Something that could be SEWA’s real problem with Modi govt
Ahmedabad, 3 April, 2011

SEWA’s Reema Nanavaty with Hilary Clinton

Chennai based English daily The Hindu published one of the US diplomatic cables via Wikileaks yesterday. The Hindu’s Hasan Suroor titled a story based on this cable as ‘Gujarat tried to use SEWA for communal propaganda.’ Leading English news channel Times Now also highlighted this story with the title ‘Latest cable exposes Modi using NGO‘.

Both ‘The Hindu’ and ‘Times Now’ choose to pick up couple of paragraphs of cable in which then US Consul General at Mumbai Michael S Owen narrated what SEWA’s Reemaben Nanavati told him.

The paras are presented below:

“The general secretary of SEWA, a large and well-respected union and self-help organization for poor women, claimed that the GOG was hoping to use the group’s reach and extensive membership as a conduit to disseminate communal ideologies. SEWA was resisting fiercely, the CG was told, and feeling the wrath of the GOG as a result. The local press expressed some interest in the USG decision to revoke the visa of Chief Minister Narendra Modi, but the CG’s other interlocutors hardly broached the issue.”

“Reemaben Nanawati, SEWA General Secretary, told the CG that any communal harmony projected by political leaders was only superficial. The GOG was trying to project normality, but politically the government was using communal animosities to “”divide and rule”” the state’s many communal, caste and tribal groups. The state government was obstructing the activities of SEWA in the remote area of Kutchch in northwestern Gujarat, Nanawati said. The GOG was withholding grants for state projects being implemented by SEWA in the region, she said, ostensibly over financial irregularities. In reality, the GOG was interested in using SEWA’s reach and vast membership as a conduit for its communal ideologies, Nanawati claimed. SEWA was resisting fiercely, since communal harmony among its members was an important factor for its success, she said. The resistance was making the GOG more vindictive and causing it to step up its pressure on the organization, she added. Due to lack of funds over 12,000 extremely poor SEWA members have not received wages for over five months, Nanawati claimed.”

Now here is our attempt to find the truth into Nanawati’s claims as narrated by Owen. Nanavati’s talk about “Government of Gujarat(GOG) withholding grants for state projects being implemented by SEWA” was in reference to Jeevika project.

If Mr. Hasan Surroor of The Hindu, and those sitting in Times Now who prominently highlighted this story are truth seeking journalists, then they should seriously give a look to the government of Gujarat documents presented below.

As per the cable, Nanawati told the Consul General that Government of Gujarat wanted to use SEWA’s reach and vast membership for communal ideologies which SEWA resisted and therefore Gujarat government was behaving in vindictive fashion. She also complained about lack of funds. Following note prepared by then Chief Secretary Sudhir Mankad would confirm that for what reason Jeevika project didn’t continue with SEWA.

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GOVERNMENT OF GUJARAT

NOTE ON THE JEEVIKA PROJECT

‘Jeevika’ is a Livelihood Support Project to be implemented in 3 Districts of Gujarat, namely Kutch, Surendrangar and Patan; which was sanctioned in the year 2002 in the aftermath of the earthquake. It is a seven year Project, to be implemented through SEWA. The size of the Project is US $ 24 Millions, out of which US $ 15 Millions would come as loan from the ‘International Fund for Agricultural Development’ (IFAD) to the Government of Gujarat. Repayment of the loan and the interest amount would be the liability of the State Government. Till date, Government of Gujarat has released Rs.10 crores to SEWA. The last installment of Rs.1.67 crores was released to SEWA on September 1, 2005 after deduction of Rs. 33.23 lakhs, based on findings of the audit reports as explained here-under.

2. Since beginning, the State Government had been receiving reports about slow progress of the Project from the various quarters, including the Review Missions of IFAD and UNOPS which visited the Project area during this period. Against Rs. 113 crores which was to be spent in seven years, only Rs. 10 crores (about 8.70 %) could be spent in three years, even as the Project is nearing its Mid-Term Review stage. The State Government had been therefore concerned about slow progress of the Jeevika Project.

2.1. The Review Mission from UNOPS which visited in January 2005, pointed out lack of clarity on the part of SEWA and their inadequate capacity. It also expressed concern at a very high level of administrative expenditure (almost 40% which ultimately came down to 33 %). Report submitted by IFAD India Representative Shri Pravesh Sharma in February 2005 pointed out that in Surendranagar district most of the Self-Help Groups (SHGs) were found to have closed down. It stated that SEWA was taking away savings of the SHGs from far off villages and was parking them in ‘SEWA Bank’ at Ahmedabad. This practice by SEWA had made it difficult for poor women to access their own money. An earlier Mission in

January 2005 led by Mr. A.K.Singha from IFAD, Rome had also pointed out weaknesses in formation of SHGs and low fund utilization. It had pointed out lack of overall strategy and the need for decentralization within SEWA. These reports were therefore very critical about field level performance of SEWA.

2.2. In March 2005, a Joint Mission of IFAD and UNOPS visited the Project area and held a Review Workshop at Ahmedabad. During the Workshop, Operations Research Group (ORG) which was the External Evaluating Agency, had pointed out several insufficiencies in the Project implementation. SEWA was so agitated that it decided to discontinue the services of ORG, and has since then with-held their payments.ORG in its letter dated March 9, 2005 mentioned that, ‘SEWA’s displeasure with ORG arises out of ORG’s field observations to the Mission not being consistent with the image that SEWA would like to project for itself’ ORG further stated that SEWA had even asked it to tone down some of its observations. ORG pointed out that ‘poorest of the poor are only fringe beneficiaries of the Jeevika intervention and most of the benefits went to well-to-do families’.It pointed out that SEWA’s Financial Management Systems were very weak and unorganized. Due to such critical report by ORG, SEWA, instead of trying to improve its own internal systems, decided to dispense with the ORG.

2.3. In May 2005, Shri Anurag Priyadarshi, an officer of Indian Postal Service who was on deputation to SEWA as the Project Coordinator for Jeevika resigned from the post. In his long resignation letter to SEWA he pointed

out several inadequacies and lack of capacity within SEWA. Shri Priyadarshi felt that he was not being allowed to improve the situation by SEWA higher-ups. He also mentioned that District Associations of SEWA were neither performing, nor providing any information; and that the project implementation was not up to the mark.

