CAG raps Andhra Pradesh over financial management

Hyderabad: A day after the chief minister remarked that observations of CAG were “not scriptures”, the public auditor picked many holes in Andhra Pradesh government’s budgeting process and financial management even as it praised the state for achieving fiscal reform targets.

In its report on the state finances for 2011-12, the CAG rapped the government for failing to ensure proper utilisation of allotted funds, particularly on capital works, resulting in staggering escalation of project costs “without achieving desired benefits”.

The CAG was also critical of the government’s spending on social sector, particularly health and education, and suggested re-prioritisation of outlay.[caption id=“attachment_675709” align=“alignleft” width=“380”] Andhra Pradesh Chief Minister Kiran Kumar Reddy. Image courtesy PIB[/caption]

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The Comptroller and Auditor General (CAG) report on State Finances was presented in the Legislative Assembly today.

Prepared by Principal Accountant General Vani Sriram, the report pointed out that as many as 228 major projects/works that were originally due for completion by 31 March 2012, remained incomplete despite the government incurring an expenditure of Rs 49,516 crore.

On top of it, the delay in completion of the deadline resulted in cost escalation of Rs 20,201 crore in respect of 24 projects/works alone.

As many as 72 major irrigation projects, taken up under the ambitious “Jalayagnam” programme in 2004, remained incomplete leading to a cost over-run of Rs 20,142 crore, the CAG said.

The government so far spent Rs 48,156 crore on these projects.

“Some of these projects remained incomplete due to prolonged processes involved in acquiring land, finalising designs and drawings, securing approvals and tendering,” the auditor pointed out.

The CAG cited many examples in its report exposing the Congress’ poor spending on major policy initiatives, though necessary funds were earmarked in budget.

While Rs 1,112 crore was allotted in the 2011-12 budget for mid-day meal scheme to poor children, the government spent only Rs 673 crore.

A sum of Rs 200 crore was allotted for the loan waiver scheme to weavers but only Rs 32.88 crore was actually spent even as the government went to town claiming it was doing everything to bail the debt-ridden weavers out of their financial crisis.

Under the Andhra Pradesh State Highway Project, taken up with the assistance of World Bank, the government spent only Rs 221 crore (48 percent) out of the budgetary allocation of Rs 463.20 crore under the general component, the CAG said.

“Like in 2010-11, there were several lacunae in the budgetary processes of the state government. There were errors in budgeting; lumpsum provisions were made without clarity of purpose. Financial rules were flouted by several departments by resorting to re-appropriation,” the CAG observed.

“Saving of about one-sixth of the budgetary allocation and non-utilisation of allocated funds for various development programmes raises serious questions. It has had an adverse impact on implementation of various policy initiatives of the government,” the CAG rapped.

PTI