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1 Public Disclosure Authorized Officeof the Director General of Audit (Central Expenditure) T~IM Z, ~4 tt# Indraprastha Estate, New Delhi Z-TW /No Ivn-/-9/3T.1 /T.3r /l7 f sii~ Dated/: 13 2r Public Disclosure Authorized a r r 14SEP 2011 #t z&ft-r, 4 ft#-ii10001 t~c ab~mtørlr rr%cr wietzr miswndfirg šmrtii w iu ~2r 3U9CrT sra-1t wrf~wvt (NCRMP) (;Tt-F.% r4772- t -qt ýtmnr4rm w-\-rt)przr Public Disclosure Authorized fr T Wrrt fk Ww r f ~t f~ t wflr zw1em -cd * wti rd #3 r ftt wtt*w t1w 1t W 3I i w rr af r r (g. -3) Public Disclosure Authorized atgien fkr E... *RfM ø49

2 Draft Inspection Report of World Bank assisted National Cyclone Risk Mitigation Project (NCRW) IDA Credit No IN, 5413-IN and 5693-IN under National Disaster Manig ment Authority, Ministry of Home Affairs for the period Part I (A) 1. Introduction The audit of National Cyclone Risk Mitigation Project (NCRMP), a project of National Disaster Management Authority, M/o Home Affairs, World Bank assisted IDA Credit No IN, 5413-IN and 5693-IN was conducted by an audit party comprising Shri. R. K. Sharma, Audit Officer, Sh. P.K. Bhardwaj, Supervisor, Sh. R. Makhija, Supervisor and Sh. Ram Prakash, Sr. Auditor of this office from to (07 working days) of the Office of the Director General of Audit, Central Expenditure, New Delhi. Last audit of the Project for the period was conducted from to (09 working days) 2. General Set-up and Activities NCRMP has been drawn by Government of India with a view to deal with mitigation of effects of cyclontis in ur country with World Bank assistance. The overall objective of the project is to minimize the vulnerability to cyclones and make people and. infrastructure disaster resilient in harmony with the conservation of the coastal eco-system in the cyclone hazard prone States and Union Territories of India. The project has identified 13 cyclone prone States/UTs. Andhra Pradesh and Odisha are part of Phase-I of the Project with NDMA being nodal authority. It has four principal components A. Early warning dissemination to coastal communities including community capacity buildingifor operation of Early Warning Dissemination System (EWDS) B. Cyclone Risk Mitigation Infrastructure C. Technical assistance for cyclone risk mitigation capacity building and knowledge creation D. Project management and implementation support and unallocated 10 per cent of total cost.

3 Project and Finance Agreement for Phase-I (IDA credit no.4772-in) was signed on 14t January 2011 with an outlay of Rs crore. The project is proposed as a centrally sponsored scheme with 75% contribution (for Component B of the project) by the Central Government, as Grant-in-aid and a matching 25% contribution by the State Governments. Other components will be funded 100% by the Central Government, as Grant-in-aid. Additional financing under NCRMP phase-i (IDA-Credit no.5413-in) was approved by the Government of India in July 2015 for the states of Andhra Pradesh and Odisha with closure by October Total outlay under additional financing is Rs.835 crore which includes Rs crore credit from the World Bank and 25 per cent contribution from state governments totaling Rs crore under Component-B on the same lines as in the NCRMP phase-i. Further, Phase-l of NCRMP (IDA-Credit no 5693-IN) was approved in July 2015 for five years up to March 2020 covering states of Goa, Gujarat, Karnataka, Kerala, Maharashtra and West Bengal at an outlay of Rs crore. World Bank funding amounts to Rs crore and Rs crore would be contributed by the state governients. The subcomponent of underground. cabling has been included under NCRMP Phase-II (tinder component -B) At the highest level there would be a National Steering Committee headed by Secretary, NDMA for overall monitoring of the NCRMP. NDMA will be responsible for the overall management and coordination of the project. The implementation of activities and procurement of goods for specific components will be undertaken through NDMA, NIDM and concerned State Governments. Disbursement by World Bank is made on the basis of quarterly interim unaudited finance reports (IUFR) submitted by PMU after consolidating [UFR received from States/I nstitut ions.

