DIMAPUR, SEP 4 (NPN): The Comptroller and Auditor General of India (CAG) has flagged a series of financial, procedural and implementation lapses across various departments, including unauthorised diversion of scheme funds, excess and fraudulent payments, irregular procurement, unexecuted works and creation of government assets on private land.
The findings are contained in the CAG Report on Social (including Local Governments Audit), Economic, General and Revenue Sectors for the year ended March 31, 2024. The report, which examined performance and compliance in various departments, was placed on the Table of the Nagaland Legislative Assembly on September 3, 2026.
Jal Jeevan Mission: The CAG found that Village Action Plans under the Jal Jeevan Mission were prepared without baseline surveys in the 34 test-checked habitations. Three of five Project Implementing Units also did not use Hydro-Geo-Morphological maps despite planning 40 groundwater-based schemes, contributing to problems such as drying of water pumps.
More seriously, supply of materials was awarded to a single supplier without inviting tenders, resulting in avoidable extra expenditure of Rs.288.12 crore.
The audit also found serious deficiencies in water-quality testing infrastructure. Only 21 of 43 required instruments were available at the State Laboratory, while district laboratories had only eight of the 35 required instruments. No laboratories had been established at the block level.
Against a target of 16,288 Functional Household Tap Connections in 34 test-checked villages, only 8,251 were provided. As a result, 5,851 households were deprived of the intended benefit, while expenditure of Rs.21.57 crore against these households was found to be fictitious as services were not provided.
Integrated Child Development Services: The audit found inadequate infrastructure in all 46 test-checked Anganwadi Centres, with deficiencies in space, kitchens, check-up rooms, outdoor activity areas, storage and sanitation facilities.
Against 619.71 MT of five supplementary nutrition food items shown as supplied to nine CDPOs, only 499.99 MT was actually received, resulting in a shortfall of 119.71 MT valued at Rs.2.45 crore.
The department also spent Rs.4.05 crore on pre-school education kits between 2021 and 2024, but proper records of their receipt and distribution were not maintained.
Physical verification found that the kits were unavailable in 41 of 46 AWCs, or 89 per cent. The Poshan Tracker was being used to monitor only 1,13,619 of 4,09,851 beneficiaries, covering just 28 per cent.
MGNREGS: Under MGNREGS, the CAG found that annual door-to-door surveys were not conducted in the 32 test-checked villages. Further, 24 government employees were enrolled as unskilled workers, with Rs.6.04 lakh paid as wages to 19 government employees.
Aadhaar seeding and authentication remained low, with only 51 per cent of job-card holders Aadhaar-seeded and 43 per cent Aadhaar-authenticated statewide.
The department did not prepare an Information, Education and Communication plan during 2019-2024, while block offices and Village Development Boards received no IEC funds during the five-year period.
The audit found that 10 projects costing Rs.2.87 crore did not physically exist despite being shown as completed.
Short execution was also detected in 51 projects involving Rs.8.69 crore, indicating possible misappropriation to that extent.
There was a 59 per cent shortfall in social audits, with 2,676 audits not conducted against the target of 4,536. Of 426 observations raised in 32 test-checked VDBs, 90 remained outstanding.
Despite State and District Quality Monitoring Cells being established, no inspections were conducted to check the quality or authenticity of works.
Motor Vehicles department: The CAG found that 6,292 of 33,567 learner’s licences issued in three test-checked RTOs/DTOs were issued without conducting the mandatory tests.
Nagaland also had no Automated Testing Station for automatic vehicle fitness testing. The Inspection and Certification Centre at Chümoukedima, proposed for conversion into an ATS, was still under construction as of November 2024.
During 2019-2024, 8,633 vehicles defaulted on tax payments, leaving outstanding dues of Rs.9.03 crore. Kohima and Mokokchung RTOs also under-imposed penalties amounting to Rs.23.41 lakh for overloading.
The audit further found non-compliance with penalty provisions for motor vehicle offences and noted that although VAHAN and SARATHI were operational, an online payment gateway had not been integrated for citizen users.
Finance (Treasuries and Accounts): Treasury computerisation suffered implementation delays due to late selection of the application-development vendor. The department also failed to use project management tools or maintain a risk register. Failure to meet stipulated milestones resulted in the State missing out on Rs.2.84 crore in Central assistance.
Of 13 TreasuryNet modules, five remained unimplemented, while the modules that were implemented did not incorporate all business rules and features specified in the Detailed Project Report.
The CAG also found database discrepancies relating to budget management, adjustment of Abstract Contingent bills, user management and transaction data, indicating weak system and access controls.
GST administration: The CAG found deficiencies in scrutiny of GST returns. Of 106 scrutiny cases examined, 82 remained non-finalised, including 69 cases where taxpayers had not submitted replies.
Internal audit under Section 65 of the NGST Act was not conducted. Action against non-filers and late-filers was also inadequate, with best-judgment assessments not initiated in prolonged cases.
Irregularities were detected in cancellation of GST registrations, including incorrect effective dates, delays and inadequate documentation, resulting in non-recovery of dues.
Centralised audit identified deviations in GST returns across 16 risk parameters in 88 cases involving Rs.84.61 crore, including mismatches in input tax credit, tax payments and turnover. Recovery remained limited and several cases lacked satisfactory departmental response.
Health and Family Welfare department: According to CAG report, the department diverted Rs.3.85 crore of NHM infrastructure funds for procurement of medicines, hospital linens and nursing sundries instead of infrastructure maintenance activities.
The tender process was also found deficient as no advertisement was issued for inviting tenders; the Notice Inviting Tender was merely displayed on the Directorate’s notice board.
