Audit IrregularityIAP

CfitA illft 3t fa 614 firflt tiaioit
Employees' Provident Fund Organisation

"Q'ci 31mr m<liR)
(Ministry of Labour & Employment, Govt. Of India)
Head Office
-110066.
Bhavishya Nidhi Bhawan, 14-Bhikaiji Cama Place, New Delhi-110066
www.epfindia.gov.in www.epfmdia.nic.in
Telephone: 011-26185580 Fax: 011-26173022
No. Audit/2(53) 1 0/IAR/THN
Dated:

To
All the Additional Central Provident Fund Commissioners
Sub: Irregularities found by the lAP while conducting the Audit.
Sir,
Please find enclosed herewith the report of the Internal Audit Report of
Regional Office Thane for the period 2011-12 & 2012-13. All the Additional
Central Provident Fund Commissioners are requested to go through the
contents of the report and take necessary action on the same analogy in the
Offices under their control. Status report on the issues related to Regional
Offices/Sub Regional Offices under their jurisdiction may kindly be furnished to
the Head Office by 10.05.2014.
Highlights of the report are also annexed for ready reference.
l Yours faithfully,
Encl: As above*
y
(SANJA Y KUMAR)
Financial Advisor and Chief Accounts Officer
Copy to
1. All Regional Provident Fund Commissioners In Charge of the Region.
2. All Officer In Charge, Sub Regional Offices.
3. All Deputy Director (Audit), Internal Audit Parties.
4. All Assistant Director (Audit)
5. R.P.F.C. (NDC) for uploading on the EPF Website.
i
!
H HLIGHTSOFTHEAUDITREPORT OF REGIONALOFFICETfJ ANE
20. GAudit Paras were pending. .
80' udit Paras were pending in respect of earlier Internal Audit.
23 aras have been raised during this Internal Audit.
Unliquidated advances and balances
Under the Head Overpayments, an amount of Rs. 94,977/- were
lying unrecovered. Details of the persons responsible were not
provided tothe Audit Party.
Under the Head Pay Advance Rs. 10,181/- were lying
unadjusted. Detailswere not provided to theAudit Party.
Under the Head Miscellaneous advance Rs. 22,243/- were lying
unadjusted since 1.4.2011.
ctioned strength was not available in the Regional Office, Thane
espect of R.P.F.C.J , R.P.F.C.II, AP.F.C.,Assistant Programmer, Personal
istant, Stenographer, Section Supervisor, Hindi Translators, Data
cessing Assistant, Staff Car Driver, Cook, Daftary, Multi Task
endant, Tea CoffeeMaker.
Cash
~ Defl encies in the reconciliation of Cash book (Bank) of Account no.I
., The Closing balance as per Bank Statement was zero as on
30.09.2013 whereas inOfficerecord it was (-) 2973136.
Further there was erroneous debit of Rs. 3.68 Crore and Erroneous
Credit of Rs.5.411 Crores inAccount No. 1.
There were non cancellation of Stale Cheques worth Rs. 22.78
Crores.
Thetransfer fromother Regionswas not reflected inthe CashBook.
~ D Iclencies in the reconciliation of Cash book (Bank) of Account No.1I
!. As on 30.09.2013, there was erroneous credit of Rs. 1.28 crore and
Erroneous debit of Rs. 13.53lakhs.
Also there was non cancellation of stale _cheques worth. Rs. 5.24
lakhs.
. There wasIncorrect carry forwarding of CashBookbalance.
~ D ciencies in the reconciliation of Cash book (Bank) of Account no. X
There was erroneous credit of Rs. 2.62 Crores and erroneous debit
of Rs. 1.71Crores upto 30.09.2013.
Alsothere was non reconciliation of stale Cheques worth Rs. 10.73
Crores.
~ De ciencies in the reconciliation of Cash book (Bank) of Account
no I
Ason 30.09.2013 there was erroneous credit of Rs. 13.44 lakhs and
erroneous debit of Rs. 9.98Iakhs.
There was non cancellation of Stalecheques worth Rs. 5.56lakhs.
~ Er neous credit of Rs.l.65 Iakhs and erroneous debit of Rs.O.68 lakhs
in count no. XXII
The suspense entries in the account have increased as manifolds
during the last three financial years whereas as per MAP Part I
wrong/ erroneous credit and incorrect entries should beintimated to
the bank for rectification.
~ Un thorized excess clearance of Rs.72.97 Iakhs from Account no.XXI
TheOfficehas not rectified the erroneous entries inthe Accounts. It
is a serious irregularity thatthe office has not taken any action to
recoup the amount of Rs. 72.97 lakhs which were withdrawn from
the accounts of the Officebythe Bank.
~ N recovery of Rs.23.91 lakhs Interest on Belated Credit due from
S ' teBank OfIndia
The Officehas not made any efforts to claimthe short paid amount
of Rs.2390896 fromthe SBI.
Eventhe interest onbelated credit has also not been claimed.
recovery of excess service charge of Rs.60.84 lakhs deducted by

The Officehas not taken any action to recover the excess service
charges deducted bythe Bank.
Nonremoval ofRs.17.36 crore credited indummy accounts.
Rs. 17.36 crores received through 433 challans were credited in
dummy accounts which are pending for proper accounting.
~ .Nonmaintenance of Valuable Document Regtster (VDR)and
del inrealization of instruments.
TheOfficehas not maintained VDRto enter the receipt and disposal
of instruments.
Several instruments received by the Office were realized after
seven days of the receipt.
Insome cases date of clearance was not available inthe VDR.
Pension:
~ NonI ecovery of Rs.5.33 lakhs excess pension commission deducted by
SBI. ,
' The SBl had deducted .the pension commission from account No. X
' without authorization.
During the calendar year 2013, an excess amount of Rs. 5,33,417/-
was deducted bythe SBI.
~ Non conciliation of Rs.48.13 crores credited inEPS1995 Account.
he Banks have transferred the undisbursed balance of Rs. 7.22
rores toAccount No.Xfromthe Pension Accounts.
n amount of Rs. 48,13,14,891/- was lying unreconciled and credit
as not given to the pensioners.
ACCOU
~ tivebalance of Rs.9.51crores was lyinginmembers accounts involving
establishments.
~ , gularities incoverage of the following establishments.
~ Dh nashree Mahila Audyogic Sahkari Sanstha Ltd.(MH/204707)
Employment strength was not verTfied to ascertain coverage
fromback date
Theestablishment hadnot been inspected.
The case had not been recommended for notification even after
oneyear fromthe date of issue of coverage notice.
ndeep Logistics Pvt. Ltd (MH/204407)
Financial statement was not available inthe file.
Initially coverage was made on 30.06.2011 whereas the coverage
was postponed to 01.10.2011.
EPFcontributions fromthe salary of employees was deducted inthe
month of August 2011. No information was available in the file
whether the same had been remitted or not.
mma Construction Pvt. Ltd (MH/204074)
The Establishment was covered w.eJ . 01.04.2011 with 68
employees.
Thedate of set up is15.03.1988.
Payments were made onthe different heads.
B Products Pvt. Ltd (MH/204SS0)
The establishment was covered w.eJ . 01.07.2011 with 55
employees.
Theemployment strength gone down to 19fromOctober 2008.
~Ac on was pending to secure compliance from Municipal
C orations/Councils coveredunder theAct.
~ D ay inconcluding enquiries initiated U/S 7Aof the Act
'. There were several cases where 7A cases were pending for more
than stipulated time. Detailsare hereunder:
~ D
Pending for 6Months to 1Year 187cases
- .
Pending for 1to 3years 324cases
Pending for more.than 3ye~rsT cases -
o o. of Estt. covered ,
o lspected
o ending
yinconducting first inspection of newly covered establishments
2011-12 2012-13
700 761
299 343
401 418
~ De y inissuing notification under section 1(4) of the Act
of 483cases pending for notification- uls 1(4) of the Act only 18had
sent for notification.
As per the Head Officedirections all the Exempted Establishments
are required to be taken once in ayear which has not been done in
many establishments.

Internal Audit Report of RO, Thane 2011-13 1

INTERNAL AUDIT REPORT
2011-13

SPECIFIC AUDIT OF CORE AREAS
OF

RO, THANE
(Mumbai-II)
Vardan Commercial Complex
6
th
Floor, MIDC Road No.16
Wagale Estate, Thane (W) - 400604
Ph: 022 25838444 Fax: 022 25838446

Under
ACC (Maharashtra & Chhattisgarh)
341, Bhavishyanidhi Bhavan
Bandra (E)
Mumbai-400051
Ph: 022 26470707 Fax: 022 26474747

Date of opening of the
office
SRO on 15/02/1982 RO on 01/04/2005
Previous audit completed
up to
2010-11
Audit undertaken for the
period
2011-12 and 2012-13
Audit camp 06/01/2014 to 21/03/2014
HO Reference Order No. Audit/13(16)/2008/TP/Main Dated
27/06/2013


Certificate of Audit
(Ref sub para (vii) of Part-IV of Para 14.3.12 of MAP Part-I)

1. Name of office Regional Office, Thane
2. Period of audit 2011-12 and 2012-13
3. Audit camp 06/01/2014 to 21/03/2014
4. OIC of the Region Sri. Shankar Pathak RPFC-I
5. Audit team Sri.G.Shaji AD(Audit)

The Internal Audit Report of RO, Thane for the period 2011-13 has been discussed with
the OIC of the Region and a copy of the report handed over to him.

(S.K.AGARWAL)
DY.DIRECTOR (AUDIT),
IAP, Jaipur
Camp: RO,THANE

Internal Audit Report for 2011-13 has been discussed and a copy received.

(Shankar Pathak)
RPFC-I and OIC
RO, Thane


INDEX

PARA NO
SUBJECT
PAGE NO

INTRODUCTION
6

EXECUTIVE SUMMARY
11

ANNEXURE-I (List of paras dropped by HO) 16

ANNEXURE-II(A) (List of paras recommended for
dropping by the IAP)
21

ANNEXURE-II(B) (List of paras NOT recommended
for dropping)
22

ADMINISTRATION
28
1 Unliquidated advances and balances 28

CASH
29-58
2 Deficiencies in the reconciliation of Cash book (Bank)
of Account no.I

29
of Account no.X
33
of Account no.II

35
of Account no.XXI

37
6 Erroneous credit of Rs.1.65 lakh and Erroneous debit
of Rs.0.68 lakh in Account no.XXII

39
7 Un authorized excess clearance of Rs.72.97 lakh from
Account no.XXI
40
8 Non recovery of Rs.23.91 lakh Interest on Belated
Credit due from State Bank Of India
41


9 Non recovery of excess service charge of Rs.60.84
lakh deducted by SBI
43
10 Non removal of Rs.17.36 crore credited in dummy
accounts
45
11 Non maintenance of Valuable Document Register
(VDR) and delay in realization of instruments

46

PENSION
59-62
12 Non recovery of Rs.5.33 lakh excess pension
commission deducted by SBI
59
13 Non reconciliation of Rs.48.13 crore credited in EPS
1995 Account
61

ACCOUNTS
63
14 Negative balance of Rs.9.51 crore in member accounts

63

COMPLIANCE
64-74
15 Irregularities in the coverage of Dhanashree Mahila
Audyogic Sahkari Sanstha Ltd.(MH/204707)

64
16 Irregularities in the coverage of Sundeep Logistics
Pvt. Ltd (MH/204407)

66
17 Irregularities in the coverage of Gamma Construction
Pvt. Ltd (MH/204074)

68
18 Irregularities in the coverage of K.B Products Pvt. Ltd
(MH/204550)
69
19 Action pending to secure compliance from Municipal
Corporations/Councils covered under the Act

70
20 Delay in concluding enquiries initiated U/S 7A of the
Act
71
21 Delay in conducting first inspection of newly covered
establishments
72
22 Delay in issuing notification under section 1(4) of the
Act

73


23 Compliance audit of Exempted establishments

74

CONCLUSION
75


INTRODUCTION

The Regional Office, Thane (Mumbai-II) is coming under the jurisdiction of Addl.
Central Commissioner (Maharashtra & Chhattisgarh). The office started functioning in
the year 1982 and upgraded into Regional Office in 2005. The jurisdictional area of the
office is spread over the following areas in the state of Maharashtra.

Jurisdictional area of RO, Thane
Mumbai suburban area i.e. Kurla(East & West) up to
Mulund, Municipal area of Thane, Kalyan(E&W),
Ulhasnagar, Titwala, Shahad, Ambivali, Badlapur,
Ambernath, Murbad, Shahapur, Wada, Bhiwandi,
Asangaon, Jawhar, Vikramgarh.

The office has one SRO under its jurisdiction and it is SRO, Vashi. The office is
functioning in a leased building of MIDC at Wagale Industrial Estate. Even though
there are more than three hundred staffs working, no office quarters are available. The
office is having canteen facility.

The audit for the period up to 2010-11 was completed and as per Head Office order no.
Audit/13(16)/2008/TP/Main/3536 dated 27/06/2013, the audit for the period 2011-12
and 2012-13 has been undertaken by the IAP, Goa. The audit was mainly focused on the
compliance of core functional areas as directed by the Head Office.

The following officers were in charge of the office for the relevant period for which the
audit was undertaken.

