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Various irregularities leading to Diphu Treasury fiasco detected

By KAMAL KUMAR BRAHMA
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DIPHU, May 9 - Various irregularities have come to the fore in the Diphu Treasury fiasco of March 31, 2019 which took aback thousands of people who were expecting payments to be credited in their accounts but were instead told that there was no sufficient balance left in the Karbi Anglong Autonomous Council�s Personal Ledger Account (PLA). The District Treasury officer-cum-Deputy Commissioner then had to seal the treasury office.

Till today, crores of rupees of government revenue from GST and various other deposits (around Rs 3 crore) have not been deposited in the government coffers, crores of rupees meant as payment to contractors has remained due, supplementary funds sanctioned by the Assam government (State Owned Priority Development) has got reverted as it could not be disbursed within the time frame � the only saving grace being that the authority cleared maximum salary and pension bills from within the mess.

A preliminary inquiry revealed the wilful negligence of a section of the treasury staff, alleged extortion of kickbacks from the beneficiaries by the treasury officer and some employees serving in key positions, committing of some irregularities by flouting all standard operational procedures of the Finance department. But the bizarre fact, which has so far been overlooked, is how could the council authority issue cheques worth more than Rs 100 crore without maintaining sufficient balance in its credited account kept up with the treasury and the Finance Department, Government of Assam.

The first round findings also revealed that various transferred departments� (around 30) functioning under the administrative jurisdiction of the KAAC have to deposit their entire budgetary and other fiscal endowments in the council�s PLA where there is no classification or the category of account deposited i.e., whether it is KAAC�s generated revenue, salary component debited by Assam government, fund for schematic development, centrally-sponsored fund as special package or non-lapsable pool of resources of the Central government and fund from diverse groupings. This hotchpotch or the confused mixture of financial credit has in fact facilitated the commission of financial irregularities by flouting of all financial rules.

The other appalling revelation made in this investigation is that the KAAC authority is maintaining more than nine joint accounts in local branches of various nationalised and private banks based at Diphu. The operational process of these accounts is that it can be operated through the dual signature of two officers who are designated as non-drawing and disbursing officer. One of them is the Principal Secretary of KAAC and the other is a senior Finance and Accounts Officer (FAO).

Interestingly, all accounts were opened without obtaining consensus from the Finance Department of the Assam government. Further, the maximum such accounts are savings in nature instead of current account and the type of fund which are canalized in all these accounts are funds for schematic development; Centrally-sponsored fund as special package or non-lapsable pool of resources, supplementary budgeted amount etc.

The Principal Secretary of KAAC, when asked about the issue, justified the whole procedure, overruling most of the objections of the standard financial norms for operating such joint accounts. He also stated that if the council authority wishes, any officer can operate such savings account without any authorisation from the Finance Department. He also insisted that after drawing of funds from the State or Central government endorsement through the treasury against certain schemes, these can be parked in joint accounts for a prolonged period.

However, he did not mention anything about furnishing of utilisation certificates against unspent fund parked in different joint accounts to the appropriate authority and placing of fresh demand for new sanction of fund for fresh schemes, ongoing schemes or supplementary amounts.

On inquiry, it was learnt that on the day of the financial year ending, around Rs 194 crore of government fund was withdrawn from the PLA of the KAAC and was deposited in various joint accounts. And as a result, the credited amount in the Diphu treasury drastically got reduced (Rs 24,000 was the balance), resulting in compulsory stoppage of bill clearance by the treasury against cheques issued by the council authority worth crores of rupees.

The peculiar software of the Assam Finance Department which doesn�t have auto debit system created another hurdle for the treasury officials in assessing the current credit figure.

Recently, after the upheaval in the treasury, it was learnt from various sources that the council authority reverted around Rs 100 crore from the joint accounts of the PLA for onward crediting to the treasury. This was done to clear various salary and non-salary bills of both the transferred departments and inherited departments of the KAAC whose maximum fiscal demands are met up from the funds provided by the Central and State governments.

Paying no attention to the standard process of making payment through e-bills and online payments, the KAAC has made the draw and disbursement process of the authority most vulnerable and porous and this has generated the leeway for committing fiscal irregularities.

The Diphu Treasury fiasco should act as an eye opener for both the KAAC and the Assam Finance Department to plug the existing loopholes and establish an error free financial system.

