The Comptroller and Auditor General of India (CAG), which conducted performance audit of scholarship schemes for SC, ST, BC and minority students for four years (2008-09 to 2011-12), has found numerous irregularities, particularly in the implementation of minority scholarships. The report of the CAG on general and social sector for the year ended March 2012 , tabled in the state legislature on June 21, comes down heavily on the minorities welfare department with critical observations.
Allocated funds for both pre- and post-matric scholarships were not utilized to the full extent in any of the four years under review. But the minorities welfare department had shown expenditure of Rs 942 crore vis-à-vis allocation of Rs 886 crore for post-matric scholarships. “The excess amount shown was on account of utilization of funds allocated much earlier, which were not spent during the concerned years. There has been enormous blocking up of funds meant for scholarship schemes by the AP State Minorities Finance Corporation (APSMFC),” the CAG noted.
The CAG noticed that huge funds were lying unutilized with APSMFC, AP State Christian (Minority) Finance Corporation (APSCMFC) and Urdu Academy of Andhra Pradesh (UAAP). The government released funds to these organizations, which in turn, released funds to the district level officials for disbursement of scholarship through online scholarship management system (OSMS). None of these organizations wassubmitting proposals to the government regarding their budgetary requirements.
Therefore, budget was allocated and funds were released by the government without any correlation between the requirements and the capacity of these entities to absorb the funds. Consequently, as of March 2012, Rs 99.60 crore pertaining to various scholarship schemes funded by the Centre and the state government had accumulated with these organizations, including Rs 80.70 crore with APSMFC, Rs 10.44 crore with APSCMFC and Rs 8.46 crore with UAAP. Further, funds amounting to Rs 45.51 crore (out of Rs 99.60 crore) were held in fixed deposits by APSMFC instead of utilizing for the purpose for which these were sanctioned.
The government, which confirming the audit observations, stated that the amounts were lying with the banks, as these were to be paid to the beneficiaries by APSMFC, only after verification of the genuineness of the claims, which is a time-consuming process. The APSMFC stated that the issue regarding misappropriation of scholarship funds kept in the fixed deposits was pending with the CB-CID.
“Considering the huge quantum of funds blocked with these corporations, especially the APSMFC, apart from negating the objective of providing scholarship within the prescribed time to eligible students of minority communities, and the fact that accounts of APSMFC are in arrears, the scope for fraud and misappropriation of these funds cannot be ruled out,” the CAG observed and asked the Government to closely monitor this issue for necessary remedial action.
The CAG also found diversion of PMS funds by APSMFC. In minorities welfare department, all pre- and post-matric scholarships and RTF (reimbursement of tuition fees) funds are being routed through APSMFC for disbursement through officials at the district level. Administrative expenses are to be met from the managerial subsidy released by the government for this specific purpose. Audit scrutiny, however, revealed that the PMS funds of Rs 17.47 crore were diverted for other purposed like advertisements, administrative and other contingencies during the period 2008-12 in violation of the guidelines.
In fact, an amount of Rs 3.90 crore was released by the government towards managerial subsidy during 2009-09 to 2011-12 and therefore, utilization of scholarship amount for this purpose was irregular. The government admitted that the corporation has been utilizing the scholarship funds for administrative expenses at the rate of one percent for prematric and two percent each for post-matric scholarship and fees reimbursement schemes.
In view of these serious irregularities, the CAG recommended to the government to take immediate steps to carry out a survey of all eligible students/institutions and update the database with valid details, including mail IDs and bank accounts.
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