Name of OIC Designation Period
From To
Sri. Shankar Pathak RPFC-I 01/07/2010 Still
continuing


Basic information of the Office

Sl.No Subject Details
1 Date of starting of the office 15/2/82
2 Date of Up gradation of office into RO 1/4/2005
3 Year up to which Internal Audit carried out 2010-11
4 No. of Exempted Estts. as on 31/03/2013 53
5 No. of Members as on 31/3/2013 101705
6 No. Unexemptd Estts. as on 31/03/2013 13793
7 No. of Members as on 31/03/2013 700150
8 No. of Subscribers as on 31/03/2013 801855
9 No of International Workers as on 31/03/2013 566
10 No of Certificate of Coverage issued upto31/03/2013 515

Sl.No. Particulars 2011-12 2012-13
1 Settlement of PF Cases (nos.) 79707 89730
2 Settlement of FPF Cases (nos.) 79901 87590
3 Settlement of EDLI Cases (nos.) 327 471
4 Settlement of Advance Cases (nos.) 1057 1465
5 Settlement of Transfer Cases (nos.) 4419 15682
6 No. of PPOs issued 5845 9253
7 No. of Estts. for which annual
account are compiled and issued
NA 2565577
8 No. of accounts which annual
account are not compiled and issued
NA Nil
9 No. of returned M.Os. Nil Nil
10 No. of returned Cheques 1120 532
11 No. of returned PPO. 176 174


12 No. of 7A cases initiated 69 255
13 No. of 7A cases disposed 173 300
14 No. of 7A cases pending 232 187
15 Amount assessed u/s 7A (in lakh) 777.65 375.10
16 Amount recovered (in lakh) 233.19 300.47
17 No. of RRC issued 20 14
18 Arrear demand recovered (in lakh) 883.40 176.73
19 No of RRC s pending 352 206
20 Amount of arrear demand pending
(in lakh)
1571.91 2380.64
21 No. of 14B cases initiated 30 62
22 No. of 14B Cases disposed 24 57
23 Amount assessed u/s 14B (in lakh) 89.15 94.72
24 Amount recovered u/s 14B (in lakh) 16.14 63.09
25 Amount recovered u/s 7Q (in lakh) 18.95 32.16


Staff position as on 31.03.2013 (RO, Thane and SRO, Vashi)

Sl.no Name of Post/Designation *Sanctioned
RO,Thane&SRO,Vashi
In position Total
Thane Vashi
1. RPFC-I Details not available 1 Nil 1
2. RPFC-II -do- 2 1 3
3. APFC -do- 5 2 7
4. Asst. Programmer -do- 1 Nil 1
5. AAO/EO 61 27 17 44
6. PA Details not available 1 Nil 1
7. JR. STENO -do- 1 1 2
8. S.S. 79 43 23
9. HINDI TRANSLATOR Details not available 1 1 2
10. SSSA(TBP)
392
48
107

303
11. SSSA 79
12. SSA 69
13. DPA Details not available 2 1 3
14. DEO GR. A 13 1 Nil 1
15. DEO GR. B 10 Nil Nil Nil
16. LDC 17 5 5 10
17. STAFF CAR DRIVER Details not available 1 Nil 1
18. COOK -do- 1 Nil 1
19. DAFTARY -do- 10 Nil 10
20. MTA -do- 10 5 15
21. TEA/COFFEE MAKER -do- 2 Nil 2
TOTAL 310 163 473

*Separate details of RO, Thane and SRO, Vashi not available.


Details of outstanding audit paras

Period Opening
balance
Dropped by
HO
Retained due to
non compliance
Balance
1995-96 1 Nil Nil 1
1996-97 1 Nil Nil 1
1997-98 2 Nil Nil 2
1998-99 4 1 Nil 3
2001-05 9 1 1 9
2005-10 76 30 1 47
2010-11 23 6 Nil 17
Total 116 38 2 80
Paras raised during the current audit (2011-13) 23
Total paras outstanding after the audit of 2011-13 103


Executive summary

The current audit is a task bound audit program mainly focused on the compliance of
the core function areas of the Organization. The main areas covered in the audit
program are

1. Reconciliation of cash book (bank) of all accounts.
2. Collection of interest on belated credit from SBI.
3. Amounts credited in dummy accounts.
4. Reconciliation of pension payments.
5. Payment of commission/ service charges to the bank
6. Cancellation of time barred cheques.
7. Negative balance in member accounts.
8. Compliance of previous audit paras.

The compliance position of the office in the core functional areas has been verified by
the IAP in detail during the audit camp. The deficiencies were brought to the notice of
the office during the beginning of the camp for remedial action. The current status is
summarized as below.

Erroneous debit of Rs.5.63 crore and Erroneous credit of Rs.9.16 crore in
the accounts

The office had prepared the cash books and reconciliation statements up to
30/09/2013 in respect of all five accounts. But the unclassified and suspense entries
were retained in the accounts without rectification. The position of suspense entries in
the five accounts of RO, Thane as on 30/09/2013 is as follows.

Erroneous debit/credit as on 30/09/2013
Account no Erroneous debits Erroneous credits
I Rs.3.68 crores Rs.5.11crores
X Rs.1.71 crores Rs.2.57 crores
II Rs.13.53 lakhs Rs.12.81 lakhs
XXI Rs.9.35 lakhs Rs.13.44 lakhs
XXII Rs.0.68 lakhs Rs.1.64 lakhs
Total Rs. 5.63 crore Rs.9.16 crore


Due to the presence of the unclassified/suspense entries in the accounts, the
Balance Sheet of RO, Thane as at 31
st
March 2013 dont present a true and fair view
of the state of affairs. Vide circular no. BSC-6(2) Suspense
Account/2010/11/52029 dated 20/03/2012, the FA & CAO has instructed
all field offices to complete the rectification of suspense/unclassified
entries from the accounts before 31/03/2012. But the position has not been
improved till the end the financial year 2013-14.

In Account no.I, Rs.6,45,78,931/- was credited in the bank as transfer from other
regions during 2011-12. This figure was not accounted for in the cash book of 2011-
12 and even 2012-13 but figure was incorporated in the Balance sheet of 2011-12
which indicates that final accounts are not correlated/based on basic records like
Cash Book. Such practice put the final accounts suspicious.

In Account no.XXI the following figures are pending to be rectified with the bank
accounts.

Short clearance of cheques Rs.1097391-60
Excess clearance of cheques Rs.7296774-00

From Account no.XXI, Rs.72.97 lakh was debited by SBI but office is not
having any details in this respect. So no claim was preferred with SBI to
get refund of this amount so far. The difference is still lying in the
reconciliation statement. The amount is lying debited since 2006 or earlier to
this period but no efforts were made by the office to get refund of this amount.

Interest on belated credit of Rs.23.91 lakh to be collected from SBI
Interest on belated credit was received for the period up to 06/2011
from State Bank of India. Thereafter no claim was preferred by the office for
belated interest. For the period 01/2011 to 06/2011 the bank has paid the belated
interest based on their calculation. There exists a mismatch between the amount
paid by the bank and the amount as per the system reports. The details are

Belated interest as per system report Rs.4401567/-
Belated interest received from SBI Rs.2010671/-
Balance to be received from SBI Rs.2390896/-


The figures in the system generated reports from the period 07/2011 onwards are
insignificant or negligible. There is serious doubt about the correctness of the
figures. The office is requested to seek the help of the IS division of Head Office in
this regard to set right the technical snag in the program.

Rs.17.36 crore credited in dummy accounts

According to the data available in the relevant module in the application software,
the receipts of Rs.17,36,41,368-26 through 433 challans for wage months
between 04/2011 and 03/2012 were credited in the dummy accounts of RO, Thane.
These receipts were not reconciled and proper credit was not given to the payer so
far.

Un reconciled amount of Rs.48.13 crore in Pension disbursement

Pension is paying through six banks from RO, Thane. Pension cash books were not
seen maintained by the office at the time of beginning of the Audit camp, except in
the case of Axis Bank. During the audit camp the cash books of all banks for pension
payments were prepared for the period 2011-13. The banks were re credited the
undisbursed amount of Rs.7.22 crore during December 2013 into account no.X.

The member wise reconciliation through system has been completed by the office
for the period up to 31/12/2013, except for the following banks. The pension
payment of Rs.48.13 crore is pending for member wise reconciliation as
follows.

Bank Period Amount
State Bank of India 03/2010-12/2012 Rs. 43.82 crore
ICICI Bank 03/2010-04/2012 Rs.1.28 crore
Bank of India 08/2013 Rs. 3.03 crore
Total Rs. 48.13 crore

Deduction of excess pension commission of Rs.5.33 lakh and deduction
of excess service charges of Rs.60.84 lakh by SBI

Commission for pension disbursement was paid to the banks up to the period
12/2013. But State Bank of India is continuing in the practice of deducting of
commission from the accounts of the office without any authorization. That too on
the amount deposited in the pension account rather than on the actual amount


disbursed. This is highly irregular and in contrary to the agreement for pension
disbursement. SBI deducted Rs. 80.77 lakh as commission for pension
payment for the period 01/2013 to 12/2013 and which includes an excess
amount of Rs. 5.33 lakh. The office has not adjusted this excess commission
deducted by SBI.

State Bank of India had deducted excess service charge of Rs.60.84 lakh
for providing banking services, during the financial years 2011-12 and
2012-13, which is pending for adjustment. The figure has been calculated by
the IAP and intimated to the office through observation memo no.8 dated
22/01/2014. But the office has neither verified the correctness of the amount of
service charges deducted by SBI nor claimed the excess amount intimated by the
IAP so far (March 2014).

Non cancellation of stale/time barred cheques worth Rs. 34.12 crore

The office is not following the Manual provisions and Head Office circulars, to
cancel the time barred and stale cheques. The position of time barred cheques
pending to be cancelled by the office as on 30/09/2013 was as follows.

Regarding B of the above, the details of the cheques, such as cheque no., date of
issue were not available. As per the information available from the office these
cheques were issued before 2010-11.

Position of stale cheques as on 30/09/2013
Account
no
Details available(A) Details not available(B) Total amt
of stale
cheques
(A)+(B)
No of
cheques

Amount Number
of
cheques
Amount

I 3262 191526550 Not
available
36267827 227794377
X 363 2725992 Not
available
104552400 107278392
XXI 87 2958044 Not
available
2602487 5560531
II 71 277771 Not
available
246707 524478
Total amount of stale cheques 341157778


Negative balance of Rs.9.51 crore in member accounts
As per the data available from the application software, as on 06/01/2014, 5833
members accounts in 1433 establishments were negative. The amount of
negative balance on 06/01/2014 was Rs.10.09 crore. The data as on
14/03/2014 was also taken during the time of finalization of audit report. As on
14/03/2014, 5127 members accounts in 1368 establishments are negative. The
amount of negative balance on 14/03/2014 was Rs.9.51 crore.

Compliance position of pending audit paras
The position of the pending audit paras is as follows.

Period No of paras
1995-96 1
1996-97 1
1997-98 2
1998-99 3
2001-05 9
2005-10 47
2010-11 17
Total 80

To serve the purpose of the Internal Audit, the field offices need to respond to the
audit objections on priority basis. RO, Thane has to take continuous follow up
action to reduce the number of outstanding paras to the minimum. Paras from
1995-96 onwards are pending and urgent action is required to settle the old
outstanding paras.

Other major issues

For the year 2012-13 the office has not maintained Valuable Document Register
(VDR). In the year 2011-12 VDR maintained and the audit noticed that
more than 350 instruments were cleared after a delay of more than 7
days from its receipts. The delayed clearances result in loss of interest to the
Organization.


Annexure-I
Statement showing the details of Paras of Previous Audit
reports recommended for dropping on verification of actual
compliance

Sl.no Period Para
no
Subject Recommendation
1 1998-99 6 Review of 7A Inquiries for
the year 1996-97 and 1997-
98
Compliance verified. The para may
be dropped
2 2005-10
3
Non refund of Advance
(Rs.5,00,000/-) by
M/s.Hindustan Prefab
Limited., towards ARM
work at RO Mumbai-II,
Thane.
be dropped
3 2005-10
6.2
Overpayment of Rs.7,190/-
in settlement of PF of Shri
Rohidas Patil,
MH/14711/93.
be dropped
4 2005-10
8.2
Overpayment of Rs.1391/-
in respect of settlement of
withdrawal benefit claim of
Mr. Ramakant Parab
P.F.A/C NO.
MH/13057/1423.
be dropped
5 2005-10
9
Non preparation of
Schedule of Receipts and
Non forwarding of the same
to Accounts Section.
be dropped
6 2005-10
16
Irregularities in
maintenance of Service
Books.
be dropped
7 2005-10
17
Improper verification of
bills towards expenditure
incurred on contract for
Electrician.
be dropped
8 2005-10
25
Non Reconciliation of
dues and Remittances of
Pension Fund in respect of
Establishments Exempted
Under Section 17 of the Act.
be dropped
9 2005-10
27 Negative Balance in Form-
24.
be dropped
10 2005-10
28 Irregularity in approval of
Form-24 despite large
amount of short
Remittances.
be dropped
11 2005-10
29
Irregular approval of Form-
24 - Non verification of
remittances with SRs /
DCBRs.
be dropped