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Various irregularities leading to Diphu Treasury fiasco detected

DIPHU, May 9 - Various irregularities have come to the fore in the Diphu Treasury fiasco of March 31, 2019 which took aback thousands of people who were expecting payments to be credited in their accounts but were instead told that there was no sufficient balance left in the Karbi Anglong Autonomous Council�s Personal Ledger Account (PLA). The District Treasury officer-cum-Deputy Commissioner then had to seal the treasury office.

Till today, crores of rupees of government revenue from GST and various other deposits (around Rs 3 crore) have not been deposited in the government coffers, crores of rupees meant as payment to contractors has remained due, supplementary funds sanctioned by the Assam government (State Owned Priority Development) has got reverted as it could not be disbursed within the time frame � the only saving grace being that the authority cleared maximum salary and pension bills from within the mess.

A preliminary inquiry revealed the wilful negligence of a section of the treasury staff, alleged extortion of kickbacks from the beneficiaries by the treasury officer and some employees serving in key positions, committing of some irregularities by flouting all standard operational procedures of the Finance department. But the bizarre fact, which has so far been overlooked, is how could the council authority issue cheques worth more than Rs 100 crore without maintaining sufficient balance in its credited account kept up with the treasury and the Finance Department, Government of Assam.

The first round findings also revealed that various transferred departments� (around 30) functioning under the administrative jurisdiction of the KAAC have to deposit their entire budgetary and other fiscal endowments in the council�s PLA where there is no classification or the category of account deposited i.e., whether it is KAAC�s generated revenue, salary component debited by Assam government, fund for schematic development, centrally-sponsored fund as special package or non-lapsable pool of resources of the Central government and fund from diverse groupings. This hotchpotch or the confused mixture of financial credit has in fact facilitated the commission of financial irregularities by flouting of all financial rules.

The other appalling revelation made in this investigation is that the KAAC authority is maintaining more than nine joint accounts in local branches of various nationalised and private banks based at Diphu. The operational process of these accounts is that it can be operated through the dual signature of two officers who are designated as non-drawing and disbursing officer. One of them is the Principal Secretary of KAAC and the other is a senior Finance and Accounts Officer (FAO).

Interestingly, all accounts were opened without obtaining consensus from the Finance Department of the Assam government. Further, the maximum such accounts are savings in nature instead of current account and the type of fund which are canalized in all these accounts are funds for schematic development; Centrally-sponsored fund as special package or non-lapsable pool of resources, supplementary budgeted amount etc.

The Principal Secretary of KAAC, when asked about the issue, justified the whole procedure, overruling most of the objections of the standard financial norms for operating such joint accounts. He also stated that if the council authority wishes, any officer can operate such savings account without any authorisation from the Finance Department. He also insisted that after drawing of funds from the State or Central government endorsement through the treasury against certain schemes, these can be parked in joint accounts for a prolonged period.

However, he did not mention anything about furnishing of utilisation certificates against unspent fund parked in different joint accounts to the appropriate authority and placing of fresh demand for new sanction of fund for fresh schemes, ongoing schemes or supplementary amounts.

On inquiry, it was learnt that on the day of the financial year ending, around Rs 194 crore of government fund was withdrawn from the PLA of the KAAC and was deposited in various joint accounts. And as a result, the credited amount in the Diphu treasury drastically got reduced (Rs 24,000 was the balance), resulting in compulsory stoppage of bill clearance by the treasury against cheques issued by the council authority worth crores of rupees.

The peculiar software of the Assam Finance Department which doesn�t have auto debit system created another hurdle for the treasury officials in assessing the current credit figure.

Recently, after the upheaval in the treasury, it was learnt from various sources that the council authority reverted around Rs 100 crore from the joint accounts of the PLA for onward crediting to the treasury. This was done to clear various salary and non-salary bills of both the transferred departments and inherited departments of the KAAC whose maximum fiscal demands are met up from the funds provided by the Central and State governments.

Paying no attention to the standard process of making payment through e-bills and online payments, the KAAC has made the draw and disbursement process of the authority most vulnerable and porous and this has generated the leeway for committing fiscal irregularities.

The Diphu Treasury fiasco should act as an eye opener for both the KAAC and the Assam Finance Department to plug the existing loopholes and establish an error free financial system.