AUDIT OF ALLIED & OTHER SECTIONS OF ORDNANCE FACTORIES

1. AUDIT OF ALLIED & OTHER SECTIONS OF ORDNANCE FACTORIES Prepared by : IA Cell RFI

2. ALLIED & OTHER ESTABLISHMENT ESTATE OFFICE IB & GUEST HOUSE ORDNANCE FACTORIES INSTITUTE OF LEARNING (OFIL) AND HOSTEL ORDNANCE FACTORY HOSPITAL MOTOR TRANSPORT SECTION ORDNANCE FACTORY SCHOOL

3. AUDIT OF ESTATE OFFICE • Estate Fund Accounts • Estate Ledger • Register of Trees • Land & Lease Register • Inventory Register AUDIT OF IB/GUEST HOUSE • Visitors Register • Inventory Register • Crockery & utensils Register

4. Recovery and adjustment of the same by Branch Accounts office also be verified from the rent register maintained by the LAO. • Whether fund received from different occupant and sources generated from estate have been deposited to the estate fund immediately may be verified. • Some times lease of certain land required approval of OFB and MOD as per the Land Lease Policy 1990. Whether above action has been taken by the factory management/ estate officer may be verified. • Whether proper numbering with details of name/type of tree has been mentioned to be verified. Sale of wood/trees has been accounted for or not may be verified. • Procedure of sale of wood may also be verified.

5. Verification may be carried out regarding expenditure of estate fund • Sometimes estate officer spend more than Rs. 1,00,000.00 for a particular purpose, which is beyond the permissible limit, the same may be verified. • Expenditure incurred from the estate fund is meant for direct development and up-keepment of estate area. However it is found that expenditure incurred for some other purpose other than the specified purpose. It is often found that estate funds are used for purchase of inventory and consumables of IB/guest houses. The same may objected to. Similarly if any expenditure incurred for the purpose other than estate to be objected by audit.

6. Encroachments/un-authorized Occupancy • Some ordnance factories is having huge estate areas in different parts of the area and not having a common boundary. It is also found that there is no boundary and leads to encroach by preparing temporary hutment for shops, Khatals etc and even permanent building. • As per the recommendation of 5th standing committee report all the defence lands should be demarked. Audit should verify the same by asking the relevant record regarding the land available with the factory. • Whether proper demarcation has been done should be verified with records. • Whether any encroachment has been made to any area may be verified from the monthly/quarterly report of the estate office forwarded to OFB.

7. Audit of Visitors Register • Guest houses/IBs maintain a visitor’s register with details like name, designation, address, organization, whether Govt or Pvt or PSUs, purpose of visit, date of arrival, date of checking out and period of stay. During audit of the above register, ask for the authority/approval/ sanction under which the officers/staff/ person admitted to stay there. • Verify if the occupant is Govt servant, whether he is on official duty or any other purpose. Verify the rate of rent charged for the period of stay. The Rate list is available with the guesthouse-in-charge for different categories. • Verify the Cash Receipt Books along with the Visitors Register to ensure that the amount collected from the occupants are immediately deposited in the Govt. Account.

8. If the rooms are furnished with AC/Geyser etc, whether any charges for the same has been received or not may be queried. • Verify if any occupant/occupants is/are staying more than the permissible limit of 10 days, then ask for the authority of overstay in the IB/Guest house with proper approval of competent authority. • Verify the calculation of rent with the no. of days reside in the guesthouse. • Verify the deposit slip with the date collection of rent from the occupant, if there is any in-ordinate delay in deposit it may be highlighted in the form of objection. • Sometimes it is found that the in-charge of the guesthouse is either depositing less or more than the collection. It can be questioned.

9. Audit of Inventory Register • Ask for the inventory register maintained by the guesthouse. • If any addition has been made to the inventory, the document regarding procurement may be asked from the management. Source/allotment against the same has been procured may be asked. Some times factory management procures the above item from estate fund, which is not in order. The same can be objected. • Ask for the disposal of the old item for which new item has been procured. • Ask for the condemnation list of the inventory item, if any item has been condemned and still in use and in the inventory register. Ask for the reason of non-disposal. Some times the items are deleted from the inventory register ask for the return note or disposal order. • Find out whether stock verification of the item has been carried out by SV group and check their endorsement in inventory register. • In addition to this ask for the crockery/utensil register maintained by the guest houses.

