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Indian Railways And Cag Audit


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Audit of Indian Railways

Published in: Economy & Finance, Business

Indian Railways And Cag Audit

  1. 1. Railways<br />A timeline<br />
  2. 2. InPompeii, ancient Greece and even in the Middle-East, "rut ways" in stone pavings were in existence several centuries earlier, for facilitating haulage of wagons and chariots<br />In the early 16th Century, in England there were metalled tracks for horse-hauled trucks;<br />1630 - Beaumont laid rails on a highway in England to transport coal from the Newcastle mines – history’s first railroad?<br />1718 - steam was for the first time put into industrial harness by a Cornish miner named Savary, who built an engine to pump water from the mines<br />1765 -  James Watt constructed his first steam engine at the Corson Iron Works, Glasgow, Scotland and the steam age began<br />1801 - A short line of track for a horse railroad was laid between Wandsworth and Croydon in the  suburbs of London - the first chartered railroad on record <br />
  3. 3. Richard Trevithick (1771-1833), a Cornish mine manager's son earlier invented the road-locomotive in 1801, putting upon the highways the first steam propelled vehicle for passengers. This invention was not for the railway but for the highway.<br />September 27, 1825 – George Stephenson pioneers the world’s first public steam railway with 600 passengers who were made to ride on wagons.<br />
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  6. 6. The first railway on the Indian sub-continent ran over a stretch of 21 miles (33.82 kms.) from Boribunder to Thane. The formal inauguration ceremony was performed on 16th April 1853, when 14 railway carriages hauled by 3 locos christened Sultan, Sindh and Sahib carrying about 400 guests left Boribunder at 3.30 pm "amidst the loud applause of a vast multitude and to the salute of 21 guns."<br />The first passenger train steamed out of Howrah station destined for Pandooah, a  distance of 37 miles (59.58 kms.), on 15th August, 1854 on the first section of the East Indian Railway.<br />
  7. 7. In the South the first line was opened on 1st July, 1856 by the Madras Railway Company. It ran between Vyasarpadi and Wallajah Road (Arcot), a distance of 63 miles (101.43 kms.)<br />In the North a length of 119 miles (191.59 kms.) of line was laid from Allahabad to Kanpur on 3rd March 1859. The first section from Hathras Road to Mathura Cantonment was opened to traffic on 19th October, 1875<br />_____________________________________________<br />By 1900 the Indian Railway system had a route mileage of 26,322 kms.<br />
  8. 8. Total Track length of 65,426 kms., of which 10,530 kms. went over to the new State of Pakistan<br /> 42 railways, 9 nationalised and 33 princely state railways classified as follows:<br /> 13 Class I with route mileage of 3,000 and annual earnings of Rs. 50 lakh or more<br /> 10 Class II with route mileage of 2,600 and annual income of Rs. 15-50 lakhs<br /> 19 Class III with route mileage of 1500 and annual revenue of less than Rs. 15 lakh<br /> In addition there were 10 private railways running mainly on narrow gauge<br />
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  10. 10. Guiding Principles for zonalisation of IR<br />units with route mileage of 5,000-6,000<br />serving a population of about 50 million<br />earning Rs. 50 crore per annum and<br />causing least dislocation to employees <br />1951-52 : Creation of Southern, Western, Central , Northern, Eastern, North Eastern zones<br />1955 :South Eastern zone<br />1958 :Northeast Frontier zone<br />1966 :South Central zone<br />
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  14. 14. Directorates at Railway Board<br />
  15. 15. RPUs & PSUs under MOR<br />
  16. 16. Zones and their Divisions<br />
  17. 17. Zonal General Manager <br />
