2, 1 Floor, 3rd Row, EB Star

DEEPIKA SETIA & CO. Market, Club Road, Mithunpura,

CHARTERED ACCOUNTANTS Muzaffarpur, Bihar-842001.M. No. 7070852455, 8294355908.E-mail: munna26@gmail.com

BIHAR GRAM SWARAJ YOJANA SOCIETYBIHAR PANCHAYAT STRENGTHENING PROJECT

Deptt. of Panchayati Raj, Govt. of Bihar

AUDITOR REPORT

We have audited the accompanying financial statements of the Bihar Gram Swaraj Yojana

Society, Bihar Panchayat Strengthening Project, Deptt. of Panchayati Raj, Govt. of Bihar,

financed under World Bank Loan/ Credit No. 5160 IN (Retroactive financing) for the year ended

on March 31, 2016. Our responsibility is to express an opinion on these financial

statements based on our audit.

We conducted the audit in accordance with National Standards on Auditing issued bythe Institute of Chartered Accountants of India. Those Standards require that we plan

and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements. An

audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements give a true and fair view of the Sourcesand Application of Funds and the financial position of Bihar Gram Swaraj YojnaSociety/Bihar Panchayat Strengthening Project for the year ended on March 31, 2016,

in accordance with relevant national standards.

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As per our information and according to the explanations given to us, we report that:

(a) With respect to IFRs adequate supporting documentation has been maintained tosupport claims to the World Bank for reimbursements of expenditures incurred;and the expenditures are eligible for financing under the Grant Agreement.

(b) The IFR submitted and the procedure and internal control involved in theirpreparation can be relied upon to support the withdrawals.

(c) We have verified all procurement documents relating to the Project. Procurementhas been done as per the agreed procedures as per the Procurement Guidelineof the World Bank.

(d) Current Assets includes advance of as Rs 105,30,177/- out of whichRs 50.00 lacsgiven to the Building Construction Department, GOB in the Financial Year 2012-13. However, no action was taken up by the BCD, except soil testing for the sitedidentified for PSBs under the Project.The BCD is yet to submit UtilizationCertificate against the expenditures incurred or refund of the balance amount.The Society has informed BCD from time-to-time on the status of the advance,with request to kindly act up on either in terms of submission of utilizationcertificate or refund of the balance amount, as may be the case. Next is the caseof advance of Rs.54 Lakh with the BISCOMAUN as a security deposit for therented space in BISCOMAUN Tower. Further, there is advance of Rs.1,18,842/-in the name of Society's employees in the Financial Year 2010-11 & 2011-12 forthe purpose of training of MRPs & DRPs, that still remains unadjusted. TheSociety has ordered for creating a committee for through review of the existingset of document with respect to the stated advance, and subsequently submit areport with recommendation of the possibilities for their adjustment.

(e) Some heads and groups rearranged/regrouped for better presentation.

For DEEPIKASETIA& Co.Chartered Accountants

Place: PATNA 10Date :.2 0 OE CN

(CA. DHA ENDAR SINGH KAJAL)Partner

M. No. 091609

jN A 13515 N

AC

BIHAR GRAM SWARM YOJNA SOCIETYBIHAR PANCHAYAT STRENGTHENING PROJECT

Deptt. of Panchayati Raj,Govt. of Bihar3rd Floor, BISCOMAUN TOWER

(Bihar Panchayat Strengthening Project)

BALANCE SHEET AS ON 31ST MARCH 2016

Previous year Liability Current year Previous year Assets Current year

T Grant From Govt.of Bihar/WB T

14,60.27,509.00 Unutlised GrantReceipt at the 12,55,65,548.00 1,27,75,143.87 Fixed 1170,36,644.87beginning of the year asset(Schedule-5)

Add: Grant Received during the (1,69,22,536.00)year

52,16,272.00 Add: Interest & other receipts 38,32,386.00 Curent assets. Loanduring the year(Schedule-1) & Advances

Balance with Canara

11,02,44,485.00 Bank (in saving 6,58,32,305.60accountno.0352101039713)

Less: Expenditure under1,89.57.935.00 ProJect Management (Schedule- 2,96,75,966.40 14961.00 Cash in Hand 4,265.00

6 & 5)

Loans & Advances

123,0102.0Less: Expenditure Under1,05,30,17700Component 2 (Schedule -7) 6545. 20ture(Schedue 13)

