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NORTH DELHI MUNICIPAL CORPORATION

INTERNAL AUDIT DEPARTMENT/SPZ
M.C.PRY SCHOOL, RAM NAGAR
SADAR PAHAR GANJ/NEW DELHI

No. F.______/IAD/ZAP/SPZ/2018 Dated________________

Sub:- Physical verification and test check audit on the accounts of SS(DEMS)
S.P.Zone for the period w.e.f. 22.03.2016 to 16.06.2017.

Please find enclosed herewith an Audit Inspection Report on the accounts of

SS(DEMS) S.P.Zone for the period w.e.f. 22.03.2016 to 16.06.2017. Para wise
replies/comments be sent to the office of the undersigned within a period of four
weeks of its receipt.

Internal Audit Officer/IAD

ZAP/S.P.Zone

ADC/SADAR PAHAR GANJ ZONE

Copy to:

1. DC/SPZ/ NDMC for kind information & further n.a. please.

2. D.C.A. (I.A.D)/ NDMC for information please
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NORTH DELHI MUNICIPAL CORPORATION

INTERNAL AUDIT DEPARTMENT/SPZ
M.C.PRY SCHOOL RAM NAGAR
SADAR PAHAR GANJ ZONE, NEW DELHI

No. F._____________/IAD/ZAP/SPZ/2018/ Dated________________

Sub: - Physical verification & test check audit on the accounts of SS(DEMS), S.P.Zone for the
period w.e.f. 22.03.2016 to 16.06.2017.

INTRODUCTION:
The I.A.R. on the accounts of SS(DEMS)/S.P.Zone for the period w.e.f. 22.03.2016 to
16.06.2017 was conducted by Zonal Audit Party/S.P. Zone comprising of Sh. Krishan Kumar, AO,
Sh. Pardeep Rawat, AAO & Sh. Manjeet Kainth, AAO, Smt. Rama, JSA. The Audit was conducted
by the ZAP/SPZ w.e.f. 16.06.2017 to 27.07.2017.

H.O.D./H.O.O/In-Charge

The following officials have served as HOD/HOO/In-charge during the period of audit:-

H.O.D Head of Office DDO Cashier

Sh. Deepak Hastir, R.B. Tomar, Mohan Singh --------
Addl. Comm./DEMS ADC/SPZ SS/SPZ

Vacancy Statement:

Record not provided to audit.

Maintenance of Records:

Since most of the chain of the records were either not maintained by the department
concerned or not produced to audit, the maintenance of records by the department concerned cannot
be considered as satisfactory for the period covered by the audit.

Details of Old Audit Report:

There were 110 Nos. outstanding audit paras in respect of the department, out of which NIL
paras has been settled. As such, All the remaining 110 paras have again been incorporated with
current audit report as part-I (old audit report).

S.No. Year Total Para Para No. of Outstanding Para’s

Para’s Settled settled Para’s with Para No.
1 1989-90 Part V of Part V of Para 3 05
05
Para 3
2 1990-91 14 ----- -------- 14
3 1991-92 06 ----- -------- 06
4 1992-93 07 ----- -------- 07
5. 1993-94 04 ----- -------- 04
6 1994-96 05 ------- ------- 05
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7. 1996-98 07 ------ ------- 07

8. 1998-01 06 ----- ------ 06
9. 2001-02 06 ----- ------ 06
10. 2002-03 08 ----- ------ 08
11. 2003-06 07 ----- ------ 07
12. 2006-09 06 ----- ------ 06
13. 2009-12 ---- ----- ------ -----
14. 24.04.12 to 08.11.13 10 ----- ------ 10
15. 09.11.13 to 23.03.15 09 ----- ------ 09
16. 24.03.15 to 21.03.16 10 ----- ------ 10
Total 110 ----- ------ 110

