022-23/7147 12-04-2022 Trade Licence 1,000.00 1401101
Reddy
Roc No:4393/ 2021/C5, K.Rajesh Reddy Jr.Asst
04/2022-23/9206 13-04-2022 Balance Of Election .A9 5,800.00 4605001
Advance
M.Uma Venkatesh (Lab
05/2022-23/32925 05-05-2022 Audit Recovery 1,800.00 1402019
Technician)
2021-22,Trade License Sri Lakshmi Durga Iron
06/2022-23/40973 07-06-2022 1,500.00 1401101
Fee (1000+500) And Paintings
Roc No,4488/08/E4, K.Virupaksha Rao (A E)
06/2022-23/44209 21-06-2022 Advance Balance Kmc 34,620.00 4605001
Amount
2021-2022 SSC Students D.GOURI SANKAR(HM)
07/2022-23/47753 02-07-2022 4,580.00 4605001
Snacks Amount Balance
2021-2022 SSC Students S.V.L.Raju (Hm)
07/2022-23/49218 11-07-2022 5,080.00 4605001
Snacks Amount Balance
2021-2022 SSC Students Smt. P.S.M.C . Girls
07/2022-23/52382 28-07-2022 7,480.00 4605001
Snacks Amount Balance High School ,
 Change Of Land Use The President, Gandhi
08/2022-23/54483 11-08-2022 From Public & Semi Centenary Junior 10,000.00 1401410
Public College
08/2022-23/56414 23-08-2022 2021-2022 SSC Students Head Master 3,750.00 1401410
Snacks Amount Balance
08/2022-23/56419 23-08-2022 2021-2022 SSC Students Head Master 660.00 1401410
Snacks Amount Balance
08/2022-23/56424 23-08-2022 2021-2022 SSC Students Head Master 660.00 1401410
Snacks Amount Balance
08/2022-23/56429 23-08-2022 2021-2022 SSC Students Head Master 4,550.00 1401410
Snacks Amount Balance
08/2022-23/56441 23-08-2022 2021-2022 SSC Students Head Master 840.00 1401410
Snacks Amount Balance
08/2022-23/56489 23-08-2022 2021-2022 SSC Students Head Master 4,760.00 1401410
Snacks Amount Balance
08/2022-23/57028 25-08-2022 2021-2022 SSC Students M.C. High School 2,890.00 1401410
Snacks Amount Balance
2021-2022 SSC Students Head Master
08/2022-23/59174 30-08-2022 5,100.00 1401410
Snacks Amount Balance
2021-2022 SSC Students A F C High School
09/2022-23/59639 01-09-2022 1,300.00 1401410
Snacks Amount Balance
2021-2022 SSC Students Head Master
09/2022-23/60315 03-09-2022 4,570.00 1401410
Snacks Amount Balance
TRADE LICENCE 2018- VASAN HEALTH CARE
09/2022-23/61033 05-09-2022 12,000.00 1401101
2019 To 2021-2022 Pvt Ltd
FRU Hospital Audit K.Umadevi
09/2022-23/66233 20-09-2022 1,800.00 1402019
Recovery 9.04 Para
FRU Hospital Audit M.Ratnam (Gnm)
09/2022-23/66248 20-09-2022 1,800.00 1402019
Recovery 9.04 Para
FRU Hospital Audit B.M.L.S.Kumari
09/2022-23/66256 20-09-2022 1,800.00 1402019
Recovery 9.04 Para
FRU Hospital Audit L.A.Narasamma
09/2022-23/66259 20-09-2022 1,800.00 1402019
Recovery 9.04 Para
FRU Hospital Audit K.Prasanthi (Gnm)
09/2022-23/67427 22-09-2022 1,800.00 1402019
Recovery Para No-9-04
Sri Prakash Synergy
01/2022-23/95255 31-01-2023 2020-21 to 2021-22 6,000.00 1402015
School
2015 - 20216 to 2021- Sri Prakash Synergy
01/2022-23/95261 31-01-2023 21,000.00 1402015
2022 School
Dr KKR GOWTHAM
02/2022-23/108103 27-02-2023 TL 2022-2023 3,000.00 1401101
SCHOOL
03/2022-23/110707 02-03-2023 TL-2022-23 Bsn Filling Station 12,000.00 1401101
Rudolf Simpson 4u
03/2022-23/114121 10-03-2023 TL-2022-23 1,500.00 1401101
Beauty Saloon
Total 1,65,540.00
Para No.7.03 Code No.9

WATER (METER) CHARGES – DECREASE IN DEMAND FOR WHICH REASONS NOT

EXPLAINED

On verification of the Demand relating to water(meter) charges, it was noticed that there is
decrease in Demand of 2022-23 compared with the previous year in some of the Revenue
Wards as detailed below

Demand for
Ward Demand % of
2022-23
2021-22 increase
1 1283200 1209450 -5.75%
2 1583600 1393200 -12.02%
8 190750 155500 -18.48%
13 197240 179300 -9.10%
14 832090 765000 -8.06%
15 485600 452300 -6.86%
19 241050 212150 -11.99%
20 112350 97700 -13.04%
26 89200 66550 -25.39%
28 42200 34650 -17.89%
29 326000 298250 -8.51%
29A, B,C 2103700 1914850 -8.98%

The reason for the decrease was not explained in audit. Immediate action would need to be
taken to make an enquiry on this and inform the reasons for decrease in Demand to audit.
 PARA NO. 7.04 CODE NO. 9

SHOP RENTS- NOT A SINGLE MONTH RENT COLLEDTED FOR THE ENITRE YEAR FROM
THE LEASE HOLDERS – FAILED TO IMPLIMENT THE LEASE CONDITIONS

In accordance with notification No. 25, Dt. 8.3.2013 under condition no. 34, if the shop rent
was not paid for 3 regular instalments by the tenants, the commissioner may cancel the lease
of tenant and conduct fresh auction for the lease besides, loss if any should be collected from
the old tenant or forfeit the deposit amount. But records of this Municipal Corporation
revealed that the following tenants were not paid Rent even for a single month. Though they
have not filed any case in the court of Law, the reasons for non-collection or Rent and not
initiating action against the defaulters was not stated to Audit.
Shopping complex Shop Name of the Owner Arrear Current Total Rs. Collected Balance Rs.
No Rs. Rs. Rs.

Market Tank 8 PUSARALA KAMARAJU 3,03,473 82,248 3,85,721 - 3,85,721

Market Tank 16 PULAVARTHI 4,38,508 82,248 5,20,756 - 5,20,756
RAMAKRISHNA
SRMT 1 CH.DURGA PRASAD 10,77,604 2,79,996 13,57,600 - 13,57,600
SRMT 2 AJIT KUMAR CHRARIA 10,82,248 2,79,996 13,62,244 - 13,62,244
SRMT 3 AJIT KUMAR JAIN 10,36,785 2,79,996 13,16,781 - 13,16,781
SRMT 4 AMIT KUMAR JAIN 9,93,687 2,79,996 12,73,683 - 12,73,683
SRMT 5 VISALANDHRA BOOK 8,97,260 2,79,996 11,77,256 - 11,77,256
HOUSE
SRMT 6 AVINASH KUMAR JAIN 12,24,485 2,79,996 15,04,481 - 15,04,481
Recherlapeta 4 P. SATYA VARA PRASAD 88,350 55,800 1,44,150 - 1,44,150
Santa Cheruvu 38 Md. Basheramma - 16,374 16,374 - 16,374
Santa Cheruvu 44 Md. Sonia Sulthana - 16,374 16,374 - 16,374
Santa Cheruvu 45 Lal Md. Jeelani - 16,374 16,374 - 16,374
Santa Cheruvu 46 Md. Jalaluddin - 16,374 16,374 - 16,374
Santa Cheruvu 47 Sk. Liyaquat Ali - 16,374 16,374 - 16,374
Santa Cheruvu 48 Dinakurthi Srinivasu - 16,374 16,374 - 16,374
Santa Cheruvu 49 Md. Shajahan - 16,374 16,374 - 16,374
Santa Cheruvu 53 Md. Basheerunnisa - 16,374 16,374 - 16,374
Santa Cheruvu 54 Sayad Basheer - 16,374 16,374 - 16,374
Gandhinagar Old 2 G.SRINIVASA RAO 1,37,300 40,020 1,77,320 - 1,77,320
Gandhinagar IDSMT 5 T.RAJASEKHAR 4,84,668 1,20,000 6,04,668 - 6,04,668

Gandhinagar IDSMT 9 T.RAJKUMAR 4,50,000 1,20,000 5,70,000 - 5,70,000

Ananda Bharathi 9 Y DATTATREYAREDDY 4,14,796 1,11,996 5,26,792 - 5,26,792
Municipal Office 24 M.KRISHNA KUMAR 4,72,423 1,50,840 6,23,263 - 6,23,263
Shopping Complex (PH)
91,01,587 25,90,494 1,16,92,081 - 1,16,92,081
PARA NO. 7.05 CODE NO.9

SHOP ROOMS – LEASE PERIOD EXPIRED FOR SOME OF THE TENANTS BUT CONTINUED
WITHOUT FURTHER ENHANCEMENT FROM YEARS TOGETHER – LOSS OF REVENUE TO
THE MUNICIPAL CORPORATION DUE TO PENDING DISPOSAL OF COURT CASES

On verification of the miscellaneous Demand Register (MDR), it was noticed that the lease
period for various Shop Rooms in Gandhi Nagar (Old) Market Shops was expired on various
dates which were above 10 years and the same tenants were continued during the year 2022-
23 because of pending disposal of court cases as noted against each in the below statement.
Shop Name of the Occupant Lease Period not available
No Old Period Rent per Court Case No. as noted in
Month Rs. the MDR

1 V.AMAR KUMAR 3392 WP.NO.38604/2012

2 G.SRINIVASA RAO 3335 WP.NO.38604/2012
4 V.RATNA KUMAR 1884 WP.NO.38604/2012
6 CH.BANGAR RAJU 3020 WP.NO.38604/2012
7 P.SOMAYYA 2492 WP.NO.38604/2012
NOT
9 M.SATYAM 4577 WP.NO.38604/2012
AVAILABLE
11 K.VEERRAJU 2667 WP.NO.38604/2012
18 B.SANNARAO 823 WP.NO.38604/2012

22 CH.KALAVATHI 631 WP.NO.38604/2012

23 R.VEERABADRARAO 873 WP.NO.38604/2012

Similarly in the case of Market Tank Shopping Complex for which lease period was completed
on 7.7.2016 as detailed below but old rent was collected because of court case pending
though enhanced rent was fixed from 7.7.2016.

Shop Name of the Owner Lease Period renewed up to 7.7.2016 to 6.7.2019

No Old Period Old Rent Court Case No. as Enhanced
per Month noted in the MDR Rent per
Rs. Month Rs.

