Monday, January 27, 2020

Financial autonomy still a distant dream for LAHDC of Ladakh, says Audit

Syed Junaid Hashmi

JAMMU, Jan 4: Budget allotments are not transferred to Ladakh Autonomous Hill Development Council (LADHDC) timely and the expenditure is met from other accounts and later recouped.

Despite having given autonomous status to LAHDC, no government has given the financial autonomy that the council richly deserves after having got the autonomous status. According to the review of treasuries, Ladakh Autonomous Hill Development Council being an autonomous body is required to maintain receipt and payment accounts on an accrual basis instead of the cash-based government Accounting System. Ideally, they are supposed to maintain accounts separate from the consolidated fund of the State i.e. in Bank account. However, the council is maintaining its funds within the state government account under a deposit head, deposits of local funds.

Expenditure of the departments falling under the Ladakh Autonomous Hill Development Council is met from those funds against the budget provisions, says audit report. It maintains that transactions from this head are made through treasuries and these treasuries are given budget allotment by Ladakh affairs Department out of capital outlay on special and backward areas.

Audit has recommended that before making payment on behalf of Drawing and Disbursing Officers, treasury officer shall ensure that adequate funds are available in the particular head of account. This was because budgeted allotment of funds was not being transferred to Ladakh Autonomous Hill Development Council by Ladakh Affairs department of state government and hence, the council was facing serious financial issues.

Due to this, the expenditure of Ladakh Autonomous Hill Development Council had to be met from other heads of account and later recouped. Audit has called it improper budgetary management by the Ladakh Affairs Department. Audit said that this creates problems in compilations of accounts as corrective adjustments have to be made at the close of the year leaving possibility of error. Audit recommended that the budget allotment of funds needs to be ensured in April each year to Ladakh Autonomous Hill Development Council by Ladakh Affairs Department.

Apart from goof-up in the accounts of the Ladakh Autonomous Hill Development Council (LAHDC), another glaring discrepancy pointed out by audit is improper accounting of stamps. Audit has said that expenses on sale of stamps have not been shown separately. Audit has pointed out that expenses on sale of stamps like commission to vendors and discount allowed on the Sale of Stamps is required to be recorded separately under expenses on the sale of stamps below major head stamps and registration.

During the test check of stamp account maintained in the treasuries of Bandipora, Sumbal Sonawari, Tangmarg and Uri, it was noticed that discount on sale of stamps was not recorded separately but instead the sale proceeds were shown as net of discount. It has also been seen that in respect of Sub-Treasury-Zanskar, no discount or commission on account of sale of Stamps was allowed to the stamp vendor by the treasury Officer, which needs to be justified.

Audit has recommended that procedure adopted by treasuries has resulted in understatement of both the receipts and charges on account of sale of stamps. Correct procedure as prescribed under rules needs to be adopted in the treasuries so that correct detail of stamp account could be shown in government account. Audit also found out non-reconciliation of sale of stamps with vendors. In accordance with Rule 3.12, each treasury officer is required to check vendor records to ascertain the balance of unsold stamps left with the vendor before fresh stock is issued to licensed vendors.

It was observed that in most treasuries, no such procedure was followed by treasuries resulting in non-verification of correctness of stock and sale of stamps. Audit strongly recommended that reconciliation needs to be conducted to verify correctness of stock and sale of stamps but who would listen to them? Annual Contingency (AC) bills amounting to Rs. 1192.69 crores comprising of 2015 items drawn were outstanding.

Most of the AC bills were classified as such due to misclassification of Grants-in-Aid payable to various autonomous bodies. Sanctions accorded by controlling authorities on account of Grant-in-aid mention sanctioned amounts as advance drawals and at the same time, require utilization certificate to be obtained from concerned which renders sanction defective. Due to these defective sanctions,  a number of items are classified as AC Bills. Director General (Budget) had promised the audit department that a standardized sanction format shall be issued to the departments concerned for use so that there is no ambiguity on this account


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