Less: Expenditure Under 1,50,00000Component 3 ______ ___________________

12,56,65,548.00 Unutlilsed Grant/Recelpt at the close of the year 7.63,63,747.60

1,27,75,143.87 Capital Fund 1,70,36,644.87

3,000.00 Current Liability (Schedule-4) 3,000.00

13,83,43,691.87 Total 9,34,03,392.47 13,83,43,691.87 Total 9,34,03,392.47

As per our report attached. (Shivanand Jha) (Kuldip Narayan)SPM- Finance Project Director

For Deepika Setia & Co. BGSYS BGSYSPalce- Patna Chartered Accountants

Daw2 0 DEC20.(CAtZARM ENDAR SINGH KAJAL)

Partner

M.No.091609

fi SE

DAC#

BIHAR GRAM SWARAJ YOJNA SOCIETYBIHAR PANCHAYAT STRENGTHENING PROJECT

Dept. of Panchayati Raj,Govt. of Bihar3rd Floor, BISCOMAUM Patna-4

(Bihar Panchayat Strengthening Project)STATEMENT OF SOURCES AND APPLICATIONS OF FUNDS

FOR THE YEAR ENDED ON 319 MARCH -2016

Particulars Current Year Previous Year1 Opening Balances0 Cash in Hand 14,981.00 20,615.00

11B Balance with Canara Bank 11,02,44,485.00 13,58,91,903.00_____Total Opening Belance(1) 11,02,59,446.00 13,59,12,518.00

2 Add: Sources/Receipts of Fund _________________

2A Interest & Other Receipts (Schedule-i) 38,32,386.GG 52,16,272.002B3 Grant (Schedule-2) (1,69,22,536.00)

Total Sourcealfeceipts(2) (1,30,90,150.00) 52,16,272.00_____Total(1+2) 9,71,69,296.00 14,11,28,790.00

3 Less: Application/Uses

3A Expenditure Under Rectroactive Finance(Schedule-_____7)

313i Expenditure Under Component 5(Schedule-6) 2,54,14,465.40 96,83,374.00313ii Expenditure for FA(Schedule-5) 42,61,501.00 92,74,561.00

30 Total Expenditure under Management (3A+3B) 2,96,75,966.40 1,89,57,935.00

3D Total Expenditure under Component 2 (Schedule- 62,85,684.00 67,20,298.007)

3E Total Expenditure under Component 3 1,50,000.00

3F Total Expenditure During the year(3C+3D) 3,61,11,650.40 2,56,78,233.00

3G (Decrease) /increase in Current Assets During the (47,78,925.00) 51,91,i11.00year

Total Applicationlses(3) 3,13,32,725.40 3,08,69,344.004 Closing Balances ________

4A Cash in Hand 4,265.00 14,961.00483 'Balance with Canara Bank 6,58,32,35O 1f,02,44,485.00

Total Closing Balance(4) 6,58,36,570.60 11,02,59,446.00Total (3+4) 9,71,69,296.00 14,11,28,790.001

As per our report attached. (h~~aFor Doepika Setia & Co. (SiAnn h) (Kuldip Narayan)Chartered Accountants SPM- Finance Project Director

Pa taBGSYS BGSYS

2A'2B

6 (CA. DARMENDAR SINGH KAJAL)

Det*fPnhyt RjGv.o ia

BIHAR GRAM SWARAJ YOJNA SOCIETYBIHAR PANCHAYAT STRENGTHENING PROJECT

Deptt. of Panchayati Raj,Govt. of Bihar3rd Floor, BISCOMAUN TOWER

Reconciliation of Audited Expenditure under PHRD Grant With IUFR Expenditure For the Year Ended on 31stMarch-2016

(Bihar Panchayat Strengthening Project)

1 Particulars Total

2 Total Expenditure as per Audited Project FinancialExpenditure(PFE)

(a) Under Component -2 as per Schedule -7 62,85,684.00

(b) Under Component -3 1,50,000.00

(c) Under Component -5 (as per Schedule -5+Sch-6) 2,96,75,966.40

Total of 2 (a+b+c) 3,61,11,650.403 Less: Ineli ible Ex enditure

Total Eligible Expenditure as per Audited Project FinancialExpenditure(PFE) under - RE- Finance (2-3)

5 Eligible Expenditure as per IUFR

6 Excess/Short Expenditure Reported (4-5) 3,61,11,650.40

7 Reimbursible % 70%8 World Bank share(4*7) 2,52,78,155.28

9 Reimbursement Claim Made for the year 2,52,78,155.28

10 Excess/Short Claim Made (8-9)

As per our report attached.For Deepika Setia & Co. (Shivanand Jha) (Kuldip arayan)Chartered Accountants SPM- Finance Project Director

