To

The Principal Finance Secretary to Government

5th Block, AP Secretariat,
Velagapudi,
Guntur District.

Sir,

Sub:- APWAS - DAOs - Impediment to the duties of the DAO(w)due to local rulings communicated by
the ENC & E.E of R&B department defeating the very purpose of APWA Code and APPW D
Code and Obstructing the functions of internal audit and financial adviser - immediate action to
allow the DAO(w) requested - Regarding.

Ref:- 1. G.O.Ms.No.184 Finance (SMPC) Department, dt.5-7-2008.

2. G.O.Ms.No.25, T. R&B (Ser.H) Department, dt 19-8-2008.
3. Proceedings No.15240/G.S(3)/2005, dt. 01-09-2008 of ENC (R&B) Admn.
& NH, Hyd.

*****

It is well know that para 89 of A.P. Works Accounts Code stipulates the duties functions and
responsibilities of the D.A.O(w). Though there is structural change in the organization of Works Accounts, those
changes are limited up to the level of the O/o the APAO, W&P. In fact no amendment was issued to the said codal
provision for alteration of the duties functions and responsibilities of the DAO(w) who are working at cutting edge
level performing internal audit and rendering advise to the EEs in all financial matter.

In this connection, it is relevant to submit that, like in all Engineering departments, the DAOs working in
R&B Divisions hither to have a considerable degree of independence to report the instances of failure to follow
procedures, instance of malpractice etc., directly to the Executive Engineer. Where there was disagreements between
DAO and the Executive Engineer then such instances would be brought to the notice of APAO/ JDWAs. Despite
thwarted attitude of the Executive Engineer towards the DAO(w) in the event of raising objections on the
irregularities on the financial matters, the DAOs had opportunity to see the orders/ opinion of the EEs against the
advise of the DAO(w).

The aforementioned codal provision stipulates that the DAO(w) shall be treated as the Senior member of
the office they audit, though his status is equal to that of Dy . Exe. Engineer, and DAOs line of reporting shall be to
the Executive Engineer. The codal provision gives strong signal to the members of the office to give meaning full
support to the DAO(w) rather than lip service to avoid impairment to the independence of the DAO(w) in fact or
appearance because the internal audit activity was recognized as an important function. Contrary to the codal
provisions, the EEs of R&B Divisions have framed local rulings defeating the very purpose of status afforded to the
post of DAO(w) as next to the Executive Engineer in Division Office. The role of the internal auditor was
undermined.

In this connection, it is imperative to bring to the notice of the authorities that the performance of any
Engineering Department will certainly depends on the strength and efficiency of its cutting edge level Engineers ie.,
AEEs/AEs who are supposed to work at field level by direct involvement in providing qualitative infrastructure
facility for affording amenities to the citizens. In other words unless the basic foundation is strong in all aspects, the
longer life of the Superstructure cannot be achieved.

Unfortunately, the Engineer-in –Chief R&B, Department and NH has obtained the orders of the
Government and suppressed 90 posts of AEEs/AEs. Under the guise of suppression of the posts of AEEs, and
leaving the plight of the public to their fate, the Engineer-in-Chief (R & B Admn and NH) has obtained the sanction
of 90 posts of P. A. to E.E. whose job chart is just confined to attend desk work to the E.E. on the plea that the work
load of the EE was tremendously increased due to delegation of powers for works costing up to 10.00 lakhs. If the
Engineer-in-Chief and Government feels that the work load of the E.E. is increased it automatically implies that
the responsibility of the DAO(w) who is the advisor to the EE also to increased. None of the DAOs working in all
Engineering Department in the state and EEs of other than R&B Department have never felt that the work load was
increased due to delegations of powers of T.S. from Rs.1.00 lakhs to 10.00 lakhs as it is quite natural in increase of
cost of work due to increase in cost of living from time to time. However it is for the Engineer-in-chief and for the
Government to decide how best the services of the engineers be used for the public service.

Contrary to the Codal provisions, the Executive Engineers of R&B Divisions have framed the local rulings
defeating the very purpose of status afforded to the DAO(w) as next to the E.E. The following few issues evidently
demonstrates the impediments caused to carryout internal audit.

As per codal provisions As per local ruling of EEs after introduction of PA to

1. The DAO(w) shall report directly to the EE the
instance of failure to follow procedure, mis-
utilization and mis appropriation of funds etc.,.
The line of reporting directly to the head of the
office allows activity of internal audit to fulfill its
responsibility.
EE system
Contrary to the Codal provisions the ENC & EEs of
R&B Department have framed local rulings to the
DAO(w) not to put up files directly to the E.E. as it is
for the PA to EE to scrutinize the files before approval
of E.E.
 Unless the local rulings framed by the ENC & EE are cancelled forthwith it is not possible to the DAOs to
discharge the duty as an internal audit of the Division. If the ENC, EE and A.G. wants to curtail the independence of
internal audit and restrict the access of DAO(w) and line of reporting to the Head of the Office in fact or appearance,
by transferring the responsibility from DAO(w) to the PA to EE in all financial matters, it is inevitable to amend the
paras in APWA code to suit the needs of PA to EE rather than interest of internal audit.

As per codal provisions As per local ruling of EEs after introduction of

2. As per Principal Secretary Finance & Planning
(W&P) Memo No.3961/ F.8(l)/03-9, dt.4-4-2004
after scrutiny of estimates in Technical aspect by
the T.O. and AEE and before according Technical
sanction by the EE, the estimate must be got
checked by the DAO(w) in financial aspect to
arrive final estimated cost of work.
PA to EE System
Due to restriction in line of reporting of the DAO(w), the
responsibility to exercise final checking before according
technical sanction by the Executive Engineer is vested
with the PA to E.E. only. The PA to EEs are empowered
to alter or modify the provisions in the estimate checked
by the DAO(w).

