Visit report by mtfs @gopalganj 3-4 april 18_md. zahurul islam

Third Urban Governance and Infrastructure (sector) Improvement Project (UGIIP-III), LGED

Field Visit Report Visited Pourashava: Gopalganj Visiting date: 03rd and 4th April 2018 Visit purpose : UGIAP follow up and Implementation supports Name of staff: Md. Zahurul Islam

Designation: Municipal Taxation and Financial Specialist, GICD-II

Travel to Gopalganj on 2 April 2018 (7.30 am) from Dhaka 1

Holdings

Govt.

Private

Total

1.

Pourashava (PS) has 24.03% collection efficiency shortage to meet 85% (85.00%-60.97%) at June end.

Total

2.

1,09,52,00 53,91,481 49.23% 89,74,203 67,56,931 75.29% 1,99,26,205 1,21,48,412 60.97%

57.02% of arrear demand and 49.10% of current demand of govt. holdings is unrealized, although PS has issued many letters to the district level govt. offices. Trend of collection of govt. holding has not been found on track.PS will be at risk to achieve 85% collection efficiency, if and unless collection of govt. holding is not realized as much as it requires.

3.

53.48% of arrears of private holdings are unrealized, although they have issued a numbers of demand notice to the private holding owners.

Out of total 225 interim assessments ,relevant documents of 79 holdings were checked and examined during visit ,which finds a scenario of severe under assessment through standing committee concerned, as below: Tax assessed Tax Tax reduced/

by Assessor finalized waived (Tk)

by STC

by STC (Tk) (%)

Collection of govt. and private holdings up to March 2018 reported as below : Arrear Demand (year) Collection Efficiency Demand (year) Collection Efficiency Demand (year) Collection Efficiency

Current

23,09,717 9,92,754 42.98% 20,29,156 9,44,040 46.52% 43,38,873 19,36,794 44.64%

86,42,285 43,98,727 50.90% 69,45,047 58,12,891 83.70% 1,55,87,332 1,02,11,618 65.51%

The status highlighted as bellow: o Holding tax collection efficiency 60.97% o 42.98% arrear tax collection from govt. holdings o 46.52% arrear tax collection from private holdings. o 50.90% current tax collection from govt. holdings. o 83.70% current tax collection from private holdings.(strength) b)

Interim assessment in numbers and tax value up to March 18 were reported as below : Quarter No. of Tax finalized holdings

by SC2 Jul-Sep 17 Oct-Dec 17 Jan-Mar 18 Total

126 60 39 225

1,81,044 12,02,332 45,447 14,28,823

4.

1

Nos. of holding

a) 1. Revenue mobilization through Holding Tax (HT)

Travel to Kusthia on 04 April 2018 (5.00 pm) from Gopalganj Gap identified /Consultant’s inputs

UGIAP performance reported up to March,2018

Ward No. Holding type

UGIAP SubArea

New 13 Extension 28 2 New Extension 3 3 New 4 Extension 7 9 New 12 Extension 12 Total 79 (see ANNEX-II for details)

1,02,871 3,47,083 1,37,425 46,288 81,018 88,610 1,64,841 9,68,136

10,271 26,550 9,809 3,048 13,308 9,169 10,704 82,859

90.02% (-) 92.35% (-) 92.86% (-) 93.41% (-) 83.57% (-) 89.65% (-) 93.51% (-) 91.44% (-)

Recommendation and Actions In the meeting held with Mayor, when he was informed that about 24% collection is yet short to achieve 85% by June end, Mayor instantly called all concerned officials to present his room, and everyone was instructed to cover their collection deficiency

by June 2018, anyhow.

Mayor was informed about finalization of interim assessment by 90% reduction through standing committee review, and its consequences.

Mayor informed that all committee members are well concerned but they are not willing to take any risk of losing their local popularity. It has been a conventional practice at now to reduce tax through reviews. Mayor added that he is one of members of SC, but he is nothing else to do as majority members of SC are in favor of such tax reduction. He said his concerns that present rules in formation of SC are to be changed through ministry circular; otherwise such practices would not be possible to stop from him-self.

