Ref. No.: AIPSBCOEA/CHQ/AUDIT STATUS/2019                              dated- 25.11.2019                                                                                                        

To

              The Secretary,

              Department of Posts,

              Dak Bhawan, Sansad Marg,

              New Delhi – 110 001.

                                                                      

Sub:    Regarding input/Suggestion reg- Change of role and responsibility of SBCO, Post GL integration.

           

AUDIT STATUS TO SBCO -  REASONS

The SBCO and ICO(SB) branches were introduced in the Department of Posts bifurcating from Accountant General , Posts & Telegraph as per the order of AG P & T No. Admn. III/5(S)4A- KWiii/2806 Dated at Simla the 31st March 1964. The aim of the bifurcation was to transfer of Audit  and Accounting work to the HPO. Since then, SBCO has been performing the Audit and Account functions of the various POSB categories of accounts involving crores of Rupees of lacs of Depositors.

            The Savings Bank Control Organisation was set up w.e.f 01.01.1960 with the approval of AG P & T, CAG and Ministry of Finance to ensure an On-Spot Checking over the work of Small Savings Schemes for audit & accounting, vouchers checking & reconciliation work vested within AG P&T which has its own separate identity other than existing PA Cadre in the Department being their nature of duties identical to the Audit & Accounts wing.

Through an Act of amendment by Nodal Ministry (Ministry of Finance) Small savings Audit & accounting work was transferred from the Audit office to the Post Office in 1964 with formation of new nomenclature as “SBCO”.

            On similar lines the Account wing was also introduced in the Department of Posts w.e.f.01.04.76 in the form of Office of Director of Accounts (Postal).

 Both the wings were previously part of AG P & T.

            Shri. J.S. Bhatia Member P & T Board (FD & AF) formulated a separate manual known as “Postal Manual of SB Control, Pairing & Internal Check Organisation” for duties of SBCO staff headed by AO ICO(SB) on the pattern of P& T Audit.

Prior to 1.8.1991, the existence of the SBCO cadres are as below,

Head Clerk/ JAO/Supervisor SBCO

U.D.C.

L.D.C

Class IV official

Time and again, our Association is demanding that the SBCO wing should be brought under the control of Director of Accounts (Postal) for effective functioning. Of late an order was issued assigning the work of NSCs & KVPs to SBCO which was previously done by DAP w.e.f 01.07.2016 vide SB Order 06/2016 issued vide No.32-01/2016-SB Dt.21.01.2019. In our strong opinion, an robust internal audit should be mooted out for POSB like various audit organizations (ie) P & T audit General, Audit Civil Audit, Defence and Railway Audit, striving for the safety of public money.

In Finacle the SBCO Auditor’s manual issued by India Post reveals that all the transactions are to be verified by the SBCO staff or auditor and all SBCO staff/Auditors have to get login IDs from CEPT, Chennai to view LOT. These lines are incorporated in page No. 03 of the said manual. Accordingly, the entire Manual indicates the detective controls by SBCO/Auditor staff. In the Auditor’s Manual under the head “Detective Controls”-Comparison of Account number and amount in the voucher with LOT, it has been written as however, the SBCO staff or Auditor has to verify all the transactions from the vouchers received from the LOT available in the Finacle.

1. The Audit function of SBCO has been mentioned clearly in 1960 under Para-1(Preamble) of introduction POSSS Part-IV by A.N. Dureja authorized by the then P & T Board.

2. The Internal control wing which is similar to SBCO is now called as “Internal Audit Office” as per Directorate Letter No. CIS/AU-1/101-06-07/2276 Dated 05.02.2007.

3. The withdrawal vouchers have been checked by the SBCO staff (even now) by putting their signature in the place marked as “Auditor” on the SB-7.(withdrawal voucher).

4. As per the Directorate order No.97-8/95-SB Dated 12.10.1995 newly created, the posts of Supervisor SBCO are carrying out the functions of JAO of erstwhile Audit and Account office.

5. SBCO has to carry out the reality check to avoid delayed detection of fraud vide the

Directorate Letter No.25-31/2017-FS-CBS Dated 19.11.2018.

