Comptroller and Auditor General (CAG) report, which was tabled in the recently concluded second session of the 13 Nagaland Legislative Assembly (NLA), detected huge financial anomalies in various departments.
DUDA (Border Area Development Programme- BADP): According to the CAG report, payment amounting to Rs. 15.94 crore was made without execution of works, short execution, incomplete and abandonment of works while also it noticed that third party inspection agency for monitoring of works under BADP was not constituted.
It also pointed out that the baseline survey conducted by the department did not bring out quantifiable gaps in social and physical infrastructure and therefore did not provide decisive inputs in preparation of Annual Action Plan. The report said allocation of funds also indicated disproportionate emphasis on infrastructure and other sectors like Education, Health, Agri and Social were given minimal share.
DCC Bills for an amount of Rs. 4.56 crore out of Rs. 7.62 crore were not submitted even after delays ranging between two to three years, the report stated. Further, CAD detected that payments amounting to Rs. 15.95 crore without execution of works, short execution, incomplete and abandonment of works were noticed.
During 2012-17, the reports stated that 457 works were taken up under BADP in the State in 116 villages at a cost of Rs. 123.69 crore. Out of the 457 works, 97 works (estimated cost Rs. 50.07 crore) were taken up in the 16 villages covered under this performance audit during 2012-17. All the selected 97 works were then selected for joint inspection by departmental officials and Audit. Examination of records and joint inspection of the 97 works (construction of roads/ bridges/ community centers/ drainage/ school buildings, etc.) revealed instances of unexecuted works, short execution of works, incomplete or abandoned works, etc., the report said.
Fisheries department: CAG report stated that the Fisheries department had furnished Utilisation Certificates for an amount of Rs. 12.79 crore even before the funds were released by the State Government. It said that the department paid Rs. 3.98 crore for seven un-executed projects and Rs. 16.37 crore for six short executed projects.
An expenditure Rs. 2.78 crore was made on a single project twice which was ultimately abandoned, rendering the expenditure as infructuous, the report stated. There was a shortfall in production of fingerlings by Rs.471.93 lakh (94.40 per cent) during the last five years which may have impacted introduction of economically improved fish species in the State, the report said.
The report stated that the department targeted to develop 246.79 hectares of water spread area under six projects at a cost of Rs. 29.34 crore during the period 2012-15. As against this, as ascertained from departmental records, water spread area of 231.15 hectares was developed at accost of Rs. 21.77 crore. During joint inspection (June/July/August 2017), it was observed that only 14.63 hectares of water spread area was developed. The short execution 216.52 hectares of water spread area resulted in excess expenditure of Rs. 16.37 crore.
In this regard, the Audit has recommended that the matter be referred to the State Vigilance Commission for further investigation.
Finance department (Taxation): The CAG report pointed out that sixteen dealers concealed inter-state purchase of Rs. 77.56 crore and evaded tax of Rs. 11.47 crore. It further said that three dealers concealed purchases and evaded tax of Rs. 3.61 crore
The report also said that failure of the assessing authority to exercise prescribed checks resulted in concealment of purchases for Rs. 5.71 crore, irregular exemption of taxable purchases of Rs. 28.60 crore and evasion of tax Rs. 1.66 crore.
Finance (directorate of Treasuries & Accounts): CAG has pointed out that due to failure of the Drawing and Disbursing Officers (DDOs) and Treasury Officers (TO) to exercise prescribed checks resulted in fraudulent drawal of Rs. 1.72 crore.
PWD (Housing): The department incurred an avoidable expenditure of Rs. 10.73 crore due to delay in handing over the project site. CAG also detected that the department had also extended undue financial benefit of Rs. 7.37 crore to a contractor on enhancement of rate for newly incorporated items of works not approved by the Government.
School Education: CAG report stated that five DDOs of the School Education department fraudulently withdrew Rs. 106.45 lakh by presenting false bills, inflating the net total of the bill, double drawal, etc.
RD department: CAG report pointed out that the Project Director, DRDA, Kiphire paid Rs. 2.03 crore for supply of 3,741 bundles of CGI sheets against fictitious transportation challans and non-existent vehicles.
CAG also detected short distribution of housing materials and cash component under Indira Awaas Yojana (IAY) totalling Rs. 73 lakh in Chiephobozou Block.
Vety &AH: An amount of Rs.14.19 lakh was fraudulent drawn by two DDOs of the Veterinary and Animal Husbandry department by presenting false bills and double drawal.
