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Ignoring CAG warning proved expensive
July, 28th 2010

The Comptroller and Auditor General (CAG) had warned the Bihar government at least four times about the growing non-adjusted contingent bills before it snowballed into allegations of financial irregularity to the tune of Rs 13,230 crore a few weeks ago.

The chaos in the Bihar Assembly, demanding the resignation of Chief Minister Nitish Kumar and a pending case in Patna High Court over financial irregularities pointed out by CAG in various government-sponsored development schemes undertaken during the 2002-08 could have been avoided if the government had taken these warnings seriously, senior CAG officials said.

CAG has been, over several years, bringing to the notice of the state government, the inordinate delay in adjusting the funds withdrawn on abstract contingent bills under auditable account heads.

According to officials, CAGs audit reports for 2004-05 and 2006-07 had revealed that of the total withdrawal of Rs 1,566.47 crore from the state exchequer, bills for only Rs 2.39 crore were submitted, leaving behind unaccounted expenses of Rs 1,564.08 crore between 2000 and 2005.

The matter was highlighted once again in the audit report of 2008, where the pending amount that needed proper bills rose to Rs 11,412.54 crore.

Officials said CAG Vinod Rai had, in February 2009, written to Chief Minister Nitish Kumar, officially intimating the increasing size of the unbilled amount.

In the absence of any action from the state government, CAG again brought this matter personally to the chief minister in February.

It was followed up with a letter to the state that the outstanding amount had increased to Rs 13,230 crore as on March 31, 2009, a senior CAG official said.

While delay in the accounting of such payments was common in all states, it was the staggering size of the outstanding amount that put the Bihar government in trouble, they added.

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