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What is interim audit report saying about team Kalmadi
August, 13th 2010

In a nutshell, following are the details of the interim report by the CAG on the CWG irregularities.

Irregular awarding of contract for QBR ( Queen's Baton Relay)
Three bidders made the presentation in Oct 2007 for providing consultancy in delivering the QBR
Pricewaterhouse Coopers : Rs. 1.91 crore
Brilliant Entertainment Networks : Rs. 1.85 crore
Maxxam International: Rs. 8.01 crore

CAG says: The contract was awarded to Maxxam who were the highest bidder. The OC says this is because they have vast experience & a professional staff. But that is irregular since the financial bids were opened only after considering the technical bids where all three firms were found at par by the OC. Giving contract to Maxxam caused an avoidable expenditure of Rs. 6.16 crore

A loss of revenue amounting to Rs. 24.60 crore
Bids invited for international broadcasting rights consultancy. Two companies responded, SMAM and Fast Track Events, London. SMAM proposed flat rate of commission of 12.5% while Fast Track's rate was 15%. In principal, it was agreed to hire Fast Track as consultant only on the basis of suggestions made by President of CGF (Fennell), CEO of CGF (Hooper), Chairman of OC (Kalmadi). No detailed technical evaluation of bidders was carried out.
Audit shows : The difference in rate of commission resulted in a loss of Rs. 5,20 crore and there was also a projected revenue loss of Rs. 19 crore due to deficiencies in services of the consultant.

Loss of interest amounting to Rs. 65.89 lakh
The OC signed agreements with Network Ten Australia and TV New Zealand to give media rights in Australia and New Zealand to those two companies respectively. The agreement was signed in January 2008 and the two companies were meant to pay 10% of the Rights Fee on the signing day (amounting to a total of Rs. 15.94 crore). But the OC didn't raise the invoices till about 5 months later and therefore suffered a loss of interest amounting to Rs. 65.81 lakh

Deficient & ineffective financial & administrative guidelines
OC's financial & administrative guidelines are deficient on many counts which may result in large financial inaccuracy and poor internal control

Irregular appointment of advisors
With reference to the previous point about ineffective administrative guidelines, there is no set criteria for appointment of advisors in terms of norms, qualifications or remuneration. To that end, audit scrutiny shows that Chairman OC appointed 15 Advisors/Personal Advisors/Chief Advisors in a two year span at salaries ranging from Rs. 35000 to Rs. 85000. OC has not replied to audit memo yet

Irregular payment towards residential accommodation
M Jeyachandran is one of the officers named as getting a House Rent Allowance higher than their entitlement. He was entitled to Rs. 22000, but was actually getting Rs. 40,000.

Hiring of vehicles
No set guidelines for hire of vehicles & entitlement of officers. No log books maintained. Non-entitled officers being given vehicles. Wide variation in monthly hire charges. Vehicles hired not always being fully utilised. Rs. 59,82, 660 has been spent in FY 2007-2008 alone for hiring cars

Non-empanelment of hotels and no effort to ensure due economy in this expenditure
OC booked rooms in a variety of hotels ranging from Taj to Ashok without creating a panel of approved hotels or obtaining bulk discounts or scouting for competitive rates. In the audit period there was an expenditure of Rs. 14.51 lakh with no effort to save money or economise

Questions over money spent on the "1000 days to go" campaign
A total of Rs. 28.32 lakh was spent on this promotional activity with money going to JWT Gurgaon and Wizcraft. But the expenditure has been filed under other, unrelated heads such as Opening & Closing Ceremony and Publicity Expense. Why this camouflaging of figures?


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