Financial mismanagement due to deficiencies in rules

GUWAHATI, Dec 8 – Serious deficiencies in the North Cachar Hills District Fund Rules (DFR) is one of the main reasons for total financial mismanagement in the NC Hills Autonomous Council and over the years, no serious effort has been made by the State and Central governments to remove those. There is need for amending the Sixth Schedule of the Constitution to prepare a proper DFR.

The special audit of the NC Hills Autonomous Council, carried out by the Office of the Accountant General (AG), pointed out the deficiencies of the DFR. As per the provisions of the Sixth Schedule, the financial affairs of the Council should be regulated by the DFR as approved by the Governor. The draft fund rules were proposed to be amended several times but it could not be done as the Sixth Schedule was not amended. However, it may be mentioned here that the Government of India has now proposed to amend the Sixth Schedule to make the financial rules more stringent.

The report of the special audit said that several deficiencies in the DFR remained unattended for years. There should be detailed procedure showing allotment of fund, exercising control over expenditure as per Budget, opening of bank accounts, system of placing of requirement of funds, etc., should have been introduced. The report pointed out that other inadequacies like lack of procedures to be followed and maintenance of records in case of re-appropriation of funds from one scheme to another, lack of proper procedures for making adjustments of advances, lack of accountability of withdrawal of money, etc., should de dealt with immediately.

The AG said that the DFR is inadequate on several issues in maintaining strict financial discipline. Paragraph 7 of the Sixth Schedule provides for laying of audit report to the Council but the DFR is silent about the procedure to be followed for discussion, remedial measures and submission of action taken reports. The time frame within which the annual accounts of the Council should be submitted for audit is not mentioned in the DFR. The AG also pointed out several other shortcomings of the DFR, which need to be addressed immediately.

The report said that the Council is required to submit its accounts in the forms prescribed by the Comptroller and Auditor General of India and subject the same to be audited. The CAG reports should be placed in the Council. But the Council is irregular in preparation of the accounts and as such the annual accounts only up to the year 2005-06 could be audited and submitted to the Governor of Assam. Audit reports only up to the year 2001-02 were laid before the Council, the report added.