1 Karri Bhavani 7.7.13 to 6.7.16 4133 WP No.7880/18 5569

2 M.Thammayya --do-- 2267 WP No.7880/18 5569
3 Karri Bhavani --do-- 4133 WP No.7880/18 6854
4 Karri Bhavani --do-- 4133 WP No.7880/18 6854
5 Bonda Satyanarayana --do-- 4133 WP No.7880/18 6854
6 K.China Satyanarayana --do-- 4133 WP No.7880/18 6854
7 Sai Durga Mahila Sakthi --do-- 4133 WP No.7880/18 6854
Sangham
8 Pusarla Kama Raju --do-- 4133 WP No.7880/18 6854
11 V.Surya Rao --do-- 2267 WP No.7880/18 6854
12 K.Venkata Ramana --do-- 4133 WP No.7880/18 6854
13 P.Sathibabu --do-- 4133 WP No.7880/18 6854
 14 D.Viswanadham --do-- 4133 WP No.7880/18 6854
15 V.Venkata Naidu --do-- 2267 WP No.7880/18 6854
16 P.Ramakrishna --do-- 2267 WP No.7880/18 6854
17 G.Mahesh --do-- 4400 WP No.7880/18 6854
18 N.Ananda Rao --do-- 4400 WP No.7880/18 6854
19 G.V.V.Satyanarayana --do-- 4133 WP No.7880/18 6854
20 V.V.Satyanarayana --do-- 4133 WP No.7880/18 6854

In respect of following Shops at Bangaruvari Choultry shopping complex though rent was
enhanced after the lease period was completed on 30.4.2017 old rent as noted against each
was still collecting because of court case pending.
Shop Name of the Occupant Lease Period renewed from 1.5.2017 to 30.4.2020
No Old Period Rent per Court Case No. as noted Enhanced Rent per
Month Rs. in the MDR Month Rs.

1 P.Anjaneyulu 1.5.2014 to 4667 WP No.7359/18 12147

30.4.2017
2 Tekumudi Ramu --do-- 4667 WP No.7359/18 12147
3 Grandhi Krishna 8.7.2016 to 5511 WP No.7359/18 12147
7.7.2019

4 D.Srinivas 1.5.2014 to 4667 WP No.7359/18 12147

30.4.2017

6 S.Subrahmanyam --do-- 3333 WP No.7367/18 4586

7 S.Padmavathi --do-- 3333 WP No.7367/18 4586
8 S.Padmavathi --do-- 3333 WP No.7367/18 4586
9 S.Padmavathi --do-- 3333 WP No.7367/18 4586
10 D.Srinivas --do-- 2400 WP No.7367/18 3200
D.S

Audit further noticed that the following Shops at Boggavarapu Aurvedic Dispensary shopping
complex though rent was enhanced from 06.02.2018, the old rent was still collecting due to
court case pending.
Shop Name of the Occupant Lease Period
No Old Period Rent per Court Case No. as Enhanced
Month Rs. noted in the MDR Rent per
Month Rs.

1. S.Sridevi 6.2.2013 to 5.2.2018 8000 OS No.249/2018 10666

2 A.Narayana Raju and 25.11.13 to 24.11.16 8000 OS No.250/2018 10666
S.Appa Rao

In respect of China Market Jagannadhapuram Shopping complex, from the following leasing
lease holders enhanced rent was not collected and old rent paid by the lease holder was
allowed due to pending court case as detailed below
 Shop Name of the Occupant Lease Period
No Old Period Rent per Court Case No. as Enhanced
Month Rs. noted in the MDR Rent per
Month Rs.

3 G.V.V.Suryanarayana 8.7.13 to 7.7.16 6133 WP No.7885/2018 7200

6 V.Srinivasa Rao 23.5.14 to 5333 WP No.7885/2018 7200
22.5.17
7 M.Panasa Ramana 23.5.14 to 5333 WP No.7885/2018 7200
22.5.17

The connected court file was also not made available for verification to know the stage of the
case in the court of Law.

In some of the shopping complexes as detailed below where court case is not pending the
shop rents were not enhanced for which reasons were not explained in audit.
Old
Shopping Shop Name of the Rent Enhanced Period of Lease Rent Paid
Complex Name No. Occupant Rs. Rent Rs. last renewed now Rs. Remarks
9 DAMMU 3500 11.1.2016 to 3500 Not enhanced from
RAMANA 10.1.2019 11.1.2019 & no court
case pending
Market Tank
10 M.ADINARAYANA 3500 11.1.2016 to 3500 Not enhanced from
10.1.2019 11.1.2019 & no court
case pending
3 P.SRINIVAS (10 6000 10666 25.11.2016 to 8000 enhanced rent not paid.
Months Demand 24.11.2019 No court case pending
Only) Vacant from as per MDR. Rent not
1/22 paid from the previous 2
years. An amount of
Rs.330626/- pending as
on 31.3.2022. Not
Enhanced from
25.11.2020
4 S.D.N.PRASAD 8000 10666 1.10.2017 to 10666 Not enhanced from
30.9.2020 1.10.2020. no court case
BOGGAVARAPU
pending as per MDR. Up
AYURVEDIC
to date rent paid up to
DISPENSARY
31.3.2022
7 MALIREDDY 5352 1.10.2015 to 5352 Rent not enhanced from
CHARITABLE 30.9.2018 1.10.2018. No court case
TRUST pending as per MDR
COMMUNITY
RADIO STATION
12 P.ADINARAYANA 5000 6667 1.3.2018 to 6667 Not paid any Rent for
(Vacant on 28.2.2021 more than 2 years & no
9/2021) court case pending as
per MDR. Not enhanced
from 1.3.2021)
 14 K.SUBBARAO 5000 6667 1.2.2018 to 6667 Rent not paid from the
(Vancat on 31.1.2021 previous 2 years and no
9/2021) court case pending as
per MDR. Rent not
enhanced from 1.2.2021
15 K.SUBBARAO 2000 3663 1.2.2018 to 3663 Rent not paid from the
(Vancat on 31.1.2021 previous 2 years and no
Gandhinagar
9/2021) court case pending as
Old
per MDR. Rent not
enhanced from 1.2.2021
16 K.SUBBARAO 2000 3663 1.2.2018 to 3663 Rent not paid from the
(Vancat on 31.1.2021 previous 2 years and no
9/2021) court case pending as
per MDR. Rent not
enhanced from 1.2.2021
1 V.NAGESWARARA 0 2125 Rent enhanced from
O 1000 to 2125
w.e.f.1.4.2019 but orders
not available. Rent is
being paid @ Rs.1000/-
in 2020-21 and no rent
paid in 2021-22. No
court case pending
2 AVVSATYANARAY 5000 10000 6.12.2017 to 10000 Not enhanced from
ANA (Vacant from 5.12.2020 6.12.2020 no court case
3/22) pending as per MDR
3 CH.S.V.RAO 5000 10000 6.12.2017 to 10000 Not enhanced from
5.12.2020 6.12.2020 no court case
pending No rent paid in
2021-22 as per MDR
4 A.N.KUMAR 5000 10000 6.12.2017 to 10000 Not enhanced from
5.12.2020 6.12.2020 no court case
Gandhinagar
pending No rent paid in
IDSMT
2021-22 as per MDR
5 T.RAJASEKHAR 5000 10000 6.12.2017 to 10000 Not enhanced from
5.12.2020 6.12.2020 no court case
pending No rent paid in
2021-22 as per MDR
6 M.AVINASH 2274 10000 6.12.2017 to 10000 Not enhanced from
KUMAR (SC) 5.12.2020 6.12.2020 no court case
pending as per MDR
7 J.VARA PRASAD 5000 10000 6.12.2017 to 10000 Not enhanced from
5.12.2020 6.12.2020 no court case
pending. No rent paid in
2021-22 as per MDR
8 K.PARVATHI 5000 10000 6.12.2017 to 10000 Not enhanced from
5.12.2020 6.12.2020 no court case
pending as per MDR
9 T.RAJKUMAR 5000 10000 15.3.2018 to 10000 Not enhanced from
14.3.2021 6.12.2020 no court case
 pending No rent paid in
2021-22 as per MDR
9 P.S.NARAYANA 4444 12570 1.8.2018 to 5925 Enhanced Rent not paid.
MURTHY 31.7.2021 No Court case pending
11 KAKI SATHIBABU 4444 12570 1.8.2018 to 5925 Enhanced Rent not paid.
31.7.2021 No Court case pending
12 P.RANI GRACE(SC) 2222 12570 1.8.2018 to 5925 Enhanced Rent not paid.
31.7.2021 No Court case pending
15 CH.MAHALAKSH 4444 12570 1.8.2018 to 5925 Enhanced Rent not paid.
MI 31.7.2021 No Court case pending
16 GOODAPATI 2222 12570 1.8.2018 to 5925 Enhanced Rent not paid.
Indira RAJU(SC) 31.7.2021 No Court case pending
Priyadarsini 18 CH.PRASADA 4444 12570 1.8.2018 to 5925 Enhanced Rent not paid.
REDDY 31.7.2021 No Court case pending
20 JODARAJU(SC) 2222 12570 1.8.2018 to 5925 Enhanced Rent not paid.
31.7.2021 No Court case pending
21 M. GANAPATHI 4444 12570 1.8.2018 to 5925 Enhanced Rent not paid.
RAO 31.7.2021 No Court case pending
22 P.SURAPU RAJU 4444 12570 1.8.2018 to 5925 Enhanced Rent not paid.
31.7.2021 No Court case pending
25 D. RAJU 2222 12570 1.8.2018 to 5925 Enhanced Rent not paid.
31.7.2021 No Court case pending

In spite of the defect having been pointed out in previous year audit report no action was
taken to rectify the defects. Immediate action would need to be taken to dispose the court
cases by filing proper counter affidavits in time and to win the case in favour of Corporation.
Loss if any sustained in this regard would need to be recovered from the person or persons
responsible and credited to General fund account under intimation to audit.
 PARA NO. 7.06 CODE NO. 9

SHOP RENTS – SHOPS NOT LEASED OUT AND KEPT VACANT FROM YEARS TOGETHER –
LOSS OF REVENUE TO THE MUNICIPAL FUNDS

The following shops for which lease period completed was handed over by the Municipal
Corporation and further lease was not accorded during the entire year for which reasons were
not forthcoming to audit. Due to this an amount of Rs. 36,40,658/- was incurred as loss to the
Municipal Funds. Action would need to be taken to let out the shops without delay duly
following the procedure prescribed. Further how the authorities allowed the tenants to
vacate the shops without collecting the rent and without taking any action was not explained
in audit. Immediate action would need to be taken to collect the balance rent pending at the
end of the year 2022-23 for Rs. 34,39,746.00 along with interest and report the compliance to
audit.

