Third Urban Governance and Infrastructure (sector) Improvement Project (UGIIP-III)-Additional Financing, LGED
Field Visit Report Visited Pourashava: Mymensingh 1
Visit purpose : UGIAP follow up and Implementation supports Name of staff: Md. Zahurul Islam Travel to Mymensingh from Dhaka on 28 May’2018 (8.15 a.m)
1. Revenue mobilization through Holding Tax (HT)
2
Consultant’s inputs and observations
UGIAP performance reported / found
a)
Collection of govt. and private holdings up to March 2018 reported as below :
Holdings a Govt.
Private
Total
Demand (year) Collection Efficiency Demand (year) Collection Efficiency Demand (year) Collection Efficiency
Arrear
Current
Total
b 1,70,14,473 1,67,50,389 98.45% 65,48,011 62,76,511 95.85% 2,35,62,484 2,30,26,900 97.73
c
d/ b+c 7,30,22,309 6,14,54,934 84.16% 6,72,47,506 5,09,39,648 75.75% 14,02,69,815 11,23,94,582 80.13
5,60,07,836 4,47,04,545 79.82% 6,06,99,495 4,46,63,137 73.58% 11,67,07,331 8,93,67,682 76.57%
The status highlighted as bellow: o Holding tax collection efficiency 80.13% o 98.45% arrear tax collection from govt. holdings. o 95.85% arrear tax collection from private holdings. o 79.82% current tax collection from govt. holdingsi. o 73.58% current tax collection from private holdings.
1
1.
FY
Pourashava at present submits it ‘Quarterly Revenue Mobilization Report (QRM) ’’ to PMU with information of one year (i.e. current FY 2017-18) , therefore it was not possible to cross check /verify through this report whether the PS have been carry-forwarded their all previous arrear-demands properly as opening balance to each subsequent year. So it was necessarily required to check that arrear demands of Mymensingh have rightly been shown in the 3 current QRM report .Therefore, last 3 years information of revenue mobilization were 4 checked, and found as OK with the figures as below: Arrear demand (govt.+pvt)
a b 2014-15 2015-16 37,23,803 2016-17 1,11,81,857 2017-18 2,35,62,484 Source : Pourashava 2.
Recommendation and Actions
Current demand (govt+pvt)
Total demand (govt+pvt)
Total collection (govt+pvt)
c
d
e
9,50,73,740 11,52,00,487 11,67,07,331
6,64,19,340 9,87,97,543 12,63,82,344 14,02,69,815
6,26,95,537 8,76,15,686 10,28,19,860 11,23,94,582
Efficiency (%)
UGIAP SubArea
Designation: Municipal Taxation and Financial Specialist, GICD-II Travel to Dhaka from Mymensingh on 29 May 2018 (3.00 p.m)
f 94.39% 88.68% 81.36% 80.13%
g/d-e 37,23,803 1,11,81,857 2,35,62,484
Last general assessment of Mymensingh was effective in FY 2015-16, and since then PS has been continuing the interim assessment. In period of July 17 to Mar 18, total 229 holdings were assessed with tax amount of Tk. 46, 29,688/-. During visit , assessment of 13 holdings on sample basis were checked through desk review which found the high reductions in a range between 27% to 52% by standing committee (STC)as follows:
In the visit, special care and attention was given on the issues of the letter of the Project Director, vide memo no. LGED/PD/UGIIP/M-02/2015/1329(1), Date 15/05/2018 (attached) As per indicators of UGIAP-Advance level 3 M&E Specialist Mr. Altaf Hossain also suggested to see this issue in the visit. 4 It was likely okay as per QRM report through cross checking. Physical review of registers, records, accounts of holding tax are a lengthy process of timing. Consultant tried to check tax data through software, but the software does not show reports accurately. Tax collector informed that they prepared QRM report based on the manual records and information of bank receipts. Page | 1 2
Closing arrears (to be forwarded to next year)
UGIAP SubArea
2
Consultant’s inputs and observations
UGIAP performance reported / found
sl Total collection of holding tax up to April was reported as 82.05%. Tax Collector (as Section head) informed that several initiatives (Annex-II) that taken in the meantime like issuing red-color notice , formation of mobile team for arrear collection, repeated reminders to non-payers, mayor ‘s message to local newspapers, cable TV channels, 10 % special rebate for arrear payment are still going on. In the visit it was understood that collection efficiency of Mymensingh would meet the minimum target of 85% by June end.