10. AUDIT OF OFIL • Inventory Register • Expense Book for the Consumable items • Procurement through Supply Orders and credit verification. • Civil Work’s Contract Files • Imprest Account. • Annual Training Grant Register • Amenity & Literature Grant Ledger

11. Documents to be verified in audit at OFIL Hostel • Arrival and Departure Book/Register for transients/boarders • Rent Account • Expense Book for consumable items • Inventory Register

12. Following procedure may be followed for audit of OFIL. ·It may be confirmed that all entries in the register must be countersigned by the head of the section and duly verified by the stock verification group. • Check the disposal action of old inventory items against which new inventory items were procured. • Expense book for consumable items is to be verified to check the issue and receipt of consumable items. Simultaneously issue vouchers and receipt vouchers of the items may be linked with the entry made in the register. • Annual Training Grant (ATG) register may be verified in audit to see the grants allotted and expenditure incurred from the allotted grant. If any discrepancies found in this regard, observation may be raised.

13. OFILs are granted separate budgetary allotment for procurement through supply orders. To verify the supply orders placed by the OFILs, it may be checked whether vendor selection has been made with consultation of Branch Accounts Office. Whether tender paper issued to registered vendors or not. Whether tender paper issued to minimum 6 vendors or not. If the tendering action has been done through open tender enquiry, verify whether wide publicity has been made or not. Whether sufficient time has been given (minimum 3 weeks) for submission of quotation. Whether tender fees have been collected for selling of tender papers and whether the same has been deposited into treasury in time or not. ·For civil works in favor of repairing of buildings, restoration of water supply and electricity, separate budgetary allotment has to be granted to each OFIL. It may be ensured that sanction against the civil work was made by the competent authority and budget was allotted for the particular civil work by the competent financial authority. It may be checked whether security deposit from the contactors were recovered properly and the same was deposited to the Govt. account through MRO in specific time. Whether completion certificate of the said work was issued in time and the work was completed within the PDC or not. If not, whether permission for the extension was asked within the period of probable date of completion as stipulated in the work order’s of contract. • Separate Imprest Fund for each OFIL is to be maintained by the head of the office to deal with the petty nature of expenditure of the institute. Verify whether proper procedure has been followed to deal with the Imprest Fund.

14. Audit of OFIL Hostel ·Arrival and departure register is being maintained by the Hostel authority to watch the boarder’s turnout in the hostel. It may be checked from this register along with the rent accounts that accurate amount of rental fees have been recovered from the occupants of the hostel. ·It is also to be watched in audit that the recovered amount is being deposited into the Govt. account through MRO within the stipulated period. In many cases, it has been observed that amount recovered from the occupants has been deposited in cash office by means of MRO after lapse of 40 to 45 days which is highly irregular and should be objected in audit.

15. ·Inventory Register for OFIL Hostel alongwith the stock verification certificate in terms of MOD letter no. 11(9)/2005-D (Prod) dt. 14.05.2007 should be verified in audit and the discrepancies found in the said register must be highlighted in audit. ·Similarly Expense Book for Consumable items should be verified to check the receipt and issue of consumable items at OFIL Hostel.

16. HOSPITAL AUDIT • Budget Register • Hospital stoppage Rolls • Inventory Register • Register of Expendable Stores • Register of Non-expendable Stores • Medicine Stock Register • Hospital Ration Store/Diet Register

17. Following aspects may be verified during audit of OF HOSPITAL Budget Register • Whether the expenditure incurred as per the allotment made to OFH in different heads, as OFH is having a separate budget. Same may be verified to watch, whether the expenditures are within the allotment. • Sometimes ordnance factory Hospitals are procuring medicine locally through cash purchase or through tender. However, some medicines are supplied by the AFMSD or some other central agencies. Some of the hospital agencies are not taking the same into accounts. • In the similar fashion rations/condiments procurement from the open market in addition to the supply made by the supply depots. Whether hospital authority are keeping track of the same may be verified.

18. Hospital Stoppage Roll • Verify whether monthly hospital stoppage has been prepared by the OFH. • Verify the correctness of the stoppage roll. • Whether prevailing HSR (as it changes time to time) has been charged to the entitled and non-entitled patients. • Verify whether there is prolonged delay in forwarding the HSR. • Whether copies of the same have been sent to respective administrative/billing authority and accounts office for recover. • Recovery action also should be verified from the respective Bill Groups/Accounts Office.

