* Report brings to fore discrepancies involving transactions amounting to a whopping Rs 1,408.12 crore
By Kartik Lokhande
Several
discrepancies, unrecovered amounts, incorrect depiction of Government
grant, negative balance, absence of records. These are just a few of the
observations recorded in the official report of Maharashtra Housing and
Area Development Authority (MHADA). But, there is more to it. The
report, tabled during winter session of State Legislature last month,
has observed on record that the ‘risk of misappropriation/fraud etc
cannot be ruled out’.
Comptroller and Auditor General of India
prepared a Separate Audit Report (SAR) on the Accounts of MHADA for the
financial year 2012-13. After the audit of balance sheets made available
by MHADA, Principal Accountant General (Audit) submitted the report to
MHADA on June 12, 2014. The audit observations were incorporated in
MHADA’s Annual Account and Statement of Account for the year 2012-13.
This report came up during the winter session of State Legislature.
However,
while preparing the report, CAG also faced problems with records and
account books. As a result, it has recorded its observations without
mincing the words. “No proper books of accounts and other relevant
records such as Deposit Register, Rent Rolls, Register of Advances,
Register of Assets, etc have been maintained by MHADA,” it is observed
in the report. After studying financial statements, accounts of 10
branches of MHADA, the audit team was simply surprised and shocked to
see discrepancies.
Several discrepancies have been pointed out, but
the most shocking thing that has come out of this report is the ‘risk’
of misappropriation/fraud during the period of 13 years from 2001 to
2012. Out of 10 Boards of MHADA, bank reconciliation up to March 2013
was pending in case of Nagpur Board, Konkan Board, and Repair and
Reconstruction Board (RRB). However, MHADA made ‘no efforts’ to settle
the discrepancies noticed in the reconciliation of seven boards.
“This
includes transactions amounting to Rs 1,408.12 crore deposited in banks
for which no credit was given by banks in their books of accounts.
Similarly, transactions amounting to Rs 25.04 crore were found debbited
by banks but no entries were taken in the Authority’s cash books. These
discrepancies are pertaining to the period 2001-2012 and the risk of
misappropriation/fraud etc cannot be ruled out,” the report states
clearly.
The most shocking fact, which gels well with the
observation about ‘risk’ of fraud running into crores of rupees, is that
the registers/records of fixed assets ‘were not available’ for
verification to the audit team. Obviously, this has prompted the audit
team to state, “Hence, the correctness of the assets could not be
verified. The department also did not furnish any certificate of
physical verification of the fixed assets”.
Besides, despite orders
and initiatives, MHADA did ‘not evolve’ any effective and adequate
internal control mechanism in matters of accounting and maintenance of
primary subsidiary records. Though MHADA Secretary had issued orders for
setting up an Internal Audit Wing in April 2011, no separate staff was
earmarked for the purpose. As a result, no internal audit could be
conducted so far.
Some of the discrepancies that have been brought
to the notice in the audit report include overstatement of assets,
understatement of income, details of consolidation of deposits amounting
to Rs 443.15 crore found ‘non-verifiable’, negative balances;
discrepancy of Rs 97.31 crore in respect of rent, service charges, and
hire-purchase instalment due to ‘difference’ between original records
and annual accounts; ‘misclassification’ in Contractor Control Accounts
by Rs 39 lakh, incorrect depiction of Government grant, ‘non-institution
of follow-up action to settle discrepancies, amount of Rs 7.53 crore
lying unrecovered, understatement of income by Rs 108.21 crore etc.
(11-01-15)
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