b)
Interim assessments in numbers and amount up to March 18 were found as below : Quarter
No. of holdings Jul-Sep 17 New 26 Extension 51 Oct-Dec 17 New 53 Extension 30 Jan-Mar 18 New 32 Extension 37 Total 229 Source : Interim Tax assessment register
2. Revenue mobilization through non-HT
Types
Tax Amount 1,08,568 12,98,280 17,16,860 6,70,340 1,55,800 6,79,840 46,29,688
Collection efficiency of non-taxes (excluding holding tax) of the current FY2017-18 in comparing to last FY2016-17 was found as below: Year Demand Collection Efficiency (%) FY 2016-17 FY 2017-18
14,01,69,915 15,32,26,212 Plus 6%
15,32,26,212 11,86,61,624 (up to March)
Holding number
1 2 3 4 5 6 7 8 9 10 11 12 13
145 145/2 31/12 95/2/A 29/2/B 95/3/A 95/1/B 95/3/B 25/B/2 48/4/A 93/3/4 93/3/12 92/3/7 Total
28,420 36,000 11,600 5,520 5,520 5,520 5,520 5,520 37,400 10,440 4,860 4,860 4,860 1,66,040
Tax finalized by Standing Committee (tk) 15000 20,000 7,200 4,000 4,000 4,000 4,000 4,000 18,000 6,000 3,300 3,500 3,000 96,000
Tax reduced/ waived (%) 47% 44% 38% 27% 27% 27% 27% 27% 52% 43% 32% 28% 38% 42%
Source : Interim Tax assessment file It was known by PS visit that about 70-80% of assessments were took placed at STC for reviews, and it became a common tendency to reduce tax through STC appeal, as a result, PS is losing its tax revenue base .Assessor, Secretary and CEO all were requested to do something favor for discontinue such practice in tax review. . 1.
109.13%
As per UGIAP advance criteria, collection of non-taxes of each year is to be increased by 6% (as official inflation ) than the actual collection of last year, so Mymensingh Pourashava (PS) still have to ensure more collection from non-tax revenue sources. ( i.e. 6% more collection than the collection of 2016-17FY)
Tax assessed by Assessor (tk)
Recommendation and Actions
2.
In a meeting held together with Secretary, Tax Collector, Market Inspector, License Inspector, it was informed all with giving reference of the Project Director’s letter (Annex-VII) that as per quarterly report of March, Mymensingh will have to mobilize more TK 4,38,01,621/- from non-tax revenue sources by end of June. Secretary and his officials in the meeting confidently informed that they are on way to achieve this target by June end, because of collection of Tk. 2.5 crore (approx.) has already been received from renewal of licenses of auto-bikes. Collections from this and as well as other sources are still ongoing.
Tax Assessor said it was made on lump-sum basis reduction although as per rule STC can reduce/ wave tax at maximum 15% by appeal review. Secretary informed that appeal of tax review is concerned of the standing committee. As per act, we have to consider STC’s decision as final valuation of tax. Regarding control of excess tax reduction, CEO was requested to convince Mayor. In a reply, CEO informed that it is not only necessary to convince Mayor but also to manage Council, as a Mayor alone will not do anything except council’s decision.
It is appreciatively mentionable that Mymensingh PS has 4250 registered auto-bikes. In the mean time they have issued a notice (Annex-III) to all licensees to renew their license by 30th June 2018.
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1.
The tax software is in operation.
2.
The benefit of this system is not fully realized as the software has following problems in application: Not gives compete and accurate status on tax demands and collections; Not shows the full of information of arrear taxes; Entries of collection of arrear amount do not remove from the arrear list in some cases.