Date from Balance Rent Per No. of Loss to the

Name of the Shop Name of the Lease which Rent month at Months Funds from
Shopping Complex No. Holder Vacant Pending as the time of Vacant the date of
on that date Vacant vacancy Rs.
Bangaruvari 1.4.2019 345881.00 Rs.12,147/- 48 583056.00
choultry Shopping 8 Devi Ratnam
Complex
Opp SRMT 1.4.2019 928550.00 Rs.23,333/- 48 1119984.00
1 B. Aruna Kumar
Shopping Complex
3 Godi Sudhakar 1.12.2021 400336.00 Rs.6667/- 16 106672.00
12 P.Adinarayana 1.10.2021 277741.00 Rs.6667/- 18 120006.00
Gandhi Nagar(Old) 14 K.Subba Rao 1.10.2021 302013.00 Rs.6667/- 18 120006.00
15 K.Subba Rao 1.10.2021 199980.00 Rs.3663/- 18 87912.00
19 Ch.Venugopal 1.4.2019 217711.00 Rs.4884/- 48 234432.00
2 A.V.V.Satyanarayana 1.3.2022 297108.00 Rs.10000/- 13 130000.00
Gandhi
10 S.Immanuel 1.4.2021 0.00 Rs.6000/- 24 144000.00
Nagar(IDSMT)
11 A.Nooka Raju 1.4.2021 182400.00 Rs.5000/- 24 120000.00
Boggavarapu 1.1.2022 330626.00 Rs.10666/- 15 159990.00
Ayurvedic 3 P.Srinivas
Dispensary
Recherlapeta 2 P.Keerthipriya 1.10.2021 51000.00 5100.00 18 91800.00
AVBLK Venkateswara 1.4.2020 11380.00 5870.00 36 211320.00
1
Rao
Raja Tank
2 D.Veera Swamy 1.4.2020 28650.00 5730.00 36 206280.00
3 J.Appala Raju 1.4.2020 34200.00 5700.00 36 205200.00
Total 34,39,746.00 36,40,658.00

Further Shop No.5 of Boggavarapu Ayurvedic Dispensary Shopping Complex was vacant from
1.12.2018 after the lease holder Smt K.Sireesha Kumari, with monthly rent of Rs.6,000/- per
month vacated the shop on 22.11.2018. But the shop was leased out to Sri P.Satyanarayana
from 1.3.2021 with a monthly rent of Rs.9100/- per month. Thus this corporation has forgone
revenue towards rent of that shop i.e. Rs.245700/- for a period of 27 months from 1.12.2018
to 28.2.2021 @ Rs.9100/- per month. The reasons for the same were not intimated to audit.
The defect was pointed out in the previous year audit report but no reply was received till the
end of this year audit.

PARA NO. 7.07 CODE NO. 9

SHOP RENTS – VIOLATION IN IMPLEMENTATION OF RULES & OTHER DEFECTS – NEEDS

RECTIFICATION

During the course of audit on the receipt of shop rents the following were the defects
noticed. The same would need to be rectified and report the compliance to audit.

A) NON PRODUCTION OF AGREEMENT FILES:

In accordance with the G.O.Ms.No. 56, Dt. 5.2.2011 of the MA & UD Dept, the
lease deed shall be executed and registered within one month from the date of confirmation
or renewal of the lease. If monthly installments are not paid within the due date, the lease is
liable for termination. But the said agreement files were not produced to know whether such
conditions were prescribed in the concluded agreement. In accordance with the statement
appended, several defaulters were noticed for non-payment of single month rent in the entire
year. But action taken by the revenue authorities for collection of rent was not evident in
audit.

B) MDR ALONG WITH COLLECTION CHALLANS NOT MADE AVAILABLE – ABSTRACT NOT
PREPARED AND CERTIFIED BY THE REVENUE OFFICERS AND EXECUTIVE AUTHORITY:

The Remittance Challlans generated in the ERP was not made available for verification in
Audit along with MDR of Shopping Complexes. Hence it could not be possible in Audit to
know the correctness of the Postings made in the Soft Copy produced at the time of Audit.
Further whether penalty clause observed or not could not be verified as the same were not
incorporated in the soft copy maintained. As the Agreements were not entered in LAMPS
module, the DCB was not generated in the ERP and the same was prepared basing on the
information available in the Revenue Section. Hence immediate action would need to be
taken to maintain the same from the next year duly preparing the Abstracts and the same
should got Certified by the Revenue Officer and Executive Authority.
C) COLLECTION FIGURES NOT TALLIED WITH ERP:

In accordance with the ERP the collection from the shopping complexes is shown as
detailed below. But the same was not tallied with the Collection Figures shown in the
Registers and DCB furnished by the Revenue Section. The same should be explained to audit.

Description Amount Rs.

In accordance with Collection Summary in ERP 10299741.00

In accordance with Revenue section Registers 10790245.00
In accordance with DCB furnished by Revenue Section 8379795.00
In accordance with annual account under the head 1301015 8362400.00

D) DEFECTIVE ADOPTION OF OPENING BALANCE OF SHOP NO.6 IN SHOPPING COMPLEX

OPP. TO SRMT AS ON 1.4.2017 NOT RECTIFIED – REASONS NOT EXPLAINED
In spite of the defect having been pointed out in the Previous Year Audit Reports at Para
No.37, that the balance rent amount was shown as Rs. 577042.00 as on 31.3.2017 to the shop
no.6 of opposite SRMT shopping complex, carried forward for the year 2017-18 as Rs.
163800.00 with a difference of Rs. 413242.00, was not rectified till the end of the year. Action
would need to be taken either to justify the adoption or to rectify the balance without further
delay.

E) LEASE AMOUNT FIXED IS NOT ACCORDANCE WITH THE ORDERS OF THE CDMA, AP,

In accordance with the orders issued in CDMA Cir. Roc. No. 14037/2/2017.K Sec
(827769/2017-K3) Dt.31.10.2017, the ULB may renew the lease of immovable properties for a
period of 3 years at one time and with the prior sanction of the Govt. renew the lease for a
period of exceeding 3 years and exceeding 25 years at a time without conducting public
auction. If the present lessee agrees to renew the lease in his favour at the rent fixed here
under and for the revision of rent once in 3 years In accordance with the procedure specified
below:

a) Rent of 10% of the current market value of the property per annum i.e. both building and
land In accordance with market value of the land construction rates of the structures and
building fixed by the Registration department under the Andhra Pradesh revision of Market
value guideline rules, 1998 or

b) Rent @ 33 1/3% above the earlier rent or

c) Prevailing rent of such properties in the vicinity whichever is higher

But it was noticed in audit that the above orders were not followed in enhancing the monthly
rent for further continuation of the occupants after completion of the Period of Lease.
Para No.7.08 Code no. 9

D & O TRADES - LICENCE FEES RATES IMPROVED BASING ON THE

NOTIFICATION ISSUED IN 2010-2011 RATES AND TYPE OF TRADES NOT REVISED
TILL DATE W.E.F. 1-4-2010 – IRREGULAR.

According to the Rules and Regulations issued by the Government from time
to time, the D & O Trades license fee rates are to be enhanced periodically basing
on the previous improvements in business trends in the notified areas.

As verified from the Gazette Notification of Local and Municipal Sheet, East
Godavari Lr.Roc No. 9232/2009-F3 Dt.18.9.2010, notification it was found that the
present D&O Trades Gazette Notification was approved by the Municipal Council in
Cr.No.104,Dt,19.11.2009 and levied fees according to it from 1.4.2010 and still
continues.

As the needs of the people in the Town increases, the Trades will also increase
accordingly, but the Municipal Corporation was unable to realise enhanced revenue
of it, and failed to enhance the license fees levied according to Corporation Act.

Immediate action would need to be taken to get the rates revised according
to the latest type of trades and publish the same duly taking the approval of the
Corporation and report the compliance to audit.
Para No.7.09 Code No.9

ESTABLISHMENT- DEFECTS NOTICED IN MAINTENANCE OF SERVICE REGISTERS

Scrutiny of Service Registers of some of the regular staff revealed the following lapses;

1.DETAILS OF FAMILY MEMBERS NOT AVAILABLE IN RESPECT OF ALL THE EMPLOYEES

According to Rule 16(b) of Annexure –VII (Rule No.92) of APTC Rules issued in G.O. Ms
No.266, Finance and Planning (FW-TA) Department, dated 21.09.1996, every employee should
furnish a list of family members who are dependent on him and the same has to be recorded
in the service register of the employee. As and when there is change in family members
either due to addition/deletion, the employee should furnish revised list duly furnishing the
reasons for the same and such revised list of family members should also be recorded in the
service register of the employee. However, the details of the family members, their
relationship with the employees, date of birth and age were not noted in the service register.

2.NOMINATIONS NOT PASTED IN THE SR:

According to general conditions of service under FR-10 and Subsidiary Rules, the
nominations for Provident Fund, DCRG and APGLI etc., were required to be obtained from the
individual employees and posted in the service register. However, the nominations for
Provident fund, DCRG and APGLI etc., were not available in the service registers. The
prescribed forms duly filled in by the employees were also not affixed in the service register.

3.DECLARATION OF HOME TOWN:

Entries regarding declaration of home town were not made in the service Registers.

4. ATTESTATION OF GOVERNMENT SERVANT:

In accordance with the instructions issued in G.O. Ms. No.152, Finance Department
dated: 20.05.1969, it shall be the duty of the Head of the office to obtain the signature of the
employee in his/her service register in token of his/her service verified up to a particular
period. However, the signatures of the employees were not obtained in the service registers.
Further, entries in the service books were not filled in the prescribed columns. Due to
improper filling of columns of the Service Book, it was difficult to trace the annual verification
certificates, release of annual grade increment, leave encashment and leave availed etc.,
Hence the errors/omissions pointed out by audit would need to be rectified in order to avoid
delay in finalization of pension and provident fund cases of the employees at the time of
retirement.
 Action would need to be taken to rectify the above defects and report compliance to
audit.

Para No. 7.10 Code No.9

NON-ISSUANCE OF OCCUPANCY CERTIFICATE AND CONSEQUENTIAL LOSS

Issue of Occupancy Certificate shall be mandatory for all buildings and unless such
certificate has been granted by the sanctioning authority no person shall occupy or allow any
other person to occupy any building or part of the building. The Property owners consequent
upon completion of the construction have to intimate the Corporation of the same in the
prescribed proforma to facilitate the ULB to issue occupancy certificate and levy of PT. It was
observed that there was no such arrangement indicating failure of the MC in enforcing the
provisions laid down. Government have issued G.O.Ms.No.119 MA&UD (M) Dept. dated 28-
03-2017 and in accordance with Rule 26(d) the rate of compounding fee shall be equivalent
to 100% of the value of the land as fixed by the Registration Department at the time of
compounding for the violated portion. As the files concerned were not produced to audit the
observance of the rules issued in the said G.O by the ULB could not be checked in audit.

Further in accordance with clause -g- under Rule 26 of GO.Ms.No.119 MA&UD (M)
Dept. dated 28-03-2017 the functional/line agencies shall not give regular connections of
power, water, sewerage etc., unless such occupancy certificate is produced or alternatively
may charge three times the tariff till such time occupancy certificate is produced. It was
noticed in audit that in most of the cases the said connections were given even without
issuing the occupancy certificate and normal tariffs were charged.