2.4. In June 2005, the State Government wrote to IFAD (with a copy to Shri R.P. Singh Deputy Secretary DEA, GOI) wherein it pointed out about non utilization of funds, as also savings lying with the Village Development Committees and sister organizations of SEWA. The State Government also pointed out about high percentage of administrative expenditure.

3. Since several Missions, Consultants and district officials had pointed out various problems in the Project, the State Government decided to carry out an audit through a professional Chartered Accountant. Clause IV.39&40 of the ‘Financing Agreement’ with SEWA authorizes the State Government to carry out audit through independent Auditors as well as by CAG. The clause provides for ‘audit by a statutory Auditor to be selected by Government of Gujarat. Selection of the auditor would be the sole right of the Government’. However, SEWA raised repeated objections to the audit and wrote to the Auditor not to enter their office and even made serious personal allegations against the Auditor. There was a persistently strong resistance by SEWA against the Audit, including attempt not to provide records to the auditor. During the audit procedure the Auditor Mr.K.S. Brahmakshatriya pointed out several serious irregularities and presented three audit reports, copies of which are enclosed. An Executive Summary of audit is also enclosed. Some of the serious observations are summarised as follows:-

3.1. The ‘Mahila Gram Haat’ was a State Govt. sponsored Project implemented in the past by SEWA, for which Govt. of Gujarat had released Rs. 2 crores to SEWA during the years from 1999 to 2003. With this fund, SEWA had constructed a building at Navrangpura, Ahmedabad. The same building was being rented out by SEWA to ‘Jeevika’ Project at the rate of Rs.35,000/- per month. This would have meant charging of a rent of Rs 23.30 lakhs during the Project period of ‘Jeevika’. In other words, SEWA constructed a building out of Govt. grant under one Scheme, and was found charging rent for using the same building under the ‘Jeevika’ Project.

3.2. The ‘Trade Facilitation Centre’ (TFC), a sister concern of SEWA conducted Exhibition- cum-Sale in India and abroad as per the following details:

Date: Expenditure Details

30/09/2003 Rs. 76,674/- Berlin exhibition expenditure

05/10/2003 Rs. 52,150/- Berlin exhibition expenditure

01/11/2003 Rs. 75,710/- Mumbai exhibition expenditure

07/11/2003 Rs. 54,643/- Mumbai exhibition expenditure

31/12/2003 Rs. 40,273/- Bangalore exhibition expenditure

09/12/2003 Rs. 57,195/- Bangalore exhibition expenditure

31/12/2003 Rs. 26,727/- Bangalore exhibition expenditure

Total Rs. 3,83,372/-

Approval of State Govt. was neither taken nor was State Govt. informed about the foreign exhibitions till the audit brought it out. No details of sales were made available to the audit. It is not clear as to how this benefited the Project villages. While the expenditure was booked under the ‘Jeevika’ Project, the sale proceeds were credited to SEWA’s own Accounts.

3.3. The ‘All India Disaster Mitigation Institute’ (AIDMI) is a registered Trust headed by Shri Mihir Bhatt, son of SEWA founder Smt. Ilaben Bhatt, and husband of Smt.Reema Nanavaty, Project Director, ‘Jeevika’.The AIDMI was engaged under ‘Jeevika’ for carrying out training, consultancy and workshops. Money was debited to ‘Jeevika’ account to the tune of Rs. 4.89 lakhs and given to AIDMI. No details of expenditure such as vouchers etc. could be made available to the Auditor. Moreover, AIDMI paid Rs. 89,402/- to ‘non-employees and its own consultants’ out of the Jeevika Project funds.

3.4. ‘SEWA Academy’ is another sister concern of SEWA. The following irregularities were found by the Auditor:

(i) The meeting hall of ‘SEWA Mahila Gram Haat’ (same building at Navrangpura,Ahmedabad constructed with State Government funds) was also used for conducting meetings and Rs.24,250/- has been charged as hall rent. This is over and above office rent already described above in para 3.1

(ii) From October 8, 2004 to January 17, 2005, Rs. 45,680/- had been paid to various printers to develop publicity material for non-Jeevika Projects. During the Audit, this issue was brought to the notice of SEWA and the above amount was recovered on June 2, 2005.

(iii) An individual Consultant namely Mr.V.K.Mishra was hired by ‘SEWA Academy’ @ Rs.2.80 Lakhs. As per the agreements he was not entitled to any other expenditure except transportation from SEWA’s office at Ahmedabad to Districts/ Blocks. It was observed by Audit that Rs.28,632/- was separately paid to him for accommodation and other transportation.

(iv) Rs.1,45,144/- was paid to various parties for printing booklets and posters. The Auditor has verified the minutes of purchase committee and has observed that this expenditure was not related to ‘Jeevika’ Project, but it pertained to SEWA’s other sister concerns. Yet this amount had been debited to ‘Jeevika’.

(v) Rs.82,004/- was incurred for holding Gandhi Shibir and Gandhi Yatra arranged at districts of Anand, Baroda and Rajpipla, in Central and South Gujarat, which fall outside the Project area. The Auditor has observed that the participants also came from Gandhinagar, Sabarkantha and Mehsana which are non-Jeevika Districts. Yet full expenditure for the Yatra and Shibir was booked under the ‘Jeevika’ Project.

(vi) The ‘Annual General Meeting’(AGM) of SEWA was held during the year 2004-05, and Rs.14,950/-were paid against dinner charges from the Project. It was exclusively SEWA’s event; hence such expenditure could not have been booked under ‘Jeevika’ Project.

(vii) Rs.2,09,408/- was paid to ‘COADY International Institute – Antigonis – Canada’ for hiring a consultant from the Institute for ‘Orientation Workshop’. The Auditor was not provided with other details as to how this expenditure could be justified under the ‘Jeevika’ Project.

3.5. Exhorbitant rates were charged to the Project for travelling, fax facility etc. For example Rs.1600/-to Rs.1900/- was charged per trip several times between Ahmedabad and Gandhinagar for a 30 Kms. stretch.

3.6. Rs.17,500/- per month was being paid to the 5-Star Hotel ‘Taj Residency’, Ahmedabad for an outlet rental, but no details of sales were provided to the Audit.