1 As per indicators of UGIAP-Advance level 2

Standing Committee on tax assessment and collection Page | 1

UGIAP SubArea 2. Revenue mobilization through non-HT

1

Gap identified /Consultant’s inputs

Recommendation and Actions

Collection efficiency of non-taxes (excluding holding tax) of the current FY2017-19 in comparing to last FY2016-17 was found as below:

1.

Trade license: As stated by license Inspector that about 63% license fees have already been collected, and it will be extended usually at 75% without any extra efforts form PS, but to ensure 85% recovery by June, PS needs some administrative efforts like ‘mobile court’ as some licensees never renew their license voluntary.

-In the exit meeting held with Mayor and other officials, Mayor instructed to Secretary to take all sorts of administrative supports even to organize ‘Mobile court’, if necessary.

2.

When collecting the trade license, a signboard fee has to be paid as well, but PS has not been collecting any signboard fee still now. (see ANNEX-III)

-License Inspector agreed inclusion of signboard fee.

3.

PS has a register for inventory of trades/business on ward basis.

Entry of trades/ business in this register was found partial and undependable. Notable that physical verification of all trades/business is a routine work of license inspector.

-License Inspector was suggested to update the inventory of trades/business through a detail filed survey or verification.

4.

Hand -writing certificates are still issued to licenses although PS has license management software (provided by UMSU). License Inspector is unable to handle this software as the software has some technical problems, like problems in entry of trade license fee, signboard fee, vat ,forms fee, and other in ‘trade license Information’ (data input form) of the software.

5.

Collection of license fee is on cash basis through money receipt.(see ANNEX-III)

6.

Rental shops/building : PS has 234 rental shops in 5 markets/buildings. It is standard that shops of the markets/buildings will be rented under a contract valid for 3 years with keeping a major condition of contract is that the PS will increase the monthly rent on the basis of prevailing present market price or specific increased rate (%) at least, and a new contract will be signed or the existing contract will be renewed at increased rate. The real status shown as below:

UGIAP performance reported up to March,2018

Year

Demand (lakh)

FY 2016-17 FY 2017-18 % in FY 2017-18

o

o

Collection (lakh)

Collection efficiency (%)

6,00,00,000 6,79,00,000

4,81,17,560 6,08,58,109

80.20 89.63

(up to March’18) 13.17% (+)

up to March’18) 26.48% (+)

up to March’18) 11.33% (-)

Demand of non-tax revenues of current FY2017-18 has been increased by 13.17% than the demand of the last FY201617(strength).As per UGIAP, collection of non-taxes of each year is to be increased with the inflation rate, while collection of nontaxes in the current FY have already been achieved with 26.48% more within nine months of the year. (Strength).

PS has 15 leasing properties including hat-bazaars,bus terminal, tempu stands, public toilets, parks etc, are the major sources of non-taxes . Tenders of all have duly been completed as per govt. rules. Govt. lease value of all properties in the tenders from last 4 Bangla years have incrementally been raised (strength) as below:

Bangla year

1422

1423

1424

1425

TK % increase/ decrease

1,45,73,551 -

1,43,19,223 1.78% (-)

1,69,46,155 18.35% (+)

1,94,18,775 14.59 (+)

on

-Support from UMSU4 to customize the license software as per PS needs is very essential.

-License Inspector agreed on collection of license fee through banks but subject to update / customizes the software as per their needs.

3

3 Irregular contract renewal of the renting shops is one of the weaknesses shortly briefed.

4 Urban Management Support Unit, LGED Page | 2

Gap identified /Consultant’s inputs Name of Established year

markets/

Number shops

sl

1 2

Notun Bazar (Est.1988) Modhumoty Super market (Est.1996) PuraonChandi (Est.2001) Alia Madrasa Poura market (Est.2017) Flower Market (Est.2017)

3 4 5

Recommendation and Actions

114 50

79,986 34,608

13 27

8,365 1,09,000

10

27,000

Years of contract sighed

UGIAP performance reported up to March,2018

Monthly rent(TK)