Thus necessary steps will have to be taken to implement the rules issued in afore said
G.O. or else there was a scope with such irregularities which cause huge loss to the income of
the ULBs.
Para No. 7.11 Code No.9

TOWN PLANNING - UNAUTHORISED BUILDING CONSTRUCTIONS - WITH

OUT APPROVAL FROM CORPORATION HUGE LOSS TO MUNICIPAL FUNDS - NEEDS
EARLY ACTION

During the course of audit for the year 2022-23, in accordance with the records of
revenue section it was noticed that many unauthorized constructions were made during the
years and Property Tax was levied with 100% penalty on that unauthorized construction
without insisting the approved plan. Further they did not share such type of building
information with town planning authorities. No data base was available in town planning
section on such type of buildings.

Due to the inaction of the Town Planning authorities number of buildings were
constructed without getting approval from Municipal Corporation there by the
Corporation sustained enormous loss by way of evasion of building license fees and other
fees like open space charges, betterment charges, development charges, Rain water
harvesting pit, tree guard and material charges etc., as they were brought to assessment of PT
without collecting the above charges. In accordance with the AP Municipal Act 1965 as
amended by Act no 15 of 2013 with effect from 05.08.2013, penalty for the unauthorised
construction is 100% of the Property Tax levied.

Therefore the above matter would need to be reviewed by the competent authority
and the loss, if any, sustained be recovered from the person or persons responsible.
Para No. 7.12 Code No.9

VARIATION OF PLINTH AREA OF THE UN-AUTHORISED CONSTRUCTIONS/

MODIFICIATIONS/ DEVIATIONS MADE AT THE TIME OF CONSTRUCTION AFTER
APPROVAL OF THE BUILDING PLAN COMPARED WITH MEASUREMENTS NOTED IN THE
ML (ERP) WHILE IMPOSING PROPERTY TAX – REASONS NOT EXPLAINED

On verification of the approved plans for the additions/ alterations made to the existing
buildings for which property tax already exists the following were the defects noticed when
Plinth Area/ Built up area shown in the approved Plan compared with the measurements
noted in the ML (ERP).

1. All the Floors were constructed with deviations the total built up area was more than
the area shown in the plan now approved. No UC penalty was implemented while
imposing the Property tax.

2. Measurements of total built up area on Ground were less in the ERP when compared
with the approved Plan shows that tax was less imposed.

3. In the ERP module the revised tax will be implemented only for 5 previous Half years
from the current half year though the construction date of the building was more than
5 previous half years as the application by the Owner, Builder/ Developer/
Construction Firm and Licensed Technical Personnel was submitted the plans even
after completion of additions/ alterations made to the building.

4. Some of the existing buildings for which property tax exists were dismantled. For
those buildings the applicants are being paid existing House Tax in advance for the
entire year (which is nominal when compared to VLT) and the same receipt is enclosed
to the building application and the existing house tax is being paid throughout the
construction period. After completion of the building the owners are approaching for
revision of the tax according to the new building plan approved. In some instances
owner ship of the new building was also changed.

When the same was enquired, the Revenue authorities had stated that some of the
owners were not constructing the buildings to the occupational stage though Plan was
approved. Basing on inspection report filed the measurements of the built up area which was
in the occupational stage were only entered in the ERP.

Some of the instances were also noticed justifying the above defects. Hence
immediate action would need to be taken
 1. The existing tax may be enhanced In accordance with Notification Rates/ type of
Usage basing on the field verification for the fit cases as well as remaining cases of
such manner noticed duly conducting field verification.

2. If any deviations noticed viz., part of the building was not in occupational stage, some
of the floors were under construction or construction was stopped etc. though plan
was approved should be noted in the Remarks column of both in Manual ML Register
and ERP.

3. List out the buildings which were constructed for more than 5 half years and submit
the proposals to CDMA office so as to implement the revised tax from the date of
construction.

4. Strict action would need to be taken to implement VLT for fully dismantled old
buildings though House Tax was paid in Advance and make arrangements for
adjusting the same to the VLT imposed.

The loss sustained in this regard should be arrived after field verification and the same should
be recovered from the persons or persons responsible and credited to Municipal Corporation
funds under intimation to audit.
Para No. 7.13 Code No.9

NON LEVY AND COLLECTION OF VLT IN THE EDUCATIONAL INSTITUTIONS WHERE

VACANT LAND EXCEEDING THREE TIMES PLINTH AREA OF THE BUILDING – LOSS OF
REVENUE TO CORPORATION FUNDS.

Section 212(2) of GHMC Act 1955 stipulates that any vacant land not exceeding three
times plinth area of the building including the site or vacant land to the extent of 1000 Sq.M.
whichever is less shall be deemed to be adjacent premises occupied as an appurtenant to the
building and assessed to tax. If appurtenant land is more than three times plinth area of the
building including its build-up site, then the excess land will be treated as vacant land and
taxed separately @ 0.50 % of estimated capital value of land. Further, the Rule 8 of HMC
assessment of property tax rules, 1990 stipulates that for the purpose of assessing the vacant
land, the estimated capital value of land shall be the market value fixed by the registration
department for the purpose of registration.

On scrutiny of building penalization records and VLT records, it was observed in one
case the Corporation did not levy annually. VLT amounting to Rs. 3,89,71,112.00 from JNTU,
Kakinada as detailed below.

Total land 447825.67Sq.M

Built up area 69686.61Sq.M
Vacant Land 378139.06 Sq.M
Area to be deducted in accordance with Section 212 of
GHMC Act 1955 1000 Sq.M
Net area for levying VLT 377139.06 Sq.M/ 451054.54 Sq.Y
Market value of the land as on the date of audit ( 1.8.2019
rates) 16000/-
Total value of land Rs. 7216872640.00
VLT to be levied Rs. 36084363.00
Add library cess @ 8% Rs. 2886749.00
Total VLT tax to be levied Rs. 38971112.00

When the same was sought to be answered in audit, the revenue authorities stated
that action will be taken in due course. Hence immediate action would need to be taken to re-
verify this type of buildings if any and levy the tax accordingly, take further action for their
collection and report the compliance to audit
Para No.7.14 Code No.9

NON-UTILISATION OF FEE TOWARDS RWHS, TREE GUARD AND PUBLICATION OF

BUILDING PERMISSION IN NEWSPAPERS COLLECTED FROM THE APPLICANTS SEEKING
PERMISSION FOR HOUSE-PLAN AND FOR HOUSE CONSTRUCTION

On verification of building application files, it was observed that in accordance with

Gazette notification number.34/2013, Dt.28.03.2013, Kakinada Municipal Corporation in its
Resolution No.71 Dt.23.03.2013, approved the Revised Building Permit fee and other charges.
In this connection the rates of Publication charges were fixed in Gazette at Rs.200/- from
individual residential, Rs.1000 from commercial builders and Rs 2500 from group housing,
and the same were being collected by the municipal authorities towards fee for publication of
building permissions in newspapers while according approval for house plans. The amounts
collected shall be utilized towards publication charges payable to news media for printing the
particulars viz., name of the applicant/GPA, sanction, total sq.ft sanctioned, total floors
sanctioned, number of flats per floor, area of flats, parking space, etc., as a measure of
transparency.

It was observed during the scrutiny of the records that the particulars of building
permissions were not made public through the Print Media utilizing the publication charges
collected from the applicants in contravention of the Government orders. No separate
account was maintained as regards publication charges so far collected. This was not in
order. The lists of all unauthorized constructions noticed especially regarding apartments,
office complexes were not published in the newspapers every month for information of
general public.

Audit further noticed that the RWHS charges collected from construction of houses/
apartments were not kept in separate account but credited to general funds, and the said
amount was not utilised for the purpose for which the applicants paid the same. Similarly
amount collected towards tree guard charges was also kept in the General funds, and was not
utilised for the purpose for which it was collected.

Keeping the above specified amounts i.e., publication charges, RWHS, Tree guard in
the General funds without utilising for the purpose for which they were intended was
irregular. The same can be diverted for other purposes in future as the said amount was kept
in General funds.

Therefore immediate action would need to be taken to utilise the said amounts for
the purpose for which they were collected and report compliance to audit.
Para No.7.15 Code No.9

NON REMITTANCE OF EDUCATION CESS COLLECTED BY THE MUNICIPAL CORPORATION

TO THE EDUCATION DEPARTMENT

In accordance with the Andhra Pradesh Education Act 1982, Education Cess shall be
levied by the ULB at such rates as may be considered necessary. It is an addition to the
taxation levied in ULBs under the head of Property tax for the purpose of providing
educational facilities within its jurisdiction. The education cess collected was to be remitted to
the education department.

In accordance with the revenue receipt and expenditure rules, for the Education Cess
which was a component in the property tax, should be obtained as and when the DCB
prepared along with components. In the present scenario of ERP components were not
bifurcated and the entire amount was shown as Property Tax. However, on scrutiny of the
DCB, it was noticed that the Education Cess pending remittance is detailed below under the
head 3503002.

Up to the year 2021-22 Rs.24,68,04,527.21

For the year 2022-23 ( In accordance with the DCB) Nil
Total Rs. 24,68,04,527.21

Thus an amount of Rs. 24,68,04,527.21 was outstanding towards Education Cess

to the end of the year 2022-23. The same should be remitted to the education department
and report compliance to audit.
Para No.7.16 Code No.9

PROPERTY TAX– CERTAIN DEFECTS NOTICED

During the course of audit on the Property tax, the authorities did not followed the
instructions issued in Circular Roc.No.6238/2015/K3 Dt.28.4.2017 of the Director of Municipal
Administration, AP, Gorantla as detailed below

1.CURRENT YEAR DEMAND REGISTERS NOT MAINTAINED:

Under tax related revenues, the most important registers are Demand Registers. The
registers in respect of House Tax contains the details regarding House Number, Assessment
Number, Name of the Owner, Annual Rental Value, Amount of tax levied on the houses
(Demand), Collection (Month wise), Write Off of tax (if any) and Balance (amount of tax
remained uncollected at the end of the year). The amount remained as balance at the end of
a year becomes arrear demand of the following year. But the same was not followed and no
demand register was maintained for the year 2022-23. When the same was questioned in
audit the authorities stated that due to implementation of ERP no manual register was
maintained. But the reply was not tangible as the entire demand register can be downloaded
at the end of every year from the ERP and can be produced at the time of audit.

2.GOVERNMENT OFFICES LOCATED IN PRIVATE BUILDINGS AND PAYING RENT TO

OWNERS - REGISTERS NOT MAINTAINED.

Information relating to Govt., Offices located in private buildings was not available
to verify whether property Tax was levied in accordance with the rents paid by Government
offices to the building owners. A register containing Government offices located in private
buildings should be maintained so as to verify whether Property Tax was being levied in
accordance with the rent paid by the Government Offices or not, and in order to prevent
leakage of revenue to the Corporation similarly a register containing Central and State
Government Offices located in their own buildings also needs to be maintained so as to verify
the correctness of levy of Property Tax in accordance with rules relating to levy and collection
of the P.T on Government buildings.