19. Inventory Register • Ask for the inventory register maintained by the OFH. • Verify whether stock verification has been carried out by the SV group and remarks there of. • Whether new addition/deletion of any inventory item has been made during the period. If yes, ask for the related documents. • Ask for the details of items condemned during the period, if not disposed off, ask for the reason.

20. Register of expendable store/ Non-expendable store • Verify the register to find out whether any items are lying un-utilized for a long time. Any addition and deletion may be queried upon. Justification of procurement can be questioned, if found discrepant. • Verify whether proper course of action is taken for regularization of Time- Expired medicines by the Hospital authority. • Verify whether any bulk quantities of PVMS medicines held on stock without proper utilization.

21. Medicine stock register • Ordnance Factory receives medicines from AFMSD Lucknow, Pune and other central agency as per the indent given by them. Some times medicines also procured locally through tender or cash purchase. All the records should be maintained by the Central Medicine Store/Central Dispensary of OFH. During audit of the above register following points may be consulted. • Verify the indent forwarded by the OFH to the central agency for supply of the medicines. Whether the demand forwarded by OFH is justified, may be verified. • Verify whether there is any medicines lying outstanding for a long time and approaching expiry date. • During audit of medicine procured through tender purchases, verify whether any non-availability certificate has been received from central agency.

22. Verify the price variation in AFMSD and cash purchase and tender purchase medicine. If there is any loss these may be highlighted. Verify the register whether receipt and issue are properly endorsed (verify the respective receipt and issue vouchers). It often came to the notice that a medicine has not been issued for a long time and all of a sudden all the medicine has been issued to avoid loss statement due to expiry of date. The issue of the medicine could be verified and checked to find the authenticity of the medicine. Verify whether any medicine has been issued to any non-entitled patients, same may be questioned.

23. MT AUDIT • Vehicle Register • Kit and Tools of Vehicles • TTB (Tyre , Tube & Battery) Register • Vehicle Log Book • Car Diaries • Kilometer Card/Mileage Cards • POL Ledger • Requisition for POL • POL retail issue voucher • MT Stationery Register (Local purchase)

24. Following aspects may be verified during audit of MT Section • Verify the Vehicle Register to check details of receipts and disposals of unit vehicles and authority for the allotment of vehicles. • Vehicle Log Book will be maintained for each individual vehicle by the unit on whose establishment the vehicle is held and should be kept up-to-date. All casualties affecting the vehicles will be recorded therein. It may be referred by the audit authority for determining the KPL as fixed by the workshop, checking the workshop running and POL consumption and correctness of changes of tyres, tubes and batteries etc. • Verify the Car Diaries of all types of vehicles viz. staff cars including jeeps, station wagons, ambulance, Motor Cycles and load carriers. Kilometer reading and POL drawn should be recorded in the relevant columns. The Car Diaries should be completed and signed by the officer using the vehicle. In no case, Car Diaries will be completed by the drivers themselves.

25. Verify whether issues of MT Gasoline/diesel to vehicle shown in kilometer card, POL retail issue voucher, Car Diary and POL ledger agree. If not, find out the discrepancy and point out the same immediately. • Receipts and Issues of POL should be properly accounted for in the POL Ledger as and when a transaction occurs. Issues made to a vehicle on POL Retail issue voucher should be signed by the driver of the vehicle at the end of the week. • Local purchased items should be invariably noted in the MT Stationery Register. Verify the register whether receipts and issues are properly endorsed (verify the respective receipt and issue vouchers).

26. FACTORY SCHOOL AUDIT • Cash Book of School • Cash Receipt Books • Tuition Fees Register • Register of Library Books • Prize Books Register • Sports Goods Register • Fund Account for extra curricular activities • Inventory Register for Furniture’s and Equipment

27. Following aspects may be verified during audit of Factory School • Verify the Cash Receipt Books, Tuition Fees Register and Cash Book simultaneously to ensure that the fees collected by the school authorities are immediately credited in the cash book of the school. • Verify whether the Cash Book is being properly maintained by the school authority as per the prescribed procedure and all entries recorded in the Cash Book are duly attested by the competent authority. • Every school should be maintained two different cash accounts i,e Public Fund Account for DGOF Grant and Non-public Fund Account for income received from other sources (excluding DGOF Fund). Verify whether proper system followed.

28. Thank you