VIJAYAWADA: The Comptroller and Auditor General of India (CAG) has delivered a sharp indictment of Andhra Pradesh’s financial management in its latest audit of the State’s Finance Accounts for 2024–25, tabled in the Assembly on Friday.
The report highlights serious lapses in disclosure, misclassification of expenditure, and irregular fund management, raising concerns over transparency and accountability in the State’s fiscal practices.
At the centre of the findings are off-budget borrowings (OBBs), which the State government failed to disclose in itsBudget. While Andhra Pradesh informed the Union Finance Ministry that no such liabilities were availed during the year, the CAG found otherwise. By March 31, 2025, outstanding OBBs stood at Rs 27,241.99 crore. Further scrutiny of vouchers revealed that Rs 7,240.57 crore had been budgeted and expended towards assistance and grants linked to OBBs. The Centre has sought confirmation from the State on these discrepancies.
The audit also uncovered widespread misclassification of expenditure amounting to Rs 2,677.64 crore. This included Rs 1,981.54 crore towards High Tension Current Consumption charges wrongly booked under Minor Works, and Rs 695.66 crore misclassified under the Capital Section, covering annuity payments under the Land Pooling Scheme and grants-in-aid.
Conversely, Rs 28.72 crore spent on office hardware and furniture was recorded under Revenue instead of Capital. Taken together, these errors understated revenue expenditure by Rs 2,648.92 crore.
Beyond expenditure misclassification, the CAG flagged irregularities in fund management. Out of 1,230 Abstract Contingent (AC) bills worth Rs 919.65 crore drawn during the year, 202 bills amounting to Rs 527.70 crore remained unadjusted as of March 31, 2025.
Interest shortfalls were also noted in several funds, including Rs 121.56 crore under the Defined Contribution Pension Scheme, Rs 295.05 crore under the State Disaster Response Fund, and Rs 395.23 crore under the Zilla Parishad Provident Fund.
The report further pointed to lapses in the transfer of Funds to the Single Nodal Agency. Detailed vouchers and supporting documents of actual expenditure were not received by the Accountant General’s office from Single Nodal Agencies (SNAs). As of March 31, 2025, Rs 1,821.65 crore remained unspent in SNA bank accounts, with the State government admitting that it relied solely on the PFMS portal for details of balances.
Irregularities were also observed in loan disbursements. Fresh loans worth Rs 5,005.31 crore were sanctioned without incorporating essential terms and conditions, as required under Article 221 of the Andhra Pradesh Financial Code.
In some cases, loans were disbursed directly to third parties instead of sanctioned borrowers, while institutional loans amounting to Rs 1,580.78 crore were routed through Personal Deposit accounts, overstating liabilities under the Public Account.
The CAG also highlighted misclassification of receipts. In March 2025, the AP State Beverages Corporation Limited remitted Rs 862 crore under Tax Revenue for the NTR Bharosa Pension Scheme, though the amount should have been booked as expenditure. Similarly, cess collections under the Building and Other Construction Workers Welfare Fund were not fully transferred, overstating the State’s cash balance by Rs 110.69 crore.