3.PROPERTY TAX ASSESSMENT FILES NOT MAINTAINED- MLs VERIFIED WITH

REFERENCE TO DATA AVAILABLE IN ONLINE

Property tax of all assessments was fixed through MLs in respect of all the new and
additional assessments etc., Elaborate procedure was prescribed to fix the property tax in
Circular instructions issued in Cir.-1 in Roc.No.11646/2006-F1-1 Dated 12-12-2006 of CDMA,
AP, Hyderabad. The measurements entered in the MLs with regard to the buildings assessed
by the Bill Collectors were to be verified by the RI and RO and finally approved by the Addl.
Commissioner and orders to be passed. Though M.L. register produced, the assessment files
maintained, if any, were not produced to audit to verify the correctness of the same. Hence
the same could not be verified. In some cases Building Applications approved on or before
2017 were not available in online.

The MLs were verified with reference to the data available in the Online. While cross
checking the Plinth areas noted in the ML with the Plinth areas approved in the Building
Applications (as noted in the ERP) it was noticed that the built up area was more in ML
register than in the approved Plan. But percentage of U.C. Penalty was not imposed, in some
instances it was less imposed. Hence loss of Revenue occurred to the Municipal Corporation.
Immediate action would need to be taken to enquire into this matter and revise the tax where
ever necessary to recoup the loss occurred so far to this Corporation and report the
compliance to audit.
4.REGISTER OF REVISION PETITIONS AND APPEALS ALONG WITH FILES NOT FULLY
FURNISHED.

The records relating to the revision petitions received and allowed were not fully
produced to audit. Hence it could not be verified in audit whether RP was allowed or not if
allowed whether the same was done in accordance with rules and eligibility or not could not
be verified. Further it was noticed that the window for modification was being allowed and
there was no assurance in audit that RPs allowed by the Commissioner were modified as the
system allows modification of any of the assessments there was scope for misuse of the
facility more so when the DEO was operating all the three logins of the RI, RO and the Addl.
Commissioner. The Executive Authority would need to produce the same to audit for
verification.

5.REGISTER OF REMISSIONS AND WRITEOFFS NOT PRODUCED

The records relating to the remissions and writes off allowed were not produced to
audit. It was not made known as to how much was allowed as remissions and writes off in the
financial year 2022-23. In the absence of the same the quantum of remission and write off
and whether the same was allowed in accordance with the provisions of the Act or not could
not be verified in audit. The same would need to be produced immediately.

6.MUTATION REGISTER NOT PRODUCED

During the course of audit the register containing all the permanent changes made
either by the Commissioner or by the Appellant Authority in the assessment of house and
land taxes after the demand registers for the tax concerned was written up for the year was
not maintained and produced, in the absence of the same whether the procedure prescribed
in arriving at the changes in the assessments were made and recorded properly or not could
not be checked in audit. This important register may be maintained and produced to audit.

7.REGISTER OF BUILDINGS EXEMPTED FROM THE PAYMENT OF PROPERTY TAX - NOT

MAINTAINED
 The register of buildings exempted from payment of property tax up to the year 2022-
23 was not maintained and produced to audit for verification. In the absence of the same, it
could not be ensured in audit whether such buildings were assessed to other taxes/charges
such as water tax, drainage tax and primary service charges etc. Early action would, therefore,
need to be taken to get the register written up and maintained up to date.

8.PROPERTY TAX COLLECTION MADE DURING THIS YEAR - NON-AVAILABILITY OF YEAR

WISE and CATEGORY WISE INFORMATION

During the year under audit it was noticed that for the property tax collections made
by means of online, E-seva, Civic Centre etc., the year wise, category details of the collections
made were not made available for verification in audit. The tax pending collection at the end
of the year 31.3.2023for the year 2022-23 was also not available. If tax was realized in
accordance with the targets, it was possible to undertake developmental works on large scale
by this Municipal Corporation

9.SPECIAL NOTICES ISSUED – NOT AVAILABLE

In case of all the new and additional assessments made during the financial year were
entered in the ERP and the special notices generated should be issued through the bill
collectors concerned. But there was no assurance in audit that all the notices were issued in
time by the bill collectors concerned. The special notice number and the date of issue had to
be entered in the ML at Col.No.45 and 46 respectively but the details were not being entered
in the MLs in majority of the cases. Further the revenue section authorities did not maintain
the copies of the special notices generated. In the absence of the same the correctness of the
procedure prescribed in accordance with the rules were followed or not and the timely
issuance of the notices could not be verified in audit.

Therefore immediate action would need to be taken to maintain all the said registers
and rectify the above defects and report compliance to audit. Else loss if, any, sustained in this
regard would need to be assessed and made good from the person or persons responsible
and credited to Municipal Funds under intimation to audit.
Para no.7.17 Code No.9

ARREAR DEMAND REGISTERS – NOT MAINTAINED – CERTAIN DEFECTS

The arrear demand registers of the following taxes were to be maintained separately
year wise beginning with the earliest year. The ADR was maintained in MF No.22 which
contains 47 columns and they were similar with those Demand Registers. The balance of
those taxes outstanding at the end of the year in the Demand Registers had to be transferred
to this Register were not made available for verification in audit though specific instruction
were issued in Roc No.6238/2015/K3 Dt.28.4.2017 of the Director of Municipal Administration,
AP, Gorantla, Guntur.

1.Property tax

2.Vacant Land tax

3.Water Tax

But the same were not maintained and produced to audit. The following were the
defects noticed

1.The object of writing arrear Demand year- wise, the earliest year at the beginning, was to
know the outstanding balances year-wise and to take action for recovery of taxes avoiding
the taxes becoming time barred.

2.The arrears of Property tax available on the online were detailed here under.

Amount in Rs
Revenue Ward Assessment Balance
No Count Arrear Property Penalty On Current Penalty On
Tax Arrear Property Tax Current
1 3,061 30,28,851 58,27,643 8,46,214 94,665
2 4,089 16,57,025 21,56,397 6,16,037.50 69,603
3 2,361 57,04,027 1,20,94,521 7,35,307 84,882
4 2,539 7,60,59,771 12,21,21,352 1,15,94,814 13,07,279
5 4,207 1,63,16,070 2,03,53,885 45,31,156 4,96,246
6 5,348 20,88,270 20,30,962 14,48,531 1,66,529
7 1,107 4,17,172 4,93,741 2,53,715 26,644
8 841 18,24,356 37,64,971 3,18,799 34,505
9 1,055 4,59,453 6,01,660 2,48,339 27,891
10 670 69,07,136 1,02,76,354 18,99,829 1,62,103
11 10,466 84,20,556 1,27,19,286 23,03,239 2,56,181
12 1,210 2,23,173 2,10,968 1,72,082 19,592
13 954 19,99,082 43,80,542 3,55,864 33,998
14 1,478 57,13,313 91,09,851 14,67,131 1,38,092
15 1,044 9,05,798 7,44,554 7,47,072 78,704
16 957 4,87,959 3,52,734 3,25,776 38,835
 17 915 12,95,899 17,01,405 5,22,069 59,130
18 722 4,51,682 5,01,832 1,49,409 16,119
19 1,143 93,68,125 1,71,38,005 22,40,095 2,36,247
20 620 3,43,745 2,66,182 5,40,304 47,762
21 1,576 15,53,608 11,95,606 3,29,910 32,247
22 2,364 7,38,748 7,55,794 5,65,932 55,688
23 950 2,01,253 3,46,257 70,629 8,170
24 691 4,45,817 5,18,506 1,78,222 19,600
25 2,518 89,01,713 1,87,27,530 8,09,626 98,306
26 790 1,31,774 2,28,290 89,041 8,513
27 2,009 4,84,571 5,31,858 2,56,600 28,700
28 4,464 12,77,539 19,29,143 5,01,570 58,187
29 12,352 61,79,397 59,22,251 36,80,887 4,53,821
30 7,508 1,29,26,523 2,02,11,797 31,52,358 3,47,984
Total 80,009 17,65,12,406 27,72,13,8 4,09,50,55 45,06,22
77 7.50 3

THOUGH ADR OF VLT WAS NOT MAINTAINED THE ARREARS UNDER VLT IN ACCORDANCE
WITH ONLINE IS DETAILED HERE UNDER.

Amount in Rs
Penalty Total
Assessment Arrear Penalty On Current
Name On PropertyTax
Count Property Tax Arrear Property Tax
Current Balance
Revenue Ward No 1 149 78,22,319 1,32,67,823 8,59,634 1,02,570 22052346
Revenue Ward No 2 124 69,23,740 96,91,061 13,58,949 1,54,825 18128575
Revenue Ward No 3 53 43,42,326 49,41,226 7,27,308 86,774 10097634
Revenue Ward No 4 108 88,26,246 1,45,10,555 9,34,757.76 1,12,200 24383758.76
Revenue Ward No 5 57 37,76,325 58,57,110 5,59,093 57,024 10249552
Revenue Ward No 6 714 3,36,29,465 5,96,11,832 33,65,675 3,96,984 97003956
Revenue Ward No 7 21 12,57,575 12,07,169 3,02,052 36,264 2803060
Revenue Ward No 8 18 10,80,734 12,54,802 1,84,558 21,885 2541979
Revenue Ward No 9 31 14,18,950 18,23,320 2,07,776 23,088 3473134
Revenue Ward No 10 27 16,29,994 23,15,641 2,26,184 27,156 4198975
Revenue Ward No 11 426 1,28,70,170 1,99,67,040 18,92,797 2,22,602 34952609
Revenue Ward No 12 31 9,81,253 13,11,275 1,31,606 15,734 2439868
Revenue Ward No 13 26 5,47,401 5,93,595 74,052 8,892 1223940
Revenue Ward No 14 40 43,29,258 50,10,889 5,73,982 68,868 9982997
Revenue Ward No 15 136 65,26,503 1,42,66,893 5,86,260 69,286 21448942
Revenue Ward No 16 22 24,50,358 35,59,201 4,07,074 48,840 6465473
Revenue Ward No 17 13 7,76,516 9,99,148 95,494 11,460 1882618
Revenue Ward No 18 32 19,94,231 27,12,363 2,36,268 28,368 4971230
Revenue Ward No 19 23 6,76,921 7,60,953 1,35,221 16,224 1589319
 Revenue Ward No 20 21 3,77,303 3,42,721 64,762 7,776 792562
Revenue Ward No 21 13 1,37,518 1,18,052 34,378 3,659 293607
Revenue Ward No 22 34 8,23,547 6,92,256 2,49,505 29,958 1795266
Revenue Ward No 23 52 16,63,823 17,82,061 2,84,356 34,107 3764347
Revenue Ward No 24 22 7,60,674 8,83,977 1,19,514 14,328 1778493
Revenue Ward No 26 7 1,75,972 1,72,324 44,602 3,086 395984
Revenue Ward No 27 31 13,78,304 21,40,004 53,596 6,264 3578168
Revenue Ward No 28 26 5,40,724 3,89,393 1,54,626 17,184 1101927
1,351 7,34,02,974 13,94,14,628 88,73,523 10,20,30 222711434
Revenue Ward No 29 9
Revenue Ward No 30 745 4,32,85,226 6,27,42,317 61,85,428 7,26,096 112939067
Total 4,353 22,44,06,350 37,23,39,629 2,89,23,030.76 33,71,811 62,90,40,820.76

But the year-wise details of the Arrear tax pending was not made available in audit.