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  20. 20. IR has……..<br />40,323 kms. of long and continuous welded rails and 16,995 kms. of short welded rails<br />1,19,984 bridges of which 565 are important and 9,792 are major ones<br />38,561 level crossings of which 16,424 are manned<br />0.42 million (4.23 lakh) hectares of land<br />2,19,662 digital electronic exchange lines<br />186 stations with Interactive Voice Response System (IVRS)<br />7,566 locomotives, 2,22,147 wagons and 37,840 coaches with a passenger seating capacity of over 3.2 million (32.3 lakhs)<br />56 per cent of passenger trains are diesel hauled while 44 per cent are electric hauled<br />57 per cent of freight trains are electric hauled while 43 per cent are diesel hauled<br />Consumed 9908.5 Million KWH of electricity and 2.032 billion litres of high speed diesel (HSD) in 2000-01<br />Carried 4.8 billion originating passengers in 2000-01 traversing 457.02 million passenger kms. On 8,520 trains at average speeds ranging from 23.7 and 37..7 on BG and 26.7 kms/hr. to 31.7 kms./hr. on MG<br />Carried 473.50 million tonnes of freight and covered 23.05 billion NTKms. in 2000-01<br />
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  24. 24. 2000-01<br />1999-2K<br />1998-99<br />All figures are in Crore of Rupees<br />34880.48<br />32938.81<br />29619.40<br />Gross Traffic Receipts<br /> <br />Excess of revenue over expenditure<br />763.59<br />345.89<br />356.30<br />25644.93<br />1670.00<br />3529.06<br />27534.42<br />2301.07<br />4831.85<br />23254.60<br />1155.00<br />3425.00<br /> Working Expenses<br /> Ordinary Working Expenses<br /> Depreciation Reserve Fund<br /> Pension Fund<br />1071.23<br />2735.67<br />2141.16<br /> Net Revenue<br />307.64<br />1863.89<br />1742.08<br /> Dividend to Govt. of India<br />732.11<br />31.48<br />0.03<br />(-) 241.75<br />395.87<br />3.21<br />Surplus appropriated to<br /> Development Fund<br /> Capital Fund<br />32261.88<br />10390.00<br />29655.31<br />10116.75<br />27312.85<br />9516.50<br /> Capital-at-charge<br /> Loan from General Revenues<br /> Capital Fund<br />
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  36. 36. Freight Earnings<br />
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  47. 47. The first locomotive, the F-734, was built in India : The F-734 built in 1895 by the Ajmer workshop of the Rajputana Malwa Railway. And used on Rajputana Malwa, Bombay Baroda & Central India Railway systems<br />The first Broad Gauge Rail Car used in India was introduced in 1906 by Madras & Southern Marhatta  Railway <br />The first Narrow gauge railcar was used in Kalka-Simla  section of North Western Railway in 1911. This 4-wheeler car was used to carry mail and was petrol driven.<br />The Gaekwad Baroda State Railway was the first railway in the world to introduce diesel-electric rail cars in 1933.<br />Toilets were first provided in First Class coaches in 1891 and in lower class carriages in 1907.<br />Lighting was mainly done by gas lights. The distinction of First Electric light on coaches in India belongs to an Indian State run Jodhpur Railway in 1902. By 1907  all main line trains had lighted coaches.<br />Early carriages opened on the outside. Inward opening coaches were introduced only in 1909, probably because the hitting of open doors to permanent structures posed a problem.<br />It took 100 years for IR to provide ceiling fans in III class coaches only at the behest of the then Rly Minister Sri Lal Bahadur Shastri in 1953.<br />Double decker coaches were first introduced in India in 1865 by Eastern Bengal Railway. These were later withdrawn as there was delay in alighting and getting in causing detention to trains in other railways' territory<br />
  48. 48. 2 3 0 1<br />RJD/SHT for all zones<br />UP<br />Superfast for ER<br />Howrah shed<br />W D M - 2<br />MIXED TRAFFIC<br />BROAD GAUGE<br />DIESEL<br />SERIES/VERSION<br />
  49. 49.   <br />Quotas on IR<br />
  50. 50. Shortest station name: Ib, near Jharsuguda on the Howrah-Nagpur main line (South Eastern Railway). <br /> Longest station name: Venkatanarasimharajuvariapeta (Halt) on the Arakkonam-Renigunta section of the Southern Railway <br />The Kanyakumari-Jammu Tawi Himsagar Express has the longest run in terms of distance and time, about 3745km in 74 hours and 55 minutes. It also runs between the northernmost and southernmost stations in the country, and passes through 4 zones (SR, SCR, CR, NR). It crosses the largest number of states (TN, Kerala, AP, Maharashtra, MP, UP, Delhi, Rajasthan, Haryana, Punjab, Himachal Pradeshand Jammu & Kashmir). <br />The Kerala Express has a daily service and covers 3054km in its run (in 42.5 hours) <br />The Trivandrum Rajdhani travels non-stop between Vadodara and Kota (528km), covering the stretch in about about 6.5 hours, the longest continuous run on IR today<br />The Trivandrum-Guwahati Exp. crosses 5 railway zones, as does the Cochin-Gorakhpur Exp.<br />