BGSYS BGSYS

(CA ARMENDAR SINGH KAJAL)Partner

Paice- Patna M.No.091609Date.-2 0 DEC 2016

BSEGSY

R N-013515NA,

BIHAR GRAM SWARAJ YOJNA SOCIETYBIHAR PANCHAYAT STRENGTHENING PROJECT

Deptt. of Panchayati Raj,Govt. of Bihar3rd Floor, BISCOMAUN TOWER

DETAILS OFAUDITED EXPENDITURE BY COMPONENT/SUB COMPONENT AUDITED FINANCIAL REPONT FOR THEYEAR ENDED 31st MARCH 2016

(Rupees in Lakh)Component/Sub Component Actuals CTD

Allocation EXPENDITURas per PAD upto F.Year YTD (2015- CTD E AS A% OF

(2014-15) 16) Allocation asnor RAfr

1 2 3 4 5

1 Panchayat Sarkar Bhawan 27,810.00 -ITotal Component 1 27,810.00 - -

2 InstitutJion Strengthening *2.1 a I Core institutional capacity building2.1 b Community Engagement 12,069.54 72.63 62.86 135.49 1.122.1 c Communicains and Mass Media2.1 d Building PRI Financial Mgt Capacity

Total 2.1 12,069.64 72.63 62.86 135.49 1.12

2 Strenthening Development Capacity of Panchayats.2.2 a Sanitation

12.2 b Safe drinking Water2.2 c Nutrition 3,225.96

2.2 d Natural Resource ManagementTotal 2.2 3V225.96 -Total Component2 15,295.50 72.63 62.86 138.49 0.89

3 State-level Policy Enviroument for Decentralization

3.1 Estbalishing Regulatory Framework for PRIs 55.62 - 1.50 1.50 2.703.2 Panchayat Finance Performance Monitoring 945.54 - - -

3.3 Development of curriculam for PRIs 11124 - -

3.4 Expanding annual audit coverage involving LFE 278.10 - - - -

- - Total Component 1390.50- 1.50 1.50 0.114 Panchayat Performance Award 11,124.00 - - . .

- ITotal Component4 11,124.00 - . .5 Profoot Management & coordination (includer M and E 8,343.00 355.60 296.76 652.36 7.82

Total Component5 8,343.00 368.60 296.76 652.36 7.82Total Baseline Costs 63,963.00 428.23 361.12 789.35 1.23Price and Physical Contingences 2,781.00 - - -Total Project Costs 66,744.00 428.23 361.12 789.35 1.18

As per our report attached.For Deepika Setia & Co.Chartered Accountants

Palce: Patna /Date:2 0 0EC (Shivanand Jha) (Kuldip Narayan)

(Aq EN R SINGH KAJAL) SPM- Finance Project DirectorPartner BGSYS BGSYS

M.No.091609

\JSEd

00-R-0355

BIHAR GRAM SWARAJ YOJNA SOCIETYBIHAR PANCHAYAT STRENGTHENING PROJECT

Dept. of Panchayati RaJ,Govt. of Bihar3rd Floor, BISCOMAUN TOWER, PATNA - 4

(Bihar Panchayat Strengthening Project)

Schedules forming part of Balance Sheet as on 31st Mar-2016

Schedule-1 itinterest & Other Received during the year

Interest Received on S.Alc 38,32,386.00 52,07,272.00

Tender Document - 9,000.00Total 38,32,386.00 52,07,272.00

Schedule-2 Current year Previous year

Grant from PRD, GoB (1,69,22,536.00)Total (1,69,22,536.00)1

Schedule-3Current Assets Current year Previous year

Loans & Advances T TBCD-RF 50,00,000.00 50,00,000.00BICOMAUN 54,00,000.00 54,00,000.00Mithila Engg (P) Ltd - 1,07,093.00Pasar Bharti - 17,01,917.00Radio Rimjhim - 29,81.250.00Ajay Kumar 26,475.00 26,475.00Chiranjib Roy 74,734.00 74,734.00Rahul 387.00 387.00Amit Preetam-RF 7,246.00 7,246.00Chiranjiv Roy-RF 10,000.00 10,000.00Tour Advance 11,335.00 -

Total 1,06,30,177.00 1,53,09,102.00

Schedule-4Current Liability Current year'* Previous year T

Stale cheque account (of Elite Agency) 3,000.00 - 3,000.00

Total 3,000.00 3,000.00

Net of rrnt AssetsS -Sh3115306102.00Increase in Net CA 47,78,925.00 4,00,85 .00

As per our report attached. (Shfnl'ha) (Kulchpga n)For Deepika Setia & Co. SPM- Finance Project Director

Chartered Accountants BGSYS BGSYS

Place: PATNA

Date.-2 0 0 C k1r(CA. DHXQENDAR SINGH KAJAL)