4. Even after three years, micro-plans of villages have not been prepared, Self-help Groups (SHGs) were found to be non-functional and the savings of SHGs were found to have been deposited in SEWA Bank Ahmedabad, when nationalized Banks were locally available. Several poor women had stated before Project Co-ordinator Ms. Juthika Banerjee that they were not paid minimum wages by SEWA for carrying out works. Instances have come to notice where signatures were incorrectly obtained from poor

villagers that they had received minimum wages, when in reality they were given mere only Rs. 25/- (village Unrot in Santalpur Taluka Dist. Patan). Irregularities in Muster Rolls were found during field visit of Patan District. Quality of works carried out was not found to be up to the mark. Such instances were found in Village Unrot in Santalpur Taluka and Gulabpura & Najupura villages in Radhanpur Taluka of Patan District. Contribution of people in Housing Scheme was deposited in SEWA account without carrying out any Housing Project. In village Dhokawada (Santalpur), Rs.40,000/- belonging to a poor Self-Help Group was transferred to another Account without passing any Resolution. Cash books were not properly maintained. SEWA was found charging 12 % interest on the loans provided to SHGs in several villages of Patan district. All the necessary documents supporting the above facts are enclosed with this report.

5. When these irregularities were pointed out, SEWA, instead of rectifying the situation started a smear campaign against the State Government. SEWA officials went to the press and media, Central Government Ministries and International Organizations, vilifying the State Government. They started creating false rumours and made allegations against various Authorities of the State Government.

6. A meeting was held in July 2005 under the Chairmanship of Chief Secretary, in which Ms. Renana Jhabvala and Ms.Lalita Karishnaswamy from SEWA were present. SEWA was apprised of the Audit issues and other inadequacies in the implementation of the Project. SEWA also made several complaints against Auditors and asked for release of funds from the State Govt. After discussion, it was decided that the Audit by CA would be wound up with effect from August 31, 2005 and in future CAG would do the Audit. It was also agreed that SEWA and State Government would work in close co-ordination, in a spirit of cooperation and ‘avoid

critical and personal remarks in discussions with outside Agencies’. The minutes of the meeting dated July 12, 2005 are enclosed.

7. Despite this agreement, SEWA continued its public criticism against the State Government. In a letter dated August 8, 2005 addressed to DEA, IFAD and the State Government, SEWA stated that State Government had no authority to order an Audit and that, ‘the object of the Audit is to gain total control over the funds under the Project…’. It further stated that SEWA will ‘not permit the Chartered Accountant to access any further information’ and that ‘the State of Gujarat is trying to replace SEWA from the Project and for that purpose is creating evidence against it’. In response to this letter, the State Government wrote on August 26, 2005 to SEWA stating ‘that the Govt. had every right to carry out an Audit’ and that ‘if this was the approach and considered view of SEWA towards the State Government despite the understanding reached in the meeting on July 12, 2005, then the state Government would be left with no alternative but to seriously reconsider association of SEWA in this Project’.

8. Despite the poor performance of SEWA in Project implementation and its anti-Government attitude, the State Government made efforts to continue the Project, and on September 1, 2005, released another instalment of Rs.2.00 crores to SEWA, out of which an amount of Rs.33.23 lakhs under Audit objections was deducted. This deduction was carried out after communicating Audit Observations to SEWA, inviting their objections and after following due process. On September 13, 2005 SEWA held a Press Conference at Ahmedabad falsely alleging that the State Government had stopped SEWA’s funds. SEWA also made several other baseless and factually incorrect allegations against the State Government. SEWA maliciously alleged that one third of its members were Muslims and therefore the BJP Government was targeting it, thereby giving a communal and political twist to the whole issue. The State Government issued rejoinders, denying the allegation that it had stopped the funds and

clarified to the media that it had merely recovered the irregular expenditure of Rs. 33.23 lakhs based on the Audit report.

9. A second Press Conference on similar lines was held by SEWA before the national media in Delhi on October 7, 2005. where discrimination on communal and caste basis was alleged by SEWA against State Government. SEWA’s press release stated that ‘the Gujarat Government is out to break SEWA…’ and that ‘the Government of Gujarat is out to destroy our credibility, our solidarity and our reputation’. They further stated that they are, ‘unable to continue with their responsibilities in this Project, as long as the Government of Gujarat remains the partner’. It also resolved to return ‘all other Projects of the State Government’.

10. On October 11, 2005 SEWA took out a protest rally of about 3000 women in Ahmedabad on the eve of elections to the Ahmedabad Municipal Corporation which were to be held on October 13, 2005. Since then, SEWA has been carrying out relentless and baseless campaign against the State Government in press, including the electronic media. Copies of relevant press cuttings are enclosed.

11. The allegation by SEWA that the State Government had blocked the funds thereby causing difficulties for thousands of rural women is incorrect; as grants were regularly released by the State Government based on progress and ‘Statements of Expenditure’ (SOE) submitted by SEWA. The detail of grant releases is enclosed. SEWA’s claim that thousands of women are affected is also unfounded. Till date, SEWA has not submitted list of Project beneficiaries. Based on various reports and as described in para 4, there is reason to believe that in reality very little work had been carried out in villages and therefore the numbers given out by SEWA appear grossly exaggerated. Moreover, as pointed out above, there were savings lying at Village Level Committees and SEWA could have made payment from such savings if at all the need arose.

12. The allegations of SEWA appear to be part of its pre-emptive strategy to side -step the main issues and divert attention of public and media from its poor performance and financial irregularities. Inspite of severe provocation State Government expressed restraint confined its comments to only financial irregularities and did not take any precipitate action. State Government has tried its best to salvage the Project and even after SEWA’s press statement to withdraw from ‘Jeevika’, State Government in its press conference held on October 7, 2005 stated that ‘the decision of SEWA to end its association with the State Government was unfortunate. We will try to persuade SEWA to continue with the Project; but, if it decides to withdraw, we will hand over the Project to some other good NGOs.’

13. Inspite of this, SEWA has vide its letter dated October 11, 2005 stated that it does not wish to continue partnership with State Government, not only in ‘Jeevika’, but in respect of all other Projects with Government of Gujarat.

-Sudhir Mankad, Cheif Secretary, Gujarat State

LIST OF ANNEXTURES.

