CAG flays Odisha for parking govt money in personal accounts

The Odisha government has drawn flak from the Comptroller & Auditor General (CAG) of India for unauthorizedly parking unspent government funds in personal deposit accounts.

The latest report of CAG on state finances for the year ended March 31, 2015 says there were 856 personal account holders in the state with a closing balance of Rs 1,146 crore operating as personal accounts.

During 2014-15, Rs 2,461.03 crore transfer-credited from the consolidated fund of the state to these personal deposit accounts and expenditure of Rs 2,601.87 crore was incurred thereof, resulting in net decrease of Rs 140.84 crore in the cumulative closing balance at the end of the year.

All such drawals had the approval of the concerned officers of the finance department. The practice resulted in erosion of legislative control over expenditure as drawals from personal deposit accounts in the subsequent years neither required legislative approval nor was the expenditure incurred subject to legislative authority through the appropriation mechanism, the CAG report rued.

The state government, in its reply to the central auditor, in November last year said the concerned administrators are being reminded to furnish the proposal for closure of inoperative account.

Rule 141 of the Odisha Budget Manual provides that money should neither be withdrawn from the treasury unless it is required for immediate disbursement nor is it permissible to draw money from the treasury under revenue heads of accounts, which form part of the consolidated fund of the state and for placing it in deposit head under public account of the state in order to avoid lapse of allotment.

Parking of funds in personal deposit accounts adversely affects the transparency of state accounts as it inflates the revenue expenditure to that extent and locks up resources, which otherwise can be utilised elsewhere for development. Besides, according to the provisions of the Odisha treasury Code, personal deposit accounts remaining inoperative for three full financial years are to be closed automatically and the unspent balances are to be transferred to government account for which the treasury officers are to furnish detailed information to the accountant general immediately after March 31 of each financial year.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel