Alike reports on IIM finances with govt

Shunglu's findings echo earlier report by accounting firm

There are similarities in the two reports prepared by separate committees looking into the financial position of the Indian Institutes of Management (IIMs).

The first report is by the one-man V K Shunglu Committee, which was submitted last week.

The second has been prepared by a New Delhi-based private chartered accountant firm, G S Mathur & Company, on the recommendations of the Educational Consultants of India Ltd (ECIL), a firm created by the ministry of human resources development, to act as a 'single window coordinating agency' for the placement of international students in premier institutions across the country.

Interestingly, ECIL asked Mathur & Company to review the accounts of the three major IIMs "" Ahmedabad, Bangalore and Kolkata "" on April 14. The chartered accountant firm submitted its report to the ECIL on April 15, a day before the Supreme Court heard a public interest litigation against the fee-cut order.

Incidentally, the chairman and managing director of ECIL, V S Pandey, joint secretary in the ministry, is said to have threatened members of IIM Ahmedabad and its director Bakul Dholakia during a meeting in February.

According to sources, the Shunglu Committee report alleged that IIM-A had been understating surplus figures in its balance sheet by transferring money to various funds, apart from understating the institutes income.

G S Mathur & Company's report to the ECIL, a copy of which is in the possession of Business Standard says: "As per Schedule No. 11, total interest on investments during 2002-03 stood at Rs 17.06 crore, out of which Rs 5.89 crore was transferred to earmarked and endowment funds. But (it has been found that) only Rs 4.15 crore was transferred to the earmarked and endowment funds. The balance of Rs 1.73 crore has been allocated along with the General Fund, and due to an incorrect accounting treatment, income is understated by Rs 1.73 crore."

Sources in the ministry said that similar explanations have been given in the Shunglu Committee report and even some of the words in both report are similar.

While the Shunglu report said that IIM-A has understated its surplus by Rs 7 crore, the GS Mathur & Co report said, "A general Fund of Rs 8.80 crore was available as on April 1, 2002 out of which only Rs 0 .04 crore was used during the year. Despite the negligible utilisation of funds, again Rs 6.99 crore had been transferred to this fund."

There was no need to make general fund as this amount could have been kept under surplus. Hence, surplus for the year is undrstated by Rs 6.99 crore."

GS Mathur & Company's report said: "During the year 2002-03, Rs 1.70 crore had been allocated towards the depreciation fund... Interest has been wrongly allocated and hence, surplus is understated."