SR. NO.	DETAILS	ANN. NO.
1	Summary of Grant release order	I
2	Grant release order dated 1st September,2005	II
3	Report of Shri Pravesh Sharma (Representative of IFAD)	III
4	Report of Ashok Singha	IV
5	ORG’s letter dated 09/03/2005	V
6	Resignation letter of Shri Anurag Priyadarshi (Project Coordinator)	VI
7	Copy of letter of State Govt. to IFAD	VII
8	Copy of Clause IV.40 of Financing Agreement with SEWA	VIII
9	SEWA’s letter to auditor stating not to enter SEWA office	IX
10	Audit Reports	X
11	Executive Summary	XI
12	Patan Field Reports	XII
13	Minutes of the meeting chaired by CS dt. 12/07/05	XIII
14	SEWA’s letter dt.8/8/05	XIV
15	Government of Gujarat’s reply to above mentioned letter	XV
16	SEWA’s press cuttings about communal	XVI
17	SEWA’s press conference dt.7/10/05	XVII
18	Press release cuttings	XVIII
19	SEWA’s letter dt.11/10/05	XIX

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And then there’s another report with details of audit, and SEWA’s reply to it.

EXECUTIVE SUMMARY OF AUDITORS OBJECTIONS, RESPONSE OF THE AUDITEE – NGO (SEWA – JEEVIKA) AND FINAL CONCLUSION OF AUDITORS.

Sr. No.	Objection Raised by Auditors	Reply given by SEWA	Justification by the auditors	Amt. Recovered/ Recoverable
1.(a)	Office Rent paid to SEWA MAHILA GRAM HAAT (SMGH) (a sister concern of SEWA) for usage of premises situated at Gramhaat House, Navrangpura, Ahmedabad. – Paid by Project Mgt. Unit Rs. 270883/- – Paid by Trade facilitation Rs. 380000/- Center ( TFC ) Total Paid Rs. 650883/- – Payable (for next 56 month) Rs. 1680000/- Sewa Mahila Gram Haat is a project funded by the Govt. of Gujarat and Cost of Infrastructure facilities including building has been funded by the Govt. of Gujarat and as per terms & conditions laid down by the Govt. this infrastructure facility can not be given on rent.	If Jeevika had not taken services from SMGH, it would have taken services from out side, and would have paid rent for hiring an office. However, agreed to return the amount charged.	SMGH is a project funded by the Govt. of Gujarat and for Jeevika Project the Gujarat Govt. has borrowed fund from International Fund for Agriculture Development ( IFAD ) and the said borrowed amount is being used as grants to the Jeevika project. The Govt. of Gujarat will repay this borrowed fund to IFAD with a very high rate of interest ( @ 9% ) for Jeevika Project. The estimated construction cost of the said building was 115.15 lakhs out which 110.50 lakhs was given by the Govt. of Gujarat. The building is having spare facility and that is being used by the Jeevika Project. Charging rent from Jeevika Project will result in an additional burden on the Govt. of Gujarat. SEWA have understood the fact and have agreed to re-deposit the amount of rent charged and have also agreed, hence forth, not to charge the rent.	Rs. 650883/- will be re-deposited & Rs. 1680000/- will not be charged in future.
1.(b)	Office rent paid to Patan Women Welfare Fund (a sister concern of SEWA) for utilizing office space at SAKAR – II building is on higher side. The rent being charged is @ Rs. 35000/- per month. The details are as under:- – Paid by Project Mgt. Unit (from 01.04.04 to 31.03.05) Rs. 315000/- – To be paid up to the Project Period. (Next 56 months) Rs. 1960000/- Rs. 2275000/- The auditors were orally informed that the total cost of the building was Rs. 34.34 Lakh. Note:- The auditor reports states that the rent was paid to the Banaskantha Dwacra Mahila Sewa Association (BDMSA) (a sister concern of SEWA). But actual payment was made to other sister concern of SEWA i.e. Patan Women Welfare Fund.	No response given as the auditors have stated that the rent was paid to BDMSA.	As Informed to us the total cost of the premises is around Rs. 34.34 Lakh. Hence in our opinion charging rent @ Rs. 35000/- P.M. is on higher side. We recommend, to refer the matter to the competent authority of the Govt. of Gujarat to fix the rent. `	Pending.

1.(c)	Rs. 24250/- being paid as rent to SEWA MAHILA GRAM HAAT (SMGH) (a sister concern of SEWA) for usage of premises by SEWA – Academy (a sister concern of SEWA).	Same building as referred in point no.1 (a) hence agreed to re-deposit the same.	As per point no. 1 (a) above.	Rs. 24250/- will be re-deposited.
2.	International & national exhibition cum sale fare expenditure of Rs. 383372/- incurred by SEWA Trader facilitation Center (STFC) (a sister concern of SEWA) for holding exhibition cum sale fare at Berlin, Bombay, Banglore. When asked for sales details and the project in which the sales were credited, it was orally informed that sales were credited in STFC and not in Jeevika. No details of sales were given.	All the expenditure incurred is as per AWPB and approved by PRC. The expenditure is claimed to have been incurred for market research, development & product development.	The expenditure is not for product development etc. as claimed by them. The sales amount was credited in STFC’s account and not in JEEVIKA. We have not been provided with details of sales & beneficiaries. In the absence of such details, the amount can not be booked under the Project.	Rs. 383372/- is recoverable.
3.	We have observed that during the year monthly salary of Rs. 120200/- was debited in Jeevika Project. Actual salary paid by Sewa Trade Facilitation Center (STFC), a sister concern of SEWA, and only journal entry passed in the books of Jeevika –TFC. There is no justification of booking salary by Journal Entries. We have also observed that some of the employees are also working for other projects being carried out by SEWA. For example Villooben Mirza (drawing salary of Rs. 50000/-) is also working for STFC, Ridhdhiben Mehta also working for BDMSA – Raw Material Project, SEWA Manager’s School, Grassroot Trading Network. Thus working part time in Jeevika but drawing full time salary.	Jeevika is availing market services from STFC and the salary of the team responsible for Jeevika activities has been booked through debit note to Jeevika.	We have observed that the staff mentioned in the report are also working for other projects being carried out by STFC yet the full salary is being charged to Jeevika Project. In our opinion only part of it can be charged. They are not maintaining timesheet or worksheet. In our opinion actual worksheet / timesheet to be made out.	Pending.

4.