2. Section 365 of APM Act, 1965 provides time limits to initiate various acts for realization of
tax. The following time limits were prescribed and they refer to use date on which tax
becomes due or liability accrues for payment. The accrual liability is 30 th April in respect of
first half year and 30th October of in respect of Second half-year. The limitation claim for the
three modes of recovery is as follows

Execution of Distraint : 3 Years

Institution of Prosecution : 6 Years

Filing of Civil Suit : 9 Years

It was evident that the assessments appended to this objection were pending from
years together and no action was taken in accordance with the above rules.

3. Cross checking of computer generated data with that of manual registers, as required to be
maintained in accordance with the instructions of the Commissioner and Director of
Municipal Administration, A.P., Guntur could not be done and the correctness of the number
of assessments coming under tax fold could not be ensured in audit.

Immediate action would need to be taken to recover the arrear amount and report
compliance to audit.
Para No. 7.18 Code No.9

ADVANCES – RELEVANT ENTRIES NOT MADE IN ERP – NEEDS ACTION

During the course of audit huge variation was noticed in Annual Account figures under the head
“4605001- Advance to Employees for works” when compare with actual figures in Advance register
under the head Advances as detailed below.
As per Annual As per Advance
Details Account Registers Difference
Opening Balance ₹ 9,65,80,711.00 ₹ 1,20,46,796.00 ₹ 8,45,33,915.00
Advances Given ₹ 31,65,000.00 ₹ 38,45,240.00 -₹ 6,80,240.00
Total ₹ 9,97,45,711.00 ₹ 1,58,92,036.00 ₹ 8,38,53,675.00
Advances Adjusted ₹ 21,25,827.00 ₹ 32,58,422.00 -₹ 11,32,595.00
Closing Balance ₹ 9,76,19,884.00 ₹ 1,26,33,614.00 ₹ 8,49,86,270.00

Though there is a huge variation in the Opening balance, the difference in Advances given and
Advances adjusted occurred due to non-posting of entries in the ERP as explained below.
1. For Advances Given
Vr. No./ Date Details Amount Rs.
493/18.5.2022 Amount paid to Sri K.Virupaksha Rao, AE towards advance 505840.00
payment of Road Taxes of Sanitation Vehicles & Water Vehicles
for the year 2022-23
713/22.7.2022 Amount paid to Sri V.Lazer, Sanitary Inspector towards advance 80000.00
for repairs to fogging machines
960/26.9.2022 Amount paid to Sri G. Dharmaji, towards advance payment for 94400.00
refreshment arrangements to YSR Cheyutha
Total 680240.00

2. For Advances Adjusted

Vr.No. / Date Details Amount Rs.

661/17.6.2022 Advance amount paid to Sri T.V.Cyril, AD, Horticulture in Vr. No.495/18.12. 5000.00
2020 now adjusted
946/15.9.2022 Advance amount paid to Sri D.Rambabu, DCP towards Salary Advance from 668952.00
30.12.2012 to 31.7.2012 during the year 2011-12 and 2012-13 now adjusted
1552/8.2.2023 Advance amount paid to Sri G.V.V.S.Murthy HM, M.C.G.School Church square 31900.00
towards snacks to 10th Class Students in Vr.No.1721/ 26.3.2022 now adjusted
1553/8.2.2023 for Rs.31900/-
Advance amountandpaid
Rs.3750/- remitted back
to Sri P.V.V.Prasad, on MCH
HM, 23.8.2022
School, Recherla peta 8590.00
towards snacks to 10th Class Students in Vr.No. 1722/ 26.3.22 now adjusted
1554/8.2.2023 for Rs.8590/-
Advance and paid
amount Rs.840/-
to Sriremitted back on
P.Narasimha 23.8.2022
Murthy, HM, towards snacks to 10th 45150.00
Class Students in Vr.No.1723/ 26.3.2022 now adjusted for Rs.45150/- and
Rs.4760/- remitted back on 23.8.2022
1555/8.2.2023 Advance amount paid to Sri P.Buchibabu, HM, GMC Balayogi MCH School 9660.00
towards snacks to 10th Class Students in Vr.No. 1724/ 26.3.22 now adjusted
for Rs.8400/- and Rs.1260/- remitted back on 21.7.2022
1556/8.2.2023 Advance amount paid to Sri P.V.Satyanarayana Raju, HM, towards snacks to 18200.00
10th Class Students in Vr.No. 1725/26.3.22 now adjusted for Rs.18200/- and
Rs.4570/- remitted back on 3.9.2022
1557/8.2.2023 Advance amount paid to Smt V. Lalitha Alivelu, HM, MCGH School, Sri Nagar 1380.00
towards snacks to 10th Class Students in Vr.No. 1726/26.3.22 now adjusted
for Rs.1380/-
1558/8.2.2023 Advance amount paid to Sri K.N.V.Prasad, HM, MCH School, Endowments 6930.00
Colony towards snacks to 10th Class Students in Vr.No. 1727/26.3.22 now
adjusted for Rs.6930/- and Rs.660/- remitted back on 23.8.2022
1559/8.2.2023 Advance amount paid to Smt N.V.S.L.Devi, HM, MCH School, Ramanayya Peta 18270.00
towards snacks to 10th Class Students in Vr.No. 1728/26.3.22 now adjusted
1560/8.2.2023 for Rs.18270/-
Advance andpaid
amount Rs.2890/- remitted
to Sri Md. back
Rabbani, on MCH
HM, 23.8.2022
School, Sriram Nagar 6930.00
th
towards snacks to 10 Class Students in Vr.No. 1729/26.3.22 now adjusted
1561/8.2.2023 for Rs.6930/-
Advance and paid
amount Rs.660/-
to Sriremitted back on 23.8.2022
A.Suryanarayana, HM, Mahatma Gandhi MCH 53550.00
th
School, Gandhi Nagar towards snacks to 10 Class Students in Vr.No.
1730/26.3.22 now adjusted for Rs.53550/- and Rs.5100/- remitted back on
23.8.2022
1562/8.2.2023 Advance amount paid to Sri Ch.V.Ramana, HM, Mother Theresa MCH School, 25120.00
Godarigunta towards snacks to 10th Class Students in Vr.No. 1732/26.3.22
now adjusted for Rs.25120/- and Rs.4550/- remitted back on 23.8.2022
1563/8.2.2023 Advance amount paid to Sri S.V.L.Raju, HM, Rajeev Gandhi MCH School, 40000.00
Ananda Bharathi towards snacks to 10th Class Students in Vr.No.
1731/26.3.22 now adjusted for Rs.40000/- and Rs.5080/- remitted back on
23.8.2022
1564/8.2.2023 Advance amount paid to Sri D.Gowri Shankar, HM, SRK MCH School, Tilak 13590.00
Street towards snacks to 10th Class Students in Vr.No. 1733/26.3.22 now
adjusted for Rs.13590/- and Rs.4580/- remitted back on 2.7.2022
1565/8.2.2023 Advance amount paid to Smt J. Subbalakshmi, HM, Smt PSGHS MCH School, 58990.00
Salipeta towards snacks to 10th Class Students in Vr.No. 1734/26.3.22 now
adjusted for Rs.58990/- and Rs.7480/- remitted back on 28.7.2022
1566/8.2.2023 Advance amount paid to Sri N.Nooka Raju, HM, AFC MCH School, Salipeta 13650.00
towards snacks to 10th Class Students in Vr.No. 1735/ 26.3.22 now adjusted
for Rs.13650/- and Rs.1300/- remitted back on 1.9.2022

Total 1025862.00

The following are the defective entries posted.

1.Out of the amount adjusted in Vr. No.712/22.7.2022 for Rs.4,71,220/- an amount of Rs.4,67,480/-
was posted in ERP with a difference of Rs.3,740/-
2.For the advances sanctioned in Previous years, unadjusted advance amount was paid in the
previous year but the adjustment bills were produced during the year as detailed below. Hence the
remitted back cash amounts Rs.1,02,993/- could not be seen in this year General Ledger.
 Vr.No.& Date in Amount Adjusted & Amount remitted back as
which advance Posting made Rs. Cash in the previous year
adjusted Rs.
391/5.2022 49,800.00 200.00
209/4.2022 4,97,207.00 2,793.00
322/27.4.2022 1,94,200.00 Rs.1,00,000.00 in 2021-22
& Rs.5,800.00 in 2022-23

Thus for the advance adjusted amount of Rs.10,25,862/- for which postings not made in
ERP, the amount of Rs.1,02,993/- and Rs.3,740/- as explained above aggregating to Rs.11,32,595/-
shown as difference with figures in Advance Register.
The matter was brought to the notice of the Executive Authority through Lr. SA No. 29 /
Audit-2022-23/ Dt 20.10.2023 of this office but no reply was received till the close of audit.
Hence I request you to rectify the above defects and also explain the difference in the
Opening and closing balance amount to audit.
Para no.7.19 Code No.9

NON-AVAILABILITY OF REGISTERED TITLE DEEDS OF ASSETS HELD BY THE MUNICIPAL

CORPORATION, KAKINADA
The Andhra Pradesh (AP) Municipal Asset Management Manual lay down the provisions (Para
2.49) for Maintenance of “Town Survey Land Register” with details of types of land, survey
number, patta land or government land and extent of land and its usage. Further, in
accordance with Para 4.10 of the Manual, the land holdings should be verified by an
inspection of the original title deed to ensure that land described therein covers all the lands.
Asset register was to be maintained in ULBs in order to achieve certain objectives such as
protection of municipal assets from encroachments, to have social control over municipal
assets, acting as a deterrent for illegal registration of municipal assets and providing
awareness among public for protection of municipal properties.

The Corporation had prepared provisional municipal asset inventory as of 1 st April 2009
covering all immovable assets with historical cost and movable assets on actual cost of
acquisition. Scrutiny of Inventory register in respect of land details revealed the following

1. In accordance with the land details, the Corporation had acquired land through gift deeds
from various organisations/institutions during the period 1960 to till date. The market value
of land (as of 1st April 2009) at the FOBS was assessed at Rs. 442, 40,57,210. However, the
Corporation was not having the title deeds/ registered documents in the name of the
Commissioner/Corporation for the land value worth of Rs.392,25,78,551. In the absence of
title deeds the assets are prone to unauthorised occupation/ encroachment and illegal
registration and the Corporation cannot claim any right on the land if questioned in any court
of law.

2. Most of the assets which do not have the title deed were received from private parties as
gift deed. If the fact of non-availability of gift deeds comes to the notice of heirs of donors,
there is a possibility of claiming the asset in their favour. The details of the same are enclosed
in the Annexure appended.