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  52. 52. Station<br /> Speciality<br /> Station<br /> Speciality<br /> Lonavala<br /> Chocolate fudge/cashew chikki<br /> Karjat<br /> Batata vada/<br /> vada pav<br /> Hyderabad<br /> Chicken Biriyani<br /> Sholapur<br /> Kunda<br /> Nagpur<br /> Oranges<br /> Ernakulam<br /> Fried yellow bananas<br /> Agra<br /> Petha<br /> Rameshwaram<br /> Idiuppam<br /> Amritsar<br /> Aloo parantha<br /> Surat<br /> Undhyo<br /> Daund<br /> Peanuts<br /> Howrah<br /> Sandesh<br /> New Delhi<br /> Chaat<br /> Manapparai<br /> Murukku<br /> Miraj<br /> Pomegranate<br /> Varanasi<br /> Mangoes, guavas<br /> Rajahmundhry<br /> Bananas<br /> Chinna Ganjam<br /> Cashewnuts<br />
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  55. 55. Dy. Comptroller & Audit General of India(Railways)<br />Pr. Director of Audit<br />SER<br />Pr. Director of Audit<br />SCR<br />Pr. Director of Audit<br />RPU & Metro Rly.<br />Pr. Director of Audit<br />ER<br />Pr. Director of Audit<br />NER<br />Pr. Director of Audit<br />NFR<br />Pr. Director of Audit<br />CR<br />Pr. Director of Audit <br />WR<br />Pr. Director of Audit<br />NR<br />OSD/ COFMOW<br />Pr. Director<br />(Railways)<br />
  56. 56. Zonal General Manager <br />
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  58. 58. System of Audit<br />RAILWAY BOARD (AUDIT BY CAG)<br />* Including all sub-offices<br />
  59. 59. R<br />A<br />N<br />C<br />Railway Audit Norms Committee<br />2003<br />
  60. 60. The Pitfalls<br />SMI published first in 1959, revised in 1981 and now in 2003, next 2025?<br />Fragmented SMI provisions leading to fragmented audit coverage and issue of large nos. of IR items;<br />No clear cut demarcation between Central and Local audit resulting in duplication of effort;<br />Outdated levels of check both in magnitude and conducting levels – not in keeping with contemporary audit complexities;<br />Issues of contemporary relevance absent in SMI;<br />R<br />A<br />N<br />C<br />
  61. 61. Our Approach-I<br />Establishment of clear cut demarcation between Central and Local audit by transferring groups of items from Central to Local and vice-versa reducing duplication of audit effort;<br />Updating levels of check both in magnitude and conducting levels to enable comprehensive analysis of contemporary audit complexities;<br />Consolidation of SMI provisions by coherent and concentrated re-grouping of subjects, addition of contemporary subjects and standardisation of checks at certain levels;<br />Introduction of Audit Task Lists (ATLs) to enhance accountability of audit staff;<br />R<br />A<br />N<br />C<br />
  62. 62. OurApproach-II<br />International Auditing Standards prescribe that:<br />Audit is to be carried out by persons whose education and experience is commensurate with the nature, scope and complexities of audit tasks<br />The Present Scenario<br /> Recruitment by promotion from Group ‘D’<br /> Direct Recruitment “ban”<br /> Contemporary audit complexities beyond grasp of Auditor<br />Recommendation<br /> Qualitative and quantitative up gradation at appropriate levels (Vol. II for details)<br />R<br />A<br />N<br />C<br />
  63. 63. Our Approach-III<br />Inflation a major factor from 1973 and onwards<br />Compounded in last 1-2 years with rise in POL prices<br />Monetary values fixed 22 years back and have no current relevance – to last for another 22 years?<br /> Recommendation: Monetary limits enhanced and check levels and magnitude revised wherever necessary (details in Vol. II)<br />Increase in no. of transactions and volume of expenditure<br />Increase in revenue and capital expenditure highest from 1980-81 to 2000-01<br />Recommendation: Revise quantum of checks<br />R<br />A<br />N<br />C<br />
