VIJAYAWADA: The Andhra Pradesh government violated treasury codes and transacted a gross amount of Rs 48,284.31 crore through ‘Special Bills’, the Comptroller and Auditor General (CAG) observed, while pointing out several lapses in managing the State’s finances. In its report for the financial year 2020-21 tabled in the State Assembly on Friday, the CAG flagged the off-budget borrowings of over Rs 38,000 crore, which was not disclosed in the State Budget.
Listing the basis for a ‘qualified opinion’, the CAG said all financial transactions of the State were initiated, approved, paid and recorded through the Comprehensive Financial Management System (CFMS), designed as a single source of truth. The APCFSS is a company under the Companies Act, 2013 that operates the CFMS.
The CAG found that the 54,092 adjustment transactions rendered from the CFMS during 2020-21, were not processed through the treasuries. Instead they were processed through the back-end. “They were processed through Special Bills in the CFMS, which is not an authorised type of bill as per the treasury code,’’ the CAG observed.
The gross amount transacted through Special Bills was more than Rs 48,000 crore, which included adjustments between the Consolidated Fund of the State (CFS) and Public Account. “The payments which led to outgo from the CFS (Rs 13,071.08 crore) accounted for 7.5 per cent of the total payments (Rs 1,73,367 crore) made from the CFS, while adjustments in the Public Account (Rs 35,213.23 crore) accounted for 13.12 per cent of the payments from the Public Account (Rs 2,66,327 crore).
When the Principal Auditor General questioned the same, the Principal Secretary (Finance) ratified the back-end transactions made at the APCFSS.“Further, the Finance Department, in compliance to the audit observations and as a corrective measure, issued a GO in October-2021, entrusting the activities which were being managed by APCFSS to the director of treasury and accounts, pay and accounts officer and director of works and accounts, which confirms the contention of the audit that the operation of Special Bills was unauthorised,’’ the CAG remarked.
“These 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 IT controls. 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,’’ the CAG observed.
Off-budget borrowings not disclosed
The 15th Finance Commission recommended that in the interest of transparency, States should make full disclosure of off-budget borrowings. The government mobilised Rs 38,312.70 crore through seven State-owned public sector undertakings during 2020-21. The off-budget borrowings from various banks, by 2021 March-end, stood at Rs 86,259.82 crore, for which principal and/or interest would be serviced out of the State Budget. “This, however, was not disclosed in the State Budget,’’ the CAG pointed out.
The total outstanding guarantees, as on March 31, 2021, amounted to Rs 1,16,330 crore.
GSDP details under wraps
Referring to the Gross State Domestic Product (GSDP) of the State for 2020-21, the report said it stands at Rs 9,86,611 crore as per the Socio-Economic Survey, 2020-21. “The status of target and achievement is required to be disclosed by the State government in the Legislature at the time of presentation of the Budget for 2020-21 as stipulated by the Fiscal Responsibility and Budget Management (FRBM) Act and Rules,’’ the CAG said, adding that no disclosure was made on significant changes in the accounting standards, policies and practices, affecting, or likely to affect, the compliance of the fiscal indicators.
As details such as proper sanction by the competent authority, budgetary provision, nature of payment and others were unavailable, the CAG observed that the actual expenditure of the State Government to the extent of Rs 41,043.02 crore (except for the cash outgo of Rs 224.22 crore) was not susceptible to verification by the Accountant General. “Therefore, its impact on the fiscal parameters can not be assessed,’’ it said.
'Over Rs 72,000 cr transferred to PD accounts'
On the transfer of funds to personal deposit accounts, the CAG found out that an amount of Rs 72,744.65 crore was transferred from the Consolidated Fund of the State to these PD accounts and an amount of Rs 23,929.58 crore was credited through challans during the auditing period. “This includes Rs 4,239.40 crore transferred in March 2021 from the Consolidated Fund. This is 5.83 per cent of the total credit to PD Accounts from the Consolidated Fund during the year,’’ the report said, adding Rs 37.31 crore was transferred on the last working day of March 2021.
Other findings
The State Goods and Services Tax (SGST) collection for 2020-21 was Rs 18,871.34 crore compared to Rs 20,227.04 crore in 2019-20, registering a decrease of Rs 1,355.70 crore. This included Advance Apportionment of IGST to the tune of Rs 1,316.33 crore.