Pointing out lapses on part of the MSME Ministry, Government auditor CAG in its Financial Audit report has said that the analysis brought to light the deficiencies in internal monitoring system such as non-conducting of external peer reviews of grantee organisations, non-submission of performance-cum-achievement reports, non-reporting of details to Parliament through annual reports, and more.
CAG Audit Report on Accounts of Union Government for 2013-14 said that the audit could not derive assurance with regard to the quality of the expenditure incurred.
“There is an urgent need to improve the existing monitoring and reporting mechanism of the expenditure on grants-in-aid, which is released by the government of India to various bodies and authorities for delivery of public goods and services,” the CAG said.
According to the detailed CAG report, the Ministry released Rs 222.97 crore under the object head ‘Grants for creation of capital assets’ during the period from 2011-12 to 2013-14. The Ministry had been including a clause in the sanction orders that the assets created out of the grants shall not be disposed of without the approval of the Ministry.
“No centralized records/database viz. name of the grantee, details of assets created including nature of assets created, amount of grants actually utilized for creation of capital assets, ownership of such assets etc. were maintained by the Ministry.
The Ministry in its reply (October 2014) said that the observation of the audit would be taken in account in future.
However, the CAG report strongly said, “the fact remains that no centralized records/database containing all the relevant details was maintained by the Ministry.”
The report also said that no MoU was entered into by the Ministry with the grantee bodies although budgetary support of more than Rs 5 crore per annum was given to each of them.
The analysis also revealed that during 2011-12 to 2013-14, the Ministry released recurring grants-in-aid of Rs 4,507.86 crore to three institutions — Coir Board; National Small Industries Corporation; and Khadi and Village Industries Commission; without taking into account the unspent balance of Rs 438.45 crore already available with these institutions.
It also found non-disclosure of expenditure incurred on loans and advances in the utilisation certificates.
The CAG report said that there has been delay between authorization and release of grants and also the grants have been released by the Ministry without taking into account unspent balance of Rs 438.45 crore.
The CAG report suggested that the Ministry prepared the Budgets without adequate proposals from the grantee bodies and there have been discrepancies in maintenance of Register of Grants.
During the years 2012-13 and 2013-14, grants-in-aid of Rs 1,611.75 crore and Rs 1,454.07 crore were released to Khadi and Village Industries Commission and Coir Board respectively.
However, these organisations while furnishing the utilisation certificates in respect of the grants for the year 2012-13 did not disclose the loans and advances of Rs 1,774.84 crore disbursed on March 31, 2013 out of the grants received.
Moreover, during 2011-12 to 2013-14, grants-in-aid aggregating Rs 559.03 crore were released to KVIC and Coir Board but no MoU was entered into by the Ministry with grantee bodies although budgetary support of over Rs 5 crore per annum was given to each of them.
The CAG report slammed the MSME Ministry by saying, “It was observed that no list containing institutions or organizations along with details of amount and purpose of grants was found to be uploaded on the website of the Ministry of MSME. Non-uploading of such list on the website by the Ministry is in contravention of the provisions of the GFRs.
Further, it could not be ascertained as how the Ministry of MSME was ensuring that there was no duplication in receipt of grants in aid by the grantee for the same purpose,” it added.