Audit report flags non-submission of UCs by state departments, surrender of funds

SHILLONG, Sep 20: The Comptroller and Auditor General (CAG) report for the year ending March 2020 was recently tabled in the autumn session of the Assembly. Apart from the regular observations on non-utilisation or misutilisation of funds what stands out this time is the non-submission of as many as 838 utilisation certificates amounting to Rs 3843.37 crore which were due for submission during 2019-20.
Further there was an increase of Rs 851.30 crore over the previous year’s balance of Rs 4299.62 crore in the pending amount of UCs.
The CAG observed that huge pendency in submission of UCs is fraught with the risk of fraud and misappropriation of funds and cautioned the state government to monitor this aspect closely.
The CAG observed with consternation the unrealistic budgetary allocations which have resulted in surrender of funds on the last working day of March 2020. As against total Budget provision of Rs 16970.71 crore during 2019-20, the departments could spend Rs 10967.32 crore. Out of net savings of Rs 6003.39 crore, savings of Rs 5242.30 crore (87.32 per cent) were surrendered on the last working day of March 2020.
While it may be argued that several projects are pending and optimal fund utilisation was not possible on account of the COVID lockdowns but a surrender of 87% of funds would mean a decrease in budget allocation for the current fiscal.
The CAG correctly observed that surrender of funds on the last working day of March denied funds for other developmental purposes.
Over and above, the cash balances of the state government at the end of the current year decreased by Rs 209.09 crore from Rs 814.33 crore in 2018-19 to Rs 605.24 crore in 2019-20. Cash Balance investment decreased from Rs 1070.04 crore in 2018-19 to Rs 801.61 crore in 2019-20.
The CAG observed that despite having large cash balances, the state government had taken recourse to market loans on several occasions during the year leading to further accretion to cash balances without putting it to productive use and increasing the debt liabilities of the state, the CAG observed. This is a question that needs answers from the MDA Government in whose tenure market borrowings have increased substantially.
Between 1971-72 and 2018-19 excess expenditure of Rs 2400.89 crore incurred is pending for regularisation, despite repeated observations in the previous reports of CAG. The State Legislature regularised Rs 949 crore in March 2021 but a balance of Rs 1451.84 crore was yet to be regularised.
The CAG has made strong recommendations that the budgetary exercise requires urgent streamlining by the Finance Department on account of huge unutilised funds over the years. CAG further observed that government should consider overhauling the preparation of estimates, which largely remained ambitious and also augment the capacity of the spending departments to utilise earmarked funds on time.
Surrenders should be so timed that they can be gainfully utilised by other needy departments where projects continue to languish due to insufficient funds.
“Excess expenditure remaining un-regularised for prolong period needs to be viewed seriously as this dilutes parliamentary control over the exchequer. The state government should also ensure that the remaining amount of Rs 1452 crore is regularised at the earliest,” the CAG observed.