Defence ministry rapped by CAG

Government Auditor CAG rapped the Defence Ministry for "persistent large savings" in budgetary allocations and their "surrendering".

Last Updated: Mar 18, 2011, 18:03 PM IST

New Delhi: Government Auditor CAG on Friday
rapped the Defence Ministry for "persistent large savings" in
budgetary allocations and their "surrendering", saying this
indicated "poor planning" for procurement projects and "lack
of an internal control system".

In its latest report, the Comptroller and Auditor
General (CAG) also pulled up the Ministry for excess
expenditure under certain heads without budgetary provisions
for them.

"The persistent trend of large savings is indicative
of over-estimation of requirement of funds or poor planning
for procurement and projects, poor contract management, lack
of an internal control system and failure to take effective
remedial measures to avoid persistent savings," it said.

It also observed that between 2007-10, the Defence
Services surrendered Rs 5,638 crore under five grants, which
included savings of Rs 5,309.49 crore.

Noting that savings are required to be surrendered as
soon as they are foreseen without waiting for the year to end
and they should not be used for future use, the CAG said,
"Besides, Rs 5,638 crore was surrendered on the last day of
the financial year which was contrary to the rules."

Pointing towards a particular grant to the Army, the
report said, "There was an overall excess of Rs 2,464 crore
but despite that excess expenditure, the Ministry surrendered
an amount of Rs 838 crore on March 2010, which reflects
deficient budgetary control mechanism in the Ministry."

The report also observed that the Ministry had
"failed" to give any justification to how authorities had
allowed excess expenditure without budget provision.

"Ministry failed to arrest the trend of persistent
excesses beyond budget provisions... this shows poor exchequer
control," it added.

PTI