Details of Old Recovery

S.No. Year Total Recovery Amount Balance Recovery

(Amount Recovered Against paras (Amt.
in Rs.) (Amount in Rs.) in Rs. Para-wise)
1 1989-90 77,500/- 20,000/- 37,500/-
2 1990-91 37,396/- 37,396/-
3 1991-92 28,382/- 28,282/-
4 1992-93 47,219/- 47,219/-
5. 1993-94 ----- ------ -----
6 1994-96 ----- ------ -----
7. 1996-98 ----- ------ -----
8. 1998-01 ----- ------ -----
9. 2001-02 1,540/- ----- 1,540/-
10. 2002-03 10,002/- ----- 10,002/-
11. 2003-06 ----- ------ -----
12. 2006-09 ----- ------ -----
13. 2009-12 ----- ------ -----
14. 24.04.12 to 08.11.13 Nil Nil Nil
15. 09.11.13 to 23.03.15 ---- ---- ----
16. 24.03.15 to 21.03.16 ----- ------ -----
Rs. 2,02,039/- Rs. 20,000/- Rs. 1,82,039/-

During the course of current audit, 05 audit memos have been issued. Department has not
made any compliance to the above mentioned audit Memos. Hence, all audit objections have been
incorporated in the current audit report.

The internal audit report has been prepared on the basis of information furnished and
the records so partly produced by the office of the SS(DEMS) Sadar Pahar Ganj Zone.

This party disclaims any responsibility for any misinformation and/of non-information
on the part of auditee.

ACCOUNTS OFFICER/ IAD

SADAR PAHAR GUNJ ZONE
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Part No. II (Current Audit):

The following records were requisitioned for audit scrutiny on test check basis vide Audit
letter No.IAD/ZAP/SPZ/2017/01 dated 16.06.2017
1. Personal file and S. Books
2. Budget watch register
3. Cheque Register
4. Death/Retirement cases
5. Record of Muster Roll
6. Absentee Statement
7. Cash Book
8. Office Order/Circular Files
9. G-8 Book with challan
10. Attendance register with biometric sheet
11. List of substitute with Circle wise
12. Provide copy of Policy of regularization of SKs pertaining to 1994-96 & 1996-98 w.e.f.
01.04.2003 & 01.04.2004 respectively alongwith list.
13. Provide the copy of policy regarding for entitlement of Grade Pay Rs 1800/- to SKs issued
by the department.
14. Provide the list of ward-wise regular S.K.to whom Pay scale Rs 4440-9000 with G.P.
1300/- and fixed their pay in the pay scale 5200-20200 with G.P. 1800/- after training or
matriculation passed
15. Provide the list of ward-wise S.K. who have been regularized from 01.04.2003 &
01.04.2004
16. Provide the list of regularized S.K. who have been claimed medical reimbursement with
retrospective effect from date of regularization.
17. Provide the list of employees who have taken bonus with retrospective effect.
18. PF & SB of these employees zone-wise
19. Provide the list of employees who have been given arrear in installments with details of
number of installments paid to each employees
20. Provide the regularization files in respect of these employees.
21. Provide the copy of attendance verification duly acknowledged by Zonal Accounts in
respect of these employees.
22. Provide the copy of minutes of Zonal Committee meeting minutes which recommended
the regularization of these employees.
23. Copy of the list furnished to Addl. Cm. DEMS vide No 38 dated 28.02.2016
24. List of Leave substitutes submitted to Anti corruption Bureau
25. Any other Auditable Record

Para No.01 : NON PRODUCTION OF RECORDS:

Out of the above requisitioned records, the record at serial number 03,04,05,06, 08 to
14,16,17,18 & 20 to 24 were not at all produced to audit despite issuance of six reminders and
verbal requests to the competent authorities. The department has only partly produced some PF &
SBs, budget register and Cash Book and no other records as requisitioned at serial No 25 were
produced to audit.
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Either the above mentioned non produced records are not being maintained in the department
or the production of the same appears to have been avoided by the department, the reason for which
may be explained and justified to audit. In case of any irregularity, if any, is found by any agency at
any time in the non produced records, then the responsibility and accountability for all the
irregularities shall lies on the shoulders of the concerned official and officer for non production of
records.