  64. 64. Railway Audit Norms Committee<br />Constituted by Dy. Comptroller & Auditor General of India (Railways) on 3rd January 2003<br />Composition<br />Smt. Anjali Sen, PDA, Western Railway – Chairperson<br />Smt. K. Ganga, PD (Railways)/CAG – Member<br />Smt. S. Srinivasan, PDA, Southern Railway – Member<br />Shri Shantanu Basu, PDA, South Central Railway – Member<br />Shri Neeraj Kumar, Dy. Director, Eastern Railway – Member (I-T)<br />Shri C.S. Sharma, Dy. Director, Northern Railway – Member Secretary<br />R<br />A<br />N<br />C<br />
  65. 65. Terms of Reference-I<br /> Examine the existing pattern of audit, frequency, coverage, extent of audit checks, level of audit scrutiny, rendition of reports, etc in respect of all areas of audit activitywith reference to the existing internal audit checks available in the Railways;<br /> In respect of those units and activities where computerisation has taken place in the Railways, the methodology and audit norms to be adopted in a computerised scenario;<br /> The comprehensive linkage required between the Zonal Railway monitoring and control vis-à-vis Divisions and Workshops, etc for a meaningful inter-related audit assessment; <br />R<br />A<br />N<br />C<br />
  66. 66. Terms of Reference-II<br /> Re-assess planning, monitoring and control mechanisms and non-departmental mechanisms available at Zonal and Divisional levels being used by Audit while planning audit activity of formations and suggest suitable methodology;<br />Examine and suggest level and percentage of audit checks, frequency of audit and level of scrutiny of items;<br />Assess and recommend changes in personnel below Group Officer level;<br />Training needs for implementation of its recommendations, especially for audit of computer activities;<br /> Any other related item (s)<br />R<br />A<br />N<br />C<br />
  67. 67. 60<br />Working Schedule of RANC<br />R<br />A<br />N<br />C<br />
  68. 68. Overview of Recommendations<br />Items proposed for transfer from Central to Local Audit;<br /> Reduction in quantum of check (Estt.);<br /> Reduction in quantum of check (Expdn.);<br /> Increase in quantum of check (Expdn.);<br /> Increase in scrutinising HR levels;<br /> Decrease in level of scrutinising HR levels;<br /> Increase in monetary limits;<br /> Augmentation of field inspection parties;<br /> New SMI provisions and deletion of obsolete ones;<br />R<br />A<br />N<br />C<br />
  69. 69. The Impact on SCR<br />5 Divisions up to 31st March 2003<br />6 Divisions from 1st April 2003 + UBL part +<br />Part of new SWR HQs +<br />3 Construction units +<br /> 840 Traffic Units +<br />2 Workshops from 1st April 2003<br />No production units<br />TOTAL UNITS: 1549<br />R<br />A<br />N<br />C<br />
  70. 70. The HR Impact-II<br />Central Audit - Zonal HQs*<br />R<br />A<br />N<br />C<br />*Figures for a model Zonal HQs with all activities<br />
  71. 71. The HR Impact-I<br />Central Audit - Divisions*<br />R<br />A<br />N<br />C<br />*Figures for a model Division with all activities<br />
  72. 72. The HR Impact-III<br />Central Audit*<br />R<br />A<br />N<br />C<br />*Figures for a model Division & Zonal HQs with all activities<br />
  73. 73. The Overall HR Impact<br />R<br />A<br />N<br />C<br />
  74. 74. SAO/AO Requirement<br />R<br />A<br />N<br />C<br />Only Audit sections covered and all support sections excluded because no changes are proposed in the latter<br />
  75. 75. AAO/SO Requirement<br />R<br />A<br />N<br />C<br />Only Audit sections covered and all support sections excluded because no changes are proposed in the latter<br />
  76. 76. Auditor Savings<br />R<br />A<br />N<br />C<br />Only Audit sections covered and all support sections excluded because no changes are proposed in the latter<br />
  77. 77. Overview of HR status<br />R<br />A<br />N<br />C<br />All sections & Costing Cell included<br />
  78. 78. Audit Plan 2003-04-A<br />R<br />A<br />N<br />C<br />
  79. 79. Audit Plan 2003-04-B<br />R<br />A<br />N<br />C<br />*Not done as part of transaction audit<br />
  80. 80. Audit Plan 2003-04-C<br />R<br />A<br />N<br />C<br />* Zonal HQ RAPs, ECPA<br />
  81. 81. Audit Plan 2003-04-D<br />Activitywise percentage distribution of mandays<br />R<br />A<br />N<br />C<br />
  82. 82. Audit Plan 2003-04-E<br />R<br />A<br />N<br />C<br />
  83. 83.<br />