1

of

UGIAP SubArea

PS life time 99 years 10 years 5 years 5 years

Admin Officer, who is responsible for hat-bazar leasing, informed that for newly constructed ‘Sheikh Rasel Shishu Park’ they have created an example of ensuring maximum leasing price (i.e 27 lakhs) through an open and highly competitive bidding processes which was more than their expectations.(See ANNEX-V for a picture view)

Except shops in sl No. 4 & 5 markets, monthly rents of all shops are comparatively under-price. Total monthly rent of 114 shops in Notun Bazar market are very minimum and contracts renewal with shop owners were not held periodically with reasonable increase.

Therefore, to understand the fact, a spot visit at Notun Bazar market was done.(see ANNEX-III, IV,VI).

3.Computeri zed tax recording system

Pourashava has holding tax management software. Computerized tax recording system of HT was found as below : Particulars Status Installation of HT management software Yes Completion of preliminary data entry Yes Updating of software data regularly Yes Computerized billing Yes Bill printed in the quarter Yes Bill delivered in the quarter Yes

1.

The accounting software is in operation.

2.

The benefit of this system is not fully realized as the software has following problems in application:   

1.

4. Fixation and Collection of water tariff

Status of fixation and collection of water tariff as on 31 March was reported as below : Basis of fixation of water tariff Billing of system is computerized Collection of water bill Last date of tariff fixation Rate of recovery

Dia-meter Computerized Bank 2017 81.44%

-Software systems need to be continuously updated. Support from UMSU in this regard is highly essential.

No compete status gives on current tax demands and collections; Not shows the full of information of arrear taxes; Entry of interim assessment gets bill of a full year. Like, if the entry of interim assessment is made for ½ year then bill gets for 1 year.

Pourashava has increased its monthly tariff rates for private and commercial connections both with effect from January 2017, as table below: Commercial Residential Lines Rate Rate %(+) Lines Rate Rate %(+) (old) (now) (old)/ (now) /Tk /Tk /Tk / /Tk 13ml.

175 275 57% 13ml 320 450 41% 19ml.

275 375 36% 19ml 500 700 40% 25ml 1200 1500 25% 38ml 3200 3500 09%

In-charge of Water section informed that the revised rate is enough to recover 90% operation costs of water supply.

He also informed that present supply of water is basis on surface water treatment plant and diameter but PS is going to take some connections with metering system with support from ‘37 Zila Town Water Supply Project’ which is under process to start.

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UGIAP SubArea

1

UGIAP performance reported up to March,2018

Gap identified /Consultant’s inputs

2.

5. Annual budget of Pourashava

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 Yes Display of draft budget for public review and opinions Yes Discussion and endorsement of budget by TLCC Yes Final approval of budget by parishad meeting Yes Uploaded budget to web site Yes Budget sent to PMU Yes

6. PS Accounts audited by ST Committee on Accounts &Audit

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 Yes Completion of audit by Standing Committee (date) 12.03.2018 Presentation of audit report to TLCC meeting Yes Presentation of audit report to Parishad meeting Yes Audit report send to PMU Yes Uploaded audit report to web site No Pourashava has prepared its yearly ‘receipt & payment statements 201617’ through computerized accounting system. All receipt and payment statements are captured with a nice cover page. (see ANNEX-VIII)

7.Computeri zed accounting system and report generated

PS maintains its account through computerized system ,i.e Municipal Accounting Software (MAS) .Status of performance of this areas was found as: Regular entry of transactions in software yes Monthly receipt and payment statement placed to Mayor yes Printing of quarterly receipt and payment statement yes Sending of quarterly receipt and payment statement to PMU yes Software are updated regularly No

Recommendation and Actions

Citizens were convinced to pay bills with mass awareness activities though public discussions and leaflets etc.(see ANNEX-IX)

1.

Annual budget 2017-18 was prepared as required through Finance & Establishment standing committee. It is demonstrable to others that in preparing current budget of FY 2017-18, Pourashava had taken a number of public engagement events which were documented during visit as a proof evidence and replicable to other PSs as well as. (see ANNEX-VII)

1.