-Software systems need to be continuously updated. Support from UMSU in this regard is highly essential.
Status of fixation and collection of water tariff as on 30 April was reported as below :
1. 2.
Basis of fixation of water tariff Billing of system is computerized Collection of water bill through bank Last date of tariff fixation Rate of recovery
yes yes yes 2005 79.61%
Collection of tariff of Mymensingh is on way to meet at minimum target by June end. Pourashava increased its monthly tariffs for private, institution and commercial connections with effect from 2005, as table below: Previous rate Present rate (effective from 1993) (effective from 2005)
Connect ion diameter
½ Inch ¾ Inch 1 Inch 1 ½ Inch
90 120 225 1200
170 325 420 1200
270 500 850 1200
Connect ion diameter
½ Inch ¾ Inch 1 Inch 1 ½ Inch
Commercial (tk)
Yes Yes No Yes yes yes
Institution (tk)
Particulars Installation of HT management software Completion of preliminary data entry Updating of software data regularly Computerized billing Bill printed in the quarter Bill delivered in the quarter
Recommendation and Actions
Residential (tk)
Pourashava has holding tax management software. Computerized tax recording system of HT was found as below :
Consultant’s inputs and observations
Commercial (tk)
UGIAP performance reported / found
Institution tk)
4. Fixation and Collection of water tariff
2
Residential (tk)
UGIAP SubArea 3.Computeri zed tax recording system
120 150 375 1500
225 375 500 1500
350 550 900 1500
-PS needs tax software also.
-Regarding increase of monthly tariff rate, CEO was requested to convincible place this 5 issue to Mayor . In a reply, CEO informed that it is not only a matter of Mayor’s convince, but convincing to all council members are necessarily required also. -Instead, CEO requested to Consultant to take some initiatives to convince the Council for tariff revisions.
Source : Discussion with Water section officials 3.
5
assessment
PS is now in badly need to increase its monthly tariff rates. It is now definitely a pending issue also. 13 years without tariff revision since from 2005 are so long time for waiting!
At the visit period, Mayor was not available in Mymensingh Page | 3
UGIAP SubArea 5. Annual budget of Pourashava
2
Pourashava prepared its current budget 2017-18 with involvement of standing committee on Establishment and Finance. UGIAP Performance in preparation of annual budget was reported as below: Preparation of draft budget of FY2017-18 Display of draft budget for public review and opinions Discussion and endorsement of budget by TLCC Final approval of budget by parishad meeting Uploaded budget to web site Budget sent to PMU
6. PS Accounts audited by ST Committee on Accounts &Audit
Consultant’s inputs and observations
UGIAP performance reported / found
yes yes yes yes yes yes
Audit of Accounts (FY2016-17) involving with Accounts and Audit Standing Committee had been done with following procedures : Receipt and payment statements 2016-17 prepared Completion of audit by Standing Committee (date) Presentation of audit report to TLCC meeting Presentation of audit report to Parishad meeting Audit report send to PMU Uploaded audit report to web site
yes 18.09.17 yes yes yes yes
1.
PS maintains its account through computerized system ,i.e Municipal Accounting Software (MAS) .Status of performance of this areas up to date was found as: Regular entry of transactions in software yes Monthly receipt and payment statement placed to Mayor Not regularly Printing of quarterly receipt and payment statement yes Sending of quarterly receipt and payment statement to PMU yes Software are updated regularly no
-Account officer informed that rest steps including, taking comments/suggestions from citizen and TLCC, approval by STC and Poura Parished and others are in plan to execute by June.
2.
From discussion, it was informed that Mymensingh PS is following the ‘10 steps guidelines ’ in preparing annual budget. Step-1(Mayor’s letter to STC and officials to start budget), step-2(meeting among STC and key officials on budget) and step-3 (budget information from all sections to accounts officer) have already been completed.Step4(preparing draft budget) is now ongoing.
- Accounts Officer was reinformed about the dead line of budget submission to LGD as per provision of the act.
1.
As per PMU guidelines in conducting and preparing audit report has two parts: (i) planning & auditing part, and (ii) reporting part, and for both parts have some specific formats to be used for a quality audit.