The following amounts have been shown to have incurred by Disaster Mitigation Institute (DMI), a sister concern of SEWA. Rs. 131770/- Debited to Community Curriculum Dev. Workshop A/c Rs. 232120/- Debited to relief response curri. Dev. Workshop A/c. Rs. 125780/- Debited to curri. Dev. Workshop Livelihood Security A/c. Rs. 489670/- ( TOTAL ) No evidence supporting the above expenditure such as vouchers, timesheets were produce before us. Likewise during the F.Y.2004-05 the total expenditure booked by the above pattern was Rs.1411445/-. When asked, it was informed that the expenditure was incurred for arranging various meetings and conducting various training under the project. No other details were produced before us supporting the expenditure under consideration. Further it was observed that the DMI has also booked Rs.89402/- in the project, being Festival Allowance given to consultants and personals who are not employees of the project. We objected to the above expenditure.

In reply they confirmed that the time sheet were not maintained. The expenditure booked on re-imbursement base. ( Rs.489670/- and Rs.1411445/- ). So far Festival Allowance is concerned they explained that DMI is paying Festival Allowance to their employees and it is rule for DMI.

The Expenditure was incurred for developing three modules and a Costing Sheet was provided to us as to how the expenditure was incurred. When asked for Time Sheet / Worksheet of the related employees, it was informed that no such Time or Work sheet was maintained and no other evidence supporting the said Costing Sheet was produced before us. We would like to add that the project has already hired various experts (on consultancy base) and as per explanation given to us they have developed the said modules, in a circumstance like this, the expenditure booked by journal Entries becomes recoverable. Before coming to the above conclusion we have written to them letters dated 23.06.05, 27.06.05, 04.07.05, 16.07.05 and 22.07.05. No reply was submitted till 14.07.05. The first reply was received on 15.07.05 confirming that no time sheet or work sheet was maintained. After going through their letter we gave one more opportunity to them to explain the expenditure booked by J/Vs and wrote a letter to them on 22.07.05. Our letter was replied on 23.07.05 with time sheets. We have gone through all the time sheets and are of the opinion that these have been prepared subsequent to the objections and are not reliable. Some of them are having dates which are clearly unacceptable / unbelievable. For example : Time sheet of May 2004 of Ms.Sindhu Suresh shows working dates as 20.05.04 to 22.05.05. How ? Her Time sheet of July 2004 shows working dates as 28.07.04 to 30.04.04. Timesheet of January05 of Mr.pushkar Gupte shows dates as 24.01.05 to 29.01.04. Timesheet of Sept.04 of Maliwad Bharat shows dates as 01.09.05. These time sheets were submitted to us on 23.07.2005. We do agree with the contention that an employee should get Festival Allowance but we do not agree with their views of giving such allowance to the consultants and non- employees.

Rs. 1990517/- is to be recovered.

5.	During the audit it was observed that Rs.45680/-were debited in the project account being expenditure of research activities of SEWA – Academy. When pointed out that the research activity is not forming part of Jeevika project the same was accepted by the Coordinator and a cheque of Rs.45680/- was taken from SEWA – Academy and deposited in the banking account of Jeevika Project.	The expenditure relates to the Training activities of Jeevika but due to auditors insistence the same was reversed but now it is rebooked.	As per our view and as accepted by the Coordinator of SEWA – Academy the said expenditure is related to the research activities of SEWA – Academy and hence a cheque of that amount was drawn from SEWA – Academy and deposited in the banking account of Jeevika Project. Thus the entry was not reversed but it was rectified by re-depositing the amount. We have never insisted them to rectify the error but they have at their own rectified the same. Then after they realised that their action of re-depositing the cheque is indication of their wrong doings, they have changed their mind and gone back to their stand alleging the auditors and re-booked the expenditure. Thus it is very much clear that the amount is not related to the Project.	Rs.45680/- to be recovered.
6.	Traveling expenses of Rs. 28632/- was paid to a consultant for Capacity and Capability Needs Assessment Assignment ( CCNAA ). The contract with the consultant very clearly shows that traveling expenses will be born by the consultant and will not be reimbursed by the Jeevika Project.	They have accepted that the amount paid is in excess of what is agreed but requested to reconsider the same on the basis of the age of the consultant.	As per agreement with the consultant Rs.280500/- (including the consultancy fees of Rs.160000/-) was agreed to be paid to him which includes traveling expense also. The amount in question is in addition to the above. As per point no. 6 of the agreement such expenses are not payable. The same can not be paid.	Rs.28632/- to be recovered.
7.	Rs.22000/- was debited to the project for printing charges of brochure related to SEWA Academy –Research. Our opinion was accepted by the coordinator.	Accepted by SEWA.	We have verified minutes of purchase committee and as per minutes the expenditure relates to other project of SEWA.	Rs.22000/- recoverable.
8.	Rs.31000/- was debited to the project by SEWA – Academy for printing of posters. As per minutes of purchase committee the demand was raised by SEWA – Health ( a sister concern of SEWA )	Relates to IEC and not health. The posters were used for Jeevika purpose.	The minutes of purchase committee shows that the demand was raised from SEWA – Health and not from SEWA – Academy. It can not be booked in SEWA – Academy.	Rs.31000/- recoverable.