3. The lands gifted from various sources were kept largely (except where schools, commercial
complexes, market places and stadium etc. were built) without any use.

4. The assets were valued in April 2009 and thereafter the assets added/deleted from the
inventory were not identified. Further, the present asset valuation of all the existing assets was
not done to arrive at the current market price and also the present status of land.

Therefore immediate action would need to be taken to update the Register with
the assets added/deleted with detailed remarks, the present Market Rate will be adopted
while arriving at the valuation of the existing assets along with present status of land and
produce the same to audit.
 Annexure
Sl Location of the Asset Survey no Area Current Value Mode of
no (yards) of the Asset Acquisition
as on the
date of FOBS
in Rs
1 Dwaraka Gardens TS no: 13/1, Block no:4, 4,356 1,96,02,000 Gift deed
ward no 2
2 Vidyanagar, Ramanayyapeta 112/1 2565.20 1,15,43,400 Gift deed
3 Cheedilapora 195,199,211,81,80 2274.80 1,02,36,600 Gift deed
4 SaradaNagar, 96/8,97/1 1810.16 81,45,720 Gift deed
Ramanayyapeta RTC colony
East
5 Ramanayyapeta (Behind 195,199,211,81,80 2032.80 91,47,600 Gift deed
Stadium)
6 Padmanagar 98/part 3436.40 1,54,63,800 Gift deed
7 Near Sashikanth nagar 218/P 837.32 37,67,940 Gift deed
8 Ramanayyapeta Near RTC 103 part 2226.40 1,00,18,800 Gift deed
colony
9 Near VS Lakshmi college 219/4,225/3,4,5 1500.40 67,51,800 Gift deed
10 Nil 86/2 251.68 11,32,560 Gift deed
11 Revised for 101/89 216/2 12,487.20 5,61,92,400 Gift deed
Sasikanthnagar
12 Godarigunta, TS no: 22/3, block 6, ward 2 3896.20 1,75,32,900 Gift deed
Atchyutaramanagar
13 Ram Mohan Raja Nagar TS No 129/8, 130/part, 4,259.20 1,91,66,400 Gift deed
ward 2, block 10
14 SastryNagar, Godari gunta 212/1,1/1 6872.80 3,09,27,600 Gift deed
15 Suresh Nagar 213/2, 225/2,3 12,293.60 5,53,21,200 Gift deed
16 Kotha Kakinada 126/1,ward 2, 919.60 41,38,200 Gift deed
17 Near Kotha Kakinada Ts no : 126/5,6, 127/part 1113.20 50,09,400 Gift deed
18 Godari Gunta Harijana Wada 2254/4A 484.00 21,78,000 Gift deed
19 Godarigunta Near 3 temples 234/P 1790.80 80,58,600 Gift deed
20 Godarigunta Harijanawada 2254/4B part 363.00 16,33,500 Gift deed
21 Near Tyagaraju Nagar 3 RS no: 233/ 2P, SR Peta 1742.40 78,40,800 Gift deed
temples
22 Near Tyagaraju Nagar TS no: 130/1A,1C part, 1113.20 50,09,400 Gift deed
Akshara School road Block 10, ward 2
23 Akshara School road TS No: 127/3C, ward 2, 1210.00 54,45,000 Gift deed
block 10
24 Godarigunta 3 temples 233/2 Part 1064.80 47,91,600 Gift deed
25 Rama Mohan Raja Nagar 52/3 A, Ward 2, Block A 484.00 21,78,000 Gift deed
26 Radha Nagar 40 buildings 40/2AP,2/BP 3194.40 1,43,74,800 Gift deed
27 40 buildings TS NO: 240/2A part RS no 1452.00 65,34,000 Gift deed
324
28 Bhaskar nagar TS No: 2258,2256/2B 3,533.20 1,58,99,400 Gift deed
29 Santhi Nagar 2260/3,2261/3,2262/3Aand 12,196.80 5,48,85,600 Gift deed
48,48/1
30 100 buildings TS no 9/1 part 3,388.00 1,52,46,000 Gift deed
31 Perrajupeta TS NO 153/2, Block 1210.00 54,45,000 Gift deed
14,ward 2
32 Burma Colony (pattas issued) TS No: 142/part, 145/part, 6582.40 2,96,20,800 Gift deed
Block 12, ward 2
33 Samba Murthy Nagar (Dairy TS no: 137, Block 11, ward 580.80 26,13,600 Gift deed
farm Mpl Elementary School) 2
34 Samba Murthy Nagar TS no: 1996/1,W2,B10 1776.28 79,93,260 Gift deed
35 Mpl Employees lay out (water 134/1,W2, B10 3,146.00 1,41,57,000 Gift deed
tank)
36 Ayodhyanagar 12/7/P,128/6 1403.60 63,16,200 Gift deed
37 Ayodhyanagar TS no: 128/P,W2,B10 2032.80 91,47,600 Gift deed
38 Mpl Employees Lay out Dairy TS no: 134/3,W2,B10 1790.80 80,58,600 Gift deed
farm
39 Venkateswara Nagar Behind TS no: 1963/9,W2, B42 2129.60 95,83,200 Gift deed
ESI
40 Prathap Nagar Water Tank 99,101, GSR peta 968.00 43,56,000 Gift deed
41 Prathap Nagar Water Tank 95/4,100 1548.80 69,69,600 Gift deed
42 New Red Cross Building RS no 52 1,089.00 49,00,500 Gift deed
Prathap Nagar
43 Chako Gardens 47/3 333.96 15,02,820 Gift deed
44 Prathap Nagar Northern Side Rs NO: 49,58 to 60 997.04 44,86,680 Gift deed
45 Treasury colony West 91/23 1258.40 56,62,800 Gift deed
46 Janaki Ram Nagar 61/part,65/part 1771.44 79,71,480 Gift deed
47 Srinivasa Nagar Bank colony, 211 3,726.80 1,67,70,600 Gift deed
prathap nagar Road
48 Narasanna Nagar ZP Guest 164 to 175,88 7,163.20 3,22,34,400 Gift deed
House
49 Near Madhura Nagar new TS No: 186/2,w29, B62 266.20 11,97,900 Gift deed
pickle factory
50 LB Nagar South RS no: 153/part 225.06 10,12,770 Gift deed
Total 60,81,73,830
Para no. 7.20 Code No.9

SOLID WASTE MANAGEMENT COULD NOT BE IMPLEMENTED DUE TO NOT OBTAINING

OWN SITE FOR COMPOST YARD FROM REVUENUE DEPARTMENT IN LIEU OF TRANSFER
OF MUNICIPAL LAND OF 0.47 CENTS TO REVENUE AUTHORITIES- LOSS TO MUNICIPAL
ASSET

The Spl.Officer of the Kakinada Municipal Corporation has passed resolution no.39 Dt.
6.11.2010 to transfer the Municipal Travellers Bungalow land of Ac 1.15 Cents at T.S.No.4 to
the Revenue Department in lieu of land previously allotted to Municipal Corporation at
Toorangi Village (Ac 29.93) for compost yard. The said land which was stated as acquired was
not in the control of this Corporation for which reasons were not explained in audit. After a
long silence of nearly three years correspondence with Revenue authorities was again started
in the year 2013.

Instead of acquiring the land at Toorangi village which was below 10Km to the
Corporation limits, the Corporation requested the Revenue Divisional Officer, Kakinada
through Lr Roc No.3053/2013/G2 Dt.1.7.2013 to alienate the identified site of Ac 29.00Cnts of
Gollakonda Poramboku land at Chendurthy village in Gollaprolu Mandal which is more than
40Kms from Kakinada for dumping yard after expiry of nearly three years from the date of
handing over of the municipal land.

The District Collector, Kakinada in Proceedings Roc No. E2/1242/2008 Dt.20.12.2013

directed the Tahsildar, Gollaprolu Mandal to hand over the advance possession of land (Acres
25.003Cnts) in Sy. No.1/1 of Chendurthi Village in Gollaprolu Mandal which was classified as
Government Hill Poramboke for establishment of dumping yard duly marking boundaries.
The Commissioner was requested to execute the work after the land was handed over to
Corporation. In accordance with the directions of the District Collector, the Tahsildar,
Gollaprolu handed over the said land to the Municipal Commissioner on 21.12.2013.

However, audit noticed that the dumping yard work could not be taken up due to
objections from public and people’s representatives.

After two years from the date of handing over of land at Chentdurthi Village, the
Commissioner, in his letter Roc No.3053/2013/G2 Dt.10.3.2015 requested the District
Collector to alienate the land to an extent of Ac20.00 cents Government land at beach road
for establishment of Scientific Compost Yard and other ancillary units. The Commissioner
further requested in his letter Dt. 12.11.2015 to cancel the land allotment at Chendurthy
village and allot another suitable land of Ac’s 20-25 for dumping yard within 10-15 Km
distance as it is essential to implement the Solid Waste Management (SWM) Rules. But no
reply was received from the Revenue authorities regarding that land at beach road.
 Audit further noticed that Dist. Collector in REV-ESECOALN (ALN)/82/2016-SA (E2)-
CLO-EG Dt.1.3.2017 directed the Commissioner, Kakinada Municipal Corporation and
Commissioner Peddapuram Municipal Council, to submit the requisition for alienation of the
Government Land to an extent of Ac11-00 Cents in S.No.897/2 of Peddapuram Village in the
limits of Peddapuram Municipality for the purpose of dumping yard for both the ULBs. But
the Commissioner of this Corporation through his Lr. Roc No.3053/2013-G2 Dt.5.4.2017
requested the Dist. Collector to allot the said Ac11-00 Cents to Kakinada Corporation only
and submitted the requisition for alienation with a request to issue necessary orders. But the
reply in this regard received from the Collector was not made available to audit.

Meanwhile based on the circumstances reported by the Collector and Dist. Magistrate,
East Godavari Dist.Kakinada in Lr. Roc NO.5599/2017-G2 Dt.2.2.2018, Govt in G.O. Rt.No.221
MA&UD Dept. Dt.5.3.2018 accorded permission to the Collector and Dist. Magistrate,
E.G.Dist., Kakinada to acquire private land to an extent of Ac7.04Cnts (i.e. Ac1.17+5.87)in
SY.No.24-1 of Jaggammagari pet(V) of Samalkot Mandal at Rs.25,00,000/- per acre from Sri
Bikkina Venkateswara Rao and Smt Gunnam Malathi Devi for institution of Compost Yard on
permanent basis in Kakinada Municipal Corporation duly meeting 50% funds from Kakinada
city MLA constitutional Development Funds and the remaining 50% funds from Kakinada
Municipal Corporation General Funds. It was also directed by the Collector, that the
Commissioner may take necessary action accordingly. But the action taken on this issue was
not informed to audit.

Hence it was concluded in audit that-

1. Even after completion of more than 15 years from the date of implementation of Solid
Waste Management, the Municipal Corporation could not identify the land for disposal of
waste scientifically.

2.The waste generated from the town was dumped illegally at Port area (Railway land) without
obtaining permission from A.P Pollution Control Board and also without processing and
thereby causing land, water and air pollution.

