Delhi's private schools had complained that they were reeling under the burden of having to pay teachers higher salaries recommended by the 6th Pay Commission. A report by the Comptroller and Auditor General (CAG), however, said they used the Pay Commission as an alibi to fatten themselves.
In a damning indictment, the auditor held that 25 elite private schools passed on the burden of implementing the recommendations of the 6th Pay Commission to parents, without drawing on the cash reserves they had accumulated by not implementing the staff salaries prescribed by the government.
The money collected from parents on the ground of the Pay Commission's burden was transferred to their societies and trusts. Schools which claimed to be making losses didn't hesitate to acquire expensive cars, the report said.
The indictment gets more serious as CAG found that schools paid salaries to fictitious employees and unauthorizedly collected money under various heads.
The CAG report, finalized last month, also found that while some contributed to the provident fund of fewer employees (National Victor School), others such as Amity International made contribution for more employees than those actually working. Sixth Pay Commission arrears were paid to staff not enrolled as employees.
Also, in clear violation of Delhi School Education Act, many of these schools did not offer 20% reservation to children from Economically Weaker Sections. CAG has also severely criticized the Directorate of Education of Delhi government for failing to monitor these lapses.
CAG had audited the accounts of 25 schools -- Mount Carmel, ASN School, Sachdeva, Mother Divine, Sadhu Vaswani, Ryan International, St Mary, Birla Vidya Niketan, Air Force Bal Bharti, GD Salwan, National Victor, Amity International, DPS-RK Puram, GD Goenka, Maharaja Agrasen, Convent of Jesus and Mary, JD Tytler, Sardar Patel, Vasant Valley, Ramjas Public School, St Xavier's, Frank Anthony, Presentation Convent, Modern School and Summer Fields School.
As for illegal transfer of money, CAG pointed out nine cases. Sardar Patel paid Rs 2.33 crore as usage charge to Gujarat Education Society for using its assets, Birla Vidya Niketan (BVN) paid Rs 5.23 crore as rent to Birla Academy of Art and Culture and Rs 2.5 crore on repair and maintenance.
CAG said it did not agree with the reply by BVN that the school paid very less user charges compared to the market rent and that the depreciation was borne by the society. CAG said the school's claim was not supported by documents and, moreover, the building was 27 years old and supposed to be fully depreciated.
GD Goenka gave Rs 4.10 crore as interest-free loan to the parent society even as the school had an outstanding liability of Rs 6.33 crore as bank loans. CAG dismissed the school's explanation, making it clear that "no amount could be transferred to the society from the school funds, more so when the school itself was in need of funds and depended on interest bearing loans from banks".
Sadhu Vaswani International School for Girls (SVISG) made a similar transfer of Rs 36 lakh to Sadhu Vaswani Mission as rent and Rs 33.81 lakh as depreciation charges. It told CAG that funds were needed to construct an auditorium and pre-primary school, a recovery of Rs 1 lakh per month was effected in the books and there was no outflow of funds. But CAG did not accept the contention and said Rs 36 lakh was routed through income and expenditure account. Similar "irregular transfers" were found in the case of Frank Anthony Public School, Summer Fields, GD Salwan Public School and Mount Carmel.
CAG also said that five among the 25 -- GD Goenka, Sachdeva, Vasant Valley, Mount Carmel and CJM -- collected excess fee ranging from Rs 4.38 crore to Rs 20.41 crore. CAG, while dismissing the reply of schools, pointed out that in case of ASN School, maintenance expenditure increased nine times from Rs 15.91 lakh in 2006-07 to Rs 1.40 crore in 2008-09 without any change in the built-up area.
Excess collection of earmarked levies was pointed out by CAG in case of DPS, RK Puram (Rs 86.23 lakh), Ramjas Public School (Rs 68.58 lakh), JD Tytler School (Rs 76.55 lakh) and Presentation Convent (Rs 1.95 crore). CAG also pointed out that despite running in loss, schools like Vasant Valley and ASN spent money on expensive cars -- BMW, Honda Accord, Innova and Honda City -- from the school fund.
CAG pointed out that National Victor School made arrear payment of Rs 8.32 lakh for 6th Pay Commission to 65 former employees but their names did not exist in the list of resignations. Similarly, Rs 4.8 lakh was paid to 13 employees whose service record was not produced.
As for reservation to EWS, CAG said five schools -- St Xavier's, Frank Anthony, Presentation Convent, Modern School and Summer Fields -- did not give any reservation to poor children. Reservation in schools like GD Goenka, CJM, JD Tytler, Sardar Patel, Vasant Valley and Ramjas ranged between 6.62% to 1.33%. None of the 25 fulfilled the obligation, CAG said.