4 3 Financial Position: Budget provision and actual expenditure incurred by NCRMP during is as follows: - (Rs. in lakh) Head. Budget Provision Actual Expenditure 2245-NCRMP Internal Audit The internal iudit of the PMU for the year and had not been conducted. Part-I C Persistent irregularities Nil

5 PART-II AUDIT FINDINGS Part-fl (A)-Significant Audit Findings -Nil- Part-I (B) - Other Incidental Findings Para-1 Delay in finalization of Post disaster needs assessment (PDNA) National Institute of Disaster Management (NIDM) made an agreement with M/s. Asian Disaster Preparedness Centre (ADPC), Thailand for Post Disaster Needs Assessment (PDNA) study under NCRMP on 15 January 2014 for 18 months at an outlay of $ 5,05,740. The study involved 12 deliverables. The study was extended up to 30 October 2015 on the ground of 'time taken for doing multiple rounds of review of Technical Steering Committee (TSC), NIDM and then for subsequent incorporation of comments provided, in order to improve the quality of deliverables for meeting the conditions set in contract signed for the study. The agency again asked for the extension of contract for two months, i.e. up to 31 December 2015 which was granted to them. Further, it was noticed that there were few left over activities under the project were yet to be achieved, therefore, an extension of the project was granted to agency up to 31 December The project was again extended up to January The agency had been given 65 per cent of the payment. Audit noticed that study had been completed in January 2017 and has since been approved by TSC with the observations that some of the deliverables need to be taken up and finalized by NIDM. Further, there should be a mid-term review of the project by the steering committee, NIDM and NIDM has to conduct pilot testing of the PDNA tools in one of the disaster affected areas. This has not been done as of August NCRMP stated (August 2017) stated that Pilot training was to be conducted in one of the disaster affected state at the district level with mutual consent between NIDM and consultant, based on the availability of the fund and justification. Such activity requires approval of state government affected during disaster also. Since this activity was beyond the contract and necessary dissemination/awareness about PDNA developed tool was done by conducting three regional trainings, hence pilot testing was not felt at that stage.

6 A at4a ) I CialtilL VuugCI1"g Circulars issued by the Miristry of Finance every year stipulate that due note should be taken of past performance; #hile framing the budget estimates, and at the stage of formulation/implementatiopi of the various schemes, the institutional capacity of the implementing agencies to implement the scheme, the constraints on spending by the spending agencies etc. Head-wise budget and expenditure figures for showed that PMU made excess provisions under the following sub-heads, which had ultimately resulted in large savings at the end of the year:- (Rs in thousands) Heads Revised Expenditure Savings Savings Estimates (%) 2245 Foreign Travel 10 Expenses Other Admn. expences Other charges Grant-In-Aid General Revised estimates were not prepared prudently, which attributed to savings ranging 66 to 100 per cent savings in above mentioned heads. The large savings in the aforesaid heads are indicative of over-estimation of the requirement of funds, poor contract management and lack of an internal control system. NCRMP stated (August 20.17) that reasons for the saving as no foreign tours were conducted during the year. Para 3 Delay in implemeotation of project National Cyclone Risk Mitigation Project (NCRMP) had been drawn up with a view to address the cyclone risk in the country, with the World Bank assistance to reduce the cyclone risk and its vulnerability in the coastal districts. Phase-[ of the project would be implemented over a period of five years w.e.f January 2011 to October 2015, which was extended up to March First phase was to be implemented in the states of Andhra Pradesh and Odisha. Audit noticed that under Phase-I, in Andhra Pradesh, out of 138 Multipurpose cyclone shelters (MPCS), 129 have been completed and 06 are under execution.

