AUDIT
REPORT ON THE ACCOUNTS OF INSURANCE REGULATORY & DEVELOPMENT
AUTHORITY FOR 2000-2001
1.
Introductions:
The
Insurance Regulatory and Development Authority (Authority) was
established on 19 April, 2000 under the Insurance Regulatory
and Development Authority Act, 1999. The main powers and functions
of the Authority are to :
a. protect the interests of holders of Insurance policies;
b. regulate, promote and ensure orderly growth of the insurance
industry and for matters connected therewith or incidental there
to ;
c. issue to the applicant a certificate of registration, renew,
modify, withdraw, suspend or cancel registration, and
d. levy fees and other charges for carrying out the purposes
of the Act.
The
audit of the accounts of the Authority has been entrusted under
Section - 19 (2) of the Comptroller and Auditor General (Duties,
Powers and Conditions of Service) Act, 1971
2.
Sources of Receipts
During the year 2000-01, the Authority received Rs. 1.50 crores
from the Government of India, Ministry of Finance (Department
of Economic Affairs) as grant for meeting day to day expenses.
The total receipts of the Authority (others than the sum of
Rs. 1.50 crores received from the Ministry of Finance) were
Rs. 21.86crores. The total expenditure was 1.67 crores.
3.
Comments on Accounts
3.1
Physical Verification of Assets
In
terms of the provisions contained in Rule 112 (iii) of the General
Financial Rules, fixed assets need to be verified at least once
a year and results of the verification recorded on the inventory.
The Authority has fixed Assets valued at Rs. 22,69,754.68 as
per the Balance Sheet as on 31st March 2001. However, no physical
verification of the fixed assets was carried out. On this omission
being pointed out by Audit, the authority stated (January 2002)
that it would adopt the procedure of physical verification of
fixed assets, from now onwards.
3.2
Receipt of Registration fees of Rs. 2,75,21,432.50 not routed
through Cash Book
Scrutiny of the Current Account maintained in HDFC Bank Ltd.,
revealed that an amount of Rs. 2,75,21,532.50 was received during
the year as Registration Fees from Agents. These receipts had
not been entered in the Cash Book.
The
Authority stated (February 2002) that the procedure had been
changed with effect from 4th December 2001. Compilation of a
separate account of the past period in respect of registration
fees is to be maintained and compliance of the same will be
verified in the next audit.
3.3
Revision of accounts at the instance of audit
The
accounts for 2000-01 were revised by the Authority at the instance
of audit in following cases:
i) The Authority was not showing the financial assistance amounting
to Rs. 150,01,000 received from the Ministry of Finance in its
Income and Expenditure Accounts as income. At the instance of
audit it was shown as income. As a result revision, "excess
of expenditure over income" changed to "excess of
income over expenditure".
ii)
Earlier amount of Contributory Provident Fund (C.P.F.) Employees'
contribution (including interest thereon) was kept out of accounts.
On being pointed out in audit, the Authority revised the Balance
Sheet. An amount of Rs. 91,062/- was shown as liability under
the head "Provident Fund Trust" and corresponding
amount was shown in the assets side under the head "Fixed
Deposits with Banks".
-Sd-
Director General of Audit
Central Revenues
New Delhi
Place:
New Delhi
Date: 25th July, 2002