Ministry of Finance of Republic of India : Major reform measures, policy initiatives and achievements of the Department of Expenditure (DOE), Ministry of Finance during the current Financial Year 2016-17(196 KB)

PRESS INFORMATION BUREAU GOVERNMENT OF INDIA

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Year End Review - 2016

Department of Expenditure

Department of Expenditure, Ministry of Finance takes various initiatives to promote use of mobile banking/e-banking technology for cashless transactions and e-payments in Central Government Ministries/Departments; Redresses 4475 out of 4508 grievances successfully under CPGRAMS; Takes various steps during the Current Financial Year 2016-17 to simplify and strengthen the Public Financial Management System (PFMS); Focuses on the development of 2nd version of the Generic Internal Audit Manual in association with the Institute of the Internal Auditors (IIA) India w.e.f. November, 2016; Has started Implementation of e-Office in a Mission Mode Project among others.

New Delhi, January 4, 2017

Pausha 14, 1938

Following are the major reform measures, policy initiatives and achievements of the Department of Expenditure (DOE), Ministry of Finance during the current Financial Year 2016-17:

Public Financial Management System (PFMS):

The Public Financial Management System (PFMS) is a web-based online software application, developed and implemented by the o/o CGA with technical support of NIC. The primary objective of PFMS is to facilitate a sound Public Financial Management System for Government of India (GoI) by establishing an efficient fund flow system as well as a Payment cum Accounting network. PFMS provides various stakeholders with a real time, reliable and meaningful Management Information System and an effective Decision Support System (DSS), as part of the Digital India initiative of GoI.

The biggest strength of PFMS is its integration with the banking network in the country. As a result, PFMS has the unique capability to push online payments to almost any beneficiary/vendor having account in any bank across the country.. At present, PFMS interface is completed with the Core Banking System (CBS) of all Public Sector Banks (26), Regional Rural Banks (54), major private sector banks (14), Reserve Bank of India, India post and Cooperative Banks (55).

The Government has emphasized the need for improved financial management in implementation of Central government Schemes so as to facilitate Just-in-time releases and monitor the usage of funds including information on its ultimate utilization. In order to abide by the directions

to implement Just-in-Time releases and monitor the end usage of funds, an action plan for universal roll-out of PFMS for Central Government schemes has been approved which inter alia includes mandatory registration of all Implementing Agencies on PFMS and mandatory use of Expenditure Advance and Transfer(EAT)module of PFMSW by all IAs.

Achievements under PFMS:

• PFMS has been fully implemented at the Central Government level for all Plan and Non Plan Scheme releases from Civil Ministries / Departments of the Central Govt.

• The Implementing Agencies are using the PFMS application for both transfer of funds to Agencies below and for e-payment to beneficiaries by direct credit to their accounts either in bank branches or in post offices.

• So far 18 lakh (approx) Implementing Agencies are registered on PFMS (till 30th November, 2016).

• The total number of beneficiaries bank accounts registered in PFMS is 19.07crores (till 30th November, 2016).

• Total Central DBT payments have been made for 26.52 crore transactions amounting Rs.

  33417.36 crores for 37 schemes (till 30th November 2016 in 2016-17).

• Total State DBT payments have been made for 2.88 crore transaction amounting Rs. 4363.28 crores for 27 schemes (till 30th November 2016 in 2016-17).

• Total UT DBT payments have been made for 2.98 crore transaction amounting Rs. 52.10 crores for 30 schemes (till 30th November 2016 in 2016-17).

• Pan-India roll out of MNREGS payments for Bank Account holders started from 1st April, 2015. 24.80 crore credits have been done for Rs. 24,571 crore through PFMS from 1.4.2016 to 30.11.2016.

• Pan-India roll out of Indira Awas Yojana (IAY) payments for Bank Account holders started from July, 2015. 19.10 lakh credits have been done for Rs. 5114 crore through PFMS from 1.4.2016 to 30.11.2016.

• E-IGAA i.e State Government payments through RBI advices have been started across Ministries.

• NTRP i.e Non Tax Receipts Portal has been started from 16th February, 2016 and this is a great step towards Hon‟ble PM‟s Digital India Initiative. It facilitates online receipt of Non Tax Receipts for GoI Departments/Ministries. 24,277 credits have been received for Rs.77565.53 crores upto 30.11.2016.

• One stop Government e -Market place (GeM) which facilitates online procurement of common use Goods and Services required by various Govt. Departments/organizations/PSUs is integrated with PFMS for facilitating the e-payment of bills received online through GeM portal by the respective Pay and Accounts Offices.

• PFMS treasury integration is currently operational in 12 states and integration process has been initiated in other states also. It is expected to be completed by 31st March 2017.

