Poor financial management and control of finances: CAG report

Kohima, March 25 (MExN): According to the audit reports of the Comptroller & Auditor General (CAG) of India on Government of Nagaland for the year ended 31st March 2011 (Report No. 1 & 2) which was laid on the floor of the House on March 22 (Thursday), the government has invested Rs. 213.41 crore in Statutory Corporations, Rural Banks, Joint Stock Companies and Cooperatives at the end of March 2011. The average returns on this investment was nil during the last five years while the government paid an average interest rate of 7.68 % on its borrowing during 2010-11.

The report also stated that there was a saving of Rs. 1370.59 crore and excess expenditure of Rs. 90.55 crore under 82 grants during 2010-11. 

Referring to Report No 2, a note make available to The Morung Express said this report contains 15 audits paragraphs (including three general paragraphs) and two performance reviews- ‘Jawaharlal Nehru National Urban Renewal Mission Scheme in Nagaland’ and ‘utilization of declaration forms in Interstate Trade’. There is a separate chapter on Integrated Audit of the Public Works Department (Roads & Bridges). Chapter I deal with the performance review on implementation of Jawaharlal Nehru National Urban Renewal Mission Schemes in Nagaland.

The Report said JNNURN was launched by the Ministry of Urban Development (MoUN), Government of India (GoI) as centrally sponsored scheme. The Urban Development Department (UDD), Government of Nagaland implemented five sub-components of JNNURM involving Rs. 302.16 crore during 2006-11. The present performance audit covered four projects (Roads and transportation project in Kohima under Urban Infrastructure and Governance; 2. Housing for Urban Poor in Kohima under basic Services for Urban poor; 3. Housing and slum development in Dimapur under integrated housing and slum development projects and 4. Upgradation of roads at Chumukedima town under urban infrastructure development schemes for small and medium towns) involving approved outlay of Rs. 251. 74 crore with a reported expenditure of Rs. 113.29 crore (upto Match 2011). 

The report said a performance review on implementation of the scheme revealed the flowing major deficiencies.

It said except for Kohima, no city development Plan was prepared for any town and the Detailed Project report (DPR) of different projects were submitted to GoI for approval without any scrutiny by the state level nodal agency/engineering division, urban development department and approval by the State level steering committee.

It said financial management and control of finances was poor at all levels which resulted in delayed released of funds, non release of ACA by state, non release of matching state share, short release of state share, irregular deduction of departmental charges, incorrect reporting and submission of UCs, violation of prescribed financial procedures and delays in submission of claims for reimbursement.

Against GOI release of Rs. 121.80 crore as Additional Central Assistance (ACA), the state government in turn released only Rs. 98. 60 crore resulting in short release of Rs. 23. 20 crore.

It said the engineering division of the department paid Rs. 16. 35 crore interest free Mobilization Advance in violation of Rules, out of which an amount of Rs. 7.25 crore remained with the contractor without valid bank guarantee.

It said against the targeted construction of 3504 Dwelling Units (DU) under BSUP and 2496 DUs under IHSDP, construction of only 1360 DUs and 720 DUs respectively were taken up by the department.

The Engineering Division, urban development department irregularly paid Rs. 3.67 crore without actual execution of works under BSUP.

Vital mandatory and optional reforms such as transfer of 18 functions to ULBS, shifting to Actual based Doubled Entry Accounting System etc. were not implemented despite entering into Memorandum, of Agreement with Government of India (GOI). As a result, GOI had withheld Rs. 13. 27 crore under UIG and UIDSSMT projects (UIG- Rs. 11.36 crore and UIDSSMT- Rs. 1.91 crore) since October 2010.

Referring to Chapter- 11 dealing with financial transactions, the report said the Director General of Police, Nagaland, Kohima drew Rs. 4 crore for procurement of 1750 Fire Extinguishers on the basis of fictitious bills.