 "CAG raps AP government over financial management")
The statutory auditor has found that over 100,000 personal deposit (PD) accounts are in operation by the government functionaries, locking up of about Rs 23,483-crore public money in these accounts. “This has affected the transparency of government accounts,” the CAG report on state finances prepared for the year 2011-12 said.
In a case in point, a couple of scams involving defrauding of public money had come into light in the past with regard to Sarva Shiksha Abhiyan and minority welfare department funds which operate similar PD accounts.
Also Read
“The government should initiate stringent measures to streamline the system on PD accounts and ensure that these are operated in a transparent manner in accordance with the letter and spirit of the relevant instructions and rules,” the statutory auditor said.
Earlier, the finance department had favoured the idea of keeping all the money in treasury accounts. However, the practice of operating the PD accounts in the state government is widely prevalent, as the report suggests. This is partly because of the ‘personal incentive’ the banks offer to the government functionaries against the deposits, according to the observers.
Besides this, financial rules were flouted by several departments by drawing funds in excess of requirement, resorting to re-appropriations without proper explanations and expending without provision of funds, according to the report. Classifying large amounts and important items of expenditures like subsidies under omnibus minor head 800 had also affected the transparency in financial reporting, the report observed.
In another instance, the government has not transferred Rs 894 crore as its share in the contributory provident fund scheme to the fund manager as required under the Pension Fund Regulatory Authority as of March 2012 and even provided Rs 100 crore less in the current year's Budget as compared to the contribution of the employees during the year.
The government has not been able to estimate the yearly pension liabilities on an actuarial basis for the ensuing years as stipulated in Fiscal Responsibility and Budget Management (FRBM) Act, according to the CAG findings.
The expenditure booking has also been wrongfully reported in some cases. While there was a separate Sinking Fund for reduction/avoidance of debt in line with the FRBM Act, an adverse balance of Rs 3,732 crore has existed under debt head due to wrong booking of assistance to various SPVs (special purpose vehicles) as repayment of the latter’s debt, which led to understatement of revenue expenditure and thereby affected the fiscal indicators of the state, according to the findings.
Lapses were also found in fund releases. “Funds earmarked for specific social sector activities were not always released on time/not released at all, thereby negating the objective of allocating these funds,” the report said.
The state outlay on education in particular was way behind (13.80 per cent) that of the general category states (17.18 per cent). Further, the share of capital expenditure in social sector (12.58 per cent of the aggregate expenditure) was also lower in the state, as compared to the general category states (13.71 per cent), according to the report.
Also, return on investment in companies and statutory corporations continued to be poor at 0.85 per cent during the year 2011-12, while the rate of interest paid by the government during the year was 7.40 per cent. The accumulated losses of 11 entities alone amounted to Rs 5,979 crore including those of AP State Housing Corporation (Rs 3,554 crore) and the Andhra Pradesh State Road Transport Corporation (APSRTC), the report said.
The report also said that the state government was yet to obtain confirmation with regard to balances of loans advanced to the tune of Rs 17,337 crore to various departments and organisations.