Audit of Account (FY 2016-17) was conducted by the Standing Committee (SC) on account and audit, but at late with a short procedure.

2.

To plan and carry out the complete procedures of auditing as per PMU guidelines, SC needs to arrange at least four meetings, but instead of this, SC followed only one meeting and decisions of one meeting are considered as audit report.

1.

The accounting software is in operation. But it sometimes gets trouble with missing of posted voucher entry.

2.

The benefit of this system is not fully realized as the software is unable to meet present accounting needs.

-Accounts Officer informed that Mayor of Gopalganj is always open and sincere to disclose its annual budget to public. He added that hopefully the proposed budget 2018-19 would be as like as before.

-Accounts officer has been reminded to fulfill UGIAP needs in the budget.

-SC needs technical supports to carry out audit in a systematic manner.

Accounts Officer agreed to give more support to SC. On-job-supports from GICD will be given to SC and accounts officials as well as.

-Software systems need to be updated .Support from UMSU in this regard is very essential.

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UGIAP SubArea 8. Payment of electricity and telephone bills

1

9. Assets list preparation, data base and creation of fixed assets depreciation account

Status of performance in this area was reported as below:

10.Repayme nt of BMDF loan

Status of repayment of govt. loan was found as below: Loan received from BMDF 37,88,979 Loan payable in the quarter 1,27,615 Loan repaid 100% Rate of loan repayment (%) -

Gap identified /Consultant’s inputs

UGIAP performance reported up to March,2018

Status of payment of electricity and telephones bills was reported as below: Particulars Electricity Telepho bills ne bill Received of bills up to (month) 1,28,67,423 9934 Payment of bills up to (month) 1,22,34,346 9934 Rate of bills payment (%) 95.08% 100% Certificates obtained for bill payments -

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

No Partly Partly Yes -

1.

Recommendation and Actions

Payment of electricity and telephone bill is regular.

Accounts Officer informed that we are concerned in paying of electricity and telephone bills regularly.

1.

Updating list of fixed assets as per formats given from MGSP5 has been completed (see ANNEX-X). Noted that formats given by PMU for preparing list of fixed assets has required some additional information, like date of assets acquisition, its past and present market values, etc.

2.

Opening of a bank account for depreciation fund was discussed in the TLCC meeting held in March.

1.

Status of repayment of loan with BMDF is found regular as per documents reviewed. (see ANNEX-XI)

-Town planner informed that they have lack of available information to update fixed assets lists as per PMU formats.

-Support from UMSU for installation of software to keep the fixed assets database always and easy updated is very essential.

-

5 Municipal Governance Support Project, LGED Page | 5

Other important UGIAP issues addressed: UGIAP areas I. TLCC

III. IV.

MMT PRAP

Issues discussed Endorsement budget 2018-19 FY in TLCC Involvement of Finance and Establishment STC on budget preparation Budget provision Budget allocation

V.

GAP

Budget allocation

Accounts Officer

VI.

PS website

Posting and update

Accounts Officer

VII.

Expenses for O& M, and essential services

Budget provision

Accounts Officer

II.

Standing committee (STC) activation

Issues discussed with whom Accounts Officer Accounts Officer

Accounts Officer Accounts Officer

Agreed actions Upcoming budget FY 2018-19would be taken place at TLCC meeting with due procedures as practiced Involvement of STC in budget preparation to be ensured more as much as possible.

Necessary allocation to be ensured in revised and proposed budget Minimum 5% allocation on revenue budget (upangso 1) to be ensured in revised and proposed budget Minimum 2% allocation on revenue budget (upangso 1) to be ensured in revised and proposed budget Disclose of budget FY 2018-19 in PS website to be ensured Necessary allocations for O&M, and essential PS services in different budget heads in revised and proposed budget to be ensured as much as possible.

