CAG report presented in the assembly
Kohima, March 28 (EMN): The Report of the Comptroller & Auditor General of India (CAG) on social, economic, revenue and general sectors, and state finances for the year ended 31 March 2016 were presented in the assembly today by the chief minister Dr. Shürhozelie Liezietsu today. The CAG report supposedly to serve as a mechanism for ensuring financial accountability of the government, highlights numerous scams involving vulgar amount of money to the tune of thousands of crores of rupees every year, however, in Nagaland, the state government’s action against those responsible for misappropriation of public funds is barely noticeable.
According to the accountant general (Audit) AP Chophy, the CAG is mandated to audit the state’s affairs and while it is the responsibility of the heads of departments to produce the evidence or argument and to ensure that irregularities does not happen, the Public Accounts Committee (PAC) of the Nagaland Legislative Assembly is the main authority to take action on the reports.
Addressing a press conference following the presentation of the CAG reports in the state legislature today, the AG (Audit) said the AG audits all the departments in a continuous process and the most serious irregularities are highlighted in the reports on the basis of finance and appropriation accounts and audit of the state government departments and state owned companies and corporations. He admitted that it was frustrating when no direct action was taken on defaulters who are involved in the huge scams.
The CAG report 2015-16 highlighted the compliance audit on different departments, including:
Finance (Treasuries & Accounts Department):
An amount of 5.58 crore was fraudulently withdrawn from Treasuries at Zunheboto and Dimapur by duplicating the pension payment authorisation letters issued by the Accountant General (A&E) and also admitted multiple claims in respect of the same pension payment orders and same persons for the same period. Failure of the Drawing and Disbursing Officers (DDOs) and Treasury Officers (TOs) in exercising the statutory checks prescribed under various rules resulted in fraudulent drawal of 1.96 crore under six departments – Rs.96.74 lakh was fraudulently withdrawn by the official of four DDOs of the School Education department by presenting false bills, inflating the net total of the bill, double drawal etc.; 2 DDOs of the Veterinary & Animal Husbandry department withdrew an amount of Rs.46.57 lakh towards travelling allowances claimed without budgetary provisions; ADC Niuland fraudulently drew Rs.37.99 lakh by presenting 12 false bills while the SDO (Civil) Akuluto incurred excess TA expenditure of Rs.3.73 lakh over the budget provision; 2 EEs of the PWD (R&B) fraudulently drew Rs.9.12 lakh on behalf of non-existent employees; 1 DDO of Sericulture department fraudulently drew an amount of Rs.0.99 lakh as house rent arrear which was already drawn earlier; AGM NST, Zunheboto inflated the total of the pay and allowances for the months from March 2015 to May 2015 and fraudulently drew an excess amount of Rs.1.24 lakh.
Additional Director, Department of Municipal Affairs Cell arbitrarily altered the specification of the Roto Crates, and an amount of Rs.1.11 crore was paid to the supplier without actual receipt of the materials.
An amount of Rs.5.08 crore received as compensation from National Institute of Technology for the standing building and land was not deposited in government account and was irregularly diverted bypassing the legislative financial control and accountability. Health & Family Welfare:
Rs.1.75 crore was released by NEC for procurement of approved equipment and machineries by the Managing Director of Aine Nursing Home and Diagnostic Centre under the supervision of the department. Director, Health and Family Welfare paid Rs.36.66 lakh without actual supply/procurement of seven medical equipment; department also paid Rs.17.19 lakh for two items not sanctioned by NEC.
EE PWD (R&B), Dimapur made excess and inadmissible payment of Rs.8.01 crore to a contractor by arbitrarily increasing the rates of three items of work.
BDO Ghatashi transferred an amount of Rs.2.53 crore to two private bank accounts out of the fund of Rs.8.69 crore received under MGNREGS during 2013-14 and possibility of misappropriation of Rs.2.53 crore could not be ruled out.
Department obtained the fund of Rs.4.99 crore from Centre on the basis of doubtful beneficiaries list and the full amount was paid to an individual who was not among the eligible beneficiaryand out of this, Rs.1.77 crore was paid without actual execution of civil works.
Rs.50.74 lakh received as compensation from National Highway Authority of India through the DC Dimapur was not deposited into government account and thus the possibility of the amount was misutilised/misappropriated could not be ruled out.