3. The land Ac1.15 Cents belonging to this Corporation was handed over to the Revenue
Department without taking approval of the Government in accordance with Section 148(3) of
GHMC Act

4. Though single cent of land shown as Possessed (Neither Ac 29.93 at Toorangi Village of
Kakinada Rural Mandal nor Ac 25.00Cnts at Chendurthi Village of Gollaprolu Mandal) is in the
control of Municipal Corporation, Kakinada in lieu of transfer of this Corporation land Ac1-15
Cents, this Corporation has failed to get or even requested any compensation from the
Revenue Department till date.
5. Due to abnormal delay in proper identification of land for years together, the wastage is
being dumped on the road side of the beach causing environmental pollution and causing
health hazard to people.

6. This Corporation is rapidly developing city in several aspects. Density of the population has
been considerably increasing for the past few years owing to migration of people from rural
areas who are seeking better employment opportunities due to establishment of various
industries around Kakinada City. Residential Complexes/ Apartments were being developed
where ever suitable location is found there by Garbage generated daily in the house holds
increased enormously. Due to no permanent Compost Yard, the garbage would be dumped in
low lying areas causing severe problems and unhygienic conditions of the places where
garbage was being dumped particularly in low lying area. Hence there is a dire necessity of
Permanent Dumping Yard in this Corporation as the Government has already proposed for
construction of SWM projects like Bio-methanization plants to process daily generated
garbage and to convert Waste in to Energy.

7. Ac 12.00Cnts of land which was being used by this Corporation for the purpose of dumping
Garbage for the last 10 years belongs to Department of Ports. Further the very important
roads in this Corporation i.e., Kalpana Junction to Kumbabhishekam and Dairy Farm Junction
to Port Railway Station belongs to Department of Ports are in very bad stage as the said
Department is unable to maintain them. If the Corporation authorities have taken any follow
up action basing on the proposal of the Dist. Collector and Spl. Officer on 9.2016 requesting
the Director of Ports, Kakinada to hand over the said Ac12.00Cnts to Corporation and in
exchange the Corporation will maintain those important Roads, the problem of construction
of Scientific Dumping Yard will be solved.

When the same was pointed out in audit, the authorities have stated that proposals
were submitted to the Dist. Collector to return the balance site of 0.66 Cents which was not
utilised from out of the site of Ac1.15 Cents handed over to Revenue Authorities. Action is
being taken to possess the suitable land for dumping yard.

Immediate action would need to be taken to get compensation from the site of Ac
0.50 Cents site handed over to the Revenue Department besides obtaining the Ratification
orders from the Government for disposing the site. Further constructing permanent dumping
yard without further delay and report compliance to audit.
Para No. 7.21 Code No.9

COMMENTS ON ANNUAL ACCOUNT IN ACCORDANCE WITH THE PROVISIONS IN

APMAM

1) NON MAINTENANCE OF REGISTERS PRESCRIBED IN THE MANUAL

The APMAM prescribed maintenance of certain registers and forms. The formats of the books,
registers and forms referred to in Table 4.1 of Chapter 4 of APMAM need to be maintained.
But it was observed that all the registers and forms were not maintained during the year
2022-23 contrary to the instructions contained in the manual. The registers and forms would
need to be maintained and produced to audit for verification of annual account along with
the registers.

2) NON-IDENTIFICATION OF MANY ASSETS

Many assets were not identified in spite of pointing out relevant objections in the
FOBS verification report. The Executive Authority of the ULB ought to have shown much more
interest in identifying valuable assets and taken steps to include the same in the Balance
Sheet.

3) ADVANCE COLLECTION OF D&O TRADE FEES INCLUDED IN THE I&E STATEMENT

The convention in the ULBs with regard to the collections of D & O trade fees was to
collect the same in advance for the subsequent year i.e., before February of an year. The
collections made after February are to be made along with collection of belated fees. The
advance collection made shall be kept under deposit for that year and adjusted to General
funds in the subsequent year. But during the course of verification of account it was noticed
that the said distinction was not observed and the collections made were not classified based
on the year to which they pertain. As a result of which the entire amount collected was
reflected as income in the Income and Expenditure statement for the year 2022-23 though
the income actually pertains to the subsequent year 2023-24. The correctness of the Income
and Expenditure statement to that extent suffered due to the above defect pointed out.

4) SOME OTHER MATERIAL OBSERVATIONS

1. As verified from the Schedules enclosed to the ‘Income and Expenditure statement’, it
was noticed that the amounts relating to the ‘previous year’ were not furnished.
2. As verified from the Schedules enclosed to the ‘Balance Sheet’, it was noticed that the
details of ‘additions’ and ‘deletions’ during the year 2022-23 were not furnished.
3. Statement of cash flows (a summary of ULBs cash flow for the period from 1-4-2022
to 31-3-2023) was not furnished.
4. Financial performance indicators were not furnished.
5. Financial ratios were not calculated and produced.
5) FIXED ASSETS REGISTER NOT MAINTAINED

The A.P. Municipal Asset Valuation Methodology Manual provides for maintenance of
Fixed Assets Register for 11 categories of assets and formats were prescribed in Annexure-6
and in accordance with instructions the register has to be maintained updating the details of
acquisition/construction/improvement of assets for each particular year. But it was noticed
during audit that no such registers have been maintained under certification by the
competent authority for the years 2009-10 to 2022-23 duly incorporating the assets identified
in FOBS/rectified FOBS.

No effort has been made either to maintain Fixed Asset Register as part of preparation
of annual account in the year 2022-23 and no updation was recorded by capturing the
additions/deletions during the year 2022-23 in the annual accounts for the year 2022-23.

Non maintenance of the important Asset register by the ULBs having significant and
valuable assets impairs the asset management system and proper watch on the cost of the
assets/improvement to assets would not be possible.

6) LACK OF FINANCIAL DISCIPLINE:

As verified from the Income and Expenditure statement for the year 2022-23 the
income ran into deficit which shows that the ULB was spending more than the income for the
year 2022-23. There is every need to exercise restraint on expenditure to limit the same well
within the income for an year.

7) NOTES TO ACCOUNTS NOT ENCLOSED TO FINANCIAL STATEMENTS

The Notes to accounts comprising of the statement of significant accounting

principles followed by the ULB in respect of accounting for its transactions and its preparation
and presentation of the financial statements, statement of contingent liabilities representing
obligations relating to past transactions and claims against the ULBs which were contingent
on the happening of future uncertain events, subsidy report in accordance with the provisions
of the Act and Rules governing the ULBs and instructions of the Government in respect of
certain services along with many other disclosures like details of honorarium paid to
mayor/chair person, amount of refunds, remissions and writes of etc., were not enclosed with
the financial statements and in the absence of the same the annual account prepared could
not be analysed fully during the course of audit.

8) REVENUE EXPENDITURE VIS-A-VIS CAPITAL EXPENDITURE

It is the object of any institution to contain the revenue expenditure well within the
revenue income. But in case of this ULB the revenue expenditure was allowed to shoot up
more than the revenue income. Excess of revenue expenditure might have been met from
capital income or by borrowings. This is disclosing the financial ill-health of the ULB. Urgent
steps would need to be taken to contain the revenue expenditure well within the revenue
income.

9) RECONCILIATION PROCEDURES NOT OBSERVED:

A.P.M.A.M., prescribed reconciliation procedures with an objective to ensure that the

accounting information is recorded at more than one place, there are no discrepancies
between the different sets of records. The procedures include the following.

a) Bank reconciliation: aiming at reconciliation of bank, treasury balances with cash book
balances.

b) Inter Unit reconciliation: intending to identify the disputed/un accepted inter unit
transactions and to take appropriate action for rectification which is necessary in the process
of consolidation of ULB at the head office level as the balances of inter unit account balances
shall be nullified.

c) Reconciliation of Deposits: Aiming at reconciliation the balance of EMD/SD etc., and any
other deposits received by the ULB. The reasons for differences shall be identify and
rectification entries passed whenever required by the section concerned.

d) Reconciliation of receivables and collections: The receivables and collections shall be

reconciled on a quarterly basis or such other shorter time intervals, however the procedure for
reconciling outstanding balances of receivables and collections of all kinds of receivables
namely viz., property tax receivables, Water tax receivables etc., is the same.

e) Reconciliation of Advances given: Advances given shall also be reconciled on a quarterly

basis including advances given to employees of ULB, sections of the ULB and contractors and
suppliers.

Further A.P.M.A.M. envisaged reconciliation of loans taken, reconciliation of payables,

reconciliation of ledger balances etc., also.

But during the scrutiny in audit it was observed that these procedures prescribed were
not followed and no reconciliation statements were enclosed to the final accounts, in the
absence of reconciliation of receivables and collections the balances shown as either
receivable or collected could not be held to be correct. Urgent steps would need to be taken
by the Executive Authority to cause preparation of the reconciliation statements in
accordance with the instructions of the A.P.M.A.M.

10) MIS-CLASSIFICATIONS

Instances of misclassifications are many and some of the misclassifications may have
material effect in reflecting the true and fair view of the accounts so prepared.
Para No.7.22 Code No.9

IMPLEMENTATION OF SWM RULES 2016 – NON-FURNISHING OF RECORDS.

In Supersession of Municipal Solid Waste (Management & Handling) Rules, 2000, Government
of India has issued (April 2016) Solid Waste Management Rules 2016 to be implemented by
all Urban Local Bodies. The State Government directed (June 2016) all the ULBs to take
immediate action for implementation of the Rules 2016.

Under Rule 15 of Solid Waste Management Rules, 2016; the duties and responsibilities of
Urban Local Bodies were specified. The State Government asked (January 2017) the ULBs, the
compliance report On implementation of sub-rules of Rule 15 i.e., 15(c ), (e), (h), (i), (x), (y), (z),
(zf), (zj) & (zk) within one week and also asked to furnish the Annual Reports by 30.4.2017.

However, the details of implementation of SWM Rules 2016 and compliance of Government
directions issued in January 2017, were not forthcoming from the records.

When requested, the Municipal Corporation had not furnished the following information for
scrutiny towards implementation of SWM in the ULB.

Rule No. Duties and responsibilities of ULB Information required to audit

15(a) Prepare a solid waste management plan as Solid Waste Management plan prepared in
per state policy and strategy on SWM accordance with state policy.
within six months from the date of
notification of state policy and strategy
and a submit a copy to respective
departments of state Government

15(b) Arrange for door to door collection of (i) details of number of households existed in
segregated solid waste from all KMC
households including slums and informal
(ii) Whether segregation of waste is done at
settlements, commercial, institutional and
source
other non residential premises.
(iii) achievement of door to door collection of
segregated solid waste
15(c ) Establish a system to recognize It may please be stated whether the
organizations of waste pickers or informal Municipality has identified any organizations of
waste collectors and promote and waste pickers for their participation in SWM. If
establish a system for integration of these identified, the details may be furnished.
authorized waste pickers and waste
collectors to facilitate their participation in
SWM including door to door collection of
waste.