12 2005-10
31
Improper scrutiny of
Returns in respect of
MH/200283 (M/s. CMS
Marshall Ltd.) Incorrect
calculation of contributions.
be dropped
13 2005-10
35
Difference in name of
members as per Form-9 and
Form-24.
be dropped
14 2005-10
39
Non- regularization of
Residual Balances in F/24.
be dropped
15 2005-10
45
Irregularities in maintaining
the Cash Books for pension
disbursement.
be dropped
16 2005-10
46
Irregularities in Payment of
Service Charges to State
Bank of India for Pension
disbursement.
be dropped
17 2005-10
47
Non maintenance of S.B.
Account in designated
Banks for EPS 1995 in
proper name.
be dropped
18 2005-10
50 Non following the
prescribed procedure in
respect of Service Charges
Payable to Bank on the total
contributions credited to
A/c.No.1, 2, 10, 21 & 22.
be dropped
19 2005-10
51 Irregularities in
maintenance of Cash Book
(Cash) for the period 2005-
06 to 2009-10.
be dropped
20 2005-10
52 Irregular transfer of funds
from Account No.22 to
Account No.24.
be dropped
21 2005-10
53 Irregular transfer of funds
from Account No.21 to
Account No.25.
be dropped
22 2005-10
maintenance of Cash Book
(Bank) in respect of
Account No.1, 2, 10, 21 &
22.
be dropped
23 2005-10
maintenance of Incumbency
Register and non-effecting
the periodical changes in
task holders.
be dropped
24 2005-10
58 Non submission Insurance
policy by the officials in
be dropped


cases of sanction of HBA
Advance
25 2005-10
59 Inordinate delay in
finalization of 7A Inquiry
in r/o M/S Garware
Synthetics Ltd.
be dropped
26 2005-10
62(1) Non Submission of
monthly Return (Appendix
A) by the Exempted
Establishment since long
period.
be dropped
27 2005-10
64 Non-furnishing of data of
total Investment as on 31
st

March every year by the
Exempted Establishments.
be dropped
28 2005-10
65 Non updation of Register of
Section 7A Inquiries.
be dropped
29 2005-10
69
Non-submission of Return
of subscribers for the year
2008-09 in respect of
M/s.CMS Marshall Ltd.
(MH/200283).
be dropped
30 2005-10
72
Improper mentioning of
past service and actual
service while issuing the
scheme certificate.
be dropped
31 2005-10
74
Improper maintenance of
Scheme Certificate Control
Register
be dropped
32 2005-10
75
Pension Payment Order
Register
be dropped
33 2005-10
76
Scroll Inward Register and
non-reconciliation of Scroll
Register with Cash Books.
be dropped
34 2010-11
Part-
II.
1(a)
Irregularities in medical
claims. Sri. Premchand
Kumar SSA.
be dropped
35 2010-11
1(b) Irregularities in medical
claims. Sri. V.M Sawaikar
EO.
be dropped
36 2010-11
2 Electricity bill for 8
th
floor is
not in the name of the
office.
be dropped
37 2010-11
3(a) Review of LPC Shri. RR
Mishra Hindi Tr. Recovery
of Rs.17386/-.
be dropped
38 2010-11
3(b-3) Non recovery of advances
from Sri. Viswajeet
be dropped


N.Marbate.
39 2010-11
4 Review of dormant SPF
accounts.
be dropped
40 2010-11
5 Inadequate fire safety
arrangements.
be dropped
41 2010-11
6 Dead stock.
be dropped
42 2010-11
7 L.T.C on leave.
be dropped
43 2010-11
9(a) L.T.C claim of Sri. Satpal
Kapil
be dropped
44 2010-11
9(b)
L.T.C claim of Sri.T.C.
Jankhani.
be dropped
45 2010-11
9(c)
L.T.C claim of Sri. Narendra
K. Singh.
be dropped
46 2010-11
9(d)
L.T.C claim of Sri.
Manoranjan Kumar.
be dropped
47 2010-11
9(e)
L.T.C claim of Smt. S.T.
Lokande
be dropped
48 2010-11
9(g)
L.T.C claim of Smt. Shilpa
Sawant.
be dropped
49 2010-11
Part-
III
3(15)
Negative balance
MH/200951/250
be dropped
50 2010-11
3(16)
Negative balance
MH/200951/265
be dropped
51 2010-11
3(17)
Negative balance
MH/200282/853
be dropped
52 2010-11
3(18)
Negative balance
MH/36623/202
be dropped
53 2010-11
4(2)
Data migration activities
(short remittance)
MH/35187
be dropped
54 2010-11
4(10)
(short remittance)
MH/39755
be dropped
55 2010-11
4(11)
(short remittance)
MH/41804
be dropped
56 2010-11
4(13)
(short remittance)
MH/99716
be dropped
57 2010-11
4(29)
(short remittance)
MH/95282
be dropped
58 2010-11
4(30)
(short remittance)
MH/44634
be dropped
59 2010-11
4(31)
(short remittance)
MH/200282
be dropped


60 2010-11
4(32)
(short remittance)
MH/36623
be dropped
61 2010-11
Part-
IV 2
PPO no 4054956 wrong
pensionable service resulted
in to excess payment.
be dropped


Annexure-II (A)

Statement showing the details of paras recommended for
dropping by the IAP on getting reply and verification of
compliance.

No reply was received by IAP during Camp Stay at Thane. Hence no recommendation
could be made to Head Office to drop the pending paras.


Annexure-II (B)

Statement showing the details of Paras of Previous Audit
Reports still Outstanding for want of final compliance

Sl.
No.

Period Para
No.
Subject Recommendations
1 1995-96 10 Finalisation of Coverage No reply, hence not recommended
for dropping.
2 1996-97 11 N.A. Details of observation not
available.
3 1997-98 4 MH/21136/11181 & 11379 No reply, hence not recommended
for dropping.
4 1997-98 5 Overpayment of Rs.1171/- in
r/o MH/16584/1617
No reply, hence not recommended
for dropping.
5 1998-99 2.1 Transport Allowance No reply, hence not recommended
for dropping.
6 4 M/s.V.G.Vakins, Raigad,
MH/96068 observation
regarding employment
strength
for dropping.
7 1998-99 10 Detection of Overpayment in
EPF settlement and irregular
payment in withdrawal
benefit under EPS in r/o Shri
B.Torvi, MH/8472/600.
for dropping.
8 2001-05 2 Negative Balance in respect of
MH/36891/50, 54, 55, 76, 77,
83, 84
for dropping.
9 2001-05 3 Overpayment of Rs.1880/- in
respect of MH/95076/324
for dropping.
10 2001-05 4 Excess payment of
Rs.97000/- with interest in
respect of MH/8291/271
for dropping.
11 2001-05 5 Negative balance in respect of
MH/4094/484, 639, 955,
1479
for dropping.
12 2001-05 6 Short remittance Para dropped by HO subject to the
verification of IAP. The reply to the
relevant para not seen submitted.
Hence recommended to retain the
para
13 2001-05 8 Negative Balance in respect of
MH/18297/203 Rs.12724/-
for dropping.
14 2001-05 9 Excess paid amount of
Rs.651/- to MH/26749C/26.
for dropping.
15 2001-05 10 Negative balance in respect of
MH/19602/1386, 685, 1252
for dropping.
16 2001-05 29 Excess/Shortage of staff in RO No reply, hence not recommended
for dropping.
17 2005-10
1
Non production of
Records/documents for Audit
for dropping.


due to improper and
irregular weeding out of
records in contravention of
Manual provisions Non
providing of space for Record
Room.
18 2005-10
2
Excess Payment of Rs.19056/-
in settlement of Tour TA
claim of Shri G.M. Mahawar,
APFC, Shri C.P. Mathur,
APFC and Smt. Rojita Sudhas,
EDP Supervisor.
for dropping.
19 2005-10
4
Dead Stock Register
for dropping.
20 2005-10
5
Misplacing of Form-9 and
irregular processing of
Accounts in respect of
M/s.Navinon Ltd., MH/9400.
for dropping.
21 2005-10
6.1
Overpayment of Rs- 27917/-
in the settlement of Transfer
out (Form -13) claim in
respect of Shri Praveen
Vijayshankar
(MH/39186/237).
for dropping.
2005-10
6.3
Overpayment of Rs.5628/- in
the settlement of EPF claim in
respect of Shri Sanjay B.
Kulkarni (MH/96594/1407)
during 2008-09.
for dropping.
2005-10
6.4
Overpayment of Rs.2,918/- to
Shri Mahesh Jadhav,,
MH/12217/765 in PF Final
Settlement.
for dropping.
2005-10
6.5
Overpayment of Rs.2,852/- to
Shri Kailas Manohar
Kshirsagar, MH/12217/1111
in PF Final Settlement.
for dropping.
22 2005-10
7
Unauthorized removal of
negative balances from F/24
of M/s. Navinon Ltd.,
MH/1492.
for dropping.
23 2005-10
8.1
Overpayment of Rs.10,934/-
to Mrs. Garima Sai
Sundaram, MH/35730/457
towards Withdrawal Benefit
Settlement.

for dropping.
24 2005-10
10
Non updation of
Overpayment Register.
for dropping.
25 2005-10
11
Non execution of Sale Deed in
favour of CBT, EPFO by
MIDC.
for dropping.
26 2005-10
12 Non verification of
genuineness of bills towards
expenditure incurred on Staff
for dropping.


engaged through Contracters,
before effecting the
Payments.
27 2005-10
13 Irregularity in Procurement of
Stationery and Printing of
Forms.
for dropping.
28 2005-10
14 Non submission of mortgage
Bond and Bill by the officials
in cases of sanction of
Computer Advance.
for dropping.
29 2005-10
15 Non submission of
Registration Book/Certificate
in cases of sanction of
Conveyance Advances.
for dropping.
30 2005-10
18
Irregularities in functioning
of Departmental Canteen.
for dropping.
31 2005-10
19
Irregularities in LTC claims. No reply, hence not recommended
for dropping.
32 2005-10
20
Non finalization of Inquiries
U/S 7 A of the Act even after
lapse of number of years from
date of initiation of the Inquiry
and involve default for old
period.
for dropping.
33 2005-10
21
Huge pendency of Voluntary
Coverage cases for issue of
Notification.
for dropping.
34 2005-10
22
Non-recovery of Arrear
Demand (Realisable) from the
defaulting Establishments.
for dropping.
35 2005-10
23
Non finalization of Inquiries
U/S 14 B & 7 Q of the Act
within time limit.
for dropping.
36 2005-10
24
Non levy of damages U/s.14B
of the Act Loss to the
Organisation.
for dropping.
37 2005-10
26
Non Updating of Form 7 (PS)
in to Computer System
Environment.
for dropping.
38 2005-10
30
Improper scrutiny of returns
submitted by M/s. Tech
Pacific India Ltd., MH/45539
showing contributions for a
period beyond date of
cessation.
for dropping.
39 2005-10
32
Improper scrutiny of F/6A
Returns and irregular
approval of Form-24 of
M/s.V.J.Dhodia & Brothers,
MH/15470 non detection of
erroneous diversion of EPS
Contributions and remittance
for dropping.


of PF at lesser rate.
40 2005-10
33
Improper scrutiny of F/6A
Returns and irregular
approval of Form-24 of
M/s.Sikova Emdroideries
Limited, MH/12217 non
detection of erroneous
diversion of EPS
Contributions.
for dropping.
41 2005-10
34
Non up dation and Improper
maintenance of F/9.
Para dropped by HO subject to the
verification of IAP. The office has
submitted reply of partial
compliance only. That too not
complete. For example updating of
Form-9 of MH/99023. The Form-
9 is still incomplete. Hence the
para may be retained.
42 2005-10
36
Irregular approval of Form-
24 Non verification of
remittances from SRs Non
scrutiny of Returns in respect
of MH/99543.
for dropping.
43 2005-10
37
Non-crediting interest for
2006-07 on transfer-in
amount at the time of
settlement in r/o
MH/99961/221.
for dropping.
44 2005-10
38
Non maintenance of
Important Registers by
Accounts Sections.
for dropping.
45 2005-10
40
Short Payment of Rs.8480/-
of Mr. Gopal Kanu Gharat, PF
A/c.No. MH/22030/42.
for dropping.
46 2005-10
41
Improper processing of PF
Claims and non debiting of
withdrawals
for dropping.
47 2005-10
42
Short Payment of Rs.5,378/-
in EDLI Settlement of Smt.
Smita Parab PF No.
MH/44262/23.
for dropping.
48 2005-10
43
Erroneous increase in NCP
Days in settlement of F/10C
cases with a view to grant
lesser amounts of withdrawal
benefits.
for dropping.
49 2005-10
44
Erroneous reduction in wages
with a view to grant lesser
amounts of withdrawal
benefits.
for dropping.
50 2005-10
48
Irregularities in issuing
cheques to designated Banks
towards Pension Payments
issuance of cheques for higher
amounts.
for dropping.
51 2005-10
49 Irregularities in respect of
for dropping.


interest on belated credits by
Bank Non-preferring of
claims thereof.
52 2005-10
55 Non-clearance of huge
outstanding amount shown in
Cash Book (Bank) in respect of
A/c.No.1 & 2.
for dropping.
53 2005-10
57 Irregularities in maintenance
of Library Register
for dropping.
54 2005-10
60 Non maintenance of
Register on watching
Inspection Charges in respect
of Account No. 02 and 22.
for dropping.
55 2005-10
61 Non maintenance of
Register of Exempted
Establishments
for dropping.
56 2005-10
62
(2,3,4,
5)
Non Submission of monthly
Return (Appendix A) by the
Exempted Establishment
since long period.
for dropping.
57 2005-10
63 Irregularity in the remittance
of Inspection Charges and
Contribution by M/s. Toyo
Engg. India Ltd. (MH/19504)
for dropping.
58 2005-10
66 Non preparation of Recovery
Dossier in respect of
defaulting Estt. having default
of Rs. Ten Lakh & above.
for dropping.
59 2005-10
67
Improper/Non-maintenance of
Register.
for dropping.
60 2005-10
68
Non maintenance of Register
of Securities.
for dropping.
61 2005-10
70
Irregular allotment of PF
Account Numbers to
members by M/s.Ranisati
Fabric Mills Ltd., MH/38981.
for dropping.
62 2005-10
71
Discrepancy in the Registered
Agreement for sale of
property submitted for
sanction of 68B(1)(a) advance
in respect of MH/14081/91
and 106 in 2009-10.
for dropping.
63 2005-10
73
Irregularity in the settlement
of Form-20 (EPF claim) in
respect Late Shri Shyam
Bihari Pandey
(MH/3944/134).
for dropping.
64 2010-11
Part-II
1(c)
Irregularity in reimbursement
of medical claims-Sri.
V.G.Bodhi
for dropping.


