Andhra flouts Constitution, abuses norms on public money: CAG

(Representative Image)

The Comptroller and Auditor General of India has found that the YS Jagan Mohan Reddy-led Andhra Pradesh government has resorted to the Constitutional violation and disbursed public funds of over Rs one lakh crore without legislative authorisation during 2020-21.

Marking it a rare instance in the history of auditing of public finances in India, the CAG expressed its inability to certify nearly a third of Andhra’s budget funds that were spent through ‘special bills’ not authorised as per the Treasury Code.

The CAG pointed out that Andhra transacted Rs 48,284 crore through the special bills and that the finance department of Andhra failed to provide information to support the transactions under question.

On being questioned by the CAG, the principal secretary (finance) of Andhra “ratified the back-end transactions made at the APCFSS (Andhra Pradesh Centre for Financial Management Systems and Services) which was not within his powers as the procedure for carrying out these adjustment transactions are laid down in the treasury code.”

In its report on the state finances for the fiscal year ended March 2021 presented to the legislature on March 25, the CAG observed that the Reddy government had resorted to excess disbursements of Rs 1.1 lakh crore without legislative authorisation.

Girish Chandra Murmu, the Comptroller and Auditor General of India, emphasised that the acts of the Andhra government “vitiates the system of budgetary and financial control and encourages financial indiscipline in management of public resources.”

In a report signed on March 23, Murmu drew attention to a number of significant issues pertaining to the accuracy, transparency, and completeness of the accounts of the Andhra government and legislative financial control over public finances.

“There was an excess disbursement of Rs 1,10,509.12 crore over the authorisation made by the State Legislature under five grants and three appropriations during the financial year 2020-21,” pointed out the CAG.

“This is in violation of Articles 204 and 205 of the Constitution, which provides that no money shall be withdrawn from the Consolidated Fund except under appropriation made by Law by the State Legislature.”

Submitting the financial, compliance, and performance audit reports on the Andhra Pradesh government for the year ended March 2021, Murmu said, “material accounting entries were effected through the back-end of the CFMS without any valid rationale and necessary documentation, bypassing the treasury system and were in violation of the Treasury Code and the IT controls.”

According to the CAG, “These irregular accounting entries are fraught with the risk of inflating the Government expenditure besides possible misappropriation as these were done in the back end of the CFMS. Therefore, my opinion of the true and fair nature of accounts is subject to the above violations.”

Further, the CAG said, “Incurring expenditure on ahead of account for which no provision has been made either in original or supplementary provision is a violation of Article 204(3) of Constitution of India.”

Off-budget borrowings not disclosed:

Drawing attention to the off-budget borrowings resorted to by the YSR Congress-led government, the CAG said the government did not disclose mobilising Rs 38,312 crore through seven state public sector undertakings during 2020-21. In all, the off-budget borrowings of Andhra from various banks stood at Rs 86,259 crore by March 2021 for which “principal and/or interest would be serviced out of the State Budget.”