The DEMS department had given a list of 293 numbers of SKs regularized w.e.f. 01.04.2003
& 77 numbers of SKs regularized w.e.f. 01.04.2004. As per the list, a total arrear payment of
6,36,73,031/- has to be made to SKs regularized w.e.f. 01.04.2003 out of which Rs 3,16,72,696/-
has been paid to them in four installments. As per the list of SKs regularized w.e.f. 01.04.2004, no
amount has been mentioned in the list regarding the total arrears to be paid as well as paid. It was
verbally stated that payment of arrears to SKs, who has been regularized w.e.f. 01.04.2004, has not
been paid. The DEMs department has stated that no medical reimbursement claim paid by the
department to any employee who has been regularized w.e.f. 01.04.2003 and 01.04.2004 to till
regularized date. The department has also stated that the bonus arrears were paid to only two
employees named Sh. Rajender S/o Sh. Vijay for Rs 12929/- and Sh. Mukesh S/o Sh. Shyam Lal for
RS 11646/-.
On the basis of records so produced to audit, the following
discrepancies/shortages/observations were noticed:

Para No.02: Irregular/Improper regularization of substitute Safai Karamcharies engaged

during the year 1994-95 & 1995-96 w.e.f. 01.04.2003 & 01.04.2004 respectively, causing
unnecessary huge recurring loss amounting to many crores to the exchequer.
As per section 480(2) of DMC Act 1957, it has been stated that “no regulation made by the
Corporation under this Act shall have effect until it has been approved by the Central government
and published in the official Gazette”.

Further, as per the RR of any post notified and published in the official gazette, it has been
clearly stated that “they shall come into force on the date of their publication in the official Gazette”
which means that the RR of any particular post is valid only with prospective/immediate effect from
the date of publication in the official Gazette and cannot be granted from retrospective/back dated
effect.

However, the DEMS (HQ) vide its Office Order No 1741/DA-III/AC/DEMS/HQ/2011 dated
10.06.2011 had regularized the daily wage Safai Karamcharies and later through Corrigendum vide
No 1798/DA-III/AC/DEMS/HQ/2011 dated 17.06.2011 which mentions that “all the Daily Wage
Safai Karamcharies engaged during the period of 01.04.1992 to 31.03.1994, who have been
regularized with immediate effect during the year of 2005/2006 etc. would be deemed to be
regularized w.e.f. 01.04.2003”. In this regard, it is worth to point out that the noting of the
competent authority of DEMS states that those daily wagers who have been working for a fairly
long time pertaining to the year 1994 to 1996 have been regularized w.e.f. 01.04.2003 which is
entirely contradictory to the corrigendum order of DEMS (HQ) wherein the period has been
mentioned as 1992 to 1994 instead of 1994 to 1996 for regularization w.e.f. 01.04.2003 i.e. the
period of employees to be regularized w.e.f. 01.04.2003 is to be taken for the period 1992 to 1994
(as per corrigendum) or to be considered as 1994 to 1996 as per the noting of the DEMS department
(HQ). If the corrigendum order of the DEMS (HQ) has to be considered for regularization w.e.f.
01.04.2003, then those daily wage employees engaged during the year 1992-1994 has to be
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regularized but the DEMS department has regularized those daily wage employees who have been
engaged w.e.f. 1994 to 1996. If the noting of the competent authority has to be considered for
regularization w.e.f. 01.04.2003, then those daily wage employees engaged during the year 1994 to
1996 has to be regularized but the corrigendum of DEMS department states that those daily wage
employees who have been engaged w.e.f. 1992 to 1994 has to be regularized w.e.f. 01.04.2003.
This contradiction needs to be reviewed and looked into by the competent authority and necessary
orders to be issued accordingly.