65 2010-11
3(b-1,2)
Non recovery of advance as
per LPC
for dropping.
66 2010-11
8
Non submission of records No reply, hence not recommended
for dropping.
67 2010-11
9(f)
L.T.C claim of Smt. Regina
Fernandes
for dropping.
68 2010-11
Part-III
1
Statement indicating
periodicity of claims settled
for the period 01/04/2010 to
31/03/2011
for dropping.
69 2010-11
2
Residual balance No reply, hence not recommended
for dropping.
70 2010-11
3
Negative balance No reply, hence not recommended
for dropping.
71 2010-11
4
(short remittance)
for dropping.
72 2010-11
5
Difference of names as per
Form-9 versus Form-24
for dropping.
73 2010-11
6
Non approval of Form-24 No reply, hence not recommended
for dropping.
74 2010-11
7
Non credit of transfer-in in
the respective members
account
for dropping.
75 2010-11
8
Non maintenance of ledger
cards
for dropping.
76 2010-11
9
Non preparation of worksheet No reply, hence not recommended
for dropping.
77 2010-11
10
Irregularity in writing short
remittance letter to the
establishment
for dropping.
78 2010-11
11
Non attestation of withdrawal
register
for dropping.
79 2010-11
Part-IV
1
PPO no.4055345 bearing
name of Sri. Rahimathullah S.
Choudhari
for dropping.
80 2010-11
3
Scrutiny of cash book of
pension
for dropping.


ADMINISTRATION

Para-1

Unliquidated advances and balances

As per the Balance Sheet of the Office as on 31/03/2013, the following advances and
balances were lying without any adjustment/recovery.

Description Overpayments Pay
advance
Miscellaneous
advance
OB as on 01/04/2012 94977-00 10181-00 22243-00
Paid during 2012-13 31431-00 19260-00 Nil
Recovered during 2012-
13
31431-00 19260-00 Nil
Closing balance on
31/03/2013
94977-00 10181-00 22243-00

1. Overpayments
The opening balance in this head is Rs.94977-00. This amount is pending from
01/04/2011 onwards without any recovery. Rs.31431-00 was seen paid during the
year 2012-13 and the amount recovered during the same year. But the balance
amount of Rs.94977-00 is not recovered so far. The office not provided the details of
the amount the persons responsible. The outstanding balance may be recovered
from the responsible persons immediately.

2. Pay advance
The opening balance under the head of account was Rs.10181/- for the year 2012-13.
The amount paid during 2012-13 was seen recovered in the year itself. But the
outstanding amount was not recovered or adjusted. The details of this pending
advance not provided. The office may take immediate action to recover/adjust the
outstanding balance.

3. Miscellaneous advance
The opening balance under this head was Rs.22243-00 for the year 2012-13. This
amount is pending from 01/04/2011 onwards without any adjustment. The office
not provided the details of this outstanding advance and the amount may be
recovered from the persons responsible without further delay.

The compliance position may be intimated to audit.


CASH

Para -2

Deficiencies in reconciliation of Cash book (bank) of Account no.I

The reconciliation statement as on 31/03/2013 was prepared as follows (page no.262 of
cash book).

Description Amount
Balance as per cash book as on
31/03/2013
(-) 292215599-70
Add : outstanding cheques for clearance (+)227636668-70
Add : Transfer from other regions not
effected in the cash book.
(+) 64578931-00
Balance as per bank statements as on
31/03/2013
0-00

The cash book of A/c No. I was last reconciled up to 30/09/2013. The reconciliation
statement of cash book (bank) with bank statements of RO, Thane as on 30/09/2013 was
prepared as follows (page no.274 of the cash book).

Description Amount
30/09/2013
(-) 294973672-70
Add : outstanding cheques for clearance (+) 233367877-70
Add : Transfer from other regions not
effected in the cash book.
(+) 64578931-00
Balance as per bank statements as on
30/09/2013
(-)2973136-00

1. The closing balance as per bank statements as on 30/09/2013 was zero. But the office
mentioned the bank balance as (-) 2973136-00. The office has intimated that the difference


in the reconciliation has been shown in the statement as bank balance since 04/2013. The
amount was transferred from account no. I to account no. V in 2005. But the
corresponding entry was not made in account no. V. So the amount has been shown as
transfer in. Now it was reversed but the corresponding entry has not been made in transfer
in account, since this amount was previously accounted for as transfer in by RO, Thane.
The office may take necessary action to rectify it and to show the correct bank balance in
the reconciliation statement.

2. Erroneous Debits of Rs.3.68 crore and Erroneous Credits of Rs.5.11
crore in Account no.I

The position of suspense account is as follows.

From the above it is obvious that the suspense entries accumulated prior to 2011-12 are
pending for rectification and no substantial progress has been achieved by the office
during the financial year 2012-13 and 2013-14 (up to date of reconciliation).

The amount shown under the head unclassified/suspense account was increasing year
after year in the Balance Sheet of RO, Thane. This is an unhealthy trend and shows that the
office has not taken adequate measures to arrest the trend. After the introduction of ECR,
normally there will not be any room for suspense/unclassified entries in the accounts. In
the meantime the office has not taken any efforts to clear the unclassified figures from its
accounts and clean the financial data.

The office may take immediate action to streamline the outstanding balance in the
suspense account and the position may be intimated.

Suspense account Erroneous Credits Erroneous Debits
As on 31/03/2011 Rs.47149298-00 Rs.5439293-00
As on 31/03/2012 Rs.47320093-00 Rs.36250638-30
As on 31/03/2013 Rs.47361162-00 Rs.36698447-80
As on 30/09/2013 Rs.51056259-00 Rs.36762389-80


3. Non cancellation of stale cheques worth Rs.22.78 crore

Position of outstanding cheques
Cheques issued but not presented for
payment as on 30/09/2013
Rs.233367877-70
Valid cheques (issued within 3
months)
Rs.5573501-00
Stale cheques for which details
available
Rs.191526550-00
Stale cheques for which details not
available
Rs.36267826-70
Total stale cheques Rs.227794376-70

.
As per the reconciliation statement as on 30/09/2013, the outstanding cheques for
realization comes Rs.23,33,67,877-70. The office has provided the details of 3360
outstanding cheques worth Rs.19,71,00,051-00 only and the details such as cheque
number, amount, date of issue of cheques worth Rs.3,62,67,826-70 were not found
available with the office. It was intimated that all these cheques were issued in the previous
years and the details were not available. The details of outstanding cheques of
Rs.19,71,00,051-00 were verified and it was found that 3262 cheques amounting to
Rs.19,15,26,550-00 were time barred or stale but not cancelled by the office. The total
amount of stale cheques as on 30/09/2013 was Rs.22,77,94,376-70.
.
The office has failed to take action as per para 7.25.12 of Chapter 7 of MAP Part-1 as well as
Circular no. Bkg./7(1)2004/2004/NBA/PartII dated 08/09/2005, to cancel the time
barred cheques. As per the Head Office Circular,

the time barred/stale cheques should be cancelled in the cash book by showing a minus
entry in red ink after verifying the bank statement of not only of that particular account
from which the cheque was issued but from the bank statements of the other accounts
also. After verifying, if it is found that the cheque is not cleared, it should be cancelled and
intimation should be sent to the account section for intimation. An intimation to the bank
should also be sent for stopping payment of that particular cheque as a measure of
caution.

Except the 98 outstanding cheques for Rs. 55,73,501-00, all other cheques worth
Rs.22,77,94,376-70 are stale and required to be cancelled.


4. Transfer from other regions not effected in the cash book

It was noted that the figure shown as transfer from other regions not effected in the cash
book is appearing in the reconciliation statement from 31/03/2012, without rectification.
On detailed verification, it was seen that this figure is the accumulation of the previous
years figures. The details are shown below.

Month/Year Amount
11/2011 2326930-00
12/2011 4555037-00
1/2012 8882449-00
2/2012 18448433-00
3/2012 30366082-00
Total 64578931-00

The office has not taken any action to account these figures in the cash book of RO, Thane
from November 2011 onwards, however incorporated this amount in Balance sheet for the
year 2011-12. This shows that whatever figures were given in Balance sheet was not based
on basic record like cash books. The reasons for this irregularity may be intimated to audit.
The office may take immediate action to rectify this.

The office may take action to rectify the deficiencies pointed out above immediately and
the position may be intimated.


Para-3

Deficiencies in reconciliation of Cash book (bank) of Account
no.X

The cash book of A/c No. X was found last reconciled up to 30/09/2013. The reconciliation
statement of the cash book (bank) of account no.X with bank statements as on 30/09/2013
was prepared by the office as follows (page no.15 cash book).

30/09/2013
(-) 173709052-50
Add : Outstanding cheques for
clearance - Previous

(+) 104552400-50
Add : Outstanding cheques for
clearance - Current

(+) 68984680-00
Balance as per bank as on
30/09/2013
(-) 171972-00

1.Erroneous credit of Rs.2.62 crore and Erroneous debit of Rs.1.71 crore

The amount parked in the heads erroneous credit and erroneous debit are a matter of
concern by the Head Office. Time and again the need to clear the suspense and doubtful
entries was emphasized by the Head Office. The position of the office in the area is as
follows.

Position of erroneous credit/debit
Balance Erroneous credit Erroneous debit
As on 31/03/2011 Rs. 53,42,909-00 Rs. 1,31,36,505-00
As on 31/03/2012 Rs. 3,08,11,083-25 Rs. 1,62,80,724-00
As on 31/03/2013 Rs. 2,57,22,501-25 Rs. 1,70,61,538-50
As on 30/09/2013 Rs. 2,62,31,771-25 Rs. 1,70,69,870-50

The issue may be brought to the notice of the bank and the matter may be followed up until
it is solved completely. It is evident from the above that the quantum of the amount has


been increased substantially during the last three years. Any laxity from the part of the
office to track the issue may affect the financial health of the Organization adversely.

2. Non cancellation of stale cheques worth Rs.10.73 crore

Rs.173537080-50
months)
Rs.66258688-00
available
Rs.2725992-00
available
Rs.104552400-50

The details such as cheque number, amount and date of issue of the outstanding cheques
issued by the office during the previous years amounting to Rs.10,45,52,400-50 was not
found available with the office. The office has failed to maintain the records of all
outstanding cheques as on 30/09/2013.The office has provided the details of outstanding
cheques worth Rs.68984680-00 only. Even after eleven months from the closing of the
financial year, the office has not taken any action to cancel the time barred/stale cheques.

Para 7.25.12 of Chapter 7 of MAP Part-1 as well as Circular no.
Bkg./7(1)2004/2004/NBA/PartII dated 08/09/2005 of Head Office stipulates that all
time barred/stale cheques to be cancelled on regular intervals to prevent fraudulent
payments and to ascertain the correct financial position of the Organization. As per the
Head Office Circular,

the time barred/stale cheques should be cancelled in the cash book by showing a minus
entry in red ink after verifying the bank statement of not only of that particular account
from which the cheque was issued but from the bank statements of the other accounts
also. After verifying, if it is found that the cheque is not cleared, it should be cancelled and
intimation should be sent to the account section for intimation. An intimation to the bank
should also be sent for stopping payment of that particular cheque as a measure of
caution.

The office may take action to collect the details of the cheques worth Rs.10.46 Crores and
to cancel all time barred/stale cheques worth Rs.10.73 crore immediately and the position
may be intimated.


Para-4

Deficiencies in reconciliation of Cash book (bank) of Account No.II

The cash book of A/c No. II was last reconciled up to 30/09/2013. The reconciliation
statement of the cash book (bank) of account no.II with bank statements, as on
30/09/2013 was prepared by the office as follows (page no.18 of cash book).

30/09/2013
(+) 48251477-46
Add : Outstanding cheques- previous (+) 246707-00
Outstanding cheques- current (+) 9761375-00
Balance as per bank statement as on
31/3/2013
(+)50321628-39

1. Erroneous credit of Rs.1.28 crore and Erroneous debit of Rs. 13.53
lakh

The position of unclassified/suspense entries in the last three financial years is as follows.

Erroneous debit/credit as on Erroneous credit Erroneous debit
31/03/2011 12683412-69 313298-00
31/03/2012 12808209-69 1184054-00
31/03/2013 12808511-69 1352914-00
30/09/2013 12808511-69 1352914-00

As per para 7.9.3 of Ch.7 of MAP Part-1, wrong/erroneous credit and incorrect entries
should be intimated to the bank for rectification. But the suspense entries pending from
2010-11 are increasing year by year. The office has failed to take action to contain the issue
so far. As per the financial statements, the adjustment of erroneous
debit/credit made during the financial year 2012-13 and 2013-14 (up to
30/09/2013) was zero. The erroneous entries were allowed to accumulate during the
financial year 2011-13 without any follow up action. The office may take steps to bring the
issue to the notice of the bank and to rectify all suspense entries immediately. The position
may be intimated to the audit.


2. Non cancellation of stale cheques worth Rs.5.24 lakh

Rs.10008082-00
months)
Rs.9483604-00
available
Rs.277771-00
available
Rs.246707-00

The office has not maintained the details of all outstanding cheques pending for realization
as on 30/09/2013. The details such as cheque number, amount and date of issue of
cheques worth Rs.246707-00 were not available in the office. It was intimated that these
cheques are pending from previous years and the details are not available. The office may
take action to collect the details of these cheques and to ascertain the status.

