CAG faults govt

• Several lacunae including financial mismanagement
• State's fiscal liability touches Rs 1,53,849 cr
• Education outlay is less than other states
• Irrigation Projects cost overrun put at Rs 20,142 cr

Hyderabad: "Financial management, budgetary process and financial reporting of Andhra Pradesh government are not up to the mark. There were several lacunae in budgetary process and errors in budgeting, several misclassifications continued to exist and lump sum provisions were made without clarity of purpose", observed Comptroller and Auditor General of India (CAG) in its report on state finances tabled in the State Legislative Assembly on Tuesday. Principal Accountant General of Andhra Pradesh, Vani Sriram, who placed the report for the year ending March 2012, faulted the financial discipline of different departments and their compliance of the accounting norms. She said that the expenditure of some departments was over and above the allocations made in the budget. "Financial rules have been flouted by several departments on its own and drawn funds more than the actual requirement". The budget formulation exercise itself was the cause for raising serious questions. There was a significant increase in the spending without a corresponding rise in the revenues. The fiscal liability till March 2012 is almost equal to the budget outlay for 2013-14. The loans of the government at the end of 2011-12 rose by Rs 15,608 crores (12 per cent) over the previous year of Rs 1,34,905 crores and it stood at 1.61 times of revenue receipts. Total fiscal liabilities as defined in Fiscal Responsibility and Budget Management Act worked out to Rs 1,53,849 crores, which is 22.67 per cent of Gross State Domestic Product (GSDP). A On financial reporting of the state accounts, the picture was not a rosy one, because many of the government departments did not comply with the applicable rules and regulations.A The implementation of socio-economic developmental schemes is not according to the guidelines.

Parking of funds "Irregular and unauthorized parking of funds in various deposits outside government accounts, non-adjustment of advances drawn on abstract contingent (AC) bills with the relevant detailed contingent (DC) bills for prolong periods", CAG said, adding that adequate attention was not given by the government to ensure that relevant vouchers and missing documents. "A total of one lakh personal deposit (PD) accounts have not operated properly and these accounts locked Rs 23,483 crores", CAG revealed. The picture of irrigation projects is worrying one, CAG said. Cost overrun worth of Rs 20,142 crores was noticed in 16 of the 72 irrigation projects taken up mainly under the Jalayagnam. A CAG said that the report is structured in three chapters � finance accounts, appropriation accounts and government compliance with various reporting requirements and financial rules. Firstly, the condition of state-owned corporations is too worst. The accumulated losses of eleven corporations went up to Rs 5,979 crores, with A P State Housing Corporation and APSRTC which are leading the list, accounting for Rs 3,554 crores and Rs 1984 crores respectively. The loan recovery of these corporations is abysmal and the gap between disbursement of Rs 4983 crores and recovery of Rs 164 crores is widening. CAG suggested to the government to pursue for repayment of both principal and interest in a time bound manner. The scene of pension liabilities is also a cause of worry. The government's progressive liability with regard to its share in the Contributory Provident Fund scheme was Rs 894 crores by March, 2012 and it was not transferred to the Fund Manager, as required by the Pension Fund Regulatory Authority. Referring the funds earmarked for specific social sector activities, CAG said that the allocation is not satisfactory. "State outlay on education in particular, was far behind that of the general category states. Andhra Pradesh spent 13.8 per cent budget funds on education when compared of 17.18 percent by other states", CAG said. So far as revenue receipts concerned, It witnessed 15.5 per cent growth during 2011-12 of Rs 12,558 crores over the previous year. This was done because of growth in own tax and non tax revenue by Rs 9,119 crores and revenue expenditure increased by 15.3 per cent of Rs 11, 881 crores over the previous year. Increase in public expenditure on socio-economic developmental works is also another concern to the CAG. Blocking of funds on incomplete projects and works impinge negatively on quality of expenditure. The total amount of funds expended on 228 projects was Rs 49,516 crores against Rs 46,330 crores of 188 works.