9.	Rs. 25250/- being paid for printing charges of book titled “ Sahiyari Saruat” and Rs.8300/- were paid for 3000 booklets titled “ Sangathan”. While going through the book we have not seen the name or logo of Jeevika but have seen the name & logo of SEWA. The expenditure not related to the project.	This book was used for training, orienting & creating awareness amongst the trainees. This book was used as IEC material.	Jeevika Project concentrates on the poorest of the poor of three Districts. Majority of them are illiterate. If related to Jeevika, logo of Jeevika would have been there. But the booklet has logo of SEWA. Not only that but we have not seen even name of Jeevika or any matter related to Jeevika in the booklet. This is a general booklet published by SEWA.	Rs.33550/- recoverable.
10.	Rs.37594/- being printing charges of evaluation posters (10025 Nos.) paid as preparation of Media Resource Materials and Rs.21000/- paid for printing of posters of Vermicompost. The expenditure relates to SEWA–Forestry (A sister concern of SEWA).	These posters were printed for self evaluation of Self Help Groups. This posters are not related to SEWA nursery as is stated in the report. These posters were used as training tool & IEC material. Relates to the project.	Our report states that the posters are relates to the SEWA – Forestry and not nursery. We have verified the minutes of the meeting of the purchase committee wherein it is clearly mentioned that the demand raised from SEWA – Forestry and not from SEWA – Academy. It can not be booked in SEWA – Academy.	Rs.58594/- recoverable.
11.	Expenditure of Rs.82004/- was booked under the head ‘Gandhi Sibir Exp”. While verifying the list of attendance it was observed that the participants were from Jeevika Districts as well as from non- Jeevika Districts ( for which SEWA is carrying out its activities )	By participating in these Sibirs, participants learns how to use Gandhian Philosophy in their work. This was a Training Of Trainers. ( T.O.T. )	We do agree with the contention that this was a T.O.T. As the participants are from other areas also we are of the opinion that 100% expenditure should not be booked under the project.	Pending.
12.	Rs.171494/- has been charged to SEWA Academy Jeevika as vehicle hire charges @Rs. 7/- per km by the sister concerns of SEWA. But when outsourced the rate charged by third parties was Rs.4.50 per km. Likewise Rs.77222/- was charged by SMGH to Project Management Unit for vehicle usage and telephone charges in the same manner. In the same way Rs.8134/- was charged for vehicle hire charged to Jeevika – TFC by Mahila Sewa Trust ( a sisiter concern of SEWA ) @ Rs.7/- per km.	SEWA is not charging for minimum km which if outsourced is 300 km per day.	Their explanation that they are not charging for minimum km which if outsourced is 300 km per day is not acceptable because the project was given to SEWA due to infrastructure facilities they are having. When SEWA hires a vehicle from Travel Agency ( taxi ) they are paying @vRs.4.50 per KM but when using their own vehicle they are charging @ Rs.7/- per KM. The rate charged is on higher side only due to the payment to the sister concerns. Thus over invoicing has been done to divert the fund. The then prevailing rate was Rs.4.50 which includes margin of profit also. We may sanction Rs.4.50 per km.	Pending.
13.	The Project Management Unit has paid Rs. 21000/- for salary to staff which is in excess of approved budget.	SEWA agrees that the higher salary was paid to the staff	No dispute as SEWA agrees that the salary paid is in excess than what is sanctioned in the budget.	Rs.21000/- recoverable.

14.	Rs. 17500/- per month is being paid to Taj Residency Ummed, Ahmedabad for outlet rentals and debited to marketing expense. But no details of sales were provided to us and as informed the same are credited in the books of accounts of STFC Project.	With the help of outlet at Taj, number of visitors to sales counters has increased and sales has also increased.	As per their response, there is an increase in sales but we have not been provided with the figures of sales. Moreover the sales are being credited in the books of accounts of STFC. Further the details as to how the income was distributed amongst the beneficiaries were not provided to us. In Absence of such details the objection is pending. It is our opinion that the outlet is used to project SEWA and not SEWA Jeevika.	Pending.
15.	Rs. 18201/- and Rs. 13042/- were debited to Market Survey expense by Jeevika – TFC for which no details was available supporting the expenditure.	No reply to the query.	In the absence of any details such as vouchers, bills etc supporting the expenditure, the amount becomes recoverable.	Rs.31243/- recoverable.
16.	While referring to the expenditure incurred on local traveling (to Gandhinagar & Bopal, around 30 K.m. from SEWA’s office) a big car ( Qualis ) was hired and Rs.1620 to Rs.1944 were paid as vehicle hire charged for a single visit (total 5 visits)	Traveled by more than one persons with necessary documents.	Expenditure is on higher side, however we may allow the expenditure with a remark that this should not happen in future	Allowed.
17.	Rs.2160/- were paid for Photography for SEWA – Forestry and Rs.100/- paid for purchase of gift for employee are not related to the project.	As explained related to project and it is practice of SEWA to give a gift to the employee visiting abroad.	Photographs taken are related to Forestry and also other expense not related to the project hence explanation not accepted.	2260/- recoverable.
18.	Office rent is being paid @ Rs.7500/- per month by Kutch Craft Association ( a sister concern of SEWA ) for hiring a building at Nakhatrana Village. Full amount of rent is being charged to the Jeevika project even though the Office is also being used by KCA for other than Jeevika purpose.	Currently KCA is implementing only Jeevika Project and there is no other activities being undertaken by KCA.	This can not be accepted because KCA’s accounts are not up to date and audit of its accounts are pending since F.Y.1999-2000. The accounts are being prepared at Jeevika’s office and by Jeevika team at that office premises.	Pending till total rent paid is finalized.
19.	Rs. 209408/- paid to Coady International Institute – Antigonis – Canada for visit of Mr.Cunningham Gorden during 24.11.03 to 02.12.03. No other details was available.	As claimed by them the expenditure was related to Jeevika. Three persons were sent to the Institute for training in May,2003 and as per their experience the training remained very good and hence to avoid cost of sending more persons to Canada they have called a faculty from Canada.	Expenditure incurred for sending three persons to Canada was first booked in Jeevika Project but when objected or otherwise, the entry for expenditure was reversed and not charged to the Jeevika Project. Thus on the same line this expenditure is also not related to the project and hence can not be booked in the project. However, the issue is debatable and hence pending.	Pending.

20.	Rs. 53875/- was paid for printing of calendars and Rs.17330/- was paid to AMA for workshop wherein the participants were from other projects also.	Calendars are being used as IEC materials and workshop was also arranged for Jeevika purpose.	Accepted & allowed.	NIL.
21.	Rs.8354/- (1838/-,2106 & 4410/- ) were debited to Marketing exp for which no details were given.	Details of expenditure submitted. It relates to advertisement and other market related expense.	Accepted.	NIL.
22.	Rs.27140/- were spent for visit to Delhi and debited in the books of PMU. No explanation was given as to how this expense relates to the project.	Explained that it related to Knowledge Sharing workshop and sanctioned by senior adviser of IFAD.	Explanation accepted. Total expense for Air ticket is Rs.21590/- and hotel stay charges is Rs.5400/-. we would like to add that they should avoid to stay in such costly hotels.	NIL.
23.	Excess salary paid to Ms. Hina Patel Rs.933/- by SEWA Academy – Jeevika.	Accepted.	No comments.	Rs.933/- recoverable.
			Total Recoverable	Rs. 3323914/-

***********

And here is another confidential document written by ORG to then Rural Development Secretary Vipul Mitra. It further throws light on SEWA and Jeevika.