The office has provided the details of 156 cheques worth Rs.9761375-00 pending for
realization as on 30/09/2013. Even after eleven months from the closing of the financial
year, the office has failed to cancel the time barred cheques. The office may take immediate
action to cancel all time barred cheques and the position may be intimated.

3. Incorrect carry forwarding of cash book balance.

On verification of the cash book, it was noticed that the closing balance as on
31/03/2012 was Rs.67932839-46 but the opening balance carry forwarded on
01/04/2012 was Rs.75870770-53. This is highly irregular and needs clarification.
Without actual receipt of money, how the cash book balance was inflated by
Rs.7937931-07 was not clarified. This is gross violation of the basic accounting
principles also. Because of this, the Balance Sheet of RO, Thane as on 31/03/2013 do not
give a true and fair view of the state of affairs of the office. The office may take action to
rectify this immediately and the position may be intimated.


Para-5

Deficiencies in reconciliation of Cash book (bank) of Account
no.XXI

The cash book of A/c No. XXI was last reconciled up to 30/09/2013. The reconciliation
statement of the cash book (bank) of account no.XXI with bank statements, as on
30/09/2013 was prepared by the office as follows (page no.12 of cash book).

30/09/2013
(+) 15666134-22
Short/excess up to (+) 1097391-60
Excess/less in clearance (-) 7296774-00
Add : Outstanding cheques- previous (+) 2602487-20
Outstanding cheques- current (+) 4509004-00
Balance as per bank statement as on
30/9/2013
(+)16578243-02

1. Erroneous credit of Rs.13.44 lakh and Erroneous debit of Rs.9.98
lakh

The Head Office has emphasized the need and importance of clearing of erroneous debit
and erroneous credit from the accounts of the field offices on several times. The annual
financial data of RO, Thane shows unclassified/erroneous data without rectification in
account no.XXI. The position of the office for the last three years is as follows.

Balance as on Erroneous
debit
Erroneous
credit
31/03/2011 Rs.290733-00 Rs.748992-00
31/03/2012 Rs.925678-99 Rs.1330513-00
31/03/2013 Rs.935267-99 Rs.1344025-00
30/09/2013 Rs.998083-99 Rs.1344025-00


The unclassified and erroneous entries increased substantially during the last three years.
It is also pertinent to note that the data cleared during 2012-13 and 2013-14 (up to
09/2013) was zero. This is a matter of concern by the Head Office. As per para 7.9.3 of
Ch.7 of MAP Part-1, wrong/erroneous credit and incorrect entries should be intimated to
the bank for rectification. The office may take immediate action to rectify the
erroneous/doubtful entries in the accounts and the position may be intimated.

2. Non cancellation of stale cheques worth Rs.5.56 lakh

Amount of cheques issued but not presented
for payment as on 30/09/2013
Rs.7111491-20
Valid cheques (issued within 3 months) Rs.1550960-00
Stale cheques for which details available Rs.2958044-00
Stale cheques for which details not available Rs.2602487-20

The office has not provided the details of all outstanding cheques for realization. The
details of the outstanding cheques worth Rs.2602487-20 were not available for
verification. The details of 112 outstanding cheques worth Rs.4509004-00 were provided
by the office. On verification it was found that several cheques issued from May 2010 are
pending for clearance as on 30/09/2013. Since the validity period of cheque is three
months according to the revised guidelines of Reserve Bank of India, cheques issued prior
to July 2013 are time barred as on 30/09/2013. Accordingly cheques worth
Rs.5560531-20 are time barred are required to be cancelled. The office has given
scant regards to the circular issued by the Head Office in this regard. The provisions of
Para 7.25.12 of Chapter 7 of MAP Part-1 was also not followed by the office to cancel the
time barred cheques.

The office may take immediate action to cancel all time barred/stale cheques issued from
the account and the position may be intimated. This procedure may be done regularly to
prevent fraudulent withdrawals and to clean the financial data.


Para-6

Erroneous credit of Rs.1.65 lakh and Erroneous debit of Rs.0.68
lakh in Account no.XXII

The cash book of A/c No. XXII was last reconciled up to 30/09/2013. According to the
annual financial data, the position of erroneous debit and erroneous credit in account
no.XXII is as follows.

Balance as on Erroneous
debit
Erroneous
credit
31/03/2011 53018-20 7527-00
31/03/2012 64852-20 7484-00
31/03/2013 67833-20 164126-89
30/09/2013 67833-20 164566-89

The suspense entries in the account have increased many folds during the last three
financial years. There was no progress in the clearance of unclassified entries achieved by
the office in the year 2012-13 and 2013-14 (up to 30/09/2013). As per para 7.9.3 of Ch.7 of
MAP Part-1, wrong/erroneous credit and incorrect entries should be intimated to the bank
for rectification.

The office may take action to bring the issue to the notice of the bank and to rectify it
immediately. The matter may be followed up until the issue is solved and the position may
be intimated to audit.


Para-7

Unauthorized excess clearance of Rs.72.97 lakh from account
no.XXI

The bank reconciliation statement of account no.XXI as on 30/09/2013 shows two entries
as follows.

Short/excess up to 1097391-60
Excess/less in clearance 7296774-00

Rs.1097391-60 was added with the cash book balance and Rs.7296774-00 was deducted
from the cash book balance. That means Rs.1097391-60 was short in clearance and
Rs.7296774-00 was excess in clearance. The bank reconciliation statement of April 2010,
which is the last reconciliation statement available in the cash book, was verified and the
above entries were appearing in the statement without any change.

Even after more than three years, the office has not rectified the erroneous entries from the
accounts. It is a serious irregularity that the office has not taken any action to
recoup the amount of Rs.72.97 lakhs, which was withdrawn from the accounts
of the office by the bank illegally and without authorization, as excess
clearance.
As per para 7.9.3 of Ch.7 of MAP Part-1, wrong/erroneous credit and incorrect entries
should be intimated to the bank for rectification. The office may take action to bring the
issue of short/excess and excess/less in clearance to the notice of the bank and rectify it
immediately. The possibility of tampering the cheque amounts cannot be ruled out at this
stage.The matter may be followed up until it is solved completely and the position may be
intimated.


Para-8

Non recovery of Rs.23.91 lakh Interest on Belated Credit due from
State Bank of India

As per Para 6.9.4 of the MAP Part-I, at the time of closing of cash book for each of the
accounts, a certificate is to be recorded in the cash book that the statement of belated
credit of funds by SBI has been prepared and forwarded to SBI under the signature of
APFC. The details of amount of interest claimed and outstanding as on 1
st
day of the
month, amount claimed during current month should also be recorded below the monthly
bank reconciliation statement recorded in cash book. The office has not followed this
procedure for claiming interest on belated credit. No records were maintained by the office
for watching the prompt and timely receipt of interest on belated credit. This has resulted
in huge financial loss to the Organization.

1. Balance interest to be received from SBI

On verification of records, it was found that the bank paid interest on belated credits up to
the period 06/2011 based on their calculation. The office has not verified the correctness of
this. There exists a gross mismatch between the amount due as per the data available from
the relevant module of application software and the amount received from SBI.

(Amount in Rs.)

The office has not made any efforts to claim the short paid amount so far. The office may
take steps to verify the statements and relevant challans immediately and claim the

Month
Interest on belated credit
Received from SBI As per system report
01/2011 128307 631992
02/2011 168113 432748
03/2011 321316 760630
04/2011 204720 467058
05/2011 140566 813943
06/2011 1047649 1295196
Total 2010671 4401567
Balance to be received from SBI 2390896


balance amount. The differential rate may be applied wherever applicable. The interest
received from the bank was credited in Account no.II instead of crediting in the respective
accounts. Account no.II is the revenue account of EPFO and the interest ought to be
credited in respective accounts as per Para 6.9.2 (xi) of MAP Part-I.

2. Non claiming of interest on belated credit

The bank has not paid the interest on belated credit after 6/2011. The office has not made
any claim in this regard with the bank authorities. Service charges were deducted by the
bank up to 03/2013 without adjusting the amount payable by them as penal interest. As
per the system generated reports for the period from 07/2011 onwards, the interest on
belated credit and service charges payable are some insignificant figures. This is also not in
conformity with the amount of service charges deducted by the bank. The office cannot
confide in solely the system generated reports right now because of the uncertainty of the
data. An indicative list is appended below. The office may take up the issue with the IS
division of Head Office and it may be sort out at the earliest.

(Amount in Rs.)

Month
Service charges Interest on
belated credit as
per system report
Deducted by bank As per system
report
07/2011 3258126 15054 1491
08/2011 4024067 88152 10337
09/2011 3215528 4760 541
10/2011 3139946 31406 1818
11/2011 3775207 289774 28591
12/2011 3561228 28208 1547

The list is indicative only. For the period after 12/2011 also shows some irrelevant figures.
Office may take action to claim the interest on belated credits on a monthly basis and the
position may be intimated.


Para-9

Non recovery of excess service charge of Rs.60.84 lakh deducted
by SBI

As per Para 6.10.2 of MAP Part-I, the RO/SRO should ensure the receipt of details of
remittances showing the period-account wise, total credit summation and amount of
charge as and when debited to Account no.II and the correctness of the amount charged by
SBI should be verified and any erroneous charge is adjusted immediately.

The office has not verified the correctness of the amount of service charge deducted by the
bank. As per the agreement for banking arrangement between SBI and EPFO, service
charge is payable to SBI at the rate of Rs.3/- per Rs.1000/- received in the link branch and
base branches except inter office transfers. On verification of the relevant data, it was
found that the bank deducted excess amount towards service charges during 2011-13.

(Amount in Rs.)
Month Total receipt
(in Rs.)
Service charge
due (in Rs.)
Service charges
deducted (in Rs.)
06/2011 969012623 2907038 3609134
08/2011 1114273157 3342819 4024067
09/2011 1053346340 3160038 3215528
10/2011 1022236276 3066708 3139946
12/2011 1183901493 3551703 3561228
01/2012 1098872430 3296616 3417041
02/2012 1108026386 3324078 3381292
03/2012 1233300074 3699900 3715144
09/2012 1250872528 3752616 4208004
10/2012 1135850857 3407550 3589489
02/2013 1170536900 3511608 3914139
Total 33690674 39775012
Excess service charge deducted by SBI Rs.60,84,338-00

The office may take action to claim the excess amount of Rs.60.84 lakhs deducted from the
account immediately. The service charges deducted by the bank may be watched and its


correctness may be verified as per the manual provisions and any excess may be adjusted
immediately in future.

Besides this excess debit, the following unauthorized debits were also seen made in
Account no.II.

Date Amount
debited
Description
23/03/2013 589665-00 Pension commission for January 2013
23/03/2013 522931-00 Pension commission for February 2013
23/03/2013 1010400-00 DEBIT CHGS REC FOR PRO NEFT FR NOV
2010 TO AUG 2012

In reply to the audit observation, the office intimated that the issue has been taken up with
SBI and the pension commission amount has been rectified by transferring the amount
from account no.X.

From the narration in the bank statement, the details of the withdrawal of the amount of
Rs.1010400-00 are not clear. The office may seek clarification from the bank regarding
this and ensure whether this is payable as per the agreement of banking arrangement with
them. Otherwise it may be reversed immediately and the position may be intimated.


Para-10

Non removal of the amount of Rs. 17.36 crore credited in dummy
accounts

The receipt of Rs.17.36 crores through 433 challans was credited in the
dummy accounts, which are pending for proper accounting. The receipts were
made for the period between 04/2011 and 03/2012. The office has not taken any action to
collect the correct details of the remitter and give proper credit to them. Non-crediting of
amount received from employers will result in non-compilation of annual statement of
accounts of the beneficiaries and will ultimately affect the delivery of quality of service and
unnecessary hardship to employees as well as employers. The wage month wise details of
remittances are furnished below.

(Amount in Rs.)

The issue of the un accounted amount credited in dummy accounts may be taken by the
office very seriously and action may be taken to give proper credit to the payer
immediately. The position may be intimated to audit.

Wage
month
Amount credited in Account No. Total
I II X XXI XXII
04/2011 1684429 152673 692177 41882 1012 2572173
05/2011 122429101 2060747-04 503239 22390 453 125015930-15
06/2011 4438290-68 130390 50406-11 727 46 4619859-00
07/2011 32980793 46944 65709-11 674 21 33094141-11
08/2011 1366212 437111 0-00 0-00 0-00 1803323-00
09/2011 5885194-21 23269 377 24-00 0-00 5908864-21
10/2011 464273 27508 0-00 0-00 0-00 491781-00
11/2011 0-00 7224 0-00 0-00 0-00 7224-00
12/2011 0-00 9895 0-00 0-00 0-00 9895-00
01/2012 570 47939 0-00 0-00 0-00 48509-00
02/2012 0-00 12503 0-00 0-00 0-00 12503-00
03/2012 0-00 57165 0-00 0-00 0-00 57165-00
Total 169248862-89 3013368-04 1311908-33 65697 1532 173641368-26


Para-11

Non maintenance of Valuable Document Register (VDR) and delay
in realization of instruments

As per para 7.7.9 of Ch. 7 of MAP Part-I, in support of Cash book (cash) a valuable
document register (VDR) for receipt and disposal of Cheques/DDs should be maintained
in Cash section. For the financial year 2012-13, the office has not maintained
VDR to enter the receipt and disposal of instruments. This is highly irregular and
gross violation of the manual provisions. In the year 2012-13 the cheques and DDs received
by the office were entered in the Cash book (cash) without making an entry in the VDR.
The date of realization not entered in the cash book (cash). The account number in which
the instrument is to be credited also not seen entered in the cash book (cash). So the office
is not position to confirm the date of realization of an instrument received by the office and
also to identify the dishonored instruments. In some cases the date of realization is not
recorded in the VDR. So it could not be confirmed if all the instruments received were sent
for collection and the status of its realization.