7 Phase4- approved in July 2015 for five years up to March 2020 with an outlay of Rs crore in the states of Goa, Gujarat, Karnataka, Kerala, Maharashtra and West Bengal. The status of physical progress as on 30 June 2017 is as under; SI. Component Gujarat West Bengal no To be Awarded Completed To be Awarded Completed/ constructed constructed Under execution I Cyclone Completed Completedshelter 10 Nil Under Under execution- execution (4 sites dropped due to Non availability of land) 2 Roads km km km The details of fund released and expenditure in the states under Phase-ll as on 30 June 2017 is as under (Rs. in crore) State Release Expenditure Unspent Unspent Percentage Goa Gujarat Karnataka Kerala Maharashtra West Bengal From the above it is evident that unspent amount ranging from 36 to 97 per cent is lying with the states. The reasons attributed for the delay was that remaining states of Goa, Karnataka, Kerala and Maharashtra are in the process of finalization of sites, environment clearance, DPR, etc. NCRMP stated (August 2017) that the status for Phase-il states of Goa, Kerala, Karnataka and Maharashtra was as per review done up to 30 th June 2017.

8 Para 4 Theft of toners Audit noticed that six toner cartridges valued Rs. 17,366 had been stolen in the month of March The FIR was lodged (March 2017) in Sarojini Nagar Police Station. The investigation report is still awaited. In this regard it is stated that final action may be intimated to audit. NCRMP stated (August 2017) that, necessary action would be initiated after receipt of Investigation Report from Police. Para 5 Non-conduct of Internal Audit An effective system of internal audit is essential to safeguard against errors, double payment and irregularities in functioning of the Institute. Greater effectiveness of internal audit often translates into greater efficiency and more effective utilization of resources in administration. The position of expenditure of the PMU during last three years was as under: (Rs in lakh) Si. Year Actual expenditure No Despite having such heavy expenditure, no internal audit of the PMU had been conducted by for the year and to check the transactions maintenance & proper observance of rules and regulations issued by the Govt. of India from time to time. Audit is of the view that the necessity of internal audit as such cannot be underestimatedlignored. The PMU may take necessary steps to get the internal audit conducted under intimation to Audit. In this regard Half margin Q6 dt was issued and PMU had accepted the facts.

9 Part-Il Position of paras settled and outstanding At the commencement of audit, 02 Inspection Report with 07 patas were pending for settlement. During the course of audit, 04 paras were settled/ taken afresh. Hence, at the end of audit 02 Inspection Report with 03 paras was outstanding. The position of paras settled and outstanding is given below: Annex-I List of paras settled/taken afresh SI. Year of, Para No. I No. Remarks Delay in finalization of PDNA Taken afresh Scope of work reduced without Tripartite Para settled I_ Iapproval Non-achievement of targets under Phase-I Para settled Unrealistic budgeting Taken a fresh Annex-II List of paras outstanding SI. Year of Para No. IR No. Brief Remarks Outstanding UC Replies furnished by the PMU were not upto date. The current status in this regard may be furnished Reimbursement of expenditure from Replies furnished by the world bank PMU were not upto date. The current status in this Delay in implementation of Early regard may be furnished Reply not furnished. Warning Dissemination (EWDS) System

10 nf t1% 1 V BEST PRACTICES Nil PART V ACKNOWLEDGEMENT The following officers have held the charge of the respective posts during the period of audit: Name Designation Period Sh. R.K. Jain Member NDMA to Ms. Mamata Kunclra Project Director to Sh. S. S. Jain Dy. Project Director to Ms. Amarpali Dikhit Assistant Advisor to Sh. Ashok Sarkar Administrative officer to Office of the Director General of Audit, Central Expenditure, New Delhi acknowledges the cooperation extended to audit by the officers/officials of National Cyclone Risk Mitigation Project (NCRMP), New Delhi.

11 The general condition of the accounts of the National Cyclone Risk Mitigation Project (NCaMP), M/o Home Afairs, financed under World Bank IDA Credit No IN, IN and 5693-IN for the period was found to be satisfactory subject to the observations made in the itnspection report. Inspection report has been prepared on the basis of informatipn furnished and made available by the Nationial Cyclone Risk Mitigation Project, New Delhi. Office of the Director General of Audit, Central Expenditure, New Delhi disclaims any responsibility for any misinformatiorl and/or nor-information on the part of the auditee. Sr. Audit officer (AMG-III)