PartnerMSNoP0M160-

BGSSEY

1,30,1204.0800

(Kli0a n

Schedule-5

Fixed assetsBalance as at end Purchase/Payment/ Balance as at end of

Particulars of the year( on 31-3- Adjustment during the year( on 31-3-2015) the year 2016)

Fixed Asset-Mobile Set 37,342.00 23,200.00 60,542.00

Wall Mounted Fans(16" Wall Fans Crompton 8 Pcs) 14,528.00 - 14,528.00

Wiring and Installation Cost of Fans 500.00 500.00Computer 1,48,900.00 42,23,301.00 43,72,201.00Fixed Assets (Data Card) Proj 2,000.00 2,000.00Fixed Assets Pen Drive 1,050.00 1,050.00Fixed Assets (Stabilizer) -Pro 16,000.00 16,000.00Fixed Assets (Tally) Proj 52,000.00 52,000.00Fixed Assets (UPS) - Prol 9,000.00 9,000.00Furniture & Fixture 7,57,639.00 7,57,639.00Office Refurbishment 58,24,628.00 - 58,24,628.00Vechicle A/c 47,63,462.00 - 47,63,462.00Printer(Model No.HP-1007) 5,899.00 5,899.00Desktop(HP ELITE 8000 Series with 3895800 38,958.00DVD,ROM,Mouse and Key Board) 38,958.00 -_38,958.00

Printer(Model No.H.P Laserjet 2727 nf)(All in one) 34,999.00 - 34,999.00UPS( UNI LINE 500 VA) 4,404.00 - 4,404.00Data Card 3,300.00 - 3,300.00Memory Card 1,300.00 1,300.00HCL Laptop(Model No.AE1V285PS.No.11155,546.80 55,546.80HCL Laptop(Model No.AE1V2986SI.No.111AE655848,782.17 48,782.17HCL Laptop(Model No.AE1V2986S.No.B A53,782.15 53,782.15HCL Laptop(Model No.AE1V2986S8.3,782.15 - 63,782.15HCL Laptop(Model No.AE1V2986 78,782.15 78,782.15SI.No.B111 IAE065582) 7878___-7878.1HCL Laptop(Model No.AE1V2986SJ.No.B 111 AE065583) 1,03,782.15 1,03,782.15HCL Laptop(Model No.AEV2986 1,43,782.15SI.No.111AE655591,43,782.15HCL Laptop(Model No.AE1V2986SI.No.B1 1 1AE065561) 2,08,782.15 -_2,08,782.15Printer(Model No.H.P Laseret-2055 Dn) 02,213.00 - 3,02,213.00RO Kent - 15,000.00 15,00000

Total of Fixed Assets 1,27,75,143.87 42,61,501.00 1,70,36,644.87

As per our report attached. (Shivanand Jha) (Kul ip Narayan)For Deepika Setia & Co. SPM- Finance Project DirectorChartered Accountants BGSYS BGSYS

Place: PATNADate:-? 0 DEC 2016 .

(CA. DHA M_NDAR SINGH KAJAL)Partner

M. No. 091609

\JS ET

K ;'] O~

Schedule-6 Current year Previous yearExpenditure under Component 5 Management& Coordination Exps)Advertigment 6,23,502.00 2,93,167.00Audit Fee - 18,000.00Aqani Surachha Saptah 62,510.00Bihar Divas 47,065.00Bank Charges 1,236.00 674.00Consultancy Fee for Consultants 69,743.00 40,000.00Electricity Charges 5,62,60000 3,68,108.00Full Time Consultanc FeeHouse Keeping 4,24,264.00 3,21,297.00Lease Rent -Local Conveyance 1,494.00 8,220.00Meeting Exps 1,63,236.00 63,942.00New Paper 7,700.00 6,264.00Office Exps 70,084.00 49,065.00Office Rent (HO) 73,09,743.00 45,50,580.00Postage & Courier 1,960.00 715.00Printing & Stationary 97,791.00 30,694.00Professional Fee Prol 2,700.00 7,67500Repairs & Maintenance 1,63,990.00 3,63,72900Staff Recruitment Exps 6,17,137.00Salary of BELTRON Staff - 90,440.00Salary to Outsource Staff 12,89,475.00 5,83.194.00Salary to BGSYS Staff 1.11,38,203.00 22,81,446.00Staff Training 6,46.705.00Staff Welfare .Telephone & Mob.Exps 1,09,491,00 1,21,651.00Tour &Travelling Exps 14,56,496.40 51,322.00Vechicle Hire Charges - 1,36q291.00Vehicle Running Exps 5,26,000.00 2,82,09300Wages 214340.00 14807.00W B Mission Meeting