As the role of DAO(w) is restricted, the PA to E.E. is only responsible for any deviation to financial regulations in
the estimates sanctioned by the E.E.

If the Engineer-in-Chief, Executive Engineer and Accountant General intends to transfer the responsibility to PA to
EE to check the estimate in financial aspect before according Technical sanction by the E.E, an amendment to the
said Government memo and codal provision is inevitable.

As per codal provisions As per local ruling of EEs after introduction of

3. The DAOs have expertise in formulation of
agreement conditions to safe guard the pecuniary
interest of the Govt, and also to avoid unavoidable
contractual litigations. It is the responsibility of the
DAO(w)L verify the conditions in tender documents
and also in the agreement before concluding the
agreement by the E.E.
PA to EE System
As per local ruling of the EE, the ultimate scrutiny is
the responsibility of the PA to EE. The role of the
DAO(w) is confined to put up the agreement to the PA
to EE who is final in line of reporting to the E.E.

In the event of any condition incorporated in violation of any procedure or any omissions are not detected by the PA
to E.E. before entering in to agreement by the E.E, the P.A. to E.E. being the final checking authority shall have to
take the responsibility for such lapses.
 As per codal provisions
4. The para 89© of AP Works Accounts Code
stipulates that the DAO(w) should be treated as a
Senior member of the Division Office with a view to
see that he is given the fullest access to all
transactions of the division and even the line of
reporting to the Head of the Office allows to fulfill
the responsibilities as Financial Adviser and as
internal auditor. The Para. 158 of APWD code
stipulates that the responsibility of DAO(w) extents
to the final checking arrangements of comparative
statements besides conducting personally a test
check of the comparative statement before accepting
of Tenders by the Executive Engineer. All the
agreements and connected confidential reports must
be in the custody of DAO(w).
As per local ruling of EEs after introduction of
PA to EE System
As per local ruling of the EEs in R&B Division, the
role of the DAOs are restricted to the level of PA
to EE defeating the purpose of his
independence and status as enshrined in the APWA
code. The PA to EE has taken responsibility of
final checking (Super check) of comparative statement
before approval of Tenders by the E.E. The role is
curtailed and the entire control of administration of
all branches in Division Office is vested with him.
The DAO has no scope for arrangements for checking
of computed tenders. As the PA to EE has acquired
status of an internal Auditor and financial adviser as
per local rulings, the agreements and all connected
confidential documents must be in the custody of PA
to EE till the local rules are cancelled.

Unless the local rulings are cancelled and the status of the DAO(w) is restored to that of next to the EE as
per APWA code, the DAO(w) will not have any grasp on the transaction^of all branches in Division Office and
restrictions on the access of DAO(w) directly to the E.E. is an impediment to render the advice/ to bring the instance
of irregularities.

The reporting line of DAO(w) who is specially trained for all matters connected with the financial
implication of division, was restricted to the level of PA to EE. The right to seek advice of the DAO(w) by the EE as
per para 93 of APWA code needs to be amended to suit the needs of the EEs according to their convenience.
As per codal provisions

As per codal provisions As per local ruling of EEs after introduction of

5. Keeping in view the status of the DAO(w) as next to
the E.E. in the division office, the Government have
assigned the responsibility of furnishing a certificate
of furnishing the FNPRs and MB pages used return
by the field officers for admitting the O&M bills for
payment. If any field Officers are failed to submit
those returns the DAOs are not yielded to the
PA to EE System
Consequent on creation of the Post of PA to EE, the
managerial and administrative functions are
transferred to the control of PA to EE. The scope of
DAO was reduced and hence there is no possibility to
pursue for submission of FNPRs and MB pages used
return. The PA to EE who is discharging the functions
hither to dealt by the DAO has to furnish the
 pressure to furnish said certificate so that the bill will certificates prescribed by the Government on the
not qualify for payment O&M bills.

Unless the local rulings framed by the E.E. are cancelled it is not possible for DAO to monitor/ pursue for
said returns as the staff will extend only lip service rather than meaningful support due to control of PA to EE over
all braches in division.

It is very pathetic to note the contents of the E.E., R&B Division, Mampalem, Visakhapatnam Lr.No.
RTI Act/A5/2005, dt.21-4-2009 and also the letter No. Supdt/RTI/09-10/229, dt.20-4-2009 of the EE, R&B,
Khammam. According to the said EEs the APWA Code has became obsolete and not suitable for prevailing
circumstances. Not only the said EEs but some more EEs are of the opinion that because the scale of pay assigned to
the post of PA to EE is higher than that of the DAO(w), the line reporting of the DAO(w) shall be to the PA to EE
only. The PA to EE shall only exercise ultimate checks on all maters before according sanction by the EE.

The above explained circumstances are very few to demonstrate the impediments due to local rulings
framed by the ENC and EEs of R&B Department. So as to safe guard the spirit of audit. The local ruling
threatens the importance of the internal audit activity to carryout its responsibility in an unbiased manner. Audit
forms an indispensable part of the financial system and is one of the important organs necessary to ensure sound
functioning of the executive by securing accountability to the legislature in the area of financial administration.
Without audit no accountability, without accountability no control.

Early action to allow the DAOs(w) to discharge the duties as per Codal provision by cancellation of all
local rulings framed by the ENC and EE will safeguard the interest of internal audit leading to safeguarding the
pecuniary interest of the Government.

Yours faithfully,