Other than above, the preamble of the DEMS department states that “The erstwhile
Corporation vide its Resolution No 709 dated 20.11.1978 had approved the policy of regularization
of Daily Wage employees in phased manner, which was continued by the Corporation vide its
Resolution No 936 dated 15.02.1984 and accordingly, Daily Wage employees of MCD were being
regularized in phased manner basis and further extended by Corporation vide its Resolution No 273
dated 27.06.1988”. However, it was worth to point out that in the same preamble, the department
has mentioned at point No 06 that “It is also submitted that as per the approval of the then
Commissioner of unified Corporation, the Substitute Safai Karamcharies engaged during the year of
1994-95 & 1995-96 were converted into Daily Wager in the first instance and then regularized
w.e.f. 01.04.2003”. In this regard, it is worth to point out as it seems that the Corporation has not
approved any resolution for regularization of Daily Wage employees of the DEMS department
w.e.f. 01.04.2003 and if so, no notified RR is available in respect of the same.

First of all, the approval of the Corporation is required and secondly the resolution passed by
the Corporation has to be notified and published in the official Gazette and the publication in the
official Gazette mentions that the same is effected from the date of publication in the official
Gazette i.e. with prospective/immediate effect and not from retrospective/back dated effect. But, the
DEMS department in the year 2011 has regularized the Daily Wage employees w.e.f. 01.04.2003
i.e. the DEMS department regularized, given full financial benefits including medical
reimbursement, Bonus and re-fixation pay arrears from 01.04.2003 by granting them 08 years extra
monetary/financial benefits prior to 2011 and thereafter to till date. It is worth to point out that
such benefits granted w.e.f. 01.04.2003 is still not correct and is totally against the DMC Act 1957
and notified RR required for the same. In the instant case, the DEMS department has not even
extended the policy of regularization of Daily Wage Employees by getting the approval of the
Corporation as the last phased manner of regularization was further extended by the Corporation
vide its Resolution No 273 dated 27.06.1988 (as per preamble of DEMS department).

Because of irregular regularization of Safai Karamcharies w.e.f. 01.04.2003 (due to want

of/non availability of necessary approval of the Corporation and also want of/non availability of
notified RR), the total liability of pay arrears towards regularization of 293 employees w.e.f.
01.04.2003 of SS/DEMS comes to Rs 6,36,73,031/- out of which Rs 3,16,72,696/- has already been
paid to the regularized employees (as per the detail provided to audit by the department in respect of
regularization w.e.f. 01.04.2003). The detail of the arrears and other payments paid to the
regularized employees could not be checked by the audit as the DEMS department/SPZ has failed to
produce the original personal files and service books of those employees regularized
w.e.f.01.04.2003, failed to produce attendance register with Bio Metric Sheets, failed to produce the
list of substitute on circle wise basis and also failed to produce the regularization files of those
employees who have been regularized w.e.f. 01.04.2003.
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As far as the regularization of Daily Wage Employees w.e.f.01.04.2004 is concerned, the

DEMS department has stated that no payment of arrears has been made to any employee who has
been regularized w.e.f. 01.04.2004. In this regard, the DEMS deptt. has submitted a list of 77
employees regularized w.e.f. 01.04.2004 but the detail of arrear payment paid or to be paid has not
been mentioned in it. As far as the policy matter in this regard is concerned, it is stated that the
resolution as recommended by the Standing Committee vide No 430 dated 13.02.2014 has been
approved by the Corporation vide Resolution No 549 but no notified RR for the post has been
published in the official Gazette so far. It seems that the department has also regularized Daily
Wage Employees w.e.f. 01.04.2004 irregularly (i.e. without the RR notified and get published in the
official Gazette).