-Accounts Officer needs to be more supportive towards the STC.
2.
In addition, as per guidelines, STC needs to arrange at least four meetings ( for planning ,auditing , and reporting purpose), but instead of thus, STC followed here only one meeting and decisions of one meeting was considered as audit report. However PS had completed the annual audit and prepared a report nominally to comply the project requirement as adhoc basis, but actual outcomes of audit works and its report did not show any reflection over the purpose of audit involving with STC.
1.
Computerized accounting software is in operation. Accounts Officer operates and handles this software system and regularly enters income and expenditure data.
-Accounts officer agreed to place monthly statements to Mayor regularly.
2.
Monthly statements are printed but not placed to Mayor regularly for approval and signing.
-The software needs to be up dated for its multi purposed use.
3.
Use of this software is not multipurpose. Only to get a receipt and payment statement. No other application like entry of budget, generate variance report are not in application yet.
Mymenhsingh PS completed ‘annual audit 2016-17’ by respective Standing Committee which was presented to TLCC and Poura Parished before forwarding these to PMU.
7.Computeri zed accounting system and report generated
A post-training follow-up was carried out in a discussion with Accounts Officer whether they are preparing their 6 budget 2018-19 as per guidelines given in the training. Mentionable that training on‘Pourashava Financial Management and budget preparation’ was held on 8-9 May at LGED Regional Office, Dhaka where Chairperson of Finance & Accounts STC and 4 key accounts officials of Mymensingh were participated.
Recommendation and Actions
-Providing training to STC members for developing their capacity to conduct (upcoming ‘annual audit (2017-18)’ is very essential.
6
Through discussion, and providing each participant a copy of ‘training manual’ and ‘hand scripts of all power point presentations’ of the training Page | 4
UGIAP SubArea 8. Payment of electricity and telephone bills
2
Status of payment of electricity and telephones bills was reported up to March as below: Particulars Received of bills up to (month) Payment of bills up to (month) Rate of bills payment (%) Certificates obtained for bill payments
9. Assets list preparation, data base and creation of fixed assets depreciation account
Consultant’s inputs and observations
UGIAP performance reported / found
Electricity bills 1,78,27,636 1,34,87,976 75.66%
1.
Telephone bill 59,823 55,823 93.31%
With giving reference of the letter of the Project Director issued on 15.05.2018, Accounts Officer, Secretary and the CEO all were informed that payment of electricity bills in this quarter showed no improvement. It is still in due with amount of Tk. 37,29,281 up to March end status.
2.
At visit, it was informed from Assistant Engineer Mr.Jillur Rahman who is the in-charge of Water supply and Electric section that delivery of bills from PDB7 is irregular. They have 19 meters in running for water supply, 1 main meter for office premises, and 14 meters for 120 switches of street lighting. Mr. Jillur also added that for street lights, PDB always produces bills on lump-sum basis (to cover their system loss)instead of on individual meter basis, and several times it was informed to the PDB concerns but still it is unresolved.
3.
Regular payment of electricity bill is now a big challenge for Mymensingh.
Recommendation and Actions -Assistant Engineer Mr.Jillur Raman said that by June they will pay off all dues. -CEO, during exit meeting, has given assurance to pay at least 90% electricity bills by June end at anyway.
Status of performance in this area was reported up to date as below: Updating list of fixed assets Increase the rental and lease value of assets Updating list of computerized data base of assets Separate bank account for depreciation fund of fixed Amount of accumulated depreciation in bank account
Partially Yes Partially Yes
A bank account titled ‘as Depreciation Fund Mymensingh Pourashva’ has been opened in Sonali Bank at Mymensingh Corporate Branch ( Annex-IV]
1.
Updating list of fixed assets as per PMU formats is partially done.PS has no software to keep the fixed assets database updated and continued.
2.
A separate bank account for depreciation fund has been opened but with zero deposit.
