CAG pulls up frauds in various departments
Source: Hueiyen News Service

Imphal, March 24 2011: The comptroller and auditor general (CAG) of India has pulled up fraud, misappropriation, embezzlement and losses in various departments of the government and recommends government review the matter and ensure that effective system is existed.

The report of the CAG for the year ended March 31, 2010 was presented in the House of the Assembly today.

Later, a briefing was given at the office of the Auditor General, Imphal.

The report pointed out a suspected fraudulent payment of Rs 49.84 lakh to a Kolkata based firm for supply of 45 MT each of soyabean and blackgram seeds in agriculture department.

As the payment was based on impermissible supply order and inconsistent delivery records, it led to suspected fraudulent payment, the report pointed out.

Government has lost Rs 1.32 crore due to the failure on the part of the Irrigation and Flood Control Department to execute bank guarantee with the transporter for the value of material to be transported and inaction to get its validity extended beyond the deadline.

The material (1237 MT of steel bars for the Dolaithabi Barrage) was to be transported from M/s Steel Authority of India Ltd, Guwahati to Imphal by a transporter according to the terms and conditions of transportation, the audit transaction report said.

Another doubtful expenditure of Rs 9.21 crore also pointed out in the same department in the construction of Guide Bund with an unacceptable dimension and without any transparency, financial norm and immediate requirement.

The department awarded ninety work orders to five local contractors at a cost of Rs 10.19 crore during the period from July, 2008 to November 2009, through restricted tender for construction of 4.60 lakh cum of Guide Bund (GB) for a length of 36.88 km along the Iril river upstream of the Dolaithabi Barrage for which the payment of Rs 9.21 crore were made as of March 2010 to the five contractors.

Audit notice that construction of the GB was neither based on survey report nor was it provided in the Annual Action Plan.

As the value of the work was above Rs one crore, approval of the Project Implementation Board (PIB) was to be obtained.

However, instead of PIB, approval was given at the level of the Chief Engineer, the CAG report alleged.

Apart from violating the norms of construction of the GB, the execution of the work was not reflected in the monthly progress report submitted to the CE from time to time and the construction of the GB for an expenditure of Rs 10.19 crore when the main barrage was nowhere near completion raises serious concern on the efficiency of the project management and was a grossly irregular, as GBs are meant to be constructed to hold the impounded water of the barrage on its completion.

Thus, an amount of Rs 9.21 crore spent on construction of GB without any transparency, financial norm, and unfeasible structures is questionable.

Further, as the department had not extended co-operation of the request of audit for a joint verification of the GB, no such physical verification could be conducted.

Fraudulent payment of Rs 2.74 crore was made to a contractor in state planning department, the CAG report pointed out alleging that the payment for supply of building material was based on fictitious records.

Test check of the record of the Manipur Development Society, conducted in May 2010, revealed that 1,715 MT of cement valued at Rs 120.05 lakh @ Rs 7000 per MT and 297 MT of steel valued at Rs 154.44 lakh @ Rs 52,000 per MT were purchased from two suppliers, M/s SK Enterprises, Guwahati and M/s Northeast Marketing Company, Dimapur during January 2009 and May 2009 .

The society made a payment of Rs 274.49 lakh to the firms for supply of the building material including transportation cost in March 2009.As per delivery challans, the building materials were transported by 33 trucks as of May 2009.The building materials were purportedly purchased for construction of two district sports complexes at Kodompokpi and Kakching, the report said alleging that during scrutiny of the supply orders, invoices of the supply, delivery challans etc., it turns out be fictitious one.

The CAG also pointed out violation of contractual obligations, undue benefit to contractors, and unavoidable/unfruitful expenditure in the public health engineering department (PHED).

In contravention of CPWD manual, excess mobilization advance of Rs 1.04 crore was paid and interest of Rs 67.49 lakh on the advance was also not realized from the contractor, resulting in extension of undue benefit to the tune of Rs 1.71 crore, it says.

In the PWD undue benefit to the tune of Rs 11.31 laky was extended to the contractors as element of Vat (Value Added Tax) included in the estimates of works was not deducted at the time of making payments, the CAG pointed out stating that as per the provisions of General Finance Rules (GFR), any expenditure should not be prima facie more than the occasion demands and should not be incurred for the benefit of a particular person.

When pointed out in auditing the construction of three Manipur Bhavans at Shillong, Guwahati and New Delhi, the divisional officer (DO) stated that VAT was not deductible from the bills of the works related with as they were executed outside the state.

This reply is not acceptable as elements of VAT though included in the estimates had not been deducted subsequently at the time of making payments to the contractors.

The progress of the works or whether any action has been taken subsequently by the department to recover the amount from the contractors from works or other on-going works has not been intimated to audit.

The matter was referred to the government in October 2010 but reply had not been received till November 2010, the report added.

Due to entrustment of work of upgradation of Information Technology Park without entering into an agreement with the executing agency, an amount of Rs 9.05 crore remained blocked for more than two and a half years in the science and technology department, the report said.

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