The regularization of daily wage employees w.e.f. 01.04.2003 (without approval of the
corporation and without the notified RR published in the official Gazette) and the regularization of
Daily Wage Employees w.e.f. 01.04.2004 (without the notified RR published in the official Gazette)
are not as per the laid down rules i.e. not as per DMC Act and not as per notified RR. The
competent higher authority should review all such cases strictly as per rules without any relaxation
and take necessary remedial action including recovery action in respect of the regularization of
Daily Wage employees made by the DEMS department till date including those SKs regularized
w.e.f. 01.04.2003 and 01.04.2004 as regularization with full financial benefits cannot be
given/granted to any employee prior to the date of RR notified and published in the official Gazette.

The audit does not agree to any proposal in which approval has not been accorded by the
Corporation and also the RR of the particular post has not been notified and published in the official
Gazette. Other than above, the audit also does not agree to back date regularization with full
financial benefits as such policies are totally against any rules prevalent in any Govt.
agency/authority.

The competent higher authorities of DEMS department need to look into the above
mentioned over lapses/irregularities/discrepancies regarding the irregular/improper regularization of
SKs till date including those regularized w.e.f. 01.04.2003 and 01.04.2004. The DEMS department
should also place the matter before the competent authority (i.e. Corporation) apprising the whole
facets of the above mentioned irregularities pointed out by the audit and need to review and
resubmit the matter of regularization of SKs till date including w.e.f. 01.04.2003 & 01.04.2004
strictly as per rules and also to take necessary remedial and recovery action in this regard
immediately in order to prevent huge recurring loss to the exchequer till date because not only
additional liability has been unnecessarily and illegally created but also that pay fixation on account
of regularization was not proper/not correct and is a huge recurring loss to the exchequer till
corrective action as per rule is taken/implemented without any delay. It is upto the competent
authority i.e. Corporation to take further administrative decision and necessary action in this regard
by adopting the laid down guidelines/instructions/rules i.e. the approval of the Corporation is
required for any post, secondly the resolution passed by the Corporation has to be notified and
published in the official Gazette and thirdly the regularization has to be given only with effect from
the date of publication in the official Gazette (with prospective/immediate effect and not from
retrospective/back dated effect). As the back date regularization of the Safai Karamcharis till date
including w.e.f. 01.04.2003 & 01.04.2004 is not as per the rules, the audit does not agree to such
type of regularization with full financial benefits. The administration concerned should place the
matter before Corporation for appropriate decision in this regard in order to prevent huge recurring
loss to the exchequer.
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Para No.3: No record related with training to Non-Metric Group D employees

As per Asstt Commissioner (Establishment) circular No UDC-II/AO/CED/NDMC/2014/481

dated 29.01.2014, a training module for Non-matriculate group-D employees of NDMC for
placement in PB-I of Rs 5200-20200+GP1800/- has been issued. Accordingly to this circular,
training to all non-matriculate Group-D employees of NDMC including Safai Karamcharis of
DEMS should be imparted by the officers of the department concerned for two hours daily in the
afternoon session on all working days for duration of 15 days to each batch. All record related to
training shall be kept safely by the concerned department. Upon successful completion of training,
the pay of such employees shall be re-fixed in pay band-I of Rs 5200-20200/-+GP 1800/- w.e.f.
01.01.2006 or any subsequent date of their regular appointment.
During checking of some of the PFs & SBs so produced, in respect of Non-matriculate
group-D employees, it has been noticed that GP of these employees has been enhanced from 1300/-
to 1800/- and pay has also been fixed accordingly. But any orders regarding successful completion
of training has not been attached in their respective PFs & SBs. In absence of these orders, audit
was not in a position to ensure that the necessary training has been imparted to these employees or
not before enhancing the GP from 1300/- to 1800/-. So, if any irregularity/over payment is found in
this matter by any agency, at any time, then the whole responsibility for the excess payment/over
payment shall lies upon the shoulders of concerned officers & officials.