  New Initiatives/ Achievements under Internal Audit

• The Controller General of Accounts (CGA) has developed a risk based control framework in the form of Generic Internal Audit Manual to guide the internal audit engagements. The manual not only explain the complexities associated with the internal audit functions but also facilitates the entire process by providing audit process, templates and guidelines.

• The work of development of 2nd version of the Generic Internal Audit Manual in association with the Institute of the Internal Auditors (IIA) India has also been commenced in November, 2016. The revised Generic Internal Audit Manual will be developed as per International Professional Practices Framework (IPPF). The revised version will also include recommendations made by the Ministry of Women and Child Development to include the guidelines on Gender Audit of Policies, Programmes and Schemes of the Government of India.

• A directional shift in the scope and approach of internal audit has been initiated by the organization by infusing two concepts- "Risk Assessment" and Performance Evaluation" for strengthening financial management and internal controls. The line Ministries are being encouraged to plan the audit assignments by adopting the Risk Based Auditing approach. Risk Based Audit in selected Ministries is being conducted on pilot basis.

• The organization is also focusing on the use of Computer Assisted Audit Tools for more transparency and accountability. Electronic Risk Assessment Software (e RAS), a diagnostic tool for internal audit has been developed in collaboration with NIC. This diagnostic tool [e RAS] is not only helpful to the audit in planning, sampling and conducting the audit efficiently but it is also helpful to the management / stakeholders to have a review of the functioning of their entities [PAOs only] in their offices instead of visiting these offices located at different places in different states.

• The organization is regularly reviewing the performance of the internal audit units of the line Ministries/Departments. The Annual Review on the performance of Internal Audit Wings of Civil Ministries depicts the information on different shortcomings of the Civil Ministries in the form of observations. The Annual performance reports of the different Ministries/Departments are analyzed and summarized by the Internal Audit Division for the purposes of brevity and ease of presentation. The outcome of Internal Audit through recoveries effected in pursuance to the observations of the Internal Audit is also included to reflect the impact of Internal Audit.

• The Annual Review for the year 2015-16 of Internal Audit conducted by the field units of the organization in the Civil Ministries/Departments have been submitted to Ministry of Finance. The audit findings have been quantified on the basis of financial implications and constitute an amount of Rs.85392.20 crore under the following categories:-

Sl.

Nature of irregularities

Amount (Rupees

No.	in Crores)
1.	Cases of non-recovery of Govt. dues from Central Govt. Departments/State Govt./Govt. Bodies/Private parties.	53610.67
2.	Cases of over payment	193.27
3.	Idle machinery/surplus stores	94.27
4.	Loss/Infructous Expenditure	1051.14
5.	Irregular Expenditure	2651.09
6.	Irregular Purchase	115.39
7.	Cases of non-adjustment of Advances	424.47
8.	Blocking of Govt. money	6185.98
9.	Non-accountal of costly stores/Govt. money	44.18
10.	Any other items of Special nature	21021.74
Total	85392.20

• The committee constituted by the organization to examine the draft Gender Audit Guidelines as circulated by the Ministry of Women & Child Development so as to recommend the framework / roadmap for the conduct of Gender Audit of Schemes of the Government of India has submitted its final report in October, 2016. The Committee examined the feasibility of including Gender Audit as one of the parameters for Risk Based Internal Audit of Schemes with an initial focus on 10% women specific schemes. The work of gender sensitization of the Generic Internal Audit manual based on the recommendations of the Ministry of Women & Child Development has been integrated with the project of up gradation of the Generic Internal Audit Manual by the Institute of Internal Auditors (IIA) - India.

• A Study Team headed by Joint Controller General of Accounts was constituted vide Ministry of Finance, Department of Expenditure OM. No. 2(2)PF-I/2010/Vol-II dated 14.1.2016, to visit North East States to understand the issues confronting utilization of Central funds implementations of Schemes and to get an overview of expenditure management. The Study Team visited four States viz. Mizoram, Tripura, Manipur and Nagaland. The main findings of the Study Team have been submitted to Ministry of Finance.

• A Memorandum of Understanding (MOU) has been signed between Office of Controller General of Accounts and Institute of Internal Auditors (IIA)-India. The MOU is made at New Delhi on the 14th day of September, 2016. The MoU is an expression of convergence between the Office of CGA and IIA-India to establish cooperative processes within their areas of competence on the following:-

1. Sharing information and best practices, including those related to activities of internal auditors of government institutions and organization and their interaction;

2. Exchanging analytical materials in the field of improving the system of internal auditing, and other pertinent information of mutual interest; for this purpose. The parties will establish the structure, format and procedures for data and information sharing;

3. Exchanging initiatives with regard to the advancement of internal auditing in state institutions and organizations;

4. Co-operating in the field of professional education and training with the aim to have qualified internal auditors in civil ministries of Government of India.;

5. Developing proposals on making improvements to internal audit activities in Government institutions and organizations, including the process of encouraging internal auditors to attain recognized professional qualifications;