Despite the suppliers not fully supplying or meeting requirements, the department released the entire Rs.3.85 crore. Items worth Rs.0.88 crore were short-supplied or rejected, resulting in overpayment to suppliers. CAG recommended recovery of the amount and fixing responsibility on officials who released payments without verifying the quantity and quality of supplies.
Municipal Affairs department: A Working Women Hostel costing Rs.13.26 crore was constructed on privately owned land over which the State government had no ownership rights, resulting in undue benefit to the landowner.
The approved DPR envisaged construction on land donated to the government, with NAPO responsible only for operation and maintenance. However, a subsequent MoA provided for NAPO to “own, operate and maintain” the asset along with ownership of the land, contrary to the approved DPR.
The State government also contributed Rs.1.37 crore that the MoA required NAPO to bear and released an additional Rs.3.58 crore.
A committee meant to fix hostel rent and fees was never constituted, while the hostel remained largely unused more than a year after its inauguration in November 2022 due to inadequate publicity.
Horticulture department: A Botanical Garden-cum-Recreational Park was created at Jalukie, Peren, at a cost of Rs.2.87 crore on privately owned land, without securing ownership or lease rights, resulting in undue benefit to the contractor-cum-landowner.
A MoU granted ownership, operational control and revenue rights to the contractor without concurrence of the State Finance Department.
The project components were also altered and essential items omitted through a revised DPR without obtaining NEC concurrence. The facility remained idle for two years, resulting in loss of potential revenue.
Planning and Transformation department: The CAG found that Rs.6.14 crore meant for construction of boys’ and girls’ hostels under the PMJVK scheme was unauthorisedly used for construction of a private school.
The DPR submitted to the Government of India did not contain specific details of the project land. The report said that two hostel buildings were subsequently constructed inside the compound of Vitoyi Memorial School at Vihokhu, owned by the school proprietor. Records showed that the school had 48 students in 2023 and 64 in 2024, with no hostel facility recorded by the Sub-Divisional Education Officer, Niuland. CAG recommended fixing responsibility on officials for the unauthorised use of scheme funds.
Tourism department: The Directorate of Tourism made an irregular payment of Rs.0.43 crore for unexecuted works based on fictitious entries in Measurement Books and Running Account Bills.
Of 32 civil works valued at Rs.0.77 crore for which payment had already been released, 22 works worth Rs.0.34 crore were subsequently completed following audit intervention. However, 10 works valued at Rs.0.43 crore remained unexecuted as of May 2024.
The project itself had faced a 33-month delay in tendering following NEC approval due to a land dispute. The CAG recommended recovery of the excess payment and action against officials responsible for false entries and failure to verify contractors’ bills.
Transport department: The project for conversion of the NST Central Workshop into a Bus Station, Night Parking-cum-Marketing Complex in Dimapur remained incomplete even after more than six years despite expenditure of Rs.10.61 crore.
The State government incurred an additional Rs.16.64 crore burden without achieving the intended transport or revenue benefits.
Although Rs.7.61 crore out of Rs.8.23 crore under one component had been utilised, physical progress stood at only 33 per cent. A revised project cost of Rs.24.87 crore, involving 30 per cent escalation and reduction in scope from two buildings to one, was not submitted to the Government of India for approval.
CAG also noted that more than 12 years after release of Rs.3 crore by the State government under another component, the department had failed to relocate the NST Central Workshop.
Finance (Treasuries and Accounts)-fraudulent drawal: Failure of Drawing and Disbursing Officers and Treasury Officers to carry out prescribed checks resulted in fraudulent, double and excess drawal of Rs.0.88 crore, of which Rs.0.24 crore remained to be recovered.
The audit found that 13 DDOs from nine departments had fraudulently drawn Rs.87.73 lakh through inflated pay-bill totals, double drawals and fraudulent claims relating to pay, allowances and arrears.
Mandatory checks were not conducted by DDOs and Treasury Officers before authorising payments. The CAG recommended immediate recovery with penal interest and investigation for possible criminal offences involving fraudulent withdrawal of public money.
Home department (Police): The CAG report stated that the Director General of Police, Nagaland, engaged an unlicensed supplier for procurement of commercial LPG cylinders/refills without following the tendering process, resulting in excess expenditure of Rs.3.46 crore.
A supplier earlier included in the government-approved panel for 2017-18 was awarded the work order for 2018-19 on grounds of “urgency” without tendering.
The audit found that the supplier was a “Consumer” rather than an authorised LPG “Distributor” under the applicable regulations. Procurement at rates significantly higher than those fixed by IOCL resulted in the avoidable excess expenditure.
CAG recommended fixing responsibility on officials for non-compliance with procurement and LPG distribution regulations.
Phek district administration: The CAG report stated that the Deputy Commissioner, Phek, was found to have misappropriated Rs.17.56 lakh from government funds meant for land acquisition for development of a Sub-Jail at Pfutsero. It said that the DC released the full payment of Rs.26 lakh to the landowner in November 2022 without execution of a Sale Deed, contrary to Land Revenue Department instructions.
The unutilised balance of Rs.17.56 lakh was subsequently withdrawn in cash instead of being refunded or deposited into the State government account, with no supporting vouchers. CAG recommended a departmental inquiry, recovery from the officials concerned and early execution of the Sale Deed to establish government ownership of the acquired land.
Overall, the audit findings point to recurring weaknesses in procurement, financial controls, project execution, record maintenance, monitoring and accountability across several departments, with the CAG recommending recovery of excess payments, fixing of responsibility and strengthening of internal controls.