Bengaluru: An audit report has revealed that there were huge irregularities in the financial management of BBMP for the year 2022-23, and Rs 2291.74 crores were misused.

A 367-page audit report has been prepared for the financial year 2022-23 of the corporation, in which irregularities in the general administration, works, health, revenue and education departments have been exposed. A total of Rs 2291.74 crores were misused, of which an objection has been filed for an amount of Rs 1820.61 crores. Rs 471.12 crores have been recommended for recovery from the concerned officers and contractors.

The report mentions the financial losses caused by illegal payments, irresponsibility of officers and staff and negligence of duty in these five departments, along with statistics and descriptive factors.

The financially distressed Corporation has not been able to pay the bills to the contractors who have carried out the works and has arrears of crores of rupees. The income collected from property tax and other sources is sufficient only for daily administration. The corporation presents an annual budget of more than 11 thousand crores. According to the audit report, there are allegations that 10 percent of the budget amount is going to the corrupt.

The BBMP’s financial transactions are audited every year and a report is being given on the losses incurred by the corporation. Accordingly, effective action has not been taken in 2023-24 for the outstanding objections and recovery claims in the annual audit reports from 1964-65 to 2022-23. Thus, the audit report has objected that a total of Rs 13961.92 crore objection amount and Rs 4116.39 crore recovery have remained pending till now.

Due to the shortcomings in the outstanding claims and dues mentioned in the audit reports, dues cannot be recovered if the defaulting officer or staff retires or dies. This will cause loss to the corporation. Therefore, it is recommended that strict action should be taken for the recovery of dues.

BBMP is not maintaining accounts as per Rule 149 of the KMC Act-1976. The receipt of income and expenditure, payment accounts, cash flow are not reconciled with the bank accounts, so these do not match. Internal control over financial transactions is not adequate. Financial rules are not followed in payments. The auditors mentioned in the report that the transparency rule in public procurement has been violated in many cases.

As per Section 166 of the KMC Act-1976, the Chief Commissioner should prepare the budget and submit it to the Tax and Finance Standing Committee on or before January 15. Then it should be tabled in the council meeting before the first day of February and approved. The budget should be prepared three weeks before the start of the financial year and the approval process should be completed before the start of the financial year. The report states that it is illegal to incur expenses after January 1 without getting approval for the budget.

There is a shortfall in the income when compared to the income expected in the budget and the actual accounts. It has been suggested that new works are being implemented without giving priority to the payment of ongoing works and pending bills without considering the financial condition of the corporation, and that the expected cost is increasing due to the formulation of a new plan.

‘Old stone, new bill’ has become a masterstroke for the corporation officials. Thus, in the year 2022-23, the auditors, who have objected to Rs 816.87 crore in the works department alone, have recommended the recovery of Rs 69.17 crore. As per the rules, the work should be carried out by negotiating the price with the contractor who has mentioned the lowest tender premium.

However, this procedure was not followed and the money order of the tender difference amount was not scanned and uploaded on the e-procurement portal and the work was carried out by giving work orders to the L-2 contractor after rejecting the L-1 contractor. The bill has also been paid. Thus, objections have been lodged for Rs 23.59 crore.

Furthermore, the auditors have found that the work was not awarded to the L-1 contractor and the work order was given to the bidder who had quoted an additional price.

Illegal payment of Rs 56.44 crore

The Karnataka Public Procurement Transparency Act 1999 and Rules 2000 were violated in other cases including implementation of works in the general administration, works, health department, purchase of materials. The report mentions that Rs 56.44 crore was paid to the contractors illegally. The old tender was continued without inviting tenders under the Minimum Wages Act, continuation even after the contract period expired, implementation of work by accepting a single tender, purchase directly on the basis of the price list without inviting tenders, and direct work order was given to the contractors without inviting tenders.