The Comptroller and Auditor-General of India, in its report to the Assam government for the 2008-2009 fiscal, has said it is yet to receive replies from the public enterprises department on its audit observations and inspection reports since 1997-98.

There have been no replies from the public enterprises department of the state government on the audit observations for a long time, Mukesh P. Singh, the principal accountant general (audit), Assam, told reporters here today.

The report, placed in the current Assembly session, states there are 309 outstanding inspection reports since 1997-98.

According to the provisions of Regulations on Audit and Accounts 2007, all inspection reports are required to be replied to, along with notes on remedial action taken/proposed to be taken, within four weeks of their receipt.

No effective action has been taken to take matters to their logical end, that is, to recover money from the concerned parties. As a result, these public sector undertakings have so far lost the opportunity to recover money which could have augmented their finances, the report states.

The report recommended that the government should ensure that a procedure exists for action against officials who fail to send replies to inspection reports along with action taken notes on the recommendations of the reports of the committee on public undertakings.

It stated that action should be taken to recover loss/outstanding advance/overpayment within the prescribed period and to ensure that the system of responding to audit observations is revamped.

The CAG report on state finances, which was also placed in the Assembly, is the first of its kind. It observed that there was no single agency monitoring the use of funds transferred directly from the Centre to the state as these funds remain outside the state budget.

The Centre has been transferring a sizeable quantum of funds directly to the state implementing agencies for various schemes. In 2008-09, it transferred Rs 2,866 crore to the agencies.

The CAG report stated that as these funds were not routed through the state budget, the states receipts, expenditure and other fiscal parameters derived from them were underestimated.

On the implementation of urban water supply projects, the CAG report said this facility was not provided to 72 of the 87 towns and the targeted population of 5.52 lakh was not covered by March 2009 because of poor planning and inadequate monitoring of execution of schemes.