CONFIDENTIAL
ORG/DB/05/82 March 09, 2005
Shri Vipul Mittra, IAS
Commissioner & Secretary
Rural Development Department, Government of Gujarat
3rd Floor, Block No. 16
Old Sachivalaya
Gandhinagar
Dear Sir,
Jeevika Project
We refer to our letter dated March 07,2005 addressed to you on the matter of delivery of the MIS as well as the balance outputs by ORG in accordance with the deliberations during the Workshop held in Ahmedabad on March 05,2005.

We now feel that it is essential that GoG be fully appraised about the various factors leading to SEWA – ORG frictions and the consequent stale-mate conditions prevailing now. We apprehend that, unless these are recognized and sorted out, further performance of the required services by ORG in a professional manner would continue to be hindered.

During the presentation on March 05,2005, ORG had specifically and purposively restricted itself from pointing out the constraints faced in working with SEWA as an organization. Our attempts to point out such constraints during the earlier meetings with GoG were not received in the right spirit by SEWA (the first meeting presided over by you on 2 December 2004 and the second meeting presided over by Shri. K.N. Bhatt, Additional Commissioner, Rural Development Department, GoG).

This experience has severely dampened our spirit and cast serious doubts on our role as a Monitoring & Evaluation Agency. You would doubtless agree that the role of a monitoring agency is somewhat like an auditor and the findings and observations of an M&E agency should be taken by the implementing agency as constructive suggestions and not as criticism. It may also be noted that ORG has no vested interest in damaging the reputation of SEWA through any negative reporting. Our mandate is to monitor and evaluate SEWA-Jevika performance to facilitate any mid-course corrections in the process of rural development project implementation and management.

Since our earlier professional views /observations led to the displeasure of SEWA of serious proportions which manifested into other problems, the ORG Team attending the 5th March Workshop decided to reserve its comments on SEWA’s operation and performance. However, for reasons mentioned in Para 2, we are constrained to present our views in a clear perspective for your information and necessary action. The enclosed note presents some important issues, which we feel, should be brought to your kind notice before your decision on the future role of ORG as an

M&E agency for
SEWA-Jeevika Project.
With kind regards,
Yours sincerely,
For Operations Research Group Pvt. Ltd.
(D.Banerjee)
Managing Director
Encl: as above

WHY SEWA DOES NOT WANT ORG?

Pre-Contract Phase
1. Training Component
Capacity building through training programmes specific to enhancing the management and implementation capacity of SEWA-Jeevika was one of the imperative project components envisaged by ORG for this project and a component of the proposal was specifically included to address this. However, SEWA decided and declared that it has sufficient inhouse capacity to address its training needs and the training component of the proposal was ultimately discarded.

Now, during the process of designing a streamlined project management system, we observe that there are severe knowledge gaps at all levels within the SEWA hierarchy that prevent an equal understanding of the suggested measures and approaches. Orientation of SEWA staff on the new approaches suggested by ORG was eliciting uneven response from different levels. The key coordinators at the district level are from different levels of education and experience. Even the coordinators at PMU level have varying understanding of the project. ORG feels that unless and until there is a common understanding of the project by the personnel at all levels, the suggested interventions may not yield any positive results. Removal of the training component has caused an untold damage negating the value of inputs provided by ORG.

Post-Contract Phase

1. Baseline study
The initial momentum of ORG baseline study was lost when the baseline was commissioned only in 92 villages. Coverage of these 92 villages took around four months (December 2003 to March 2004). However, SEWA could not finalize the list of remaining 26 villages within this period and balance list was subsequently provided to ORG only in September 2004. The field survey was ultimately completed in November 2004. The field team could not be held in suspension over the six-month gap between surveys and had been disbanded during the gap period. This break in survey cost ORG additional resources as a new team had to be selected and trained all over again.

2. Monitoring Process
The process of monitoring was totally misunderstood by SEWA. It is indeed ironic that an implementation agency directs the monitoring agency on how to monitor and what to monitor. ORG was initially blamed that SEWA operations were getting hampered because ORG did not provide any quarterly progress report based on data to be collected by ORG itself. Thanks to a meeting with GoG on 12 January 2005, a GoG Expert defined monitoring and SEWA was specifically instructed that it is the responsibility of the implementer (SEWA) to collect implementation data and prepare monthly and quarterly progress reports. It was also directed that these reports should be given to ORG who will select villages on a random basis and report to GoG. However, this suggestion is yet to be implemented by SEWA. ORG has instructed its field team to carry out physical verification of villages only if data is supplied by SEWA.

3. Data Gaps
Even while initially collecting implementation data, ORG has identified several data gaps in the reports from SEWA. Many Karyakartas were scared of showing zero as progress and returned total blanks without data. This leads to a suspicion that data has been cooked at the PMU level. Otherwise, provision of regular reports to GoG by SEWA would not have been possible.

4. Planning Gaps
It is also ironic that implementation work of SEWA-Jeevika is being carried out without proper emphasis or attention to planning. This was evident through several cases where the progress was reported in terms of specific numbers only. The Information on planning was left blank, as the SEWA’s field implementing team was not aware of this aspect. For the monthly monitoring exercise, it is expected that SEWA gives ORG team the villagewise monthly implementation plans for various activities at the beginning of the month. In fact, ORG should carry out the M&E exercise keeping these village level plans in mind. However, during the last three months, despite our repeated requests, SEWA has never provided such plans. We feel that our Monitoring Exercise is ending just as a progress reporting of SEWA work, rather than as a monitoring (against the plans prepared) and evaluation exercise. SEWA did not like our repeated requests for the above.

5. SEWA Field Capacity
Most of the SEWA Karyakartas at the district level are grossly under prepared to manage the task of implementation due to severe knowledge constraints. SEWA’s approach for capacity building through its Training Academy and its other in-house resource persons has not resulted in providing any key strengths to thrir field staff to manage or self-monitor their own work. ORG efforts (on ORG’s own initiative) to prepare the district teams have not yielded the desired effect as the learning levels of the Karyakartas were very diverse. ORG has brought this fact to SEWA’s notice and suggested that a core team of trainers needs to be identified and trained through ToTs. This suggestion was not well received by SEWA and a recent Sewa communication insists that the training all district karyakartas on the use of Participatory Monitoring Tools is the responsibility of ORG in violation of the provisions of the contract.