Total 2,6,14,465.40 96,83,374.00Schedule-7Expenditure Under Component-2 (Capacity Current year Previous yearBuilding) cretya rvosya

Counsultancy fee 4,00,000.00 5,50,000.00CB TourIC Materials & Broadcasting 46,83,167.00 58,17,551.00Advertisement 12,02,517.00 3,52,747.00

Total 62,85,684.00 67,20,298.00

(Shivanand Jha) (Kuldip Narayan)For Deepika Setia & Co. SPM- Finance Project DirectorChartered Accountants BGSYS BGSYS

Place: PATNADate:. IN 1)E 2,b V

(CA. DHA MENDAR SINGH KAJAL)Partner

M. No. 091609

~SE 14.0

BIHAR GRAM SWARAJ YOJNA SOCIETYBIHAR PANCHAYAT STRENGTHENING PROJECT

Dept. of Panchayati Raj,Govt. of Bihar3rd Floor, BISCOMAUM Patna-4

IDA CREDIT NO.5160-IN (Bihar Panchayat Strengthening Project)

Bank Reconciliation Statement as on 31st March 2016

(Amount in Rs.Balance as per Book on 31.03.2016 6,58,32,305.60Add: Unpresented Cheque

Dated ch no Rs.29.03.16 010889 4,69,930.0029.03.16 010890 75,711.0028.03.16 010886 4,809.0028.03.16 010885 6,300.0021.03.16 010882 14,700.0018.03.16 010873 31,242.0018.03.16 010872 61,372.0008.03.16 010868 4,462.0004.03.16 010849 9,631.0004.03.16 010850 2,739.00

23/11/2015 3455 31,081.0001.09.15 786422 1.013.00 7,12,990.00

Balance as per Bank on 31.03.2016 6,65,45,295.60

As per our report attached.

For Deepika Setia & Co. (Shivanand Jha) (Kuldip arayan)Chartered Accountants SPM- Finance Project Director

BGSYS BGSYS

(CA. DHARIVINDAR SINGH KAJAL)Partner

Palce- Pntna M.No.091609Date-2 0 E C 20 I6

SEN

RN0193515N 0r

BIHAR GRAM SWARAJ YOJNA SOCIETY

BIHAR PANCHAYAT STRENGTHENING PROJECTDept. of Panchayati Raj,Govt. of Bihar

Irrigation Barrack No.1 (Near Haj Bhawan), Harding Road, Patna-1Loan/ Credit No. 5160 IN

Financial Year 2015-16

ACCOUNTING POLICIES FOR THE PROJECT AND NOTES TO ACCOUNTS

1. Basis of Accounting

Project Accounts are maintained on Cash basis of accounting, double entry book keeping systemon historical cost convention following Accounting Standards generally accepted in India.

2. Fixed Assets

Fixed Assets are stated at their cost of acquisition including taxes, duties, freight and otherincidental expenses relating to their acquisition, and substantial expenditure on subsequentimprovements thereto.

In case of Fixed Assets acquired through Project grants and Retroactive Financing and owned byBGSYS, an amount equivalent to the cost of acquisition is credited to a Capital Fund and shownin the Balance Sheet. Depreciation has not been provided on Fixed Assets.

3. Treatment of Interest Earned

Interest earned on balance/s in Project bank account has been recognized as project fund and willbe utilized for project purpose.

4. Valuation of Stocks

Materials and office supplies purchased for the Program charged as expenditure at the time of itspayment, through memorandum stock registers.

5. Treatment of advance payment

Advances provided for various program activities. These advances adjusted and recognized asexpenditure only on rendering of services or on delivery of goods, submission of supportingdocuments after approval. All such payments continue to be treated as an advance until its finalapproval and adjustment.

\4-P- S E 7

R".1351N

6. Treatment of Grant Received/Fund under Retroactive Financing.

Grant/Fund Received from World Bank/State Govt. to the extent of the expenditure has beenshown as application of fund under prescribed head and un-utilized amount at the end of the yearis being shown as an un-utilized Grant/Fund on liability side. Amount from available fundprovided in bank account by the state Government has been used for Project purpose to befinanced under Retroactive Financing Guideline of World Bank has been separately bookedunder head "Expenditure under Retroactive Financing"

As per Our Report attached

For Deepika Setia & Co. (Shi4nand Jha) (Kuldi Narayan)Charter tant SPM- Finance Project Director

BGSYS BGSYS

(C h SM gh Kajal)er

M.

Place-PatnaDate2 0 DEC 2016