1. Delayed clearances of cheques and DDs

The office has maintained a computer generated VDR for the year 2011-12. On
verification, it was found that several instruments received by the office were
realized after seven days of its receipt. According to para 7.8.5 of Ch.7 of MAP Part-
I, the instruments should be sent for collection on the date of receipt or on the next day. In
no case it shall be retained for more than two days. The employer is liable to pay penal
damages and interest up to the date of dispatch and any delay beyond that will have to be
borne by the Organization. Since EPFO will not accept outstation cheques, the instruments
must be either local cheques or DDs. According to the clearing house rules, all local
cheques/DDs are to be cleared immediately. So the delay occurred will ultimately resulted
in revenue loss to the Organization. An indicative list of delayed realization in 2011-12 is
appended below.

Cheque/DD
no.
Amount Date of
receipt
Date of
realisation
Delay in
days
841019 45687-00 07/04/2011 19/04/2011 12
751040 134527-00 07/04/2011 19/04/2011 12
750719 156972-00 07/04/2011 19/04/2011 12
751039 216837-00 07/04/2011 19/04/2011 12
750648 210777-00 07/04/2011 19/04/2011 12
463790 185425-00 11/04/2011 19/04/2011 12


987329 683732-00 11/04/2011 19/04/2011 12
943698 26249-00 11/04/2011 19/04/2011 12
943700 92696-00 11/04/2011 19/04/2011 12
943701 26160-00 11/04/2011 19/04/2011 12
943699 24352-00 11/04/2011 19/04/2011 12
890578 242050-00 11/04/2011 19/04/2011 12
015422 21927-00 13/04/2011 26/04/2011 13
622484 27523-00 13/04/2011 26/04/2011 13
938066 108429-00 13/04/2011 26/04/2011 13
291762 1121906-00 13/04/2011 26/04/2011 13
716362 231835-00 13/04/2011 26/04/2011 13
943702 124319-00 15/04/2011 27/04/2011 12
711348 55070000-00 15/04/2011 27/04/2011 12
079680 63314-00 15/04/2011 27/04/2011 12
064334 15125-00 15/04/2011 27/04/2011 12
005034 34057-00 15/04/2011 27/04/2011 12
721986 4320-00 15/04/2011 27/04/2011 12
205537 25809-00 15/04/2011 27/04/2011 12
076057 48700-00 15/04/2011 27/04/2011 12
031492 7085-00 09/05/2011 18/05/2011 8
957800 6150-00 09/05/2011 18/05/2011 8
001785 9063-00 09/05/2011 18/05/2011 8
992563 15067-00 09/05/2011 18/05/2011 8
013171 10162-00 09/05/2011 18/05/2011 8
018234 34593-00 09/05/2011 18/05/2011 8
024529 20488-00 09/05/2011 18/05/2011 8
012404 15534-00 09/05/2011 18/05/2011 8
074339 13210-00 09/05/2011 18/05/2011 8
007410 14291-00 09/05/2011 18/05/2011 8
269356 13680-00 09/05/2011 18/05/2011 8
105489 14191-00 09/05/2011 18/05/2011 8
063992 16971-00 09/05/2011 18/05/2011 8
005631 10752-00 09/05/2011 18/05/2011 8
005630 13349-00 09/05/2011 18/05/2011 8


055040 1920-00 09/05/2011 18/05/2011 8
504208 7183-00 09/05/2011 18/05/2011 8
574289 14325-00 09/05/2011 18/05/2011 8
000815 9107-00 09/05/2011 18/05/2011 8
205241 8191-00 09/05/2011 18/05/2011 8
609043 19638-00 09/05/2011 18/05/2011 8
012681 30134-00 09/05/2011 18/05/2011 8
582458 2087-00 13/06/2011 24/06/2011 11
515201 40366-00 13/06/2011 24/06/2011 11
512991 548877-00 13/06/2011 22/06/2011 11
152465 103-00 13/06/2011 24/06/2011 11
890634 179751-00 13/06/2011 23/06/2011 11
658409 138046-00 13/06/2011 22/06/2011 11
841051 58602-00 13/06/2011 24/06/2011 11
596141 16943-00 13/06/2011 24/06/2011 11
512925 108724-00 13/06/2011 22/06/2011 11
009728 38388-00 13/06/2011 24/06/2011 11
171972 3332130-00 13/06/2011 22/06/2011 11
849966 633-00 13/06/2011 24/06/2011 11
849928 1441-00 13/06/2011 24/06/2011 11
849827 66-00 13/06/2011 24/06/2011 11
711371 74980429-00 13/06/2011 22/06/2011 9
711372 25820608-00 13/06/2011 22/06/2011 9
055745 50528-00 13/06/2011 24/06/2011 11
063896 454664-00 13/06/2011 23/06/2011 10
063894 37274-00 13/06/2011 24/06/2011 11
055746 127739-00 13/06/2011 23/06/2011 10
055742 144927-00 13/06/2011 23/06/2011 10
055743 139054-00 13/06/2011 23/06/2011 10
063895 115824-00 13/06/2011 23/06/2011 10
890632 61191-00 13/06/2011 24/06/2011 11
890651 21086-00 13/06/2011 24/06/2011 11
525455 10436-00 13/06/2011 24/06/2011 11
000481 1623-11 13/06/2011 24/06/2011 11


100002 1430-00 13/06/2011 24/06/2011 11
248610 354312-00 14/06/2011 23/06/2011 9
750488 138090-00 14/06/2011 23/06/2011 9
513083 53119-00 14/06/2011 24/06/2011 10
943808 6975-00 14/06/2011 24/06/2011 10
150599 42684-00 14/06/2011 24/06/2011 10
945787 113377-00 14/06/2011 23/06/2011 9
101025 74464-00 14/06/2011 24/06/2011 10
101024 102690-00 14/06/2011 23/06/2011 9
945786 97176-00 14/06/2011 24/06/2011 10
938160 199548-00 14/06/2011 23/06/2011 9
938159 793293-00 14/06/2011 23/06/2011 9
750463 88564-00 14/06/2011 24/06/2011 10
006108 53956-00 14/06/2011 24/06/2011 10
304307 1618032-00 14/06/2011 23/06/2011 9
512949 127572-00 14/06/2011 23/06/2011 9
100662 155857-00 14/06/2011 23/06/2011 9
725536 103114-00 14/06/2011 23/06/2011 9
992646 13331-00 24/06/2011 04/07/2011 10
083753 746585-00 24/06/2011 04/07/2011 10
083758 55106-00 24/06/2011 04/07/2011 10
951243 219879-00 24/06/2011 04/07/2011 10
571805 531-00 24/06/2011 04/07/2011 10
944268 141851-00 24/06/2011 04/07/2011 10
944264 25265-00 24/06/2011 04/07/2011 10
944265 26683-00 24/06/2011 04/07/2011 10
944266 56594-00 24/06/2011 04/07/2011 10
006303 184037-00 24/06/2011 04/07/2011 10
665473 91333-00 06/07/2011 15/07/2011 9
171562 168-00 06/07/2011 15/07/2011 9
304314 447985-00 06/07/2011 15/07/2011 9
751079 348708-00 06/07/2011 15/07/2011 9
513403 143-00 06/07/2011 15/07/2011 9
514156 449085-00 06/07/2011 15/07/2011 9


732834 111852-00 06/07/2011 15/07/2011 9
514153 776181-00 06/07/2011 15/07/2011 9
749768 1042659-00 06/07/2011 15/07/2011 9
657196 22902-00 06/07/2011 15/07/2011 9
513416 241-00 06/07/2011 15/07/2011 9
172119 344-00 06/07/2011 15/07/2011 9
863752 31893-00 06/07/2011 15/07/2011 9
005050 5837-00 06/07/2011 15/07/2011 9
878372 40000-00 07/07/2011 15/07/2011 8
941081 60000-00 07/07/2011 15/07/2011 8
000590 1623-11 18/07/2011 28/07/2011 10
015425 21927-00 18/07/2011 28/07/2011 10
081047 926715-00 18/07/2011 28/07/2011 10
083862 930944-00 18/07/2011 28/07/2011 10
083842 81291-00 18/07/2011 28/07/2011 10
083861 708849-00 18/07/2011 28/07/2011 10
083851 31461-00 18/07/2011 28/07/2011 10
083838 89243-00 18/07/2011 28/07/2011 10
433540 63826-00 18/07/2011 28/07/2011 10
711384 14066462-00 18/07/2011 28/07/2011 10
608346 46397-00 22/07/2011 01/08/2011 10
943232 1615566-00 22/07/2011 01/08/2011 10
697082 305241-00 22/07/2011 01/08/2011 10
809748 122716-00 22/07/2011 01/08/2011 10
711387 593595-00 29/07/2011 11/08/2011 13
025741 21553-00 10/08/2011 20/08/2011 10
103952 1425021-00 10/08/2011 20/08/2011 10
085439 150668-00 10/08/2011 20/08/2011 10
020240 43226-00 10/08/2011 20/08/2011 10
518013 147610-00 10/08/2011 20/08/2011 10
202618 161440-00 10/08/2011 20/08/2011 10
929314 407564-00 10/08/2011 20/08/2011 10
963435 12320-00 10/08/2011 20/08/2011 10
963434 10974-00 10/08/2011 20/08/2011 10


943584 99722-00 10/08/2011 20/08/2011 10
085426 813683-00 10/08/2011 20/08/2011 10
103930 50756-00 10/08/2011 20/08/2011 10
873650 80454-00 11/08/2011 20/08/2011 9
819584 200000-00 12/08/2011 20/08/2011 8
015426 21927-00 12/08/2011 20/08/2011 8
006757 49130353-00 12/08/2011 20/08/2011 8
064176 155600000-00 12/08/2011 20/08/2011 8
496039 350585-00 12/08/2011 20/08/2011 8
083849 99042-00 12/08/2011 20/08/2011 8
808582 4819-00 12/08/2011 20/08/2011 8
017839 91808-00 12/08/2011 20/08/2011 8
94496 182850-00 12/08/2011 20/08/2011 8
796565 40188-00 12/08/2011 20/08/2011 8
016066 28103-00 12/08/2011 20/08/2011 8
287577 192276-00 12/08/2011 20/08/2011 8
006689 94669-00 12/08/2011 20/08/2011 8
006684 102679-00 12/08/2011 20/08/2011 8
701505 112305-00 12/08/2011 20/08/2011 8
000642 1623-11 12/08/2011 20/08/2011 8
000420 27217-00 29/08/2011 06/09/2011 8
000402 59184-00 29/08/2011 06/09/2011 8
890758 60079-00 29/08/2011 06/09/2011 8
222754 24006-00 29/08/2011 06/09/2011 8
003187 159222-00 29/08/2011 06/09/2011 8
462134 94255-00 29/08/2011 06/09/2011 8
514224 181636-00 29/08/2011 06/09/2011 8
097937 102242-37 29/08/2011 06/09/2011 8
100195 40677-00 29/08/2011 06/09/2011 8
514276 12511-00 29/08/2011 06/09/2011 8
222743 76838-00 29/08/2011 06/09/2011 8
501664 144027-00 29/08/2011 06/09/2011 8
155365 2318162-00 29/08/2011 06/09/2011 8
000406 40690-00 29/08/2011 06/09/2011 8


659156 1471-00 29/08/2011 06/09/2011 8
608594 409460-00 29/08/2011 06/09/2011 8
514156 3092-00 29/08/2011 06/09/2011 8
718770 18874-00 29/08/2011 06/09/2011 8
511258 68984-00 29/08/2011 06/09/2011 8
101556 77047-00 29/08/2011 06/09/2011 8
559530 89016-00 29/08/2011 06/09/2011 8
563924 20565-00 12/10/2011 20/10/2011 10
563923 22477-00 12/10/2011 20/10/2011 10
418366 19427-00 12/10/2011 20/10/2011 10
418365 20451-00 12/10/2011 20/10/2011 10
418364 19939-00 12/10/2011 20/10/2011 10
418361 22187-00 12/10/2011 20/10/2011 10
418362 22187-00 12/10/2011 20/10/2011 10
418363 22187-00 12/10/2011 20/10/2011 10
418359 27181-00 12/10/2011 20/10/2011 10
418360 27181-00 12/10/2011 20/10/2011 10
722196 49238-00 12/10/2011 20/10/2011 10
722190 93555-00 12/10/2011 20/10/2011 10
722202 41444-00 12/10/2011 20/10/2011 10
722189 31732-00 12/10/2011 20/10/2011 10
722195 22321-00 12/10/2011 20/10/2011 10
722197 22509-00 12/10/2011 20/10/2011 10
722194 81293-00 12/10/2011 20/10/2011 10
722199 75739-00 12/10/2011 20/10/2011 10
722198 27231-00 12/10/2011 20/10/2011 10
722203 87173-00 12/10/2011 20/10/2011 10
722201 59312-00 12/10/2011 20/10/2011 10
722192 131361-00 12/10/2011 20/10/2011 10
722204 83419-00 12/10/2011 20/10/2011 10
514811 307349-00 12/10/2011 20/10/2011 10
651748 2025-00 14/10/2011 22/10/2011 8
111137 19661-00 14/10/2011 22/10/2011 8
111117 289566-00 14/10/2011 22/10/2011 8