6. Ad-hoc Training Programmes (Additional Inputs by ORG)
Despite the fact that training as a project component was deleted by SEWA before the launch of this project, ORG has conducted, for the interest of the project, detailed training programmes on Objective Oriented Project Planning, Use of monitoring tools and the process to be followed and SHG design and Operation. These inputs are rarely acknowledged by SEWA as they are not within the contract. Instead, SEWA now wants ORG to train all district level Karyakartas on the use of Participatory Monitoring Tools at its own cost.

7. Participatory Monitoring (PM) Tools
ORG has initially discussed the concept of Participatory Monitoring with SEWA in November 2003. At ORG’s own initiative, literature on participatory monitoring was procured from the APRLP project of Andhra Pradesh and shared with SEWA. In its initial enthusiasm, SEWA promised to arrange the services of an artist to prepare the posters proposed to be used as PM Tools. This never happened. Later it was decided to design the PM tools for JSM evaluation. Though these tools were finalized after detailed discussions with SEWA, pretested, fine-tuned and currently used for the thematic study on JSMs, SEWA blatantly refuses to accept these tools as finalized.

8. Reimbursements
Reimbursements of actual support service charges to be reimbursed by SEWA are delayed. Charges for services through hired vendors are also disputed by SEWA and payments delayed over long periods. ORG is still awaiting its pending payment of Rs.35,645/- due from SEWA against invoices submitted in November 2004.

9. Payment against services
SEWA has so far not acted in processing the ORG invoice dated December 03, 2004 (Rs. 6,03,423/-) due against submission of Participatory Monitoring Tools. Varying reasons are given for this delay. Sometimes it is the non-submission of hourly attendance reports of ORG staff (not as per the Contract agreement), while in other times it is due to nonfinalization of the Participatory Monitoring Tools (see point 7). Strangely enough, in the mean time, SEWA had given the go-ahead to start the JSM thematic study using the same tools. The latest excuse by SEWA for non-payment of our dues is that the PM Tools are not converted to a Poster form with pictures. ORG never accepted the responsibility to prepare these posters as preparation of such posters is not there in the agreement.

10. Negative attitude and non-cooperation
SEWA’s displeasure with ORG arises out of ORG’s field observations (gathered during baseline, M&E and specific thematic studies) not being consistent with the Image SEWA would like to project for itself with respect to Jeevika. At one point, ORG was even asked to tone-down some of the strong observations in the reports before they were to be shared with GoG and IFAD.

One of the ORG Consortium Team members, nominated to the project by our consortium partner Water Infotech, during one of the visits to the village of Zanzansar in Patan district and was informed by the villagers about serious financial malpractices carried out by the SEWA staff in that village. When this matter was brought to the notice of the SEWA authorities, they insisted that ORG should discontinue the services of this Consultant. Dr. P.M. Gujarathi, one of the senior professionals working with ORG became unwanted for pointing out lapses on the part of SEWA during the meeting at Gandhinagar on 12 January 2004. SEWA called up the ORG office at Delhi to inform Mr. P.K. Kar, General Manager, ORG, that SEWA does not want Dr. Gujarathi to remain in the ORG Team anymore. ORG staff is not encouraged to approach the SEWA district staff without a prior approval of the PMU staff. From the experience of our interaction with SEWA’s district staff, it is felt that they could also have been instructed by the PMU not to interact with ORG staff or provide any data related to the ongoing work without prior approval from the PMU. This is not a healthy sign for the task assigned to ORG on M&E.

11. Non-availability of SEWA staff
Despite prior appointments, the SEWA district staff is usually un-available at the appointed time due their sudden commitments like VIP visits, training programmes, etc. ORG teams have wasted valuable time waiting for the SEWA staff at various stages of the work.

12. SEWA approach – SHGs and ‘Poorest of the Poor’
ORG findings clearly point out that SEWA has exploited rural women by using their meager savings for rotation at the SEWA Bank in Ahmedabad. ORG study brought out this fact in its theme report. Such reporting could be the major cause for the sudden apathy of SEWA for ORG. Field visits also show that the ‘Poorest of the Poor’ are only fringe beneficiaries of the Jeevika intervention. Most of the benefits have gone to well to do families. SEWA has also bred certain villages and individuals as show-cases and take all VIP guests only to such villages. Some select women in the project villages are coached in detail to repeat the benefits gained by them. The ground realities in other villages are really different. ORG’s comments on this issue have obviously caused a good deal of discomfiture to SEWA.

13. Non-compliance with GoG Directives
It may be recalled that during the December 2004 meting with the Commissioner and Secretary, Rural Development, GoG, one of the District Development Officers categorically mentioned that SEWA personnel at the District level do not have the requisite capacity to implement the Jeevika project. Based on this observation, The Commissioner and Secretary, RD, has directed SEWA to submit a list of SEWA personnel with their qualifications and also directed that a list of topics where training is required by SEWA be prepared and submitted to GoG. While the list of personnel has been prepared by SEWA, it appears that they are yet to submit a training needs assessment report. Such list would help ORG in designing its training approach and strategy for handing over and training on the physical and financial MIS packages.

It may also be noted that based on ORG’s observation during the December 2004 meeting, the Commissioner and Secretary, RD, has directed that required modes of transport (twowheelers) may be procured by SEWA for use at the District level by the Karyakartas. Till date, SEWA has not complied with the directive. It was observed during the ongoing thematic study on Jeevika Seva Mandals conducted by ORG that the village community wants SEWA field Karyakartas to be visiting the villages more frequently. The Karyakartas mention that reaching remote villages is a difficult task for them as they do not have transportation.

14. SEWA’s Negative Stance on Financial MIS ORG, as part of its project mandate, was required to design an accounting manual, provide suggestions to streamline the existing accounting and finance management system and establish the Financial MIS for application. However, during the course of time, it was realized that the finance management systems at SEWA (especially for Jeevika) were very weak and unorganized. SEWA failed to respond positively to ORG’s observation and evaded the issue by not providing interaction time to our financial expert. Later, as GoG was designing it’s MIS using SQL software, it was felt logical that the MIS to be designed for Jeevika should also be based on SQL software to ensure compatibility with the GoG effort. SEWA was however unwilling to shift their accounting package from TATA Ex as it would require major changes in their accounting procedures. On being appraised the incompatibly of the SQL software with TATA Ex in terms of linking the required input data for the MIS, SEWA has started blaming ORG for the delay in MIS preparation without realizing that until and unless they streamline their accounting procedures, the design of financial MIS design would be impossible.

Former US Consul General(Mumbai) Michael S Owen