District Jail, Zbto: CAG report stated that an amount of Rs. 6.53 lakh was drawn by inflating the monthly net total amount of pay and allowances on 20 bills drawn during the period from February 2014 to October 2015 which resulted in fraudulent drawal of pay and allowances amounting to Rs. 6.53 lakh
ADC Pungro: An amount of Rs. 1.89 lakh76 was drawn as arrears of house rent allowance for 15 employees during March 2016 which resulted in fraudulent drawal of arrears of house rent allowance amounting to Rs. 1.89 lakh. While accepting the facts, the ADC stated (March 2017) that entire amount had been recovered the said amount and deposited to government account, the report said.
NST, Zbto: An amount of Rs.0.58 lakh77 was drawn as arrears of house rent allowance for the period from May 2015 to January 2016 in respect of seven employees who were regularly drawing HRA in their monthly pay and allowances. CAG said, this resulted in fraudulent drawal of arrears of house rent allowance amounting to Rs. 0.58 lakh. While accepting the facts, the Asst. GM, NST stated that the amount had been recovered (April 2017) and deposited to government account.
7th NAP, Bhandari: CAG report stated that Commandant, 7th NAP Battalion, Bhandari, Wokha had drawn an amount of Rs. 34.53 crore being pay and allowances of Grade IV employees of the battalion during the period from October 2015 to February 2017. Detailed examination of the paid vouchers revealed that the basic pay of 114 employees was manipulated thereby inflating the gross pay and allowances of the employees. Against the actual pay and allowances entitlement of Rs. 34.13 crore, during the aforementioned period, Rs. 34.53 crore was drawn resulting in excess drawal of Rs. 39.28 lakh.
CAG report stated that the Commandant while accepting (September 2017) the facts stated that excess amount had been recovered and deposited to government account through the treasury.
Taking not of all these cases of fraudulent/excess drawals by 12 DDOs of seven departments, CAG report said that it indicated failure on the part of the DDOs and TOs to exercise internal control/non-adherence to prescribed rules and procedures.
CAG also pointed out that over the years, misappropriations of similar nature by the DDOs in collusion with the TOs were highlighted in the Audit Reports of the Comptroller and Auditor General of India, Government of Nagaland.
However, these malpractices continue to persist which indicates the seriousness of the problem, the report said. Therefore, the CAG has recommended that the government should take immediate steps to tackle this recurring wrongdoing.
In the instant cases pointed out by Audit, it recommended that FIRs be lodged, disciplinary action initiated against the concerned officers and the cases handed over to the State Vigilance Commission for prosecutorial action.
Rs. 56.12 lakh scholarship funds diverted
CAG has detected diversion/suspected misappropriation of scholarship funds under Technical education department.
As per the report, Rs. 56.12 lakh from the funds for scholarship schemes were diverted for private use. It further said that Rs. 51.87 lakh was also suspected to be misappropriated, as there were no records for utilisation of this amount.
Upon examination (March 2017) of subsidiary cash book of the directorate of Technical
Education and bank statements solely operated for transaction of scholarship funds revealed that the an amount of Rs. 1.32 crore out of the balance of Rs. 1.49 crore was utilised for purposes other than scholarships– Rs. 35 lakh utilised as admission fee of three candidates belonging to the backward tribes of Nagaland for MBBS course and consultancy fee, Rs. 40.01 lakh utilised for farewell function of retired director, Rs. 1.80 lakh utilised for purchase of computers/ laptops and Rs. 3.32 lakh diverted for salaries of fixed pay employees.
While accepting (July 2017) the diversion of scholarship funds, the department stated that advances were granted to some staff from the scholarship fund due to urgent needs while Rs. 6.01 lakh was recovered from the staff and another Rs. 18 lakh (out of Rs. 40.01 lakh) was recovered from a retired director and the balance amount would be recovered from him on instalment basis.
It said Rs. 3.32 lakh utilised for payment of salaries of employees was also recovered (yet it said no documentary evidence in support of the recovery of this amount was furnished to Audit). Further, the reports stated that Rs. 51.87 lakh had not been utilised and the same was lying with the department.
Asserting that the reply of the department was not acceptable, CAG has asked the department to lodge FIRs against the concerned officials for diversion/suspected misappropriation of scholarship funds amounting to Rs. 1.08 crore, and refer the matter to the State Vigilance Commission for investigation.
Const of bridge under DUDA: CAG detected anomalies in construction of bridge at Yetyong river Tobu, where the work was executed twice for the same project and full payments made to two contractors.
Joint inspection (June/July 2017) revealed that the work order issued to a firm on December 2015 for the construction of bridge was the same bailey bridge for which work order was issued to another firm in May 2014. The construction of bailey bridge had not been completed despite making full payments to the two contractors for the same work, the report stated.
CAG stated that the department did not offer any reply (November 2017). In this regard, the Audit has recommended that an FIR be filed against the concerned officials and contractors concerned and the matter handed over to the State Vigilance Commission for further investigation.
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