111138 172153-00 14/10/2011 22/10/2011 8
111110 80166-00 14/10/2011 22/10/2011 8
111107 713012-00 14/10/2011 22/10/2011 8
111118 115892-00 14/10/2011 22/10/2011 8
111152 20190-00 14/10/2011 22/10/2011 8
111144 49612-00 14/10/2011 22/10/2011 8
111134 30290-00 14/10/2011 22/10/2011 8
111136 19511-00 14/10/2011 22/10/2011 8
111113 370431-00 14/10/2011 22/10/2011 8
111131 88369-00 14/10/2011 22/10/2011 8
111119 126277-00 14/10/2011 22/10/2011 8
111111 821369-00 14/10/2011 22/10/2011 8
111142 72842-00 14/10/2011 22/10/2011 8
111153 5991-00 14/10/2011 22/10/2011 8
111154 9731-00 14/10/2011 22/10/2011 8
111141 1067761-00 14/10/2011 22/10/2011 8
111146 48835-00 14/10/2011 22/10/2011 8
111132 258818-00 14/10/2011 22/10/2011 8
111112 720334-00 14/10/2011 22/10/2011 8
111116 363115-00 14/10/2011 22/10/2011 8
111150 89459-00 14/10/2011 22/10/2011 8
111108 65103-00 14/10/2011 22/10/2011 8
111148 21584-00 14/10/2011 22/10/2011 8
111133 243606-00 14/10/2011 22/10/2011 8
111123 2042173-00 14/10/2011 22/10/2011 8
111151 7920-00 14/10/2011 22/10/2011 8
111115 248344-00 14/10/2011 22/10/2011 8
111122 223165-00 14/10/2011 22/10/2011 8
111121 496170-00 14/10/2011 22/10/2011 8
111149 21805-00 14/10/2011 22/10/2011 8
111147 34517-00 14/10/2011 22/10/2011 8
111143 103216-00 14/10/2011 22/10/2011 8
111139 639029-00 14/10/2011 22/10/2011 8
111114 675845-00 14/10/2011 22/10/2011 8


111126 212362-00 14/10/2011 22/10/2011 8
111128 97006-00 14/10/2011 22/10/2011 8
111127 204981-00 14/10/2011 22/10/2011 8
111156 2013-00 14/10/2011 22/10/2011 8
111157 193-00 14/10/2011 22/10/2011 8
111125 430268-00 14/10/2011 22/10/2011 8
111124 107082-00 14/10/2011 22/10/2011 8
111129 30496-00 14/10/2011 22/10/2011 8
111120 129604-00 14/10/2011 22/10/2011 8
111155 4678-00 14/10/2011 22/10/2011 8
11130 1670832-00 14/10/2011 22/10/2011 8
111109 1880152-00 14/10/2011 22/10/2011 8
111135 90917-00 14/10/2011 22/10/2011 8
111140 681197-00 14/10/2011 22/10/2011 8
111145 168359-00 14/10/2011 22/10/2011 8
878375 40000-00 28/10/2011 05/11/2011 8
015428 21927-00 28/10/2011 05/11/2011 8
762232 1105-00 28/10/2011 05/11/2011 8
026690 14423-00 28/10/2011 05/11/2011 8
309921 285000-00 28/10/2011 05/11/2011 8
309922 10000-00 28/10/2011 05/11/2011 8
309923 120326-00 28/10/2011 05/11/2011 8
000713 1623-11 28/10/2011 05/11/2011 8
032174 81909-00 28/10/2011 05/11/2011 8
010831 5000-00 28/10/2011 05/11/2011 8
761107 89426-00 28/10/2011 05/11/2011 8
300799 24730-00 28/10/2011 05/11/2011 8
025936 16827-00 28/10/2011 05/11/2011 8
000437 1103571-00 28/10/2011 05/11/2011 8
030506 49899-00 28/10/2011 05/11/2011 8
559576 238292-00 31/10/2011 08/11/2011 8
100593 43087-00 31/10/2011 08/11/2011 8
198156 888175-00 31/10/2011 08/11/2011 8
693639 391633-00 31/10/2011 08/11/2011 8


107045 165174-00 31/10/2011 08/11/2011 8
107046 103262-00 31/10/2011 08/11/2011 8
107044 121696-00 31/10/2011 08/11/2011 8
771527 53886-00 31/10/2011 08/11/2011 8
103500 32754-00 31/10/2011 08/11/2011 8
167164 170-00 31/10/2011 08/11/2011 8
222879 128764-00 31/10/2011 08/11/2011 8
812775 1816635-00 31/10/2011 08/11/2011 8
016206 250723-00 31/10/2011 08/11/2011 8
006263 26342-00 31/10/2011 08/11/2011 8
104049 88252-00 31/10/2011 08/11/2011 8
719860 110564-00 31/10/2011 08/11/2011 8
104048 52008-00 31/10/2011 08/11/2011 8
047924 25393-00 31/10/2011 08/11/2011 8
938465 1076531-00 31/10/2011 08/11/2011 8
374047 247756-00 31/10/2011 08/11/2011 8
374039 89301-00 31/10/2011 08/11/2011 8
374053 72211-00 31/10/2011 08/11/2011 8
069222 883994-96 31/10/2011 08/11/2011 8
007917 33175-00 31/10/2011 08/11/2011 8
005782 271385-00 31/10/2011 08/11/2011 8
172235 331910-00 31/10/2011 08/11/2011 8
172227 2444801-00 31/10/2011 08/11/2011 8
191586 175664-00 31/10/2011 08/11/2011 8
809048 137161-00 31/10/2011 08/11/2011 8
931916 62596-00 31/10/2011 08/11/2011 8
588426 102265-00 31/10/2011 08/11/2011 8
958548 309891-00 31/10/2011 08/11/2011 8
513901 127338-00 31/10/2011 08/11/2011 8
751720 196087-00 31/10/2011 08/11/2011 8
722193 25295-00 31/10/2011 08/11/2011 8
722200 32084-00 31/10/2011 08/11/2011 8
722191 1672-00 31/10/2011 08/11/2011 8
104044 377284-00 31/10/2011 08/11/2011 8


596179 70171-00 31/10/2011 08/11/2011 8
473063 23813-00 31/10/2011 08/11/2011 8
129882 11361-00 04/11/2011 12/11/2011 8
502046 50000-00 04/11/2011 12/11/2011 8
867719 76753-00 10/11/2011 18/11/2011 8
867729 41611-00 10/01/2012 18/01/2012 8
867730 26895-00 10/01/2012 18/01/2012 8
867718 116376-00 10/01/2012 18/01/2012 8
867734 392403-00 10/01/2012 18/01/2012 8
867737 106149-00 10/01/2012 18/01/2012 8
867725 103318-00 10/01/2012 18/01/2012 8
867732 569306-00 10/01/2012 18/01/2012 8
867723 130720-00 10/01/2012 18/01/2012 8
867717 125398-00 10/01/2012 18/01/2012 8
867736 12808-00 10/01/2012 18/01/2012 8
867728 71642-00 10/01/2012 18/01/2012 8
867731 87690-00 10/01/2012 18/01/2012 8
867724 66682-00 10/01/2012 18/01/2012 8
867720 50581-00 10/01/2012 18/01/2012 8
867735 3030-00 10/01/2012 18/01/2012 8
867727 2972-00 10/01/2012 18/01/2012 8
867739 147017-00 10/01/2012 18/01/2012 8
867721 24775-00 10/01/2012 18/01/2012 8
867726 60346-00 10/01/2012 18/01/2012 8
867738 134064-00 10/01/2012 18/01/2012 8
867722 89982-00 10/01/2012 18/01/2012 8
008325 84-00 10/01/2012 18/01/2012 8
697572 335-00 10/01/2012 18/01/2012 8
133289 108510-00 10/01/2012 18/01/2012 8
133285 35063-00 10/01/2012 18/01/2012 8
133290 151383-00 10/01/2012 18/01/2012 8
133288 213668-00 10/01/2012 18/01/2012 8
303974 479-91 10/01/2012 18/01/2012 8
932886 105299-00 10/01/2012 18/01/2012 8


374221 42122-00 10/01/2012 18/01/2012 8
374228 240133-00 10/01/2012 18/01/2012 8
374229 78202-00 10/01/2012 18/01/2012 8
101722 461511-00 10/01/2012 18/01/2012 8
348448 1393343-00 10/01/2012 18/01/2012 8
008151 44309-78 10/01/2012 18/01/2012 8
101868 56522-00 10/01/2012 18/01/2012 8
1125199 3492-00 10/01/2012 18/01/2012 8
008147 165599-10 10/01/2012 18/01/2012 8
008146 233492-91 10/01/2012 18/01/2012 8
101865 15191-00 10/01/2012 18/01/2012 8
582857 102698-00 10/01/2012 18/01/2012 8
123055 84012-00 10/01/2012 18/01/2012 8
384562 336281-00 10/01/2012 18/01/2012 8
075018 71644-00 10/01/2012 18/01/2012 8
699736 48741-00 19/03/2012 28/03/2012 9

Since VDR is not maintained for the year 2012-13, the details of delayed clearances for that
period are not available. The office may verify all cases of delayed clearances and action
may be taken to make good the loss sustained to the Organization. If the delay is occurred
on the part of the bank, interest on delayed credit may be collected from the bank without
further delay. VDR should be maintained to record the receipt and disposal of cheque/DD.
The position may be intimated to audit.

2. Date of clearance not available in VDR

The dates of realization of several instruments were not mentioned in the VDR for 2011-12.
Due to this the audit could not confirm whether the instruments were sent for collection
and whether these were dishonored or not. There was no mention in the VDR regarding
the status of realization of these instruments. The indicative list of such cases is attached
below.

Cheque no Amount Date of receipt
679104 100000-00 11/05/2011
005848 330310-00 24/06/2011
313320 19080-00 08/08/2011


527118 39722-00 05/09/2011
423961 275493-00 16/09/2011
573607 25964-00 29/09/2011
877405 20538-00 29/09/2011
877404 16915-00 29/09/2011
877406 17105-00 29/09/2011
192550 258010-00 02/11/2011
333818 40000000-00 14/11/2011
013259 8956-00 14/11/2011
092687 12519-00 14/11/2011
432850 54616-00 14/11/2011
267410 365750-00 14/11/2011
759619 248065-00 14/11/2011
958550 330068-00 14/11/2011
020933 106483-00 14/11/2011
930562 23043-00 14/11/2011
101136 36992-00 14/11/2011
020934 472608-00 14/11/2011
374108 90831-00 14/11/2011
006443 78156-00 13/12/2011
021431 33347-00 28/02/2012
790158 3500000-00 29/02/2012
790157 1500000-00 29/02/2012
494283 4100-00 01/03/2012

The office may look into the matter immediately and intimate the status of realization as
well as the date of realization with supporting documents to audit.


PENSION

Para-12

Non recovery of Rs.5.33 lakh being excess commission deducted by
SBI on pension disbursement

State Bank of India has been following some unethical business practices by deducting the
pension commission from account no.X without the authorization of the office. As per the
agreement for pension disbursement, pension commission is payable to the disbursing
agency after a due process of reconciliation of amount disbursed with the amount
deposited in EPS 1995 account. But SBI is deducting the commission based on the amount
deposited in the EPS 1995 account rather than based on the amount actually disbursed by
the bank. The position as on 30/12/2013 is as follows.

(Amount in Rs.)

Month
Commission Excess
deducted by
SBI
Deducted by SBI Actual payable
01/2013 589665 517374 72291
02/2013 522931 502336 20595
03/2013 637689 515389 122300
04/2013 613538 568058 45480
05/2013 584787 561366 23421
06/2013 616606 590177 26429
07/2013 734448 645020 89428
08/2013 752449 727612 24837
09/2013 736185 707365 28820
10/2013 766138 736684 29454
11/2013 779245 753386 25859
12/2013 742866 718363 24503
Total 8076547 7543130 533417


The office may take immediate action to stop the practice of deduction of pension
commission from account no.X without authorization of the office. The excess amount
deducted may be recovered from the bank immediately. The position may be intimated to
audit.


Para-13

Non reconciliation of Rs.48.13 crore credited in EPS 1995 Account

1. Amount credited by the banks in account no.X after the introduction of CBS
for pension payment

The banks have transferred the undisbursed balance of Rs.7.22 crore to Account no.X from
the pension accounts as follows.

Bank Date of transfer Amount in Rs.
State Bank of India 02/12/2013 26853174-45
Bank of India 27/11/2013 36114544-50

Punjab National
Bank
26/11/2013 1000000-00
02/12/2013 5576090-30
Axis Bank 02/12/2013 574718-00

HDFC Bank
27/11/2013 83931-00
02/12/2013 1598021-21
ICICI Bank 27/11/2013 358765-64
Total 72159245-10

2. Amount pending for member wise reconciliation

Pension is disbursed through six banks from the office. The office has intimated that
pension reconciliation was completed up to 31/12/2013. But on verification it was found
that the following payments were not reconciled and credit was not given to the pensioner.

Bank Period Amount
State Bank of India 03/2010 to 12/2012 438181892-00
ICICI Bank 03/2010 to 04/2012 12777488-00
Bank of India 08/2013 30355511-00
Total 481314891-00


Since the banks credited the balance amount in account no.X, the amount was disbursed
by the bank from the pension account. Only after completion of reconciliation the credit
will be available to members account in the pension module.

Even though the undisbursed amount was re credited in account no.X, the reconciliation
can be considered as complete only after the reconciliation of the amount disbursed in the
members account. So the office may take action to reconcile the amount of Rs.48.13 crores
disbursed by the banks with the members account. The position may be intimated.