Acceptance of returns filed by the dealers and assessment of tax without proper verification by the assessing authority resulted in evasion of tax amount of Rs.5.65 crore; 5 dealers submitted incorrect tax returns and evaded tax payment of Rs.2.71 crore; Assessing Authority also assessed the tax returns without cross verifying with the utilisation certificate forms and the applicable rate of taxes; failure of the department to cross verify the utilisation of “C” Forms from the selling states and initiate re-assessment resulted in loss of revenue of Rs.0.54 crore to the government; Assessing Authority also did not scrutinise the returns filed by the dealer and invoke relevant provisions of the Nagaland VAT Act and Rules which resulted in evasion of tax of Rs.0.82 crore.
The CAG report also outlines the performance audit on the following:
Education under Right to Education Act, 2009 (RTE):
The major points noticed were- household survey to ascertain the actual elementary school going children population was not conducted by the concerned authorities; Avoidable expenditure of Rs.11.96 crore was incurred due to excess procurement of school uniforms; In contravention to the Act, collection of fees of Rs.30.03 lakh from the children in the three test checked districts (Dimapur, Mon and Kohima) occurred as schools grants was not released; 457 teachers were posted in offices under the establishment of the Directorate, District Education Officers and Sub-Divisional Education Officers in contravention to RTE Act; As of September 2016, a total of 10,690 teachers (65 per cent) in Government schools were yet to be trained thus compromising the quality of education in the state.
Major points noticed in the performance audit on ‘Construction, inaintenace and management of tourism infrastructure in Nagaland’ were- the state government did not prepare Tourism Master Plan and Perspective plans as envisaged in Nagaland Tourism Policy 2001, and in absence, Tourism plan the infrastructure projects were randomly selected; 2projects (viz. Mega Destination Dimapur and Tourist Destination at Chesezu) were abandoned after incurring a total expenditure of Rs.15.95 crore; Convention Centre at Dimapur constructed at a cost of Rs.4.57 crore was lying idle as all the facilities as approved were not provided; Department paid Rs.19.63 crore for un-executed items of works; State Institute of Hotel Management, Dimapur constructed at a cost of Rs.17.69 crore yet to be functional even after 9 years; 16 infrastructure developed by the Tourism Department through funding from GoI were illegally occupied by private individuals without executing deed of agreement with the department.
Nagaland State Lotteries:
Selection of distributor for conducting of lotteries was not transparent which led to a court case, and further, as per the Rules. the distributor was required to pay sale proceeds instead of Minimum Guaranteed Revenue (MGR); During 2010-16, against the total receipt from the sale of tickets of Rs.17,653.74 crore the net proceeds was Rs.4579.17 crore, and against this the share of the state government in the form of MGR was only Rs.56.93 crore (1.24%) whereas the distributor’s share was Rs.4522.24 crore (98.67%); MGR was fixed at Rs.15,000 per draw instead of Rs.35,000 per draw during the interim period of September 2013 to March 2015, and therefore the Government incurred a revenue loss of Rs.37.80 crore; Unsold tickets were not excluded from being part of draw resulting in claim of prize from unsold tickets; As per the Rule and agreement with the distributor, the location of the central server should be within the geographical area of the state of Nagaland but, contravening the rule and agreement the central server was placed outside the state; During 2010-11 to 2014-15 the profit and loss accounts of the distributor showed, the distributor received Rs.10.73 crore as prize money on unsold tickets which was not remitted to government account.
Nagaland State Transport:
Planning process of the department was inadequate as comprehensive study to assess the operational requirements to cater to the growing demands of public transport was not carried out; Department irregularly diverted funds from the revenue receipts to meet departmental expenditure; Department claimed subsidy from government of India for 703 chartered services used by VIPs and government officials on subsidized rates; Helipad constructed at Alichen could not be put to use due to obstruction by Hydro-Electric Tower; Construction of Inter State Bus Terminal at Kohima at a cost of Rs.8.92 crore could not be completed due to non-settlement of land dispute.
Computerisation of Motor Vehicles Department:
Department did not formulate and adopted the IT policy and therefore the risk involved in record keeping of personal data, statutory documents, revenue collection, and data security, were not ensured; Department had not completely migrated to the more advanced system of Vahan and Sarathi from the old legacy system to provide smooth interface with the data of Regional Transport Officers and District Transport Officers while issuing authorisation for national permits and collection of taxes/fees by State Transport Authorities; Department did not incorporate provision for validation checks in the software to compulsorily capture statutory fields at the time of data entry; Non-utilisation of complete permit module resulted in irregular issue of permits for goods and passenger vehicles and also resulted in underutilisation of the Vahan database for integration with databases across India; Instances of short remittance of revenue to government account ranging from Rs.1.06 lakh to Rs.2.55 crore in the selected districts were noticed. As of March 2016, a revenue of Rs.8.37 crore was retained in the bank account of Axis bank in contravention of the terms of agreement.