Odisha Officers made UPI payment for insurance, mobile recharges from Tribal Welfare Funds: CAG flags massive irregularities

Authorities responsible for implementing welfare schemes for the integrated socio-economic development of Scheduled Tribe communities in Odisha’s scheduled areas have been found misusing government funds. Methods of misappropriation included cash withdrawals through ATMs and UPI payments for insurance premiums and mobile phone recharges.

These startling revelations have come to light in a compliance audit by the Comptroller and Auditor General of India (CAG). The audit of the Department of Scheduled Tribes and Scheduled Castes Development exposed glaring irregularities, misuse of funds, and violations of procedural norms in projects carried out by Integrated Tribal Development Agencies (ITDAs).

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The compliance audit, covering 11 sampled ITDAs over the period from 2018-19 to 2022-23, found large-scale fund misuse from the state exchequer. Junior Engineers (JEs) and Assistant Engineers (AEs) conducted personal transactions worth Rs148.75 crore from official bank accounts. These transactions included ATM withdrawals, cheque payments, payments through Point of Sale (POS) transactions, UPI transfers, mobile recharges, and insurance premium payments, all pointing to suspected misappropriation of public funds by the JEs/ AEs concerned, the audit report noted.

The audit raised numerous discrepancies, ranging from misappropriation to inadmissible expenditures.

“Out of Rs 1,709.47 crore available with the 11 sampled ITDAs during the period 2018-23, a sum of Rs 1,190.44 crore (70 per cent) only could be spent, indicating poor spending efficiency of the sampled ITDAs”, said the report.

Shockingly, none of the ITDAs prepared annual accounts, as mandated under the Societies Registration Act, 1860.

Though the departmental execution of works should be carried out as per the provisions of the Odisha Public Works Department code (OPWD) Code, expenditures for departmental works should be incurred from the Personal Ledger accounts of the ITDAs, separate unauthorised bank accounts were opened in the names of the JEs/AEs. All payments for departmental executed works were remitted to these personal Bank Accounts of JEs/ AEs, which points to a major failure of internal control, the audit compliance report stated.

The infrastructure development works were executed by JEs/ AEs of the ITDAs and they were paid towards the cost of execution on the basis of the Running Account bills.
The bill payment for infrastructure development works was remitted to the bank accounts opened in the names of JEs/ AEs by the ITDAs. However, this payment system violated both government guidelines and standard procedures, exposing gaping holes in implementation of tribal welfare projects

In 325 test-checked works carried out by ITDAs, payments of Rs 3.23 crore were made without proper invoices in the Running Account (RA) Bills. In another 544 test-checked works involving 2,476 invoices (worth Rs 22.78 crore), auditors found serious irregularities — including missing invoice numbers and dates, duplicate invoices, invoices from unregistered entities, invoices raised by entities not registered under GST and invoices raised by entities different from the entities to whom the reported GST Registration number belonged to (14), were noticed in Audit report.

Further, cost estimates for these projects were prepared without site visits, design plans, or index maps. The ITDAs also failed to empanel suppliers or conduct market surveys to determine fair pricing, violating procurement norms.

Cost estimates of 544 test-checked works had been prepared without conducting site visits, design plans and index maps.
Further, no attempts had been made to empanel a pool of suppliers for the input materials or to determine fair pricing by conducting any formal market surveys or by obtaining periodic price quotations or by examining the price lists published by public sector entities, the report further saying that all procurement norms were flouted.

The report also highlighted a case where the Project Administrator of ITDA Paralakhemundi overstepped his authority by procuring musical instruments and costumes worth Rs 3.74 crore, against the administrative approval of Rs 73.60 lakh only.