CEO, in the exist meeting, instructed to Estate officer (In-charge) to complete the list of fixed assets/data base as early as possible but by June. -A software to keep fixed assets database easy and regular update is very essential. -CEO, in the exit meeting, instructed to Accounts Officer to put forward a file-note for depositing depreciation fund to said bank account.
7
Bangladesh Power Development Board Page | 5
UGIAP SubArea 10.Repayme nt of BMDF loan
2
Consultant’s inputs and observations
UGIAP performance reported / found
Recommendation and Actions
Status of repayment of govt. loan was found up to April as below: 1. Loan received from BMDF Loan payable in the quarter Loan repaid Rate of loan repayment (%)
2,64,90,031 51,40,587 43,36,553 84.36%
Status of repayment of loan with BMDF is found with one installment due of Tk.8,04,034/-
-Accounts officer, from his side took the responsibility to repay all dues with BMDF by June end.
Other important UGIAP issues addressed: UGIAP areas
Issues discussed
Discussed with whom
Issues agreed
Endorsement of budget Involvement of standing committee for budget preparation Budget allocation for PRAP
Accounts Officer Accounts Officer
3.
Working of TLCC Working of Standing committee PRAP
4.
GAP
Budget allocation for GAP
Accounts Officer
To take place the upcoming budget FY 2018-19 at TLCC for discussion To engage the standing committee on finance & accounts more in budget preparation To keep at least 5% allocation of revenue budget (upangso 1) in revised and proposed budget both. To keep at least 2% allocation of revenue budget (upangso 1) in revised and proposed budget both.
5.
Preparation and Implementation of PDP PS website
PDP preparation and update
Town Planner
PDP is ready to send PMU through currier service
Posting and update
IT Officer (master roll)
Ensure participation and assistance in conducting all trainings Keeping essential PS services functional Preparing Annual O&M Plan including Budget Provision
Spend of budget of training
All Participants in Exit meeting
To disclose of annual budget FY 2018-19 with all other relevant information time to time To arrange some in-house training course under over all supervision the CEO
Budget provision
Accounts Officer
To keep necessary allocations in the revised and proposed budget heads
Budget provision
Accounts Officer
To keep necessary allocations in the revised and proposed budget heads
1. 2.
6. 7.
8. 9.
Accounts Officer
Signature of the Consultant Date: 03.06.2018 Enclosed: ANNEX I-VII
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Annex I Persons with whom met at Mymensingh Pourashava Sl
Name
Designation
Mobile Number
1
Mr. A.K.M Tariqul Alam
Chief Executive Officer
01713-011315
2
Mr. Md. Abdul Halim
Secretary
01711-020030
3
Mr. Ashim Kuma Saha
Accounts Officer
01711-072466
4
Mr. Manas Biswas
Town Planner
01712-288401
5
Mr. Shwarakul Islam
Tax Collector
01712-154260
6
Mr. M.H. Hannan
Tax Assessor
01951-232528
7
Khandoka Jahangir Alam
Market Inspector
01711-016545
8
Mr. Murshed Ahmed
License Inspector
01712-221113
9
Mr. Jillur Rahman
Assistant Engineer-Electric , and In-charge –Water supply
01711-478351
10
Mr. Javid Tanvir
Supervisor, Water supply
01715-660911
11
Mr. M.A Wares Babu
IT Officer
01768-486466
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Annex II Initiatives for collection of arrear holding tax
Red notice to tax defaulters
Public notice on a local newspaper’ to pay holding tax
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Annex III Public notice for renew of license of auto-bikes
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Annex IV Opening of depreciation fund bank account
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Annex V Photos of Mymensingh Pourashava
Entrance meeting with CEO to share visit purpose
Discussion with Secretary and 3 section heads of his department
Reviewing the interim assessment file with Tax Assessor
Discussion with Water supply in-charge and his officials
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Discussion with Accounts Officer
Discussion with Tax Collector
Discussion with License Inspector
Discussion with Town Planner
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Discussion with IT Officer
Paurashava website: www.mymensinghmunicipality.gov.bd
Exit meeting with CEO and his officials to share the visit observations
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Annex VI Attendance of the Visit exit meeting
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Annex VII
-End-
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