ACCOUNTS

Para-14

Negative balance of Rs.9.51 crore in member accounts

The data relating to negative balance is changing on a day to day basis. The details of the
negative balance as on 06/01/2014 are furnished below.

Position of negative balance as on 06/01/2014
No of estts No of members Negative balance in Total
EE share ER share
1433 5833 Rs.46684584 Rs.54227323 Rs.100911907

This position has been intimated to the office through observation memo no.10 dated
22/01/2014 for rectification. But the office could not show any considerable progress in
eliminating the negative balance. The position as on 14/03/2014 was as follows.

Position of negative balance as on 14/03/2014
No of estts No of members Negative balance in Total
EE share ER share
1335 5038 Rs.43545830 Rs.51584959 Rs.95130789

The detailed establishment member wise list is available in the relevant module of the
software. The office may take action to fix responsibility in the case of overpayment or to
eliminate the negative balance from the member accounts, as the case may be, and the
position may be intimated to audit.


COMPLIANCE

Para-15

Irregularities in the coverage of Dhanashree Mahila Audyogic
Sahkari Sanstha Ltd.(MH/204707)

The following points were noticed in the coverage of the establishment.

1. The establishment was covered with effect from 01/02/2012 U/S 1(4) of the Act with fifteen
employees.

2. As per the certificate issued under the Bombay Shops and Estts. Act,1948, the estt.
registered on 29/11/2011.

3. As per the certificate of registration, the date of registration of the estt. was 28/01/2005.

4. As per the note issued by Tata Mills NTC (WR) Ltd. dated 01/11/2008, the estt. was a
contractor of Tata Mills during 2008.

5. As per the certificate issued by BMC the estt. is in existence from 16/09/2010.

6. The Balance Sheet and Profit & Loss Account for the FY 2009-10 is available in the file and
in which salary of Rs.225000/- paid and labour charges Rs.337685/25 received from Tata
Mills.

7. Employment strength of the estt. from 11/2011 only available in the file.

8. As per the PAN card the name of the estt. is Dhanashree Mahila Udyogic Udpadan Co-
Operative Society Ltd.

Even though the estt. was started in 2005, and engaged as a contractor, the employment
strength from the date of set up was not verified before issuing coverage notice. The aspect
of whether the estt. is/was an exclusive contractor of Tata Mills was not considered.
Whether Tata Mills recovered and paid the contribution in respect of the contract
employees from the date of engagement was not considered. Since the employee strength
from the date of set up was not available, whether it has crossed the statutory minimum
before 01/02/2012 could not be ascertained. The estt. was not inspected so far and the case
was not recommended for notification even after one year from the date of issue of
coverage notice.


The office may take action to cause inspection to ascertain the employee strength from
date of set up and the possibility of coverage under section 1(3)(a) or 1(3)(b) of the Act and
the position may be intimated.


Para-16

Irregularities in the coverage of Sundeep Logistics Pvt. Ltd
(MH/204407)

The establishment was covered with effect from 01/10/2011 U/S 1(4) of the Act with 12
employees and coverage notice issued on 14/11/2011. The date of set up of the
establishment was 29/12/2010. The Registered office of the establishment is in Hyderabad
and the Corporate office at Secundarabad. The unit at Mumbai was covered at Thane office
without covering the Head Office in Andrapradesh. The report of the RPFC of that region
was not obtained before issuing the coverage notice.

The establishment was inspected by the EO and the inspection report dated 30/10/2012 is
available in the file. The EO reported that the balance sheet is collected but the copies of
the financial statements were not available in the file.

The employer and employees requested for coverage with effect from 30/06/2011 initially
and it was later on changed to 01/10/2011. The ledger copies were collected by the EO and
attached along with the inspection report. As per the ledger copies the employer deducted
EPF contribution from the salary of the employees for August 2011 as follows.

But nothing was reported by the EO regarding whether the employer remitted the
contribution or returned it to the employees. The case was not recommended for
notification so far.
Name of employee EPF recovery (in Rs.)
Sundeep Alisinghani 5780
Aju George 780
shraddha 745
Prakash Shinde 780
Sandesh 780
Ajay Agre 696
Sebastian 745
Kiran Jadhav 636
Vineet Kotak 780
Jalindar Ingavale 696


The office may take action to inspect the establishment and the recovery of contribution
from the salary of the employees before the date of coverage may be ascertained. Report
may be obtained from the RPFC of the region where the Head Office of the establishment
is located, regarding the employee strength of the establishment there. Since this is a case
of voluntary coverage the Office must ensure that the combined employee strength of all
units of the establishment never crossed 19 and not coverable otherwise under the Act.

The position may be intimated to audit.


Para-17

Irregularities in the coverage of Gamma Construction Pvt. Ltd
(MH/204074)

The establishment was covered with effect from 01/04/2011 with 68 employees. The date
of set up of the establishment was 15/03/1988. The employer submitted a declaration that
the employee strength of the establishment from 03/1988 to 03/2011 was nil. In the
enquiry report, the EO also reported that the employee strength for that period as nil. The
copies of the Profit and Loss Account for the period 2009-10 was available in the file. The
following payments were made during the period 2009-10.

Head of Account Amount in
Rs.
Excavation work 15356067-19
Fabrication work 125643-21
Garden Development and
Maintenance
170900-31
Labour and wages 183289-22
Profession tax 2500-00
Professional charges 3132044-00
Security expense 1194651-20
Workmen compensation 139677-00

The expenditure incurred in respect of the above head of accounts is clear indication of the
engagement of employees by the establishment directly or through contractors.

The office may take action to inspect the establishment and verify the books of accounts
and vouchers to ascertain the exact employee strength from the date of set up and the date
of applicability of Act may be decided accordingly. Position may be intimated to audit.


Para-18

Irregularities in the coverage of K.B Products Pvt. Ltd
(MH/204550)

The establishment was covered with effect from 01/07/2011 with 55 employees. K.B
Products was a proprietary concern and it was taken over by K.B Products Pvt. Ltd with
effect from 03/04/2007. The employer submitted a declaration for the employee strength
from 2007. According to it the employee strength was as follows.

Employment strength of the establishment
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 17 17 17 18 18 17 17 17 17 17 14 14
2008 13 13 13 17 17 17 17 17 17 19 19 19
2009 19 19 19 19 19 19 19 19 19 19 19 19
2010 19 19 19 18 19 19 19 19 19 19 19 19
2011 19 19 19 19 19 19 55

The employer submitted a letter and it was stated in the letter that the balance sheet of the
establishment was with the auditor and he could not produce it before the Enforcement
Officer. The EO accepted the explanation and recommended the coverage with effect from
01/07/2011. The employment strength was 19 from 10/2008 and this need to be verified
thoroughly with books of accounts and financial statements.

The office may take action to inspect the establishment and the books of accounts,
payment vouchers and financial statements from the date of set up to be verified to
ascertain the exact employee strength of the establishment. The employer may be
prosecuted for non production of records before the Inspector and the financial statements
may be collected from the Income Tax Department or from the Registrar of Companies, if
necessary. The presence of contract employees, casual/piece rated employees and
temporary employees may be confirmed and the date of applicability may be decided
accordingly. The position may be intimated to audit.


Para-19

Action pending to secure compliance from Municipal
Corporations/Councils covered under the Act

Govt. Of India, vide notification no S.O.30(E) dated 08/01/2011, specified Municipal
Corporations/Councils employing twenty or more employees as class of establishments to
which the Act shall apply, with effect from the date of notification. Based on the
notification the office issued coverage notices to the following Municipal
Corporations/Councils. The basic documents were not seen collected from the
establishments before issuing coverage notices. The establishments were not inspected so
far and no compliance is reported. The position is as follows.

Name and code no. of
establishment
Date of issue
of coverage
notice
Current status
Ulhasnagar Municipal
Corporation
(MH/204840)
24/05/2012 None of the establishment covered
under the head has started
compliance under the Act and
Scheme so far. The EOs concerned
were directed to inspect the
establishment and submit reports
during the month of August 2013.
No inspection reports submitted.
The matter is pending for securing
compliance.
Ambernath Municipal
Corporation
(MH/204841)
24/05/2012
Kulgaon Badlapur
Municipal Corporation
(MH/204842)
24/05/2012
Bhivandi Nizampur
Municipal Corporation
(MH/204843)
24/05/2012

Establishments were covered w.e.f 08/01/2011 and coverage notice issued on 24/05/2012.
The basic records to prove the employee strength, monthly salary paid to the employees,
details of contract and casual employees, details of persons responsible for the conduct of
the business of the establishment and payment of salary as well as recovery of PF dues
were not collected. The EOs submitted the preliminary enquiry report without verifying
the actual employment strength and had intimated some speculative data regarding the
number of employees engaged by the establishments which will not serve any purpose for
securing compliance from the establishment.

Even after more than one year from the date of issue of coverage notice, the establishments
were not inspected and compliance position not verified.

The office may take immediate action to cause inspection and secure compliance in respect
of all establishments covered under the scheduled head Municipal Corporations/Councils
and the position may be intimated.


Para-20

Delay in concluding enquiries initiated U/S 7A of the Act

As per the data available from the records of the office, several enquiries initiated under
section 7A of the Act were pending for a long time without conclusion/assessment. The
dates of postings were not seen entered in the blue book. So the number of postings could
not be ascertained. The Head Office has given certain guidelines for conducting the
proceedings under section 7A and it is imperative on the part of all Assessing Officers to
avoid inordinate delay in assessing dues from the defaulters. Delay in assessing dues will
ultimately affect the interest of the stake holders and the office may look into it seriously to
conclude all proceedings in a time bound manner. The position is as follows.

Pending 7A enquiries
6 months to 1 year 187 nos
1 year to 3 year 324 nos
Above 3 year 4 nos

The action taken to conclude the pending enquiries and the latest position may be
intimated to audit.


Para-21

Delay in conducting first inspection of newly covered
establishments

The Head Office has instructed to conduct the first inspection of all newly covered
establishments within three months of issue of coverage notice to check the compliance
status and to take corrective actions at an early stage. The office is lagging behind in
conducting the first inspection and the position is as follows.

Particulars 2011-12 2012-13
No. of establishments covered 700 761
No. of establishments inspected 299 343
Inspections pending 401 418

The office could not achieve 50% of the targeted inspections during the years 2011-12 and
2012-13. Immediate action may be taken to complete the backlog and the position may be
intimated to audit.


Para-22

Delay in issuing notification under section 1(4) of the Act

As per the data available, the position in the case of forwarding proposals to Head Office
for notification under section 1(4) of the Act is as follows.

Applications pending for reference to
HO as on 01/04/2012
459
Added during 2012-13 24
Disposed during 2012-13 18
Pendency as on 31/03/2013 465

Inordinate delay was occurred already in forwarding the proposals to Head Office for
notification in the case of establishments covered under section 1(4) of the Act. Not even
5% of the cases were disposed during the financial year 2012-13. The Head Office had
issued instructions to forward all voluntary coverage cases within three months of issue of
code number. The provisions of the Act and Schemes cannot be made applicable to the
establishments in the absence of notification in the Official Gazette.

The office may take actions to inspect the establishments covered under section 1(4) of the
Act and to forward the proposals to Head Office immediately.

The compliance position may be intimated to audit.


Para-23

Compliance audit of Exempted establishments

As per the Head Office instruction, all exempted establishments must be inspected once in
a year by a team of officers headed by an Asst.P.F Commissioner. The information received
from the office shows that the compliance audit for the period 2012-13 is pending in
respect of the following exempted establishments.

Code
no. MH/
Name of establishment Period up to
which inspected
73 The Premier Ltd. Not available
74 PAL Peougot Not available
75 GKW Ltd. 2010-11
711 GKW Ltd. 2010-11
9074 GKW Ltd. 2010-11
377 Indian Smelting & Refining
Co. Ltd.
2010-11
8102 Indian Smelting & Refining
Co. Ltd.
2010-11
378 Kamani Metal Alloy Ltd. 2010-11
616 Hindalco Industries 2010-11
2979 Sony Pictures Releasing Ltd 2010-11
3900 Patanwala Glass Works Not available
4413 Deve Paints Ltd 2010-11
16656 Ray Constructions Not available
1140 Kamani Metallic Oxide Ltd Not available
2373 DIC India Ltd Not available

The office may take action to inspect the establishments immediately and the position may
be intimated.


CONCLUSION

The task bound audit program to verify the status of compliance of the core issues of
Regional Office, Thane was entrusted with the IAP, Goa by the Head Office. The audit
camp started on 06/01/2014 and concluded on 21/03/2014. During the course of audit,
twenty three observation memos were issued and the office gave satisfactory reply to three
memos. Some memos were bifurcated for clarity and convenience. Altogether twenty three
audit paras were raised. The status of the office was reported to the Director (Audit) and
Deputy Director (Audit), Jaipur. The Dy. Director brought the issues to the notice of the
OIC for necessary action. There was no substantial progress made by the office during the
audit camp to sort out the deficiencies pointed out by the IAP. The Dy. Director visited the
audit camp on 13/03/2014 and 14/03/2014 and reviewed the audit program. Sustained
efforts and regular follow up action is necessary to improve the compliance position. The
OIC is requested to take appropriate action to set right the things and to give the replies of
the pending audit paras to the Head Office. The officers and staff of the office were very
cooperative and responsive for the smooth conduct of the audit and the IAP is very
thankful to them.

_____________

Audit IrregularityIAP

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recovery of excess service charge of Rs.60.84 lakhs deducted by

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