6. Preventive Vigilance –Procedure has to be followed by the SBCO to prevent fraud vide Directorate Letter No.4-5/DR-02/2018-Inv.Dated 20.12.2018

Application.  All SBCO Staff/Auditors have to get Login IDs from CEPT Chennai Team to view LOT either in production or through MIS server.

Under the head “Sample LOT is given below” it has been written as “ SBCO/Auditor has to verify Account Number and Amount mentioned in LOT with the voucher and in case of any discrepancy, full transaction can be viewed in Finacle Application with input as TRAN ID mentioned in LOT and voucher. SBCO/Audit has to raise the objection procedurally for the discrepancy.

There is a head written as “Inquiries and reports for SBCO/AUDITOR staff. Menu options

1. HACSP

2. HACLI

3. HACLPCA

4. HACI

Under the head “Detective Controls – Interest Inquiries” written as

All Financial organizations will be receiving various income. The major share of the income for Ministry of Finance comes from interest. SBCO/AUDITOR has to see that annual interest, closing interest and the post maturity (overdue) interest has been correctly accounted for.

The two types of interest inquiries are:

Interest Inquiries

Interest Reports

These inquiries are on the various activities/transactions conducted by the employees working in a Post Office. These reports and inquiries are effective for operations as well as detective controls for SBCO/AUDITOR staff. It has been written as All other field shown in the screen are auto populated. The Auditors can even specify what type of Interest they are looking for, for example, additional, overdue or penal and so on, by choosing from the dropdown in interest type.

It is pertinent to mention that all the financial institutions must have a separate wing for Checking, Auditing & Accounting to safeguard the public money and on that’s why the Department has termed SBCO as unique cadre and recruit the personnel separately..Inter-change of SBCO staff with operative work (Pos) vice-versa was not allowed.. SBCO is considered as custodian of small savings business records in order to prevent any untoward incidents of misuse.The nature of work is of similar type dealing with the POSB Audit and Accounting and the financial transactions of pay and allowance of employees which are also accounted through the POSB Accounts only.

In this context, it is a compulsory requirement that Audit status to SBCO staff should be granted and change of nomenclature as Auditor in place of PA(SBCO)  and  grant of promotions accordingly: Ultimately SBCO section is dealing entirely with the work of audit ie. down loading the data from Finacle and voucher checking with most concentration.

The term AUDIT defines “an official inspection of an organizations account by an independent body and it cannot be expected to detect every fraud”. Fortunately the work presently done by SBCO has still coincided with the definition of AUDIT. The SBCO cadre is treated as distinct category in the department so far. POSB is very large banking institution under the Department of Posts having crores of account holders and multi crore of rupees as investment by the people. Proper audit to POSB system is a must and inevitable. In our strong opinion, robust internal audit should, be mooted out in POSB like various audit organizations (ie) P & T Audit, General Audit ,Civil Audit, Defence and Railway Audit, for the sake of safety of public money.

It is pertinent to point out that the duplicate accounting done by SBCO wing has been abolished with induction of CBS & Finacle in POSB banking operations. As such the SBCO wing is now entrusted with sole work of auditing of day to day transactions of POSB and Certificates by the latest orders. This work is being done by the SBCO on behalf of Ministry of Finance. Now the Government/Department should take initiative to re-designate the SBCO wing as POSB Audit wing and grant Audit status to SB Control Organization and treat its cadre are Auditors and make it as part of Postal Audit office. The status of the staff of present SBCO should be re-designated as “Junior Auditors” or “Senior Auditors” and supervisory posts as “Audit Officers”.

            The above suggestion will create an independent cell to perform the work on the spot under the Postal Audit Office without any fear of reprisal for pointing out the genuine mistakes and detection of frauds spontaneously.

         

 With Regards,

                                                                                                                 

     

                                                                                                              -Sd-

                                                                                         (SHP. JASMINE JALAL BEGAM)  

                                                                                                   General Secretary

Copy To:

1.    Shri. Sachin Kishore,

           DDG FS, Department of Posts,

           Dak Bhawan, Sansad Marg,

           New Delhi – 110 001.

2.     Smt. Meera Kumar,

            DDG (P), Department of Posts,

            Dak Bhawan, Sansad Marg,

            New Delhi – 110 001.