Signature of the Consultant Date: 20.05.2018 Enclosed: ANNEX I - XII

Annex I Persons with whom met at Gopalganj Pourashava visit Sl

Name

Designation

Mobile Number

1

Mr. Kazi Liakat Ali

Mayor

01711-152637

2

Mr. K.G.M Mahamud

Secretary

01715-290975

3

Mr. Md. Harunar Rashid

Admin Officer

01819-606914

4

Mr. Sohal Sorder

Town Planner

01764-546054

5

Mr. S.M Sazzad Hossain

Accounts Officer

01715-477562

6

Mr. Jakaria Alam

In-charge , Water Section

01711964099

7

Mr. Khan Ariful Rahman

Tax Assessor

01981-874833

8

Mr. Sankar Kumar Shaha

Tax Collector

01914-096473

9

Mr, Sodhanshu Sordar

License Inspector

01712-816323

10

Mr. Md. Azad Rahman

Market Collector

01718-703619

Mr. Sohel Biswas

Market Collector

01714-452365 Page | 6

Annex II Statements of Interim Assessment of 79 holdings, Gopalganj PS

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Annex III Visited at newly constructed rental shops ‘Alia Madrasa Notun Poura market’ in Gopalganj Pourashava

   

Year of start: 2017 Shop Name: Tahmina Enterprise Contract signed: 5 years Monthly rent TK-5000

CDA-Municipal Finance GICD-II in a discussion with the proprietor of ‘ Tahmina Enterprise, Biswas Road, A8 NotunPoura Market, Gopalganj

  

Trade license of Tahmina Enterprise Trade license certificate is still on hand writing No signboard fee is charged

Trade license certificate of Tahmina Enterprise



PS is collecting trade license fee on cash

Money Receipt of Tahmina Enterprise

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Annex IV Visited at newly constructed rental shops ‘Full (flower) market’ in Gopalganj

Annex V Visited at newly constructed ‘ Sheikh Rasel Sishu Park’ in Goapalganj

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Annex VI Visited at old rental shops/markets ‘Natun Bazar Poura Market’ in Gopalganj Pourashava

Market start : 1988 Monthly rent : TK. 828 Present market rent??

Boikontha Saha, Shop No.3, Notun Bazar Poura Market, Gopalgqnj

Market start : 1988 Monthly rent : TK. 828 Present market rent??

Shuvas Store, Shop No.1, Notun Bazar Poura Market, Gopalgonj

Market start : 1988 Monthly rent TK. 720 Present market rent??

Page | 16 Tonu Store, Shop No.1, Notun Bazar Poura Market, Gopalganj

Annex VII Documentation on preparation and public discloser of Budget FY 2017-18 in Gopalganj Pourasahva

Mayor’s letter to instruct all staffs to start budget

Draft budget for discussion for TLCC meeting

Mayor’s invitation letter to citizens to attend in’ the budget declaration meeting’

Disclose of budget on open public place

Annex VIII Pourashava Annual Budget FY 2017-18

Page | 17 News on local newspaper on ‘Pourashava Budget’

Annex VIII Receipt & Payment statement (FY 2016-17) of Gopalganj Pourashava as per Municipal Accounts Software (MAS)

Yearly receipt and payment account FY 2016-17

Annex IX Leaflet on public awardees to pay water bills at revised rate

Annex X Leaflet to citizens to explain about revised rates of commercial lines

Annex X Leaflet to citizens to explain about revised rates of private X lines Annex Page | 18

Inventory of Fixed Assets in Gopalganj Pourashava

Asset Register / data base of fixed assets

Contents of Asset Register / data base of fixed assets

Annex XI Payment of BMDF loan dues in Gopalganj Pourashava

Demand draft to repay BMDF loan

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Annex XII Discussions with Mayor and Officials in Gopalganj Pourashava

Arrival meeting with PS officials to share the visit purposes

Discussion with Market Collectors

Figure 1

Discussion with Tax Collector

Discussion with Licensee Inspector

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Discussion with Tax Assessors

Discussion with Accounts Officer

Discussion with In-charge, Water Section

Discussion with Administrative Officer

Exit meeting with Mayor and key officials to share visit observations and recommendations

Discussion with Secretary

-End-

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