The finance division of the Defence Ministry has come under the scanner of the Comptroller and Auditor General (CAG) over irregularities in delegating financial powers to the Defence Research and Development Organisation (DRDO) to overcome delays in procurement of equipment for its laboratories.
In a letter to Defence Secretary Shashi Kant Sharma, the Director General of Audit for defence services has questioned the entire process. The revised system will add more powers to the Director General of DRDO, instead of decentralising it to the lab level.
The decision had also taken against the wishes of Defence Minister A K Antony, who wanted decentralisation at all levels to strengthen the system.
The DG audit has also accused the then-Secretary (Defence Finance) for not consulting the issue with the CAG and the Defence Secretary.
While deliberating the proposal in May, 2010, a Defence Secretary note had clearly stated that the proposal for the financial decentralisation and empowerment at various levels will be consulted with the CAG.
The DG audit letter and notes accessed by Express reveal that Defence Minister was misled and his approval was obtained without placing the full facts on record. The file, which was later approved by the Defence Minister, was not routed through Defence Secretary and the CAG as envisaged in the proposal.
The DG Audit (Defence Services), in his letter in May 2012, has raised serious concerns over the entire process of granting approval bypassing the key stakeholders.
“The note was put up on May 31, 2010 and signed by the Secretary (Defence Finance) the same day, the day on which she retired. The file was not routed through the Defence Secretary even though the proposal for the constitution of the task force was routed through him,” letter said.
With the newly-achieved financial might, the Director General of DRDO can sanction projects costing from `5 crore to `50 crore.
The CAG is of the view that the revised delegation did not meet the objectives of decentralisation to the full extent as desired by the Defence Minister.
Earlier in May, 2009, the Defence Minister had observed that the clear delegation of financial powers required at all levels in the Ministry of Defence - from the level of Scientific Advisor to the Raksha Mantri and further to the laboratories with the appropriate financial checks and balances.
But instead of the delegation of the powers to the level of laboratories, the financial powers were concentrated at the DRDO headquarters.
The letter suggests that while seeking Defence Minister’s approval, secretary (R&D) and Secretary (Defence Finance) did not inform the matter to the Defence Secretary.
Based on Defence Minister’s approval, government sanction to the revised delegation of financial powers in DRDO was issued on July 31, 2010.