Para No 04: Non production of PFs & SBs of regularized SKs alongwith chain of records

The department has not given to audit the PFs & SBs of those SKs who have been
regularized w.e.f. 01.04.2003 & 01.04.2004 and has verbally stated to audit that the original
personal file and service book of those SKs regularized w.e.f. 01.04.2003 has been kept/retained by
the DEMS (HQ) and the payment of arrears to those SKs regularized w.e.f. 01.04.2004 has not been
made so far. The audit could not check the genuineness and correctness of the regularization
process and arrear payment made so far because the department has totally failed to produce the
entire chain of records such as original PFs & SBs, attendance register with Bio-metric machine of
all the employees and regularization files of all those SKs who have been regularized w.e.f.
01.04.2003 & 01.04.2004. From above, it seems that that various concerned zonal authorities has
no data/record of each and every employee with actual number of working days. The department is
intimated that if any irregularity/over payment is found in this matter by any agency, at any time,
then the whole responsibility for all the over payment cases shall lie on the shoulders of
concerned officials and officers.

Para No 05: Irregularities noticed in Cash Book

During the test check of Cash book, following discrepancies have been noticed:
1) Guidelines laid down under Mpl. Act for maintenance of Cash Book are not being
followed
2) Day to day totaling of Receipt & payment is not done.
3) No paging was done in Cash Book.
4) Cutting and overwriting were noticed at many places
5) Opening and closing balance at the beginning and end of every month was not mentioned.
6) Detail of pending payments was not specified at the end of every month.
7) Periodical test checking of cash book was not done by any supervisory authority
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8) Reconciliation of Cash Book in coordination with Monthly Bank Statement is not been
done
9) Income side is shown blank. No receipt from Accounts Deptt. is written in any month.
The above mentioned irregularities are serious in nature and may result into major lapses.
The department/DDO is directed to personally supervise the maintenance of Cash Book and
ensure that the monthly reconciliation of cash book with bank account is done without any lapse,
as per rules laid down in receipt & payment and also as per CPWD manual.
The department is intimated that if any irregularity/over payment is found in this matter by
any agency, at any time, then the whole responsibility for all the irregularities shall lie on the
shoulders of concerned officials and officers.
Para No-06:- NON MAINTENANCE OF BANK RECONCILIATION STATEMENT

The department is not maintaining the bank reconciliation statement, which is an irregular
Act. It is very much mandatory upon all the DDOs to maintain the Bank Reconciliation Statement
on Monthly Basis by Reconciliation of the DDOs account in the bank with the cash book to avoid
any irregularity and shortage in the DDOs account. Reason for not maintaining the Bank
Reconciliation Statement may be explained to audit and the department should maintain the Bank
Reconciliation Statement immediately. In case of any irregularity in the DDOs account is found
by any agency at any stage, then the entire responsibility for the same shall lie on the shoulders of
the concerned official and DDO for non-maintenance of Bank Reconciliation Statement.

The department is intimated that if any irregularity/over payment is found in this matter by any
agency, at any time, then the whole responsibility for all the irregularities shall lie on the shoulders
of concerned officials and officers

Para No. 7: Non-Verification of Remittance into Municipal Treasury

As per Para 22.3.2 of C.P.W.D. Code as well as instructions issued by Worthy

Commissioner, MCD vide No. 12(87)/CA/F&G/2002/1203 dated 24.6.2002, “At the end of each
month a statement in duplicate shall be prepared by the DDOs of the collections made by them
clearly indicating G-8 Nos., amount received, Challan No. and date vide which it has been
deposited in Municipal Treasury and sent it for verification to concerned Accounts Officer. The
concerned Zonal Accounts Officer will get this income statement checked from income cash book
and retain one copy in Zonal Accounts Office as per the income cash book/register maintained in
the Zonal Accounts Office and send the other copy back to DDO after proper verification. The
duly verified copy received from Accounts Officer shall be pasted in income cash register by
DDO.” But, no any such action has been taken by the concerned department till date.
The department is intimated that if any irregularity/over payment is found in this matter by
any agency, at any time, then the whole responsibility for all the irregularities shall lie on the
shoulders of concerned officials and officers.

ACCOUNTS OFFICER/IAD
ZAP/SPZ